On July 29, 2003, the Office of Personnel Management (OPM) issued proposed regulations to revise 5 CFR part 595, Physicians' Comparability Allowances. (See 68 FR 44489.) The 60-day comment period for the proposed regulations ended on September 29, 2003. We received comments from one Federal agency. The agency suggested that we add the sentence “A physician who is employed on less than a half-time or intermittent basis is excluded from the physicians' comparability allowance program” to the regulation. We agree and have added this sentence to 5 CFR 595.105(d).

This rule has been reviewed by the Office of Management and Budget in accordance with E.O. 12866.

I certify that these regulations would not have a significant economic impact on a substantial number of small entities because they would apply only to Federal agencies and employees.

The Foreign Agricultural Service, under a delegation of authority from the Secretary of Agriculture, administers the Dairy Tariff-Rate Import Quota Licensing Regulation codified at 7 CFR 6.20-6.37 that provides for the issuance of licenses to import certain dairy articles under tariff-rate quotas (TRQs) as set forth in the Harmonized Tariff Schedule of the United States. These dairy articles may only be entered into the United States at the low-tier tariff by or for the account of a person or firm to whom such licenses have been issued and only in accordance with the terms and conditions of the regulation.

Licenses are issued on a calendar year basis, and each license authorizes the license holder to import a specified quantity and type of dairy article from a specified country of origin. The Import Policies and Programs Division, Foreign Agricultural Service, U.S. Department of Agriculture, issues these licenses and, in conjunction with the U.S. Customs Service, monitors their use.

The regulation at 7 CFR 6.34(a) states: “Whenever a historical license (Appendix 1) is not issued to an applicant pursuant to the provisions of § 6.23, is permanently surrendered or is revoked by the Licensing Authority, the amount of such license will be transferred to Appendix 2.” Section 6.34(b) provides that the cumulative annual transfers will be published in the Federal Register . Accordingly, this document sets forth the revised Appendices for the 2004 tariff-rate quota year.

Karnal bunt is a fungal disease of wheat ( Triticum aestivum ), durum wheat ( Triticum durum ), and triticale ( Triticum aestivum X Secale cereale ), a hybrid of wheat and rye. Karnal bunt is caused by the smut fungus Tilletia indica (Mitra) Mundkur and is spread primarily through the movement of infected seed. Some countries in the international wheat market regulate Karnal bunt as a fungal disease requiring quarantine; therefore, without measures taken by the Animal and Plant Health Inspection Service (APHIS), United States Department of Agriculture, to prevent its spread, the presence of Karnal bunt in the United States could have significant consequences with regard to the export of wheat to international markets.

Upon detection of Karnal bunt in Arizona in March of 1996, Federal quarantine and emergency actions were imposed to prevent the interstate spread of the disease to other wheat producing areas in the United States. The quarantine continues in effect, although it has since been modified, both in terms of its physical boundaries and in terms of its restrictions on the production and movement of regulated articles from regulated areas. The regulations regarding Karnal bunt are set forth in 7 CFR 301.89-1 through 301.89-16 (referred to below as the regulations).

The regulations in § 301.89-3(e) provide that we will classify a field or area as a regulated area when it is:

• A field planted with seed from a lot found to contain a bunted wheat kernel;

• A distinct definable area that contains at least one field that was found during as survey to contain a bunted wheat kernel. The distinct definable area may include an area where Karnal bunt is not known to exist but where intensive surveys are required because of the area's proximity to a field found during survey to contain a bunted wheat kernel; or

• A distinct definable area that contains at least one field that has been determined to be associated with grain at a handling facility containing a bunted kernel of a host crop. The distinct definable area may include an area where Karnal bunt is not known to exist but where intensive surveys are required because of that area's proximity to the field associated with the bunted kernel at the handling facility.

The boundaries of distinct definable areas are determined using the criteria in paragraphs (b) through (d) of § 301.89-3, which provide for the regulation of less than an entire State, the inclusion of noninfected acreage in a regulated area, and the temporary designation of nonregulated areas as regulated areas. Paragraph (c) of § 301.89-3 states that the Administrator may include noninfected acreage within a regulated area due to its proximity to an infestation or inseparability from the infected locality for regulatory purposes, as determined by:

• Projections of the spread of Karnal bunt along the periphery of the infestation;

• The availability of natural habitats and host materials within the noninfected acreage that are suitable for establishment and survival of Karnal bunt; and

• The necessity of including noninfected acreage within the regulated area in order to establish readily identifiable boundaries.

When we include noninfected acreage in a regulated area for one or more of the reasons previously listed, the noninfected acreage, along with the rest of the acreage in the regulated area, is intensively surveyed. Negative results from surveys of the noninfected acreage provide assurance that all infected acreage is within the regulated area. In effect, the noninfected acreage serves as a buffer zone between fields or areas affected with Karnal bunt and areas outside of the regulated area.

Under the regulations in § 301.89-3(f), a field known to have been infected with Karnal bunt, as well as any non-infected acreage surrounding the field, will be released from regulation if:

• The field is no longer being used for crop production; or

• Each year for a period of 5 consecutive years, the field is subjected to any one of the following management practices (the practice used may vary from year to year): (1) Planted with a cultivated non-host crop; (2) tilled once annually; or (3) planted with a host crop that tests negative, through the absence of bunted kernels, for Karnal bunt.

The regulations in § 301.89-3(g) describe the boundaries of the regulated areas in Arizona, California, and Texas. In this interim rule, we are amending § 301.89-3(g) by removing certain areas in Arizona and Texas from the list of regulated areas, based on our determination that the fields in those areas are eligible for release from regulation under the criteria in § 301.89-3(f). This action relieves restrictions on fields within those areas that are no longer warranted.

The list of regulated areas in Arizona includes individual fields and other distinct definable areas located in La Paz, Maricopa, and Pinal Counties. In this interim rule, we are removing two fields and the surrounding regulated acreage (a total of 26,256 acres) located in La Paz County, AZ. The fields had been designated as a regulated area because they were planted, in 1996, with seed that was potentially contaminated with Karnal bunt. We are now deregulating this portion of the regulated area because each year for a period of 5 consecutive years, the fields were subjected to at least one of the management practices described in § 301.89-3(f)(2).

The list of regulated areas in Texas includes distinct definable areas located in Archer, Baylor, Knox, McCulloch, San Saba, Throckmorton, and Young Counties. In this interim rule, we are modifying the boundaries for the regulated areas in McCulloch and San Saba Counties by removing one field in San Saba County and the surrounding regulated acreage, which falls in both counties (a total of 23,680 acres) from the list of regulated areas. This particular field had been designated as part of the regulated area in 1997 because it was found during survey to contain spores consistent with Karnal bunt. We are now deregulating this portion of the regulated area because each year for a period of 5 consecutive years, the field was subjected to at least one of the management practices described in § 301.89-3(f)(2).

Immediate action is warranted to relieve restrictions on certain fields or areas that are no longer warranted. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the Federal Register .

We will consider comments we receive during the comment period for this interim rule (see DATES above). After the comment period closes, we will publish another document in the Federal Register . The document will include a discussion of any comments we receive and any amendments we are making to the rule.

This rule has been reviewed under Executive Order 12866. For this action, the Office of Management and Budget has waived its review under Executive Order 12866.

We are amending the Karnal bunt regulations to make changes to the list of areas or fields regulated because of Karnal bunt. We are removing certain areas in Arizona and Texas from the list of regulated areas based on our determination that the fields in those areas meet our criteria for release from regulation. This action is necessary to relieve restrictions that are no longer warranted.

The Regulatory Flexibility Act requires that agencies consider the economic effect of their rules on small entities. The entities most likely to be affected by this rule are producers of Karnal bunt host crops whose fields are being removed from the list of regulated areas and who plan to grow Karnal bunt host crops in the future.

Producers affected by this rule are likely to be classified as small entities based on the size standards set by the Small Business Administration (SBA), as well as data from the 1997 Census of Agriculture, which is the most recent census available. The SBA classifies wheat producers with total annual sales of less than $750,000 as small entities. According to the 1997 census data, there were a total of 6,135 farms in Arizona (this total includes, but is not limited to, wheat farms). Of the total number of farms in Arizona, 89 percent had annual sales of less than $500,000, well below the SBA's small entity threshold of $750,000 for wheat farms. Of the 194,301 farms in Texas, 98 percent are considered small entities according to SBA guidelines. Thus we expect that the farms affected by this rule will be small.

Producers whose fields are deregulated will benefit because they will be able to move wheat or other Karnal bunt host crops without restriction. Prior to this rule, any wheat, durum wheat, or triticale grown in those fields could be moved into or through a non-regulated area without restriction only if it first tested negative for bunted kernels. In addition, any wheat, durum wheat, or triticale grown in those fields could not be used as seed within or outside a regulated area unless it was tested and found free of bunted kernels and spores.

The impact of this rule on individual producers is not likely to be significant. The elimination of restrictions will increase marketing opportunities for producers, with impacts on prices those producers may set for their wheat, durum wheat, or triticale. Producers whose fields are deregulated may enjoy increased market opportunities for any wheat, durum wheat, or triticale they grow in the future ( e.g., the availability of export markets). They may also receive a higher commodity price for their wheat, durum wheat, or triticale, although any price changes would most likely be small.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

This rule contains no new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Animal and Plant Health Inspection Service (APHIS) of the United States Department of Agriculture (USDA or the Department) administers regulations at 9 CFR part 53 (referred to below as the regulations) that provide for the payment of indemnity to owners of animals that are required to be destroyed because of foot-and-mouth disease, pleuropneumonia, rinderpest, exotic Newcastle disease, highly pathogenic avian influenza, infectious salmon anemia, or any other communicable disease of livestock or poultry that, in the opinion of the Secretary of Agriculture, constitutes an emergency and threatens the U.S. livestock or poultry population. Payment for animals destroyed is based on the fair market value of the animals.

Section 53.2 of the regulations authorizes the APHIS Administrator to cooperate with a State in the control and eradication of disease. Paragraph (b) of this section allows for the payment of indemnity to cover the costs for purchase, destruction, and disposition of animals and materials required to be destroyed because of being contaminated by or exposed to such disease.

Spring viremia of carp (SVC) is a foreign animal disease, caused by a rhabdovirus, that affects several cyprinid species, including goldfish and common carp, of which koi is a variety. SVC was first reported in Yugoslavia in 1969 and has since spread to other European countries, Russia, and the Middle East.

SVC is characterized as a listed disease by the Office of International des Epizooties (OIE). Characteristics of listed aquatic animal diseases include the following:

1. The disease has been shown to cause significant production losses due to morbidity or mortality at a national or multinational level where it occurs;

2. The disease has been shown to, or is strongly suspected to negatively affect wild aquatic animal populations that are shown to be an asset worth protecting;

3. The disease has the potential for international spread, including via live animals, their products, and inanimate objects.

If SVC is discovered in an OIE member country, the affected country must report the discovery to OIE, which will notify the 163 other member countries. As a result, SVC-free countries may cease importing any commodities that could potentially harbor the virus. Such trade restrictions would have a negative economic impact on the U.S. carp industry.

