Section 216 of the FACT Act adds a new section 628 to the Fair Credit Reporting Act (FCRA) that, in general, is designed to protect a consumer against the risks associated with unauthorized access to information about the consumer contained in a consumer report, such as fraud and identity theft. 15 U.S.C. 1681w. Section 216 of the FACT Act requires NCUA to adopt a rule requiring any FCU “that maintains or otherwise possesses consumer information, or any compilation of consumer information, derived from consumer reports for a business purpose to properly dispose of any such information or compilation.” Pub. L. 108-159, 117 Stat. 1985-86. The FACT Act mandates that the rule be consistent with the requirements issued pursuant to the Gramm-Leach-Bliley Act (GLBA) (Pub. L. 106-102), as well as other provisions of Federal law. The FACT Act also requires NCUA to consult and coordinate with the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), Office of Thrift Supervision (OTS), Federal Trade Commission (FTC), and Securities and Exchange Commission (collectively, the Agencies) so that, to the extent possible, NCUA's rule is consistent and comparable with the regulations issued by each of the other agencies.

In 2001, NCUA amended the security program rule to establish standards for federally insured credit unions (FICUs) relating to administrative, technical, and physical safeguards to protect the security and confidentiality of member records and information, pursuant to section 501 of GLBA. 15 U.S.C. 6805(b). NCUA worked with the Agencies and state insurance authorities to develop appropriate standards. 66 FR 8152 (Jan. 30, 2001). The Federal banking agencies issued their standards as guidelines under section 39 of the Federal Deposit Insurance Act. 12 U.S.C. 1831p. 1 NCUA determined it could best meet the congressional directive to prescribe standards by amending the rule governing security programs and by providing guidance in an appendix to the rule. 12 CFR part 748, appendix A; 66 FR 8152 (Jan. 30, 2001).

Section 748.0 requires an FICU to develop a security program that implements safeguards designed to: (1) Ensure the security and confidentiality of member records and information; (2) protect against any anticipated threats or hazards to the security or integrity of such records; and (3) protect against unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to a member. 12 CFR 748.0(b)(2).

Appendix A to part 748 sets forth NCUA's Guidelines for Safeguarding Member Information (Guidelines), which are substantially identical to the guidelines issued by the Agencies. 66 FR 8152 (Jan. 30, 2001). The Guidelines “are intended to outline industry best practices and assist credit unions to develop meaningful and effective security programs to ensure their compliance with the safeguards contained in the regulation.” Id.

The Guidelines direct FICUs to assess the risks to their member information and member information systems and, in turn, implement appropriate security measures to control those risks. 12 CFR part 748, appendix A. For example, under the risk-assessment framework, FICUs should evaluate whether the controls the FICU has developed sufficiently protect its member information from unauthorized access, misuse, or alteration when the FICU disposes of the information. “[A] credit union's responsibility to safeguard member information continues through the disposal process.” 66 FR 8152, 8155.

On May 28, 2004, the NCUA Board published a proposal to add a section to the new fair credit reporting rule and amend the security program rule and Guidelines for Safeguarding Member Information (Guidelines) to require FCUs to implement controls designed to ensure the proper disposal of consumer information within the meaning of section 216. 69 FR 30601 (May 28, 2004). NCUA's proposed regulation and the preamble were substantively similar to a joint notice of proposed rulemaking issued by the FRB, OCC, FDIC and OTS (the Federal banking agencies). 69 FR 31913 (June 8, 2004).

In the proposal, NCUA noted that section 216 of the FACT Act requires NCUA to issue final regulations for entities under its enforcement authority under section 621 of the FCRA. Unlike the current provisions in the security program rule, which apply to all FICUs, the requirements in NCUA's final rule apply solely to FCUs. See 15 U.S.C. 1681s(b)(3). Federally insured state-chartered credit unions are subject to the enforcement jurisdiction of the FTC for purposes of the FCRA. See 15 U.S.C. 1681s(a). State charters, therefore, should refer to the final rule issued by the FTC regarding the proper disposal of consumer information under section 216.

NCUA received fourteen comment letters: One from a corporate credit union; four from natural person credit unions; five from credit union trades or leagues; one from a consumer; two from financial services trade organizations; and a joint letter from seven consumer rights organizations. The Agencies also received numerous letters from financial institutions, industry trade organizations, consumer advocacy groups, consumers, and trade associations from the information destruction industry. NCUA and the Agencies considered the comments and suggestions submitted.

Of the letters received by NCUA, twelve commenters generally supported the proposed regulation requiring FCUs to properly dispose of consumer information. One commenter stated that the proposal balanced the concerns of consumers and the industry by providing reasonable protections from identity theft and the unintended disclosure of consumer information while giving FCUs sufficient latitude for the disposal of consumer information. One comment letter, submitted on behalf of seven consumer groups, found the proposed rule weak and inadequate to meet Congress' intended purpose of preventing identity theft and other fraud.

As set forth in the proposal, NCUA is establishing a new part 717 to house its fair credit reporting rules and adds a subpart setting forth the duties of users of consumer reports regarding identity theft. To implement section 216, NCUA is adding § 717.83 to require FCUs to develop and maintain, as part of their information security programs, appropriate controls designed to ensure that they properly dispose of consumer information. The final rule retains the statute's rule of construction as proposed stating that this requirement does not impose any requirements to maintain or destroy consumer records beyond those imposed by any other law. The final rule also does not affect any requirement to maintain or destroy consumer records imposed under any other provision of law.

The only revisions to § 717.83 from the proposed rule incorporate examples of appropriate measures to properly dispose of consumer information and clarify “consumer information” in its definition and through examples. These additions required a renumbering of the section and are discussed in further detail below.

The final rule also includes a general definitions section, § 717.3, to define the terms “you” and “consumer.” Although these definitions were not included in the proposed disposal rule, they were published in another FACT Act proposal. 2 The final rule refers to FCUs using the plain language term “you” because section 216 requires NCUA to adopt a final disposal rule for FCUs. The final rule also uses the term “consumer.” Paragraph (e) of § 717.3 defines the term “consumer” to mean an individual, which follows the statutory definition in section 603(c) of the FCRA. 15 U.S.C. 1681a(c). NCUA will add more definitions to § 717.3 as the agency adopts other rules to implement provisions of the FCRA.

The final rule retains § 748.0(c) as proposed. Paragraph (c) cross references the section 216 requirement in § 717.83, for ease of reference when FCUs adopt or modify their information security programs.

The final rule amends the Guidelines to specifically address the disposal of consumer information by: (1) Defining “consumer information” as defined in § 717.83; (2) adding an objective regarding the proper disposal of member information and consumer information; and (3) providing that an FCU should implement appropriate measures to properly dispose of member information and consumer information. NCUA discusses the final rule's slight variations from the proposal below.

The changes to the Guidelines are intended to provide guidance to FCUs for compliance with § 717.83. As noted above, the requirements of this final rule only apply to FCUs, while federally insured state-chartered credit unions are subject to the jurisdiction of the FTC on this matter. NCUA believes, however, that federally insured state charters may find this guidance helpful in adopting meaningful and effective security programs that deal with the disposal of consumer information.

In accordance with section 216, NCUA has consulted with the Agencies to ensure that, to the extent possible, the final rules issued by the respective agencies to implement section 216 are consistent and comparable.

Proposed § 717.83(c)(1) defined “consumer information” to mean “any record about an individual, whether in paper, electronic, or other form, that is a consumer report or is derived from a consumer report and that is maintained or otherwise possessed by or on behalf of the credit union for a business purpose.” “Consumer information” was also defined to mean “a compilation of such records.”

Commenters generally supported NCUA's proposed definition of this term, but argued that NCUA should include statements or illustrations to clarify the nature and scope of “consumer information.” Several commenters found the proposed phrase “about an individual” to be ambiguous and urged NCUA to adopt a definition expressly stating that “consumer information” only includes information that identifies a particular individual.

Similarly, some commenters supported NCUA's explanation in the proposal that “consumer information” does not include information derived from a consumer report that does not identify any particular consumer, such as the mean credit score derived from a group of consumer reports. These commenters suggested that NCUA include this example or similar examples in the definition.

In § 717.83(d)(1), the final rule defines “consumer information” as proposed but modifies the term to expressly exclude from the definition “any record that does not identify an individual.” NCUA believes that qualifying the term “consumer information” to cover only personally identifiable information appropriately focuses on the information derived from a consumer report that, if improperly disposed, could be used to commit fraud or identity theft against a consumer. NCUA believes that limiting this definition to information that identifies a consumer is consistent with the current law relating to the scope of the term “consumer report” under the FCRA and the purposes of section 216 of the FACT Act.

Under the final rule, an FCU must implement measures to properly dispose of consumer information that identifies a consumer, such as the consumer's name and the credit score derived from a consumer report. This requirement, however, does not apply to aggregate information, such as the mean credit score that is derived from a group of consumer reports, or blind data, such as a series of credit scores that do not identify the subjects of consumer reports from which those scores are derived. The final rule includes examples of records that illustrate this aspect, but it does not rigidly define the nature and scope of personally identifiable information. These examples are found in § 717.83(d)(1)(i). NCUA notes that there are a variety of types of information apart from an individual's name, account number, or address that, depending on the circumstances or when used in combination, could identify the individual.

As discussed in the proposal, NCUA notes that the scope of information covered by the terms “consumer information” and “member information” will sometimes overlap, but will not always coincide. The definition of “consumer information” is drawn from the term “consumer” in section 603(c) of the FCRA, which defines a “consumer” as an individual. 15 U.S.C. 1681a(c). By contrast, “member information” under the Guidelines, only covers nonpublic personal information about a “member,” as defined in § 716.3(n), namely, an individual who obtains a financial product or service to be used primarily for personal, family, or household purposes and who has a continuing relationship with the FCU.

The relationship between consumer information and member information can be illustrated through the following examples. Payment history information from a consumer report about an individual, who is an FCU's member, will be both consumer information because it comes from a consumer report and member information because it is nonpublic personal information about a member. In some circumstances, member information will be broader than consumer information. For instance, information that an FCU maintains about its member's transactions with the FCU would be only member information because it does not come from a consumer report. In other circumstances, consumer information will be broader than member information. Consumer information would include information from a consumer report that an FCU obtains about an individual who guarantees a loan for a business entity or who has applied for employment with the FCU. In these instances, the consumer reports would not be member information because the information would not be about a “member” within the meaning of the Guidelines but would be consumer information.

NCUA believes the phrase “derived from consumer reports” covers all of the information about a consumer that is taken from a consumer report, including information that results in whole or in part from manipulation of information from a consumer report or information from a consumer report that has been combined with other types of information. Consequently, an FCU that possesses any of this information must properly dispose of it. For example, any record about a consumer derived from a consumer report, such as the consumer's name and credit score, that is shared between an FCU and its credit union service organization (CUSO) affiliate must be disposed of properly by each affiliate that possesses that information. Similarly, a consumer report that is shared among affiliates after the consumer has been given a notice and has elected not to opt out of that sharing, and therefore is no longer a “consumer report” under section 603(d)(2)(A)(iii) of the FCRA, would still be consumer information. Accordingly, an affiliate that receives consumer information under these circumstances must properly dispose of the information. NCUA notes that a CUSO affiliate subject to the jurisdiction of the FTC must properly dispose of consumer information in accordance with the FTC's final rule.

The proposed definition of consumer information included the qualification “for a business purpose,” as set forth in section 216. NCUA believes that this phrase encompasses any commercial purpose for which an FCU might maintain or possess consumer information. Commenters did not raise concerns about this interpretation.

In the proposed rule, NCUA requested comment on the standard for proper disposal. Of the comment letters received by NCUA, five commenters thought that the concept was clear and sufficiently explained the nature and scope of an FCU's responsibilities under the rule, but two of those commenters welcomed additional clarification through guidance or examples. Four commenters believed “proper disposal” was not clear in the proposed rule and asked for either a definition or examples in the regulatory text like those used in the FTC's proposed rule. 69 FR 21388 (April 20, 2004). Some of these commenters stated that the rule should adopt a clear standard that requires FCUs to render paper and electronic data unreadable and incapable of being reconstructed. They also asked that the rule provide examples of proper disposal techniques consistent with the FTC's proposed regulatory text.

NCUA believes that there is no need to adopt a definition of the term “disposal” because, in the context of the duty imposed under section 216, the ordinary meaning of that term applies. The final rule, however, includes examples of appropriate measures to properly dispose of consumer information as requested by the commenters in renumbered paragraph (b) of § 717.83. NCUA believes these examples will be helpful as illustrative guidance for compliance with the rule.

NCUA notes that any sale, lease, or other transfer of any medium containing consumer information constitutes disposal of the information insofar as the information itself is not the subject of the sale, lease or other transfer between the parties. By contrast, the sale, lease, or other transfer of consumer information from an FCU to another party can be distinguished from the act of throwing out or getting rid of consumer information, and accordingly, does not constitute disposal subject to NCUA's rule.

NCUA proposed to add a new objective regarding the proper disposal of consumer information in paragraph II.B. of the Guidelines. A few commenters expressed objections to this aspect of the proposal primarily as it relates to service providers.

The final rule slightly revises the proposal to add a new objective in the Guidelines providing that an FCU should design its information security program to “[e]nsure the proper disposal of member information and consumer information.” With this revision from the proposal, NCUA omitted the proposed provision stating that an FCU should ensure proper disposal of consumer information “in a manner consistent with the disposal of member information.” By making this change and adding the reference to “member information” in paragraph II.B., the Guidelines more clearly and fully state an FCU's information security objectives with respect to disposing of information. As noted in the proposal, a credit union should properly dispose of member information as part of designing and maintaining its information security program under the Guidelines. The inclusion of “member information” in the objective, therefore, does not establish a new objective in the Guidelines.

NCUA continues to believe that including this additional objective in paragraph II.B. of the Guidelines is important because section 216's disposal requirement applies to an FCU's consumer information maintained or otherwise in the possession of the FCU's service providers. NCUA notes that, under current paragraph III.D.2., an FCU is expected to “[r]equire its service providers by contract to implement appropriate measures designed to meet the objectives” of the Guidelines.

By expressly incorporating a provision in paragraph II.B. of the Guidelines, FCUs should contractually require service providers to develop appropriate measures for the proper disposal of consumer information and, where warranted, monitor service providers to confirm that they have satisfied their contractual obligations. As some commenters observed, the particular contractual arrangement that an FCU may negotiate with a service provider may take varied forms or use general terms. As a result, some credit unions already may have existing contracts that are sufficiently broad to cover the proper disposal of member information and consumer information, and therefore they would not have to be amended. NCUA continues to believe that the parties should have substantial latitude in negotiating the contractual terms appropriate to their arrangement in any manner that satisfies the objectives of the Guidelines. NCUA, therefore, has not prescribed any particular standards that relate to these service provider contracts.

The final rule also amends paragraph III.G.4. of the Guidelines to allow an FCU a reasonable period of time, after the final rule is issued, to amend its contracts with its service providers to incorporate the necessary requirements in connection with the proper disposal of consumer information. After reviewing the varying comments on this provision of the proposal, NCUA has determined that FCUs should modify contracts that will be affected by the final rule's requirements, if necessary, no later than July 1, 2006.

NCUA has amended paragraph III.C. of the Guidelines by adding a new provision stating that an FCU, as part of its information security program, should develop, implement, and maintain, appropriate measures to properly dispose of consumer information and member information. Like the proposal, this new provision also provides that FCUs should implement these measures “in accordance with the provisions in paragraph III.” of the Guidelines.

Paragraph III. of the Guidelines presently states that an FCU should undertake measures to design, implement, and maintain its information security program to protect member information and member information systems. Because “member information systems” is defined to include any methods used to dispose of member information, an FCU presently must use risk-based measures to protect member information. Building on this provision in the Guidelines, NCUA proposed a provision in paragraph III.C.4. stating that FCUs should develop controls “in a manner consistent with the disposal of member information.” Commenters generally supported this provision because FCUs could develop and implement risk-based protections, rather than be subject to a prescriptive standard that required them to adopt particular methods for disposing of consumer information.

In the final rule, NCUA has revised the proposed provision in paragraph III.C.4. by omitting “in a manner consistent with the disposal of member information.” In its place, the Guidelines now provide a more direct and general statement that FCUs should develop and maintain risk-based measures to properly dispose of consumer information and member information. Under this final amendment to the Guidelines, an FCU is expected to properly dispose of both classes of information, which is consistent with the Guidelines and the FACT Act.

An FCU should broaden the scope of its risk assessment to include an assessment of the reasonably foreseeable internal and external threats associated with the methods it uses to dispose of consumer information, and adjust its risk assessment in light of the relevant changes relating to such threats. By expressly referencing the disposal requirement in § 748.0(c) and the Guidelines, NCUA expects FCUs to integrate into their information security programs the risk-based measures in paragraph III of the Guidelines for the disposal of consumer information.

After reviewing the comments, NCUA continues to believe that it is not necessary to propose a prescriptive rule describing proper methods of disposal.

Nonetheless, consistent with interagency guidance previously issued through the Federal Financial Institutions Examination Council (FFIEC), 3 NCUA expects FCUs to have appropriate disposal procedures for records maintained in paper-based or electronic form. In addition, as noted above, the final rule includes illustrative examples of appropriate measures to properly dispose of consumer information in § 717.83(b). An FCU's information security program should ensure that paper records containing either member or consumer information should be rendered unreadable as indicated by the FCU's risk assessment, such as by shredding or any other means. FCUs also should recognize that computer-based records present unique disposal problems. Residual data frequently remains on media after erasure. Since that data can be recovered, FCUs should apply additional disposal techniques to sensitive electronic data. 4

The final rule requires FCUs to implement the appropriate measures to properly dispose of consumer information by July 1, 2005. NCUA believes that any changes to an FCU's existing information security program likely will be minimal because many of the measures that an FCU already uses to dispose of member information can be adapted to properly dispose of consumer information. Several commenters agreed with NCUA's assessment and noted that they already have appropriate disposal policies in place. Nevertheless, a comment on behalf of small credit unions and a few comments to the Federal banking agencies noted the proposed period for compliance would be relatively short in light of the work required to amend policies and locate and track consumer information in an institution's existing information system. Accordingly, NCUA has determined that the final rule should afford FCUs a six-month period to adjust their systems and controls.

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact any proposed regulation may have on a substantial number of small entities (those under $10 million in assets). The NCUA Board has determined and certifies that the final rule will not have a significant economic impact on a substantial number of small credit unions. Accordingly, a regulatory flexibility analysis is not required.

The rule requires an FCU to implement appropriate controls designed to ensure the proper disposal of consumer information. An FCU must develop and maintain these controls as part of implementing its existing information security program as required by § 748.0.

Any modifications to an FCU's information security program needed to address the proper disposal of consumer information could be incorporated through the process the FCU presently uses to adjust its program under paragraph III.E. of the Guidelines, particularly because of the similarities between the consumer and member information and the measures commonly used to properly dispose of both types of information. To the extent the rule imposes new requirements for certain types of consumer information, developing appropriate measures to properly dispose of that information likely would require only a minor modification of an FCU's existing information security program.

Because some consumer information will be member information and because segregating particular records for special treatment may entail considerable costs, NCUA believes that many FCUs, including small entities, already are likely to have implemented measures to properly dispose of both member and consumer information. In addition, NCUA and the Federal banking agencies, through the Federal Financial Institutions Examination Council (FFIEC), already have issued guidance regarding their expectations concerning the proper disposal of all of an institution's paper and electronic records. See FFIEC Information Security Booklet, December 2002, p. 63. 5 Therefore, the rule does not require any significant changes for FCUs that currently have procedures and systems designed to comply with this guidance.

NCUA anticipates that, in light of current practices relating to the disposal of information in accordance with § 748.0, the Guidelines, and the guidance issued by the FFIEC, the final rule would not impose undue costs on FCUs. NCUA believes that the controls that small FCUs would need to develop and implement, if any, to comply with the rule likely pose a minimal economic impact on those entities.

NCUA has determined that the final rule does 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 regulatory 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 final 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 the final rule does not constitute a policy that has federalism implications for purposes of the executive order.

The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by section 551 of the Administrative Procedures Act. 5 U.S.C. 551. The Office of Management and Budget (OMB) has determined that this rule is not a major rule for the purposes of the Small Business Regulatory Enforcement Fairness Act of 1996.

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).

What events have caused this AD? Transport Canada, which is the airworthiness authority for Canada, notified FAA that an unsafe condition may exist on all Bombardier Inc. Model (Otter) DHC-3 airplanes that incorporate 524085 BC, Ltd. STC Number ST01243NY or SA01243NY. Transport Canada reports one incident of structural failure of the elevator servo tab balance assembly.

What is the potential impact if FAA took no action? Vibration may cause structural failure of the elevator servo tab. This failure could lead to loss of control of the airplane.

