NRC's regulations at 10 CFR Parts 25 and 95 govern access to and protection of classified information by licensees or other persons who have a need for access to this information. Part 25 contains procedures for establishing initial and continuing eligibility for access authorizations for individuals who may require access to classified information. Part 95 contains procedures for obtaining a facility security clearance for licensees, certificate holders, or other persons who need to use, process, store, reproduce, transmit, transport, or handle certain types of NRC classified information at any location in connection with Commission-related activities. The purpose of this rulemaking is to amend Parts 25 and 95 to: (1) Add references to 10 CFR Parts 60 and 63 in §§ 25.5, 25.17(a) and 95.5; (2) expand the scope of §§ 25.3 and 95.3 to include persons who may not be licensees or certificate holders or applicants for a license or certificate; (3) clarify the definition of “license” in §§ 25.5 and 95.5 to include a reference to Part 52; (4) correct the omission of a reference to certificate holders in § 25.3; (5) correct a typographical error in the definition of “security container” in § 95.5; and (6) update references to Executive Order 12958 to reflect that this Executive Order has been amended and could be further amended in the future.

Although 10 CFR 25.3 speaks broadly of the regulations that apply to “licensees and others who may require access to classified information related to a license or an application for a license,” in 10 CFR 25.5, “license” is defined to mean “a license issued pursuant to 10 CFR Parts 50, 70, or 72.” Similarly, 10 CFR 95.3 states that the regulations apply to licensees and certificate holders and others regulated by the Commission who need access in connection with a license or certificate or an application for a license or certificate. However, at 10 CFR 95.5, “license” is defined to mean “a license issued pursuant to 10 CFR Parts 50, 70, or 72.” Absent from these provisions is any reference to the Commission's regulations that govern the issuance of construction authorizations and licenses for disposal of high-level radioactive waste in geologic repositories (10 CFR Part 60) or in a potential geologic repository at Yucca Mountain, Nevada (10 CFR Part 63). Parts 25 and 95 were published on March 5, 1980; 45 FR 14476, before issuance of Part 60 (February 25, 1981; 46 FR 13971) or Part 63 (November 2, 2001; 66 FR 55732) and Parts 25 and 95 were not amended to include these regulations. The Commission currently anticipates receiving a license application from the U.S. Department of Energy under the provisions of Part 63. An adjudicatory proceeding on this license application could implicate the need for access authorizations and facility security clearances by persons who are admitted as parties to the proceeding. Accordingly, NRC is amending the definition of “license” in §§ 25.5 and 95.5 to include references to licenses issued under Parts 60 and 63. For the same reason, references to Parts 60 and 63 are added to § 25.17(a).

A second restriction that presently exists in 10 CFR 25.3 and 95.3 is that the requested access authorizations or facility security clearances must be related to a license or certificate, or an application for a license or certificate. There may be, however, certain Commission-related activities undertaken by entities who are not licensees or certificate holders, or applicants for a license or certificate where an access authorization or facility security clearance may be needed. The NRC believes there is a need for access authorizations and facility security clearances for vendors who are involved in the design of advanced reactors. These vendors could need access to classified information which would enable them to consider potential mitigative measures for operating reactors and design features for the various advanced reactor systems. Currently, a vendor who is not an NRC licensee or a contractor to an NRC licensee and does not have a facility clearance or access authorization provided by another Government agency, is not eligible for an access authorization or a facility security clearance under Parts 25 and 95. NRC believes that most current vendors of advanced reactor designs are NRC licensees or contractors to NRC licensees or holders of clearances from other Government agencies. However, to allow for the possibility that there could be vendors who would need to seek access authorizations and facility security clearances through the regulations at Parts 25 and 95, the NRC is adding language to the scope sections of these parts to allow the processing of requests for access authorization or facility security clearances with respect to “other activities as the Commission may determine.” This language could also be used to begin the processing of such requests, in advance of NRC's receipt of a license application under Part 63, by potential parties in an adjudication on the application, or in circumstances when a need for access authorization might arise in the future.

Further, the NRC is clarifying the definition of “license” in §§ 25.5 and 95.5 to include a reference to Part 52 which contains provisions for combined licenses in Subpart C and for manufacturing licenses in Appendix M. Although NRC's intent that access authorizations needed in connection with activities under Part 52 be included is evidenced by a reference to Part 52 in § 25.17(a), a similar reference to Part 52 does not appear in the definition of “license” in §§ 25.5 and 95.5. The Commission is correcting this oversight in this rulemaking.

In this rulemaking, the NRC is also correcting the omission of a reference to certificate holders in § 25.3. Although § 25.5 includes a definition of “certificate holder” and § 25.17(a) includes activities under Part 76 that issue certificates to gaseous diffusion plants, § 25.3, unlike § 95.3, does not include a reference to certificate holders or certificates. The NRC believes this is an oversight that is now being corrected.

In addition, the NRC is correcting a typographical error which appears in the definition of “security container” in § 95.5. In the description of a “safe” in paragraph (2), the phrase “at least 1/2 thick” should read “at least 1/2 inch thick.”

Finally, NRC is amending references to Executive Order 12958 where they appear in Parts 25 and 95 to include the phrase “as amended.” This reflects that Executive Order 12958 was amended on March 25, 2003 by Executive Order 13292 (68 FR 15315; March 28, 2003) and could be further amended in the future.

The current scope limits the access to classified information to access “related to a license or an application for a license.” This scope is broadened to include persons who may need access in connection with other activities as the Commission may determine, such as vendors of advanced reactor designs. Thus, the phrase “or other activities as the Commission may determine” is added to this section. The Commission is also correcting an oversight by including certificate holders in this section.

References to Parts 52, 60, and 63 are added to the definition of “license.”

The phrase “Executive Order 12958” is replaced by “Executive Order 12958, as amended” under definitions of “classified national security information” and “national security information.”

References to Parts 60 and 63 are added to paragraph (a).

The phrase, “Executive Order 12958” is replaced by “Executive Order 12958, as amended” in paragraph (b).

The current scope applies to “licensees, certificate holders and others regulated by the Commission” who may require access to certain types of classified information “in connection with a license or certificate or an application for a license or certificate.” The Commission is broadening the scope of the regulations applicable to procedures for obtaining facility security clearances, to include persons who may need to use, process, store, reproduce, transmit, transport, or handle NRC classified information in connection with other activities as the Commission may determine, such as vendors of advanced reactor designs. Thus, the phrase “regulated by the Commission” is deleted and the phrase “or other activities as the Commission may determine” is added.

References to Parts 52, 60, and 63 are added under the definition of “license.”

The phrase “E.O. 12958” is replaced by “E.O. 12958, as amended” under definitions of “classified national security information,” “infraction,” and “violation.”

The phrase “at least 1/2 thick” is replaced by “at least 1/2 inch thick” under the definition of “Security container,” paragraph (2).