Evidence suggests that SVC can kill a very diverse group of species, including many representatives of the families that are dominant in North America. According to the OIE Aquatic Animal Health Code, susceptible host species for SVC are: common carp ( Cyprinus carpio ), grass carp ( Ctenopharyngodon idellus ), silver carp ( Hypophthalmichthys molitrix ), bighead carp ( Aristichthys nobilis ), crucian carp ( Carassius carassius ), goldfish ( Carassius auratus ), tench ( Tinca tinca ), and sheatfish ( Silurus glanis ). SVC is considered extremely contagious, and there are currently no U.S.-approved vaccines or treatments for the virus.

Transmission of the virus may occur through water contaminated with feces, urine or mucus from infected fish, and parasites such as leeches. SVC can survive for long periods of time in water and mud, increasing the possibility of transmission between sites by contaminated equipment. In addition, animals such as birds, which prey on SVC-susceptible species, often travel over very large areas and can transmit the disease between sites. The presence of SVC virus in ovarian fluid also suggests that the disease may be transmitted from parent to offspring as well. Some fish that recover from SVC can become non-clinical carriers of the virus. Non-clinical carriers of the virus can transmit the virus to other susceptible species, but do not show symptoms of SVC.

The disease flourishes in the spring as water temperatures increase, but maximum mortality occurs when temperatures are below 64 °F, since the immune resistance of carp rises as temperatures reach 68 °F. Once the disease is detected, depopulation is necessary given the disease's contagiousness and the possibility of non-clinical carriers that would not exhibit symptoms.

Clinical signs of SVC may be nonspecific and include darkening of the skin, exophthalmia (pop-eye), ascites (dropsy), pale gills, hemorrhages in the gills, skin, and eyes, and a protruding vent with a thick mucoid (white to yellowish) fecal cast. Pinpoint hemorrhages may occur in many organs and are considered an important indicator for SVC. Other internal symptoms include edema, inflammation of the intestine, and enlargement of the spleen. Concurrent infections often occur and may confuse the diagnosis. Mortality can be up to 70 percent in yearlings; adult fish are less affected by the disease.

In April 2002, a koi farm in North Carolina experienced an outbreak of SVC. The farm had sent a sample of the diseased koi to the Fish Disease Diagnostic Laboratories of the University of Arkansas at Pine Bluff, a USDA approved diagnostic laboratory. After a tentative positive diagnosis for SVC, the Arkansas labarotory forwarded the sample to the OIE reference laboratory for SVC in Weymouth, United Kingdom. The OIE laboratory confirmed the tentative diagnosis as positive for SVC on June 25, 2002. The SVC outbreak diagnosis was reported to APHIS, USDA on July 3, 2002.

The affected koi farm operates sites for hatching and resale in North Carolina and Virginia. Due to transfers of fish between sites, both of the farm's sites were considered infected with the SVC virus. SVC virus antibodies have been detected in native and nonnative fish both upstream and 12 miles downstream from the site of the initial outbreak in North Carolina. Additionally, SVC has emerged in populations of wild carp in Wisconsin and Illinois.

The States of North Carolina and Virginia took immediate steps to prevent further spread of SVC; however, the States lacked sufficient funding and personnel to effectively control and eradicate the disease, which poses a potentially serious threat to animal health and the U.S. economy. Therefore, State officials asked the USDA to assist with epidemiology, surveillance, and indemnification to respond to the presence of SVC.

On March 25, 2003, the Secretary of Agriculture authorized a transfer of funds within the Department in order to assist the States of North Carolina and Virginia with SVC-related epidemiology, surveillance, and indemnification. The Secretary authorized this transfer of funds after determining that SVC constitutes an emergency that threatens a segment of agricultural production in the United States. Under part 53 of the regulations, APHIS/USDA indemnified the owner of the affected sites in North Carolina and Virginia. The sites contained a total of 8 million koi and goldfish. Nearly all of those fish, with the exception of 15,000 that died previously from SVC and those that were lost due to bird predation, were depopulated to control the virus. Providing indemnity to the owner of the SVC-infected fish in North Carolina and Virginia to prevent further spread of SVC was an integral step in ensuring the disease's eradication.

APHIS Veterinary Services staff, in cooperation with State authorities in North Carolina and Virginia, have already implemented surveillance and biosecurity auditing measures to continue to monitor for SVC outbreaks. Further, APHIS officials have begun a nationwide surveillance program, within which many carp and bait fish producers are voluntarily participating in SVC testing. Continuing the surveillance program is essential to ensure eradication and/or control of SVC and to relieve foreign restrictions on U.S. trade related to SVC-susceptible species. To regain SVC-free status, the United States, an OIE member country, must test for SVC on farms that raise susceptible species. The tests typically include a sample of 150 SVC-susceptible fish and should take place in the spring and fall in environments where the disease flourishes (usually warm water). The member country must produce negative results for at least 2 years, after which foreign restrictions should be lifted.

We believe the virus can be controlled and contained within high-risk zones through continued surveillance and best management practices. Control of SVC requires depopulation of all ponds holding infected fish and disinfection of ponds, and associated equipment. Currently, carp producers are under no obligation to report the occurrence of SVC to APHIS. Through industry feedback, APHIS determined that farmers are less likely to report SVC outbreaks if they risk the loss of their entire carp stock without indemnification. Indemnification will provide an incentive for producers to report diseased fish and to continue testing for SVC, and therefore assist with USDA's goal of complete eradication in the U.S. carp industry.

Therefore, this interim rule amends the regulations in part 53 to provide for the payment of fish destroyed because of SVC. The specific amendments are discussed below.

We have amended the definition of disease in § 53.1 to include SVC among the diseases listed.

The regulations in § 53.2 allow for payments by the Department for losses growing out of the destruction of animals affected with SVC. The Administrator may pay claims of up to 50 percent of eligible losses incurred by each producer resulting from the destruction of fish affected with the disease. Producers who collect salvage value for fish destroyed because of SVC will have that amount subtracted from the amount of eligible indemnity payments. In addition, expenses incurred in connection with any cleaning and disinfection required shall be shared according to the agreement between APHIS and the State in which the work is done.

By providing carp producers with indemnity, we can improve the probability of rapid reporting by producers, who are in a position to quickly report a disease situation. This enhances the likelihood of prompt control and eradication. In addition, such payments will benefit carp producers who could otherwise suffer uncompensated economic losses as a result of their participation in a control and eradication program.

Paragraph (a) of § 53.4 directs operators to destroy animals affected by or exposed to disease promptly after appraisal and dispose of them by burial or burning, unless otherwise specifically provided by the Administrator. Because food fish infected with or exposed to SVC may retain salvage value if they are sold for processing or rendering, we are adding a provision to this section to allow for those options. Producers who collect salvage value for fish destroyed because of SVC will have that value subtracted from the amount of indemnity they are eligible to receive from APHIS under § 53.2(b) resulting from the destruction of fish affected with the disease.

Cyprinids are produced as food fish, bait fish, and ornamental fish. Carp produced for food or bait would be subject to the requirements of their appraisal classes to determine their fair market value based on their size. With regard to bait fish, smaller fish are more valuable. Fish produced for food, however, gain value as they grow larger. Such factors are commonly used to determine the fair market value of poultry, fish, and other livestock, as described in paragraph (b) of § 53.3. However, the primary type of carp currently affected by SVC are ornamental koi. These fish can carry significant breeding value, which is a valuation category already explicitly included in § 53.3(b). In the case of ornamental fish, their fair market value is determined using the following characteristics: (1) Conformation, which includes body size, shape, proportion and evidence or lack of deformities; (2) quality, which includes coloration, depth of color, tint, hue, and whiteness of background; (3) pattern of colors displayed; and (4) breed differences relating to buyer desire/interest. Again, these ornamental characteristics contribute to the breeding value of the fish; therefore, it is not necessary to amend paragraph (b) of § 53.3 to provide indemnity based on these characteristics.

Section 53.10 of the regulations lists reasons why the Administrator will disallow indemnity claims. We are adding provisions to the section to require claimants to follow certain precautions to avoid future SVC infection. Specifically, we are requiring that producers depopulate all infected and exposed fish on their farms under USDA or State supervision in order to ensure depopulation is conducted humanely and under optimal biosecurity conditions. Further, we are requiring producers to clean and disinfect affected premises and equipment under USDA or State supervision to ensure the cleaning and disinfection destroys all traces of SVC. We are also requiring that any restocking be done with fish that are certified SVC-free by a USDA-APHIS approved laboratory or in accordance with the diagnostic procedures described in Chapter 2.1.4 of the OIE Manual of Diagnostic Tests for Aquatic Animals, 2003 edition. 1

Additionally, we are requiring that the producers demonstrate that their water source(s) are SVC-free. Producers can ensure this by using first-use spring water, spring water without fish, well water, ozone- or ultraviolet-treated surface water, or bore-hole water and by using a water source that is free of wild carp and any other SVC-susceptible species. Finally, we are requiring producers to demonstrate that no wild carp or any other wild SVC-susceptible species are able to migrate into their farming operations. We are confident that these measures will prevent the possibility of SVC reemerging on premises that receive indemnity because of an SVC outbreak.

We are adding a new paragraph (d)(6) in § 71.3 to describe conditions governing the interstate movement of SVC-affected fish. Carp, especially ornamental varieties, are often shipped to other aquaculture farms or to consumers where they may come into contact with other farmed or wild fish. Therefore, preventing the interstate movement of SVC-affected fish is especially important to prevent the disease from spreading to other areas of the United States. SVC-affected fish being moved in interstate transport directly to a facility where they are to be processed into food for human consumption are exempt from this requirement.

This rulemaking is necessary on an emergency basis to provide for the payment of indemnity to carp producers in the event that the ongoing nationwide surveillance program reveals additional SVC-affected areas. SVC is characterized as a listed disease by OIE and fits several criteria for this classification, including having a negative affect on wildlife populations that are shown to be an asset worth protecting and having the potential to spread internationally. SVC has been discovered on one fish farm in North Carolina and as a result, fish from that farm as well as an associated farm in Virginia, were depopulated. We will continue the nationwide surveillance program to ensure additional farms are not infected with SVC and to restore relationships with our trading partners. It is also essential to establish interstate movement prohibitions for SVC-affected fish.

Additional outbreaks of SVC may prove economically devastating for carp producers in the United States. Providing indemnity to the producers is instrumental in gaining their support for USDA's ongoing surveillance program, which is essential to ensuring early detection, control, and eradication of SVC. Under these circumstances, the Administrator has determined that prior notice and opportunity for public comment are contrary to the public interest and that there is good cause under 5 U.S.C. 553 for making this rule effective less than 30 days after publication in the Federal Register .

We will consider comments we receive during the comment period for this interim rule (see DATES above). After the comment period closes, we will publish another document in the Federal Register . The document will include a discussion of any comments we receive and any amendments we are making to the rule.

This rule has been reviewed under Executive Order 12866. The rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

We are amending our general indemnity regulations to allow the Department to pay indemnity to owners for fish destroyed because of SVC. Subject to available funding, the Department may pay eligible owners up to 50 percent of the fair market value for fish destroyed because of SVC. In addition, expenses incurred in connection with any cleaning and disinfection required shall be shared according to the agreement between APHIS and the State in which the work is done. These actions are necessary to help control and eradicate this disease in the United States. We are also amending our interstate movement regulations to prevent the movement of fish infected with or exposed to SVC.