Has FAA taken any action to this point? We issued a proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to Bombardier Inc. Model (Otter) DHC-3 airplanes that incorporate 524085 BC, Ltd. STC Number ST01243NY or SA01243NY. This proposal was published in the Federal Register as a notice of proposed rulemaking (NPRM) on July 29, 2004 (69 FR 45293-95). The NPRM proposed to replace the existing Viking Air Ltd. elevator servo tab assembly with a redesigned Viking Air Ltd. elevator servo tab assembly.

Was the public invited to comment? We provided the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal and FAA's response to each comment:

What is the commenter's concern? The commenter wants the issuance of the Airworthiness Directive to be delayed until it is determined whether the manufacture of the parts is authorized through a Canadian Parts Design Approval (PDA), a Canadian Approval Limitation Record (ALR), or 14 CFR 21.303(a). The commenter claims that the manufacturing of these parts should be authorized through a Canadian PDA, not an ALR, and that Viking Air is not authorized to manufacture the parts per 14 CFR 21.303(a).

What is FAA's response to the concern? The FAA does not agree. Viking Air manufactured the parts that are being removed per the AD for STC SA01243NY under a Canadian ALR. The modification parts being installed per the AD following Viking Air Service Bulletin V3/01 are the same parts as in the latest amendment to STC SA01243NY. Viking Air, under the Canadian ALR, 22-80 manufactured the parts for STC SA01243NY for export to the United States with Transport Canada Civil Aviation (TCCA) Export Certificates of Airworthiness. Per the Implementation Procedures Agreement (IPA) of the U.S./Canadian Bilateral Aviation Safety Agreement (BASA), the FAA accepts TCCA Export Certificates of Airworthiness for replacement and modification parts. Civil Airworthiness Regulations (CAR)/Airworthiness Manual Chapter 561 covers the manufacturing of replacement and modification parts. Regulation 14 CFR 21.303 “Replacement and modification parts” does not apply to parts manufactured in Canada for export to the United States under the terms of the IPA of the US/Canadian BASA.

Therefore, FAA has determined that Viking Air does have the authority to manufacture parts for the accomplishment of this AD action.

We have made no changes to the final rule based on this comment.

Are there any changes from the NPRM? The STC holder issued a revision to the original type certificate because of a typographical error. Both the original and the revised STC (ST01243NY or SA01243NY) may be used.

What is FAA's final determination on this issue? We have carefully reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed except for the changes discussed above and minor editorial corrections. We have determined that these changes and minor corrections:

Where can I go to view the docket information? You may view the AD docket that contains information relating to this subject in person at the DMS Docket Offices between 9 a.m. and 5 p.m. (eastern standard time), Monday through Friday, except Federal holidays. The Docket Office (telephone 1-800-647-5227) is located on the plaza level of the Department of Transportation NASSIF Building at the street address stated in ADDRESSES . You may also view the AD docket on the Internet at http://dms.dot.gov.

How does the revision to 14 CFR part 39 affect this AD? On July 10, 2002, the FAA published a new version of 14 CFR part 39 (67 FR 47997, July 22, 2002), which governs the FAA's AD system. This regulation now includes material that relates to altered products, special flight permits, and alternative methods of compliance. This material previously was included in each individual AD. Since this material is included in 14 CFR part 39, we will not include it in future AD actions.

How many airplanes does this AD impact? We estimate that this AD affects 11 airplanes in the U.S. registry.

What is the cost impact of this AD on owners/operators of the affected airplanes? We estimate the following costs to accomplish the modification:

Will this AD impact various entities? We have determined that this AD will not have federalism implications under Executive Order 13132. This AD 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.

Will this AD involve a significant rule or regulatory action? For the reasons discussed above, I certify that this AD:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the 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.

We prepared a summary of the costs to comply with this AD and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under ADDRESSES . Include “Docket No. FAA-2004-18606; Directorate Identifier 2004-CE-17-AD” in your request.

The FAA proposed to amend 14 CFR part 39 with an AD for certain Boeing Model 737-600, -700, -700C, -800, and -900 series airplanes. That action, published in the Federal Register on July 8, 2004 (69 FR 41207), proposed to require replacing the bracket for the wire bundle of the fuel quantity indicating system (FQIS), performing a general visual inspection of the FQIS wire bundle for damage, and doing corrective actions if necessary.

We provided the public the opportunity to participate in the development of this AD. We have considered the comments that have been submitted on the proposed AD.

Two commenters, the Air Line Pilots Association, on behalf of its members, and the manufacturer, generally agree with the proposed AD.

One commenter, the Civil Aviation Authority, which is the airworthiness authority for the United Kingdom, requests reducing the compliance time specified in paragraph (f) of the proposed AD. The proposed compliance time is “within 24 months after the effective date of this AD.” The commenter notes that Boeing issued Special Attention Service Bulletin 737-28-1190, dated January 16, 2003, over a year and a half ago. The commenter contends that the compliance time in the proposed AD should be reduced to ensure the prevention of a chaffed wire in the fuel tank.

We do not agree to reduce the compliance time in the final rule. In developing an appropriate compliance time, we considered the safety implications, parts availability, and maintenance schedules that would allow for timely accomplishment and minimal fuel tank entries. Minimizing fuel tank entries reduces the potential for unintended hazardous conditions. In consideration of all of these factors, we determined that the compliance time, as proposed, represents an appropriate interval in which the required actions can be done in a timely manner within the fleet, while still maintaining an adequate level of safety. Operators are always permitted to accomplish the requirements of an AD at a time earlier than the specified compliance time. If additional data are presented that would justify a shorter compliance time, we may consider further rulemaking on this issue.

We have carefully reviewed the available data, including the comments that have been submitted, and determined that air safety and the public interest require adopting the AD as proposed.

There are about 1,063 airplanes of the affected design in the worldwide fleet. This AD will affect about 518 airplanes of U.S. registry.

Replacing the bracket will take about 1 work hour per airplane, at an average labor rate of $65 per work hour. Required parts will cost about $186 per airplane. Based on these figures, we estimate the cost of the required replacement on U.S. operators to be $130,018, or $251 per airplane.

Inspecting the FQIS wire bundle will take approximately 1 work hour per airplane, at an average labor rate of $65 per work hour. Based on these figures, we estimate the cost of the required inspection on U.S. operators to be $33,670, or $65 per airplane.

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD 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.

For the reasons discussed above, I certify that this AD:

(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.

We prepared a regulatory evaluation of the estimated costs to comply with this AD. See the ADDRESSES section for a location to examine the regulatory evaluation.

In the Federal Register of March 24, 2004 (69 FR 13765), FDA issued a proposed rule to amend the regulations for sodium labeling for OTC drug products to require sodium content labeling for rectal drug products containing sodium phosphates. FDA considers it important that consumers be aware of the sodium content of OTC rectal drug products containing sodium phosphates and that this information appear in product labeling so that it will be readily available to consumers, physicians, and other health professionals. Some OTC laxative drug products intended for rectal administration can contain very high levels of sodium from both active and inactive ingredients. Significant amounts of some of these products may be absorbed causing an electrolyte imbalance.

Section 201.64 (21 CFR 201.64) requires orally ingested sodium phosphates products to bear sodium content information. FDA proposed to add paragraph (k) to § 201.64 to require sodium content information to appear in the labeling of rectal drug products containing dibasic sodium phosphate and/or monobasic sodium phosphate.

FDA did not receive any comments to its proposed new labeling requirements, its discussion of the statutory authority to require this labeling, or its discussion of this labeling requirement being constitutionally permissible under the first amendment. Accordingly, FDA is not repeating those discussions in this final rule, but is incorporating the discussions regarding statutory authority and the first amendment by reference (see 69 FR 13766 to 13767). FDA is finalizing its proposal by requiring sodium content information to appear in the labeling of OTC rectal drug products containing dibasic sodium phosphate and/or monobasic sodium phosphate.

FDA has examined the impacts of this final rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 et seq. ). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Under the Regulatory Flexibility Act, if a rule has a significant economic impact on a substantial number of small entities, an agency must analyze regulatory options that would minimize any significant impact of the rule on small entities. Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement of anticipated costs and benefits before proposing any rule that may result in an expenditure in any one year by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million (adjusted annually for inflation).

FDA concludes that this final rule is consistent with the principles set out in Executive Order 12866 and in these two statutes. As discussed in this section of the document, the final rule will not be economically significant as defined by the Executive order. With respect to the Regulatory Flexibility Act, FDA concludes that the rule would not have a significant economic impact on a substantial number of small entities. The Unfunded Mandates Reform Act of 1995 does not require FDA to prepare a statement of costs and benefits for the final rule, because the final rule is not expected to result in any 1-year expenditure that would exceed $100 million adjusted for inflation. The current inflation adjusted statutory threshold is about $110 million.

The purpose of this final rule is to extend the requirement for sodium content labeling to OTC rectal drug products that contain sodium phosphates so that the information is available to: (1) Health professionals and (2) individuals who need to limit their sodium intake. The final rule would require minor relabeling of OTC rectal drug products containing sodium phosphates. There are fewer than five major manufacturers of these products in the OTC drug marketplace. One company manufactures a nationally branded product with the others producing private label products. One large manufacturer produces about one-half to two-thirds of the products covered by this final rule. Three small manufacturers account for the remainder of the market. There may be other manufacturers/marketers not identified in sources FDA reviewed, but FDA believes there are a limited number and they would be small manufacturers. FDA concludes that this final rule would not have a significant economic impact on small entities, using the U.S. Small Business Administration designations for this industry (750 employees). Together, fewer than 300 stockkeeping units (SKUs) are marketed. The manufacturer of the nationally branded product and some private label manufacturers of these products already include sodium content information in the labeling of their products. Any necessary relabeling (addition of sodium content labeling) will impose direct one-time costs on some manufacturers. FDA has been informed that the cost to relabel these products ranges from $500 to $3,500 per SKU. Using $3,500 per SKU, and assuming all SKUs would need to be relabeled, the total one-time cost to relabel these products would be $1,050,000. Actual costs will be lower because most of these products already include the sodium content information in their labeling.

Manufacturers that have not voluntarily included sodium content information may also incur one-time costs to test their products to determine the sodium content. The cost to test for one cation (e.g., sodium) is about $150 for private label manufacturers. Assuming they repeat the testing, the total one-time costs for an estimated 10 products would be $3,000.

FDA considered but rejected several labeling alternatives: (1) A longer implementation period and (2) an exemption from coverage for small entities. A longer time period would unnecessarily delay the benefit of the new labeling to consumers who self-medicate with these products. FDA rejected an exemption for small entities because the labeling is also needed by consumers who purchase products marketed by those entities.

For the reasons stated previously and under the Regulatory Flexibility Act (5 U.S.C. 605(b)), FDA certifies that this final rule will not have a significant economic impact on a substantial number of small entities.

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its State program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of this Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to this Act.” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Indiana program effective July 29, 1982. You can find background information on the Indiana program, including the Secretary's findings, the disposition of comments, and the conditions of approval, in the July 26, 1982, Federal Register (47 FR 32071). You can also find later actions concerning the Indiana program and program amendments at 30 CFR 914.10, 914.15, 914.16, and 914.17.

By letter dated May 19, 2004 (Administrative Record No. IND-1726), the Indiana Department of Natural Resources, Division of Reclamation (Indiana or IDNR) sent us an amendment to its program under SMCRA (30 U.S.C. 1201 et seq. ). Indiana sent the amendment in response to a June 17, 1997, letter (Administrative Record No. IND-1575) that we sent to Indiana in accordance with 30 CFR 732.17(c) and in response to the required program amendments at 30 CFR 914.16(f), (s), and (hh) through (mm). The amendment also included changes made at Indiana's own initiative.

We announced receipt of the proposed amendment in the July 19, 2004, Federal Register (69 FR 42931). In the same document, we opened the public comment period and provided an opportunity for a public hearing or meeting on the adequacy of the amendment. We did not hold a public hearing or meeting because no one requested one. The public comment period ended on August 18, 2004. We received comments from one Federal agency.

During our review of the amendment, we identified concerns about inspection of abandoned sites and several editorial-type errors. We notified Indiana of these concerns by letter dated July 26, 2004, (Administrative Record No. IND-1732).

By letter dated September 14, 2004 (Administrative Record No. IND-1733), Indiana responded to our July 26, 2004, letter. Indiana intends to make changes to its inspection of abandoned sites rule and to correct the editorial-type errors through the errata and program amendment processes at a later date. Therefore, we are proceeding with this final rule Federal Register document.

Following are the findings we made concerning the amendment under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. We are approving the amendment with an additional requirement as described below.

Indiana proposed minor wording, editorial, punctuation, grammatical, and recodification changes to the following previously-approved rules:

312 Indiana Administrative Code (IAC) 25-4-17(a)(1), Surface mining permit applications—identification of interests; 25-4-115(a)(3), Permit approval or denial; 25-4-118(8), Permit conditions; 25-6-17(b)(2)(J), Surface mining-siltation structures; 25-6-23(a)(2), Surface mining-surface and ground water monitoring; and 25-7-1(a)(1) and (d)(2), Inspections of sites.

Because these changes are minor, we find that they will not make Indiana's rules less effective than the corresponding Federal regulations.

Indiana's rules listed in the table below contain language that is the same as or similar to the corresponding sections of the Federal regulations.

Because the above State rules have the same meaning as the corresponding Federal regulations, we find that they are no less effective than the Federal regulations. We also find that Indiana's revisions at 25-6-20(a)(9)(E) and 25-6-84(a)(9)(E) that change the term “subsection” to the term “clause” in the phrase “the following impoundments shall be exempt from the examination requirements of this subsection” satisfy the required amendment at 30 CFR 914.16(ii)(3), and we are removing it.

1. 312 IAC 25-1-8(a)(1) through (7). Indiana designated the existing provision as subsection (a) and amended the definition of “affected area” to mean “any land or water surface area that is used to facilitate, or is physically altered by, surface coal mining and reclamation operations.” Subdivisions (a)(1) through (7) specify those areas of a permit that will be considered affected areas. At subdivisions (a)(2), (4), and (6), Indiana replaced the terms “an” with the term “any” to refer to areas that would be considered “affected areas.” At subdivision (a)(3), Indiana added the word “any” before the word “adjacent.” At subdivision (a)(4), Indiana added the language “except as provided in this section” at the end of the subdivision. Indiana restructured subdivision (a)(5) and changed the words “a site” to “any area.” At subdivision (a)(6), Indiana made minor wording revisions by adding the word “property” between the words “other” and “material”; changing the word “incidental” to “incident”; and adding the word “and” after the word “mining.” At subdivision (a)(7), Indiana removed the words “of a mine” from the end of the subdivision.

We find that the revised language at subsection (a) is substantively the same as the counterpart language in the Federal definition of “affected area” at 30 CFR 701.5. Therefore, we are approving 312 IAC 25-1-8(a).

2. 312 IAC 25-1-8(b) and (c). Indiana added introductory language at subsection (b) to identify the roads associated with the permit area that are considered affected areas and added subdivisions (b)(1) through (4) to identify the criteria for exemption of those roads that are not considered affected areas. Roads must meet all of the criteria listed in subdivisions (b)(1) through (4) before being considered for exemption. Subsection (b) identifies as affected areas those roads used for the purposes of access to, or for hauling coal to or from, any surface coal mining and reclamation operation unless they meet the criteria in subdivisions (b)(1) through (4). Subdivision (b)(1) specifies that for a road to be exempt, it must be “designated as a public road pursuant to the laws of the jurisdiction in which it is located.” Subdivision (b)(2) specifies that the road must be “maintained with public funds, and constructed in a manner similar to other public roads of the same classification within the jurisdiction.” Subdivision (b)(3) provides that the road must have a “substantial (more than incidental) public use.” Finally, subdivision (b)(4) specifies that “the extent and the effect of mining-related uses of the road by the permittee must not warrant regulation as part of the surface coal mining and reclamation operations.” Indiana added subsection (c) to require the director of the IDNR (director) to determine on a case-by-case basis whether a road satisfies the requirements of subdivision (b)(4) based on the mining related use of the road and consistent with Indiana's definition of “surface coal mining operation.”

The language at subsection (b) and subdivisions (b)(1), (b)(2), and (b)(3) is substantively the same as language found in the counterpart Federal definition of “affected area” at 30 CFR 701.5. On November 20, 1986 (51 FR 41952), we suspended the definition of “affected area” at 30 CFR 701.5 insofar as it might limit jurisdiction over roads covered by the definition of “surface coal mining operations.” Our revised road rules were published on November 8, 1988 (53 FR 45192). In finalizing those rules, we declined to add a reference to “affected area” to the definition of road on the basis that the definition of “affected area” as partially suspended no longer provides additional guidance as to which roads are included in the definition of surface coal mining operations. At the same time, we declined to expressly exclude public roads from the definition of road. In the preamble, we stated that we are concerned that roads constructed to serve mining operations should not avoid compliance with performance standards by being deeded to public entities, but it was not our intent to automatically extend jurisdiction into the existing public road network. Instead, jurisdiction decisions are to be made by the regulatory authorities on a case-by-case basis. Indiana intends to continue to use the definition of “affected area” in determining which roads are subject to jurisdiction. The provisions at 312 IAC 25-1-8(b)(4) and (c) clarify when a public road will be regulated and adequately address the concerns we expressed in the November 8, 1988, preamble (53 FR 45192) regarding public roads. Therefore, we find that Indiana's definition of “affected area” is no less effective than the Federal regulations concerning jurisdiction over public roads and is consistent with the Federal definition of “affected area.” Based on this finding, we are approving 312 IAC 25-1-8(b) and (c).

Indiana's August 21, 2001, amendment concerned the recodification of its rules to comply with formatting guidelines set forth by the Indiana Legislative Services Agency (Administrative Record No. IND-1712). In recodifying some of its rules, Indiana inadvertently removed previously-approved language. In its May 19, 2004, amendment, Indiana made corrections to the following rules, which were recodified (Administrative Record No. IND-1726).

Indiana's rule at 312 IAC 25-4-17 specifies the information that must be included in a surface mining permit application for identification of interests. In recodifying 312 IAC 25-4-17(d), (e), and (f), Indiana inadvertently removed language that required an applicant to submit the specified information with an application. Therefore, in our approval of Indiana's recodified rule on November 16, 2001 (66 FR 57655), we required Indiana to submit an amendment or otherwise modify its program to clarify that the information specified in 312 IAC 25-4-17(d), (e), and (f) must be submitted with the permit application. We codified this requirement at 30 CFR 914.16(jj). In its May 19, 2004, amendment, Indiana revised 312 IAC 25-4-17 by adding the language “shall be submitted with the application” to the end of subsections (d), (e), and (f).

With the addition of the language that requires the information specified in the subsections to be submitted with the application, we find that Indiana's rules at 312 IAC 25-4-17(d), (e), and (f) are no less effective than the counterpart Federal regulations at 30 CFR 778.13(a), (b), and (d), respectively. Therefore, we are approving the revisions. We further find that Indiana's revisions satisfy the required amendment at 30 CFR 914.16(jj), and we are removing it.

Indiana's rule at 312 IAC 25-4-45 specifies the information that must be included in the reclamation plan for a surface mining permit. In recodifying 312 IAC 25-4-45(b)(4), Indiana inadvertently removed “total depth” as one of the factors that the operator is to analyze to demonstrate the suitability of topsoil substitutes or supplements. We consider “total depth” to be one of the factors that must be evaluated to demonstrate the suitability of topsoil substitutes or supplements. Therefore, in our approval of Indiana's recodified rule on November 16, 2001 (66 FR 57655), we required Indiana to submit an amendment or otherwise modify its program to require the demonstration of the suitability of topsoil substitutes or supplements to also be based upon analysis of the “total depth” of the different kinds of soils. We codified this requirement at 30 CFR 914.16(ll). In its May 19, 2004, amendment, Indiana restructured 312 IAC 25-4-45(b)(4) and added “total depth” to the list of factors that must be analyzed to demonstrate the suitability of topsoil substitutes or supplements.

With the addition of “total depth” to the list of factors to be analyzed for the different kinds of soils proposed for topsoil substitutes or supplements, we find that Indiana's rule at 312 IAC 25-4-45(b)(4) is no less effective than the counterpart Federal regulation at 30 CFR 780.18(b)(4). Therefore, we are approving the revision. We further find that Indiana's revision satisfies the required amendment at 30 CFR 914.16(ll), and we are removing it.

