In FR Doc. 03-31093, published on December 17, 2003 (68 FR 70131), make the following corrections:

Congress enacted the FACT Act, which the President signed into law on December 4, 2003. Pub. L. 108-159, 117 Stat. 1952. In general, the Act amends the FCRA to enhance the ability of consumers to combat identity theft, to increase the accuracy of consumer reports, and to allow consumers to exercise greater control regarding the type and amount of marketing solicitations they receive. The FACT Act also restricts the use and disclosure of sensitive medical information that is contained in a consumer report. To bolster efforts to improve financial literacy among consumers, title V of the Act (entitled the “Financial Literacy and Education Improvement Act”) creates a new Financial Literacy and Education Commission empowered to take appropriate actions to improve the financial literacy and education programs, grants, and materials of the Federal government. Lastly, to promote increasingly efficient national credit markets, the FACT Act establishes uniform national standards in key areas of regulation regarding consumer report information.

The Act includes effective dates for many of its sections that vary to take account of the need for rulemaking, implementation efforts by industry, and other policy concerns. Section 3 of the FACT Act requires the Agencies to prescribe joint regulations establishing an effective date for each provision of the Act for which the Act itself does not specifically provide an effective date. The FACT Act requires that the Agencies jointly adopt final rules establishing the effective dates within two months of the date of enactment of the Act. The Act also provides that each of these effective dates must be “as early as possible, while allowing a reasonable time for the implementation” of that provision, but in no case later than ten months after the date of issuance of the Agencies' joint final rules establishing the effective dates for the Act (117 Stat. 1953).

The Agencies are jointly adopting these interim final rules that establish December 31, 2003, as the effective date for section 711 and certain other provisions of the Act that establish the relationship between the FCRA and state laws, as well as for the provisions that authorize rulemaking and other agency action under the FACT Act. In a separate notice published in conjunction with this action, the Agencies are jointly proposing regulations that establish effective dates for the other applicable provisions of the FACT Act. As noted above, the Agencies must complete these effective date rules by February 4, 2004.

The Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) generally requires an agency to publish a notice of a proposed rule and afford interested persons an opportunity to participate in the rulemaking by providing comments prior to promulgation of the rule. The requirement for providing notice of the proposed rule and an opportunity for public comment do not apply “when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” Correspondingly, a rule may not be made effective less than thirty days after publication, unless as otherwise provided by the agency for good cause found and published with the rule. 2

The current FCRA contains provisions that preempt state laws in seven areas governed by the FCRA. Under section 624(d)(2) of the FCRA, these provisions expire on January 1, 2004. 3 One of the central aims of the FACT Act is to eliminate this so-called sunset provision and make permanent the current preemption provisions and add others. 4 In these interim final rules, the Agencies are establishing December 31, 2003, as the effective date for section 711 of the FACT Act, which amends section 624(d)(2) of the FCRA, as well as for sections 151(a)(2), 212(e), 214(c), and 311(b) of the FACT Act, each of which similarly determines the relationship of state laws to areas governed by the FCRA.

The Agencies believe that there is good cause for adopting these rules as interim final rules effective without advance public comment or delay. As noted above, the current preemption provisions in the FCRA expire on January 1, 2004. Delaying final action on these provisions of the FACT Act would undermine the purpose of these provisions and is likely to provoke substantial confusion about the applicability of some state laws in areas that Congress has determined should be governed by uniform nationwide standards. Adopting these rules in final form on an interim basis also will have the effect of preserving the current state of the law while comment is received. Implementing these interim final rules is consistent with the statutory directive to act quickly and to “establish effective dates that are as early as possible.”

Certain provisions of the Act require one or more agencies to undertake an action or rulemaking within a specified period of time after enactment of the Act. For example, section 213(b) states that the Commission's regulations implementing that section “shall be issued in final form not later than 1 year after the date of enactment of this Act.” The Agencies have determined that no joint regulations under section 3 of the FACT Act are required to make these provisions effective. The Agencies believe that, in these cases, Congress has specified the date of enactment as the lawful effective date because that is the predicate for mandating that an agency action be performed within a specified period of time after the date of enactment.

There are, however, several sections of the Act that do not specify the period for rulemaking or other action. To address this, the Agencies' interim final rules establish December 31, 2003, as the effective date for each provision of the FACT Act that authorizes an agency, without establishing an implementation date, to issue a regulation or to take other action to implement the Act or the applicable provision of the FCRA, as amended by the FACT Act. The Agencies believe that there is good cause for adopting these rules in final form on an interim basis without advance public comment or delay. Establishing an early effective date for these regulatory provisions would allow the agencies to begin immediately to perform their responsibilities under the FACT Act. The Agencies note that this section of the interim final rules applies only to the provisions of the FACT Act without effective dates that relate to an agency's authority to issue a regulation or to take other action to implement the Act. These interim final rules do not affect the substantive provisions of the FACT Act implemented by an agency rule. The substantive provisions of the Act become effective as provided in the Act, as provided in the Agencies joint effective date rules, or as provided by the substantive rules promulgated by the agencies, as appropriate.

Accordingly, the Agencies find good cause for adopting these rules as interim final rules effective on December 31, 2003.

To allow for public participation and assure that these interim rules are appropriate, the Agencies invite comment on the interim final rules and on the Agencies' findings. Based on comments received, the Agencies may adjust the effective date of a section governed by the interim final rules as necessary.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Agencies have reviewed the interim final rules. (The Board has done so under authority delegated to the Board by the Office of Management and Budget.) The rules contain no collections of information pursuant to the Paperwork Reduction Act.

Written communications and summaries or transcripts of oral communications respecting the merits of this proceeding from any outside party to any Commissioner or Commissioner's advisor will be placed on the public record. 16 CFR 1.26(b)(5)

Section 722(a) of the Gramm-Leach-Bliley Act requires the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. 5 In light of this requirement, the Board has sought to present the provisions of the joint interim final rule in a simple and straightforward manner. The Board invites your comments on how to make the rule easier to understand. For example:

• Have we organized the material to suit your needs? If not, how could this material be better organized?

• Do the regulations contain technical language or jargon that is not clear? If so, which language requires clarification?

• Would a different format (grouping and order of sections, use of headings, paragraphing) make the regulation easier to understand? If so, what changes to the format would make the regulation easier to understand?

• What else could we do to make the regulation easier to understand?

The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay the issuance of the design approval, and, as a result delay the delivery of aircraft with these engines installed. In addition, the substance of these special conditions has been subject to the public comment process on a prior occasion with no substantive comments received. The FAA, therefore, finds that good cause exists for making these special conditions effective upon issuance.

The FAA has determined that good cause exists for making these special conditions effective December 31, 2003; however, the FAA invites interested parties to submit comments on the special conditions. Comments should identify the Rules Docket and special conditions number and be submitted in duplicate to the address specified above. The FAA will consider all comments received by the closing date. These special conditions may be changed in light of the comments received. All comments submitted will be available in the Rules Docket for examination by interested persons, both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerning this proposal will be filed in the docket. Commenters wishing the FAA to acknowledge receipt of their comments submitted in response to this notice must include a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. NE126.” The postcard will be date-stamped and returned to the commenter.

On March 12, 2003, General Electric Aircraft Engines (GEAE) applied for an amendment to Type Certificate No. E8NE to include the new model CT7-8A turboshaft engine. The application was subsequently amended to include the CT7-8A5, CT7-8B, CT7-8B5, CT7-8E, CT7-8E5, CT7-8F, and CT7-8F5 engines. These engine models, which are derivatives of the CT7-8 currently approved under Type Certificate (TC) No. E8NE, will have the same engine rating structure as the CT7-8 model except that they will include rated continuous one engine inoperative (OEI) power instead of rated 30-minute OEI power. These engine models will be rated at 30-second OEI, 2-minute OEI, continuous OEI, 30-minute, takeoff, and maximum continuous ratings. The requirements in the existing regulations do not contain adequate or appropriate safety standards of this new and unusual engine rating structure.

The rated 30-minute power is the approved brake horsepower developed under static conditions at specified altitudes and temperatures within the operating limitations established under part 33 for periods of use no longer than 30 minutes each. This rating power would provide for rotorcraft hovering operations at a power level greater than maximum continuous power. The certification requirements have been defined around the worst case scenario of unrestricted periods of use, up to 30 minutes each, in one flight. Therefore, the total accumulated time for endurance testing of 30-minute periods, at rated 30-minute power for each period, must be 25 hours for certification. However, when the CT7-8A, CT7-8A5, CT7-8B, CT7-8B5, CT7-8E, CT7-8E5, CT7-8F, or CT7-8F5 engine models have a rated continuous OEI power equal to or higher than rated 30-minute power, the test run time of 25 hours under § 33.87(d) may be credited to satisfy the required running time of 25 hours at rated 30-minute power.

Under the provisions of 14 CFR § 21.101, GEAE must show that the CT7-8A, CT7-8A5, CT7-8B, CT7-8B5, CT7-8E, CT7-8E5, CT7-8F, CT7-8F5 turboshaft engines meet the applicable provisions of the regulations incorporated by reference in TC No. E8NE or the applicable regulations in effect on the date of application for the change to the CT7-8. The regulations incorporated by reference in the TC are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in TC No. E8NE are part 33, effective February 1, 1965, as amended by amendments 33-1 through 33-19 and Special Conditions Numbers 33-002-SC and 33-003-SC.

If the Administrator finds that the applicable airworthiness regulations ( i.e., 14 CFR part 33) do not contain adequate or appropriate safety standards for the CT7-8A, CT7-8A5, CT7-8B, CT7-8B5, CT7-8E, CT7-8E5, CT7-8F, CT7-8F5 engines because of a novel or unusual design feature, special conditions are prescribed under the provisions of 14 CFR 21.16.

Special conditions, as appropriate, are issued in accordance with 14 CFR 11.49, as required by 14 CFR 11.28 and 11.29(b), and become part of the type certification basis in accordance with 14 CFR 21.101(b)(2).

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of 14 CFR 21.101(a)(1).

The GEAE CT7-8A, CT7-8A5, CT7-8B, CT7-8B5, CT7-8E, CT7-8E5, CT7-8F, and CT7-8F5 turboshaft engines will incorporate the following novel or unusual design feature: rated 30-minute power. The power available for rotorcraft hovering to perform search and rescue or similar missions is limited to the maximum continuous rating power under the current part 33 requirements. The rated 30-minute power will provide a higher power level than currently available for use up to 30 minutes at any time between takeoff and landing during any flight. This new rating will enhance rotorcraft safety through the availability of increased power for hovering operations calling for greater than maximum continuous power.

As discussed above, these special conditions apply to the CT7-8A, CT7-8A5, CT7-8B, CT7-8B5, CT7-8E, CT7-8E5, CT7-8F, and CT7-8F5 turboshaft engines. Should GEAE apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of 14 CFR 21.101(a)(1).

This action affects only certain novel or unusual design features on these models of engines. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the engine.

The substance of these special conditions has been subjected to the notice and comment period in one prior instance and has been derived without substantive change from those previously issued. The FAA has determined that prior public notice and comment are unnecessary and that good cause exists for adopting these special conditions immediately. Therefore, these special conditions are being made effective December 31, 2003. The FAA is, however, requesting comments to allow interested parties to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

On November 14, 2003, the FAA proposed to amend part 71 of the Federal Aviation Regulations (14 CFR part 71) by establishing Class D airspace at Hilton Head Island, SC, (68 FR 64574). This action provides adequate Class D airspace for IFR operations at Hilton Head Airport. Designations for Class D are published in FAA Order 7400.9L, dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR part 71.1. The Class D designations listed in this document will be published subsequently in the Order.

Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments objecting to the proposal were received.

This amendment to part 71 of the Federal Aviation Regulations (14 CFR part 71) establishes Class D airspace at Hilton Head Island, SC.

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

History

On Monday, September 29, 3003, the FAA proposed to amend 14 CFR part 71 to modify Class E airspace at Zanesville, OH (68 FR 55915). The proposal was to modify controlled airspace extending upward from the surface of the earth to contain Instrument Flight Rules (IFR) operations in controlled airspace during portions of the terminal operation and while transiting between the enroute and terminal environments. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments objecting to the proposal were received. Class E airspace areas designated as an extension to a class D surface area are published in paragraph 6004, of FAA Order 7400.9L dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the order.

This amendment to 14 CFR part 71 modifies Class E airspace at Chicago, IL to accommodate aircraft executing instrument flight procedures into and out of Aurora Municipal Airport. The area will be depicted on appropriate aeronautical charts.

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

On Monday, September 29, 2003, the FAA proposed to amend 14 CFR part 71 to modify Class E airspace at Zanesville, OH (68 FR 55913). The proposal was to modify controlled airspace extending upward from 700 feet above the surface of the earth to contain Instrument Flight Rules (IFR) operations in controlled airspace during portions of the terminal operation and while transiting between the enroute and terminal environments.

Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments objecting to the proposal were received. Class E airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005, of FAA Order 7400.9L dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the order.

This amendment to 14 CFR part 71 modifies Class E airspace at Wilmington Clinton Field, OH, to accommodate aircraft executing instrument flight procedures into and out of Wilmington Clinton Field. The area will be depicted on appropriate aeronautical charts.

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

On Monday, September 29, 2003, the FAA proposed to amend 14 CFR part 71 to establish Class E airspace at Canby, MN (68 FR 55914). The proposal was to establish controlled airspace extending upward from 700 feet or more above the surface of the earth to contain Instrument Flight Rules (IFR) operations in controlled airspace during portions of the terminal operation and while transiting between the enroute and terminal environments.

Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments objecting to the proposal were received. Class E airspace designations for airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005 of FAA Order 7400.9L dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in the Order.

This amendment to 14 CFR part 71 establishes Class E airspace at Canby, MN, to accommodate aircraft executing instrument flight procedures into and out of Myers Field. The area will be depicted on appropriate aeronautical charts.

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

On November 14, 2003, a notice proposing to amend Part 71 of the Federal Aviation Regulations (14 CFR Part 71) by modifying the Class E airspace area at Erie, PA was published in the Federal Register (68 FR 64575-64576). The proposed action would provide additional controlled airspace to accommodate a Standard Instrument Approach Procedure (SIAP), based on area navigation (RNAV), to the Life Star Base Heliport. Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA on or before December 15, 2003. No comments to the proposal were received. The rule is adopted as proposed.

The coordinates for this airspace docket are based on North American Datum 83. Class E airspace area designations for airspace extending upward from the surface of the earth are published in paragraph 6005 of FAA Order 7400.9L, dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published in the Order.

This amendment to Part 71 of the Federal Aviation Regulations (14 CFR Part 71) provides controlled Class E airspace extending upward from 700 feet above the surface for aircraft conducting IFR operations within a 6-mile radius of Life Star Base Heliport, Harbor Creek, PA.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

On November 12, 2003, a notice proposing to amend part 71 of the Federal Aviation Regulations (14 CFR part 71) by modifying the Class E airspace area at Jamestown, NY was published in the Federal Register (68 FR 64008-64009). The proposed action would provide additional controlled airspace to Standard Instrument Approach Procedure (SIAP), based on area navigation (RNAV), to the WCA Hospital Heliport, Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA on or before December 12, 2003, No comments to the proposal were received. The rule is adopted as proposed.

The coordinates for this airspace docket are based on North American Datum 83. Class E airspace area designations for airspace extending upward from the surface of the earth are published in paragraph 6005 of FAA Order 7400.9L, dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published in the Order.

This amendment to part 71 of the Federal Aviation Regulations (14 CFR part 71) provides controlled Class E airspace extending upward from 700 feet above the surface for aircraft conducting IFR operations within a 6-mile radius of WCA Hospital Heliport, Jamestown, NY.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not have significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

On November 6, 2003, a notice proposing to amend part 71 of the Federal Aviation Regulations (14 CFR Part 71) by amending Class E airspace extending upward from 700 feet above the surface of Spring Hill Airport, Sterling, PA was published in the Federal Register (68 FR 62759-62760). Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA on or before December 5, 2003. No comments to the proposal were received. The rule is adopted as proposed. The coordinates for this airspace docket are based on North American Datum 83. Class E airspace area designations for airspace extending upward from the surface of the earth are published in paragraph 6005 of FAA Order 7400.9L, dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published in the Order.

This amendment to Part 71 of the Federal Aviation Regulations (14 CFR Part 71) provides controlled Class E airspace extending upward from 700 feet above the surface for aircraft conducting IFR operations within a 6-mile radius of Spring Hill Airport, Sterling, PA.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule will not significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

On Monday, September 29, 2003, the FAA proposed to amend 14 CFR part 71 to modify Class E airspace at Zanesville, OH (69 FR 55911). The proposal was to modify controlled airspace extending upward from 700 feet above the surface of the earth to contain Instrument Flight Rules (IFR) operations in controlled airspace during portions of the terminal operation and while transiting between the enroute and terminal environments.

Interested parties were invited to participate in this rulemaking proceeding by submitting written comments on the proposal to the FAA. No comments objecting to the proposal were received. Class E airspace areas extending upward from 700 feet or more above the surface of the earth are published in paragraph 6005, of FAA Order 7400.9L dated September 2, 2003, and effective September 16, 2003, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the order.

This amendment to 14 CFR part 71 modifies Class E airspace at Zanesville, OH, to accommodate aircraft executing instrument flight procedures into and out of Zanesville Municipal Airport. The area will be depicted on appropriate aeronautical charts.