Cyprinids are produced as food fish, ornamental fish, and bait fish. Overall, the United States is not a major world producer of SVC-susceptible species. In 2000, the U.S. produced 10,625 metric tons of carp, barbels, and other cyprinids, which was less than 0.1 percent of world production that year. There are little solid data available on this segment of the aquaculture industry. However, in 1998, the USDA conducted a census, the first of its kind, on the cyprinid industry. The survey's responses show that within the United States, 76 farms produced carp for food, 115 farms produced ornamental koi, 65 farms produced ornamental goldfish, and 34 farms produced baitfish. These numbers do not reveal the specific number of separate U.S. farms that produced each of the SVC-susceptible species in 1998, since some farms produced more than one species. In 1998, the United States exported live carp valued at $ 1.7 million.

Currently, SVC has been detected at only one commercial U.S. farm; that farm operates fish-producing sites in both North Carolina and Virginia. SVC virus antibodies were detected in native and nonnative wild fish both upstream and 12 miles downstream from the initial outbreak in North Carolina. Additionally, SVC has emerged in populations of wild carp in Wisconsin and Illinois. Unless SVC is eradicated or controlled, we believe that the disease could spread further in the United States aquaculture industry through normal interstate trade of farmed fish and associated products. Additionally, the presence of SVC in this country damages our trading relationships with other nations. Finally, further outbreaks of SVC also pose a risk to susceptible species of fish in the wild. Officials from the North Carolina Wildlife Commission have detected susceptible fish in the waters of west-central North Carolina; some of those fish, however, are not native to those waters. In order to prevent the further spread of SVC, indemnification is necessary.

The Regulatory Flexibility Act requires agencies to consider the economic effects of their rules on small entities. This rule has the potential to affect cyprinid farms, large and small.

We expect producers with SVC-infected or -exposed fish to benefit from this rule, because they will be eligible to receive indemnity payments for certain losses and costs resulting from SVC. Currently, those producers would suffer total losses, less any potential salvage value, if their stock were infected with SVC. Further, producers would have to carry the full costs of cleaning and disinfection. Under this rule, the Department may pay eligible owners up to 50 percent of the fair market value for fish destroyed because of SVC, subject to available funding. In addition, expenses incurred in connection with any cleaning and disinfection required shall be shared according to the agreement between APHIS and the State in which the work is done.

Affected producers, especially those that own small cyprinid operations, could see benefits, as described above, from this rule. However, the number of potentially affected producers, of any size, appears to be small; 273 operations in the United States raised SVC-susceptible species in 1998. 2 In 2004, APHIS identified 447 units producing SVC-susceptible species. Based on composite data for providers of the same and similar services, we assume that most of those cyprinid operations are considered small entities. Of the 110,580 U.S. farms engaged in animal aquaculture and other animal production  3 in 1997, 99 percent had sales of less than $500,000, well below the Small Business Administration's threshold of $750,000 for aquaculture operations. The number of aquaculture farms likely to be affected is unknown because SVC surveillance is ongoing. However, the portion of the aquaculture industry susceptible to SVC is approximately 2 to 5 percent. 4

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are in conflict with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

This interim rule contains no new information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

The Board has a policy of continually reviewing NCUA regulations to “update, clarify and simplify existing regulations and eliminate redundant and unnecessary provisions.” NCUA Interpretive Rulings and Policy Statement (IRPS) 87-2, Developing and Reviewing Government Regulations. The NCUA staff's most recent review of NCUA's regulations revealed the need for several minor updates and corrections.

Section 701.21(i)(4) currently states that Federal credit unions must account for financial options contracts transactions in accordance with the NCUA Accounting Manual for Credit Unions, but the current version of the Accounting Manual does not address financial options contracts accounting. 12 CFR 701.21(i)(4). Accordingly, the Board amends § 701.21(i)(4) to delete the reference to the Accounting Manual.

Section 703.1(b)(6) contains an incorrect reference to § 741.3(a)(3). The correct reference should be to § 741.3(a)(2). The Board amends § 703.1(b)(6) to make this correction.

Sections 709.1(c) and 725.18(c) contain incorrect references to §§ 700.1(j) and 700.1(k), respectively. The correct references should both be to § 700.2(e)(1). The Board amends §§ 709.1(c) and 725.18(c) to make this correction.

In § 715.3(a), the conjunction “and” that should be between the two subparagraphs (1) and (2) is incorrectly placed in the second subparagraph. The Board amends § 715.3(a) to correct this.

In the first sentence of § 723.20(b), the phrase “members business loan rule” should be “member business loan rule.” In § 723.21, the capitalization of “Net Member Business Loan Balance” should be changed to “Net member business loan balance” to make it consistent with the format of the other definitions in that section. The Board amends §§ 723.20(b) and 723.21 to make these changes.

The amendments in this rule are technical rather than substantive. NCUA finds good cause that notice and public comment are unnecessary under sec. 553(b)(B) of the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(B). NCUA also finds good cause to dispense with the 30-day delayed effective date requirement under sec. 553(d)(3) of the APA. The rule will, therefore, be effective immediately upon publication of this notice.

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small entities (those credit unions under ten million dollars in assets). This rule will not have a significant economic impact on a substantial number of small credit unions, and, therefore, a regulatory flexibility analysis is not required.

NCUA has determined that this rule will not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget.

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on State and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. NCUA has determined that this rule does not constitute a policy that has federalism implications for purposes of the executive order.

The NCUA has determined that this rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 2681 (1998).

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an airworthiness directive (AD) that is applicable to certain Bombardier Model CL-600-2B19 (Regional Jet Series 100 & 440) airplanes was published in the Federal Register on October 31, 2003 (68 FR 62029). That action proposed to require repetitive inspections for cracking of the upper and lower web of the engine support beam (ESB) at fuselage station 640, and repair if necessary. That action also proposed to provide an optional terminating action for the repetitive inspections.

Interested persons have been afforded an opportunity to participate in the making of this amendment. The FAA has duly considered the comments received.

One commenter requests that we extend the repetitive inspection interval from 740 flight cycles to 1,100 flight cycles. The commenter points out that Transport Canada Civil Aviation (TCCA), which is the airworthiness authority for Canada, has approved an alternative method of compliance (AMOC) for Canadian airworthiness directive CF-2001-26R1, dated September 20, 2002, which is the parallel airworthiness directive to this one. The AMOC to the Canadian airworthiness directive provides for repetitive inspections at an interval of 1,100 flight cycles.

We concur. We have coordinated this issue with TCCA, and they have confirmed that the AMOC referenced by the commenter was issued on November 20, 2002. TCCA also advises that, if Canadian airworthiness directive CF-2001-26R1 is revised in the future, the repetitive inspection interval will be extended to 1,100 flight cycles. In developing an appropriate compliance time for this AD, we considered TCCA's recommendation and the degree of urgency associated with the subject unsafe condition. In light of these factors, we find that a repetitive interval of 1,100 flight cycles represents an appropriate interval that will not compromise safety for affected airplanes. We have revised paragraph (b) of this AD accordingly.

One commenter requests that we clarify the area subject to inspection per the proposed AD. The commenter notes that the proposed AD specifies external detailed inspection for cracking of the upper and lower web of the ESB at fuselage station (FS) 640. The commenter points out that the instructions in the service bulletin specify inspection of the area between FS 625 and FS 640.

We concur. We have revised the Summary section and paragraph (b) of this AD to clarify that the area subject to the inspections is between FS 625 and FS 640. We find that this change does not expand the scope of the proposed AD because the area between FS 625 and FS 640 is the subject area specified in the Accomplishment Instructions of Bombardier Alert Service Bulletin A601R-53-059, Revision ‘D,’ dated July 2, 2003, and we stated no intent in the proposed AD to differ from the referenced service bulletin in this regard.

Two commenters request that we give credit for inspections and repairs accomplished previously per Bombardier Alert Service Bulletin A601R-53-059, Revision ‘B,’ dated August 6, 2002; or Revision ‘C,’ dated February 3, 2003. The commenters state that the instructions in these revisions of the service bulletin do not differ substantially from the instructions in Revision ‘D’ of the service bulletin, dated July 2, 2003, which the proposed AD refers to as the appropriate source of service information.

We concur and have added a new paragraph (a)(3) to this AD to give credit for actions accomplished before the effective date of this AD per Revision ‘B’ or ‘C’ of the service bulletin.

One commenter requests that we give credit for any future revisions of Bombardier Alert Service Bulletin A601R-53-059. The commenter notes that this would eliminate the need for operators to apply for approval of an AMOC if the service bulletin is revised in the future.

We do not concur. We cannot approve use of revisions of a service document issued after publication of the AD because doing so would violate Office of the Federal Register (OFR) regulations for approval of materials “incorporated by reference” in rules. In general terms, we are required by these OFR regulations to either publish the service document contents as part of the actual AD language; or submit the service document to the OFR for approval as “referenced” material, in which case we may only refer to such material in the text of an AD. To allow operators to use later revisions of the referenced service bulletin, we must either revise the AD to reference specific later revisions, or operators must request approval to use later revisions as an AMOC under the provisions of paragraph (e) of this AD. We have not revised this AD in this regard.

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

We estimate that 150 airplanes of U.S. registry will be affected by this AD. It will take approximately 1 work hour per airplane to accomplish the required inspection, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of the required inspection on U.S. operators is estimated to be $9,750, or $65 per airplane, per inspection cycle.

The cost impact figure discussed above is based on assumptions that no operator has yet accomplished any of the requirements of this AD action, and that no operator would accomplish those actions in the future if this AD were not adopted. The cost impact figures discussed in AD rulemaking actions represent only the time necessary to perform the specific actions actually required by the AD. These figures typically do not include incidental costs, such as the time required to gain access and close up, planning time, or time necessitated by other administrative actions.

The optional terminating action, if done, would take approximately 290 work hours, at an average labor rate of $65 per work hour. Required parts would be provided by the manufacturer at no charge. Based on these figures, we estimate the cost of the optional terminating action to be $18,850 per airplane.

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

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

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) by superseding AD 94-04-02, amendment 39-8820 (59 FR 10272, March 4, 1994), which is applicable to certain Bombardier Model CL-215-6B11 series airplanes, was published in the Federal Register on February 13, 2004 (69 FR 7179). The action proposed to continue to require inspections to detect cracking in the rear engine mount struts, and replacement of struts with new struts, if necessary; and the eventual replacement of all struts with new struts. The action also proposed to require adding repetitive detailed inspections to detect cracking in the rear engine mount struts and replacement of struts with new struts, if necessary. The action also proposed to expand the applicability of the existing AD and make the replacement of all struts with new, machined struts an optional terminating action for the repetitive inspections.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were submitted in response to the proposal or the FAA's determination of the cost to the public.

The Cost Impact section of the proposed AD states that approximately 3 airplanes of U.S. registry would be affected by the proposed AD. Since the issuance of the proposed AD, we have determined that there are no airplanes currently on the U.S. Register that will be affected by this AD. We have revised the Cost Impact section of this final rule accordingly.

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

Currently, there are no affected airplanes on the U.S. Register. However, if an affected airplane is imported and placed on the U.S. Register in the future, the costs stated below would apply.

The actions that are currently required by AD 94-04-02 would take about 10 work hours per airplane to accomplish, at an average labor rate of $65 per work hour. Required parts would be provided by the manufacturer at no cost to the operators. Based on these figures, we estimate that the cost impact of the currently required actions would be about $650 per airplane.