Indiana's rule at 312 IAC 25-4-113 provides the exceptions to public availability of permit application information. In recodifying 312 IAC 25-4-113, Indiana inadvertently removed its previously-approved provision that allowed a person to oppose or seek disclosure of confidential information. Indiana also inadvertently removed its previously-approved provision concerning the confidentiality of information on the nature and location of archaeological resources on public and Indian land. Therefore, in our approval of Indiana's recodified rule on November 16, 2001 (66 FR 57655), we required Indiana to revise 312 IAC 25-4-113 or otherwise modify the Indiana program to allow a person to oppose or seek disclosure of confidential information. We also required Indiana to revise 312 IAC 25-4-113 or otherwise modify the Indiana program to add a provision that classifies information on the nature and location of archeological resources on public land and Indian land as qualified confidential information. We codified these requirements at 30 CFR 914.16(mm)(1) and (2). In its May 19, 2004, amendment, Indiana revised 312 IAC 25-4-113 by adding new subsection (f) to specify that information on the nature and location of archaeological resources on public and Indian land is confidential. Indiana also redesignated existing subsection (f) as subsection (g) and revised the first sentence to allow a person who opposes or seeks disclosure of confidential information to submit a request under 312 IAC 25-4-110.

With the addition of new subsection (f) and the revisions to subsection (g), we find that Indiana's rules at 312 IAC 25-4-113(f) and (g) are no less effective than the counterpart Federal regulations at 30 CFR 773.6(d)(3) and (d)(3)(iii), and we are approving them. We further find that Indiana's revisions satisfy the required amendments at 30 CFR 914.16(mm)(1) and (2), and we are removing them.

On October 20, 1994 (59 FR 53022), we revised the Federal regulations at 30 CFR 780.25 (Surface Mining) and 784.16 (Underground Mining) concerning reclamation plan requirements for siltation structures, impoundments, banks, dams, and embankments. On June 17, 1997, we sent Indiana a letter (Administrative Record No. IND-1575) in accordance with 30 CFR 732.17(c). We notified Indiana that it must amend its rules to be no less effective than the revised Federal regulations. Also, in our October 29, 1996 (61 FR 55743), approval of Indiana's September 26, 1994, amendment, as revised on August 16, 1995, we required Indiana to amend 310 IAC 12-3-49 (Surface Mining) and 310 IAC 12-3-83 (Underground Mining) [currently 312 IAC 25-4-49 and 312 IAC 25-4-87, respectively] to add the requirement concerning stability analysis of each structure as is required by 30 CFR 780.25(f) and 784.16(f). We codified this requirement at 30 CFR 914.16(ii)(1). In response to our June 17, 1997, letter and the required amendment at 30 CFR 914.16(ii)(1), Indiana proposed the following revisions to its rules.

1. 312 IAC 25-4-49(a) and 25-4-87(a). Indiana revised the first sentence of subsection (a) by requiring an application to include “a general plan and a detailed design plan” instead of “a plan” for each proposed structure within the proposed permit area. Indiana also added “refuse pile” to the list of coal processing waste structures for which a general plan and a detailed design plan were needed.

The counterpart Federal regulations at 30 CFR 780.25(a) and 784.16(a) also require that a permit application include “a general plan and detailed design plan” for each proposed structure. Although the Federal regulations do not include the term “coal processing refuse pile,” Indiana's use of the term is equivalent to the Federal term “coal processing waste bank.” Therefore, we find that 312 IAC 25-4-49(a) and 25-4-87(a), as revised, are no less effective than the counterpart Federal regulations, and we are approving the revisions.

2. 312 IAC 25-4-49(c) and 25-4-87(c). Indiana revised 312 IAC 25-4-49(c) by requiring that permanent and temporary impoundments be designed to comply with the requirements of 312 IAC 25-6-20 and the requirements of the Mine Safety and Health Administration at 30 CFR 77.216-1 and 30 CFR 77.216-2. Indiana revised 312 IAC 25-4-87(c) by requiring that permanent and temporary impoundments be designed to comply with the requirements of 312 IAC 25-6-84 and the requirements of the Mine Safety and Health Administration at 30 CFR 77.216-1 and 30 CFR 77.216-2.

The Federal regulations at 30 CFR 780.25(c) and 784.16(c) contain substantively the same requirements. Therefore, we find that 312 IAC 25-4-49(c) and 25-4-87(c), as revised, are no less effective than the counterpart Federal regulations, and we are approving the revisions.

3. 312 IAC 25-4-49(d) and 25-4-87(d). Indiana added a new subsection (d) to 312 IAC 25-4-49 that requires refuse piles to be designed to comply with 312 IAC 25-6-36 through 312 IAC 25-6-39. Indiana added a new subsection (d) to 312 IAC 25-4-87 that requires refuse piles to be designed to comply with 312 IAC 25-6-98 through 312 IAC 25-6-102. For both rules, Indiana redesignated existing subsection (d) as subsection (e).

The Federal regulations at 30 CFR 780.25(d) and 784.16(d) contain substantively the same requirements. Therefore, we find that Indiana's new rules at 312 IAC 25-4-49(d) and 25-4-87(d) are no less effective than the counterpart Federal regulations, and we are approving them.

4. 312 IAC 25-4-49(f) and 25-4-87(f). In response to the required amendment at 30 CFR 914.16(ii)(1), Indiana added new subsection (f). For structures that meet the Class B or C criteria for dams in Technical Release 60 (TR-60) or that meet the size and other criteria of 30 CFR 77.216(a), each reclamation plan under subsections (b), (c), and (e) must include a stability analysis of the structure. The stability analysis must include strength parameters, pore pressures, and long term seepage conditions. The plan must also include a description of each engineering design assumption and calculation.

We find that Indiana's rules at 312 IAC 25-4-49(f) and 25-4-87(f) contain requirements that are substantively the same as the counterpart Federal regulation requirements at 30 CFR 780.25(f) and 784.16(f). Therefore, we are approving them. We further find that Indiana's rules at 312 IAC 25-4-49(f) and 25-4-87(f) satisfy the required amendment at 30 CFR 914.16(ii)(1), and we are removing it.

5. 312 IAC 25-4-49(g) and 25-4-87(g). Indiana's rule at subsection (g) requires that applications for specified types of proposed permanent structures that impound water and meet specified criteria must be submitted to the Department of Natural Resources, Division of Water for approval before construction of the structure begins. Indiana redesignated existing subsection (e) as subsection (g) and added introductory language to clarify the types of structures for which applications must be submitted. These structures include proposed permanent siltation structures, water impoundments, coal processing waste dams, or embankments. Indiana also removed the last sentence from subdivision (g)(3).

There are no Federal counterparts to Indiana's rules at 312 IAC 25-4-49(g) and 25-4-87(g). However, we find that the revisions made to these previously-approved rules will not make the Indiana rules less effective than the Federal regulations or SMCRA.

On September 11, 1995, Indiana submitted an amendment concerning statutory requirements for lands eligible for remining (Administrative Record No. IND-1509). After reviewing the amendment, we determined that Indiana's amendment did not include all of the necessary requirements of section 510(e) of SMCRA and the implementing Federal regulations for lands eligible for remining. Therefore, in our approval of Indiana's amendment on April 10, 1996 (61 FR 15891), we required Indiana to amend its program to provide implementing regulations for the statutory requirements. We codified this requirement at 30 CFR 914.16(hh). In response to this requirement, Indiana proposed the following revisions to its rules.

At 312 IAC 25-4-105.5, Indiana added the permitting requirements for lands eligible for remining. An application for a permit must contain an identification of potential environmental and safety problems related to prior mining activity at the site that could be reasonably anticipated to occur. The identification is based on an investigation that includes visual observations, record reviews of past mining, and environmental sampling tailored to the site conditions. An application must also contain descriptions of the mitigative measures that will be taken to ensure the applicable reclamation requirements of the regulatory program can be met. Indiana also provided that the requirements of 312 IAC 25-4-105.5 do not apply after September 30, 2004.

Indiana's September 11, 1995, proposed statute at IC 14-34-4-10.5 did not contain the proviso that the permitting requirements for lands eligible for remining will not apply after September 30, 2004. This proviso is required by section 510(e) of SMCRA and the implementing Federal regulation at 30 CFR 785.25. See 60 FR 58480, November 27, 1995. In our April 10, 1996, approval of Indiana's statute, we required Indiana to amend its program by adding a counterpart to 30 CFR 785.25 to implement IC 14-34-4-10.5. Indiana added this counterpart at 312 IAC 25-4-105.5 for lands eligible for remining. Indiana's proposed rule contains requirements that are substantively the same as the counterpart Federal regulation, including the proviso that the requirements do not apply after September 30, 2004. The effective date of our decision in this final rule is after the September 30, 2004, expiration date for these requirements. However, Indiana established the September 30, 2004, date in its rule to clarify that its statute at IC 14-34-4-10.5 and its implementing rule at 312 IAC 25-4-105.5 only apply to permits issued before September 30, 2004. Therefore, we find that 312 IAC 25-4-105.5 is no less effective than the counterpart Federal regulation, and we are approving it.

At 312 IAC 25-4-114, Indiana added new subsection (d) to require that the prohibitions on the issuance of a permit at subsection (b) do not apply to a violation resulting from an unanticipated event or condition at a surface coal mining operation on lands eligible for remining under a permit held by the applicant. The violation must have occurred after October 24, 1992, and be a result of an unanticipated event or condition on a permit. The permit must have been issued before September 30, 2004, including subsequent renewals, and held by the person making application for a new permit. For a permit issued under 312 IAC 25-4-105.5, concerning lands eligible for remining, an event or condition is presumed to be unanticipated if the event or condition arose after permit issuance, was related to prior mining, and was not identified in the permit.

Indiana's rule at 312 IAC 25-4-114(d) contains substantively the same requirements as the counterpart Federal regulation at 30 CFR 773.13 concerning unanticipated events or conditions at remining sites. Therefore, we find that 312 IAC 25-4-114(d) is no less effective than the counterpart Federal regulation, and we are approving it.

At 312 IAC 25-4-115(a)(13), Indiana added a requirement that the director make a written finding for permits to be issued for lands eligible for remining. For these permits, the director must find that the permit applications contain: (1) Lands eligible for remining; (2) an identification of any potential environmental and safety problems related to prior mining activity; and (3) mitigation plans to address potential environmental and safety problems.

Indiana's rule at 312 IAC 25-4-115(a)(13) is substantively the same as the counterpart Federal regulation at 30 CFR 773.15(m), concerning written findings for permits to be issued for lands eligible for remining. Therefore, we find that Indiana's rule at 312 IAC 25-4-115(a)(13) is no less effective than the counterpart Federal regulation, and we are approving it.

At 312 IAC 25-5-7(b), Indiana added a provision that allows lands eligible for remining included in permits issued before September 30, 2004, or any renewals thereof, to have a liability period of two years. To the extent that success standards are established by 312 IAC 25-6-59(c)(1) or 25-6-120(c)(1), the lands must equal or exceed the standards during the growing season of the last year of the responsibility period.

Indiana's new provision at 312 IAC 25-5-7(b) is substantively the same as the counterpart Federal regulation at 30 CFR 816.116(c)(2)(ii), concerning the period of liability for lands eligible for remining. Therefore, we find that the new provision at 312 IAC 25-5-7(b) is no less effective than the counterpart Federal regulation, and we are approving it.

5. Based on the above findings, Indiana's revisions at 312 IAC 25-4-105.5, 25-4-114, 25-4-115, and 25-5-7(b) satisfy the required amendment at 30 CFR 914.16(hh), and we are removing it.

On August 21, 2001 (Administrative Record No. IND-1712), Indiana's recodified rules included a rule at 312 IAC 25-4-118 that we had not previously-approved. This rule specified the conditions under which a permit is issued. In our approval of Indiana's rule on November 16, 2001 (66 FR 57655), we required Indiana to revise 312 IAC 25-4-118(4) or otherwise modify its program to require permittees to allow authorized representatives of the Secretary of the Interior to have right of entry to surface coal mining and reclamation operations for purposes of inspections, monitoring, and enforcement and to be accompanied by private persons under specified conditions. We codified this requirement at 30 CFR 914.16(kk). In its May 19, 2004, amendment, Indiana revised 312 IAC 25-4-118(4) by changing the phrase “authorized representatives of the director” to “authorized representatives of the director and the Secretary of the Interior.” With this revision, the permittee must allow the authorized representatives of the director and the Secretary of the Interior, rather than just the director, to have the right of entry to a mine site for the purpose of conducting inspections and to be accompanied by private persons when the inspection is in response to an alleged violation.

Based on the above discussion, we find that Indiana's rule at 312 IAC 25-4-118(4) is no less effective than the counterpart Federal regulation at 30 CFR 773.17(d), and we are approving it. We further find that Indiana's revision satisfies the required amendment at 30 CFR 914.16(kk), and we are removing it.

On March 26, 1992, as clarified on November 5, 1992, February 1, 1993, and May 19, 1993, Indiana submitted an amendment that included revisions to 310 IAC 12-5-27(a) [currently 312 IAC 25-6-23(a)]. In our August 16, 1993, approval of the revisions (58 FR 43248), we required Indiana to amend 310 IAC 12-5-27(a)(4) [currently 312 IAC 25-6-23(a)(4)] or otherwise amend the Indiana program to be no less effective than 30 CFR 816.41(c)(2), which references and requires compliance with 30 CFR 773.17(e). We codified the required amendment at 30 CFR 914.16(s). In response to this requirement, Indiana proposed to add 312 IAC 25-6-23(a)(4)(C) to require that if the analysis of a ground water sample indicates noncompliance with a permit condition, the permittee must minimize any adverse impact to the environment or public health and safety resulting from the noncompliance, including: (1) Accelerated or additional monitoring to determine the nature and extent of the noncompliance and the results of the noncompliance; (2) immediate implementation of measures necessary to mitigate the noncompliance; and (3) as soon as practicable issue warning to any person whose health and safety is in imminent danger due to the noncompliance.

The counterpart Federal regulation at 30 CFR 816.41(c)(2) references the Federal regulation at 30 CFR 773.17(e), rather than restating its requirements. However, we find that Indiana's addition of the substantive requirements of 30 CFR 773.17(e) at 312 IAC 25-6- 23(a)(4)(C), rather than referencing its counterpart to 30 CFR 773.17(e), is no less effective than the counterpart Federal regulation at 30 CFR 816.41(c)(2). Therefore, we are approving 312 IAC 25-6-23(a)(4)(C) and removing the required amendment at 30 CFR 914.16(s).

In our August 2, 1991 (56 FR 37013), approval of Indiana's amendment concerning water rights and replacement, we required Indiana to amend 310 IAC 12-5-29 (currently 312 IAC 25-6-25) or otherwise amend the Indiana program to clearly require the replacement of water supplies that are affected by contamination, diminution, or interruption proximately resulting from surface mining activities which do not involve a legitimate water use by a person conducting these surface mining activities. We codified this requirement at 30 CFR 914.16(f). In response to this requirement, Indiana revised 312 IAC 25-6-25 by removing the language “pursuant to a lawful order of an agency or court under IC 14-25-4 or another state water rights law” from the first sentence. Indiana also removed the existing second sentence, which stated that water replacement rights are not determined by the Indiana program. Indiana added a provision that requires the use of baseline hydrologic information to determine the extent of the impact of mining on ground water and surface water, as well as other relevant information.

Indiana's proposed revisions make 312 IAC 25-6-25 substantively identical to the counterpart Federal regulation at 30 CFR 816.41(h). Therefore, we find that 312 IAC 25-6-25 is no less effective than the counterpart Federal regulation, and we are approving the revisions. We further find that Indiana's revisions satisfy the required amendment at 30 CFR 914.16(f), and we are removing it.

1. On September 26, 1994 (Administrative Record No. IND-1401), as revised on August 16, 1995 (Administrative Record No. IND-1506), Indiana submitted an amendment that included revisions to 310 IAC 12-5-69.5(2) and 12-5-137.5(2) [currently 312 IAC 25-6-66(2) and 25-6-130(2)] concerning primary roads. On October 29, 1996, we approved Indiana's revisions except to the extent that the provisions allowed the use of a maximum slope of 3h:1v without providing engineering design standards that ensure compliance with the minimum static safety factor of 1.3 (61 FR 55743). We required Indiana to remove the language that we did not approve and notify us when the removal was complete or propose engineering design standards for a slope of 3h:1v that ensures compliance with the 1.3 minimum static safety factor requirements. In response to this requirement, Indiana revised 312 IAC 25-6-66 and 25-6-130 by removing the language that allowed the use of a maximum slope of 3h:1v. We find that with the removal of this language, 312 IAC 25-6-66(2) and 25-6-130(2) are no less effective than the counterpart Federal regulations at 30 CFR 816.151(b) and 817.151(b) for primary roads, and we are approving them.

2. In its May 19, 2004, amendment, Indiana also proposed engineering design standards at 312 IAC 25-6-130(2)(A) through (H) for underground mining primary roads. The design standards allow the use of a maximum slope of 2h:1v as an alternative to the 1.3 static safety factor requirement for primary road embankments.

The Federal regulations at 30 CFR 780.37(c) and 784.24(c) allow regulatory authorities to establish engineering design standards for primary roads in lieu of engineering tests to establish compliance with the minimum static safety factor of 1.3 for primary road embankments. In its September 26, 1994, amendment, Indiana had proposed substantively identical design standards for surface mining primary roads. We conducted a technical review of Indiana's surface mining design standards, found them to be acceptable, and approved them on October 29, 1996. Therefore, we find that Indiana's proposed design standards for underground mining primary roads meet the requirement at 30 CFR 784.24(c), and we are approving them.

On November 28, 1994 (59 FR 60876), we revised the Federal regulations at 30 CFR 840.11 concerning inspection procedures. On June 17, 1997, we sent Indiana a letter (Administrative Record No. IND-1575) in accordance with 30 CFR 732.17(c). We notified Indiana that it must amend its rules to be no less effective than the revised Federal regulations. In response to this requirement, Indiana proposed revisions to its rule at 312 IAC 25-7-1. Indiana removed existing subdivision (a)(2) and redesignated existing subdivisions (a)(3) and (4) as subdivisions (a)(2) and (3). Indiana also redesignated existing subsection (f) as subsection (h) and added new subsections (f) and (g).

1. New subsection (f) provides that in lieu of the inspection frequency established in subsection (a), the regulatory authority must inspect each abandoned site on a set frequency commensurate with the public health and safety and environmental considerations present at each specific site, but in no case will the inspection frequency be set at less than one complete inspection per calendar year. Subdivisions (f)(1) through (3) provide the procedures that the regulatory authority must follow to establish an alternative inspection frequency for abandoned sites.

The requirements of Indiana's new rule at 312 IAC 25-7-1(f) are substantively identical to the counterpart Federal regulation at 30 CFR 840.11(h)(1). Therefore, we find that 312 IAC 25-7-1(f) is no less effective than the counterpart Federal regulation, and we are approving it.

2. New subdivision (g)(1) provides the procedures for publishing a public notice and offering the public an opportunity to comment on the alternative inspection frequency for an abandoned site. New subdivision (g)(2) provides information on the content of a public notice.

The requirements of Indiana's new rule at 312 IAC 25-7-1(g) are substantively identical to the counterpart Federal regulation at 30 CFR 840.11(h)(2). Therefore, we find that 312 IAC 25-7-1(g) is no less effective than the counterpart Federal regulation, and we are approving it.

3. In our June 17, 1997, letter, we notified Indiana that we had revised 30 CFR 840.11(g)(4) to allow a site to be classified as abandoned only in cases where a permit has either expired or been revoked. Previously, 30 CFR 840.11(g)(4) allowed a site to be classified as abandoned on the basis that the permit has expired or been revoked or permit revocation proceedings have been initiated and are being pursued diligently. Indiana did not revise its rule at 312 IAC 25-7-1 to reflect this new requirement of the revised Federal regulation. Therefore, we are requiring Indiana to revise 312 IAC 25-7-1(h)(2)(D)(i) to allow a site to be classified as abandoned only in cases where a permit has expired or been revoked. We are codifying this requirement at 30 CFR 914.16.

We asked for public comments on the amendment, but did not receive any.

On June 10, 2004, under 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, we requested comments on the amendment from various Federal agencies with an actual or potential interest in the Indiana program (Administrative Record No. IND-1729).

The U.S. Fish and Wildlife Service (FWS) responded on July 12, 2004 (Administrative Record No. IND-1731), that the amendment contains some items of interest to the FWS related to language concerning prime farmland soils. FWS commented that for conservation of wildlife resources, it is important that pre-mining forest on prime farmland soils can continue to be restored as forest. FWS then stated that it understood from discussions with the IDNR staff that the proposed changes will not adversely affect forest restoration; therefore, it had no specific comments on the amendment.

We agree that the proposed changes to Indiana's prime farmland rule will not adversely affect forest restoration.

Under 30 CFR 732.17(h)(11)(ii), we are required to get a written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq. ) or the Clean Air Act (42 U.S.C. 7401 et seq. ). None of the revisions that Indiana proposed to make in this amendment pertain to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment.

On June 10, 2004, under 30 CFR 732.17(h)(11)(i), we requested comments on the amendment from EPA (Administrative Record No. IND-1729). EPA did not respond to our request.