The phrase “E.O. 12958” is replaced by “E.O. 12958, as amended.”

This rulemaking will become effective on February 28, 2005. However, if the NRC receives significant adverse comments by January 14, 2005 or if the NRC receives substantive comments on information collection requirements by January 14, 2005, then the NRC will publish a document that withdraws the direct final rule and will address the comments received in a final rule as a response to the companion proposed rule published elsewhere in this issue of the Federal Register . Absent significant modifications to the proposed revisions requiring republication, the NRC will not initiate a second comment period on this action.

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

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

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

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

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

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

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

Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs” approved by the Commission on June 30, 1997, and published in the Federal Register on September 3, 1997 (62 FR 46517), this rule is classified as Compatibility Category “NRC.” Compatibility is not required for Category “NRC” regulations. The NRC program elements in this category are those that relate directly to areas of regulation reserved to the NRC by the Atomic Energy Act of 1954, as amended (AEA), or the provisions of Title 10 of the Code of Federal Regulations. Although an Agreement State may not adopt program elements reserved to NRC, it may wish to inform its licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws but does not confer regulatory authority on the State.

The Presidential Memorandum dated June 1, 1998, entitled, “Plain Language in Government Writing” directed that the Government's writing be in plain language. The NRC requests comments on this direct final rule specifically with respect to the clarity and effectiveness of the language used. Comments should be sent to the address listed under the heading ADDRESSES above.

The National Technology Transfer Act of 1995 (Pub. L. 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this direct final rule, the NRC broadens the scope of Parts 25 and 95 by adding references to Parts 60 and 63 and by including language in the scope sections which will enable NRC to consider access authorizations and facility security clearance for persons who are not licensees or certificate holders or applicants for a license or certificate. This action does not constitute the establishment of a standard that establishes generally applicable requirements.

The NRC has determined that this direct final rule is the type of action described in categorical exclusion 10 CFR 51.22(c)(1). Therefore neither an environmental impact statement nor an environmental assessment has been prepared for this direct final rule.

This direct final rule contains amended information collection requirements that are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq ). This rule has been submitted to the Office of Management and Budget for review and approval of the information collection requirements.

Type of submission, new or revision: Revision.

The title of the information collection: 10 CFR Part 25—Access Authorization for Licensee Personnel; 10 CFR Part 95—Facility Security Clearance and Safeguarding of National Security Information and Restricted Data.

The form number if applicable: Not applicable.

How often the collection is required: On occasion.

Who will be required or asked to report: Persons who may need access in connection with licensing and regulatory activities under 10 CFR Parts 60 and 63 for the disposal of high-level radioactive waste in geologic repositories and in connection with other activities as the Commission may determine, such as vendors of advanced reactor designs.

An estimate of the number of annual responses: 688 (Part 25: 572; Part 95:116).

The estimated number of respondents (one time): 34 (Part 25: 28; Part 95: 6).

An estimate of the total number of hours needed annually to complete the requirement or request: 485 (Part 25: 150; Part 95: 335).

Abstract: The NRC is broadening the scope of its regulations applicable to persons who may require access to classified information to include persons who may need access in connection with licensing and regulatory activities under 10 CFR Parts 60 and 63 for the disposal of high-level radioactive waste in geologic repositories, and persons who may need access in connection with other activities as the Commission may determine, such as vendors of advanced reactor designs. The Commission is also broadening the scope of its regulations applicable to procedures for obtaining facility security clearances to include persons who may need to use, process, store, reproduce, transmit, transport, or handle NRC classified information in connection with the above-identified activities.

The U.S. Nuclear Regulatory Commission is seeking public comment on the potential impact of the information collections contained in this direct final rule and on the following issues:

1. Is the proposed information collection necessary for the proper performance of the functions of the NRC, including whether the information will have practical utility?

2. Is the estimate of burden accurate?

3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?

4. How can the burden of the information collection be minimized, including the use of automated collection techniques?

A copy of the OMB clearance package may be viewed free of charge at the NRC Public Document Room, One White Flint North, 11555 Rockville Pike, Room O-1 F21, Rockville, MD 20852. The OMB clearance package and rule are available at the NRC worldwide Web site: http://www.nrc.gov/public-involve/doc-comment/omb/index.html for 60 days after the signature date of this notice and are also available at the rule forum site, http://ruleforum.llnl.gov.

Send comments on any aspect of these proposed information collections, including suggestions for reducing the burden and on the above issues, by January 14, 2005 to the Records and FOIA/Privacy Services Branch (T-5 F52), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, or by Internet electronic mail to INFOCOLLECTS@NRC.GOV and to the Desk Officer, John A. Asalone, Office of Information and Regulatory Affairs, NEOB-10202, (3150-0046 and 3150-0047), Office of Management and Budget, Washington, DC 20503. Comments received after this date will be considered if it is practical to do so, but assurance of consideration cannot be given to comments received after this date. You may also e-mail comments to John_A._Asalone@omb.eop.gov or comment by telephone at (202) 395-4650.

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

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

In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the Commission certifies that this rule does not have a significant economic impact on a substantial number of small entities. This rule merely makes procedures available to individuals and entities for obtaining access authorizations and facility security clearances in connection with licensing activities under Parts 60 and 63 or with other activities as the Commission may determine, corrects the omission of a reference to Part 52 in the definition of “license” in Parts 25 and 95, corrects the omission of a reference to certificate holders in Part 25, updates references to Executive Order 12958, and clarifies a dimension used to describe a security container.

The NRC has determined that the backfit rule (§§ 50.109, 70.76, 72.62, or 76.76) does not apply to this direct final rule because this amendment does not involve any provisions that would impose backfits as defined in the backfit rule. Therefore, a backfit analysis is not required.

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

This amendment to 14 CFR Part 71 modifies the Class E airspace area extending upward from 700 feet above the surface of Mena, AR and will be published in paragraph 6005 of FAA Order 7400.9M, dated August 30, 2004, and effective September 16, 2004, which is incorporated by reference in 14 CFR 71.1.

The FAA anticipates that this regulation will not result in an adverse or negative comment, and, therefore, issues it as a direct final rule. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Unless a written adverse or negative comment, or a written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified. After the close of the comment period, the FAA will publish a document in the Federal Register indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of an intent to submit such a comment, a document withdrawing the direct final rule will be published in the Federal Register, and a notice of proposed rulemaking may be published with a new comment period.

Although this action is in the form of a direct final rule, and was not preceded by a notice of proposed rulemaking, interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications must identify both docket numbers. All communications received on or before the closing date for comments will be considered, and this rule may be amended or withdrawn in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of this action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this action will be filed in the Rules Docket.

This rule does not have federalism implications, as defined in Executive Order No. 13132, because it does 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. Accordingly, the FAA has not consulted with state authorities prior to publication of this rule.