The new inspections that are required by this AD action would take about 3 work hours per airplane to accomplish, at an average labor rate of $65 per work hour. Based on these figures, the cost impact of these inspections would be about $195 per airplane, per inspection cycle.

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

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

Document Availability: In addition to publishing the full text of this document in the Federal Register , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through FERC's Home Page ( http://www.ferc.gov ) and in FERC's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. eastern time) at 888 First Street, NE., Room 2A, Washington DC 20426.

From FERC's Web site on the Internet, this information is available in the eLibrary (formerly FERRIS). The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field and follow other directions on the search page.

User assistance is available for eLibrary and other aspects of FERC's website during normal business hours. For assistance, contact FERC Online Support at FERCOnlineSupport@ferc.gov or toll free at (866) 208-3676, or for TTY, contact (202) 502-8659.

The Federal Energy Regulatory Commission (Commission) is issuing this notice to update filing fees that the Commission assesses for specific services and benefits provided to identifiable beneficiaries. Pursuant to 18 CFR 381.104, the Commission is establishing updated fees on the basis of the Commission's Fiscal Year 2003 costs. The adjusted fees announced in this notice are effective June 16, 2004. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget, that this final rule is not a major rule within the meaning of section 251 of Subtitle E of Small Business Regulatory Enforcement Fairness Act, 5 U.S.C. 804(2). The Commission is submitting this final rule to both houses of the United States Congress and to the Comptroller General of the United States.

The new fee schedule is as follows:

On January 13, 2004, we published a notice of proposed rulemaking (NPRM) entitled “Drawbridge Operation Regulation; Chincoteague Channel, Chincoteague, VA” in the Federal Register (69 FR 1958). We received no comments on the proposed rule. No public hearing was requested nor held.

The Town of Chincoteague requested a change from the current operating regulation set out in 33 CFR 117.5 that requires the drawbridge to open promptly and fully for the passage of vessels when a request to open is given.

The purpose of this rule is to accommodate the Pony Swim across the Assateague Channel between Assateague Island and Chincoteague Island that takes place every year on the last Wednesday and Thursday in July. The herd is owned by the Chincoteague Volunteer Fire Department and managed by the National Park Service. This annual event began in the 1700's, but in 1925 the Fire Department took over the event that is also referred to as the Chincoteague Volunteer Fireman's Carnival. The proceeds from the auctioning of the ponies provide a source of revenue for the fire company and it also serves to trim the herd's numbers. On Wednesdays, the ponies are led across the Assateague Channel from Assateague Island to Chincoteague where they are auctioned off. On Thursdays, the remaining ponies are led back across the channel to Assateague Island.

Due to the high volume of spectators that attend this yearly event, it is necessary to close the draw span on each of these days between the hours of 7 a.m. to 5 p.m. to reduce vehicular traffic congestion on this small island as a result of drawbridge openings.

This rule will require the Chincoteague Channel Bridge to remain in the closed position each year from 7 a.m. to 5 p.m. on the last Wednesday and Thursday of July.

Since the Pony Swim is a well-known annual event, and is publicly advertised, vessel operators can arrange their transits to minimize any impact caused by the closure. Vessel operators with mast heights lower than 15 feet still can transit through the drawbridge across Chincoteague Channel during this event since only the bridge is closed and not the waterway. The Atlantic Ocean is the only alternate route for vessels with a mast height greater than 15 feet.

The Coast Guard received no comments on the NPRM for the Chincoteague Channel Bridge and no changes are being made to this final rule.

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

This conclusion was based on the fact that this rule will have a very limited impact on maritime traffic transiting this area. Since the Chincoteague Channel will remain open to navigation during this event, mariners with mast height less than 15 feet may still transit through the bridge and vessels with mast heights greater than 15 feet can use the Atlantic Ocean to the west or transit after the closed hours.

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 rule will not have a significant economic impact on a substantial number of small entities because even though the rule closes the Chincoteague Channel bridge to mariners, those with mast heights less than 15 feet will still be able to transit through the bridge during the closed hours and mariners whose mast heights are greater than 15 feet will be able to use the Atlantic Ocean as an alternate route or transit after the closed hours.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1966 (Pub. L. 104-121), we offered to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process. In our notice of proposed rulemaking, we provided a point of contact to small entities who could answer questions concerning proposed provisions or options for compliance.

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 expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

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

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

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

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

We have 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. Allowing the draw to remain closed for the brief times indicated on only the last Wednesday and Thursday of July of each year would have no individually or cumulatively significant impact on the environment.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. The exact date of the event was not known with sufficient time to allow for the publication of an NPRM followed by an effective date before the event. Any delay in the effective date of the event could pose unnecessary risks to those dignitaries attending the event.

The security zone will encompass all waters of Cleveland Harbor south of a line drawn from the northeast corner of Voinovich Park (41°30′40.5″ N, 081°41′47.5″ W) to the northwest corner of Burke Lakefront Airport (41°30′48.5″ N, 081°41′37″ W). These coordinates are based upon North American Datum (NAD 1983).

Entry into, transit through, or anchoring within this security zone is prohibited unless authorized by the Captain of the Port Cleveland or his designated on-scene representative. The designated on-scene representative will be the Coast Guard Patrol Commander. The Coast Guard Patrol Commander may be contacted via VHF Channel 16.

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

The security zone will only be in effect for a few hours on the day of the event and vessels may easily still transit inside the Cleveland Harbor breakwall.

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 rule will affect the following entities: The owners or operators of vessels intending to transit or anchor in this portion of Cleveland Harbor from noon (local) to 3 p.m. on May 21, 2004. This regulation will not have a significant economic impact for the following reasons. The regulation is only in effect for one day of the event. The designated area is being established to allow for maximum use of the waterway for commercial and recreational vessels. The Coast Guard will inform the public that the regulation is in effect via Marine Information Broadcasts.

Under Section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can 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 U.S. 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).

We have analyzed this rule under Executive Order 13132, Federalism, and have determined that this rule does not have implications for federalism under that Order.

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

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

This 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.

The Coast Guard has analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulation 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.

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 considered the environmental impact of this rule and concluded that under figure 2-1, paragraph (34)(g), of Commandant Instruction M16475.1C, this rule is categorically excluded from further environmental documentation. A written categorical exclusion determination is available in the docket for inspection or copying where indicated under ADDRESSES .

Throughout this document, “we,” “us” and “our” refer to EPA.

On February 13, 2003 (68 FR 7330), EPA proposed to approve the following rules into the California SIP.

We proposed to approve these rules because we determined that they addressed the deficiencies noted in our July 19, 2001 limited approval and limited disapproval of the previous versions of these rules (66 FR 37587) and otherwise complied with relevant Clean Air Act (CAA or Act) requirements. Our February 13, 2003, Federal Register notice of proposed rulemaking (NPRM) contains more information on the rules and our evaluation.

EPA's limited disapproval cited three deficiencies in the previous versions of Rules 2020 and 2201. First, EPA determined that the previous version of Rule 2201 was not approvable because its offset tracking equivalency system failed to contain a mandatory remedy. We also found the previous version of Rule 2201 deficient because section 4.5 of the rule exempted agricultural sources from permitting. Finally, we concluded the previous version of Rule 2020 was not approvable because it did not require all sources making modifications that result in a significant increase in emissions to meet the Lowest Achievable Emission Rate (LAER). For a more detailed discussion of these three rule deficiencies please see our July 19, 2001 final limited approval and limited disapproval at 66 FR 37587 and the accompanying Technical Support Document dated August 30, 1999 (“1999 TSD”).

EPA's July 2001 limited disapproval informed the District that the following actions were required to correct the rule deficiencies:

1. The District must revise Rule 2201 to provide a mandatory, enforceable and automatic remedy to cure any annual shortfall and, in the future, prevent shortfalls in the District's New Source Review Offset Equivalency Tracking System.

2. The District must remove the agricultural exemption from Rule 2020.

3. The District must revise Rule 2201 to ensure that all sources meet LAER  1 if they are allowed to make a significant increase in their actual emissions rate.

The District revised Rule 2201 to clarify and expand the requirements for tracking the equivalency of the District's NSR offset requirements to the federal NSR program offset requirements. The revised District rule includes specific and automatic remedies to address any shortfall found by the tracking system or any failure to implement the tracking system. The revisions to section 7.0 of Rule 2201 reasonably satisfy EPA's requirement for mandatory, enforceable and automatic remedies to address any shortfalls and prevent future ones.

To address the deficiency in Rule 2020, the District deleted the previous permit exemption for agricultural sources. We note that the State has also removed a similar blanket exemption, thereby providing the District with authority to require air permits for agricultural sources, including federally required NSR permits. 2

Finally, the District revised Rule 2201 to require LAER for all modifications considered major under federal regulations. Sections 3.24 and 4.1.3 provide that any major modification, as defined in the federal regulations in 40 CFR 51.165, must meet LAER. We conclude this revision reasonably addresses the noted deficiency.

EPA's proposed action provided a 30-day public comment period. During this period, we received comments from the following parties.

1. Seyed Sadredin, SJVUAPCD; letter dated March 13, 2003.

2. Caroline Farrell, Center on Race, Poverty & the Environment, on behalf of the Association of Irritated Residents (AIR); letter dated March 17, 2003.

3. David Farabee, Pillsbury Winthrop, LLP, on behalf of the Western States Petroleum Association (WSPA); letter dated March 17, 2003. 3

4. Ann Harper, Earthjustice; letter dated March 17, 2003.

These comments and our responses are summarized below.

The District and WSPA support approval of the revised rules into the SIP, but argue that EPA should revise or clarify various preamble statements, in particular those regarding the creditability of certain “pre-1990” Emission Reductions Credits. 4 Earthjustice and AIR oppose approval of Rule 2201 for the reasons described below.

In addition to these comments, EPA received four other letters related to the proposed action after the close of the comment period:

1. Paul Fanelli, Manufacturers Council of the Central Valley (MCCV); letter dated March 21, 2003. This letter is addressed to the Regional Administrator and does not specifically comment on the proposed approval notice. The letter instead notes that “The MCCV has been advised that the EPA Region IX staff has formulated policy regarding pre-1990 Emission Reduction Credits (ERC's)” and raises concerns with such policy formulation.

2. Joe Neves, Kings County Board of Supervisors; letter dated April 2, 2003. The letter echoes concerns raised by the District regarding the treatment of pre-1990 Emission Reduction Credits.

3. L.W. Clark, Independent Oil Producers' Agency (IOPA), letter dated April 22, 2003. IOPA argues pre-1990 emission reduction credits should not be discounted in any equivalency demonstration.

4. Harley Pinson, Occidental of Elk Hills (Oxy); letter dated July 1, 2003. Oxy notes in its letter that it previously submitted comments regarding the proposed rule in its capacity as a member of WSPA, but adds that it would like to reiterate some of the concerns raised by WSPA, the District and others.

We have not prepared separate responses to these late comments. Our responses to the timely comments sufficiently address their concerns.