Under 30 CFR 732.17(h)(4), we are required to request comments from the SHPO and ACHP on amendments that may have an effect on historic properties. On June 10, 2004, we requested comments on Indiana's amendment (Administrative Record No. IND-1729), but neither responded to our request.

Based on the above findings, we approve with an additional requirement the amendment Indiana sent us on May 19, 2004. As discussed in Finding III.K.3, we are requiring Indiana to revise its rule at 312 IAC 25-7-1(h)(2)(D)(i) to allow a site to be classified as abandoned only in cases where a permit has expired or been revoked.

We approve the rules proposed by Indiana with the provision that they be fully promulgated in identical form to the rules submitted to and reviewed by OSM and the public.

To implement this decision, we are amending the Federal regulations at 30 CFR part 914, which codify decisions concerning the Indiana program. We find that good cause exists under 5 U.S.C. 553(d)(3) to make this final rule effective immediately. Section 503(a) of SMCRA requires that the State's program demonstrate that the State has the capability of carrying out the provisions of the Act and meeting its purposes. Making this rule effective immediately will expedite that process. SMCRA requires consistency of State and Federal standards.

The provisions in the rule based on counterpart Federal regulations do not have takings implications. This determination is based on the analysis performed for the counterpart Federal regulations. The revisions made at the initiative of the State that do not have Federal counterparts have also been reviewed and a determination made that they do not have takings implications. This determination is based on the fact that the provisions are administrative and procedural in nature and are not expected to have a substantive effect on the regulated industry.

This rule is exempted from review by the Office of Management and Budget (OMB) under Executive Order 12866.

The Department of the Interior has conducted the reviews required by section 3 of Executive Order 12988 and has determined that this rule meets the applicable standards of subsections (a) and (b) of that section. However, these standards are not applicable to the actual language of State regulatory programs and program amendments because each program is drafted and promulgated by a specific State, not by OSM. Under sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State regulatory programs and program amendments submitted by the States must be based solely on a determination of whether the submittal is consistent with SMCRA and its implementing Federal regulations and whether the other requirements of 30 CFR parts 730, 731, and 732 have been met.

This rule does not have Federalism implications. SMCRA delineates the roles of the Federal and State governments with regard to the regulation of surface coal mining and reclamation operations. One of the purposes of SMCRA is to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” Section 503(a)(1) of SMCRA requires that State laws regulating surface coal mining and reclamation operations be “in accordance with” the requirements of SMCRA, and section 503(a)(7) requires that State programs contain rules and regulations “consistent with” regulations issued by the Secretary pursuant to SMCRA.

In accordance with Executive Order 13175, we have evaluated the potential effects of this rule on Federally-recognized Indian tribes and have determined that the rule does not have substantial direct effects 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. This determination is based on the fact that the Indiana program does not regulate coal exploration and surface coal mining and reclamation operations on Indian lands. Therefore, the Indiana program has no effect on Federally-recognized Indian tribes.

On May 18, 2001, the President issued Executive Order 13211 which requires agencies to prepare a Statement of Energy Effects for a rule that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not expected to have a significant adverse effect on the supply, distribution, or use of energy, a Statement of Energy Effects is not required.

This rule does not require an environmental impact statement because section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency decisions on proposed State regulatory program provisions do not constitute major Federal actions within the meaning of section 102(2)(C) of the National Environmental Policy Act (42 U.S.C. 4332(2)(C)).

This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3507 et seq. ).

The Department of the Interior certifies that a portion of the provisions in 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 they are based upon counterpart Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this part of the rule would have a significant economic impact, the Department relied upon the data and assumptions for the counterpart Federal regulations. The Department of the Interior also certifies that the provisions in this rule that are not based upon counterpart Federal regulations 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. ). This determination is based upon the fact that the provisions are administrative and procedural in nature and are not expected to have a substantive effect on the regulated industry.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; and (c) does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based upon the fact that a portion of the State provisions are based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulation was not considered a major rule. For the portion of the State provisions that is not based upon counterpart Federal regulations, this determination is based upon the fact that the State provisions are administrative and procedural in nature and are not expected to have a substantive effect on the regulated industry.

This rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of $100 million or more in any given year. This determination is based upon the fact that a portion of the State submittal, which is the subject of this rule, is based upon counterpart Federal regulations for which an analysis was prepared and a determination made that the Federal regulations did not impose an unfunded mandate. For the portion of the State provisions that is not based upon counterpart Federal regulations, this determination is based upon the fact that the State provisions are administrative and procedural in nature and are not expected to have a substantive effect on the regulated industry.

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

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

Prior to 2002, claims to DART royalties generally were considered timely filed with the Copyright Office only if they were hand delivered to the correct location within the Copyright Office or mailed to the correct address and bore a January or February U.S. Postal Service postmark. However, in October 2001, concerns about possible anthrax contamination of mail addressed to facilities in the District of Columbia caused severe disruptions of postal service to the Copyright Office. See 66 FR 62942 (December 4, 2001) and 66 FR 63267 (December 5, 2001). Although mail delivery to the Copyright Office resumed, the Office continued to experience delays in the receipt of mail due in part to the diversion of all incoming mail to an off-site location for screening. As a result, the Copyright Office announced alternative methods for the filing of DART claim for the claim years 2001 through 2003. See 67 FR 5213 (February 5, 2002), 67 FR 71477 (December 2, 2002), and 68 FR 74481 (December 24, 2003). Specifically, the Office waived its regulations requiring that claims bear the original signature of the claimant or of a duly authorized representative of the claimant, 37 CFR 259.3(b), to allow the electronic submission of claims, and prohibiting the filing of claims by facsimile transmission, 37 CFR 259.5(d), to allow the submission of claims by facsimile. See 67 FR 5213 (February 5, 2002), 67 FR 71477 (December 2, 2002), and 68 FR 74481 (December 24, 2003).

The electronic submission of claims proved to be popular with claimants and administratively efficient for the Office. This coupled with the fact that the Office's mail will continue to be diverted to an off-site location for screening led the Office to conclude that establishing a permanent system for the electronic filing of claims would be beneficial to claimants and to the Office. Subsequently, the Office announced its intention to issue such regulations in time for the filing of DART claims in January and February 2005. See 69 FR 630577 (May 28, 2004).

Accordingly, the Office proposed and solicited comments on rules establishing a permanent system for the electronic filing of claims, 69 FR 61325 (October 18, 2004), including the use of a Personal Identification Number (“PIN”) as a proxy for a signature on claims submitted on-line through the Office's website. See 69 FR 61325, 61326-27 (October 18, 2004). The comments received by the Office raised several issues concerning the proposed PIN system which the Office will not be able to resolve in time to issue final regulations prior to the submission of 2004 DART claims starting in January 2005.

Entities potentially affected by this action are those that use and emit VOC as well as States that have programs to control VOC emissions. This action has no substantial direct effects on the States or industry because it does not impose any new mandates on these entities but, to the contrary, removes four chemical compounds from regulation as a VOC.

This matrix lists the types of entities that EPA is now aware could potentially be affected by this action. Other types of entities not listed in the table have the potential of being affected.

The four compounds we are excluding from the definition of VOC all have potential for use as refrigerants, fire suppressants, aerosol propellants, or blowing agents (used in the manufacture of foamed plastic). In addition, all of these compounds, may be used as an alternative to ozone-depleting substances such as chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs).

Three of the compounds, 1,1,1,2,2,3,3-heptafluoro-3-methoxy-propane, 1,1,1,2,3,3,3-heptafluoropropane, and methyl formate are approved by EPA's Significant New Alternatives Policy (SNAP) program (CAA section 612; 40 CFR part 82, subpart G) as acceptable substitutes for ozone-depleting compounds. The fourth compound, 3-ethoxy-1,1,1,2,3,4,4,5,5,6,6,6-dodecafluoro-2-(trifluoromethyl) hexane, has not been reviewed under SNAP because it was submitted for use in secondary loop refrigeration systems. Fluids used in these systems are not covered by the SNAP program (62 FR 10700 March 10, 1997). However, this compound is a member of a larger class of compounds known as hydrofluoroethers (HFEs), and other HFEs have been recognized by SNAP as substitutes for ozone-depleting substances.

Also, we are making a nomenclature clarification to two previously exempted compounds. We have added the designations “HFE-7100” to 1,1,1,2,2,3,3,4,4-nonafluoro-4-methoxy-butane (C 4 F 9 OCH 3 ) and “HFE-7200” to 1-ethoxy-1,1,2,2,3,3,4,4,4-nonafluorobutane (C 4 F 9 OC 2 H 5 ). These names are widely accepted alternative designations for the two compounds and can be found in the book titled, Handbook for Critical Cleaning by Barbara Kanegsberg and Edward Kanegsberg, CRC Press, 2001, p. 77.

The EPA is now in the process of assessing its VOC policy in general. As part of this process, we intend to publish a future notice inviting public comment on the VOC exemption policy and the concept of negligible reactivity as part of a broader review of overall policy. One of the issues we will address in this notice is the extent to which compounds that are exempt from the VOC definition should still be subject to recordkeeping, emissions reporting, and inventory requirements which apply to VOC. The Agency wants to investigate whether substantial emissions of “negligibly reactive” compounds may contribute to ozone formation under certain conditions. This effort will require additional modeling, and it may be necessary to have a more accurate inventory of such compounds in order to obtain accurate modeling results. However, instead of addressing this issue in this rule, which applies to only four compounds, we intend to address it more broadly in our upcoming notice dealing with our overall VOC policy.

To determine whether your organization is affected by this action, you should carefully examine the applicability criteria in § 51.100 of title 40 of the Code of Federal Regulations. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

Tropospheric ozone, commonly known as smog, occurs when VOCs and nitrogen oxides (NO X ) react in the atmosphere. Because of the harmful health effects of ozone, EPA and State governments limit the amount of VOCs and NO X that can be released into the atmosphere. Volatile organic compounds are those compounds of carbon (excluding carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates, and ammonium carbonate) which form ozone through atmospheric photochemical reactions. Compounds of carbon (also known as organic compounds) have different levels of reactivity—that is, they do not react to form ozone at the same speed or do not form ozone to the same extent. It has been EPA's policy that organic compounds with a negligible level of reactivity need not be regulated to reduce ozone. The EPA determines whether a given organic compound has “negligible” reactivity by comparing the compound's reactivity to the reactivity of ethane. The EPA lists these compounds in its regulations (at 40 CFR 51.100(s)) and excludes them from the definition of VOCs. The chemicals on this list are often called “negligibly reactive” organic compounds.

In 1977, EPA published the “Recommended Policy on Control of Volatile Organic Compounds” (42 FR 35314, July 8, 1977) which established the basic policy that EPA has used regarding organic chemical photochemical reactivity since that time. In that statement, EPA identified the following four compounds as being of negligible photochemical reactivity and said these should be exempt from regulation as VOCs under SIPs: methane; ethane; 1,1,1-trichloroethane (methyl chloroform); 1,1,2-trichloro-1,2,2-trifluoroethane (CFC-113). That policy statement said that as new information becomes available, EPA may periodically revise the list of negligibly reactive compounds to add compounds to or delete them from the list.

The EPA's decision to exempt certain organic compounds in its 1977 policy was heavily influenced by experimental smog chamber experiments performed by EPA's Office of Research and Development earlier in the 1970's. In this experimental work, various compounds were injected into a smog chamber at a molar concentration that was typical of the total molar concentration of VOC in Los Angeles ambient air (4 parts per million by volume (ppmV)). As the compound was allowed to react with NO X at concentrations of 0.2 parts per million (ppm), the maximum ozone formed in the chamber was measured. If the compound in the smog chamber did not result in ozone formation of 0.08 ppm (0.08 ppm was the NAAQS for oxidants at that time), it was assumed that emissions of the compound would not cause an exceedance of the NAAQS. Following this reasoning, EPA concluded that the compound was negligibly reactive. Ethane was the most reactive compound tested that did not cause the 0.08 ozone level in the smog chamber to be met or exceeded. Based on those findings and judgments, EPA therefore designated ethane as negligibly reactive, and ethane became the benchmark VOC species for separating reactive from negligibly reactive compounds under the assumed conditions.

Since 1977, EPA's primary method for comparing the reactivity of a specific compound to that of ethane has been to compare the k OH values for ethane and the specific compound of interest. The k OH value represents the molar rate constant for reactions between the subject compound ( e.g. , ethane) and the hydroxyl radical ( i.e. , •OH). This reaction is very important since it is the primary pathway by which most organic compounds initially participate in atmospheric photochemical reaction processes to form ozone. The EPA has exempted 45 compounds or classes of compounds based on a comparison of k OH values since 1977.

In 1994, in response to a petition to exempt volatile methyl siloxanes, EPA, used another type of comparison to ethane based on incremental reactivity (IR) metrics (59 FR 50693, October 5, 1994). The use of IR metrics allowed EPA to take into consideration the ozone forming potential of other reactions of the compound in addition to the initial reaction with the hydroxyl radical. Volatile methyl siloxanes proved to be less reactive than ethane on a per mole basis. In 1995, EPA considered another compound, acetone, using IR metrics. Because acetone breaks down to form ozone by the process of photolysis rather than by the normal OH reaction scheme, EPA considered the IR metrics instead of k OH values, and exempted acetone based on the fact that acetone was less reactive than ethane on the basis of grams of ozone formed per grams of VOC emitted (60 FR 31635, June 16, 1995). Prior to 1994, EPA had only granted VOC exemptions based on k OH values. Since 1995, EPA has exempted one additional compound, methyl acetate, reinforced by comparisons of IR metrics. Besides a lower k OH value than ethane, EPA found that the reactivity of methyl acetate was comparable to or less than that for ethane, under a per mole basis.

On February 5, 1999, the Performance Chemicals and Fluid Division of the 3M Company submitted to EPA a petition requesting that the compound 1,1,1,2,2,3,3-heptafluoro-3-methoxy-propane be added to the list of compounds which are negligibly reactive and therefore exempt from the definition of VOC at 40 CFR 51.100(s). The next year, on August 21, 2000, the Performance Chemicals and Fluid Division of the 3M Company submitted to EPA a petition requesting that the compound 3-ethoxy-1,1,1,2,3,4,4,5,5,6,6,6-dodecafluoro-2-(trifluoromethyl) hexane be added to the same list.

Potential uses for these two compounds (and other compounds for consideration under this proposal) are shown in Table 1. In its first petition, 3M points out that it has requested the compound 1,1,1,2,2,3,3-heptafluoro-3-methoxy-propane be listed as an acceptable substitute for CFCs and HCFCs in certain uses and; as such, use of this substance may help mitigate the depletion of stratospheric ozone.

Although 3-ethoxy-1,1,1,2,3,4,4,5,5,6,6,6-dodecafluoro-2-(trifluoromethyl) hexane has not been identified as a CFC substitute, specifically, the SNAP program has identified hydrofluoroethers (HFEs), as a class, as replacement substitutes for CFCs.

In support of the 1,1,1,2,2,3,3-heptafluoro-3-methoxy-propane and the 3-ethoxy-1,1,1,2,3,4,4,5,5,6,6,6-dodecafluoro-2-(trifluoromethyl) hexane petitions, 3M Company supplied information on the photochemical reactivities of the compounds. The 3M Company stated that, as hydrofluoroethers, these compounds are very similar in structure, toxicity, and atmospheric properties to other compounds such as C 4 F 9 OCH 3 , (CH 3 ) 2 CFCF 2 OCH 3 , C 4 F 9 OC 2 H 5 , and (CH 3 ) 2 CFCF 2 OC 2 H 5 which are exempt already from the VOC definition.

Other information submitted by 3M Company consists mainly of a peer-reviewed article entitled “Atmospheric Chemistry of Some Fluoroethers,” Guschin, Molina, Molina: Massachusetts Institute of Technology, May 1998. This article discusses a study in which the rate constant for the reaction of HFE-7000 (and several other individual compounds) with the hydroxyl (OH) radical is shown to be less than the rate constant for ethane but slightly more than the rate constant for methane on a mole basis. This rate constant (k OH value) is commonly used as one measure of the photochemical reactivity of compounds. The petitioner compared the rate constants with that of ethane which has already been listed as photochemically negligibly reactive (ethane is the compound with the highest k OH value which is currently regarded as negligibly reactive). The two compounds under consideration for exemption are listed with their reported k OH rate constants in Table 2 along with ethane (and compounds for consideration under this proposal). 3M Company has also included Material Safety Data Sheets, together with 5-day and 28-day inhalation toxicity studies, indicating both their compounds as having very low toxicity. The scientific information which the petitioner has submitted in support of the petition has been added to the docket for this rulemaking. This information includes references for the journal articles where the rate constant values are published.

On February 18, 1998, the Great Lakes Chemical Corporation (“Great Lakes”) petitioned EPA for the exemption of 1,1,1,2,3,3,3-heptafluoropropane (HCF-227ea) from the definition of VOC. The rate constant for the reaction of HFC-227ea with the OH radical was based on studies performed at the laboratories of Aerodyne Research, Inc. and reported by Nelson, Zahniser, and Kolb in the Geophysical Research Letters., Vol. 20, No. 2, pages 197-200. The rate constant for HFC-227ea as reported in this paper (Table 2) is 1.09 × 10 -15 cm 3 /molecule/sec at 277K (0°C) which places it well under two orders of magnitude below ethane's reactivity.

Great Lakes also claims that HFC-227ea is not an ozone-depleting substance. The EPA has approved this compound already under the SNAP program as an acceptable substitute for Halon 1301 and Halon 1211 in various fire suppression applications. Also, EPA has determined HFC-227ea to have a GWP at 3800 times that of carbon dioxide, making it a probable substitute for its competitor fire suppressants which have even higher GWPs. The GWP is a number that refers to the amount of global warming caused by a substance. The GWP is the ratio of the warming caused by a substance to the warming caused by a similar mass of carbon dioxide. Thus, the GWP of CO 2 is defined to be 1.0. CFC-12 has a GWP of 8,500, while CFC-11 has a GWP of 5,000. Various HCFCs and HFCs have GWPs ranging from 93 to 12,100. Water, a substitute in numerous end-uses, has a GWP of 0.

On February 12, 2002, Foam Supplies, Inc. submitted a petition to exclude methyl formate from the definition of VOC. Also submitted were journal articles detailing three separate studies with hydroxyl radicals in which methyl formate's rate constants are measured against that of ethane on a mole basis (cm3/molecule/sec). Of the three studies, the highest value tested for methyl formate was that of 2.27 × 10 -13 cm 3 /molecule/sec which is slightly below that for ethane at 2.4 × 10 -13 cm 3 /molecule/sec (shown in Table 2).

Foam Supplies, Inc. also notes that methyl formate has a zero ODP and a very low or zero GWP. In addition, Foam Supplies, Inc. notes that EPA has approved this compound under SNAP as an acceptable alternative to HCFC-141b and HCFC-22 in various blowing agent applications.

Because of the closeness in rate constant values attributed to methyl formate and ethane, in addition to the information on k OH value submitted by the petitioner, EPA has examined further evidence of low reactivity for methyl formate. This evidence, which is desirable when rate constant values are so close (as in the case of methyl formate and ethane), increases the confidence level with which EPA can make a final decision on whether to approve or disapprove of a petition to exempt a compound from the VOC definition. Dr. William P. L. Carter of the University of California at Riverside has published “The SAPRC-99 Chemical Mechanism and Updated VOC Reactivity Scales,”(revised 11/29/2000) on his Web site at: http://ftp.cert.ucr.edu/pub/carter/SAPRC99/appndxc.doc. Appendix C of his report gives maximum incremental reactivity (MIR) values which are another accepted measure of photochemical reactivity. Dr. Carter's MIR values are calculated in grams ozone per gram of organic compound. These same MIR values can be calculated on the basis of grams of ozone per mole of organic compound as discussed in the above section concerning differences between gram-basis and mole-basis reactivity rates. Methyl formate has negligible reactivity rates at less than half that of ethane. Sections of the Carter report showing ethane and methyl formate values have been added to the docket. Also, this same data may be seen on Dr. Carter's website as stated above.

While the purpose of exempting negligibly reactive VOCs is to avoid unnecessary regulation that will not help in the attainment of the ozone NAAQS, it is possible that exempting specific compounds from regulation as a VOC could result in significant health risks or other undesirable environmental impacts. The EPA has included available information about the toxicity of the four compounds under consideration in the docket. Also, EPA invited public comment, during the comment period, on the potential for significant health or environmental risks that may be expected as a result of the proposed exemptions, taking into account the expected uses for the compounds.

For the petitions submitted by the 3M Company, Great Lakes Chemical Corporation, and Foam Supplies, Inc., the data submitted by the petitioners support the contention that the reactivities of the compounds submitted, with respect to reaction with OH radicals in the atmosphere, are lower than that of ethane. There is ample evidence in the literature that methyl formate and the halogenated paraffinic VOC, listed above, do not participate in such reactions significantly.