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

On April 16, 2002, we published a notice of proposed rulemaking (NPRM) entitled Drawbridge Operation Regulation Change, St. Croix River, MN in the Federal Register (67 FR 18521). We received six letters commenting on the proposed rule. On March 25, 2003, we clarified a statement in the NPRM and reopened the comment period to receive additional comments (68 FR 14364). No comments were received during the additional comment period. On September 9, 2003, we published a Supplemental Notice of Proposed Rulemaking (SNPRM) (68 FR 53079) in which we amended the original proposed rule based on comments received in response to the April 16, 2002 NPRM. No additional comments were received in response to the SNPRM. No public hearing was requested, and none was held.

In accordance with 33 CFR 117.667, the draws of the Burlington Northern Santa Fe Railroad Bridge, Mile 0.2 at Prescott, Wisconsin, the U.S. 16-61 Bridge, Mile 0.3, at Prescott, Wisconsin and the Union Pacific Railroad Bridge, Mile 17.3, at Hudson, Wisconsin, currently open on signal; except that, from December 15 through March 31, the draws open on signal if at least 24-hours notice is given. Currently, the S36 Stillwater Highway Bridge, Mile 23.4 at Stillwater, Minnesota opens on signal at various times throughout the day from May 15 through October 15, and on signal from October 16 through May 14. The NPRM proposed to amend the regulations governing drawbridges across the St. Croix River by adding a notice requirement for bridge openings during the summer season. Specifically, the NPRM requiring that advance notice be given prior to 11 p.m. for openings between midnight and 7 a.m. from April 1 to October 15 for three of the four bridges.

The Burlington Northern Santa Fe Railroad, Mile 0.2 at Prescott initially requested a change to the regulation for the Burlington Northern Santa Fe Railroad, to open on signal from 7 a.m. to midnight and to open between midnight and 7 a.m., if the bridge was notified prior to 11 p.m. during the summer tourism months. Although the request was submitted by only one bridge owner, the approval would also impact the U.S. 16-61 Bridge and the Union Pacific Railroad Bridge. Therefore, the proposal was expanded to include these two bridges. The S36 Bridge at Stillwater is more remotely located than the other three bridges, and we have proposed a separate opening requirement for the S36 Bridge rather than including it with the other three bridges.

The Coast Guard received no comment letters in response to the SNPRM. No changes will be made to this final rule.

This rule is not a “significant regulatory action” under section 3(f) of the Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS).

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

Implementing the regulation will allow the owners of drawbridges to reduce the number of hours drawtenders are required to be on site due to a reduction in requests to open the drawbridges between midnight and 8 a.m. from 1 April to 31 October. Previously, these advance notification requirements were temporarily instated to facilitate maintenance on the bridges. During the maintenance periods, the bridge owners received no complaints from commercial or recreational vessel operators. Additionally, this has become the widely accepted method of voluntarily requesting bridge openings from local vessel operators during non-maintenance periods without complaint.

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

The Coast Guard certifies under 5 U.S.C. 605 (b) that this rule will not have a significant economic impact on a substantial number of small entities. This Coast Guard identified local marinas as small entities that might be affected by this rule due to restricted access to the marinas during periods when drawtenders are not on site. These Entities were consulted prior to initiating this rulemaking process to minimize the economic impact that might result from this rule.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

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

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

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

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

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

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

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

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

We have analyzed this rule under Commandant Instruction M16475.1D, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (32)(e), of the Instruction, from further environmental documentation. Promulgation of changes to drawbridge regulations have been found to not have significant effect on the human environment. A final “Environmental Analysis Check List” and a final “Categorical Exclusion Determination” are available in the docket where indicated under ADDRESSES.

On October 6, 2003, the Coast Guard published an interim final rule entitled “Regulated Navigation Area; Reporting Requirements for Barges Loaded with Certain Dangerous Cargoes, Illinois Waterway System Within the Ninth Coast Guard District” in the Federal Register (68 FR 57616). In the preamble of that interim rule, we stated that we would publish a separate notice when and if the Office of Management and Budget (OMB) approved the revised collection of information (1625-1505) contained in the rule (68 FR 57621). On November 3, 2003, OMB announced that they had approved this revised collection of information.

As set forth below, the USPTO is extending the postponement of the applicability date of those regulations that require use of electronic forms in connection with certain Madrid Protocol submissions until November 2, 2004. Additionally, the USPTO is likewise extending to November 2, 2004 , the postponement of the applicability date of those regulations that require that international fees be paid concurrently with Madrid filings, and that these fees be paid through the USPTO.

The Madrid Protocol provides a system for obtaining an international trademark registration. The Madrid Protocol Implementation Act of 2002, Pub. L. 107-273, 116 Stat. 1758, 1913-1921 (MPIA) amends the Trademark Act of 1946 to implement the provisions of the Madrid Protocol in the United States.

On September 26, 2003, the USPTO published new regulations to implement the MPIA. 68 FR 55748, posted on the USPTO Web site at http://www.uspto.gov/web/offices/com/sol/notices/68fr55748.pdf. These regulations took effect on November 2, 2003. The regulations require that certain submissions that are made to the USPTO in connection with the Madrid Protocol be transmitted using the Trademark Electronic Application System (TEAS). Specifically, 37 CFR 7.11(a) requires that an international application be submitted through TEAS; 37 CFR 7.21(b) requires that a subsequent designation (a request that protection be extended to countries not identified in the original international application) be submitted through TEAS; and 37 CFR 7.14(e) requires that where the International Bureau of the World Intellectual Property Organization (IB) has issued a notice of irregularity to an international applicant, and the international applicant submits a response to that notice through the USPTO, the response must be transmitted through TEAS.

On October 24, 2003, the USPTO published a document in which it announced that it would permit international applications, responses to irregularity notices, and subsequent designations to be submitted on paper rather than through TEAS, for a temporary period of time. The document accordingly postponed the applicability of 37 CFR 7.11(a), 7.21(b), and 7.14(e), to the extent that those provisions require transmission through TEAS. The document further provided that this postponement would remain in effect until January 2, 2004.

Thereafter, on November 7, 2003, the USPTO published a second document in which it announced that the postponement remained in effect but was modified. The original postponement had provided that applicants could make their submission either on paper or through TEAS. However, the document of November 7, 2003, provided that all Madrid submissions must be made on paper. That modification was necessary, because technical difficulties had prevented the deployment of TEAS.

Some of these difficulties have not yet been resolved, and the TEAS forms cannot yet be posted. Therefore, the postponement of the applicability date of 37 CFR 7.11(a), 7.21(b), and 7.14(e) is hereby extended to November 2, 2004 .

If the TEAS forms are posted while the extended postponement of the applicability dates of 37 CFR 7.11(a), 7.21(b), and 7.14(e) is still in effect, then applicants will be able to file international applications, responses to irregularity notices, and subsequent designations either on paper or through TEAS. Under any circumstances, there will be a transition period during which the USPTO will accept both electronic and paper submissions. This additional period will give applicants the flexibility and the opportunity to become comfortable with the electronic system when it becomes available.

In addition to requiring that certain submissions that are made to the USPTO in connection with the Madrid Protocol be transmitted using TEAS, the Rules of Practice that took effect on November 2, 2003, also require that international application fees be paid at the time of submission. However, the document of November 7, 2003, temporarily suspended the applicability of those requirements, until January 4, 2004. Thus, the document suspended 37 CFR 7.11(a)(9), to the extent that it requires that international application fees for all classes and the fees for all designated Contracting Parties identified in an international application be paid at the time of submission. Likewise, the document suspended 37 CFR 7.21(b)(7), to the extent that it requires that all international fees for a subsequent designation be paid at the time of submission.

The document of November 7, 2003, further provided that (1) applicants who file Madrid submissions on paper must pay the USPTO certification fee at the time of submission, but must pay the international fees directly to the IB, and that (2) applicants who submit a subsequent designation on paper must pay the USPTO transmittal fee at the time of submission, but must pay the international fees directly to the IB. Additionally, the notice provided that applicants may pay the international fees to the IB either before or after submission of the international application or subsequent designation.

These provisions of the document of November 7, 2003, are hereby extended to November 2, 2004.

If the TEAS forms are posted while the postponement of the applicability dates of 37 CFR 7.11(a)(9) and 7.21(b)(7) remains in effect, then applicants who elect to use those forms will pay the international fees (1) at the time of submission, and (2) through the USPTO.

Applicants making Madrid submissions should use forms provided by the IB for that purpose. These forms may be downloaded from the IB Web site http://www.wipo.int/madrid/en/. Please note that the IB will not process paper submissions that are not prepared using IB forms.

Pursuant to 37 CFR 2.190(a), all trademark-related documents submitted on paper must be mailed to a designated USPTO address. However, the document of November 7, 2003, waived that rule with respect to international applications, subsequent designations, and responses to notices of irregularities that are filed on paper. The document further provided that all Madrid submissions made on paper should be mailed to the following address: Commissioner for Trademarks, P.O. Box 16471, Arlington, Virginia 22215-1471, Attn: MPU.

Please note that any trademark-related correspondence other than international applications, subsequent designations, and responses to irregularity notices that is sent to the above-identified address will not be accepted, and will be returned to the sender.

If a submission mailed to the above address pursuant to this document and to the document of November 7, 2003, is delivered by the Express Mail service of the United States Postal Service, the USPTO will deem that the date of receipt of the submission in the USPTO is the date the submission was deposited as Express Mail, provided that the submitter complies with the requirements set forth in 37 CFR 2.198.

Please note that the USPTO is not suspending those rules that require electronic filing of extensions of time to oppose and notices of opposition with the Trademark Trial and Appeal Board, namely 37 CFR 2.101(b)2 and 37 CFR 2.102(a)2.

Background

Chapter 10 of the Copyright Act, 17 U.S.C., places a statutory obligation on manufacturers and importers of digital audio recording devices and media (“DART”) who distribute the products in the United States to submit royalty fees to the Copyright Office. 17 U.S.C. 1003. Distribution of these royalty fees may be made to any interested copyright owner who has filed a claim and (1) whose sound recording was distributed in the form of digital musical recordings or analog musical recordings and (2) whose musical work was distributed in the form of digital musical recordings or analog musical recordings or disseminated to the public in transmissions. 17 U.S.C. 1006.

Section 1007 provides that claims to these royalty fees must be filed “[d]uring the first 2 months of each calendar year” with the Librarian of Congress “in such form and manner as the Librarian of Congress shall prescribe by regulation.” 17 U.S.C. 1007. Part 259 of title 37 of the Code of Federal Regulations sets forth the procedures for the filing of claims to the DART royalty funds. Section 259.5 states that in order for a claim to be considered timely filed with the Copyright Office, the claims either have to be hand delivered to the Office by the last day in February  1 or if sent by mail, received by the Office by the last day in February or bear a January or February United States Postal Service postmark. 37 CFR 259.5(a). Claims received after the last day in February will be accepted as timely filed only upon proof that the claim was placed within the United States Postal Service during the months of January or February. 37 CFR 259.5(e). A January or February postmark of the United States Postal Service on the envelope containing the claim or, if sent by certified mail return receipt requested, on the certified mail receipt constitutes sufficient proof that the claim was timely filed. 2 37 CFR 259.5(e). The regulations do not provide for the filing of DART claims by alternative methods such as online submission or facsimile transmission.

In the year 2001, due to severe disruptions in the delivery of mail to the Office caused by threat of possible anthrax contamination, the Copyright Office waived the regulations requiring that claims bear “the original signature of the claimant or of a duly authorized representative of the claimant,” 37 CFR 259.3(b), and prohibiting the filing by “facsimile transmission,” 37 CFR 259.5(d), for the filing of claims to the DART royalty funds for the year 2001. See 67 FR 5213 (February 5, 2002). Due to continued security measures affecting the delivery of mail, the Copyright Office waived regulations for the filing of 2002 DART claims last year as well. Certain incoming mail continues to be irradiated and all mail is diverted to an off-site location for screening, resulting in delays in its delivery to the Office. In light of these continuing delays, the Office once again is waiving §§ 259.3(b) and 259.5(d) and allowing the online and facsimile submission of DART claims to the 2003 royalty funds. Online forms are available and may be submitted via the Office's Web site. Note however, that the alternative methods set forth in this Notice apply only to the filing of DART claims for the 2003 royalties which are due by March 1, 2004, and in no way apply to other filings with the Office. Please note that as a result of the last date in February occurring on a Sunday this year, the DART claims are due on Monday, March 1, 2004, in accordance with 37 CFR 259.5(b).

This Notice covers only the means by which claims may be accepted as timely filed; all other filing requirements, such as the content of claims, remain unchanged, except as noted herein. See 37 CFR part 259.

Claims to the 2003 DART royalty funds may be submitted as follows:

In order to best ensure the timely receipt by the Copyright Office of DART claims, the Office strongly encourages claimants to file their claims online by February 29, 2004, via the Copyright Office Web site. The Office has devised online electronic forms for filing both single and joint DART claims. Claimants will be able to access and complete the forms via the Copyright Office Web site and may submit the forms online as provided in the instructions accompanying the forms. DART forms will be posted on the Office Web site at http://www.copyright.gov/carp/dart/index.html. Claimants filing a joint claim may list each of their joint claimants directly on the Office's online joint claim form or may submit the list of joint claimants as a file attachment to the submission page. Lists of joint claimants sent as an attachment must be in a single file in either Adobe Portable Document (“PDF”) format, in Microsoft Word Version 2000 or earlier, in WordPerfect 9 or earlier, or in ASCII text. There will be a browse button on the form that will allow claimants to attach the file containing the list of joint claimants and then to submit the completed form to the Office. The attachment must contain only the list of names of joint claimants. Joint claims with attachments containing information other than the joint claimants' names will be rejected.

The DART forms will be available for use during the months of January, February and on March 1, 2004. It is critically important to follow the instructions in completing the forms before submitting them to the Office. Claims submitted online using forms or formats other than those specified in this Notice will not be accepted by the Office. Claims filed online must be received by the Office no later than 11:59 p.m. E.S.T. on March 1, 2004. Specifically, the completed electronic forms must be received in the Office's server by that time. Any claim received after that time will be considered untimely filed. Claimants will receive an electronic mail message in response stating that the Office has received their submission. Therefore, claimants utilizing this filing option are required to provide an e-mail address. Claimants submitting their claims online are strongly encouraged to send their claim no later than February 29, 2004, in order to avoid any unforseen delays in receipt of claims by the Office.

When filing claims online, all provisions set forth in 37 CFR part 259 apply except § 259.3(b), which requires the original signature of the claimant or of the claimant's duly authorized representative on the claim. The Office is waiving this provision for this filing period because at this time the Office is not equipped to receive and process electronic signatures.

Claims may be filed with the Office via facsimile transmission and such filings must be sent to (202) 252-3423. Claims filed in this manner must be received in the Office no later than 5 p.m. E.S.T. on March 1, 2004. The fax machine will be disconnected at that time. Claims sent to any other fax number will not be accepted by the Office.

When filing claims via facsimile transmission, claimants must follow all provisions set forth in 37 CFR part 259 with the exception of § 259.5(d), which prohibits the filing of claims by facsimile transmission. The Office is waiving this provision at this time in order to assist claimants in the timely filing of their claims.

Section 259.5(a)(2) directs claimants filing their claims by mail to send the claims to the Copyright Arbitration Royalty Panel, P.O. Box 70977, Southwest Station, Washington, DC 20024. Claimants electing to send their claims by mail are encouraged to send their claims by certified mail return receipt requested, to have the certified mail receipt (PS Form 3800) stamped by the United States Postal Service, and to retain the certified mail receipt in order to provide proof of timely filing, should the claim reach the Office after March 1, 2004. In the event there is a question as to whether the claim was deposited with the United States Postal Service during the months of January, February, or on March 1, 2004, the claimant must produce the certified mail receipt (PS Form 3800) which bears a United States Postal Service postmark, indicating an appropriate date.

Because of delays in the receipt of mail, claimants are urged not to use the mail as a means of filing their claims to the 2003 DART royalty funds. While the Office is not prohibiting the filing of claims by mail, those who do so assume the risk that their claim will not reach the Office in a timely manner. Claims sent by mail must be addressed in accordance with § 259.5(a)(2), and the Office again strongly encourages the claimant to send the claim by certified mail return receipt requested, to have the certified mail receipt (PS Form 3800) stamped by the United States Postal Service, and to retain the certified mail receipt, as it constitutes the only acceptable proof of timely filing of the claim. Claims dated only with a business meter that are received by the Office after March 1, 2004, will be rejected as being untimely filed.

When filing claims by this method, claimants must follow all provisions set forth in 37 CFR part 259.

Beginning December 29, 2003, the Library of Congress will no longer accept in-person, on site deliveries from non-governmental, commercial couriers or messengers. See 68 FR 70039 (December 16, 2003). Instead, couriers must deliver materials for staff at the Library of Congress, including claims to DART royalties, directly to the Congressional Courier Acceptance Site (“CCAS”), located on 2nd and D Streets, NE. The CCAS will accept items from couriers with proper identification, e.g. , a valid driver's license, Monday through Friday between 8:30 a.m. and 4 p.m. The date of receipt as documented by CCAS will be considered the date of receipt by the Copyright Office for purposes of timely filing. Any claim received from CCAS which does not have a date stamp of March 1, 2004 or earlier, will be considered untimely for this filing period and rejected by the Copyright Office. Alternatively, if a party chooses to hand deliver its claim personally, it can still do so. However, it is possible that under the new system such deliveries may still be redirected to CCAS for processing. For this reason, claimants who choose to have their claims hand delivered to the Copyright Office are strongly encouraged to have their claims delivered by 4 p.m. on Friday, February 27, 2004. The Copyright Office cannot guarantee timely receipt of a hand delivered claim after this date.