Comment 1: WSPA expresses concern that sources in compliance with District Rules 2020 and 2201 may not comply with federal offset requirements because EPA noted that sources should “ensure that the emission reductions used to satisfy offset requirements meet federal creditability criteria.” WSPA writes that this statement suggests sources that comply with Rule 2201 may still not meet pertinent federal offset requirements. WSPA urges EPA to clarify that compliance with the District's SIP-approved NSR rule satisfies federal offset requirements and that a separate federal emission reduction creditability analysis is not necessary.

Response: EPA agrees that a source that complies with the applicable District SIP-approved NSR rule would be in compliance with the provisions of the Clean Air Act that the District SIP rule implements. As EPA explained in the NPRM, with the exception of the requirement to determine the surplus value of emission reduction credits at the time of use, the District rule applies the same criteria for determining the creditability of such emission reduction credits as the CAA. See 68 FR 7333. As a result, sources must continue to meet CAA creditability requirements as incorporated in sections 4.5 and 3.2.1 of Rule 2201. The equivalency demonstration in Rule 2201 provides some flexibility regarding surplus adjusting but the rule does not otherwise exempt sources from obtaining creditable emission reduction credits to meet offset requirements. Once these other requirements are met, nothing in section 7.1.5 requires the District to withdraw a permit issued in reliance on an emission reduction credit that is of lesser surplus value at the time of use under federal criteria. 5 Rule 2201 allows such credits to be used as long as equivalency is demonstrated annually. 6 Should the District allow too many non-surplus emission reductions to be used as offsets, the remedy is outlined in section 7.4. The District will retire additional creditable reductions that have not been used as offsets and have been banked or generated as a result of enforceable permitting actions. If a deficit remains, the District must implement the requirements specified in the federal rules.

Comment 2: WSPA disagrees with EPA's determination that the offset equivalency tracking system only covers permits for sources with authority to construct (ATC) applications deemed complete on or after August 20, 2001. WSPA argues that because EPA granted limited approval to a prior version of the tracking system in its July 19, 2001 final action, EPA cannot rely on the fact that it subsequently required additional changes to the tracking system to exclude sources covered by ATC applications deemed complete before August 20, 2001. EPA should clarify that even sources that have permit applications deemed complete before August 20, 2001 should be treated as covered by the District's tracking system.

Response: Section 7.3.1 of District Rule 2201 limits the scope of the tracking system to “new and modified sources for which a complete application for Authority to Construct was submitted after August 20, 2001.” This date aligns with the effective date of EPA's July 19, 2001 limited approval and limited disapproval of the previous version of Rule 2201. Prior to August 20, 2001, the SIP required offsets but did not include a requirement to track and demonstrate offset equivalency. The rule being approved into the SIP today clearly specifies the period covered by Rule 2201. Whether we use the effective date of the prior approval or the terms of the current rule, we would still limit allowances for non-surplus credits under the equivalency tracking system to sources submitting ATCs after August 20, 2001 unless the District changes the rule to include these sources in the tracking system.

Comment 3: WSPA notes that EPA has concluded that the District may not rely on the application of LAER requirements to newly constructed federal minor sources for purposes of demonstrating equivalency with federal NSR requirements because the District's LAER rules do not require these minor sources to make actual emission reductions. WSPA observes that despite this finding, the District's rules result in emissions from new minor sources that are substantially lower than would be the case under federal NSR requirements. WSPA also observes that in certain cases, the District's NSR program does reduce actual emissions from sources that are not major under federal NSR. WSPA encourages EPA to work with the District to assess further approaches for evaluating the overall effectiveness of the District's NSR rules as compared to federal NSR requirements.

Response: EPA will continue to work with the District to assess where more stringent District requirements result in actual emission reductions that may be used to compensate for any less stringent offset requirements. It is important to reiterate, however, that the exercise is to demonstrate that the District achieves real reductions in the inventory of emissions through requirements more stringent than the Act's. For this reason, construction of a new source, even if it adds fewer new emissions than might occur in other areas, does not reduce real emissions from the air and the baseline inventory. The purpose of the tracking system is not to make creditable certain actions that do not otherwise qualify as offsets, such as avoided possible emission increases. CAA section 173(c)(2) requires that offsets be reductions in “actual emissions.” As commenter notes, there may be examples where actual reductions of emissions in the air and in the inventory do occur and we will assess these examples with the District.

Comment 4: WSPA notes that the equivalency tracking program requires the District to demonstrate equivalency with the federal NSR rules in effect on November 14, 2002. See Rule 2201, section 7.1.1. WSPA observes that newly promulgated federal NSR Reform rules took effect on March 3, 2003 and urges EPA to work promptly with the District to incorporate the new federal NSR rules into the equivalency demonstration requirement.

Response: On December 31, 2002, EPA finalized revisions to the federal NSR rules (“NSR Reform”). 67 FR 80186. Pursuant to the revised rules in 40 CFR 51.165, permitting agencies revising their rules to meet NSR Reform must adopt and submit such revisions to EPA by January 2, 2006. As suggested by the comment, EPA is working with the District to determine how the District will implement NSR Reform, although the rule does not provide for establishing a different deadline for the District.

Comment 5: WSPA encourages EPA to continue to work with the District to develop alternative NSR rules that demonstrate equivalency with federal offset requirements, while accounting for the unique characteristics of the District's permitting system. WSPA also suggests that more flexible approaches to satisfying federal offset requirements may be appropriate in other jurisdictions and encourages EPA to consider alternative approaches in other states and air districts.

Response: EPA acknowledges WSPA's support for alternative approaches to satisfying federal emissions offset requirements and will consider submissions from other jurisdictions on a case-by-case basis.

Comment 6: WSPA agrees that creditable emission reductions must be surplus when created and either used immediately to offset emissions or banked for later use. However, WSPA argues that nothing in the Clean Air Act or EPA regulations requires banked emission reduction credits to be surplus at the time of use. WSPA suggests that EPA revisit its position on the treatment of credits banked for later use in order to assure that the District's banking program remains effective.

Response: We disagree with WSPA's assertion that the Clean Air Act does not require emission reduction credits to be surplus at time of use. The surplus requirement derives from CAA section 173(c)(2), which provides, “Emission reductions otherwise required by this Act shall not be creditable as emissions reductions for purposes of any such offset requirement.” We believe the provision, by focusing on emission reductions “for purposes” of the offset requirement, is clear that the creditability of an emission reduction is to be determined at the time it is used as an offset. See also CAA § 173(a)(1)(A) (requiring “actual” emission reductions equal to the total tonnage of increase at the time construction is commenced). Even if we found this language ambiguous, however, the most reasonable interpretation is to reconcile creditability, including the surplus value, no earlier than at the time of use when the permitting agency formally determines that an applicant meets Clean Air Act requirements for an authority to construct permit. WSPA's interpretation that emission reduction credits retain their value for all time is inconsistent with the purposes of section 173(c)(2) and related requirements of Part D of Title I of the Act that require continuing air pollution reductions in nonattainment areas.

For example, one of the purposes of this requirement is to ensure that offsets are real reductions in the area's emissions inventory. Without “surplus adjusting” at time of use, there is no assurance that emissions reductions have not already been counted in the area's plan as a decrease in the inventory. If a reduction is otherwise required by a subsequently adopted rule, the reduction is typically included in the emissions reduction benefits of the rule incorporated into the SIP. This inconsistency with the requirement for reasonable further progress is one reason why EPA believes the “surplus-at-time-of-use” requirement is consistent with the goals of the Act.

WSPA's reading of the surplus requirement of section 173(c)(2) would diminish it to a mere timing provision with no broader air quality protection function. WSPA's interpretation would mean that sources making emission reductions that they know will be required would be able to use these emission reduction credits for all time as long as they are made before officially required. Sources would be motivated to make these “early” reductions in order to preserve these emissions for future use. If such a “loophole” in section 173(c)(2) did exist, the result would be that the emission reduction benefits of many CAA requirements such as Reasonably Available Control Technology (RACT) for existing sources would be lost because the reductions could be used to allow increases in emissions at the same source or other sources. This is not a reasonable interpretation of section 173(c)(2). A more reasonable interpretation is that Congress established section 173(c)(2) at least in part to preserve the benefits of other CAA requirements and that creditability must instead be determined when a stationary source uses a credit to meet offset requirements.

Comment 7: AIR contends that EPA should not approve Rules 2020 and 2201 because the District's revised rules remain unenforceable. AIR urges EPA to consider the District's past failure to meet statutory or regulatory reporting deadlines before relying on the District's commitment to submit annual offset equivalency demonstration reports. Accordingly, AIR recommends that EPA reject any remedy hinging on the District's compliance with reporting requirements. Likewise, Earthjustice contends that EPA's reliance on the District's promise of compliance is unjustified and unreasonable in light of the District's history of noncompliance with the CAA.

Response: EPA agrees that the District's NSR program must generate real, enforceable reductions in emissions that meet all EPA creditability requirements. Accordingly, EPA's July 19, 2001 limited approval of Rules 2020 and 2201 directed the District to include in the Rule 2201 offset equivalency tracking system “a mandatory and enforceable remedy to cure any annual shortfall and prevent future shortfalls.” 66 FR 37587. EPA believes the District's revised Rule 2201 addresses this concern. Section 7.4.1 of Rule 2201 establishes two remedies that would take effect if the District fails to demonstrate equivalency with federal NSR offset requirements. First, the District will retire any unused emission reduction credits that meet federal creditability criteria to make up for any shortfall in the amount of federal creditable emission reductions required. Rule 2201, section 7.4.1.1. If the shortfall persists after the District retires unused federally creditable emission reduction credits, the District must also apply federal offset requirements to all permits issued after the annual demonstration deadline. Rule 2201, section 7.4.1.2. As we stated in our NPRM, EPA has determined that these remedies satisfy the concerns raised in our July 19, 2001 limited approval of Rule 2201.

While EPA acknowledges AIR's concern regarding the possible failure to meet reporting deadlines, we believe the current rules provide adequate remedies for any possible noncompliance. For example, section 7.4.1.1 of Rule 2201 specifies that if EPA determines that the District's demonstration is erroneous, the mandatory and enforceable remedies discussed in the preceding paragraph will automatically be imposed. In addition, section 7.4.2.3 specifically addresses the consequences should the District fail to submit the required report to EPA and the public. These provisions include specific, automatic remedies that provide safeguards should the District be unable to meet the equivalency demonstration requirements. These remedies will become federally enforceable upon the effective date of today's action.

Comment 8: Earthjustice argues that the District's offset equivalency tracking system fails to comply with “some of the most basic elements” of the Clean Air Act. Specifically, Earthjustice believes the District's annual equivalency demonstration “does little more than “track and report” annual shortfalls in the District's system.” Earthjustice expresses concern that a year or more may pass before any remedy to cure annual shortfalls takes effect. Earthjustice claims that such a delay is unreasonable and violates the Act.

Response: As noted above, EPA has concluded that the provisions of District Rule 2201, section 7.4.1 provide automatic and mandatory enforceable remedies in the event that an annual shortfall in the District's offset equivalency tracking system occurs. While it is true the remedies set forth in section 7.4.1 take effect only after the District fails to demonstrate equivalency with federal NSR offset requirements, CAA section 173(a)(1)(A) allows for this type of aggregate demonstration (please see response to Comment 9 for further discussion). The reporting schedule is unlikely to cause a significant delay compared to permit-by-permit review of annual aggregate equivalency. Accordingly, EPA has concluded that the District's program reasonably implements section 173(a)(1) and (c) of the Act.