The EPA is responding to the petitions by adding the compounds in Table 3 to the list of compounds exempt from the definition of VOC appearing in 40 CFR 51.100(s). Also, EPA is adding the following nomenclature designations “HFE-7100” to 1,1,1,2,2,3,3,4,4-nonafluoro-4-methoxy-butane (C 4 F 9 OCH 3 ) and “HFE-7200” to 1-ethoxy-1,1,2,2,3,3,4,4,4-nonafluorobutane (C 4 F 9 OC 2 H 5 ).

In the proposal for the exemption of 4 compounds, EPA indicated that interested persons could request that EPA hold a public hearing on the proposed action ( see section 307(d)(5)(ii) of the CAA). EPA received no requests for a public hearing.

The EPA also provided for a public comment period in the proposal. The EPA received 13 comments on the proposal. The comments fell into three general categories: (1) Comments in favor of the exemptions, (2) comments of concern about toxicity and stratospheric ozone depletion, and (3) comments that object to the reporting and recordkeeping requirements. All comment letters are in the docket for this action. In today's final action, we have summarized what EPA views as the significant comments and provided the Agency's responses. We provide no responses to favorable comments because they referred to industry's desire for suitable negligibly-reactive compounds that would serve as substitutes for higher-reacting ozone precursor compounds.

While EPA concurs that encouraging use of lower reactivity compounds is the policy basis for the VOC exemption approach, today's action focuses on the technical basis and appropriateness of exempting these four specific compounds.

Comment: One comment asserted that EPA should not encourage the production of any chemical that will enlarge the hole in the stratosphere above the Antarctic or (in the same letter with reference to methyl formate) have properties that make it toxic, flammable, or cause pulmonary damage.

Response: Section 612 of 40 CFR part 82 subpart G of the EPA SNAP rule, requires EPA to establish a method to identify alternatives to Class I (CFCs, halons, carbon tetrachloride, methylchoroform, methyl bromide, and hydrobromofluorocarbons) and Class II (HCFCs) ozone-depleting substances and to publish lists of acceptable and unacceptable substitutes. Pursuant to SNAP's rule, it is illegal to replace a Class I or Class II substance with any substitute which the Administrator determines may present adverse effects to human health or the environment where other substitutes have been identified that reduce overall risk and are currently or potentially available. In addition, all of the compounds affected by this action, may be used as an alternative to ozone-depleting substances such as CFCs and HCFCs.

Three of the compounds, 1,1,1,2,2,3,3-heptafluoro-3-methoxy-propane, 1,1,1,2,3,3,3-heptafluoropropane, and methyl formate are already approved by the SNAP program as acceptable substitutes for ozone-depleting compounds. The fourth compound, 3-ethoxy-1,1,1,2,3,4,4,5,5,6,6,6-dodecafluoro-2-(trifluoromethyl) hexane, has not been reviewed by EPA under SNAP because it was submitted for use in secondary loop refrigeration systems. Fluids used in these systems are not covered by the SNAP program (62 FR 10700, March 10, 1997). However, this fourth compound is a member of a larger class of compounds known as HFEs, and other HFEs have been recognized by SNAP as ODS substitutes.

The EPA uses the SNAP program to identify substitutes for ozone-depleting compounds, to evaluate the acceptability of these substitutes, to promote the use of those substitutes EPA determines to present lower overall risks to human health and the environment (relative to the Class I and Class II compounds being replaced, as well as to other substitutes for the same end-use), and to prohibit the use of those substitutes found, based on the same comparisons, to increase overall risks. EPA's SNAP program has identified the HFCs as a class of replacement substitutes for CFCs. Because they do not contain chlorine or bromine, they do not deplete the ozone layer. All HFCs have an ozone depletion potential (ODP) of 0 although some HFCs have high global warming potential (GWP).

In its VOC exemption petition, 3M points out that it has requested EPA list the compound 1,1,1,2,2,3,3-heptafluoro-3-methoxy-propane as an acceptable substitute for CFCs and HCFCs in certain uses and; as such, use of this substance may mitigate depletion of stratospheric ozone. Although 3-ethoxy-1,1,1,2,3,4,4,5,5,6,6,6-dodecafluoro-2-(trifluoromethyl)hexane has not been identified as a substitute, specifically, the SNAP program has identified HFEs, as a class, as replacement substitutes for CFCs.

Great Lakes also claims in its VOC exemption petition that HFC-227ea is not an ozone-depleting substance. EPA has approved this compound under the SNAP program as an acceptable substitute for Halon 1301 and Halon 1211 in various fire suppression applications. As stated in the background section above, EPA has determined HFC-227ea to have a GWP at 3800 times that of carbon dioxide, making it a probable substitute for its competitor fire suppressants which have even higher GWPs.

In approving methyl formate as an acceptable substitute for CFC's and HCFC's, EPA's SNAP Program noted that methyl formate is toxic and flammable and should be handled by users with proper precautions. Methyl formate causes irritation to the eyes, skin, and lungs, and at high levels may cause pulmonary damage. However, EPA believes that use of methyl formate is well regulated by other programs; therefore, exposures to this compound will be below levels of concern. The Occupational Safety and Health Administration (OSHA) has established an enforceable occupational exposure limit of 100 ppm as an 8-hour time-weighted average. The National Institute for Occupational Safety and Health (NIOSH) has also established a short-term exposure limit (averaged over 15 minutes) of 150 ppm. There is only one supplier of methyl formate in the U.S., and its total production is less than 10 million pounds per year. We estimate that use of methyl formate as an HCFC replacement in the foam sector will be relatively small, reaching 2.5 million pounds between years 2008 and 2010. Although we do not have information on all the possible exposure scenarios for methyl formate, based on information provided by industry, the air concentration levels reached in testing methyl formate as a foam blowing agent have been less than 10 ppm (without ventilation), a concentration well below the occupational exposure limits set by other agencies.

Comment: The EPA received a number of comments opposing the implementation of recordkeeping and reporting requirements. According to the commenters, this requirement would cause some inequity in marketability and in cost-burden for their chemicals, resulting in a competitive advantage to companies producing the chemicals that EPA had previously exempted. Client companies and States' environmental agencies would bear the burden of additional recordkeeping and reporting costs. Could the same information be gotten from manufacturers? Could EPA employ purchase and use records as inventories? Also, there is concern that EPA will impose daily recordkeeping and reporting in order to follow multi-day ozone events and ozone transport phenomena. Another point for discussion questions how adequate atmospheric modeling can be done without data to represent the total of over forty compounds that have been exempted already. Can EPA find an optional method to atmospheric modeling? The EPA may be wiser to defer recordkeeping and reporting considerations until after development of the forthcoming reactivity policy reassessment.

Response: The EPA agrees that it would be more appropriate to address this issue as part of the reassessment of our overall reactivity policy. We have therefore decided not to include recordkeeping and reporting requirements in today's rule.

We recognize that most organic compounds that EPA has exempted as “negligibly reactive” do have some photochemical reactivity, albeit small. At some future point during the reassessment of our reactivity policy, in order to develop an accurate assessment of the atmospheric chemistry, EPA may need to begin incorporating at least some of the widely used exempt VOCs into a model that determines a significant, or insignificant, or possibly even a beneficial environmental impact. An assessment toward this end has begun already under the aegis of an ongoing Reactivity Research Working Group (RRWG) investigation of the current scientific findings.

This type of modeling effort may require better speciated inventories of organic compounds, including compounds that we have exempted from the VOC definition. Thus, it may be necessary to develop some sort of system for gathering more accurate information about these compounds—at least those that are widely used. (In this regard, we note that the four compounds we are excluding from the VOC definition today are expected to be used in relatively small amounts.) Rather than addressing this issue in today's rule, which applies to only four compounds, we intend to address it more broadly in our upcoming notice dealing with our overall VOC policy.

Again, with this action, the EPA is not finalizing a decision on how future petitions will be evaluated. As noted above, the Agency is currently in the process of assessing its overall policy toward regulating VOCs with the inclusion of multi-day ozone and ozone transport events, as well as toxicity and stratospheric ozone depletion and global warming potential concerns. We intend to publish in the near future a notice inviting public comment on the VOC exemption policy and the concept of negligible reactivity as part of a broader review of overall policy.

Today's final action is based on EPA's review of the material in Docket No. OAR-2003-0086. The EPA hereby amends its definition of VOC at 40 CFR 51.100(s) to exclude the compounds in Table 3 from the term “VOC” for ozone SIP and ozone control purposes. States are not obligated to exclude from control as a VOC those compounds that EPA has found to be negligibly reactive. However, as this action is made final, States may not include reductions in emissions of these compounds in their calculations for determining reasonable further progress under the CAA ( e.g. , section 182(b)(1)) and may not take credit for controlling these compounds in their ozone control strategy.

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

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

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

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

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

Pursuant to the terms of Executive Order 12866, it has been determined that this rule is not “significant” because none of the listed criteria apply to this action. Consequently, this action is not submitted to OMB for review under Executive Order 12866.

This action does not contain any information collection requirements subject to OMB review under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. It does not contain any recordkeeping or reporting requirement burden.

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

An Agency does not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et seq. requires the identification of potentially adverse impacts of Federal regulations upon small business entities. The Act specifically requires the completion of a RFA analysis in those instances where the regulation would impose a substantial impact on a significant number of small entities. Because this rulemaking imposes no adverse economic impacts, an analysis has not been conducted.

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This rule will not impose any requirements on small entities. Today's rule concerns only the definition of VOC and does not directly regulate any entities. The RFA analysis does not consider impacts on entities which the action in question does not regulate. See Motor & Equipment Manufacturers Ass'n v. Nichols, 142 F. 3d 449, 467 (D.C. Cir. 1998); United Distribution Cos. v. FERC, 88 F. 3d 1105, 1170 (D.C. Cir. 1996), cert. denied, 520 U.S. 1224 (1997). Pursuant to the provision of 5 U.S.C. 605(b), I hereby certify that the rule will not have an impact on small entities.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

Since this rule is deregulatory in nature and does not impose a mandate upon any source, this rule is not estimated to result in the expenditure by State, local and Tribal governments or the private sector of $100 million in any 1 year. Therefore, the Agency has not prepared a budgetary impact statement or specifically addressed the selection of the least costly, most cost-effective, or least burdensome alternative. Because small governments will not be significantly or uniquely affected by this rule, the Agency is not required to develop a plan with regard to small governments.

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

This action addressing the exemption of four chemical compounds from the VOC definition does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action does not impose any new mandates on State or local governments. Thus, Executive Order 13132 does not apply to this rule. In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicited comment on the proposed rule for this final rule from State and local officials.

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

This rule does not have Tribal implications. It will not have substantial direct effects on Tribal governments, on the relationship between the Federal government and Indian Tribes, or on the distribution of power and responsibilities between the Federal government and Indian Tribes, as specified in Executive Order 13175. Today's action does not have any direct effects on Indian Tribes. Thus, Executive Order 13175 does not apply to this rule. In the spirit of Executive Order 13175, and consistent with EPA policy to promote communications between EPA and Tribal governments, EPA solicited comment on the proposed rule for this final rule from Tribal officials.

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

While this rule is not subject to the Executive Order because it is not economically significant as defined in Executive Order 12866, EPA has reason to believe that ozone has a disproportionate effect on active children who play outdoors (62 FR 38856; 38859, July 18, 1997). The EPA has not identified any specific studies on whether or to what extent the four above listed chemical compounds affect children's health. The EPA has placed the available data regarding the health effects of these four chemical compounds in docket no. OAR-2003-0086. The EPA invites the public to submit or identify peer-reviewed studies and data, of which EPA may not be aware, that assess results of early life exposure to any of the four above listed chemical compounds.

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

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d), (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A Major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a major rule as defined by 5 U.S.C. 804(2). This rule will be effective upon publication in the Federal Register. This final rule is a deregulatory action and, therefore, does not result in expenditures by State, local, and Tribal governments, in the aggregate, or to the private sector of $100 million or more in any 1 year. Also, this final rule will not have a significant economic impact on a substantial number of small entities. The deregulatory nature of this final rule will result in a cost benefit for industries using or manufacturing these chemical compounds.

I. General Information A. How Does This Rule Fit Into Existing Regulations?

The EPA is revising the definition of VOC to say that TBAC will not be a VOC for purposes of VOC emissions limitations or VOC content requirements, but will continue to be a VOC for purposes of all recordkeeping, emissions reporting, and inventory requirements which apply to VOC. If you use or produce TBAC and are subject to EPA regulations limiting the use of VOCs in your product, limiting the VOC emissions from your facility, or otherwise controlling your use of VOCs for purposes related to attaining the ozone NAAQS, then you will not count TBAC as a VOC in determining whether you meet these regulatory obligations. However, TBAC emissions will still be subject to reporting requirements that exist for other VOC emissions. This action may also affect whether TBAC is considered a VOC for State regulatory purposes, depending on whether the State relies on EPA's definition of VOC. This decision responds to a petition submitted by the Lyondell Chemical Company  1 and is based on information included in the petition and other information submitted to the docket for this rule (OAR-2003-0084). The EPA proposed the VOC exemption of TBAC on September 30, 1999 (64 FR 52731), and provided a 60-day comment period.

Tropospheric ozone, commonly known as smog, occurs when VOCs and nitrogen oxides (NO X ) react in the atmosphere. Because of the harmful health effects of ozone, EPA and State governments limit the amount of VOCs and NO X that can be released into the atmosphere. Volatile organic compounds are those compounds of carbon (excluding carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates, and ammonium carbonate) that form ozone through atmospheric photochemical reactions. Compounds of carbon (also known as organic compounds) have different levels of reactivity—that is, they do not react at the same speed or do not contribute to ozone formation to the same extent. It has been EPA's policy that organic compounds with a negligible level of reactivity need not be regulated to reduce ozone. The EPA determines whether a given organic compound has “negligible” reactivity by comparing the compound's reactivity to the reactivity of ethane. The EPA lists these compounds in its regulations (at 40 CFR 51.100(s)) and excludes them from the definition of VOCs. The chemicals on this list are often called “negligibly reactive” organic compounds.

On January 17, 1997, Lyondell submitted a petition to EPA which requested that EPA add TBAC to the list of compounds that are designated negligibly reactive in the definition of VOC at 40 CFR 51.100(s). The petitioner subsequently submitted supplemental materials to EPA in support of its petition. These materials are contained in docket OAR-2003-0084. The petitioner based the request on a comparison of the reactivity of TBAC to that of ethane, the latter having already been listed, since 1977, as negligibly reactive. In the past, EPA has determined that ethane and compounds with lower reactivity than ethane are negligibly reactive and therefore exempted them from the definition of VOC. Reactivity data presented by Lyondell in support of the petition included both k OH values and incremental reactivity values. The k OH values are values of the rate constant for the VOC + OH (hydroxyl radical) reaction. The incremental reactivity values, which support the petition and reflect TBAC's potential for producing ozone in the atmosphere, are based on atmospheric photochemical modeling.

Lyondell's primary case for TBAC being less reactive than ethane is based on the use of incremental reactivity data set forth in a report titled “Investigation of the Atmospheric Ozone Formation Potential of T-Butyl Acetate” by W.P.L. Carter, et al. In that study, Carter compared the incremental ozone formed per-gram of TBAC under urban atmosphere conditions to that formed, under the same conditions, per-gram of ethane. The study repeated these comparisons for 39 condition scenarios, that is, sets of ambient conditions intended to represent 39 urban areas across the United States. Carter concluded that, on average, TBAC formed 0.4 times as much ozone as an equal mass of ethane under the conditions assumed in the study.

Comparing the reactivity of TBAC to ethane on a per mole basis, as opposed to a per gram basis, calculations based on Carter's results show that a mole of TBAC forms 1.5 times the ozone formed by a mole of ethane under the conditions assumed in the study. The difference in reactivity results between the “per gram” and “per mole” comparisons is due to the fact that a molecule of TBAC is almost four times heavier than a molecule of ethane. Along with other reasons stated below, this “closeness” to EPA's reactivity exemption line requires the Agency to retain certain emission reporting requirements for TBAC.

In 1977, EPA published the “Recommended Policy on Control of Volatile Organic Compounds” (42 FR 35314, July 8, 1977) which established the basic policy that EPA has used regarding organic chemical photochemical reactivity since that time. In that statement, EPA identified the following four compounds as being of negligible photochemical reactivity and said these should be exempt from regulation under State Implementation Plans: methane; ethane; 1,1,1-trichloroethane (methyl chloroform); 1,1,2-trichloro-1,2,2-trifluoroethane (CFC-113). That policy statement provides that as new information becomes available, EPA may periodically revise the list of negligibly reactive compounds to add compounds to or delete them from the list.

The EPA's decision to exempt certain compounds in its 1977 policy was heavily influenced by experimental smog chamber work done earlier in the 1970's. In this experimental work, various compounds were injected into a smog chamber at a molar concentration that is typical of the total molar concentration of VOCs in Los Angeles ambient air (4 ppmv). As the compound was allowed to react with NO X at concentrations of 0.2 ppm, the maximum ozone formed in the chamber was measured. If the compound in the smog chamber did not result in ozone formation of 0.08 ppm (0.08 ppm was the NAAQS for oxidants at that time), it was assumed that emissions of the compound would not cause the oxidant standard to be exceeded. The compound could then be considered to be negligibly reactive. Ethane was the most reactive compound tested that did not cause the 0.08 ozone level in the smog chamber to be met or exceeded. Based on those findings and judgments, EPA designated ethane as negligibly reactive, and ethane became the benchmark VOC species separating reactive from negligibly reactive compounds.

Since 1977, the primary method for comparing the reactivity of a specific compound to that of ethane has been to compare the k OH values for ethane and the specific compound of interest. The k OH value represents the molar rate constant for reactions between the subject compound (e.g., ethane) and the hydroxyl radical (i.e., •OH). This reaction is very important since it is the primary pathway by which most organic compounds initially participate in atmospheric photochemical reaction processes. The EPA has exempted forty five compounds or classes of compounds based on a comparison of k OH values since 1977.

In 1994, in response to a petition to exempt volatile methyl siloxanes, EPA, for the first time, considered a comparison to ethane based on Incremental Reactivity (IR) metrics (59 FR 50693, October 5, 1994). The use of IR metrics allowed EPA to take into consideration the ozone forming potential of other reactions of the compound in addition to the initial reaction with the hydroxyl radical. Volatile methyl siloxanes proved to be less reactive than ethane on a per mole basis. In 1995, EPA considered another compound, acetone, using IR metrics. Because acetone breaks down to form ozone by the process of photolysis rather than by the normal OH reaction scheme, EPA considered the IR metrics instead of K OH values, and exempted acetone based on the fact that acetone was less reactive than ethane on the basis of grams of ozone formed per grams of VOC emitted (60 FR 31635, June 16, 1995). Prior to 1994, all exemptions had been based on K OH values compared on the basis of a mole of ozone formed per mole of VOC emitted. Since 1995, EPA has exempted one additional compound, methyl acetate, based on comparisons of IR metrics. The reactivity of methyl acetate was found to be comparable to or less than that for ethane under a per mole basis.

In the proposal for this rule (64 FR 52731), EPA announced two things: (1) Our intent to grant Lyondell's petition for exemption of TBAC based on a comparison of IR metrics for TBAC as compared to ethane in units of grams of ozone formed per gram of VOC emitted, and (2) our intent to base decisions on future petitions for VOC exemptions only on an equi-molar comparison of K OH and IR values for the compound in question to the K OH and IR values for ethane. In the proposal, EPA indicated that it might grant the TBAC exemption on the theory that the petitioner had detrimentally relied on earlier EPA statements and actions concerning the use of a gram-based comparison rather than a molar comparison of the reactivity of compounds.

In the proposal for the TBAC exemption, EPA indicated that interested persons could request that EPA hold a public hearing on the proposed action (see section 307(d)(5)(ii) of the CAA). There were no requests for a public hearing.

In the proposal action, EPA provided for a public comment period. The EPA received 30 comment letters. The comments received were divided into two general categories: comments concerned with EPA VOC exemption policy in general and comments focused specifically on the exemption of TBAC. Several commented on EPA VOC exemption policy, in general, as well as supporting the TBAC exemption. The comments received are too numerous to list each one in this final rule. All of the comment letters have been placed in the docket for this action. A summary of the comments received and EPA responses are given in a technical support document, titled “Responses to Significant Comments on the Proposed Revision to the Definition of Volatile Organic Compounds—Exclusion of t-Butyl Acetate (64 FR 52731, September 30, 1999),” which is in the docket. In today's final rule, we have summarized what EPA views as the most significant comments and our responses.