The regulations governing the filing of DART claims require “the original signature of the claimant or of a duly authorized representative of the claimant,” 37 CFR 259.3(b), and do not allow claims to be filed by “facsimile transmission,” 37 CFR 259.5(d). This Notice, however, waives these provisions as set forth herein solely for the purpose of filing claims to the 2003 DART royalties. The Office is not, and indeed cannot, waive the statutory deadline for the filing of DART claims. See, United States v. Locke, 471 U.S. 84, 101 (1985). Thus, claimants are still required to file their claims by March 1, 2004.

Waiver of an agency's rules is “appropriate only if special circumstances warrant a deviation from the general rule and such deviation will serve the public interest.” Northeast Cellular Telephone Company v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990); see also, Wait Radio v. FCC, 418 F.2d 1153 (D.C. Cir. 1969), cert. denied, 409 U.S. 1027 (1972). Under ordinary circumstances, the Office is reluctant to waive its regulations. However, the continuing delays in the receipt of the mail constitutes a special circumstance which has led the Office to deviate from its usual mail processing procedures. Thus, given the delays in the receipt of mail, the Office believes that the public interest will best be served by waiving, for this filing period, the requirement that DART claims bear the original signature of the claimant or of a duly authorized representative of the claimant, when, and only when, such claim is filed online through the Office's Web site. See 67 FR at 5214.

The Office cannot waive the statutory deadline set forth in 17 U.S.C. 1007 and accept claims filed after March 1, 2004. See Locke, supra. Therefore, in order to serve the public interest the Office is providing claimants with alternative methods of filing, in addition to those set forth in the regulations, in order to assist them in timely filing their claims. By allowing claims to be filed online and by facsimile transmission, the Office is affording to all claimants an equal opportunity to meet the statutory deadline.

Entities potentially affected by this final action include sources in all industry groups. The majority of sources potentially affected are expected to be in the following groups.

Entities potentially affected by this final action also include State, local, and tribal governments that are delegated authority to implement these regulations.

The EPA has established an official public docket for this action under E-docket OAR-2002-0068 (Legacy Docket No. A-2002-04). The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include Confidential Business Information or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the EPA Docket Center, EPA West, Room B-102, 1301 Constitution Avenue, NW, Washington, DC 20460. The Docket Center is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is (202) 566-1744, and the telephone number for the Docket is (202) 566-1742. A reasonable fee may be charged for copying docket materials.

Electronic Access. You may access this Federal Register document electronically through the EPA Internet under the Federal Register listings at http://www.epa.gov/fedrgstr/.

Worldwide Web (WWW). In addition to being available in the docket, an electronic copy of today's final rule will also be available on the WWW through EPA's Technology Transfer Network (TTN). Following signature by the EPA Administrator, a copy of the rule will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules at: http://www.epa.gov/ttn/oarpg. The TTN provides information and technology exchange in various areas of air pollution control. If more information regarding the TTN is needed, call the TTN HELP line at (919) 541-5384.

Under section 307(b) of the CAA, judicial review of the final rule is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit February 23, 2004. Under section 307(d)(7)(B) of the CAA, only an objection to the rule that was raised with reasonable specificity during the period for public comment can be raised during judicial review. Moreover, under section 307(b)(2) of the CAA, the requirements established by today's final action may not be challenged separately in any civil or criminal proceeding we bring to enforce these requirements.

The information presented in this preamble is organized as follows:

The 1978 final rule also incorporated section 52.21 by reference into the SIP's for 54 programs (50 States, Puerto Rico, Virgin Islands, American Samoa, and Guam) as follows:

On August 7, 1980 (43 FR 52676), we amended our PSD regulations in response to the decision by the U.S. Court of Appeals for the D.C. Circuit in Alabama Power Company v. Costle, 636 F.2d. 323 (D.C. Cir. 1979). In addition to revising the PSD rules to respond to the court, this final rule disapproved a number of SIP's for PSD purposes and incorporated section 52.21 by reference into the Federal implementation plan portions of the SIP's for those programs. It also contained the same language concerning plan disapprovals that is contained in the December 31, 2002 provisions at section 52.21(a)(1), as well as the same language concerning incorporation by reference in the relevant subparts of part 52 ( see 45 FR 52741).

Today, we are making administrative amendments to the Federal implementation plan portions of State plans to update the reference to the PSD FIP that is already incorporated into these plans. When we proposed the RMRR regulation, we indicated that the rule would impact State and local authorities implementing the Federal PSD program through delegations. In the rule that was published in the Federal Register on October 27, 2003 (68 FR 61248), consistent with the proposal, we unambiguously announced our intent to finalize an update to the State plans that had delegated FIPs for PSD. Today's final rule makes administrative amendments to the these delegated programs to incorporate the provisions published in the Federal Register on October 27, 2003. This rule is similar in effect to the amendments published in the Federal Register on March 10, 2003 (68 FR 11316). In that action, EPA adjusted the citations incorporated into the Federal implementation plan portions of State plans so that all of the substantive amendments as of December 31, 2002 to the PSD regulations would become part of the Federal implementation plan portions of State plans. In today's action, we are further revising references for each FIP to incorporate the equipment replacement provision amendments into the Federal implementation plan portions of State plans.

Today's rule differs in one respect from the previous action to revise the Federal implementation portions of State plans. In the previous rule, we incorporated the relevant subsection 52.21 by referring to the paragraphs as “(a)(2) and (b) to (bb).” The purpose of that reference was to incorporate all the substantive provisions of 52.21. Today's rule adopts a different cross-referencing format—“40 CFR 52.21 except paragraph (a)(1).” Using this format, the Agency intends for the Federal implementation plan portions of State plans to automatically update whenever new sections are added to 52.21.

No tribal government currently has an approved tribal implementation plan (TIP) under the CAA to implement the NSR program. The Federal government is currently the NSR reviewing authority in Indian country. Pursuant to section 52.21(a)(1), the provisions of section 52.21 are applicable to all lands owned by the Federal Government and Indian Reservations located in each State. Therefore, we are incorporating the PSD regulations in section 52.21 by reference into the FIP portion of SIP's where the requirements of CAA sections 160-165 are not met for federally designated Indian lands. By this final action, we are not changing the authority for implementing and enforcing the Federal PSD permitting program for any sources located in Indian country. This incorporation by reference only applies to those sections of subparts B through DDD of part 52 that currently incorporate the PSD FIP program for Indian lands.

Today's final regulations are effective on December 26, 2003. This is consistent with the December 26, 2003 effective date for the changes to the Federal PSD program in section 52.21 that were published in the Federal Register on October 27, 2003. (See 68 FR 61248.)

Under Executive Order 12866, [58 FR 51735 (October 4, 1993)] the Agency must determine whether the regulatory action is “significant” and therefore subject to OMB review and the requirements of the Executive Order. The Order defines “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order

It has been determined that this rule is not a “significant regulatory action” under the terms of Executive Order 12866 and is therefore not subject to EO 12866 review.

The information collection requirements for the final rule published October 27, 2003 (68 FR 61248) has been submitted for approval to OMB under the requirements of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An ICR document has been prepared by EPA (ICR No. 1230.14), and a copy may be obtained from Susan Auby, U.S. Environmental Protection Agency, Office of Environmental Information, Collection Strategies Division (2822T), 1200 Pennsylvania Avenue, NW., Washington, DC 20460-0001, by e-mail at auby.susan@epa.gov, or by calling (202) 566-1672. A copy may also be downloaded off the Internet at http://www.epa.gov/icr. The information requirements included in ICR No. 1230.14 are not enforceable until OMB approves them.

The information that ICR No. 1230.14 covers is required for the submittal of a complete permit application for the construction or modification of all major new stationary sources of pollutants in attainment and nonattainment areas, as well as for applicable minor stationary sources of pollutants. This information collection is necessary for the proper performance of EPA's functions, has practical utility, and is not unnecessarily duplicative of information we otherwise can reasonably access. We have reduced, to the extent practicable and appropriate, the burden on persons providing the information to or for EPA. In fact, we expect that this rule will result in less burden on industry and reviewing authorities since it streamlines the process of determining whether a replacement activity is RMRR.

However, as we articulated in ICR No. 1230.14, we do anticipate an initial increase in burden for reviewing authorities as a result of the rule changes, to account for revising state implementation plans to incorporate these rule changes. As discussed above, we expect those one-time expenditures to be no more than $580,000 for the estimated 112 affected reviewing authorities. For the number of respondent reviewing authorities, the analysis uses the 112 reviewing authorities count used by other permitting ICR's for the one-time tasks (for example, SIP revisions).

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purpose of responding to the information collection; adjust existing ways to comply with any previously applicable instructions and requirements; train personnel to respond to a collection of information; search existing data sources; complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15. We will continue to present OMB control numbers in a consolidated table format to be codified in 40 CFR part 9 of the Agency's regulations, and in each CFR volume containing EPA regulations. The table lists the section numbers with reporting and recordkeeping requirements, and the current OMB control numbers. This listing of the OMB control numbers and their subsequent codification in the CFR satisfy the requirements of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ) and OMB's implementing regulations at 5 CFR part 1320.

The EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this final rule. The EPA has also determined that this rule will not have a significant economic impact on a substantial number of small entities. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) Any small business employing fewer than 500 employees (based on Small Business Administration's size definition); (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; or (3) a small organization that is any not-for-profit enterprise that is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's final rule on small entities, we have concluded that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the proposed rule on small entities” (5 U.S.C. sections 603 and 604). Thus, an agency may conclude that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect, on all of the small entities subject to the rule.

Today's rule will not have a significant economic impact on a substantial number of small entities because it will decrease the regulatory burden of the existing regulations and have a positive effect on all small entities subject to the rule. This rule improves operational flexibility for owners or operators of major stationary sources and clarifies applicable requirements for determining if a change qualifies as a major modification. We have therefore concluded that today's rule will relieve regulatory burden for all small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost effective or least burdensome alternative if the Administrator publishes with the final rule an explanation as to why that alternative was not adopted.

Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

We have determine that this rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any 1 year. There is no burden for State, local, and tribal agencies in order for this rule to be included in the SIP, as this final action directly incorporates the changes into the SIP. Moreover, these revisions will ultimately provide greater operational flexibility to sources permitted by the States, which will in turn reduce the overall burden of the program on State and local authorities by reducing the number of required permit modifications. In addition, we believe the rule changes will actually reduce the regulatory burden associated with the major NSR program by improving the operational flexibility of owners and operators and improving the clarity of requirements. Thus, today's rule is not subject to the requirements of sections 202 and 205 of the UMRA.

For the same reasons stated above, we have determined that this rule contains no regulatory requirements that might significantly or uniquely affect small governments. Thus, today's rule is not subject to the requirements of section 203 of the UMRA.

Executive Order 13132, entitled “federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

This final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. We do not expect this final rule to result in expenditures by the States. Today's final rules only apply in States that have been delegated the authority to implement the Federal PSD rules. Therefore, reviewing authorities will not incur a burden to revise their SIP's. Moreover, these revisions provide greater operational flexibility to sources permitted by the States, which will in turn reduce the overall burden of the program on State and local authorities by reducing the number of required permit modifications. Thus, Executive Order 13132 does not apply to this rule. Nevertheless, in the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, we specifically solicited comment on the proposed rule from State and local officials.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” We believe that this final rule does not have tribal implications as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

The EPA began considering potential revisions to the NSR rules in the early 1990's and proposed changes in 1996. The purpose of today's final rule is to add greater flexibility to the existing major NSR regulations. These changes will benefit both reviewing authorities and the regulated community by providing increased certainty as to when the requirements apply, and by providing alternative ways to comply with the requirements. Taken as a whole, today's final rule should result in no added burden or compliance costs and should not substantially change the level of environmental performance achieved under the previous rules.

No tribal government currently has an approved tribal implementation plan (TIP) under the CAA to implement the NSR program. The Federal government is currently the NSR reviewing authority in Indian country, thus tribal governments should not experience added burden, nor should their laws be affected with respect to implementation of this rule. Additionally, although major stationary sources affected by today's final rule could be located in or near Indian country and/or be owned or operated by tribal governments, such sources would not incur additional costs or compliance burdens as a result of this rule. Instead, the only effect on such sources should be the benefit of the added certainty and flexibility provided by the rule.

We recognize the importance of including tribal consultation as part of the rulemaking process. Although we did not include specific consultation with tribal officials as part of our outreach process on this final rule, which was developed largely prior to issuance of Executive Order 13175 and which does not have tribal implications under Executive Order 13175, we will continue to consult with tribes on future rulemakings to assess and address tribal implications, and will work with tribes interested in seeking TIP approval to implement the NSR program to ensure consistency of tribal plans with this rule.

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

This final rule is not subject to the Executive Order because it is not economically significant as defined in Executive Order 12866, and because the Agency does not have reason to believe the environmental health or safety risks addressed by this action present a disproportionate risk to children because we believe that this package as a whole will result in equal or better environmental protection than currently provided by the existing regulations, and do so in a more streamlined and effective manner.

This rule is not subject to Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355 (May 22, 2001)) because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Pub. L. No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical.

Voluntary consensus standards are technical standards (for example, materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This action does not involve technical standards. This final rule does not create new requirements but, rather, revises an existing permitting program by providing a series of program options that affected facilities may choose to adopt. These options will reduce the regulatory burden associated with the major NSR program by improving the operational flexibility of owners and operators, improving the clarity of requirements, and providing alternatives that sources may take advantage of to further improve their operational flexibility. Therefore, EPA did not consider the use of any voluntary consensus standards.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA submitted a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Therefore, this rule will be effective on December 26, 2003.

This Federal Register document is available from the Federal Register online database through GPO Access , a service of the U.S. Government Printing Office. The Web site address is: http://www.access.gpo.gov/nara/index.html .

In addition, the information in this final rule will be available soon after publication in the Federal Register on our MEDLEARN Web site: http://cms.hhs.gov/medlearn/refphys.asp .

The final rule, entitled “Medicare and Medicaid Programs; Physicians’ Referrals to Health Care Entities With Which They Have Financial Relationships,” published in the Federal Register on January 4, 2001 (66 FR 856), interpreted certain provisions of section 1877 of the Social Security Act (the Act). Under section 1877, if a physician or a member of a physician's immediate family has a financial relationship with a health care entity, the physician may not make referrals to that entity for the furnishing of designated health services (DHS) under the Medicare program, and the entity may not bill for the services, unless an exception applies. Many of the statutory and new regulatory exceptions that apply to compensation relationships require that the amount of compensation be “set in advance.” Section 411.354(d)(1) of the final rule defines the term “set in advance.”

The last sentence of § 411.354(d)(1) reads: “Percentage compensation arrangements do not constitute compensation that is ‘set in advance' in which the percentage compensation is based on fluctuating or indeterminate measures or in which the arrangement results in the seller receiving different payment amounts for the same service from the same purchaser.” Many of the comments we received regarding the January 4, 2001 physician self-referral final rule indicated that physicians are commonly paid for their professional services using a formula that takes into account a percentage of a fluctuating or indeterminate measure (for example, revenues billed or collected for physician services). According to the commenters, this compensation methodology is frequently used by hospitals, physician group practices, academic medical centers, and medical foundations. Several commenters pointed out that this aspect of the final rule, which is applicable to academic medical centers and medical foundations (among others), is inconsistent with the compensation methods permitted under the statute for many physician group practices and employed physicians (that is, neither section 1877(h)(4)(B)(i) of the Act nor section 1877(e)(2) of the Act contains the “set in advance” requirement). We understand that hospitals, academic medical centers, medical foundations and other health care entities would have to restructure or renegotiate thousands of physician contracts to comply with the language in § 411.354(d)(1) regarding percentage compensation arrangements.

Accordingly, we published a 1-year delay of the effective date of the last sentence in § 411.354(d)(1) in the Federal Register on December 3, 2001 (66 FR 60154), an additional 6-month delay in the effective date on November 22, 2002 (67 FR 70322), and a further 6-month delay on April 25, 2003 (68 FR 20347) in order to reconsider the definition of compensation that is “set in advance” as it relates to percentage compensation methodologies.

To avoid any unnecessary disruption to existing contractual arrangements while we consider modifying this provision, we are further postponing, for an additional 6 months, until July 7, 2004, the effective date of the last sentence of § 411.354(d)(1). This delay is intended to avoid disruptions in the health care industry, and potential attendant problems for Medicare beneficiaries, which could be caused by allowing the last sentence of § 411.354(d)(1) to become effective on January 7, 2004. In the meantime, compensation that is required to be “set in advance” for purposes of compliance with section 1877 of the Act may continue to be based on percentage compensation methodologies, including those in which the compensation is based on a percentage of a fluctuating or indeterminate measure. We note that the remaining provisions of § 411.354(d)(1) will still apply and that all other requirements for exceptions must be satisfied (including, for example, the fair market value and “volume and value” requirements.)