Comment 9: AIR argues the District's NSR program improperly relies on pre-1990 emission reduction credits without adequately accounting for these credits. AIR contends that the District may not use pre-1990 emission reduction credits without verifying that the credits are surplus ( i.e. , in excess of emission reductions expressly required by the Clean Air Act). AIR also notes that there are “very real concerns” that the pre-1990 emission reduction credits are not “actual or quantifiable.”

Response: Section 7.1.3 of Rule 2201 requires the Air Pollution Control Officer to track the surplus value of “creditable” emission reductions used as offsets. Section 7.1.5 defines “creditable” for purposes of this tracking as emission reductions that are real, surplus, quantifiable, enforceable and permanent. EPA agrees that pre-baseline emission reduction credits create special challenges in meeting these requirements. Thus, EPA agrees with AIR's comment insofar as it suggests the need to carefully scrutinize the creditable value of pre-baseline emission reduction credits in the equivalency tracking system.

However, to the extent AIR challenges EPA's authority to allow individual sources to rely on pre-baseline credits for offsetting purposes, EPA believes AIR's arguments are addressed by our July 19, 2001 limited approval of the District's NSR rules. In that notice, EPA concluded that the District can rely on pre-baseline credits in issuing individual construction permits provided it demonstrates sufficient creditable offsets are available on an aggregate basis. 66 FR 37588-89. EPA believes this conclusion is reasonable in light of the requirements of CAA § 173(a)(1)(A), which provides that offset requirements are satisfied if “total allowable emissions from existing sources in the region, from new or modified facilities which are not major emitting facilities and from the proposed sources, will be sufficiently less than total emissions from existing sources.” The language of section 173(a)(1)(A) supports the District's reliance on aggregate emissions to demonstrate equivalency. See also 57 FR 13498, 13508 (Apr. 16, 1992) (noting, “[f]or purposes of equity, EPA encourages States to allow the use of pre-enactment [ i.e. , pre-baseline] emission reduction credits for offsetting purposes' and establishing the requirements for States to meet if they wish to allow these credits). 7

Comment 10: AIR believes the offset equivalency tracking system will have an adverse effect on air quality in the San Joaquin Valley if the system fails to generate enough surplus emission reduction credits to offset pre-1990 credits. According to AIR, EPA is currently unable to predict whether the District Rules 2020 and 2201 will generate sufficient emission reduction credits to demonstrate equivalency with federal NSR rules.

Response: EPA acknowledges AIR's concerns regarding the inclusion of pre-1990 emission reduction credits. However, EPA believes the nonattainment planning process and the equivalency tracking system are the proper mechanisms for addressing these concerns. For example, in the District's 2003 PM-10 Plan recently proposed for approval (69 FR 5412 (Feb. 4, 2004)), the District evaluated the number of pre-baseline ERCs that could be used in the future without jeopardizing attainment or reasonable further progress. See 2003 PM-10 Plan at 3-17 to 3-20 (Amended Dec. 2003). The analysis in the 2003 PM-10 Plan follows that outlined in the August 26, 1994 Seitz Memo. The District uses economic forecast data to project growth in the various industry sectors in the area. Some of this growth will trigger NSR and the offset requirements. This growth would normally not impact the area's inventory because reductions from other sources would be required to compensate for this growth. Using pre-baseline ERCs has the effect of allowing growth in emissions without obtaining actual inventory reductions. The Seitz memo explains that in order to ensure that the use of these pre-baseline ERCs is consistent with the area's attainment plan and reasonable further progress, the District is required to either show that their use is reflected in the growth estimates in an identifiable way or add these ERCs on top of the growth estimates. The District has shown that by capping the number of pre-baseline ERCs that may be used at the projected level of growth, the area can still achieve sufficient emission reductions elsewhere to achieve attainment and reasonable further progress “net” of this allowed growth in emissions. This demonstration supports the limited use of pre-baseline ERCs as consistent with attainment of the national ambient air quality standards (NAAQS) for PM-10. EPA agrees that a similar demonstration must be included in the area's ozone plan to account for pre-baseline emission reduction credits and ensure that the plan generates sufficient creditable emission reductions to satisfy reasonable further progress and compliance demonstration requirements for extreme ozone nonattainment areas. 8 We encourage AIR to participate in the public process regarding this plan and to raise any concerns with how pre-baseline emission reduction credits are included.

Comment 11: AIR also notes that there is uncertainty surrounding the District's ability to manage the tracking system if the San Joaquin Valley is redesignated as an extreme ozone nonattainment area. AIR therefore concludes that EPA should not approve Rule 2201 until these uncertainties are resolved.

Response: On April 8, 2004, EPA took final action to reclassify the San Joaquin Valley ozone nonattainment area from a severe to an extreme 1-hour ozone nonattainment area. 69 FR 8126. EPA agrees that redesignation of the ozone nonattainment area will affect the implementation of the offset equivalency tracking system. See 68 FR 8127. The District will need to update its NSR program to meet the new federal requirements triggered by redesignation. The offset tracking system and equivalency demonstration was approved for limited purposes and EPA would like to avoid any possible misunderstanding that it was intended to address additional rule deficiencies that would occur if the District failed to update its rules to comply with federal NSR requirements for extreme ozone nonattainment areas.

As AIR acknowledges, it is not certain when or if the area will be unable to demonstrate equivalency in the future. In the meanwhile, we believe it is reasonable to approve the proposed revisions to Rule 2201 because the Rule provides automatic remedies in the event equivalency cannot be demonstrated. Thus, if the District cannot demonstrate equivalency, the District will meet all federal offset requirements on a case-by-case basis.

Comment 12: AIR argues that the District's use of pre-1990 emission reduction credits violates CAA section 193. AIR observes that section 193 prohibits the modification of any pre-1990 implementation plan in effect in a nonattainment area unless the modification ensures equivalent or greater emission reductions. AIR contends that allowing the District to use pre-1990 emission reduction credits without determining whether or not they are surplus would not have been allowed prior to the 1990 Clean Air Act Amendments and would violate section 193.

Response: Section 193 of the Clean Air Act prohibits the modification of any control requirement in effect in a nonattainment area prior to November 15, 1990 “unless the modification insures equivalent or greater emission reductions of such pollutant.” AIR does not identify which pre-1990 control requirement is being relaxed in this action. In fact, the revisions being approved today are to District rules approved into the SIP in 2001. It is unclear how section 193 applies to these changes given that they do not revise any pre-1990 control requirements. Moreover, there is no basis for claiming these revisions relax the previously approved SIP measures; to the contrary, these changes strengthen rules 2020 and 2201 by addressing deficiencies noted in the 2001 limited approval/limited disapproval.

Comment 13: Comments from WSPA, along with the District, disagreed with EPA's conclusion that pre-1990 emissions reduction credits are not surplus creditable reductions available to meet federal offset requirements. These commenters argue that the District had properly accounted for pre-1990 credits in previous submittals to EPA. In support of this claim, the commenters cite the District's 1994 Ozone Attainment Demonstration Plan, Revised 1993 Rate of Progress Plan, and Revised Post-1996 Rate of Progress Plan. Several of the comments note that EPA approved these documents without questioning the methodology used to account for pre-1990 emissions reduction credits. WSPA encourages EPA to work with the District to resolve this issue in a manner that maintains the viability of the District's emissions banking program and protects the ability of permittees to obtain offsets for future projects.

Response: EPA has worked with the District in preparing its new 2003 PM-10 Plan to demonstrate more clearly that limited use of pre-baseline ERCs is consistent with attainment of the PM-10 NAAQS and reasonable further progress toward these standards. EPA proposed approval of this plan on February 4, 2004. 69 FR 5412. EPA believes that the plan shows that even assuming a limited amount of growth in emissions is not offset by reductions in the current inventory because pre-baseline ERCs are used, the area will still be able to attain the NAAQS and demonstrate reasonable further progress. The District will need to support a similar demonstration as part of the area's ozone plan.

The plans referenced by commenters did not reasonably support a conclusion that the area can attain the ozone NAAQS while foregoing meaningful offsets from the emissions inventory. EPA approval of an attainment demonstration does not automatically allow the use of pre-baseline ERCs. There is no requirement that an area carry forward pre-baseline ERCs. The decision of whether to allow their continued use is up to the State and local District. Should a State or local District choose to protect these credits for future use, the amount of such ERCs must be correctly included in the plan. A state or local agency could choose to include all pre-baseline ERCs and require compensating reductions elsewhere, or could choose to not allow any pre-baseline ERCs to be carried forward. The plans referenced by commenters included no specific, identifiable quantity of pre-baseline ERCs and did not in any way limit or account for their use. More fundamentally, these demonstration have not proven out. Reliance on such demonstrations while simultaneously redesignating the ozone area from severe to extreme nonattainment would not be reasonable. Until revised demonstrations are provided with respect to ozone attainment, EPA's position remains that the District has not shown that use of these ERCs as offsets can be allowed while preserving the area's ability to attain and make reasonable further progress toward attainment of the ozone NAAQS.

No comments were submitted that changed our assessment that the submitted rules address the deficiencies noted in our July 19, 2001 limited disapproval and comply with the relevant CAA requirements. Therefore, as authorized in section 110(k)(3) of the Act, EPA is fully approving SJVUAPCD Rules 2020 and 2201 into the California SIP. This action terminates all sanction and FIP obligations associated with our July 19, 2001 action on a previous version of the rule.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 16, 2004. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

By this document, FCC 04-72, adopted March 25, and released on April 13, 2004, we amend our rules governing the collection of claims owed the United States, 47 CFR part 1 subpart O, to implement the Debt Collection Improvement Act of 1996, Public Law 104-134, 110 Stat. 1321, 1358 (1996) (DCIA). The term “claim” or “debt” has the meaning used in 31 U.S.C. 3701(b), which is any amount of funds or property that has been determined by an appropriate official of the Federal Government to be owed to the United States by a person, organization or entity other than a Federal Agency. We also adopt a rule providing that we will withhold action on applications and other requests for benefits upon discovery that the entity applying for or seeking benefits is delinquent in its non-tax debts owed to the Commission, and dismiss such applications or requests if the delinquent debt is not resolved.

In the Notice of Proposed Rulemaking (NPRM) in this proceeding, we proposed many revisions to our rules based on the statutory changes adopted in the DCIA, as implemented in rules adopted by the Departments of Treasury and Justice. No comments relevant to the proposed rule changes were received. We therefore adopt the DCIA rule changes as generally proposed in the NPRM. As we noted in the NPRM, the major changes to the Commission's debt collection rules include an increase in the principal claim amount from $20,000 to $100,000 or such amount as the Attorney General deems appropriate, that agencies are authorized to compromise or to suspend or terminate collection activity thereon without the concurrence of the Department of Justice, and an increase in the minimum amount of a claim that may be referred to the Department of Justice from $600 to $2,500. The rules also reflect several new debt collection procedures under the DCIA, including but not limited to (a) transfer or referral of delinquent debt to the Department of the Treasury or Treasury-designated debt collection centers for collection (known as cross-servicing); (b) mandatory, centralized administrative offset by disbursing officials; (c) mandatory credit bureau reporting; and (d) mandatory prohibition against extending Federal assistance in the form of loan or loan guarantees to delinquent debtors. The rules adopted conform the Commission's definitions to those used by the Departments of Justice and Treasury in their regulations on the DCIA. Finally, we have added § 1.1935 adopting the new Treasury regulations adopting the DCIA administrative wage garnishment requirements. See Administrative Wage Garnishment , 63 FR 25139 (May 6, 1998) (permitting agencies to garnish up to 15 percent of the disposable pay of a debtor to satisfy delinquent non-tax debt owed), adopting 31 CFR 285.11.