The FAA has determined that this regulation is noncontroversial and unlikely to result in adverse or negative comments. For the reasons discussed, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as these routine matters will only affect air traffic procedures and air navigation. I certify that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This amendment to 14 CFR part 71 establishes a Class E airspace area extending upward from 700 feet above the surface of Melbourne, AR and will be published in paragraph 6005 of FAA Order 7400.9M, dated August 30, 2004, and effective September 16, 2004, which is incorporated by reference in 14 CFR 71.1.

The FAA anticipates that this regulation will not result in an adverse or negative comment, and, therefore, issues it as a direct final rule. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Unless a written adverse or negative comment, or a written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified. After the close of the comment period, the FAA will publish a document in the Federal Register indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of an intent to submit such a comment, a document withdrawing the direct final rule will be published in the Federal Register , and a notice of proposed rulemaking may be published with a new comment period.

Although this action is the form of a direct final rule, and was not preceded by a notice of proposed rulemaking, interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications must identify both docket numbers. All communications received on or before the closing date for comments will be considered, and this rule may be amended or withdrawn in light of the comments received. Factual information that supports the commenters' ideas and suggestions is extremely helpful in evaluating the effectiveness of this action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this action will be filed in the Rules Docket.

This rule does not have federalism implications, as defined in Executive Order no. 13132, because it does not have a substantial direct effect on the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the FAA has not consulted with state authorities prior to publication of this rule.

The FAA has determined that this regulation is noncontroversial and unlikely to result in adverse or negative comments. For the reasons discussed, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as these routine matters will only affect air traffic procedures and air navigation. I certify that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This amendment to 14 CFR part 71 establishes a Class E airspace area extending upward from 700 feet above the surface of Mount Vernon, TX and will be published in paragraph 6005 of FAA Order 7400.9M, dated August 30, 2004, and effective September 16, 2004, which is incorporated by reference in 14 CFR 71.1.

The FAA anticipates that this regulation will not result in an adverse or negative comment, and, therefore, issues it as a direct final rule. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Unless a written adverse or negative comment, or a written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified. After the close of the comment period, the FAA will publish a document in the Federal Register indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of an intent to submit such a comment, a document withdrawing the direct final rule will be published in the Federal Register , and a notice of proposed rulemaking may be published with a new comment period.

Although this action is in the form of a direct final rule, and was not preceded by a notice of proposed rulemaking, interested persons are invited to comment on this rule by submitting such written data, views, or arguments as they may desire. Communications must identify both docket numbers. All communications received on or before the closing date for comments will be considered, and this rule may be amended or withdrawn in light of the comments received. Factual information that supports the commenter's ideas and suggestions is extremely helpful in evaluating the effectiveness of this action and determining whether additional rulemaking action would be needed.

Comments are specifically invited on the overall regulatory, economic, environmental, and energy aspects of the rule that might suggest a need to modify the rule. All comments submitted will be available, both before and after the closing date for comments, in the Rules Docket for examination by interested persons. A report that summarizes each FAA-public contact concerned with the substance of this action will be filed in the Rules Docket.

This rule does not have federalism implications, as defined in Executive Order No. 13132, because it does 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. Accordingly, the FAA has not consulted with state authorities prior to publication of this rule.

The FAA has determined that this regulation is noncontroversial and unlikely to result in adverse or negative comments. For the reasons discussed, I certify that this regulation (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as these routine matters will only affect air traffic procedures and air navigation. I certify that this rule will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The Chemical Diversion and Trafficking Act of 1988 (Pub. L. 100-690) (CDTA) created the definition of “chemical mixture” (21 U.S.C. 802(40)), and exempted chemical mixtures from regulatory control. The CDTA established 21 U.S.C. 802(39)(A)(v) to exclude “any transaction in a chemical mixture” from the definition of a “regulated transaction.” The exemption of all chemical mixtures, however, provided traffickers with an unregulated source for obtaining listed chemicals for use in the illicit manufacture of controlled substances.

To remedy this situation, the Domestic Chemical Diversion Control Act of 1993 (DCDCA), enacted in April 1994, subjected chemical mixtures containing listed chemicals to CSA regulatory requirements, unless specifically exempted by regulation. The DCDCA, therefore, subjected all regulated chemical mixtures to recordkeeping, reporting, and security requirements of the CSA. Additionally, the DCDCA added a registration requirement for handlers of regulated List I chemical mixtures.

The DCDCA, however, also amended 21 U.S.C. 802(39)(A)(v) to provide the Attorney General with the authority to establish regulations exempting chemical mixtures from the definition of a “regulated transaction” “based on a finding that the mixture is formulated in such a way that it cannot be easily used in the illicit production of a controlled substance and that the listed chemical or chemicals contained in the mixture cannot be readily recovered” (21 U.S.C. 802(39)(A)(v)). This authority has been delegated to the Administrator of DEA by 28 CFR 0.100 and redelegated to the Deputy Administrator under 28 CFR 0.104 (Subpart R) Appendix Sec. 12.

Prior to publication of a final rulemaking, chemical mixtures containing listed chemicals have been treated as exempt from CSA regulatory control. This final rulemaking specifies criteria used to determine whether chemical mixtures qualify for automatic exemption from CSA chemical regulatory controls. Those chemical mixtures that do not meet the exemption criteria shall be treated as regulated chemicals and therefore subject to CSA chemical regulatory controls.

Since DEA recognizes that concentration or category criteria alone cannot identify all mixtures that warrant exemption, an application process has been implemented in 21 CFR 1310.13. This process, finalized in a Final Rule published in the Federal Register at 68 FR 23195 (May 1, 2003), allows manufacturers to apply for exemption from CSA regulatory controls, for those chemical mixtures that do not qualify for automatic exemption.

21 U.S.C. 802(40) defines the term “chemical mixture” as “a combination of two or more chemical substances, at least one of which is not a List I chemical or a List II chemical, except that such term does not include any combination of a List I chemical or a List II chemical with another chemical that is present solely as an impurity.” Therefore, a chemical mixture contains any number of listed chemicals along with any number of non-listed chemicals. A combination of only listed chemicals is, therefore, not a chemical mixture pursuant to CSA definition. As such, the regulatory controls pertaining to each individual listed chemical are applicable.

DEA does not consider a chemical mixture to mean the combination of a listed chemical in an inert carrier. An inert carrier can be any chemical that does not interfere with the listed chemical's function but is present to aid in the delivery of the listed chemical so it can be used in some chemical process. Examples include, but are not limited to, solutions of listed chemicals such as methylamine in water or hydrogen chloride dissolved in water or alcohol. Sassafras oil, an essential oil mostly consisting of safrole, is not regarded as a chemical mixture containing safrole. It is regulated as the List I chemical safrole. These examples have always been treated as listed chemicals and are not new to this rulemaking. Persons who question if their formulations are chemical mixtures should contact DEA for guidance.