We ordinarily publish a notice of proposed rulemaking and invite public comment on the proposed rule. This procedure can be waived, however, if an agency finds good cause that the notice and comment rulemaking procedure is impracticable, unnecessary, or contrary to the public interest and if the agency incorporates in the rule a statement of such a finding and the reasons supporting that finding.

Our implementation of this action without opportunity for public comment is based on the good cause exception in 5 U.S.C. 553(b). We find that seeking public comment on this action would be impracticable and unnecessary. We believe public comment is unnecessary because we are implementing this additional delay of effective date as a result of our review of the public comments that we received on the January 4, 2001 physician self-referral final rule. As discussed above, we understand from those comments and the comments we received on the December 3, 2001 interim final rule that, unless we further delay the effective date of the last sentence of § 411.354(d)(1), hospitals, academic medical centers, and other entities will have to renegotiate numerous contracts for physician services, potentially causing significant disruption within the health care industry. We are concerned that the disruption could unnecessarily inconvenience Medicare beneficiaries or interfere with their medical care and treatment. We do not believe that it is necessary to offer yet another opportunity for public comment on the same issue in the limited context of whether to delay this sentence of the regulation. In addition, given the imminence of the January 7, 2004 effective date, we find that seeking public comment on this delay in effective date would be impracticable because it would generate uncertainty regarding an imminent effective date. This uncertainty could cause health care providers to renegotiate thousands of contracts with physicians in an effort to comply with the regulation by January 7, 2004 if the proposed delay is not finalized until after the opportunity for public comment. Thus, providing the opportunity for public comment could result in the very disruption that this delay of effective date is intended to avoid.

This is a summary of the Commission's Report and Order and Order on Reconsideration , in WC Docket No. 02-60 released On November 17, 2003. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC 20554. There was also a companion Further Notice of Proposed Rulemaking in WC Docket No. 02-60 released on November 17, 2003.

1. In this Report and Order and Order on Reconsideration , we modify our rules to improve the effectiveness of the rural health care support mechanism, which provides discounts to rural health care providers to access modern telecommunications for medical and health maintenance purposes. Because participation in the rural health care support mechanism has not met the Commission's initial projections, we amend our rules to improve the program, increase participation by rural health care providers, and ensure that the benefits of the program continue to be distributed in a fair and equitable manner. Specifically, we expand the scope of entities eligible to receive discounts, provide support for Internet access, and modify the way in which we calculate discounts to offer rural health care providers more flexibility. In addition, in the Order on Reconsideration , we deny Mobile Satellite Ventures Subsidiary's petition for reconsideration of the 1997 Universal Service Order , 62 FR 32862 (June 17, 1997). The actions we take encourage the development of public/private partnerships and other creative solutions to meet the needs of rural communities and increase participation in the rural health care mechanism.

2. The actions we take will also strengthen telemedicine and telehealth networks across the nation, help improve the quality of health care services available in rural America, and better enable rural communities to rapidly diagnose, treat, and contain possible outbreaks of disease. Moreover, enhancing access to an integrated nation-wide telecommunications network for rural health care providers will further the Commission's core responsibility to make available a rapid nation-wide network for the purpose of the national defense, particularly with the increased awareness of the possibility of biological or chemical terrorist attacks. Finally, these changes will further the Commission's efforts to improve its oversight of the operation of the program to ensure that the statutory goals of section 254 of the Telecommunications Act of 1996 are met without waste, fraud, or abuse.

3. We now further define the statutory term “public health care provider.” We conclude that dedicated emergency departments of rural for-profit hospitals that participate in Medicare should be deemed “public” health care providers eligible to receive prorated rural heath care support. We agree with commenters that this clarification is consistent with congressional intent and is necessary to give meaning to the term “public” health care provider under the rural health care program. Dedicated emergency departments in for-profit hospitals, including the emergency departments of critical access hospitals, are required, pursuant to the Emergency Medical Treatment and Labor Act (EMTALA), to provide medical screening examinations to all patients who present themselves and to stabilize or arrange for appropriate transfer of those patients with emergency conditions. Thus, such providers are “public” in nature by virtue of the persons they are required, pursuant to EMTALA, to examine and/or treat for emergency medical conditions.

4. Moreover, we now determine that dedicated emergency departments in for-profit rural hospitals constitute “rural health clinics.” As UVA notes, in most communities, emergency departments are the only ambulatory care entities that serve the public on a 24-hour a day, 7-day a week basis. In many instances, emergency departments of rural for-profit hospitals and critical access hospitals are the only health care providers in rural areas serving the medical needs of the community. Dedicated emergency departments typically provide the types of medical services often provided in traditional health clinics. Therefore, we find that dedicated emergency departments in rural for-profit hospitals should be eligible to receive prorated discounts as “public” “health providers,” and more specifically as “public” “rural health clinics.” It is necessary to clarify the definition of “rural health clinic” in this way to promote timely access to acute specialty healthcare services, chronic disease management programs and other preventive services essential to public health and safety. These entities are generally the initial point of entry into the healthcare system for any person suffering the consequences of a severe catastrophe or accident and constitute a vital segment of the health care community, particularly in the event of a national public health emergency.

5. Additionally, as suggested by several commenters, given the realities of rural health care providers in offering quality health care services in rural areas, we clarify the entities listed in section 254(h)(7)(B) that qualify as rural “health care providers.” We conclude that entities listed in section 254(h)(7)(B) include non-profit entities that function as one of the listed entities on a part-time basis. Pursuant to this modification, non-profit entities that provide ineligible services, even on a primary basis, would be able to receive prorated support commensurate with their provision of eligible rural health care services. For example, if a doctor operated a rural health clinic on a non-profit basis in a rural community one day per week or during evenings in the local community center, that community center would be able to receive prorated support, because it serves as a “rural health clinic” on a part-time basis. Similarly, if a non-profit community mental health center also operated as a for-profit pharmacy, that center would also be able to receive prorated support as a part-time “community mental health center.” Our goal in implementing this proposal is two-fold—to encourage the development of public/private partnerships and other creative solutions to meet the needs of rural communities, and to increase participation in the rural health care support mechanism.

6. We decline to expand the definition of health care provider to include nursing homes, hospices, and other long-term care facilities. Congress specifically listed seven categories of entities eligible for support under this program in section 254(h)(7)(B). Given this specific listing, we find that if Congress had intended to include nursing homes, hospices, and other long-term care facilities as health care providers, it would have explicitly done so in the statute. The Commission is not authorized to amend the statute to add categories to the definition, as suggested by commenters. Thus, we affirm the Commission's previous decision that nursing homes, hospices, and other long-term care facilities are ineligible for support, whether operated on a for-profit or non-profit basis. However, because Congress did specifically list seven categories of entities qualifying as health care providers, the Commission may clarify the types of entities that fit within those seven categories. Therefore, consistent with our clarification that entities that serve as a non-profit rural health care clinic on a part-time basis are “health care providers,” part-time non-profit rural health care clinics are eligible for prorated support, even when associated with a nursing home, hospice, or other long-term care facility.

7. In addition, at this time, we decline to expand the definition of rural health care provider to include any rural, non-profit health care entity with a certified Medicare and/or Medicare provider number as proposed by commenters. The record lacks sufficient information to identify the types of entities that would become eligible under this proposal, as Medicare/Medicaid supports a wide range of services, drugs, and products. We are concerned that by including such entities within the definition of “health care provider” we may exceed our statutory authority. Moreover, with the information in the record we are unable to determine the potential impact on the demand for support.

8. Given the rapid development of the Internet's capacities, the proliferation of applications available on the Internet, and the increase in the number of Internet users since the 1997 Universal Service Order was issued, we believe that it is now appropriate to provide funding for Internet access to rural health care providers. In particular, we conclude that support equal to twenty-five percent of the monthly cost for any form of Internet access reasonably related to the health care needs of the facility should be provided to rural health care providers. The definition for Internet access that we adopt here is intended to provide rural health care providers considerable flexibility to utilize the resources available over the Internet that will assist them in fulfilling their health care needs.

9. We agree with commenters that the Internet can serve as an invaluable resource, by providing on-line courses in health education, medical research, follow-up care, regulatory information such as compliance with the Health Insurance Portability and Accountability Act of 1996, video conferencing, web-based electronic benefit claim systems including on-line billing, and other crucial business functions. The incredible potential of the Internet to provide access to such a breadth of medical information may also help reduce isolation in rural communities. In light of the development of medical applications for the Internet since 1997, we conclude that encouraging access to this information service will improve the level of care available in rural areas.

10. Furthermore, health care information shared over the Internet may enable rural health care providers to diagnose, treat, and contain possible outbreaks of disease or respond to health emergencies. We agree with commenters that Internet access provides a vital link to information and instantaneous communications in times of natural disasters and public health emergencies. National connectivity of telehealth and telemedicine networks could also promote the national defense by serving as vehicles for rapid, secure communications in times of emergency, due to outbreaks of disease or biological and chemical attacks.

11. Accordingly, for purposes of the rural health care support mechanism only, we define “eligible Internet access” as “an information service that enables rural health care providers to post their own data, interact with stored data, generate new data, or communicate over the World Wide Web.” Eligible Internet access provides access to the world-wide information resource of the Internet, and includes all features typically provided by Internet service providers to provide adequate functionality and performance. To qualify as Internet access under the definition we adopt today for the rural health care support mechanism, transmissions must traverse the Internet in some fashion. Internet access may provide transport of digital communications using any Internet-based protocols, including encapsulation of data, video, or voice.

12. We specifically decline to adopt the definition of Internet access currently used in the schools and libraries support mechanism. Under those rules, Internet access includes: This definition thus specifically precludes support for features that provide the capability to generate or alter the content of information. We believe adopting such a limitation for the rural health care program would significantly undercut the utility of providing support for Internet access to rural health care providers, because the ability to alter and interact with information over the Internet is precisely the feature that could facilitate improved medical care in rural areas. Under the rural health care support mechanism, we will provide support for Internet access, as long as it is reasonably related to the health care needs of the facility, and it is the most cost-effective method of meeting those needs. We will not provide support, however, for the purchase of internal connections, computer equipment or other telecommunications equipment, even when used to access the Internet, because such items are not information services.

13. We conclude that a flat discount percentage of twenty-five percent off the cost of monthly Internet access will assist health care providers seeking to purchase Internet access, while also providing incentives for rural health care providers to make prudent economic decisions concerning their telemedical needs. We agree with commenters that a flat discount, analogous to the operation of the schools and libraries support mechanism, will lead to greater predictability and fairness among health care providers. A flat discount is consistent with section 254(b)(5), which requires “a specific, sufficient, and predictable mechanism * * * because it limits the amount of support that each health care provider may receive per month to a reasonable level.” A flat discount is also easy to administer. Although it is difficult to estimate the impact of providing support for Internet access service due to the wide range of costs between and among the various types of Internet access services, we agree with commenters' projections that our actions today regarding Internet access are unlikely to result in program demand in excess of the cap. We act conservatively by choosing a twenty-five percent flat discount initially because it will provide an incentive for rural health care providers to choose a level of service appropriate to their needs, will provide more certainty that demand for Internet access support will not exceed the annual funding cap, and will deter wasteful expenditures. Furthermore, we find that a twenty-five percent discount is reasonable because provision of support to health care providers under the rural health care support mechanism is not contingent on economic need, similar to the twenty-five percent discount provided to the least disadvantaged rural schools and libraries. As we gain more experience with this aspect of the support mechanism, we will determine whether an increase in the discount is necessary or advisable. Finally, we disagree with WorldCom that support for Internet access must be based on the difference between urban and rural rates, because section 254(h)(2)(A) of the Act, the statutory provision dealing with information services, makes no reference to an urban-rural comparison, unlike section 254(h)(1)(A). The urban-rural comparison for telecommunications services that WorldCom cites to in section 254(h)(1)(A) does not apply to information services such as Internet access. Provision of Internet access and other information services is governed by section 254(h)(2)(A).

14. Consistent with the Commission's long-standing principles of competitive neutrality, rural health care providers may receive discounts for the most cost-effective form of Internet access, regardless of the platform. Thus, a provider could opt for dial-up Internet access or broadband Internet access over wireline, cable, wireless, or satellite platforms. Health care providers must certify, however, that the particular Internet access service selected is the most cost-effective way of meeting the facility's health care needs. We believe this policy will provide flexibility to rural health care providers to purchase the most appropriate offerings for their health care needs and may also facilitate the deployment of facilities-based broadband deployment in rural areas.

15. Moreover, we will continue to provide support for toll charges incurred by health care providers that cannot obtain toll-free access to an ISP, limited to the lesser of $180.00 or 30 hours of usage per month. The 1997 Universal Service Order stated that the proliferation of ISPs and the competitive marketplace “soon should eliminate the need for such support.” However, we are persuaded by commenters' showings that the need for such support still exists. Providing support for limited toll charges will place those providers who cannot reach an ISP without incurring toll charges on the same footing as other health care providers with respect to Internet access.

16. We decline at this time to provide support for services other than telecommunications services, Internet access, and limited toll charges. In the NPRM , 67 FR 34653 (May 15, 2002) the Commission sought comment on whether we should establish new policies to enhance access to advanced telecommunications and information services for health care providers consistent with the scope of our authority under section 254(h)(2)(A). Commenters suggested that telecommunications equipment, surcharges imposed by statewide or regional networks, internal connections, and health care providers' travel costs should be eligible for universal service support. We find that providing support for telecommunications equipment, surcharges, and travel costs exceeds the scope of our statutory authority under section 254(h), because these items are neither telecommunications nor information services. In addition, we believe there is insufficient information in the record to provide support for internal connections. Moreover, given our experience with the schools and libraries support mechanism, we are concerned that providing support for internal connections may place an undue burden on the rural health care support mechanism.

17. We alter our current policy to allow rural health care providers to compare the urban and rural rates for functionally similar services as viewed from the perspective of the end user. We agree with commenters that our current policy of comparing technically similar services does not take into account that certain telecommunications services offered in urban areas are not always available in rural areas. In particular, new technologies are often first deployed in urban areas, and such services may be less expensive than services in rural areas based on older technologies. This modification to our rules will better effectuate the mandate of Congress to ensure comparable services for rural areas, as provided in section 254 of the Act, by allowing rural health care providers to benefit from obtaining telecommunications services at rates equivalent to those in urban areas. Eligible health care providers must purchase telecommunications services and compare their service to a functionally equivalent telecommunications service in order to receive this discount.

18. Accordingly, we create “safe harbor” categories of functionally equivalent services based on the advertised speed and nature of the service. For purposes of the rural health care support mechanism only, we establish the following advertised speed categories as functionally equivalent: low—144-256 kbps; medium—257-768 kbps; high—769-1400 kbps (1.4 mbps); T-1—1.41-8 mbps; T-3—8.1-50 mbps. We will also consider whether a service is symmetrical or asymmetrical when determining functional equivalencies. Telecommunications services will be considered functionally similar when operated at advertised speeds within the same category (low, medium, high, T-1, or T-3) and when the nature of the service is the same (symmetrical or asymmetrical). For example, a symmetrical fractional T-1 service operating at an advertised speed of 144 kbps would be considered functionally similar to a symmetrical DSL transmission service with an advertised speed of 256 kbps. By developing “safe harbor” categories of functionally equivalent speeds, we hope to minimize the disparity in rates of services available in rural and urban areas in an administratively easy fashion. We will update these categories, as needed, to reflect technological developments.

19. We now revise section 54.605 of our rules to allow rural health care providers to compare rural rates to urban rates in any city with a population of at least 50,000 in the state, as opposed to the nearest city with a population of 50,000. The Commission originally required comparison to the nearest city with 50,000 people, in part, because they believed health care providers would likely connect to a point in that nearest large city. Based on our experience with the program and information in the record, health care providers may not always find the needed expertise in the nearest large city. Allowing comparison to rates in any city in the state acknowledges that rural health care providers may communicate with experts in other cities in the state. Such action also should allow rural health care providers to benefit from the lowest rates for services in the State, thereby providing additional support to develop better telemedicine links. Verizon asserts that, under this policy, rural health care providers may receive better rates than those available in some urban areas of the state. However, we believe that the public interest in providing more flexibility in utilizing telemedicine services and quality health care facilities outweighs any minimal advantage gained by rural health care providers over those health care providers located in certain urban areas. Further, we do not believe the urban rates within states differ so significantly that revising this rule will increase demand to the extent that we may risk exceeding the funding cap of $400 million.

20. We revise the Maximum Allowable Distance (MAD) to equal the distance between the rural health care provider and the farthest point on the jurisdictional boundary of the largest city in that State. Accordingly, for distance-based charges actually incurred, we modify our rules to provide support to rural health care providers to any location that exceeds the SUD and is less than this revised MAD. As the Commission indicated in the NPRM, our experience to date suggests that limiting rural heath care providers to discounts for distance-based charges to the nearest city of 50,000 or more may not be adequate for purposes of creating a comprehensive telehealth and telemedicine network. Further, commenters contend that the current MAD assumes that the rural health care provider will connect with specialists in the nearest urban area, which may not necessarily have the essential complement of specialists to provide telemedicine services. We believe, in most instances, calculating the MAD as described will provide more support for distance-based charges than our current rules, without creating additional administrative burdens for the Administrator. In addition, this modification should provide rural health care providers access to high levels of care and greater flexibility in developing appropriate telehealth networks.