A number of commenters asserted that the primary purpose of a VOC exemption policy should be to encourage replacement of current emissions of highly reactive compounds with emissions of lower reactive compounds. This would ostensibly result in lower ozone formation and lower adverse environmental impact. The commenters stated that one way of doing this would be to exempt more low reactivity compounds. The use of a “reactivity per gram” basis for comparing reactivities for exemption purposes would be less strict than a “per mole” basis, and would permit more exemptions, and thus more solvent substitution.

The intent of EPA's current VOC exemption policy is to avoid placing an undue regulatory burden on the use of compounds that do not significantly contribute to the formation of harmful concentrations of ozone. Once a compound is exempted, emissions of the compound may increase significantly due to substitution and new uses of the compound. Because these potential increases are exempt from control, it is important that the compounds be negligibly reactive and not simply marginally less reactive than compounds that they may replace. If by exempting negligibly reactive compounds EPA encourages the substitution of negligibly reactive compounds for highly reactive compounds, this is an added benefit.

EPA is currently evaluating a variety of scientific, legal, and practical issues associated with the design and implementation of a policy to encourage further substitution, such as the use of VOC reactivity scales. To address these issues, EPA is working with the State of California and the Reactivity Research Working Group, a government/industry/ academic working group established under NARSTO (formerly the North American Research Strategy for Tropospheric Ozone) to identify research priorities related to VOC reactivity. The results of these efforts will be considered by EPA as part of a multi-year review of our current VOC policy and addressed through future rulemakings.

Many commenters opposed EPA's announcement that reactivity petitions will be evaluated on a “reactivity per mole” basis for petitions submitted after the TBAC proposal notice date. These commenters supported the “per gram” basis and questioned the use of the smog chamber experiments that were reported in 1977 as the basis for the molar comparison with ethane.

The EPA believes that a “reactivity per mole” comparison is more consistent with the smog chamber experiments underlying the 1977 policy, is more consistent with the historical use of k OH values as a basis of comparison, and is arguably more environmentally protective than a “reactivity per mass” comparison. However, EPA believes that the issues raised by commenters warrant a more extensive review of the overall exemption policy and its scientific bases. Consequently, EPA is not revising its current VOC exemption policy with this final rule. As noted in the proposal, EPA has commenced a multi-year review of its policy, which will hopefully be informed by the research activities being identified by the RRWG mentioned above. The EPA believes that it would be desirable for this review to be completed before reaching a decision on how to address future petitions. Parties submitting petitions for VOC exemptions should expect their petitions to be reviewed under a new policy.

Commenters opposed to the TBAC exemption said that because EPA intended to change its exemption policy to a “per mole” comparison, EPA should apply that test to this petition and not grandfather it under the “per gram” policy. The petitioner argued that it relied on past EPA statements regarding the acceptability to EPA of using a per gram basis in the acetone exemption proposal (59 FR 49877, September 30, 1994) and final rule (60 FR 31633, June 16, 1995) and in the 1995 Report to Congress “Study of Volatile Organic Compound Emissions from Consumer and Commercial Products.” The petitioner argued that in reliance on these statements it had expended significant resources in research and planning to develop its petition for the exemption of TBAC on the per gram basis.

As discussed above, in today's action, EPA is not finalizing a change to the existing VOC exemption policy. Therefore, our decision to grant the TBAC petition does not involve grandfathering this pre-existing petition from the application of a new policy. In any event, we do not believe that the petitioner's investment of significant resources in research and planning would be, in itself, a sufficient justification for such grandfathering. First, an important consideration for grandfathering is the statutory interest in applying the new policy. If we were to adopt a policy today permitting only a per mole comparison, retaining ethane as the benchmark, we might conclude that granting the TBAC petition would not further the statutory interest in reducing ozone, because on a per-mole basis TBAC is more reactive than ethane. A second consideration for grandfathering is whether the new policy represents an abrupt departure from well-established practice. We would not necessarily characterize use of a per-mole basis in evaluating VOC exemption petitions as such a departure. Most VOC exemptions to date have been granted using k OH values, which is consistent with using a per-mole basis.

The remaining considerations for grandfathering relate to the petitioner's reliance on the old policy and the burden to the petitioner imposed by the new policy. Although the petitioner stated that it expended significant resources in reliance on the per-gram policy, the petitioner competes in a regulated marketplace in which regulations can be expected to evolve with both scientific understanding and market conditions. In addition, because the petitioner claimed that it undertook only preliminary activities, such as research and planning, it would be difficult to identify concrete effects of the petitioner's alleged reliance. Furthermore, changes in EPA's VOC exemption policy would likely affect both the petitioner and its competitors. As commenters pointed out, EPA previously exempted acetone despite the argument that another company had developed a low VOC industrial cleaner as an alternative to acetone in reliance on acetone's status as a VOC. In summary, if we were to apply a grandfathering analysis to a VOC exemption petition such as the TBAC petition, we would consider not only investment of resources in research and planning, but also the other factors discussed here.

Some commenters questioned the exemption of TBAC before further study of the compound's toxicity. According to the commenters: (i) The health effects data available for TBAC are limited; (ii) no chronic, developmental, or reproductive toxicity data are available for TBAC; and (iii) no genetic toxicity or carcinogenicity data are available for TBAC. Due to the lack of information on TBAC, the commenters contended that it is not possible to assess the potential for adverse effects from prolonged exposure. However, the commenters point to evidence that TBAC metabolizes to t-butyl alcohol, for which some animal testing data suggests that it may be carcinogenic. This information was emphasized in a letter to EPA from the California Environmental Protection Agency (signed by Air Resources Board, Office of Environmental Health Hazard Assessment,and State Water Resources Control Board). Other commenters urged EPA to deny the exclusion of TBAC from the VOC definition because of concerns about toxicity.

Since the close of the comment period, the California Air Resources Board, in conjuction with California's Office of Environmental Health Hazard Assessment, has completed a draft assessment of a VOC exemption for TBAC. The assessment quantifies (1) the potential benefits associated with decreased ozone formation as a result of TBAC substituting for more reactive compounds, and (2) the potential cancer risks associated with increased exposure to TBAC. A copy of this draft assessment is included in the docket.

As part of their original submission, Lyondell had provided EPA with information on the acute toxicity of TBAC. As input into California's assessment, Lyondell submitted to EPA and California a variety of additional information about chronic toxicity. Copies of this information, as well as a copy of Lyondell's critique of California's assessment, are included in the docket.

The EPA has carefully reviewed the limited data that is available on the chronic toxicity of TBAC, including California's risk assessment, and has reviewed the data available about the potential health benefits due to reduced ozone exposure from the use of TBAC as a substitute for more reactive substances. The EPA has concluded that (1) there is insufficient evidence of a significant toxic risk to justify not granting the exemption petition, and (2) granting the exemption will provide a net improvement in public health and environmental quality. However, given the potential for increased use of TBAC, EPA does believe that further toxicity testing is warranted to resolve the uncertainty associated with the limited evidence that is currently available.

In response to these concerns, Lyondell has agreed to work with EPA to perform the toxicity testing needed to resolve the current uncertainty. As part of this effort, Lyondell will conduct a tiered series of tests designed to confirm and elucidate the mechanisms of potential toxicity observed in the limited data available. Lyondell will submit the testing results to an independent scientific peer consultation panel that will make recommendations to EPA and Lyondell as to whether further testing is warranted. Based on the information currently available and experience with similar compounds, EPA believes that the first tier of testing is likely to be sufficient to resolve much of the current uncertainty. Until the testing program is completed and evaluated, Lyondell has agreed to limit their annual production of TBAC to ensure that significant chronic ambient exposures will not occur. If the testing program indicates that TBAC does pose a potentially significant public health risk, EPA will take appropriate regulatory action to address the risk.

The EPA believes that moving forward with the exemption and simultaneously pursuing additional toxicity testing is a responsible risk management approach that allows society to benefit from lower ozone exposures while protecting against other potential chronic risks.

The petitioner claimed that TBAC will be used to substitute for the common industrial solvents toluene and xylene which are classified by EPA as Hazardous Air Pollutants (HAPs) and which are much more photochemically reactive than TBAC. The petitioner claimed that this will be a great environmental benefit from the TBAC exemption. Other commenters asserted that TBAC will not be substituted to any great degree for toluene and xylene as the petitioner claims. These commenters claimed that TBAC is more expensive than toluene and xylene and may be added on top of the legal VOC limit of these chemicals in a product to increase the solvent content of product without increasing VOC content.

The EPA acknowledges that the properties of TBAC make it technically suitable to be substituted for toluene and xylene in many products. The extent to which TBAC will be used as a substitute will depend on costs. Currently, TBAC is relatively expensive compared to toluene and xylene. However, if exempted, demand for TBAC is expected to increase, increasing production and driving down costs. There is a possibility that companies will use relatively cheap solvents like toluene and xylene up to the legal limit and then use TBAC to add solvent above the applicable VOC content limits. Ultimately, EPA expects that substitution of TBAC for more reactive and harmful solvents will outweigh increases in solvent use, resulting in a net improvement in environmental quality. However, this is not the reason that EPA is granting this exemption from VOC emission limitations. The action is based on photochemical reactivity relative to ethane.

After reviewing these comments and the other material in the docket, EPA is acting in accordance with our existing policy by modifying the definition of VOC to say that TBAC is not a VOC for purposes of VOC emission limitations or content requirements because TBAC is less reactive than ethane on a per gram basis.

In prior VOC exemption decisions, EPA has not required continued recordkeeping and reporting on the use and emissions of the exempt compounds. However, EPA has proposed to retain recordkeeping and reporting requirements for TBAC and other future exempt compounds based on our understanding that even “negligibly reactive” compounds may contribute significantly to ozone formation if present in sufficient quantities and the need to represent these emissions accurately in photochemical modeling analyses.

In addition to these general concerns about the potential cumulative impacts of negligibly reactive compounds, the need to maintain recordkeeping and reporting requirements for TBAC is further justified by the potential for widespread use of TBAC, the fact that its relative reactivity falls close to the borderline of what has been considered negligibly reactive, and the continuing efforts to assess long-term health risks. Therefore, in today's rule, EPA is excluding TBAC from the definition of VOC for purposes of control requirements, but EPA is requiring that emissions information for TBAC continue to be recorded and reported.

The EPA does not believe that a requirement to collect and report emissions data on TBAC is a new recordkeeping burden on industry, because users of TBAC are currently required to collect and report this information on TBAC as a VOC. However, industry will now be required to track and report TBAC emissions as a distinct class of emissions, separate from non-exempt VOCs.

Similarly, EPA does not believe that a requirement for continued reporting of TBAC emissions is a new burden on States, since States are already collecting information and reporting on these emissions.

The EPA is now in the process of assessing its VOC policy in general, and its VOC exemption policy in particular. EPA intends to address the issue of whether recordkeeping and reporting requirements should apply to other exempt compounds as part of a future rulemaking addressing possible changes to EPA's overall VOC policy. Today's rule requiring record keeping and reporting for TBAC does not necessarily indicate the content of a future overall policy.

Today's final action is based on EPA's review of the material in Docket No. OAR-2003-0084. The EPA hereby amends its definition of VOC at 40 CFR 51.100(s) to say that TBAC is not VOC for purposes of VOC emissions limitations or VOC content requirements, but will continue to be VOC for purposes of all recordkeeping, emissions reporting, and inventory requirements which apply to VOC. You should not count TBAC as a VOC for purposes of EPA regulations related to attaining the ozone NAAQS, including regulations limiting your use of VOCs or your emissions of VOCs; but you must record and report the use and emissions of TBAC. Your recordkeeping and reporting of TBAC must conform to those requirements that would apply to you for non-exempt VOCs used in the same manner or in the same application as TBAC, except that TBAC emissions shall be broken out from other VOC and reported as a distinct class of emissions. You should check with your State to determine whether you should count TBAC as a VOC for State regulations. However, your State should not include TBAC in its VOC emissions inventories for determining reasonable further progress under the CAA ( e.g. , section 182(b)(1)) or take credit for controlling this compound in its ozone control strategy. However, States must include TBAC in inventories used for ozone modeling to assure that such emissions are not having a significant effect on ambient ozone levels. States are encouraged to include other already exempt compounds in such inventories, and should anticipate that future VOC exemptions will not eliminate inventory requirements.

The EPA is not finalizing a decision on how future petitions will be evaluated. We intend to publish a future notice inviting public comment on the VOC exemption policy and the concept of negligible reactivity as part of a broader review of overall policy. Given the existence of this policy review, parties submitting petitions for VOC exemptions should expect their petitions to be reviewed under a new policy.

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

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

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

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

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

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

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

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. This action revises the definition of “Volatile Organic Compounds” for purposes of federal regulations related to attaining the National Ambient Air Quality Standards (NAAQS), for ozone, and makes no changes to recordkeeping or reporting burden.

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

An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any requirements on small entities. Today's rule concerns only the definition of VOC and does not directly regulate any entities. The RFA analysis does not consider impacts on entities which the action in question does not regulate. See Motor & Equipment Manufacturers Ass'n v. Nichols, 142 F. 3d 449, 467 (D.C. Cir., 1998); United Distribution Cos. v. FERC, 88 F. 3d 1105, 1170 (D.C. Cir., 1996), cert. denied, 520 U.S. 1224 (1997).

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any 1 year. Before promulgation of an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost effective, or least burdensome alternative that achieves the objective of the rule, unless EPA publishes with the final rule an explanation of why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments including Tribal governments, it must have developed under section 203 of the UMRA a small government plan which informs, educates and advises small governments on compliance with the regulatory requirements. Finally, section 204 provides that for any rule that imposes a mandate on a State, local or Tribal government of $100 million or more in any 1 year, the Agency must provide an opportunity for such governmental entities to provide input in development of the rule.

Since today's rulemaking is deregulatory in nature and does not impose any mandate on governmental entities or the private sector, EPA has determined that sections 202, 203, 204 and 205 of the UMRA do not apply to this action.

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

This final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Today's final rule does not impose any new mandates on State or local governments, but simply retains the existing requirement to include TBAC in inventories used for ozone modeling. Thus, Executive Order 13132 does not apply to this rule.

On November 6, 2000, the President issued Executive order 13175 (65 FR 67249) entitled, “Consultation and Coordination with Indian Tribal Governments.” Executive order 13175 took effect on January 6, 2001, and revokes Executive order 13084 (Tribal Consultation) as of that date. The EPA developed this final rule, however, during the period when Executive order 13084 was in effect; thus, EPA addressed Tribal considerations under Executive order 13084.

Under Executive order 13084, EPA may not issue a regulation that is not required by statute, that significantly or uniquely affects the communities of Indian Tribal governments, and that imposes substantial direct compliance costs on those communities, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by the Tribal governments, or EPA consults with those governments. If EPA complies by consulting, Executive order 13084 requires EPA to provide to the OMB, in a separately identified section of the preamble to the rule, a description of the extent of EPA's prior consultation with representatives of affected Indian Tribal governments, a summary of the nature of their concerns, and a statement supporting the need to issue the regulation. In addition, Executive order 13084 requires EPA to develop an effective process permitting elected officials and other representatives of Indian Tribal governments “to provide meaningful and timely input in the development of regulatory policies on matters that significantly or uniquely affect their communities.”

Today's rule does not impose substantial direct compliance costs on the communities of Indian Tribal governments. This rule is deregulatory in nature and does not impose any direct compliance costs. Accordingly, the requirements of section 3(b)of Executive order 13084 do not apply to this rule.

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

While this rule is not subject to the Executive order because it is not economically significant as defined in Executive order 12866, EPA has reason to believe that ozone has a disproportionate effect on active children who play outdoors. (See 62 FR 38856 and 38859, July 18, 1997). The EPA has not identified any specific studies on whether or to what extent t-butyl acetate directly affects children's health. The EPA has placed the available data regarding the health effects of t-butyl acetate in docket no. OAR-2003-0084.

This rule is not subject to Executive order 13211, “Actions that Significantly Affect Energy Supply, distribution, or Use,” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive order 12866. Information on the methodology and data regarding the assessment of potential energy impacts is found in chapter 6 of the U.S. EPA 1002, Cost, Emission Reduction, Energy, and Economic Impact Assessment of the Proposed Rule Establishing the Implementation Framework for the 8-hour, 0.08 ppm Ozone National Ambient Air Quality Standard, prepared by the Innovative Strategies and Economics Group, Office of Air Quality Planning and Standards, Research Triangle Park, NC, April 24, 2003.

Section 12(d) of the National Technology Transfer Advancement Act of 1995 (NTTAA), Public Law No. 104-113. Section 12(d), (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Controller General of the United States.

The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective December 29, 2004.

The supplementary information is organized in the following order:

What a SIP is —Each state has a SIP containing the control measures and strategies used to attain and maintain the national ambient air quality standards (NAAQS). The SIP is extensive, containing such elements as air pollution control regulations, emission inventories, monitoring network, attainment demonstrations, and enforcement mechanisms.

How EPA enforces SIPs —Each state must formally adopt the control measures and strategies in the SIP after the public has had an opportunity to comment on them. They are then submitted to EPA as SIP revisions upon which EPA must formally act.

Once these control measures and strategies are approved by EPA, after notice and comment, they are incorporated into the Federally approved SIP and are identified in part 52 (Approval and Promulgation of Implementation Plans), title 40 of the Code of Federal Regulations (40 CFR part 52). The actual state regulations approved by EPA are not reproduced in their entirety in 40 CFR part 52, but are “incorporated by reference” (IBR'd) which means that EPA has approved a given state regulation with a specific effective date. This format allows both EPA and the public to know which measures are contained in a given SIP and ensures that the state is enforcing the regulations. It also allows EPA and the public to take enforcement action, should a state not enforce its SIP-approved regulations.

How the State and EPA updates the SIP —The SIP is a living document which the state can revise as necessary to address the unique air pollution problems in the state. Therefore, EPA must, from time to time, take action on SIP revisions containing new and/or revised regulations in order to make them part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for IBR'ing Federally-approved SIPs, as a result of consultations between EPA and the Office of the Federal Register (OFR).

EPA began the process of developing: (1) A revised SIP document for each state that would be IBR'd under the provisions of title 1 CFR part 51; (2) a revised mechanism for announcing EPA approval of revisions to an applicable SIP and updating both the IBR document and the CFR; and (3) a revised format of the “Identification of Plan” sections for each applicable subpart to reflect these revised IBR procedures. The description of the revised SIP document, IBR procedures, and “Identification of Plan” format are discussed in further detail in the May 22, 1997, Federal Register document.

How EPA compiles the SIPs —The Federally-approved regulations, source-specific permits, and nonregulatory provisions (entirely or portions of) submitted by each state agency have been compiled by EPA into a “SIP compilation.” The SIP compilation contains the updated regulations, source-specific permits, and nonregulatory provisions approved by EPA through previous rulemaking actions in the Federal Register .

How EPA organizes the SIP compilation —Each compilation contains three parts. Part one contains the regulations, part two contains the source-specific requirements that have been approved as part of the SIP, and part three contains nonregulatory provisions that have been EPA approved. Each part consists of a table of identifying information for each SIP-approved regulation, each SIP-approved source-specific permit, and each nonregulatory SIP provision. In this action, EPA is publishing the tables summarizing the applicable SIP requirements for Maryland. The EPA Regional Offices have the primary responsibility for updating the compilations and ensuring their accuracy.

Where you can find a copy of the SIP compilation —EPA Region III developed and will maintain the compilation for Maryland. A copy of the full text of Maryland's regulatory and source-specific SIP compilation will also be maintained at NARA and EPA's Air Docket and Information Center.

The format of the new Identification of Plan section —In order to better serve the public, EPA revised the organization of the “Identification of Plan” section and included additional information to clarify the enforceable elements of the SIP. The revised Identification of Plan section contains five subsections:

1. Purpose and scope.

2. Incorporation by reference.

3. EPA-approved regulations.

4. EPA-approved source-specific permits.

5. EPA-approved nonregulatory and quasi-regulatory provisions such as air quality attainment plans, rate of progress plans, maintenance plans, monitoring networks, and small business assistance programs.

When a SIP revision becomes Federally enforceable —All revisions to the applicable SIP become Federally enforceable as of the effective date of the revisions to paragraphs (c), (d), or (e) of the applicable Identification of Plan section found in each subpart of 40 CFR part 52.

The historical record of SIP revision approvals —To facilitate enforcement of previously approved SIP provisions and provide a smooth transition to the new SIP processing system, EPA retains the original Identification of Plan section, previously appearing in the CFR as the first or second section of part 52 for each state subpart. After an initial two-year period, EPA will review its experience with the new system and enforceability of previously approved SIP measures and will decide whether or not to retain the Identification of Plan appendices for some further period.

Today's rule constitutes a “housekeeping” exercise to ensure that all revisions to the state programs that have occurred are accurately reflected in 40 CFR part 52. State SIP revisions are controlled by EPA regulations at 40 CFR part 51. When EPA receives a formal SIP revision request, the Agency must publish the proposed revision in the Federal Register and provide for public comment before approval.