Regulations regarding the exemption of chemical mixtures were initially proposed by DEA on October 13, 1994 as part of its proposed regulations to implement the DCDCA (59 FR 51888). In response to industry concerns, the proposed regulations were withdrawn on December 9, 1994 (59 FR 63738).

DEA proposed new regulations regarding the exemption of chemical mixtures by publishing a new NPRM entitled “Exemption of Chemical Mixtures” on September 16, 1998 (63 FR 49506). DEA proposed the following three-tiered approach to identify which chemical mixtures qualify for automatic exemption: (1) It contains a listed chemical at or below an established concentration limit; or (2) it falls within a specifically defined category; or (3) the manufacturer of the mixture applies for and is granted a specific exemption for the product.

DEA proposed that each chemical be assigned a concentration limit that, if found at or below the limit, will cause the mixture to be treated as a non-regulated chemical. This quantitative approach is considered necessary in order to simplify the method of identifying regulated chemical mixtures. Identifying regulated chemical mixtures by narrative is impractical due to the variety of chemical products. These concentration limits are expected to exempt the vast majority of chemical mixtures containing listed chemicals.

DEA also proposed the creation of three specific categories of automatic exemption. They are (1) waste materials regulated by the Environmental Protection Agency (EPA); (2) fully formulated paints and coatings; and (3) harvested plant material. A chemical mixture that falls into one of these three categories is exempt regardless of the amount of listed chemical it contains.

Waste materials were proposed as an exempt category provided there is documentation on EPA Form 8700-22 (Uniform Hazardous Waste Manifest) and the materials are being distributed to another person solely for the purpose of disposal by incineration. These mixtures include only those that are covered by EPA regulations and have a “cradle to grave” paper trail. Further, the exemption applies only to the extent that the Form 8700-22 is available for inspection and copying by DEA.

Completely formulated paints and coatings were proposed for exemption because they contain ingredients, such as pigments, and other components, which render them unsuitable to traffickers. Proposed for inclusion in this category were paints, clear coats, topcoats, primers, varnishes, sealers, adhesives, lacquers, stains, shellacs, inks, and temporary protective coatings.

The final proposed exempt category is harvested plant material. Harvested plant material that contains listed chemicals, while meeting the definition of a chemical mixture, was proposed for exemption if the plant material is not concentrated or changed from its natural state. This provision was finalized in a Federal Register Notice (68 FR 23195) published May 1, 2003. Harvested plant material refers to the plant itself and not material growing on a plant, such as Ergot, a source for the List I chemicals ergonovine and ergotamine.

As stated above, DEA recognizes that the concentration limit and category exemption criteria cannot identify all mixtures that should receive exemption status. DEA has implemented an application process to exempt additional mixtures (21 CFR 1310.13). This application process was also finalized in the Federal Register Notice (68 FR 23195) published May 1, 2003. Under the application process manufacturers may submit an application for exemption for those mixtures that do not qualify for automatic exemption. Exemption status can be granted if DEA determines that the mixture is formulated in such a way that it cannot be easily used in the illicit production of a controlled substance and the listed chemical cannot be readily recovered ( i.e. , it meets the conditions in 21 U.S.C. 802(39)(A)(v)). An application may be for a single or a multiple number of formulations.

While the September 16, 1998 NPRM (63 FR 49506) pertained to the regulation of chemical mixtures which contain any of 34 listed chemicals subject to DEA control, this rulemaking finalizes only those portions of the NPRM pertaining to the 27 chemicals given in The Table of Concentration Limits provided in this rulemaking (hereafter referred to as “The Table”). Six of the 34 listed chemicals—ephedrine, N-methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and pseudoephedrine—were addressed in a separate rulemaking (68 FR 23195, May 1, 2003). Concentration limits for the List I chemical iodine, which were proposed to be established as part of the September 16, 1998 rulemaking, will be addressed in a separate rulemaking.

A concentration limit is established for each listed chemical provided in The Table. If the concentration of the listed chemical is at or below the limit, then the mixture will be automatically exempted and treated as a non-regulated chemical mixture. The Table also gives conditions for calculating the concentration limit.

The concentration limits are being finalized as proposed, except those for the chemicals benzaldehyde, anthranilic acid, and phenylacetic acid. The concentration limits for these three chemicals are being increased from the limits which were proposed.

One comment, which DEA received in response to the NPRM, informed DEA that there are a significant number of chemical mixtures in anthranilic acid and phenylacetic acid that could be regulated at the proposed concentration limit of 20 percent. Since DEA determined that these chemical mixtures do not pose a significant risk of being diverted, the DEA is increasing the concentration limit to 50 and 40 percent for anthranilic acid and phenylacetic acid, respectively. The comment also suggested increasing the concentration limit for benzaldehyde from 35 percent to 85 percent. However, the DEA determined that chemical mixtures containing greater than 50 percent benzaldehyde are at risk of diversion. Therefore, in order to minimize the risk of diversion and provide the maximum amount of regulatory relief, the concentration limit for benzaldehyde is being finalized at 50 percent (for a discussion see Part II Comment Section 11. Exempt Formulations Used as Flavor and Fragrances).

Two categories that were originally proposed as exempt categories of chemical mixtures are distributions to waste disposal facilities and completely formulated paints and coatings. These categories may contain chemical mixtures that have listed chemical(s) above the established concentration limits. However, DEA believes that chemical mixtures in these categories are not likely to be diverted.

Based on comments to the NPRM, DEA modified these categories from those originally proposed. The proposed category that includes transportation of chemical waste has been modified to include chemical mixtures intended for recycling. Added are distributions to waste recycling facilities that have a “paper trail” as required by the United States Environmental Protection Agency.

The category of paints and coatings is modified to make it clear that inks are included in the category. Inks were intended to be included, however, a comment pointed out that the inclusion of inks could be overlooked under the proposed wording. A comment raised concern over distributions of multiple-component paint systems, which are not included in this category because they are not completely formulated. The DEA agrees that multiple-component paint systems are not likely to be diverted in domestic and import transactions. DEA is introducing an interim rule that addresses this concern and provides regulatory relief for chemical mixtures that are not at risk of diversion (see below).

Based on comments and DEA's analysis of the potential for diversion, this Final Rule also adds a new exemption category. Comments informed DEA of a significant number of distributions that may not be exempt under the proposed regulations. DEA determined that certain solvent based mixtures involving silicon-based products, paint-related materials, and other solvent-based chemical mixtures containing acetone, ethyl ether, 2-butanone, and toluene are not likely to be diverted domestically. These solvent chemicals are mostly a concern because they are used in cocaine and heroin processing, which occurs outside the United States. These chemical mixtures pose a risk of diversion for international transactions for which the requirement of 21 U.S.C. 802(39)(A)(v) is not met.