21. Although commenters generally favor eliminating the MAD, we decline to do so at this time. We are concerned that eliminating the MAD could result in wasteful expenditures for the program, as providers could connect to more distant locations when a closer one would suffice. Expanding the MAD to the largest city in a state should provide support sufficient to enable rural health care providers to connect with health care facilities with a wide range of medical expertise, without introducing the potential for waste associated with eliminating the MAD or making the MAD equal to the furthest point in the state. Moreover, we decline to expand the MAD to equal the distance between the health care provider and the nearest center of tertiary care. Although this proposal may have a more direct relationship to health care services, we agree with commenters that the nearest point of tertiary care may not provide the required specialized expertise. In addition, this proposal would require the identification and continued monitoring of all tertiary care centers throughout the Nation, which would impose significant administrative burdens upon the Administrator of the program.

22. We revise our policy to allow rural health care providers to receive discounts for satellite services even where alternative terrestrial-based services may be available. As suggested by commenters, however, these discounts will be capped at the amount providers would have received if they purchased functionally similar terrestrial-based alternatives. Providers seeking discounts for satellite services will be required to provide to the Administrator documentation of the urban and rural rates for the terrestrial-based alternative services. We believe imposing a cap on support for satellite service is necessary because satellite services are often significantly more expensive than terrestrial-based services. Thus, pursuant to these changes, where rural health care providers opt for more expensive satellite-based services when a cheaper terrestrial-based alternative is available, the provider, and not the support mechanism, will be responsible for the additional cost. For example, if a health care provider pays $100 per month for satellite service, the rural rate for a comparable wireline service plan is $60 per month, and the urban rate is $40 per month, the health care provider would receive $20 per month towards the satellite service. We conclude this approach furthers the principle of competitive neutrality and recognizes the role that satellite services may play in rural areas without unduly increasing the size of the fund. We also seek further comment in the accompanying Further Notice on whether additional rule changes should be adopted to facilitate support for mobile rural health care providers.

23. Although we continue to recognize that using urban rates within a State as the benchmark for reasonable rates may be ill-suited to certain insular areas, we believe that the proposal of some commenters to permit the comparison of insular rural rates to the nearest urban area outside the State is inconsistent with the statutory language set forth in section 254(h)(1)(A). As the Commission indicated in the Fifteenth Order on Reconsideration, 64 FR 66778 (November 30, 1999), Congress could have provided discounts for telecommunications services that connect rural health care providers to the nearest major hospital within or outside the State. Congress, however, explicitly provided that rates should be compared to the urban rate in that State. We continue to believe section 254(h)(1)(A) precludes us from designating an urban area outside of the State as the benchmark for comparison for remote, insular areas.

24. We also disagree with American Samoa Telecommunications Authority that section 254(h)(2)(A) authorizes the Commission to provide support for telecommunications links between American Samoa to an urban center outside the territory, such as Honolulu, Hawaii, without regard to the urban-rural rate difference. Section 254(h)(2)(A) authorizes the Commission to take action to increase access to advanced telecommunications and information services. Support for telecommunications services, however, is provided subject to section 254(h)(1)(A) and as discussed herein, requires an urban to rural comparison within the State. Although we do not believe we can grant the request of providers in insular areas, we do provide support for Internet access for all eligible rural health care providers, including those in insular areas, which we believe will functionally provide significant support to health care providers in insular areas.

25. Because entities that engage in both eligible and ineligible activities or that collocate with an entity that provides ineligible services will now be eligible for prorated support, we adopt rules requiring such providers to allocate their discounts to prevent discounts from flowing to ineligible activities or providers of services. Prorated discounts will be provided commensurate only with entities' eligible activities. The method of cost allocation chosen by an applicant should be based on objective criteria, and reasonably reflect the eligible usage of the facilities. Thus, if telecommunications facilities are used jointly for eligible and ineligible purposes, the allocation should be based on the percentage of time the facility is used for eligible purposes or some other method that reasonably reflects eligible usage. Health care providers must keep documentation explaining their allocation methods for five years and present that information to Universal Service Administrative Company upon request. We also direct USAC to evaluate the allocation methods selected by program participants in the course of its audit activities to ensure program integrity. Additionally, we codify the requirement that health care providers must maintain records for their purchases of supported services for at least five years sufficient to document their compliance with all Commission requirements.

26. To illustrate the general principle of discount allocation, we provide several “safe harbor” examples of allocation methods. First, if a dedicated emergency department in a for-profit rural hospital shares access to a T-3 with the rest of the hospital, and the T-3 is used seventy-five hours per week related to EMTALA-emergency care and the education of health care professionals who work in the dedicated emergency department and fifty hours per week related to other hospital use, the T-3 would be used for eligible purposes sixty percent of the time (seventy-five hours of use by emergency department divided by 125 total hours of use by the entire hospital). Therefore, the eligible dedicated emergency department would receive sixty percent of the difference between the urban and rural rate for the T-3. Second, another dedicated emergency department in a for-profit rural hospital that shares access to a T-3 with the rest of the hospital, might choose to allocate discounts based on employee hours. For example, if the emergency department staff, including on-call physicians, is staffed at 3,360 hours per week (twenty employees covering 168 hours per week), and the rest of the hospital is staffed at 4,000 hours per week (100 employees covering 40 hours per week), the emergency department would receive forty-six percent of the difference between the urban and rural T-3 rate (3,360 emergency staff hours divided by 7,360 total staff hours). Third, if a non-profit rural health clinic operates in a local community center for five hours one evening per week and uses the community center's T-1 line, and the community center's normal operating hours are 10 a.m.-10 p.m., Monday through Saturday, the T-1 would be used for eligible purposes seven percent of the time (five hours divided by eighty-four open hours in a week). Therefore, the eligible non-profit rural health clinic would receive seven percent of the difference between the urban and rural rate for the T-1. Fourth, if a dedicated emergency department in a for-profit rural hospital shares access to a T-1 with the rest of the hospital, and the dedicated emergency department occupies 250 square feet and the hospital occupies 2,500 square feet, the T-1 would be used for eligible purposes ten percent of the time (250 square feet divided by 2,500 square feet). Therefore, the eligible dedicated emergency department would receive ten percent of the difference between the urban and rural rate for the T-1. If a rural health care provider can document that it adopted an allocation method consistent with one of these four examples, we will consider the method compliant with our requirements. Rural health care providers may choose a different allocation method, but will bear the burden of demonstrating, in the event of an audit or otherwise, that the chosen method was based on objective criteria and reasonably reflects the eligible usage of the facilities.

27. Conversely, when services are used solely by an eligible entity for eligible purposes, no allocation would be necessary. For example, if a T-1 is located solely in the dedicated emergency room and is used only for medical or educational purposes, the dedicated emergency room would be able to receive the full discount based on the difference between the urban and rural rate. Similarly, if there is a phone line in a private room at the community center that is dedicated exclusively to a rural health care clinic, no allocation would be necessary because the personnel staffing the part-time rural health care clinic would be the only ones to use the phone.

28. Since the NPRM was released, USAC has streamlined the application process significantly in response to the numerous comments submitted in this proceeding on this issue. For example, USAC has implemented electronic filing and e-certification for all forms and has arranged for electronic forms to be filled automatically with the previous year's information for repeat on-line filers. USAC has also created a database of urban rates on its Web site. As a result, a health care provider can now bypass the arduous step of having to retrieve this information from its carrier. In addition, USAC has significantly expanded its outreach efforts, such as by sending mailings to carriers and health care providers to alert them to changes in the program, holding monthly conference calls for carriers and health care providers to ask questions and raise concerns, and setting up a toll-free access number where carriers and health care providers can call at their convenience. Finally, USAC has eliminated the form submitted by service providers, FCC Form 468, by combining the relevant information into FCC Form 466, which is submitted by applicants. This modification to the reimbursement process has reduced to a great extent the interval between receipt of service and payments to service providers, thereby mitigating commenters' concerns.

29. We believe USAC's efforts to ease the burdens of applying to the program have been exemplary, as further evidenced by the number of completed applications received by USAC in Funding Year 2003 compared to Funding Year 2002. Nevertheless, in the Further Notice of Proposed Rulemaking, we seek comment on ways in which USAC could further streamline the application process and expand outreach efforts. In addition, we note that the Commission, through the Consumer & Governmental Affairs Bureau, will endeavor through its educational and outreach efforts, to ensure that those most likely affected are informed about the actions taken in this Order. In addition to making fact sheets and other informational materials available for dissemination through the Commission's Web site, the Commission will include the dissemination of such information as part of its on-going, grassroots outreach efforts directed at rural America and undertaken in coordination with other federal and state agencies.

30. Based on our estimates and the comments we have received, we continue to believe that our current rules requiring pro-rata distribution of funds if requests exceed the cap, are the most effective and equitable means of distributing limited funds in accordance with the goals and purposes of the statute. Therefore, we agree with the majority of commenters that the current rules should be maintained. We note that the rules adopted in this Order could increase the level of discounts requested in a year, so applicants are encouraged to submit applications during the filing window to secure their universal service funding. We disagree with the commenter that suggested we prioritize universal service support for telecommunication services over information services. We do not think such a measure is necessary at this time because program demand has never approached the cap. Moreover, prioritization would add another level of unnecessary administrative complexity to the support mechanism.

31. We agree with commenters that the current rules are adequate to ensure that health care providers select the most cost-effective services. Our certification requirements, combined with the requirement that health care providers remain responsible for a significant portion of service costs ( i.e. , the urban rate of telecommunications services and 75% of Internet access) will ensure that rural health care providers make prudent economic decisions. We also agree with commenters that applicants should not be required to use the lowest-cost technology because factors other than cost, such as reliability and quality, may be relevant to fulfill their telemedical needs.

32. In the NECA Order, 62 FR 41294 (August 1, 1997), the Commission directed the National Exchange Carrier Association (NECA) to establish the Rural Health Care Corporation to administer the rural health care support mechanism. Subsequently, the Commission directed the Rural Health Care Corporation to be merged into a division of USAC. In light of the Commission's prior actions, we hereby amend our rules to replace all references to the “Rural Health Care Corporation” with the “Rural Health Care Division.” We also revise § 54.609(a)(1)(i) to conform to the Fifteenth Order on Reconsideration. We also adopt several other non-substantive rule changes to improve the clarity of the rules.

33. Funding Year 2003 for the rural health care program ends June 30, 2003, and Funding Year 2004 begins July 1, 2004. Because we do not wish to introduce changes to the program in the middle of a funding year, the modifications to the program adopted in this Order will be implemented beginning with Funding Year 2004. We direct USAC to take the necessary operational steps to implement the improvements to the program adopted herein for Funding Year 2004.

34. Consistent with the policy objectives underlying our decision, we deny, to the extent indicated herein, Mobile Satellite Ventures' (MSV) petition for reconsideration of the 1997 Universal Service Order. We decline to revise our policy, as MSV suggests, to subsidize satellite service at the same price as terrestrial mobile service. We agree with Verizon that equalizing these rates could undercut competition and competitive neutrality. Although we agree that MSV and similar carriers provide valuable services to rural areas, particularly insular areas unserved by wireline carriers, we are concerned that equalizing the rates for satellite and terrestrial mobile service could significantly increase program demand and disadvantage those carriers already providing functionally similar services at more competitive prices. Accordingly, we deny MSV's petition for reconsideration to the extent indicated herein.

35. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rulemaking. The Commission sought written public comments on the proposals in the NPRM, including comment on the IRFA. The Commission received seventy-five comments, fourteen reply comments, and six ex partes in response to the NPRM. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

36. The Commission is required by section 254 of the Act to promulgate rules to implement the universal service provisions of section 254. On May 8, 1997, the Commission adopted rules that reformed its system of universal service support mechanisms so that universal service is preserved and advanced as markets move toward competition. Among other things, the Commission adopted a mechanism to provide discounted telecommunications services to public or non-profit health care providers that serve persons in rural areas. Over the last few years, important changes in the rural health community prompt us to review the rural health care universal service support mechanism. In this Report and Order, we adopt several modifications to the Commission's rules to improve the effectiveness of the rural health care universal service support mechanism and increase utilization of this mechanism by rural health care providers.

37. Specifically, in the Report and Order, we clarify the scope of entities eligible to receive discounts. We conclude that dedicated emergency departments of rural for-profit hospitals that participate in Medicare should be deemed “public” health care providers eligible to receive prorated rural heath care support. We believe this clarification is necessary to give meaning to the term “public” health care provider under the rural health care program. Moreover, we also determine that dedicated emergency departments in for-profit rural hospitals constitute “rural health clinics.” These entities are generally the initial point of entry into the healthcare system for any person suffering the consequences of a severe catastrophe or accident and constitute a vital segment of the health care community, particularly in the event of a national public health emergency. Additionally, we conclude that entities listed in section 254(h)(7)(B) include non-profit entities that function as one of the listed entities on a part-time basis. Pursuant to this modification, non-profit entities that provide ineligible services, even on a primary basis, would be able to receive prorated support commensurate with their provision of eligible rural health care services. Our goal in implementing this proposal is two-fold—to encourage the development of public/private partnerships and other creative solutions to meet the needs of rural communities, and to increase participation in the rural health care support mechanism. Further, because entities that engage in both eligible and ineligible activities or that collocate with an entity that provides ineligible services will now be eligible for prorated support, we also adopt rules requiring such providers to allocate their discounts to prevent discounts from flowing to ineligible activities or providers of services.

38. We also provide funding for Internet access for rural health care providers. We conclude that support equal to twenty-five percent of the monthly cost for any form of Internet access reasonably related to the health care needs of the facility should be provided to rural health care providers. We believe that the Internet can serve as an invaluable resource, by providing on-line courses in health education, medical research, follow-up care, regulatory information such as compliance with Health Insurance Portability and Accountability Act of 1996, video conferencing, web-based electronic benefit claim systems including on-line billing, and other crucial business functions. The incredible potential of the Internet to access such a breadth of medical information may also help reduce isolation in rural communities. Furthermore, health care information shared over the Internet may enable rural health care providers to diagnose, treat, and contain possible outbreaks of disease or respond to health emergencies. Thus, in light of the development of medical applications for the Internet since 1997, we conclude that encouraging access to this information service will improve the level of care available in rural areas.

39. We also alter our current policy to allow rural health care providers to compare the urban and rural rates for functionally similar services as viewed from the perspective of the end user. This modification to our rules will better effectuate the mandate of Congress to ensure comparable services for rural areas, as provided in section 254 of the Act, by allowing rural health care providers to benefit from obtaining telecommunications services at rates equivalent to those in urban areas.

40. We also revise § 54.605 of our rules to allow rural health care providers to compare rural rates to urban rates in any city with a population of at least 50,000 in the state, as opposed to the nearest city with a population of 50,000. Allowing comparison to rates in any city in the state acknowledges that rural health care providers may communicate with experts in other cities in the state. Such action also should allow rural health care providers to benefit from the lowest rates for services in the State, thereby providing additional support to develop better telemedicine links.

41. Additionally, we revise the maximum allowable distance (MAD) to equal the distance between the rural health care provider and the farthest point on the jurisdictional boundary of the largest city in that State. Accordingly, for distance-based charges, we modify our rules to provide support to rural health care providers to any location (within or outside of the state) that exceeds the SUD and is less than this revised MAD. We believe, in most instances, calculating the MAD as described will provide more support for distance-based charges than our current rules, without creating additional administrative burdens for the Administrator. In addition, this modification should provide rural health care providers access to high levels of care and greater flexibility in developing appropriate telehealth networks.

42. Lastly, we revise our policy to allow rural health care providers to receive discounts for satellite services even where alternative terrestrial-based services may be available. However, these discounts will be capped at the amount providers would have received if they purchased functionally similar terrestrial-based alternatives. We conclude this approach furthers the principle of competitive neutrality and recognizes the role that satellite services may play in rural areas without unduly increasing the size of the fund.

43. No petitions for reconsideration or comments were filed directly in response to the IRFA or on issues affecting small businesses.

44. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

45. A small organization is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of 1992, there were approximately 275,801 small organizations. The term “small governmental jurisdiction” is defined as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” As of 1997, there were approximately 87,453 government jurisdictions in the United States. This number includes 39,044 counties, municipal governments, and townships, of which 27,546 have populations of fewer than 50,000 and 11,498 counties, municipal governments, and townships have populations of 50,000 or more. Thus, we estimate that the number of small government jurisdictions must be 75,955 or fewer. Small entities potentially affected by the proposals herein include small rural health care providers, small local health departments and agencies, and small eligible service providers offering discounted services to rural health care providers, including telecommunications carriers and ISPs.

46. Section 254(h)(5)(B) of the Act defines the term “health care provider” and sets forth seven categories of health care providers eligible to receive universal service support. Although SBA has not developed a specific size category for small, rural health care providers, recent data indicate that there are a total of 8,297 health care providers, consisting of: (1) 625 “post-secondary educational institutions offering health care instruction, teaching hospitals, and medical schools;” (2) 866 “community health centers or health centers providing health care to migrants;” (3) 1633 “local health departments or agencies;” (4) 950 “community mental health centers;” (5) 1951 “not-for-profit hospitals;” and (6) 2,272 “rural health clinics.” We have no additional data specifying the numbers of these health care providers that are small entities. In addition, non-profit entities that act as “health care providers” on a part-time basis will now be eligible to receive prorated support. However, we have no data specifying the number of potential new applicants. Consequently, using the data we do have, we estimate that there are 8,297 or fewer small health care providers potentially affected by the actions proposed in this Notice.