We also incorporate the Federal salary offset procedures, governed by 5 U.S.C. 5514 and Office of Personnel Management (OPM) regulations. See 5 CFR 550.1104. Many other adjustments have been made to take into account debts arising under our auction rules. Other provisions have been redrafted for clarity but do not substantively change debt collection procedures.

As noted, we received no comments concerning our proposed rules changes, including the proposed “red light rule.” In the NPRM, we explained that our regulatory and application fee rules already permit us as a matter of discretion to dismiss applications for failure to pay appropriate fees. See 47 U.S.C. 158(c)(2), 159(c)(2). See also 47 CFR. 1.1109(c), 1.1109(d)(1); 1.1112(a)(1)(i); 1.1112(a)(2)(ii); 1.1157(a)(2); 1.1161(a)(1)(i); 1.1161(a)(2)(ii); 1.1164(e); and 1.1166(c).

Our auction rules provide that an applicant must certify that it “is not in default on any Commission licenses and that it is not delinquent on any non-tax debt owed to any Federal agency” or its application will be dismissed. 47 CFR 1.2105(a)(2)(x). See also 47 CFR 1.2105(a)(2)(xi). (These rules are not affected by the proposed red light rule.) 47 CFR 1.2105(b). We proposed that as a next step in the improvement of the management of the Commission's accounts, we would adopt a rule that anyone delinquent in any non-tax debts owed to the Commission will be ineligible for or barred from receiving a license or other benefit until the delinquency has been resolved by payment in full or by the completion of satisfactory arrangements for payment.

We adopt the rule changes as indicated in the Appendix to this Order. Our regulatory and application fee rules are amended (with some minor modifications from the rules proposed in the NPRM) to make it clear that we will withhold action on applications or other requests for benefits by delinquent debtors and ultimately dismiss those applications or other requests if payment of the delinquent debt is not made or other satisfactory arrangement for payment is not made. In addition, we are adding a generally applicable rule (with some necessary exceptions, as discussed below) to be added as § 1.1910 of our rules as set forth in the appendix to withhold action on applications or other requests for benefits by debtors delinquent in debts other than application or regulatory fees, and to dismiss those applications or other requests if the delinquent debt is not paid or satisfactory arrangement for payment is not made.

Under the rules adopted here, the Commission will not approve any applications or other authorizations until we determine that all delinquent debt to the Commission by entities using the same taxpayer identifying number (TIN) is paid or satisfactory arrangements are made for payment. Applications subject to the red light rule do not include matters that are subject to more restrictive procedures, e.g. requests to waive, defer, or reduce application fees or regulatory fees under 47 CFR 1.1117 and 1.1166, and petitions or applications for review under 47 CFR 1.1117, 1.1159, and 1.1167 related to applications or other requests requiring the filing of an FRN. See para 10, infra. See also 31 U.S.C. 7701(c)(2) (DCIA definition of doing business with the Federal government); 47 CFR 1.8002(a) (indicating anyone doing business with the Commission must obtain an FRN).

An applicant's FCC Register Number (FRN) will be used to determine all delinquent debt owed attributable to all entities using the same TIN. Entities may acquire multiple FRNs. However, only delinquent debt attributable to the same TIN will trigger our proposed red light rule.

By delinquent debt we mean a claim or debt that has not been paid by the date specified in the initial written demand for payment, applicable agreement, instrument, or Commission rule or rules, unless other satisfactory payment arrangements have been made by that date, or, at any time thereafter, the debtor has failed to satisfy an obligation under a payment agreement or instrument with the agency, or pursuant to a Commission rule. See also 31 CFR 900.2(b) (“a debt is ‘delinquent’ if it has not been paid by the date specified in the agency's initial written demand for payment or applicable agreement or instrument (including post-delinquency payment agreement), unless other satisfactory payment arrangements have been made.”).

We note that, pursuant to section 504(c) of the Communications Act, as amended, 47 U.S.C. 504(c), we do not treat monetary forfeitures imposed after issuance of a notice of apparent liability as debts owed to the United States until the forfeiture had been partially paid or a court of competent jurisdiction has ordered payment of the forfeiture and such order is final. All Commission electronic systems are linked with Revenue And Management Information System (RAMIS), which after the rules take effect, will check the FRN provided on the filing for eligibility-based fee sufficiency and the existence of any non-tax delinquent debt. The delinquency of any entity covered by the same TIN as that used by the entity making the filing will trigger this new rule. The delinquent debtor will be notified that a fee and delinquent debt check revealed either a fee insufficiency or delinquent debt that must be resolved within 30 days of the notification. Resolution includes payment of the debt, or other satisfactory resolution such as adequate arrangement that the debt will be paid. This resolution period is not intended to restrict our exercise of any right to recover or collect amounts due to the Commission. An application or other request for benefit will not be granted until the delinquent debt issue has been resolved. If the delinquency has not been resolved within 30 days of the date of the notification letter, the application or request for authorization will be dismissed.

We asked in the NPRM how to handle those situations where a timely challenge has been filed either to the existence of or the amount of a debt, and whether such debts should be considered delinquent for purposes of the red light rule. Cf. 31 CFR 285.13(d)(2)(iii) (a debt is not delinquent for purposes of the denial of financial assistance to delinquent debtors under 31 U.S.C. 3720B if it is subject to time-filed administrative or judicial challenge). No comments were received. We believe that a timely written challenge to a debt should preclude consideration of the debt for purposes of the red light rule. Accordingly, where an applicant has filed a timely administrative appeal, or a contested judicial proceeding, challenging either the existence of, or the amount of, a debt, such debt shall not be considered delinquent for purpose of the red light rule. For the purpose of the red light rule, we will consider appeals made to the Administrators of the Universal Service Fund and the Telecommunications Relay Services Fund and to the Billing and Collections Agent for the North American Numbering Plan as administrative appeals. Similarly, if an applicant has submitted a written request for compromise of debt in conformance with applicable rules, such a debt shall not be considered delinquent for purposes of the red light rule. See 31 U.S.C. 3711. As we noted in the NPRM, for purposes of part 1, subpart O only, an installment payment under 47 CFR 1.2110(g) will not be considered delinquent until the expiration of all applicable grace periods and any other applicable periods under Commission rules to make the payment due. The rules adopted here in no way affect the Commission's rules regarding payment for licenses (including installment, down, or final payments) or automatic cancellation of Commission licenses.

We invited comment on the exceptions to the red light rule, but received no comments. However, we raised several issues in this regard that we now resolve.

In the NPRM, we proposed that emergency authorizations, special temporary authority (STA) applications involving safety of life or property, including national security emergencies, requests to waive, defer, or reduce applications fees or regulatory fees under 47 CFR. 1.1117 and 1.1166, and petitions or applications for review under 47 CFR 1.1117, 1.1159, and 1.1167 related to other requests will not be subject to the red light rule. See FRN Order , 16 FCC Rcd at 16146 n.63 (citing regulations for emergency authorizations and STAs).

We proposed that such applications should include the FRN, as we noted in the FRN Order. Id. at 46. We also proposed that we would examine any subsequent applications for regular authority in place of the emergency authorization or STA to determine if the applicant is a delinquent debtor, and would not grant such applications until such delinquencies are resolved. We adopt this proposal as set forth in the NPRM. Further, we expand these exceptions to include situations where an entity's license is cancelled or expired, and where the entity seeks STA in order to continue providing service to a substantial number of customers or end-users for a brief period until those customers or end-users can be transitioned to other methods of communication. This approach minimizes service disruption to the public, including those who use radio systems for E911 and emergency communications.

We also sought comment on how to handle certain sections of the Communications Act that contain congressionally mandated deadlines, or provide that if the Commission fails to act by a set date, the Commission is deemed to have approved the action sought. See 47 U.S.C. 271(d)(3) (Bell operating company interLATA applications must be decided within 90 days); 47 U.S.C. 252(e)(5) (if a state commission fails to act on an interconnection agreement, the Commission shall issue an order preempting the state commission's jurisdiction within 90 days of notice of failure of the state to act); 47 U.S.C. 405(b)(1) (Commission must act on petition for reconsideration of an order concluding a hearing under section 204(a) or 208(b)); 47 U.S.C. 208(b)(1) (Commission must issue an order concluding an investigation of lawfulness of a charge, classification, regulation, or practice within 5 months after filing of complaint); 47 U.S.C. 614(h)(C)(iv) (Commission must decide cable must carry complaints within 120 days). See 47 U.S.C. 160(c) (Commission must act on petition for forbearance within one year, extendable by an additional 90 days, or petition deemed granted).

In addition, we noted that certain sections of the Commission's rules provide that uncontested applications are granted automatically once a given period of time has passed. See, e.g. , 47 CFR 63.03 (a), which allows an applicant to transfer control of the domestic lines or authorization to operate on the 31st day after the date of public notice listing a domestic section 214 transfer of control application as accepted for filing as a streamlined application. We proposed that in these circumstances, if the applicant is found to be a delinquent debtor at the statutory or Commission imposed deadline, the application will be dismissed, consistent with the general rule. We received no comments on this proposal. We therefore adopt the rule as proposed. We continue to believe that this result is unlikely. Debtors will receive sufficient notice in advance of a debt being classified as delinquent. We expect that most applicants will diligently check to determine whether they are delinquent in any debts owed to the Commission and resolve any such delinquencies in a timely manner. Nonetheless, dismissal of such applications for delinquencies is possible.

The red light rule permits delinquent debtors to resolve the delinquency within 30 days to avoid dismissal of an application. We proposed that the 30-day resolution period would not apply to applications or requests for benefits where more restrictive rules govern treatment of delinquent debtors. For example, under existing rules auction applicants must already certify that they are not delinquent in non-tax debt or their short form application will be dismissed and they will be ineligible to participate in an auction. See 47 CFR 1.2105(a)(2)(x) and (xi).

We noted, however, that the red light rule would apply to subsequent applications filed by winning bidders, e.g. , the long-form application. We adopt this proposal without modification.

In the NPRM, we asked whether the Bankruptcy Code requires an exception to the red light rule. No comments were received concerning this question. We have concluded that we must adopt an exception to the red light rule to comply with section 525(a) of the Bankruptcy Code as interpreted by the Supreme Court in FCC v. Nextwave Personal Communications, Inc., 537 U.S. 293 (2003). Therefore, the rules provide that applications or requests for benefits to which 11 U.S.C. 525(a) applies will not be dismissed by virtue of the applicant's delinquent status. We are not always aware that a delinquent debtor has filed for bankruptcy. Therefore, if an applicant receives a letter pursuant to § 1.1910 of the Commission's rules and that applicant has filed for bankruptcy, it should notify the Managing Director in writing of its status so that it can be determined whether section 525(a) applies.

In some instances, such as tariffs, filings with the Commission go into effect immediately (or within one day), thus precluding a check to determine if the filer is a delinquent debtor before the request goes into effect. See 47 U.S.C. 203, 206.