Therefore, DEA is creating a new exemption category for these mixtures. Domestic and import transactions in chemical mixtures that are regulated solely due to the presence of the List II solvent chemicals acetone, ethyl ether, 2-butanone, or toluene are removed from the definition of a regulated transaction by adding a new paragraph to 21 CFR 1310.08. Methyl isobutyl ketone, also a List II solvent chemical, is not included because domestic and import transactions in that chemical have already been excluded from the definition of a regulated transaction at 21 CFR 1310.08.

DEA is exempting domestic and import transactions in these chemical mixtures under 21 CFR 1310.08 pursuant to 21 U.S.C. 802(39) (A) (iii) because regulation of such transactions has been determined to be unnecessary for the enforcement of the CSA. DEA determined that there is not a significant risk of domestic diversion for these chemical mixtures. However, exports of these chemical mixtures could have significant potential for diversion. Therefore, these chemical mixtures, unless otherwise exempt, are subject to the export requirements of the CSA. Mixtures containing these List II chemicals will not qualify for automatic exemption if the mixture also contains another listed chemical above its concentration limit.

This new exemption (for domestic and import transactions in chemical mixtures containing the List II chemicals acetone, ethyl ether, 2-butanone, and toluene) was not discussed in the original NPRM. Therefore, this exemption will be implemented on an interim basis with opportunity for public comment. DEA is soliciting comments only on this portion of this final rule. After close of this comment period, DEA will publish a Final Rule in the Federal Register to inform interested persons if changes are needed or if this regulation will be adopted as written.

In addition, other modifications to the original proposed regulations are being made. All references to the American Society for Testing Materials have been removed and the manufacturers are being allowed to determine the unit of measurement in calculating the concentration limit for liquid chemicals. These modifications were suggested in the comments and DEA agrees that they should be implemented.

DEA received comments that chemical mixtures containing seven percent iodine are being diverted for the illicit manufacture of methamphetamine. Methamphetamine is an addictive Schedule II controlled substance and is the primary controlled substance clandestinely produced in the United States. It is regarded by DEA as a major threat to public health and safety.

DEA proposed a 20 percent concentration limit for iodine. This proposed amount is consistent with the proposed concentration limit for other listed chemicals that are used as reagents, as is iodine. Prior to the publication of the NPRM and while DEA was formulating the proposed regulations, seven percent iodine chemical mixtures were not a concern to law enforcement. Although DEA theorized that seven percent iodine solutions have the potential to be diverted, DEA lacked sufficient evidence to show that these chemical mixtures were being diverted prior to establishing the proposed concentration limit.

In addition to information obtained from law enforcement, public sources, and communication with the regulated community, DEA relies on comments to the NPRM to help establish regulations. DEA was informed that seven percent iodine chemical mixtures are being used in the illicit manufacture of methamphetamine. The proposed concentration limit of 20 percent is high relative to the concentration of iodine contained in mixtures used by traffickers. The approach of the proposed rule dictates that the concentration limit be lowered to assure that chemical mixtures desirable to traffickers are not automatically exempt. Persons who may not have commented on the 20 percent concentration limit may have comments on this relatively lower concentration limit. In order to ensure that the public has adequate opportunity for comment, the DEA is addressing issues relating to the regulation of iodine chemical mixtures in a separate NPRM.

In a separate final rule (68 FR 23195, May 1, 2003), DEA finalized those portions of the NPRM pertaining to the six List I chemicals ephedrine, N-methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and pseudoephedrine. Like the approach taken in this rulemaking, that Final Rule established a concentration limit for each of the above List I chemicals. The exempt category of harvested plant material was also finalized in that rulemaking.

This rulemaking does not address the List I chemicals gamma-butyrolactone (GBL), red phosphorus, white phosphorus, or hypophosphorous acid and its salts. When the NPRM “Exemption of Chemical Mixtures” was published, they were not listed chemicals. Therefore, regulations to exempt their chemical mixtures were not proposed. DEA will address provisions concerning GBL and the above phosphorus chemicals in separate Federal Register publications.

To that end, on July 19, 2002, DEA published an Advance Notice of Proposed Rulemaking soliciting comments from the regulated industry regarding chemical mixtures containing GBL (67 FR 47493; corrected at 67 FR 53842, August 19, 2002; corrected at 67 FR 56776, September 5, 2002). DEA also published an Advance Notice of Proposed Rulemaking soliciting industry comment regarding chemical mixtures containing listed forms of phosphorus (68 FR 4968, January 31, 2003). Based on comments received from these publications, DEA will develop regulations concerning chemical mixtures containing GBL and the phosphorus chemicals.

DEA received fourteen comments in response to the NPRM which was published September 16, 1998 (63 FR 49506). Five comments were from industry related membership organizations, three from law enforcement organizations, and the remaining from commercial interests.

In general, the comments supported efforts by DEA to regulate chemical mixtures that have potential use to drug traffickers. Some comments requested that DEA exempt an additional category or increase some concentration limits. Comments also suggested that mixtures be exempted based on the type of distribution. Other comments requested clarification or suggested ways to ease compliance.

1. Reference to the American Society for Testing Materials (ASTM): ASTM is a not-for-profit organization that develops test methods, and other criteria, with application to 130 areas. Reference to ASTM was made in the NPRM section that proposed the exemption of paints/coatings. That section stated that a paint/coating would be exempt if, among other things, it met the ASTM specifications for the product. This statement was included to help authenticate the product. Authenticity is desired by DEA to prevent this category from being used by traffickers as a loophole. However, DEA was informed that such a requirement is not practical.

Although the manufacturer can use some test methods to insure quality control, the methods are not definitive in qualifying a product. Not all paints/coatings are necessarily subject to these test methods in order to be marketed as an authentic product.

DEA was also informed that ASTM standards are not written to cover all applications. Some products can have unique applications where ASTM standards are not applicable. Therefore, in response to the comments, DEA is removing all references to the ASTM requirement. This action does not alter the basic definition of “completely formulated,” which determines whether such products are automatically exempt.

2. Request to exempt small container transactions: Three persons suggested that DEA exempt chemical mixtures based on container size. One comment requested that DEA consider a minimum container volume limit to which the rule does not apply. The commenter questioned whether the rule applies to a 1-ml vial or a 3-ounce tube. A second comment suggested that mixtures of List II solvents in containers of five gallons or less be exempt from regulation. A third comment suggested that transactions in 55-gallon size containers and less should be exempt.

DEA has considered the request to exempt transactions of regulated chemicals based on container size. DEA determined that traffickers have and could divert regulated chemicals if packaged in small containers. Therefore, an exemption based on container size will not be added.