47. As noted, non-profit businesses and small governmental units are considered “small entities” within the RFA. In addition, we note that census categories and associated generic SBA small business size categories provide the following descriptions of small entities. The broad category of Ambulatory Health Care Services consists of further categories and the following SBA small business size standards. The categories of providers with annual receipts of $6 million or less consists of: Offices of Dentists; Offices of Chiropractors; Offices of Optometrists; Offices of Mental Health Practitioners (except Physicians); Offices of Physical, Occupational and Speech Therapists and Audiologists; Offices of Podiatrists; Offices of All Other Miscellaneous Health Practitioners; and Ambulance Services. The category of Ambulatory Health Care Services providers with $8.5 million or less in annual receipts consists of: Offices of Physicians; Family Planning Centers; Outpatient Mental Health and Substance Abuse Centers; Health Maintenance Organization Medical Centers; Freestanding Ambulatory Surgical and Emergency Centers; All Other Outpatient Care Centers, Blood and Organ Banks; and All Other Miscellaneous Ambulatory Health Care Services. The category of Ambulatory Health Care Services providers with $11.5 million or less in annual receipts consists of: Medical Laboratories; Diagnostic Imaging Centers; and Home Health Care Services. The category of Ambulatory Health Care Services providers with $29 million or less in annual receipts consists of Kidney Dialysis Centers. For all of these Ambulatory Health Care Service Providers, census data indicate that there is a combined total of 345,476 firms that operated in 1997. Of these, 339,911 had receipts for that year of less than $5 million. In addition, an additional 3414 firms had annual receipts of $5 million to $9.99 million; and additional 1475 firms had receipts of $10 million to $24.99 million; and an additional 401 had receipts of $25 million to $49.99 million. We therefore estimate that virtually all Ambulatory Health Care Services providers are small, given SBA's size categories. In addition, we have no data specifying the numbers of these health care providers that are rural and meet other criteria of the Act.

48. The broad category of Hospitals consists of the following categories and the following small business providers with annual receipts of $29 million or less: General Medical and Surgical Hospitals, Psychiatric and Substance Abuse Hospitals; and Specialty Hospitals. For all of these health care providers, census data indicate that there is a combined total of 330 firms that operated in 1997, of which 237 or fewer had revenues of less than $25 million. An additional 45 firms had annual receipts of $25 million to $49.99 million. We therefore estimate that most Hospitals are small, given SBA's size categories. In addition, we have no data specifying the numbers of these health care providers that are rural and meet other criteria of the Act.

49. The broad category of Nursing and Residential Care Facilities consists of the following categories and the following small business size standards. The category of Nursing and Residential Care Facilities with annual receipts of $6 million or less consists of: Residential Mental Health and Substance Abuse Facilities; Homes for the Elderly; and Other Residential Care Facilities. The category of Nursing and Residential Care Facilities with annual receipts of $8.5 million or less consists of Residential Mental Retardation Facilities. The category of Nursing and Residential Care Facilities with annual receipts of less than $11.5 million consists of Nursing Care Facilities and Continuing Care Retirement Communities. For all of these health care providers, census data indicates that there are a combined total of 18,011 firms that operated in 1997. Of these, 16,165 or fewer firms had annual receipts of below $5 million. In addition, 1205 firms had annual receipts of $5 million to $9.99 million, and 450 firms had receipts of $10 million to $24.99 million. We therefore estimate that a great majority of Nursing and Residential Care Facilities are small, given SBA's size categories. In addition, we have no data specifying the numbers of these health care providers that are rural and meet other criteria of the Act.

50. The broad category of Social Assistance consists of the category of Emergency and Other Relief Services and small business size standard of annual receipts of $6 million or less. For all of these health care providers, census data indicates that there are a combined total of 37,778 firms that operated in 1997. Of these, 37,649 or fewer firms had annual receipts of below $5 million. An additional 73 firms had annual receipts of $5 million to $9.99 million. We therefore estimate that virtually all Social Assistance providers are small, given SBA's size categories. In addition, we have no data specifying the numbers of these health care providers that are rural and meet other criteria of the Act.

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

52. Total Number of Telephone Companies Affected. The United States Bureau of the Census (the “Census Bureau”) reports that, at the end of 1997, there were 6,239 firms engaged in providing telephone services, as defined therein. This number contains a variety of different categories of carriers, including local exchange carriers, interexchange carriers, competitive access providers, cellular carriers, mobile service carriers, operator service providers, pay telephone operators, PCS providers, covered SMR providers, and resellers. It seems certain that some of those 6,239 telephone service firms may not qualify as small entities because they are not “independently owned and operated.” For example, a PCS provider that is affiliated with an interexchange carrier having more than 1,500 employees would not meet the definition of a small business. It seems reasonable to conclude, therefore, that 6,239 or fewer telephone service firms are small entity telephone service firms that may be affected by the decisions and rules adopted in this Report and Order.

53. Local Exchange Carriers, Interexchange Carriers, Competitive Access Providers, Operator Service Providers, Payphone Providers, and Resellers. Neither the Commission nor SBA has developed a definition particular to small local exchange carriers (LECs), interexchange carriers (IXCs), competitive access providers (CAPs), operator service providers (OSPs), payphone providers or resellers. The closest applicable definition for these carrier-types under SBA rules is for telephone communications companies other than radiotelephone (wireless) companies. The most reliable source of information regarding the number of these carriers nationwide of which we are aware appears to be the data that we collect annually on the Form 499-A. According to our most recent data, there are 1,335 incumbent LECs, 349 CAPs, 204 IXCs, 21 OSPs, 758 payphone providers and 454 resellers. Although it seems certain that some of these carriers are not independently owned and operated, or have more than 1,500 employees, we are unable at this time to estimate with greater precision the number of these carriers that would qualify as small business concerns under SBA's definition. Consequently, we estimate that there are fewer than 1,335 incumbent LECs, 349 CAPs, 204 IXCs, 21 OSPs, 758 payphone providers, and 541 resellers that may be affected by the decisions and rules adopted in this Report and Order.

54. Internet Service Providers. The SBA has developed a small business size standard for “On-Line Information Services,” NAICS code 514191. This category comprises establishments “primarily engaged in providing direct access through telecommunications networks to computer-held information compiled or published by others.” Under this small business size standard, a small business is one having annual receipts of $18 million or less. Based on firm size data provided by the Bureau of the Census, 3,123 firms are small under SBA's $18 million size standard for this category code. Although some of these Internet Service Providers (ISPs) might not be independently owned and operated, we are unable at this time to estimate with greater precision the number of ISPs that would qualify as small business concerns under SBA's small business size standard. Consequently, we estimate that there are 3,123 or fewer small entity ISPs that may be affected.

55. Satellite Service Carriers. The SBA has developed a definition for small businesses within the category of Satellite Telecommunications. According to SBA regulations, a small business under the category of Satellite communications is one having annual receipts of $12.5 million or less. According to SBA's most recent data, there are a total of 371 firms with annual receipts of $9,999,999 or less, and an additional 69 firms with annual receipts of $10,000,000 or more. Thus, the number of Satellite Telecommunications firms that are small under the SBA's $12 million size standard is between 371 and 440. Further, some of these Satellite Service Carriers might not be independently owned and operated. Consequently, we estimate that there are fewer than 440 small entity ISPs that may be affected by the decisions and rules of the present action.

56. Wireless Service Providers. The SBA has developed a definition for small businesses within the two separate categories of Cellular and Other Wireless Telecommunications or Paging. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. According to the Commission's most recent Telephone Trends Report data, 1,495 companies reported that they were engaged in the provision of wireless service. Of these 1,495 companies, 989 reported that they have 1,500 or fewer employees and 506 reported that, alone or in combination with affiliates, they have more than 1,500 employees. We do not have data specifying the number of these carriers that are not independently owned and operated, and thus are unable at this time to estimate with greater precision the number of wireless service providers that would qualify as small business concerns under the SBA's definition. Consequently, we estimate that there are 989 or fewer small wireless service providers that may be affected by the rules.

57. Cable and Other Subscription Programming or Other Program Distribution and Related Entities. The SBA has developed small business size standards which include all such companies generating $12.5 million or less in revenue annually. These standards cover two categories of Cable Services: Cable and Other Subscription Programming; and Cable and Other Program Distribution.

58. Cable and Other Subscription Programming. This industry comprises establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers. According to Census Bureau data for 1997, there were a total of 234 firms in this category, total, that had operated for the entire year. Of this total, 188 firms had annual receipts of under $10 million. Consequently, the Commission estimates that the majority of providers in this service category are small businesses that may be affected by the rules and policies adopted herein.

59. Cable and Other Program Distribution. This category includes cable systems operators, closed circuit television services, direct broadcast satellite services, multipoint distribution systems, satellite master antenna systems, and subscription television services. According to Census Bureau data for 1997, there were a total of 1,311 firms in this category, total, that had operated for the entire year. Of this total, 1,180 firms had annual receipts of under $10 million and an additional 52 firms had receipts of $10 million or more but less than $25 million. Consequently, the Commission estimates that the majority of providers in this service category are small businesses that may be affected by the rules and policies adopted herein.

60. The Report and Order adopts several modifications to the Commission's rules to improve the effectiveness of the rural health care universal service support mechanism and increase utilization of this mechanism by rural health care providers. As articulated, in the Report and Order , we clarify the scope of entities eligible to receive discounts. Specifically, because entities that engage in eligible and ineligible activities or that collocate with an entity that provides ineligible services will now be eligible for prorated support, we adopt rules requiring such providers to allocate their discounts to prevent discounts from flowing to ineligible activities or providers of services. Health care providers are required to maintain documentation explaining their allocation methods for five years and present that information to USAC upon request. The method of cost allocation chosen by an applicant should be based on objective criteria and reasonably reflect the eligible usage of the facilities. Additionally, health care providers must maintain for their purchases of supported services procurement records for at least five years sufficient to document their compliance with all Commission requirements.

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

62. In this Report and Order , we amend our rules to improve the program, increase participation by rural health care providers, and ensure that the benefits of the program continue to be distributed in a fair and equitable manner. Specifically, we expand the scope of entities eligible to receive discounts, provide support for Internet access, and modify the way in which we calculate discounts to offer rural health care providers more flexibility. The actions taken in the Report and Order help improve the quality of health care services available in rural America, and better enable rural communities to rapidly diagnose, treat, and contain possible outbreaks of disease. Thus, rural health care providers stand to benefit directly from the modifications to our rules and policies.

63. The Commission will send a copy of the Report and Order and Order on Reconsideration including this FRFA, in a report to be sent to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Report and Order and Order on Reconsideration including this FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the Report and Order and Order on Reconsideration and FRFA (or summaries thereof) will also be published in the Federal Register .

64. The action contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose new or modified reporting and recordkeeping requirements or burdens on the public. Implementation of these new or modified reported and recordkeeping requirements will be subject to approval by the Office of Management and Budget (OMB) as prescribed by the Act, and will go into effect upon announcement in the Federal Register of OMB approval.

65. Alternative formats (computer diskette, large print, audio recording, and Braille) are available to persons with disabilities by contacting Brian Millin at (202) 418-7426 voice, (202) 418-7365 TTY, or bmillin@fcc.gov . This Report and Order can also be downloaded in Microsoft Word and ASCII formats at <http://www.fcc.gov/ccb/universalservice/highcost> .

66. For further information, contact Shannon Lipp at (202) 418-7954 or Regina Brown at (202) 418-0792 in the Telecommunications Access Policy Division, Wireline Competition Bureau.

67. Pursuant to the authority contained in sections 1, 4(i), 4(j), 201-205, 214, 254, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 201-205, 214, 254, and 403, this Report and Order and Order on Reconsideration is adopted.

68. Pursuant to the authority contained in section 405, of the Communications Act of 1934, as amended, 47 U.S.C. 405, and 0.291 and 1.429 of the Commission's rules, Mobile Satellite Ventures Subsidiary's Petition for Clarification or Reconsideration is denied to the extent indicated herein.

69. Part 54 of the Commission's rules, is amended, effective January 23, 2004 except for §§ 54.609(a)(2), 54.609(A)(3)(ii), and 54.621(a) which contain information collection requirements that have not been approved by the Office of Management and Budget (OMB). The Commission will publish a document in the Federal Register announcing the effective date of those sections.

70. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order and Order on Reconsideration , including the Final Regulatory Flexibility Analysis and Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

On March 6, 2000, the Commission released a Report and Order , published at 65 FR 38432, June 21, 2002, in CC Docket No. 98-67; FCC 00-56. The information collections contained in the Report and Order were approved by OMB on June 20, 2000. The OMB approval of the information collections contained in the Report and Order was announced in the Federal Register on June 29, 2000. See 65 FR 40093, June 29, 2000.

Pursuant to the Paperwork Reduction Act of 1995, Public Law 104-13, an agency may not conduct or sponsor a collection of information unless it displays a currently valid control number. Notwithstanding any other provisions of law, no persons shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act (PRA) that does not display a valid control number. Questions concerning the OMB control numbers and expiration dates should be directed to Les Smith, Federal Communications Commission, (202) 418-0217. The OMB Control Number is 3060-0463.

In the Report and Order , the Commission amended its rules governing the delivery of TRS to expand the kinds of relay services available to consumers and to improve the quality of relay service. The Commission also amended its rules to better conform to the statutory mandate that TRS must be “functionally equivalent” to voice telecommunications service to the extent possible. Among other things, these rules are intended to improve the speed at which calls are answered and conversations relayed.

Atlantic tunas are managed under the dual authority of the Magnuson-Stevens Act and ATCA. ATCA authorizes the Secretary of Commerce (Secretary) to implement binding recommendations of ICCAT. The authority to issue regulations under the Magnuson-Stevens Act and ATCA has been delegated from the Secretary to the Assistant Administrator for Fisheries, NOAA (AA).

Background information regarding these regulatory changes was provided in the preamble to the proposed rule (68 FR 63747, November 10, 2003), and is not repeated here. By this final rule, NMFS announces the new Purse seine start date of July 15; the new Harpoon category closure date of November 15 or when the quota is reached, whichever comes first; the General category closure date of January 31 or when the quota is reached, whichever comes first; and new large medium BFT tolerances for the Purse seine and Harpoon categories. The large medium tolerance limit for each vessel in the Purse seine category is 15 percent by weight of that vessel's annual landings, and the large medium tolerance for the Harpoon category is two BFT per vessel per day.

Several sections of regulatory text have been modified to be consistent with the change to the Purse seine category start date, specifically, § 635.28 (a)(2) and §§ 635.71(b)(10) and (b)(17). In addition, the final rule also includes a provision to delay the Purse seine category start date to no later than August 15 should it further assist in achieving the objective of the rule to reduce gear conflicts or overlap between fishing categories.

Comment 1 - NMFS received numerous comments in favor of a change in the Purse seine category start date from August 15 to July 15. Many commenters supported the July 15 Purse seine category start date for a variety of reasons including providing a greater length of time over which to spread Purse seine category landings, providing more time for purse seine vessels to catch their quota, and providing more opportunity to fish when the weather is better. In supporting the July 15 start date, some commenters stated that as the bulk of General category landings now occur later in the year than they had occurred when the August 15 purse seine start date was originally established, the date should be adjusted to July 15. Commenters stated that this change would be consistent with the original purpose of a purse seine start date that reduces overlap between fishing categories. One commenter also stated that currently the peak General category and Purse seine category landings coincide, which results in negative economic impacts for all in the fishery. This commenter noted that although a change to July 15 may negatively affect the Harpoon category, the proposed increase in allowance of two large mediums per vessel per day for the Harpoon category may mitigate these negative impacts by providing more of an opportunity for the Harpoon category to attain its quota by July 15, prior to the commencement of the Purse seine category fishing season.

Response - The final action establishes a start date for the Purse seine category of July 15. The intent of this action is to maximize positive economic impacts to the BFT fishery as a whole while minimizing negative impacts to the Harpoon category. Increasing the length of the season for the Purse seine category should help alleviate the overlap of large catches in the late summer and fall by allowing for the distribution of purse seine catches throughout more of the season, should improve market prices in the Purse seine and General categories, and would minimize gear conflict on the water. The increase of the Harpoon category large medium retention limit may mitigate impacts by improving the ability of the Harpoon category to land the annual quota, perhaps prior to the commencement of the Purse seine category season. In addition, the final rule includes a provision for delaying the start date to no later than August 15 if a delay would further reduce gear conflicts or overlap between the different categories. Any adjustment to the start date would be filed with the Office of the Federal Register but would not be filed less than 14 calendar days prior to July 15. Because there are only five vessels in the Purse seine category, NMFS will be able to provide actual notice to the affected fishermen.

Comment 2 - NMFS also received comments suggesting alternative start dates for the Purse seine category as well as other commercial fishing categories. Some commenters opposed to a July 15 Purse seine category start date supported the status quo August 15 date, and stated that the slower, late fall market could probably better withstand the fiscal impacts of large purse seine catches. One commenter preferred a start date for the Purse seine category later than August 15 and creation of an earlier start date than June 1 for the commercial handgear categories to reduce overlap. One commenter specifically requested an earlier season opening date of the General and Harpoon categories on May 1. A few commenters supported a purse seine start date earlier than July 15, and a number of commenters specifically requested that all categories start on the same date. One commenter requested that the purse seine season be open year-round.