EPA has determined that today's rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3) which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). Today's rule simply codifies provisions which are already in effect as a matter of law in Federal and approved state programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by removing outdated citations.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866. Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the Administrative Procedure Act or any other statute as indicated in the Supplementary Information section above, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995 (UMRA) (Public Law 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule also 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, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it 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 rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. This rule does not involve technical standards; 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. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). EPA has complied with Executive Order 12630 (63 FR 8859, March 15, 1998) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). EPA's compliance with these statutes and Executive Orders for the underlying rules are discussed in previous actions taken on the State's rules.

The Congressional Review Act (5 U.S.C. 801 et seq. ), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. Today's action simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. 5 U.S.C. 808(2). As stated previously, EPA has made such a good cause finding, including the reasons therefore, and established an effective date of November 29, 2004. 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 . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

EPA has also determined that the provisions of section 307(b)(1) of the Clean Air Act pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Maryland SIP compilations had previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for these “Identification of plan” reorganization actions for Maryland.

Regulated Entities. Entities potentially affected by this action are those industrial facilities that manufacture or use EGBE. The final rule amends the list of HAP contained in section 112(b)(1) of the CAA by removing the compound EGBE. The decision to issue a final rule to delist EGBE removes EGBE from regulatory consideration under section 112(d) of the CAA.

Judicial Review. Under section 307(b)(1) of the CAA, judicial review is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit by 60 days from publication in the Federal Register . Under section 307(d)(7)(B) of the CAA, only an objection to a rule or procedure raised with reasonable specificity during the period for public comment can be raised during judicial review. Moreover, under section 307(b)(2) of the CAA, the requirements established by the final rule may not be challenged separately in any civil or criminal proceeding brought to enforce these requirements.

Outline. The information presented in this preamble is organized as follows:

Section 112 of the CAA contains a mandate for EPA to evaluate and control emissions of HAP. Section 112(b)(1) includes an initial list of HAPs that are composed of specific chemical compounds and compound classes to be used by EPA to identify source categories for which EPA will subsequently promulgate emissions standards.

Section 112(b)(2) of the CAA requires EPA to make periodic revisions to the initial list of HAPs set forth in section 112(b)(1) and outlines criteria to be applied in deciding whether to add or delete particular substances. Section 112(b)(2) identifies pollutants that should be listed as: “ * * * pollutants which present, or may present, through inhalation or other routes of exposure, a threat of adverse human health effects (including, but not limited to, substances which are known to be, or may reasonably be anticipated to be carcinogenic, mutagenic, teratogenic, neurotoxic, which cause reproductive dysfunction, or which are acutely or chronically toxic) or adverse environmental effects whether through ambient concentrations, bioaccumulation, deposition, or otherwise. * * * ”

To assist EPA in making judgements about whether a pollutant causes an adverse environmental effect, section 112(a)(7) defines an “adverse environmental effect” as: “* * * any significant and widespread adverse effect, which may reasonably be anticipated, to wildlife, aquatic life, or other natural resources, including adverse impacts on populations of endangered or threatened species or significant degradation of environmental quality over broad areas.”

Section 112(b)(3) establishes general requirements for petitioning EPA to modify the HAP list by adding or deleting a substance. Although the Administrator may add or delete a substance on his or her own initiative, the burden is on a petitioner to include sufficient information to support the requested addition or deletion under the substantive criteria set forth in CAA section 112(b)(3)(B) and (C). The Administrator must either grant or deny a petition within 18 months of receipt of a complete petition. If the Administrator decides to grant a petition, the Agency publishes a written explanation of the Administrator's decision, along with a proposed rule to add or delete the substance. If the Administrator decides to deny the petition, the Agency publishes a written explanation of the basis for denial. A decision to deny a petition is final Agency action subject to review in the D.C. Circuit Court of Appeals under CAA section 307(b).

To promulgate a final rule deleting a substance from the HAP list, CAA section 112(b)(3)(C) provides that the Administrator must determine that there are: ” * * * adequate data on the health and environmental effects of the substance to determine that emissions, ambient concentrations, bioaccumulation, or deposition of the substance may not reasonably be anticipated to cause any adverse effects to the human health or adverse environmental effects.”

The EPA will grant a petition to delete a substance and publish a proposed rule to delete that substance, if it makes an initial determination that these criteria have been met. After affording an opportunity for comment and for a hearing, EPA will make a final determination whether the criteria have been met.

The EPA does not interpret CAA section 112(b)(3)(C) to require absolute certainty that a pollutant will not cause adverse effects on human health or the environment before it may be deleted from the list. The use of the terms “adequate” and “reasonably” indicate that the Agency must weigh the potential uncertainties and their likely significance. Uncertainties concerning the risk of adverse health or environmental effects may be mitigated if EPA can determine that projected exposures are sufficiently low to provide reasonable assurance that such adverse effects will not occur. Similarly, uncertainties concerning the magnitude of projected exposure may be mitigated if EPA can determine that the levels which might cause adverse health or environmental effects are sufficiently high to provide reasonable assurance that exposures will not reach harmful levels. However, the burden remains on a petitioner to resolve any critical uncertainties associated with missing information. The EPA will not grant a petition to delete a substance if there are major uncertainties which need to be addressed before EPA would have sufficient information to make the requisite determination.

On August 29, 1997, the ACC's Glycol Ethers Panel submitted a petition to delete EGBE (CAS No. 111-76-2) from the HAP list in CAA section 112(b)(1), 42 U.S.C. 7412(b)(1). Following the receipt of the petition, we conducted a preliminary evaluation to determine whether the petition was complete according to Agency criteria. To be deemed complete, a petition must consider all available health and environmental effects data. A petition must also provide comprehensive emissions data, including peak and annual average emissions for each source or for a representative selection of sources, and must estimate the resulting exposures of people living in the vicinity of the sources.

In addition, a petition must address the environmental impacts associated with emissions to the ambient air and impacts associated with the subsequent cross-media transport of those emissions. After receiving additional submittals through December 21, 1998, we determined the petition to delete EGBE to be complete. We published a notice of receipt of a complete petition in the Federal Register on August 3, 1999 and requested information to assist us in technically reviewing the petition.

We received eight submissions in response to our request for comment and information which would aid our technical review of the petition. The comments made general statements encouraging EPA to delist EGBE. None of the comments included technical information.

On November 4, 2003, based on a comprehensive review of the data provided in the petition and otherwise provided to EPA, the Agency made an initial determination that the statutory criteria for deletion of EGBE from the HAP list had been met. The EPA, therefore, granted the petition by the ACC's Glycol Ethers Panel and issued a proposed rule to delist EGBE (68 FR 65648, November 21, 2003).

The EPA received a total of 18 comments on the November 21, 2003 proposed rule. While three of the commenters opposed deleting EGBE from the HAP list, they provided no substantive arguments to support this position. There was no request for a public hearing.

The EPA's decision to remove EGBE from the list of HAP is based on the results of a risk assessment demonstrating that emissions of EGBE may not reasonably be anticipated to result in adverse human health or environmental effects. In addition to the risk assessment, we have considered public comments, as well as other information related to EGBE in making this decision, namely the transformation of EGBE into other HAP as it decomposes in the ambient air. We conclude that ambient concentrations of the transformed HAP are very small, and that they decompose rapidly. Therefore, we do not anticipate that EGBE transformation will be significant enough to have an adverse impact on human health.

We also considered the fact that EGBE is reported to the Toxics Release Inventory (TRI) as part of the group of glycol ethers. The 2000 TRI shows the air emissions of the class of chemicals “Certain Glycol Ethers” to be ranked number 12 by volume. Under the final rule, it will no longer be regulated as a HAP, but it will continue to be reported in the TRI, as part of the group “Certain Glycol Ethers” and regulated under EPA's criteria pollutant (ozone) program.

The EPA has made a final determination, after careful consideration of the petition and after completing additional analyses, that there are adequate data on the health and environmental effects of EGBE to determine that emissions, ambient concentrations, bioaccumulation, or deposition of EGBE may not reasonably be anticipated to cause any adverse effects to the human health or adverse environmental effects.

In the preamble to the proposed rule, we stated that the Agency believes EGBE is not genotoxic and that two distinctly different nonlinear modes of action are principally responsible for the increased forestomach and liver tumors reported by NTP (2000a). These modes of action are discussed in detail in the Interim Final position paper, “An Evaluation of the Human Carcinogenic Potential of Ethylene Glycol Butyl Ether,” available from the Docket for the final rule. We also stated that there are reports of weak positive effects by EGBE at high concentrations in some in vitro assays which may indicate the potential for genotoxicity by butoxyacetaldehyde (BAL), an EGBE metabolite known to cause clastogenic changes at high in vitro concentrations (see the section on “Other Possible Modes of Action for Forestomach Tumor Development in Female Mice” in the Agency's position paper). However, available evidence from a published EGBE physiologically based pharmacokinetic model that had been modified to include kinetics for the metabolism of the BAL intermediate (Corley, 2003) suggested that the concentrations of BAL metabolite predicted to occur in vivo would be much lower than the concentrations used in the in vitro assays. Based on this, it appears that genotoxicity is not a factor in tumor development in female mice. This increases our confidence that a nonlinear mechanism is involved in tumor formation (versus a linear mechanism which would be suggested if genotoxicity was involved). As we discussed in the preamble to the proposed rule, additional research ( e.g. , verification of these PBPK modeling results and further genotoxicity research using more appropriate assays and currently accepted test protocols) would be beneficial to provide a more definitive determination regarding the role of BAL in the formation of forestomach tumors in female mice.

Since the publication of the proposed rule, additional research has been completed and submitted to EPA. Subsequently, we commissioned a peer review panel to evaluate the new data submitted and EPA's conclusions of the proposed ruling and interim final position paper in light of the recent research and literature that has been submitted to the Agency in response to the Agency's proposed EGBE ruling. The peer review was conducted on May 19, 2004 by an external review panel of seven experts. A report on the results of this peer review is included in the docket for the final rule. In summary, the peer review panel was unanimous in agreeing that there is enough information to support an informed decision concerning the significance of BAL genotoxicity to the formation of EGBE induced liver and forestomach tumors. The available information support a nonlinear mode of action, not a linear mode of action ( e.g. , genotoxicity) for the male mouse liver tumors and female mouse forestomach tumors observed following EGBE exposure. That is, the reviewers concluded that genotoxicity is not important in the development of these tumors.

The panel also concluded that it is reasonable to expect that a lack of hemolytic effects in humans would preclude the formation of liver tumors in humans and that a lack of hyperplastic effects in the region of the gastroesophogeal junction in humans would preclude the formation of gastrointestinal tumors in humans. That is, the data support the finding that we would not expect to find these tumors in humans following environmental exposures. The RfC and RfD values for EGBE have been set at levels that prevent both the precursor events that would lead to tumors and other noncancer effects, and the Agency has determined that exposures to EGBE are at levels well below the RfC and RfD. We can therefore conclude with confidence that emissions, ambient concentrations, bioaccumulation, or deposition of EGBE may not reasonably be anticipated to cause any adverse effects to the human health.

Of the 18 written comments we received pertaining to the proposed delisting of EGBE, 15 were supportive of the decision to delist and 3 opposed the decision to delist.

The EPA has considered carefully all the comments both supporting and opposing the proposed delisting. A summary of the comments and EPA responses to them has been included in the docket for this proceeding. We received substantive comments with regard to the BAL issue, which we discussed in detail above. We received no substantive negative comments. Two of the comments in support of the delisting also asked specific policy questions. We respond to those questions below.

Comment: One commenter asked if the rule also applies to diethylene glycol monobutyl ether (DEGBE). The commenter expressed support for delisting both chemicals in the rule.

Response: The final rule applies only to EGBE, one of the compounds included in the group of glycol ethers listed in the section 112(b)(1) HAP list. The petition requested that one single compound, EGBE, be delisted; it did not request EPA to consider removing any other compounds in the group of glycol ethers. Therefore this action pertains only to EGBE.

Comment: One commenter urged EPA to address the “Once In, Always In” policy in the final rulemaking for facilities that will no longer be major sources for MACT standards once EGBE is delisted. This commenter requested that the “Once In, Always In” policy not apply to delistings in general, since a facility that was only over the major source threshold due to emissions of a subsequently delisted HAP may never have been a “major source” from a health perspective, and therefore never really “in”. The commenter argued that the purpose of the policy that sources not be allowed to backslide from MACT standards, is not applicable to delistings because in such cases the health and environmental protection of a standard is not undermined since the delisted chemical has been determined not to be a health and environmental threat.

Response: This action addresses a request to remove a specific pollutant from the HAP list. Any questions about the “Once In Always In Policy” are beyond the scope of today's action. The EPA will address the “Once In Always In Policy” in the future.

The detailed factual rationale for supporting the Agency's initial determination that the criteria in Clean Air Act section 112(b)(3)(C) had been met is set forth in the proposed rule published in the Federal Register on November 21, 2003 (68 FR 65648). However, as described above, EPA received additional data during the public comment period and had those data peer reviewed. The results of the peer review strengthen the case for delisting. The EPA also received 18 public comments on the proposed rule, none of which caused EPA to revise the scientific basis upon which the initial determination to delist EGBE was predicated. The EPA hereby incorporates into its rationale for the final rule the substantive assessment of potential hazards, projected exposures, human risk, and environmental effects set forth in the proposed rule to delist EGBE. Based on that assessment, the Agency's evaluation of the comments, and additional information submitted during the rulemaking (as summarized above), EPA has made a determination that there are adequate data on the health and environmental effects of EGBE to determine that emissions, ambient concentrations, bioaccumulation, or deposition of the compound may not reasonably be anticipated to cause adverse human health or environmental effects.

The final rule will be effective on November 29, 2004, the date it is published in the Federal Register . Although Section 553(d) of the Administrative Procedures Act, 5 U.S.C. 553(d), provides that substantive rules must be published at least 30 days prior to their effective date, this requirement does not apply to this action. First, the rule was promulgated pursuant to CAA section 307(d), and that provision expressly states that the provisions of section 553 do not apply to this action. Second, even under section 553, the requirement that a rule be published 30 days prior to its effective date does not apply to a rule, “which grants or recognizes an exemption or relieves a restriction.”

References cited in the preamble can be viewed in the docket for the final rule.

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

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

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

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

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

Pursuant to the terms of Executive Order 12866, it has been determined that the final action does not constitute a “significant regulatory action” and is, therefore, not subject to OMB review.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The final action will remove EGBE from the CAA section 112 (b)(1) HAP list and, therefore, eliminate the need for information collection under the CAA. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. An Agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small business, small organizations, and small governmental jurisdictions. For the purposes of assessing the impacts of today's final rule on small entities, small entity is defined as: (1) A small business that meets the definitions for small business based on the Small Business Association (SBA) size standards which, for this final action, can include manufacturing (NAICS 3999-03) and air transportation (NAICS 4522-98 and 4512-98) operations that employ less 1,000 people and engineering services (NAICS 8711-98) operations that earn less than $20 million annually; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impact of today's final rule on small entities, I certify that this final action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analysis is to identify and address regulatory alternatives “which minimize any significant economic impact of the final rule on small entities.” (5 U.S.C. 603 and 604). Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule. The final rule will eliminate the burden of additional controls necessary to reduce EGBE emissions and the associated operating, monitoring and reporting requirements. We have, therefore, concluded that today's final rule will relieve regulatory burden for all small entities. We continue to be interested in the potential impacts of the final rule on small entities and welcome comments on issues related to such impacts.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 1044, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for final and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

Today's final rule contains no Federal mandates for State, local, or tribal governments or the private sector. The final rule imposes no enforceable duty on any State, local or tribal governments or the private sector. The EPA has determined that the final rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any 1 year. Because the final rule removes a compound previously labeled in the CAA as a HAP, it actually reduces the burden established under the CAA. Thus, today's final rule is not subject to the requirements of sections 202 and 205 of the UMRA.

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

Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the final regulation. The EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the final regulation.

Today's final rule removes the substance EGBE from the list of HAP contained under section 112(b)(1) of the CAA. It does not impose any additional requirements on the States and does not affect the balance of power between the States and the Federal government. Thus, the requirements of section 6 of the Executive Order do not apply to the final rule.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” The final rule does not have tribal implications, as specified in Executive Order 13175. The final rule will eliminate control requirements for EGBE and, therefore, reduces control costs and reporting requirements for any tribal entity operating a EGBE source subject to control under the CAA. Thus, Executive Order 13175 does not apply to the final rule.

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

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. The final rule is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866, and because the Agency does not have reason to believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This determination is based on the fact that the RfC is determined to be protective of sensitive sub-populations, including children.

Executive Order 13211, “Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), requires EPA to prepare and submit a Statement of Energy Effects to the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, for certain actions identified as “significant energy actions.” The final rule is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

Section 112(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104-113, section 12(d) 915 U.S.C. 272 note), directs all Federal agencies to use voluntary consensus standards instead of government-unique standards in their regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , material specifications, test method, sampling and analytical procedures, business practices, etc. ) that are developed or adopted by one or more voluntary consensus standards bodies. Examples of organizations generally regarded as voluntary consensus standards bodies include the American society for Testing and Materials (ASTM), the National Fire Protection Association (NFPA), and the Society of Automotive Engineers (SAE). The NTTAA requires Federal agencies like EPA to provide Congress, through OMB, with explanations when an agency decides not to use available and applicable voluntary consensus standards. The final rule does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing the 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 . However, this action is not a major rule as defined by 5 U.S.C. 804(2). The final rule will be effective November 29, 2004.

This is a summary of the Report and Order (R&O) in MB Docket No. 03-185, FCC 04-220, adopted September 9, 2004, and released September 30, 2004. This proceeding was initiated by the Notice of Proposed Rule Making, 68 FR 55566, September 26, 2003. The complete text of this R&O is available for inspection and copying during normal business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC and may also be purchased from the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI), Portals II, 445 12th Street SW, CY-B402, Washington, DC 20554. The R&O is also available on the Internet at the Commission's Web site: http://www.fcc.gov. Alternative formats are available to persons with disabilities by contacting Brian Millin at (202) 418-7426 or TTY (202) 418-7365 or at Brian.Millin@fcc.gov

This document contains information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the information collection requirements contained in this proceeding.

1. The R&O adopts definitions and permissible use provisions for digital TV translator and LPTV stations to mirror the analog operation of these stations. Digital translators will rebroadcast DTV broadcast signals. Whenever operating, a digital LPTV station must use some of its channel capacity to provide a free video programming service to the public. Upon meeting this requirement, LPTV stations may offer ancillary and supplementary services on the same basis as DTV broadcast licensees.

2. As to the timing of the digital transition for these stations, LPTV, TV translator, and Class A stations are required to convert to digital operation, but the Commission has discretion to set the date by which analog operations of these stations must cease. The R&O states that the Commission will seek to hasten their transition to digital service and will work toward the goal of achieving an end-date at, or soon after, the end date of the full-power transition. Although the Commission intends to hasten their transition to digital service, certain issues regarding the transition of full service stations must be resolved before a low-power transition deadline can be set. The final transition date of these stations will be considered in the Commission's Third DTV periodic review proceeding.

3. Existing LPTV and TV translator stations may convert to digital operations (“flash cut”) on their current channel. Applications for this purpose will be accepted on a first-come, first serve basis. Mutually exclusive applicants will be resolved by auction. In addition, to facilitate their digital transition, licensees and permittees of LPTV, TV translator, and Class A stations will be allowed to seek a digital companion channel for their analog station operations. A filing window for this purpose will be announced at a later date. The Commission will determine the deadline and process for stations' obtaining a digital companion channel to return of one of their channels. At a later date, the Commission will institute a separate first-come-first-served filing procedure not limited to incumbent low power stations.

4. Due to limited spectrum availability, the R&O makes available VHF channels 2-13, inclusive, and UHF channels 14-51, inclusive (except channel 37) for digital LPTV and TV translator operations. The R&O also permits the use of channels 52-69 on a limited basis. Existing LPTV and TV translator stations on channels 52-69 may flash-cut to digital operations. The use of channels 52-59 for digital companion channels is limited to those stations that can certify the unavailability of any in-core channel (channels 2-51). The use of channels 60-69 for companion channels is prohibited. Applicants for operations on channels 52-69 must notify potentially affected commercial wireless and public safety licensees before filing their applications. Additionally, applicants proposing to flash-cut to digital on channels allocated for public safety use (channels 63, 64, 68 and 69) are required to coordinate with regional and state entities representing potentially affected public safety licensees.

5. All digital LPTV and TV translator stations will operate on a secondary, non-interfering basis with respect to primary services, including the commercial wireless and public safety services. The R&O adopts for digital stations in the LPTV service the protected contour values for digital Class A stations. For digital stations in the LPTV and Class A services, the R&O replaces the current contour protection methodology with the DTV interference prediction methodology.