DEA regulates transactions of chemicals that are desirable to traffickers, in part, by establishing thresholds. Thresholds are established so that records do not have to be maintained for certain transactions, i.e. , those below the threshold to a single customer within a calendar month. The thresholds for export of the List II solvent chemicals acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene are considered large enough that distributions in small container sizes are not likely to be above the established threshold.

The threshold is meant to allow smaller volume distributions without the imposition of regulatory controls. However, the threshold can be easily reached using gallon size containers, including five and 55-gallon containers. DEA determined that adopting this suggestion would result in unlimited non-regulated export of chemicals desired by traffickers, especially those chemicals desired by cocaine traffickers.

3. Request to adopt a single concentration limit for List II chemicals: Three comments requested that List II chemicals be assigned a single concentration limit of 35 percent. They believed this would allow for better compliance and management of inventory by simplifying the process.

DEA proposed that the List II solvent chemicals, which have the same basic application, be assigned the same concentration limit. The chemicals acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene all function as solvents. These chemicals have been identified to be responsible for the greatest number of List II chemical mixtures, some of which may be regulated. This group of chemicals already has been assigned a single concentration limit of 35 percent. Thus, the argument to ease compliance with a uniform concentration limit is addressed by the single value for these chemicals having the same basic application.

The chemicals acetic anhydride and benzyl chloride can be considered precursors while hydrochloric acid, iodine, and sulfuric acid function as reagents. Except for iodine, which is being addressed in a separate NPRM, these are assigned the single concentration limit of 20 percent. Potassium permanganate, also a reagent, is assigned the concentration limit of 15 percent. The limit is lower for this chemical because DEA has not identified any legitimately produced chemical mixture containing potassium permanganate greater than 15 percent.

After careful consideration, DEA decided not to change the concentration limit for all List II chemicals to 35 percent. Concerns regarding compliance are mostly addressed because the concentration limits are the same for List II chemicals that have similar functions. In addition, other comments have raised the issue of iodine and hydrochloric acid as having application to the manufacture of illicit substances at a lower concentration than the proposed concentration limit.

4. Request to allow companies to choose the unit of measure to calculate the percent concentration: Two comments suggested that each manufacturer should be allowed to determine the unit of measurement to use when calculating the percent concentration. There appears to be no commercial standard practice that predisposes that a chemical is measured by weight or by volume when formulating a mixture. These persons are concerned about the possible administrative impact of forcing manufacturers to convert existing and extensive records and chemical record systems.

The amount of chemical present in a mixture can vary depending on the unit used to measure the chemical when formulating. Chemicals can be measured in units of weight or volume. The numerical values of weight and volume for chemicals are not usually equal. Therefore, a mixture reporting the concentrations of a chemical can actually contain different amounts of the chemical, depending on whether the concentration is based on weight or volume.

The comments informed DEA that some manufacturers might already have procedures in place to calculate the concentration. They state that converting from one unit to another is burdensome. DEA has considered this and decided that manufacturers should determine the unit of measure when formulating liquid mixtures. Therefore, a formulation containing liquid chemicals may have a concentration based on the volume or the weight of the chemicals contained.

DEA determined that accurate measurement of solids and gases by the unit of volume is not practical. Therefore, solids and gases should be calculated by unit of weight. The “Table of Concentration Limits” is being amended to reflect this modification.

5. Request for clarification of issues relating to internal transfer and research and development: Two persons requested clarification on issues of internal transfers and research and development. A third person asked whether research and development activities are exempt from this rule.

Chemical mixtures that do not qualify for automatic exemption are regarded and treated like listed chemicals. The term “regulated transaction” as defined in 21 U.S.C. 802(39), excludes “a domestic lawful distribution in the usual course of business between agents or employees of a single regulated person.” Therefore, such internal transfers are not regarded as regulated transactions. However, one must understand what a regulated person is to understand what transactions are regulated.

The definition of a “regulated person” is given in 21 U.S.C. 802(38) and means a person who manufactures, distributes, imports, or exports a listed chemical. The term “distribute” and “distributor” are defined in 21 U.S.C. 802(11). By definition, a distribution occurs when a listed chemical is delivered while a distributor is the person who makes the delivery.

21 U.S.C. 822(e) requires that each site which handles a List I chemical must have a separate registration. Each registered location is regarded as a “regulated person.” A distribution of List I chemicals between separate locations, even if owned by the same person, fulfills the definition in 21 U.S.C. 802(11). Therefore, above threshold distributions of List I chemicals between separately registered sites are regulated transactions as defined in 21 U.S.C. 802(39).

However, different locations that do not require separate registration are regarded as a single “regulated person” if owned by a single business. Because separate site registration for handling List II chemicals is not required, distributions of List II chemicals between sites owned by a single person are not regulated transactions.

The CSA does not include provisions that exempt the distribution of listed chemicals if associated with research and development. If a regulated mixture is distributed at or above threshold quantities, even for the purpose of research and development, the transaction is regulated.

6. Request for publication of Chemical Abstract Service numbers for listed chemicals: Two persons requested that Chemical Abstract Service (CAS) numbers be published for listed chemicals in the “Table of Concentration Limits.” The commenter stated that CAS numbers are used worldwide by industry and should be listed to simplify the identification of listed chemicals.

Although the CAS numbers are used throughout industry and specific to a chemical, DEA believes that publishing these numbers in the Code of Federal Regulations (CFR) may not be beneficial. CAS numbers are specific to a given chemical. If a chemical can exist in the form of a salt, for example, there is a separate CAS number for each form of the salt. Several listed chemicals include their salts, esters, optical isomers, and salts of optical isomers. All of these variations have individual CAS numbers. DEA believes it is not practical to list all such numbers, as the list will be extensive and possibly non-inclusive. Listing only the CAS numbers for the specifically named listed chemicals may mislead some to believe the list is all-inclusive. Therefore, DEA has decided not to publish CAS numbers in the CFR.

7. Request for category exemption of multiple-component paint systems: DEA proposed the exemption of paints/coatings only if the product is “completely formulated.” “Completely formulated” is defined in the proposed rule as “only those formulations that contain all the components of the paint/coating for use in the final application without the need to add any additional substance except possibly a thinner.”

DEA proposed the exemption of completely formulated paints/coatings because these products are complex, high density mixtures having several components, including pigments, binders, curing agents, and other chemicals in a single system. The numerous additives that make up a substantial bulk of the formulation deter the use of these mixtures in an illicit operation. In addition, completely formulated paints cure upon exposure to air or heat, rendering them unusable by traffickers.