Response - NMFS analyses for this action determined that with the status quo purse seine start date of August 15, the early fall market for the overall fishery suffers from reduced ex-vessel prices that are temporally associated with the height of Purse seine and General category landings. A July 15 start date is intended to shift purse seine landings to earlier in the season and improve ex-vessel prices during the early fall, which is when the General category harvests most of its quota. Alternative dates do not appear to meet the objectives of the rulemaking to assist overall fishery prices and avoid overlap between the Purse seine and General categories. A start date later than August 15 would shorten the season and could thereby negatively affect the ability of the Purse seine category to harvest its quota, which contradicts one objective of this final rule. A start date earlier than July 15 would allow for a longer period of time during which purse seine and harpoon landings would overlap and therefore could increase negative impacts to the Harpoon category, which are somewhat mitigated by the increase in the large medium tolerance for that category. Harmonizing all commercial fishery start dates to the same date would undermine the objective of this action to minimize gear conflicts on the water and to improve ex-vessel prices. Opening the start date for any fishery prior to June 1 would require adjustment of the fishing year, which must be accomplished through an FMP amendment. A year-round fishery for the Purse seine category was not considered as an alternative since it does not address the need to reduce gear conflicts identified in the original purpose for this action. However, as it is likely that market conditions and landing rates will vary among categories and from fishing year to fishing year the final rule includes a provision to provide some flexibility for adjusting the commencement of the Purse seine start date to no later than August 15.

Comment 3 - Several commenters opposed a July 15 start date because it was inconsistent with a current industry agreement regarding operations of spotter aircraft in the purse seine fishery. For this reason, one commenter supported a July 28 start date. The commenter noted that this fishing year was relatively calm regarding spotter plane activity and that the fishery would benefit from a permanent regulation regarding a July 28 start date for purse seine operations and their associated spotter aircraft.

Response - The 2003 fishing year was the first year for implementation of an industry agreement regarding the use of spotter planes throughout the industry. The July 28 start date for purse seine vessels and associated spotter aircraft established in the industry agreement is not an enforceable provision of NMFS regulations and could change based on revised industry arrangements. Consequently, it could be problematic to link season openings to actions not in NMFS control. NMFS recognizes the benefits of industry communication and cooperation on the issue of use of spotter planes in the fishery, and encourages the industry to continue to work together towards a constructive arrangement. The final rule includes a provision to provide some flexibility to the commencement of the Purse seine start date and any influence of spotter planes on landings rates could be considered as part of the deliberations to delay the opening from July 15 to a more appropriate date but no later than August 15.

Comment 4 - Several comments were received regarding quota allocation to the Purse seine category, the impact of purse seine landings on the market, and timing of BFT market forces on ex-vessel prices in general. Several commenters stated that the purse seine fishery interfered with both the General and Harpoon category fisheries, that the Purse seine category should be eliminated altogether, and the quota redistributed among the other commercial categories with higher ex-vessel value landings. These comments noted that there has been ample opportunity for purse seine vessels to catch available quota, i.e., if they had chosen to fish off southern states later in the season, and that purse seine fishing operations this year tended to disrupt the biology and behavior of the fish as well as other traditional fishing patterns and agreements. A commenter stated that shifting the start date to avoid market gluts was not going to help as the volume of fish landed by purse seiners would flood the market regardless of when they were landed. Several commenters noted that adjustment of start and opening dates among the categories would not necessarily assist prices of ex-vessel landings as the markets in Japan were dominated by imports from other countries. In addition, they noted that Japan had business interests in farm raised BFT in pens around the world and could control the flow of tuna from these pens depending on the Japanese domestic market need. A few commenters also mentioned that there was now a strong U.S. domestic market for BFT and that controlling or even banning imports of BFT into the United States could provide stronger prices for U.S. domestic fishermen for BFT destined for internal domestic markets.

Response - One of the purposes of this action is to provide modest changes to the current timing of several commercial categories to assist in increasing economic yield in the fishery overall. To achieve this objective, NMFS analyzed means of decreasing the overlap of the General category and Purse seine category fisheries to improve market conditions and reduce conflicts as these two fishing categories are responsible for the greatest amount of landings in the BFT fishery. This action was intended to provide modest adjustments, pending development of an FMP amendment, to address allocation issues that have arisen. The final rule provides flexibility for fine tuning of the commencement of the Purse seine category between July 15 and August 15 to further assist in achieving the objective of reducing gear conflicts and overlap between fishing categories based on, among others, data from landings and market conditions. NMFS recently published a Notice of Intent to prepare an FMP amendment (68 FR 40907; July 9, 2003) which will address BFT allocation as well as other issues. Elimination of the Purse seine category would require an FMP amendment as well. Information from ICCAT's Bluefin Statistical Document Program indicates that Japan imports BFT from many countries and that the U.S. domestic market for BFT has grown over the past several years. Controlling this international flow of product to improve United States domestic prices is beyond the purview of this rulemaking and would involve international trade negotiations with careful consideration of consequences to existing trade treaties and agreements. While this action will not be able to address BFT imports, it will provide modest adjustments to alleviate overlap in sectors of the U.S. Atlantic BFT fisheries, which could contribute to improved ex-vessel prices and reduce gear conflicts on the water.

Comment 5 - Comments were generally in favor of the November 15 end date for the Harpoon category. Commenters supported implementation of the end date as a means of preserving the Harpoon category quota for the traditional fishery. A few comments were opposed to establishing an end date. One comment stated it was creating two different standards for categories within the fishery especially when NMFS was considering extending the General category season. A few commenters requested that the end date be established on November 1.

Response - The final action includes a November 15 end date for the Harpoon category. This action is intended to maintain the Harpoon category quota for the traditional Gulf of Maine fishery, which upholds the purpose of the 1980 action that established the Harpoon category (45 FR 40118; June 13, 1980). Unlike other categories, the original intent of this fishery and quota allocation was for a particular geographic sector of traditional harpoon fishermen. November 15 is the approximate date by which most or all BFT have migrated out of the Gulf of Maine area. By closing the fishery on November 15, fishermen in other areas will not be able to land BFT against the Harpoon category quota. However, use of a harpoon to harvest BFT will continue to be available to all fishermen under the General category when the General category season is open. NMFS did not consider a November 1 end date because BFT landings in New England have occurred in mid-November, and November 15 attempts to provide the traditional fishery with all available opportunities to harvest the quota while still avoiding investment in a fishery outside the New England area.

Comment 6 - NMFS received several comments in favor of extending the General category end date. Many commenters supported the temporal extension of the General category fishery to include a winter fishery off south Atlantic states, and noted the important economic contribution this fishery makes to the local economy. Several commenters noted that they had invested in this fishery by purchasing equipment and needed more certain annual access to the fishery as opposed to depending upon potential remaining late season quota. One commenter stated that the 2003 quota increase from ICCAT would provide for this action with minimal impact on the summer and fall New England General category fishery. Other commenters noted that this would address some of the concerns raised by the North Carolina Division of Marine Fisheries petition, such as providing more fair and equitable access to BFT when they are available off the south Atlantic coast. A number of commenters requested that the January 31 season end date be applicable for the 2003 fishing year, i.e., for January 2004.

Response - The final action includes a January 31 end date for the General category season. The intent of this action is to more broadly distribute General category fishing opportunities both temporally and geographically. Although there may be a small negative impact on General category fishermen in the northern areas of the fishery, NMFS agrees that the recent increase in the ICCAT quota as well as NMFS' continuing management of the fishery with annual specifications and inseason actions will minimize these impacts. In addition, northern area General category vessels could mitigate impacts by traveling south to participate in the winter fishery. This action addresses, in part, a petition for rulemaking submitted by the North Carolina Division of Marine Fisheries to provide a reasonable opportunity for southern fishermen to harvest BFT when they are available in the southern area. NMFS published a Federal Register notice requesting public comment on the petition (67 FR 69502; November 18, 2002), and received 28 comments which ranged from support to opposition. Other aspects of the petition relate to changes in the BFT quota allocations, which would require an FMP amendment process with further analyses and input from the HMS Advisory Panel (AP) and the public. The AP generally supported a late season commercial General category fishery for southern Atlantic states, depending upon the details and impacts on other fishery participants. In particular, AP members were generally supportive of using some proportion of the additional BFT quota allocated by ICCAT in 2002 towards meeting the objectives of the petition. The AP will revisit BFT allocation issues at its next meeting scheduled for February 9 - 11, 2004.

Comment 7 - Several commenters were opposed to extending the General category season and recommended alternative General category closure dates. A few commenters stated that the fishery off North Carolina was a new fishery rather than a traditional fishery, and thus should not be considered in setting the General category season and no extension should be provided. Several commenters proposed an alternative end date for the General category season of November 30, and requested that the General category retention limits early in the season be increased in order to provide northern area fishermen with a greater opportunity to harvest the quota. Several comments stated concern that if the General category was open during December, there may not be enough quota for the extended fishery in January and thus preferred opening the General category for either December or January but not both. Other comments suggested providing for a distinct set-aside quota and time period for a North Carolina fishery.

Response - The intent of this action is to more broadly distribute General category fishing opportunities both temporally and geographically and provide for an increase in optimum yield for the fishery overall. At the time of development of the HMS FMP, the General category quota tended to be harvested prior to the migration of BFT to waters off the southern states. However, since that time, the fishery has changed and General category quota has been available later into the season. Unlike the Harpoon category quota, the General category quota was not established for use solely by a traditional New England fishery. The potential increase in gross revenues provided by a winter General category fishery could help maximize optimum yield for the BFT fishery overall. Reallocation of quota among time periods or establishing set-aside quotas for particular areas would require an FMP amendment and is beyond the scope of this rulemaking. These issues may be addressed in HMS FMP Amendment Two which is currently under development. A Notice of Intent to prepare this amendment was published in the Federal Register on July 9, 2003 (68 FR 40907).

Comment 8 - Comments were generally in favor of the increase in tolerance limit for the Harpoon category. Commenters stated that this fishery is selective, that it is fair and equitable to adjust the tolerance if doing so for the Purse seine category, and an increase in the tolerance limit would not result in an increase in dead discards. A few commenters opposed any tolerance of large medium BFT. One commenter noted that the decrease in availability of giant BFT and any concerns regarding additional mortality of large medium were insignificant when compared to mortality of small fish in the eastern Atlantic and Mediterranean.

Response - The final action increases the tolerance limit for large medium BFT retention in the Harpoon category to two fish per vessel per day. The intent of this action is to balance mortality of pre-spawning fish with the requirement to provide a reasonable opportunity for the Harpoon category to attain its annual quota while avoiding dead discards. Although NMFS stated at the proposed rule stage that logbooks were not expected to be implemented, it is clear that additional information about at-sea operations is needed in order to better evaluate the affect of tolerance limits on dead discards and overall mortality of pre-spawning BFT. NMFS will pursue collection of such information through the implementation of previously approved vessel logbook and/or observer programs. To avoid duplication, existing programs for other fisheries such as the Northeast Region Vessel Trip Report will be evaluated relative to developing HMS specific reporting mechanisms.

Comment 9 - NMFS received comments both in favor of and opposed to the proposed increase in tolerance limit for the Purse seine category. Some commenters were opposed to any increase in tolerance limit, while others opposed the proposed tolerance in favor of a higher one.

Many commenters who were in favor of the change in tolerance limits stated that purse seine vessels would not target smaller fish as a result of a tolerance limit increase. Some commenters also noted that the mortality of undersized fish in the purse seine fishery was negligible when compared with mortality of small fish in the east Atlantic or even mortality of small fish in the U.S. Angling category. Commenters stated that increasing tolerance was particularly relevant when one considered the new data regarding mixing rates between east and west Atlantic stocks, and the uncertainty of BFT size and age at maturity.

Some commenters opposed to an increase in tolerance limit stated that the preferred alternative (15 percent by weight) would result in purse seine vessels targeting smaller fish, and could result in an increase of dead discards. Many commenters requested a thorough study of the effect of any increase in tolerance limits on dead discards. A commenter stated that purse seine vessels already had many advantages over other fishing categories, and that perhaps larger mesh nets would reduce catch of undersized BFT. Another commenter noted that there is a higher mortality associated with release of undersized BFT from purse seine nets compared to those released alive off hook-and-line. This commenter could only support up to a 50-percent increase if observers were deployed on all vessels; otherwise both trip and annual limits should remain the same. At least one commenter specifically requested that a trip limit remain in place for the Purse seine category.

Several commenters suggested a higher tolerance limit than that proposed, and some suggested waiving the tolerance limit all together and proposed a 73-inch (185.4 cm) minimum size for the Purse seine category. A commenter stated that there is a large potential for discards and wasted mortality because of the preponderance of schools of mixed BFT sizes, and suggested that the tolerance be increased to 50 percent by weight as a form of mitigation. This commenter stated that approximately 315 more large medium BFT would be harvested at a 25 percent tolerance limit than a 15 percent tolerance limit, and that 315 more BFT would be biologically insignificant. Several commenters broadened this request to establish 73-inch as a minimum size for all commercial fishing categories. Several commenters emphasized the need for the United States to ensure all possible quota is utilized in order to support domestic needs at ICCAT negotiations. A number of commenters referred to the 25-percent tolerance limit provided in year 2003 exempted fishing permits (EFPs), and encouraged NMFS to continue with what they considered a successful approach.

Response - The final action includes an increase in tolerance for large medium BFT in the Purse seine category of up to 15 percent of landings (by weight). The intent of this action is to balance mortality of large medium BFT while increasing the ability of the Purse seine category to catch the annual quota. NMFS has determined that only a modest increase in large medium tolerance is appropriate at this time, in light of the uncertainty of the effect of a greater tolerance limit on overall mortality of large mediums including dead discards, stock rebuilding, and dead discards of undersized BFT. NMFS estimates that an increase in the tolerance limit of up to 50 percent would result in an additional direct mortality of approximately 1,066 more large medium BFT over the current status quo direct mortality of 251 fish, i.e. over a four-fold increase.

Data from the 2003 season, which relaxed tolerance limits for the purse seine fishery to 25 percent under EFPs, show that purse seine vessels were able to increase landings over 2002 levels with the increased tolerance limit. Further evaluation of this data, in addition to socio-economic data to be provided from the 2003 EFP fishery, will assist NMFS with future management of this fishery sector, including compliance and enforcement of revised tolerance limits. NMFS will be collecting data on dead discards and other variables in this fishery through previously approved programs including vessel logbooks and/or observers. Additional data regarding discard rates and mortality of large medium BFT in the Purse Seine category will help to determine the biological impacts of adjusting the tolerance limits.

Comment 10 - One commenter requested that electronic comments via email be accepted in the future.

Response - NMFS has implemented pilot programs which accepted electronic comments for past rulemakings with some success. The agency intends to pursue the use of electronic media for public comment in the near future.

Comment 11 - One commenter noted that reciprocity should be established for commercial fishermen from other states to fish in North Carolina waters.

Response - The issue of fishing access in state waters by out of state fishermen is a matter of state jurisdiction and not under the purview of NMFS. However, NMFS notes that the State of North Carolina has provided reciprocity for commercial BFT fishermen from other states. In order to fish commercially for BFT in North Carolina, BFT commercial fishermen from other states are now able to obtain a “license to sell” which allows them to sell their catch in North Carolina. Out of state vessels are also allowed to fish within state waters with a permit from North Carolina Division of Marine Fisheries.

Comment 12 - A commenter suggested providing a “mulligan” or tolerance limit of some set number of undersized fish per vessel in all categories that would allow vessels to retain and land accidentally caught undersized fish and reduce discards. The commenter stated that this approach could also help reduce incentives to sell these undersized fish illegally, and that the Japanese market has a preference for these smaller sized fish and offers relatively higher prices per pound.

Response - Adjusting size limits or tolerance limits for reasons other than improving the ability of the Purse seine and Harpoon categories to harvest their respective quotas was beyond the objective for this action. A more comprehensive approach towards eliminating dead discards will be addressed in HMS Amendment Two.

Comment 13 - Comments were received regarding decreasing quotas for all species; eliminating the use of gill nets, seine nets, longlines, and harpoons; and including environmentalists on agency panels. One commenter noted that an ecosystem imbalance caused by a reduction in the number of herring available in New England waters has resulted in a decreased availability of BFT in New England. Many commenters opposed the recent closing of the BFT Angling category.

Response - These issues are outside the scope of the current rulemaking. NMFS has issued a notice of intent for preparation of an amendment to the HMS FMP (68 FR 40907; July 9, 2003) which could address many of these issues, as well as others, during the FMP amendment process. The Herring fishery is managed under the Herring Fishery Management Plan and is currently in the amendment process. The New England Fisheries Management Council is the responsible council for the Herring FMP amendment and has analyzed several alternatives for action that include considerations of the impact of herring on elements of the ecosystem such as predator- prey relationships. The BFT Angling category was closed on November 17 (68 FR 64990, November 18, 2003) because of recent data indicating an over-harvest of this category in 2002. NMFS is reviewing these data to determine if further action is necessary.

This final rule is published under the authority of the Magnuson-Stevens Act and ATCA. The AA has determined that the regulations contained in this final rule are necessary to implement the recommendations of ICCAT and to manage the domestic Atlantic HMS fisheries. NMFS has determined that these regulations are consistent with the Magnuson-Stevens Act, ATCA and ICCAT recommendations.