In the tariff situation, we have the ability to take appropriate action against a tariff after its effective date for noncompliance with any of our rules. See 47 U.S.C. 205. We adopt this proposal for tariffs that go into effect immediately on filing and where it is later discovered that the filer is a delinquent debtor. We will not apply this rule to multi-party tariffs where one party is discovered to be a delinquent debtor, as we do not wish to penalize the other parties to the tariff.

We did not propose to pre-screen FOIA requestors for delinquent debt under the proposed procedures, as our FOIA rules already address situations where FOIA requesters previously failed to pay FOIA fees. See 47 CFR 0.469(a)(2).

We adopt this proposal as previously stated. We note, however, that if an applicant is delinquent in paying its FOIA fees that delinquency will trigger the red light rule for other applications.

We proposed that if we adopted the red light rule, it would apply to any applications or requests for benefits pending at the time the rule goes into effect. Pending applications or requests for benefits are subject to a check for debt delinquency at any time before the request is granted. No comments were received on this proposal, and we adopt it as stated. Any submissions on or after the effective date of the red light rule will be subject to screening for delinquent debt.

The FRN became mandatory on December 3, 2001. See FRN Order, 16 FCC Rcd at 16148. Prior to that date, we encouraged entities doing business with the Commission to obtain and include the FRN in their filings with the Commission. See New Commission Registration System (CORES) to be Implemented July 19, 15 FCC Rcd 18754 (2001).

While many applicants included the FRN prior to December 3, 2001, many did not. We proposed that applications still pending if we ultimately adopt the red light rule that were filed prior to December 3, 2001 without an FRN will not be subject to the rule due to the administrative difficulties in checking for delinquent debt on those applications. Absent any comments on this issue, we adopt the proposal as stated.

Pursuant to the DCIA and the FCCS, the head of the agency is empowered to collect claims of the United States for money or property arising out of activities of the agency, compromise debts that do not exceed $100,000 without the approval of the Department of Justice, and to suspend or terminate collection activity on a debt. See 31 U.S.C. 3711 (a) (1); 31 CFR part 901. See also 31 U.S.C. 3711(a) (2); 31 CFR part 902.

The DCIA rules we adopt here (and the predecessor rules) define the Chairman as the head of the agency for DCIA purposes, but neither the DCIA implementing rules nor our existing delegations of authority expressly address various administrative determinations specifically assigned to the head of the agency under the DCIA. See 47 CFR 1.1901(c) See also 47 CFR 0.211 and part 1, subpart O (2002).

Additionally, the head of the agency is authorized to waive the ban on the issuance of Federal financial assistance to persons or entities delinquent in non-tax debt owed to the Federal Government, and to delegate this authority to the Chief Financial Officer or the Deputy Chief Financial Officer. See 31 U.S.C. 3720B(a) (waiver of ban on issuance of Federal Financial assistance to delinquent debtors by agency head); 3720B(b) (delegation of waiver authority to Chief or Deputy Chief Financial Officer).

Our existing regulations did not specifically address this authority. See 47 CFR 0.211, 0.231, and part 1, subpart O (2002).

We amend the delegations of authority to make clear that the Chairman may make all administrative determinations under the DCIA. We also amend the rules to delegate to the Managing Director and the General Counsel authority to make administrative determinations (except waiver determinations under section 3720B) under the DCIA. Finally, we add a delegation to the Chief Financial Officer and the Deputy Chief Financial Officer to make the waiver determination under 31 U.S.C. 3720B. We adopt these rules of agency organization, procedure and practice without notice and comment. See 5 U.S.C. 553(b)(A).

Regulatory Flexibility Certification. We hereby certify that the rules adopted in this Order will not have a significant economic impact on a substantial number of small entities. See 5 U.S.C. 605(b). The amendment of the delegations of authority is adopted without notice and comment and therefore does not require regulatory flexibility analysis. See 5 U.S.C. 604(a). The amendment of our part 1 subpart O rules to conform to the DCIA streamline our debt collection rules reflecting the statutory language contained in the DCIA, and therefore a regulatory flexibility analysis is not required. See FCCS Rules, 65 FR 70395, November 22, 2000 (certifying under section 605(b) that the FCCS rules did not require a regulatory flexibility analysis). The rule amendments requiring payment of delinquent debts before final action is taken on an application or other request for a federal benefit will not affect a substantial number of small entities. We estimate that there are approximately 1,225 debtors currently delinquent in their debt to the Commission out of approximately 750,000 entities that hold an FRN. This means that potentially less than 1/4 percent of entities doing business with the Commission could be affected by this rule. Of the 1225 delinquent debtors, it is impossible to determine how many are small entities, but we can reasonably posit that less than all 1225 are small entities. Consequently, fewer than one percent of entities subject to this rule are small entities. We have no reason to expect that this percentage will change over time. Therefore, we certify pursuant to 5 U.S.C. 605(b) that the “red light rule” does not require a regulatory flexibility analysis.

Accordingly, it is ordered that, pursuant to sections 4(i), 8(c)(2), 9(c)(2), and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 158(c)(2), 159(c)(2), and 303(r), and 5 U.S.C. 5514, the rules set forth in the appendix are hereby adopted, effective June 16, 2004, except that changes to rules 1.1112, 1.1116, 1.1161 and 1.1164 and newly adopted rule 1.1910 are effective October 1, 2004.

It is further ordered that the Commission's Consumer & Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Report and Order including the Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

Last September RSPA amended a regulation (49 CFR 192.739(c)) that applies to existing pressure limiting and regulating stations (68 FR 53901; Sept. 15, 2003). The amendment established an upper limit on the control or relief pressure in pipelines these stations protect against accidental overpressure. These limits are the same as part 192 requires for newly installed pressure limiting and regulating stations. As a consequence, § 192.739(c) now requires (through a cross-reference to § 192.201(a)) that the control or relief pressure on steel pipelines whose maximum allowable operating pressure (MAOP) is 60 psig or more may not exceed the pressure that produces a hoop stress of 75 percent of the specified minimum yield strength (SMYS) of the pipe.

For new steel pipelines, 75 percent of SMYS is an appropriate limit on control or relief pressure because part 192 does not allow these pipelines to operate at a hoop stress greater than 72 percent of SMYS. However, § 192.619(c) allows certain existing pipelines in rural areas to operate at pressures experienced before part 192 took effect. On some of these pipelines, current operating pressures produce hoop stresses greater than 72 percent of SMYS. Consequently, Duke Energy, an operator of interstate gas transmission lines, alerted RSPA that amended § 192.739(c) could be construed to require a reduction in the operating pressure of pipelines operating at hoop stresses greater than 72 percent of SMYS. In addition, for other pipelines operating under § 192.619(c), operators may not be able to calculate hoop stress as a percentage of SMYS, either because a factor needed to calculate hoop stress ( e.g., wall thickness) is unknown or SMYS is unknown. In such cases, compliance with the 75-percent-of-SMYS limit would be impracticable.

Because these results were not intended, RSPA is revising § 192.739(c). The revision establishes an appropriate control or relief pressure limit for the affected pipelines ( i.e., steel pipelines whose MAOP determined under § 192.619(c) is 60 psig or more, with corresponding hoop stress greater than 72 percent of SMYS or unknown as a percentage of SMYS). Under revised § 192.739(c), if the MAOP produces a hoop stress greater than 72 percent of SMYS, the control or relief pressure limit is MAOP plus 4 percent. This pressure limit corresponds to the 75-percent-of-SMYS limit for new steel pipelines under § 192.201(a)(2)(i). MAOP plus 4 percent is also the limit on control or relief pressure that the American Society of Mechanical Engineers prescribes for new steel pipelines that operate at hoop stresses greater than 72 percent of SMYS (Section 845.411(a), ASME B31.8-1999 code, “Gas Transmission and Distribution Piping Systems”). If the hoop stress is unknown as a percentage of SMYS (either hoop stress or SMYS is unknown), operators will have to determine a safe control or relief pressure limit after considering the operating and maintenance history of the protected pipeline and its MAOP. Operators' decisions on safe pressure limits must be explained in their operating and maintenance procedures, which are subject to review by government inspectors.

RSPA made a similar amendment to § 192.743(a), requiring the capacity of relief devices at existing pressure limiting and regulating stations to be consistent with the pressure limits of § 192.201(a) (68 FR 53901; Sept. 15, 2003). Because of the 75-percent-of-SMYS limit discussed above, Duke Energy alerted RSPA that § 192.743(a) also could be construed to require a reduction in the operating pressure of some pipelines operating at hoop stresses greater than 72 percent of SMYS. In addition, compliance with § 192.743(a) would be impracticable if hoop stress as a percentage of SMYS were unknown. To avoid these unintended results, RSPA is revising § 192.743(a) in the same manner as § 192.739(c).

RSPA does consider this Direct Final Rule to be a significant regulatory action under section 3(f) of Executive Order 12866 (58 FR 51735; Oct. 4, 1993). Therefore, the Office of Management and Budget (OMB) has not received a copy of this rulemaking to review. RSPA also does not consider this rulemaking to be significant under DOT regulatory policies and procedures (44 FR 11034; February 26, 1979).

The regulations being revised by this Direct Final Rule, §§ 192.739(c) and 192.743(a), were published in the Federal Register of September 15, 2003. RSPA prepared a Regulatory Evaluation of the costs and benefits of those regulations, and a copy is in the docket. The evaluation concluded there should be no cost for operators to comply with the regulations, and possibly a cost savings. Because this Direct Final Rule merely removes an unintended impact of the regulations, RSPA does not believe that any further evaluation of costs and benefits is needed. If you disagree with this conclusion, please provide information to the public docket as described above.

Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), RSPA must consider whether its rulemakings have a significant economic impact on a substantial number of small entities. The regulations being revised by this Direct Final Rule are consistent with customary practices in the pipeline industry. Therefore, based on the facts available about the anticipated impacts of this rulemaking, I certify that this rulemaking will not have a significant impact on a substantial number of small entities. If you have any information that this conclusion about the impact on small entities is not correct, please provide that information to the public docket as described above.

This Direct Final Rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Because the Direct Final Rule does not significantly or uniquely affect the communities of the Indian tribal governments and would not impose substantial direct compliance costs, the funding and consultation requirements of Executive Order 13175 do not apply.

This Direct Final Rule does not impose any new information collection requirements.

This Direct Final Rule does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It would not result in costs of $100 million or more to either State, local, or tribal governments, in the aggregate, or to the private sector, and would be the least burdensome alternative that achieves the objective of the rule.

For purposes of the National Environmental Policy Act (42 U.S.C. 4321 et seq. ), RSPA prepared an Environmental Assessment of the regulations being revised by this Direct Final Rule, and a copy is in the docket. The assessment determined that because the regulations are consistent with customary practices, they do not significantly affect the quality of the human environment. Because this Direct Final Rule merely removes an unintended impact of the regulations, RSPA does not believe that any further assessment of environmental impact is needed. If you disagree with this conclusion, please submit your comments to the docket as described above.

This Direct Final Rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). The Direct Final Rule does not have any provision that (1) has substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government; (2) imposes substantial direct compliance costs on State and local governments; or (3) preempts state law. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

This rulemaking is not a significant energy action under Executive Order 13211. 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. Further, this rulemaking has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action.