One comment argued that some paints actually consist of multiple components. Multiple-component paint systems consist of one or more separate formulations of hardeners, activators, catalysts, polymeric material, pigments, accelerators, solvents, or other components. A single component may contain one or more of these ingredients mixed, suspended, emulsified, dissolved, or somehow formulated into a chemical mixture containing a List II chemical(s). The List II chemicals are typically solvent chemicals in these formulations. The components are kept separate because once mixed, the paint begins to cure. Therefore, they are mixed just prior to application. The comment claimed that the use of any one of these component mixtures in an illicit operation is as difficult as using a completely formulated paint.

DEA was informed that multiple-component paint systems are a predominant technology used in the automobile refinishing market. There are approximately 60,000 such body shops in the United States; each one engages in a large number of domestic transactions each year. The mixtures they utilize may contain one or more of the List II solvent chemicals acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene.

DEA has not found significant examples of diversion of these chemical mixtures domestically or through imports. However, traffickers in other countries have used related formulations. Therefore, DEA will exempt domestic and import distributions of mixtures in the List II solvent chemicals acetone, ethyl ether, 2-butanone, and toluene from the definition of “regulated transaction.” Such an exemption for domestic and import distributions of methyl isobutyl ketone already exists under 21 CFR 1310.08.

This exemption will not apply if the mixture contains a List I chemical or a List II chemical (other than acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, or toluene) above its established concentration limit. This category exempts chemical mixtures used by different industries, not only those associated with paints and coatings. Therefore, it will be included separately from the category of fully formulated paints and coatings.

This new exemption (for domestic and import transactions in chemical mixtures containing the List II chemicals acetone, ethyl ether, 2-butanone, and toluene) was not discussed in the original NPRM. Therefore, this exemption will be implemented on an interim basis with opportunity for public comment. DEA is soliciting comments only on this portion of this final rule. Comments should be submitted on or before January 14, 2005. After close of this comment period, DEA will publish a notice in the Federal Register to inform interested persons if changes are needed or if this regulation will be adopted as written.

Although DEA is establishing this exemption on an interim basis, an alternative means to exempt multiple-component paint systems was supplied in this comment. It sets a concentration limit for both the solid component and for the listed chemical(s). The commenter suggested that a chemical mixture be exempt if it contains at least 10 percent by weight of solids, including resins, polymers, or film formers, and less than 65 percent cumulative weight of List II solvents.

Although the above suggestion addresses those concerned about multiple-component paint systems, it may only partially address similar concerns of other sectors. Also, a dual-exemption criterion that considers both the concentration of solids and the listed chemical may be confusing and difficult for both industry and law enforcement to implement. Therefore, DEA decided to create a new category, as explained above, to exempt a broader range of mixtures. The new exempt category is easily interpreted and is not limited to a single sector but all industries that may use these solvents in chemical mixtures.

A second comment suggested the inclusion of multiple-component paint systems in the category of exempt paints and coatings. The comment included suggested wording that is similar to the language proposed by DEA except that it includes, in addition to completely formulated paints, two-part systems. It is anticipated that perceived burdens incurred by regulating distributions of multiple-component paint systems will be addressed via the creation of the interim exemption of domestic and import transactions of the List II solvents discussed above.

8. Silicone products as exempt mixtures: One comment suggested that exempt mixtures should include silicone related products. These silicone products are manufactured for downstream customers who produce end products and could contain List II solvent chemicals. To exempt these products, the commenter suggested that the mixture meet three criteria: the mixture is produced and distributed (1) through sophisticated, well-established channels; (2) in accordance with recognized commercial specifications; and (3) for controlled end-use applications.

The comment did not elaborate on how to define these criteria or how to identify if a product is produced in compliance with these criteria. DEA concluded that these suggestions regarding the exemption of silicone products are overly subjective and open to interpretation.

In attempting to identify silicone products, DEA learned that silicone products cannot be clearly distinguished by the chemical content alone. Representative formulations submitted by this industry show concentrations of up to 99 percent listed chemical. The example formulations contain silicone material from less than 1 percent to 75 percent while some contain no silicone or other solid material. These silicone related chemical mixtures are similar to the multiple component paint systems discussed above in relation to their risk of diversion. DEA has determined that regulation of domestic and import transactions are not at significant risk of diversion.

DEA is establishing provisions, on an interim basis, to exempt all domestic and import transactions in the List II chemicals of concern to this industry (see above). Some export transactions in these mixtures are exempt via the established concentration limit. Therefore, DEA decided that there is no need to take additional action to exempt this category because most transactions in these mixtures are addressed in the interim portion of this rulemaking. Because the exemption is on an interim basis, this interest, as well as others, will have the opportunity to inform DEA whether this approach is suitable.

9. Mixtures intended for recycling: One comment stated that the exemption category that includes distributions of waste products to incinerators does not include distributions to recycling centers. The comment suggested including distributions to authorized waste recyclers and reprocessors under the category of exempt waste material. DEA agrees with this comment.

Waste materials were proposed as an exempt category provided there is documentation on U.S. Environmental Protection Agency (EPA) Form 8700-22 (Uniform Hazardous Waste Manifest) and the waste materials are being distributed to another person solely for the purpose of disposal by incineration. These mixtures include only those that are covered by EPA regulations and have a “cradle to grave” paper trail. Further, the exemption applies only to the extent that the Form 8700-22 is available for inspection and copying by DEA.

The comment cites Department of Transportation (DOT) regulation 49 CFR 172.205 to show that records are required for waste-recovery shipments. Examination of this section shows that DOT requires the same EPA Form 8700-22 that was proposed as a requirement for exemption of waste product. Therefore, the same “paper trail” is in place for distributions sent to incinerators or to recyclers. DEA agrees that distributions to recycling facilities should be included in the category that exempts distributions to incinerators. DEA is amending the language of Section 1310.12(d)(2) to expand the category to include distribution to recyclers as requested in the comment.

DEA proposed the exemption of distributions of waste material provided a “paper trail,” which is required by another agency, already exists. Exemption, if to a recycler or incinerator, is contingent on the existence of a hazardous waste manifest (EPA form 8700-22). It will be the generator's responsibility to maintain records if EPA does not already require a hazardous waste manifest.

Although a distribution to a recycling facility may not be a regulated transaction, recovering a listed chemical from a chemical mixture in a recycling process satisfies the term “manufacture” as defined at 21 U.S.C. 802(15). However, this is not new to this rulemaking. Any person who performs a manufacturing operation, including the recovery of a listed chemical from a chemical mixture, has been bound to applicable regulations since their inception.

The comment also expressed concerns over distributions that are not required to have an EPA Form 8700-22 and, therefore, are not automatically exempt under this category. DEA decided not to categorically exempt all distributions for waste recycling or incineration. Such a category would include any combination of listed and non-listed chemical. DEA decided that such an exemption category could result in diversion of chemicals desirable to traffickers. Such distributions shall be regulated unless the transactions meet other exemption criteria.