This action relieves a restriction by extending the BFT General category end date until January 31, thus providing this category with approximately 30 more days in the fishing season. The General category closed on December 10 because the General category had attained its quota. However, there is additional quota available in other categories that NMFS intends to transfer into the General category in January 2004, after updating and reviewing landings data. This action will re-open the General category to fishing through January 31 to allow for the harvest of the additional quota. Therefore, pursuant to 5 U.S.C. 553(d)(1), the 30-day delayed effectiveness period is not applicable to Section 635.27(a)(1)(i)(c), the General category end date provision.

NMFS prepared an Initial Regulatory Flexibility Analysis (IRFA) for the proposed rule and submitted it to the Chief Counsel for Advocacy of the Small Business Administration. No comments were received on the IRFA concerning the economic impact of this final rule. A summary of the FRFA is provided below.

The analysis for the FRFA examines the impacts of the alternatives for adjusting the Purse seine category start date, establishing a Harpoon category end date, adjusting the General category end date, and adjusting the retention limit for large medium BFT in the Harpoon and Purse seine category fisheries on small entities. The purpose of this final action is to ensure the BFT fishery is managed consistently with the objectives of the HMS FMP and its implementing regulations, applicable statutes including the Magnuson-Stevens Act and ATCA, and the 1998 ICCAT Rebuilding Plan for western Atlantic BFT.

The analysis for the FRFA assesses the impacts of the various alternatives on the vessels that participate in the BFT fisheries, all of which are considered small entities. This final action would affect vessels in three permit categories, namely the Purse seine, Harpoon, and General categories. The gross revenues for 2002, and number of vessels to date for 2003 for each category are as follows: General category, $13.9 million, 6,797 vessels; Purse seine category, $3.0 million, 5 vessels; and the Harpoon category, $0.5 million, 59 vessels.

Three alternatives were analyzed for the adjustment of the Purse seine category start date, including the no action/status quo alternative of an August 15 start date, the same start date as all other categories - June 1, and the selected alternative of a July 15 start date. These alternatives were evaluated to determine their ability to improve optimum yield and ex-vessel prices for the Purse seine and General categories while minimizing negative impacts to other commercial categories, specifically the Harpoon category. Because of the various factors that affect ex-vessel prices for BFT (i.e., supply, quality, etc.), the exact effect of different Purse seine category season start dates on ex-vessel prices is unknown. NMFS estimated these impacts by assuming that the amount of product on the market was the primary factor affecting ex-vessel prices.

Under the no action alternative, both the General and Purse seine categories appear to be negatively affected by depressed ex-vessel prices which appears to result from a mid-season glut of BFT on the market. However, under this alternative the Harpoon category benefits with higher ex-vessel prices early in the season before the Purse seine category commences.

Another alternative, opening the Purse seine category on June 1, could shift Purse seine category landings to earlier in the year and result in positive impacts for the Purse seine and General categories by relieving the mid-season market glut and distributing landings more uniformly over the fishing year. However, the Harpoon category could suffer the most negative impacts under this alternative because of the overall net increase in early season landings resulting from the overlap with the Purse seine category fishery season that would increase by 76 days. This overlap would occur during the time period when the Harpoon category traditionally experiences the best ex-vessel prices and on average annually lands the bulk (87 percent) of its product.

The selected alternative of a July 15 start date appears to minimize the negative impacts on the Harpoon category by reducing by more than half the amount of overlap with the Purse seine category season relative to the June 1 start date alternative, while still reducing the mid-season market glut, which should positively impact Purse seine and General category ex-vessel prices. Under this alternative, increase in overlap with the Harpoon category would be reduced to 30 days and such overlap would occur during the time period when the Harpoon category averages approximately 26 percent of its gross revenues annually. Due to the large amount of landings, gross revenues and numbers of participants attributed to the Purse seine and General category commercial BFT sectors, this alternative is expected to provide the greatest positive impacts to the BFT fishery as a whole, even though the smaller Harpoon category may experience slightly negative economic impacts. Any negative impact to the Harpoon category could be partially mitigated by the increase in this final rule of the Harpoon category tolerance limit for large medium BFT to two fish per vessel per day, which would improve the ability of the Harpoon category to catch its annual quota. In addition, in response to comment, the final rule for this alternative includes a provision for delaying the start date to no later than August 15 if such a delay would further reduce gear conflicts or overlap between the different categories. Any adjustment to the start date would be filed with the Office of the Federal Register but would not be filed less than 14 calender days prior to July 15. Because there are only five vessels in the Purse seine category, NMFS will be able to provide actual notice to the affected fishermen.

Three alternatives were also considered for the Harpoon category end date. The no action/status quo alternative would maintain an open Harpoon category season year round, provided there is Harpoon category quota available. Alternative two (selected) would close the Harpoon category season on November 15, and alternative three would establish a flexible season end date based on the actual dates of the BFT fall migration.

The no action/status quo alternative is expected to result in negative impacts for the traditional northern Harpoon category fishery since BFT could be harvested under the Harpoon category quota in areas outside the New England area, thereby reducing the quota available to the traditional fishery. In addition, the status quo may encourage the development of, and investment in, a southern area Harpoon category fishery, which has not yet occurred.

Alternative two is designed to maintain the Harpoon category quota for the traditional New England fishery and impact only the Harpoon category vessels. This alternative is selected as it is expected to provide positive impacts for the traditional New England Harpoon category fishery since it would close the fishery near the time period when BFT migrate out of the New England area. Negative impacts to southern area fishermen interested in participating in the Harpoon category fishery under this alternative are expected to be negligible since there had been no BFT landings against the Harpoon category quota in such area prior to 2002, few vessels have participated in the Harpoon category fishery in the south Atlantic since that time, and there has been little investment in gear and equipment in a Harpoon category fishery outside of the New England area. Finally, vessel owners/operators that fish outside the traditional New England area that wish to use a harpoon as a primary gear type would still be allowed to do so under the General category permit, albeit under General category retention limits and restrictions.

The third alternative is also designed to affect only Harpoon category vessels and maintain the Harpoon category quota for the traditional New England fishery. Unlike the status quo and alternative two, it could provide additional positive impacts to the traditional New England Harpoon category fishery since it would more closely track the BFT fall migration, and could eliminate the landing of any BFT under the Harpoon category quota outside of the area of the traditional fishery. However it could be difficult to administer due to the difficulty in tracking the BFT migration and may lead to uncertainty for members within the Harpoon category regarding closure of the fishery. Alternative three also would have negligible impacts on southern area fishermen, for the same reasons noted above for alternative two.

The General category season is scheduled to end on December 31 of each fishing year or when the General category quota is harvested, whichever comes first. A winter fishery for large medium and giant BFT has existed in the south Atlantic since the early 1990s, and when quota is available, fish have been harvested under the General category. Two alternatives (in addition to the no action/status quo alternative) were considered that would both extend the General category season to provide southern Atlantic fishermen with more access to the General category BFT quota in the late fall and winter. Under the status quo the General category season would close on December 31 regardless of whether the full allocated quota has been attained or not. Southern area fishermen have been adversely affected this closure date as it occurs when BFT appear off southern states and commercial fishing opportunities have been denied to them after December 31.

Alternative two (selected) would move the General category end date to January 31 of each fishing year. Overall economic impacts of this alternative to the General category BFT fishery as a whole would be neutral since the same overall amount of the General category quota would be landed and the value of the General category quota would not be changed. General category fishermen in the northern region may experience negative economic and social impacts, when compared to the status quo, since any unharvested quota as of December 31 would otherwise be rolled over to the following year. General category fishermen in the southern region would be positively affected by this alternative as it would allow greater utilization of existing investment in gear and equipment if quota was still available for harvest after December 31, and since BFT are usually available in the southern region during the end of the calender year due to the fall migration from the north.

Under alternative three, extending the General category end date to May 31, overall impacts would again be neutral but northern General category fishermen could be more negatively affected and southern region fishermen could be more positively affected, due to the BFT fall migration, and depending on the amount of quota that remains after the season would have usually been closed. Alternative two was the alternative selected since it minimizes negative impacts to northern area fishermen by providing a more limited southern fishery extension and provides positive impacts for southern area fishermen by allowing further utilization of gear and equipment previously invested in a southern area large medium and giant BFT fishery. Negative impacts on northern area fishermen could be slightly mitigated if they are willing to travel south late in the season, provided there is reciprocity among different states' permitting costs and out-of-state fishermen are allowed under a coastal state's regulations to participate in a BFT commercial fishery, regardless of whether it occurs in federal or state waters.

As discussed above, the Purse seine and Harpoon categories have recently experienced difficulties in landing the full annual quota provided for each of these categories with the result of decreased annual gross revenues. Each alternative considered would modify the tolerance limits for landing large medium BFT and was analyzed to determine the increased likelihood of harvesting the respective quotas in the designated time frames while balancing any ecological impacts of increased fishing mortality against the potential to reduce dead discards. As NMFS currently has insufficient information on discards, data will be collected through previously approved information collection programs (i.e., vessel logbooks and/or observers) to determine the effect of adjusting tolerance limits for large medium BFT in the Harpoon and Purse seine categories on mortality of pre-spawning fish and the ability of these categories to harvest allocated quotas.

Alternative one, the no action/status quo alternative, has had negative impacts with a resulting decrease in optimum yield for both the Purse seine and Harpoon categories since they have been unable to land and sell the full allotted quota. Alternatives two, three, and four, all related solely to the Purse seine category, were all designed to increase access to large medium BFT for the Purse seine category and to increase the possibility of full quota attainment while balancing the need to control overall mortality and increased pressure on the large medium size class of BFT. Alternative two removes the 10-percent annual tolerance limit and maintains the 15-percent trip limit which could increase landings and gross revenue for the Purse seine category. Alternative three (selected), which eliminates the trip limit and establishes the annual limit at 15 percent, would provide access to the same total amount of landings as alternative two, but may also increase net revenues by increasing flexibility in meeting the annual tolerance limit. Alternative four could provide the greatest increase in access by decreasing the minimum size to 73 inches (185 cm) for the Purse seine category; however, it was not selected because of the associated potential negative ecological impact of a relatively large increase in overall BFT mortality within the large medium size class of BFT.

Alternatives five and six, related solely to the Harpoon category, were designed to increase access to large medium BFT for the Harpoon category and, similar to considerations with the Purse seine category, balance the attainment of the quota allocation with concerns regarding an increase in mortality and negative ecological impacts. Alternative five would allow an increase in the daily retention limit for the Harpoon category from the status quo of one large medium BFT per day to two large medium BFT per day, and was selected since it is expected to provide an acceptable balance between positive economic effects and a modest increase in mortality of large medium BFT. Large medium BFT mortality is not expected to increase significantly under this alternative because of a harpooner's ability to visually determine the size class of BFT prior to throwing a harpoon. Alternative six would allow full access to the large medium size class by reducing the minimum size limit for the Harpoon category to 73 inches (185 cm), and would provide the most positive economic impacts. However, it was not chosen because of the potential negative ecological impact of a relatively large increase in mortality on large medium fish.

Finally, alternative seven, unlike all other alternatives, would eliminate the tolerance for large medium size class and raise the minimum size of BFT to 81 inches (206 cm) in both the Purse seine and Harpoon categories. This alternative was considered due to the potential positive ecological impacts that would enhance western Atlantic BFT stock rebuilding, but would likely have negative economic and social impacts and further impede full attainment of quota and optimum yield. By narrowing the universe of fish available for harvest to just the giant size class, it would be more difficult for these categories to harvest the allocated quotas, thus the original objective for this action would be contradicted.

This final rule does not duplicate, overlap, or conflict with any other Federal rules.

This rule does not contain any new information collection, reporting, recordkeeping or other compliance requirements. Logbook and observer data collection schemes were proposed and made final in the HMS Fishery Management Plan issued in 1999 and the Office of Management and Budget approved the information collections as part of that rulemaking process. Both the Purse Seine and Harpoon fisheries for BFT were included in the approved information collection requests for these programs. NMFS has faced resource constraints in implementing the approved information collections and has tried to reduce costs and avoid duplication by examining all possible avenues of accessing data on catch, effort and discards in these fisheries. In this final rule, NMFS balanced requirements to reduce dead discards against the requirements to limit mortality on pre-spawning fish and provide a reasonable opportunity for U.S. fishermen to harvest the quotas allocated to each category under the international rebuilding program for BFT and the HMS FMP allocation sector scheme. NMFS addressed this issue by adjusting the tolerance limits for landing large medium BFT for both the Harpoon and Purse Seine categories. In developing this rule, it has become apparent that additional information on the size distribution of fish encountered/caught (as opposed to fish landed) is needed, and NMFS plans on obtaining this information through the previously approved logbook and observer programs.

NMFS prepared an EA for this final rule, and the AA has concluded that there would be no significant impact on the human environment if this final rule were implemented. The EA presents analyses of the anticipated impacts of these regulations and the alternatives considered. A copy of the EA and other analytical documents prepared for this final rule, are available from NMFS (see ADDRESSES ).

This rule has been determined to be not significant for purposes of Executive Order 12866.

On September 7, 2000, NMFS reinitiated formal consultation for all HMS commercial fisheries under section 7 of the Endangered Species Act (ESA). A Biological Opinion (BiOp) issued June 14, 2001, concluded that continued operation of the Atlantic pelagic longline fishery is likely to jeopardize the continued existence of endangered and threatened sea turtle species under NMFS jurisdiction. NMFS is currently implementing the reasonable and prudent alternative required by the BiOp. This final rule would not have any additional impact on sea turtles as these actions do not affect the use of pelagic longline gear, would not likely increase or decrease pelagic longline effort, nor are they expected to shift effort into other fishing areas. No irreversible or irretrievable commitments of resources are expected from this final action that would have the effect of foreclosing the implementation of the requirements of the BiOp.

NMFS has determined that the final regulations would be implemented in a manner consistent to the maximum extent practicable with the enforceable policies of those Atlantic, Gulf of Mexico, and Caribbean coastal states that have approved coastal zone management programs. On November 10, 2003, the proposed regulations were submitted to the responsible state agencies for their review under Section 307 of the Coastal Zone Management Act. As of November 28, 2003, NMFS has received 3 responses, all concurring with NMFS' consistency determination. Because no responses were received from the other states, their concurrence is presumed.

The area in which this final action is planned has been identified as an Essential Fish Habitat (EFH) for species managed by the New England Fishery Management Council, the Mid-Atlantic Fishery Management Council, the South Atlantic Fishery Management Council, the Gulf of Mexico Fishery Management Council, the Caribbean Fishery Management Council, and the HMS Management Division of the Office of Sustainable Fisheries at NMFS. Based on the 1999 Fishery Management Plan for Atlantic Tunas, Swordfish, and Sharks, which analyzed the impacts of purse seine, harpoon, and rod and reel gear on EFH, this action is not anticipated to have any adverse impacts to EFH.

Regulations governing the summer flounder fishery are found at 50 CFR part 648. The regulations require annual specification of a commercial quota that is apportioned among the coastal states from North Carolina through Maine. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.100.

The initial total commercial quota for summer flounder for the 2003 calendar year was set equal to 13,980,028 lb (6,341,235 kg). The percent allocated to vessels landing summer flounder in Virginia is 21.31676 percent, and in North Carolina is 27.44584 percent. This resulted in an initial commercial quota for Virginia of 2,980,089 lb (1,351,746 kg), and for North Carolina of 3,836,936 (1,740,405 kg) (68 FR 60, January 2, 2003). The 2003 allocation for Virginia was further reduced to 2,968,429 lb (1,346,457 kg), and for North Carolina to 3,821,924 lb (1,733,596 kg), due to research set-aside (January 2, 2003). The 2003 allocation for Virginia was also adjusted downward due to an estimated overage of the 2002 quota of 76,024 lb (34,484 kg), as of October 31, 2002, so that the resulting adjusted 2003 commercial quota for Virginia was 2,904,065 lb (1,317,275 kg) as of January 2, 2003 (68 FR 60). However, NMFS later found that the estimate of a 76,024-lb (34,484-kg) overage as of October 31, 2002, was in error, and restored that amount to Virginia's 2003 quota for a revised total of 2,968,429 lb (1,346,457 kg) on March 3, 2003 (68 FR 9905). The North Carolina quota allocation was not affected by overages from 2002. Therefore, their quota allocation remained at 3,821,924 lb (1,733,596 kg) (68 FR 9905).

The final rule implementing Amendment 5 to the FMP that was published on December 17, 1993 (58 FR 65936), provided a mechanism for summer flounder quota to be transferred from one state to another. Two or more states, under mutual agreement and with the concurrence of the Administrator, Northeast Region, NMFS (Regional Administrator), can transfer or combine summer flounder commercial quota under § 648.100(d). The Regional Administrator is required to consider the criteria set forth in § 648.100(d)(3) in the evaluation of requests for quota transfers or combinations.

North Carolina has agreed to transfer 357,867 lb (162,326 kg) of its 2003 commercial quota to Virginia. This transfer is prompted by a problem with shoaling in the Oregon Inlet, caused by the recent Hurricane Isabel, that is preventing some North Carolina fishing vessels from landing at their normal ports. Landing their catch in Virginia represents the next best alternative, but requires a transfer to account for an increase in Virginia landings that would have otherwise accrued against the North Carolina quota. The Regional Administrator has determined that the criteria set forth in § 648.100(d)(3) have been met. The revised quotas for calendar year 2003 are: Virginia, 3,326,296 lb (1,508,783 kg); and North Carolina, 3,464,057 lb (1,571,270 kg).

This action is taken under 50 CFR part 648 and is exempt from review under E.O. 12866.