6. Paperwork Reduction Act of 1995 Analysis. This R&O contains new or modified information collection(s) subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new or modified information collection(s) contained in this proceeding.

7. Written comments by the public on the proposed information collection(s) are due January 28, 2005. Written comments must be submitted by the public, Office of Management and Budget and other interested parties on the proposed information collection(s) on or before January 28, 2005. In addition to filing comments with the Secretary, a copy of any comments on the information collection(s) contained herein should be submitted to Leslie Smith, Federal Communications Commission, Room 1-A804, 445 12th Street, SW., Washington, DC 20554, or via the Internet to Leslie.Smith @fcc.gov, and to Kristy L. LaLonde, OMB Desk Officer, Room 10234 NEOB, 725 17th Street, NW., Washington, DC 20503, or via the Internet to Kristy L. LaLonde@omb.eop.gov, or via fax at 202-395-5167.

8. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Notice of Proposed Rule Making (NPRM), 68 FR 55566, September 26, 2003. The Commission sought written public comment on the proposals in the NPRM, including comment on the IRFA. One comment was received on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

9. The R&O establishes a regulatory framework that will hasten the transition of LPTV and TV translator stations to digital operations while minimizing disruption of existing service to consumers served by analog LPTV and TV translator stations. These stations are a valuable component of the nation's television system, delivering over-the-air TV service, including locally produced service, to millions of viewers in rural and discrete urban communities. The Commission desires to facilitate, wherever possible, the digital transition of these stations, thereby enabling their viewers to realize the many benefits of digital broadcast television (DTV) technology. The rules and policies adopted in the R&O provide flexible and affordable opportunities for low power digital television service, both through the conversion of existing analog service and, where spectrum is available, new digital stations.

10. The R&O provides additional flexibility for existing broadcasters to transition to digital. The R&O declines to apply the full-service deadline for stations to cease analog operations finding that low power television broadcasters and their viewers do not have the resources to “flash-cut” from analog to digital and need additional time to identify available channels for digital use. Setting a transition deadline at some fixed time after the full-service transition would be less disruptive and minimize potential loss of service.

11. The R&O allows existing broadcasters the first opportunity to either immediately convert from analog to digital (“flash-cut”) on their existing analog channel or to apply for a digital companion channel. This will provide existing broadcasters the flexibility to identify a workable digital channel for operation before new broadcasters are allowed to apply for channels. These applications will be filed as “minor changes,” thus reducing the overall time and processing burden on the stations.

12. While the R&O concludes that digital flash-cut and companion channel applications filed by low power broadcasters are subject to auction (except Class A flash-cut applications), an opportunity is provided for applicants to find settlements or engineering solutions to avoid having to go to auction. This will facilitate the processing of applications and permit applicants to avoid having to use limited resources to bid for their digital channels.

13. Applicants that choose to flash-cut or file for digital companion channels will have greater flexibility to seek channels between 52-69 (with restrictions). This will enable numerous stations that otherwise could not find a digital channel with the opportunity to participate in the digital transition.

14. Stations will have the flexibility to choose the types of service to provide for their viewers. Translators will be limited to rebroadcasting programs and signals of full-service DTV stations without alteration to content or video format but may insert the types of local messages permitted for analog translators and may rebroadcast a DTV signal as an analog signal. LPTV stations must provide a free over-the-air video program service but have the freedom to use the remainder of their spectrum to offer ancillary services on the same basis as full-service DTV stations (including a 5% fee on gross revenues of feeable services).

15. The interference rules and methodology in the R&O provide the needed flexibility for stations to engineer new digital operations without undermining established interference protection rights of existing broadcasters. The equipment rules will enable stations to use much of their existing equipment, thus reducing the overall cost of digital implementation.

16. There were no comments filed in response to the Initial Regulatory Flexibility Analysis.

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

18. In this context, the application of the statutory definition to television stations is of concern. An element of the definition of “small business” is that the entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific television station is dominant in its field of operation. Accordingly, the estimates that follow of small businesses to which rules may apply do not exclude any television station from the definition of a small business on this basis and therefore might be over-inclusive.

19. An additional element of the definition of “small business” is that the entity must be independently owned and operated. It is difficult at times to assess these criteria in the context of media entities and our estimates of small businesses might therefore be over inclusive.

20. Class A TV, LPTV, and TV translator stations. The rules and policies apply to licensees of LPTV and TV translator, and to potential licensees in these television services. Certain rules and policies also apply to licensees of Class A TV stations. The Small Business Administration defines a television broadcasting station that has no more than $12 million in annual receipts as a small business. Television broadcasting consists of establishments primarily engaged in broadcasting images together with sound, including the production or transmission of visual programming which is broadcast to the public on a predetermined schedule. Included in this category are establishments primarily engaged in television broadcasting and which produce programming in their own studios. Separate establishments primarily engaged in producing programming are classified under other NAICS numbers.

21. Currently, there are approximately 2,100 licensed LPTV stations, 600 licensed Class A stations, 4,700 licensed TV translators and 11 TV booster stations. According to Commission staff review of the BIA Publications, Inc., Master Access Television Analyzer Database, virtually all LPTV broadcast stations, including LPTV stations that have converted to Class A status, have revenues of less than $12 million. We note, however, that under the SBA's definition, revenue of affiliates that are not LPTV stations should be aggregated with the LPTV station revenues in determining whether a concern is small. Our estimate may thus overstate the number of small entities since the revenue figure on which it is based does not include or aggregate revenues from non-LPTV affiliated companies. We do not have data on revenues of TV translator or TV booster stations, but virtually all of these entities are also likely to have revenues of less than $12 million and thus may be categorized as small, except to the extent that revenues of affiliated non-translator or booster entities should be considered.

22. Cable and Other Program Distribution. Cable systems often receive the television service transmitted over the cable system from a TV translator or LPTV station. Thus, cable systems may also be affected by the rules in the R&O . The SBA has developed a small business size standard for cable and other program distribution services, which includes all such companies generating $12.5 million or less in revenue annually. This category includes, among others, cable operators, direct broadcast satellite (DBS) services, home satellite dish (HSD) services, multipoint distribution services (MDS), multichannel multipoint distribution service (MMDS), Instructional Television Fixed Service (ITFS), local multipoint distribution service (LMDS), satellite master antenna television (SMATV) systems, and open video systems (OVS). According to Census Bureau data, there are 1,311 total cable and other pay television service firms that operate throughout the year of which 1,180 have less than $10 million in revenue. We address below each service individually to provide a more precise estimate of small entities.

23. Cable Operators. Under the Commission's rules, a “small cable company” is one serving fewer than 400,000 subscribers nationwide. We last estimated that there were 1,439 cable operators that qualified as small cable companies. Since then, some of those companies may have grown to serve over 400,000 subscribers, and others may have been involved in transactions that caused them to be combined with other cable operators. Consequently, we estimate that there are fewer than 1,439 small entity cable system operators that may be affected by the decisions and rules proposed in this Notice.

24. The Communications Act, as amended, also contains a size standard for a small cable system operator, which is “a cable operator that, directly or through an affiliate, serves in the aggregate less than 1% of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” The Commission has determined that there are 68,500,000 subscribers in the United States. Therefore, an operator serving fewer than 685,000 subscribers shall be deemed a small operator if its annual revenues, when combined with the total annual revenues of all of its affiliates, do not exceed $250 million in the aggregate. Based on available data, we find that the number of cable operators serving 685,000 subscribers or less totals approximately 1,450. Although it seems certain that some of these cable system operators are affiliated with entities whose gross annual revenues exceed $250,000,000, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

25. Direct Broadcast Satellite (DBS) Service. Because DBS provides subscription services, DBS falls within the SBA-recognized definition of Cable and Other Program Distribution services. This definition provides that a small entity is one with $12.5 million or less in annual receipts. There are four licensees of DBS services under part 100 of the Commission's rules. Three of those licensees are currently operational. Two of the licensees that are operational have annual revenues that may be in excess of the threshold for a small business. The Commission, however, does not collect annual revenue data for DBS and, therefore, is unable to ascertain the number of small DBS licensees that could be impacted by these proposed rules. DBS service requires a great investment of capital for operation, and we acknowledge, despite the absence of specific data on this point, that there are entrants in this field that may not yet have generated $12.5 million in annual receipts, and therefore may be categorized as a small business, if independently owned and operated. Therefore, we will assume all four licensees are small, for the purpose of this analysis.

26. Home Satellite Dish (HSD) Service. Because HSD provides subscription services, HSD falls within the SBA-recognized definition of Cable and Other Program Distribution services. This definition provides that a small entity is one with $12.5 million or less in annual receipts. The market for HSD service is difficult to quantify. Indeed, the service itself bears little resemblance to other MVPDs. HSD owners have access to more than 265 channels of programming placed on C band satellites by programmers for receipt and distribution by MVPDs, of which 115 channels are scrambled and approximately 150 are unscrambled. HSD owners can watch unscrambled channels without paying a subscription fee. To receive scrambled channels, however, an HSD owner must purchase an integrated receiver decoder from an equipment dealer and pay a subscription fee to an HSD programming package. Thus, HSD users include: (1) Viewers who subscribe to a packaged programming service, which affords them access to most of the same programming provided to subscribers of other MVPDs; (2) viewers who receive only non subscription programming; and (3) viewers who receive satellite programming services illegally without subscribing. Because scrambled packages of programming are most specifically intended for retail consumers, these are the services most relevant to this discussion. As noted, supra, for the category Cable and Other Program Distribution, most of providers of these services are considered small.

27. Multipoint Distribution Service (MDS), Multichannel Multipoint Distribution Service (MMDS) Instructional Television Fixed Service (ITFS) and Local Multipoint Distribution Service (LMDS). MMDS systems, often referred to as “wireless cable,” transmit video programming to subscribers using the microwave frequencies of the MDS and ITFS services. LMDS is a fixed broadband point-to-multipoint microwave service that provides for two-way video telecommunications.

28. In connection with the 1996 MDS auction, the Commission defined small businesses as entities that had annual average gross revenues of less than $40 million in the previous three calendar years. This definition of a small entity in the context of MDS auctions has been approved by the SBA. The MDS auctions resulted in 67 successful bidders obtaining licensing opportunities for 493 Basic Trading Areas (BTAs). Of the 67 auction winners, 61 met the definition of a small business. In addition, MDS includes licensees of stations authorized prior to the auction. As noted, the SBA has developed a definition of small entities for pay television services, which includes all such companies generating $12.5 million or less in annual receipts. This definition includes multipoint distribution services, and thus applies to MDS licensees and wireless cable operators that did not participate in the MDS auction. Information available to us indicates that there are approximately 850 of these licensees and operators that do not generate revenue in excess of $12.5 million annually. Therefore, using the SBA small business size standard, we find that there are approximately 850 small MDS providers.

29. The SBA definition of small entities for Cable and Other Distribution services, which includes such companies generating $12.5 million in annual receipts, seems reasonably applicable to ITFS. There are presently 2,032 ITFS licensees. All but 100 of these licenses are held by educational institutions. Educational institutions are included in the definition of a small business. However, we do not collect annual revenue data for ITFS licensees, and are not able to ascertain how many of the 100 non-educational licensees would be categorized as small under the SBA definition. Thus, we tentatively conclude that at least 1,932 licensees are small businesses.

30. Additionally, the auction of the 1,030 LMDS licenses began on February 18, 1998, and closed on March 25, 1998. The Commission defined “small entity” for LMDS licenses as an entity that has average gross revenues of less than $40 million in the three previous calendar years. An additional classification for “very small business” was added and is defined as an entity that, together with its affiliates, has average gross revenues of not more than $15 million for the preceding calendar years. These regulations defining “small entity” in the context of LMDS auctions have been approved by the SBA. There were 93 winning bidders that qualified as small entities in the LMDS auctions. A total of 93 small and very small business bidders won approximately 277 A Block licenses and 387 B Block licenses. On March 27, 1999, the Commission re-auctioned 161 licenses; there were 40 winning bidders. Based on this information, we conclude that the number of small LMDS licenses will include the 93 winning bidders in the first auction and the 40 winning bidders in the re-auction, for a total of 133 small entity LMDS providers as defined by the SBA and the Commission's auction rules.

31. Satellite Master Antenna Television (SMATV) Systems. The SBA definition of small entities for Cable and Other Program Distribution services includes SMATV services and, thus, small entities are defined as all such companies generating $12.5 million or less in annual receipts. Industry sources estimate that approximately 5,200 SMATV operators were providing service as of December 1995. Other estimates indicate that SMATV operators serve approximately 1.5 million residential subscribers as of July 2001. The best available estimates indicate that the largest SMATV operators serve between 15,000 and 55,000 subscribers each. Most SMATV operators serve approximately 3,000-4,000 customers. Because these operators are not rate regulated, they are not required to file financial data with the Commission. Furthermore, we are not aware of any privately published financial information regarding these operators. As noted, supra, for the category Cable and Other Program Distribution, most of providers of these services are considered small.

32. Open Video Systems (OVS). Because OVS operators provide subscription services, OVS falls within the SBA-recognized definition of cable and other program distribution services. This definition provides that a small entity is one with $ 12.5 million or less in annual receipts. The Commission has certified 25 OVS operators with some now providing service. Affiliates of Residential Communications Network, Inc. (RCN) received approval to operate OVS systems in New York City, Boston, Washington, DC and other areas. RCN has sufficient revenues to assure us that they do not qualify as small business entities. Little financial information is available for the other entities authorized to provide OVS that are not yet operational. Given that other entities have been authorized to provide OVS service but have not yet begun to generate revenues, we conclude that at least some of the OVS operators qualify as small entities.

33. Electronics Equipment Manufacturers. Rules adopted in this proceeding could affect manufacturers of digital transmitting and receiving equipment and other types of consumer electronics equipment. The SBA has developed definitions of small entity for manufacturers of audio and video equipment as well as radio and television broadcasting and wireless communications equipment. These categories both include all such companies employing 750 or fewer employees. The Commission has not developed a definition of small entities applicable to manufacturers of electronic equipment used by consumers, as compared to industrial use by television licensees and related businesses. Therefore, we will utilize the SBA definitions applicable to manufacturers of audio and visual equipment and radio and television broadcasting and wireless communications equipment, since these are the two closest NAICS Codes applicable to the consumer electronics equipment manufacturing industry. However, these NAICS categories are broad and specific figures are not available as to how many of these establishments manufacture consumer equipment. Census Bureau data indicates that there are 554 U.S. establishments that manufacture audio and visual equipment, and that 542 of these establishments have fewer than 500 employees and would be classified as small entities. The remaining 12 establishments have 500 or more employees; however, we are unable to determine how many of those have fewer than 750 employees and therefore, also qualify as small entities under the SBA definition. Under the SBA's regulations, a radio and television broadcasting and wireless communications equipment manufacturer must also have 750 or fewer employees in order to qualify as a small business concern. Census Bureau data indicates that there 1,215 U.S. establishments that manufacture radio and television broadcasting and wireless communications equipment, and that 1,150 of these establishments have fewer than 500 employees and would be classified as small entities. The remaining 65 establishments have 500 or more employees; however, we are unable to determine how many of those have fewer than 750 employees and therefore, also qualify as small entities under the SBA definition. We therefore conclude that there are no more than 542 small manufacturers of audio and visual electronics equipment and no more than 1,150 small manufacturers of radio and television broadcasting and wireless communications equipment for consumer/household use.

34. Computer Manufacturers. The Commission has not developed a definition of small entities applicable to computer manufacturers. Therefore, we will utilize the SBA definition of electronic computers manufacturing. According to SBA regulations, a computer manufacturer must have 1,000 or fewer employees in order to qualify as a small entity. Census Bureau data indicates that there are 563 firms that manufacture electronic computers and of those, 544 have fewer than 1,000 employees and qualify as small entities. The remaining 19 firms have 1,000 or more employees. We conclude that there are approximately 544 small computer manufacturers.

35. The R&O contains additional reporting and recordkeeping requirements. For example, stations must file an application to either flash-cut to digital or for a companion digital channel. Applicants proposing digital channels 52-69 must make a certification in their application that no suitable channel 2-51 is available. In addition, applicants proposing to use digital channel 60-69 must certify that they have coordinated the use of their facilities with public safety entities. In addition, applicants in mutually exclusive groups may file settlements or engineering solutions with the Commission to avoid having to go to auction. Without these filings, stations cannot participate in the digital television transition. Factors that could make the digital transition time consuming are not likely to be related to whether the entity is small or large. These requirements will serve to promote the overall DTV transition and represent a temporary burden on stations. We expect that stations will be able to recoup the cost of these filings with advance DTV operation.

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

37. The Commission is aware that many low power licensees, including smaller entities, operate with limited budgets. Accordingly, every effort was taken to craft rules that impose the least possible burden on all licensees, including smaller licensed entities.

38. The R&O allows low power broadcasters additional time (as compared to full-service broadcasters) to transition from analog to digital service. The amount of additional time has not yet been determined. Allowing additional time for the low power DTV transition is less disruptive to low power broadcasters and will minimize potential loss of service. The Commission considered making low power broadcasters cease operating their analog facilities at the deadline applicable to full-service broadcasters but we found that this would result in many low power stations being unable to obtain the spectrum they needed to accomplish the digital transition. The Commission rejected this approach in order to prevent low power broadcasters from prematurely flash-cutting to digital and the loss of service that would result.

39. The R&O allows existing broadcasters the first opportunity to either flash-cut on their existing analog channel or to apply for a digital companion channel. This will provide existing broadcasters the flexibility to identify a workable digital channel for operation before new broadcasters are allowed to apply for channels. The Commission considered allowing applicants to seek new channels at the same time that incumbent stations seek companion channels but rejected this approach because new channels would use valuable spectrum that must be used by incumbent stations to successfully transition to digital.

40. The R&O concludes that digital flash-cut and companion channel applications filed by low power broadcasters are subject to auction (except Class A flash-cut applications). The Commission concluded that the statute provides the discretion in this case. At the same time, the Commission sought to alleviate the burden on all stations by allowing all applicants an opportunity to find settlements or engineering solutions to avoid having to go to auction. The Commission concluded that the settlement opportunity will facilitate the processing of applications and permit applicants to avoid having to use limited resources to bid for their digital channels.

41. The R&O allows applicants to seek digital channels between 52-69 on a limited secondary basis. The Commission found that this approach will provide stations with greater flexibility to seek channels where a core channel (between 2 and 51) cannot be identified. The Commission considered not allowing any additional licensing on these channels because of concerns of interference to new wireless and public safety users. This approach was rejected because it was found that limited use of channels 52-69 was necessary for the successful DTV transition of many LPTV and TV translator stations. This will enable numerous stations that otherwise could not find a digital channel with the opportunity to participate in the digital transition.

42. The R&O provides stations with the flexibility to choose the types of service to provide for their viewers. Translators will be limited to rebroadcasting programs and signals of full-service DTV stations without alteration to content or video format but may insert the types of local messages permitted for analog translators and may rebroadcast a DTV signal as an analog signal. LPTV stations must provide a free over-the-air video program service but have the freedom to use the remainder of their spectrum to offer ancillary services on the same basis as full-service DTV stations (including 5% fee on gross revenues of feeable services). We considered allowing LPTV and TV translator stations to operate without restrictions but that proposal was rejected because it would interfere with the Commission's overall DTV goals and the rules and policies adopted for full-service stations.

43. The R&O adopts interference rules and methodology to provide the needed flexibility for stations to engineer new digital operations without undermining established interference protection rights of existing broadcasters. The equipment rules will enable stations to use much of their existing equipment, thus reducing the overall cost of digital implementation. The Commission considered adoption of stricter rules but concluded that such rules would interfere with low power stations being able to successfully propose and construct new DTV facilities and to afford to convert their analog facilities.

44. None.

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

46. It is ordered that pursuant to the authority contained in sections 1, 4(i) and (j), 5(c)(1), 7, 301, 302, 303(f), 303(r), 303(u), 303(w), 303(x), 307, 308, 309, 316, 319, 324, 336(c), 336(f), 337, 330(b), 330(c), 332(c) of the Communications Act of 1934, 47 U.S.C 151, 154(i) and (j), 155(c)(1), 157, 301, 302, 303(f), 303(r), 303(u), 303(w), 303(x), 307, 308, 309, 316, 319, 324, 336(c), 336(f), 337, 330(b), 330(c), 332(c) that the Commission's rules are hereby amended as set forth in the rules changes and shall become effective January 28, 2005 except §§ 73.6027, 74.703, 74.705, 74.707, 74.710, 74.786 through 74.788, 74.790, and 74.793 through 74.796 of the Commission's rules, which contain information collection requirements under the Paperwork Reducation Act (PRA) that are not effective until approved by the Office of Management and Budget (OMB). Written comments by the public on the new and modified information collections are due January 28, 2005. The Commission will publish a document in the Federal Register announcing the effective date for these rules.

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

48. It is further ordered, that the Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).