10. Clarification as to whether chemical mixtures are included in 21 CFR Part 1313: One comment requested that DEA clarify whether the requirements governing the importation, exportation, transshipment and in-transit shipment of listed chemicals pursuant to 21 CFR Part 1313 apply to regulated chemical mixtures.

The commenter asserted that Part 1313 includes reference to “listed chemicals” but does not specifically include chemical mixtures. Therefore, the commenter concluded, mixtures of List II chemicals do not appear to be subject to import/export notification requirements.

DEA disagrees. A chemical mixture, if not exempt by regulation or the application process, is regarded and treated as a listed chemical pursuant to all provisions of the CSA. This includes provisions of 21 CFR Part 1313.

The term “regulated transaction” means “a distribution, receipt, sale, importation or exportation of, or an international transaction involving shipment of, a listed chemical, or if the Attorney General establishes a threshold amount for a specific listed chemical, a threshold amount, including a cumulative threshold amount for multiple transactions * * * of a listed chemical * * *” (21 U.S.C. 802(39)). The term excludes “any transaction in a chemical mixture which the Attorney General has by regulation designated as exempt * * * based on a finding that the mixture is formulated in such a way that it cannot be easily used in the illicit production of a controlled substance and that the listed chemical or chemicals contained in the mixture cannot be readily recovered” (21 U.S.C. 802(39)(A)(v)). The term “chemical mixture” is defined in 21 U.S.C. 802(40) as a combination of two or more chemicals, at least one of which is not a List I or List II chemical.

This rulemaking is finalizing regulations that identify those chemical mixtures that the Attorney General designates as exempt. Outside of those exemptions, distributions in chemical mixtures, including importation, exportation, transshipment, and in-transit shipment, are subject to the regulatory controls of the CSA that pertain to listed chemicals. This rulemaking establishes that chemical mixtures containing listed chemicals are treated as listed chemicals unless exempted by regulation.

11. Request for exemption of formulations used as flavors and fragrances: One commenter, representing both the Flavor and Extract Manufacturers Association of the United States and the Fragrance Materials Association of the United States (hereafter referred to as the flavor and fragrance industries), gave arguments as to why their mixtures should be exempt from regulatory controls. The commenter suggested that the flavor and fragrance industries be exempt by category. As an alternative, the commenter suggested that the concentration limits for benzaldehyde, anthranilic acid, and phenylacetic acid be increased.

The commenter stated that an industry exemption should be provided because of the manner in which the flavor and fragrance industry operates. The commenter stated that while manufacturers work closely with customers to develop the necessary flavoring or fragrance, routinely their formulations are unknown to the customer. The commenter asserted that traffickers would not know what to order because the trafficker would not know the mixture's composition. Additionally, the commenter stated that these mixtures are expensive because of developmental costs and therefore, they would not be a practical source of precursor chemicals. The commenter also stated that these mixtures are not sold to the public but only to manufacturers of foods and toiletries. In addition, the commenter claimed that the mixtures are complex formulations that make the extraction of listed chemicals, or direct use of the mixture impractical.

DEA agrees that legitimately traded, expensive, and chemically complex chemical mixtures, which are marketed under strict self-imposed practices, are at a lower risk of diversion. However, these conditions may not be universal to all that trade in these commodities. Therefore, DEA has decided that exempting these industries would create a loophole for traffickers to divert List I chemicals. Under a blanket exemption for these industries, any person could distribute any listed chemical they use without restriction.

The comment requested that, as an alternative to a category exemption, the concentration limits for benzaldehyde, anthranilic acid, and phenylacetic acid be set to 85, 50, and 40 percent, respectively. The concentration limits for these chemicals were proposed at 35 percent for benzaldehyde and 20 percent for anthranilic acid and phenylacetic acid. The concentration limit for benzaldehyde was proposed higher than the 20 percent proposed for most other precursor chemicals because benzaldehyde was known to be used by food flavoring manufacturers in higher concentrations than the other chemicals.

DEA weighed the degree of regulatory relief, as indicated in the comment, against the risk of diversion for the chemicals of concern to these industries. Based on the comments and an examination of sample formulations, DEA concluded that some, but not all, of the conditions requested in the comment could be put into regulation without significantly increasing the risk of diversion.

The commenter indicated that these industries' formulations contain no more than 50 and 40 percent of anthranilic acid and phenylacetic acid, respectively, and that these formulations are not at risk of diversion. This was the only comment concerned with these List I chemicals. DEA has not identified these chemicals as being important in the formulation of other chemical mixtures. Formulations that use these chemicals are complex and not likely to be diverted. Considering these facts, DEA has decided to increase the concentration limits for benzaldehyde and anthranilic acid to 50 percent and phenylacetic acid to 40 percent.

The commenter also requested that the concentration limit be increased to 85 percent for benzaldehyde. Benzaldehyde is used in clandestine operations to make the Schedule II controlled substances amphetamine, phenyl-2-propanone, and methamphetamine. It was once the chemical of choice in the synthesis of methamphetamine. Currently, over 95 percent of the clandestine laboratories seized in the United States are methamphetamine laboratories. Although the precursor favored in the clandestine synthesis of methamphetamine has changed, the demand for methamphetamine and increased controls of the current precursor of choice is likely to contribute to increased diversion of benzaldehyde if it is not carefully regulated.

DEA considered increasing the concentration limit for benzaldehyde from the proposed 35 percent to the suggested 85 percent. However, benzaldehyde may be found in simpler formulations than those alluded to in the comment, either within the represented industries or other sectors. Increasing the concentration limit will impact all sectors of the chemical industry, including those conducting commerce with the public. Increasing the concentration limit to 85 percent could result in unrestricted trade in exempt mixtures useful to traffickers. DEA determined that traffickers would seek simpler formulations containing benzaldehyde at the suggested concentration limit if there are no regulatory controls governing their distribution. DEA regards an 85 percent concentration limit in benzaldehyde to be significantly high; such mixtures are at risk of diversion.

DEA re-examined the concentration limit for benzaldehyde in light of the comment from the flavor and fragrance industries and decided that increasing the concentration limit to 50 percent will not significantly increase the risk of diversion. The comment stated that the types of formulations containing benzaldehyde are as complex as those containing anthranilic acid and phenylacetic acid. DEA has not identified benzaldehyde chemical mixtures as being used prominently outside the flavor and fragrance industry. A 50 percent concentration limit is consistent with objectives of this regulation.

DEA recognizes that benzaldehyde is important to the food flavoring industry and sometimes found in formulations at a higher concentration than other List I chemicals. However, DEA decided that an 85 percent concentration limit is too high, especially in light of the fact that it is a chemical used in the illicit manufacture of methamphetamine, the primary illicit controlled substance manufactured in the United States.

The comment also expressed concerns regarding the exemption application process (Section 1310.13) and claimed that the application process is an impractical means to exempt these formulations because hundreds or thousands of new formulations are produced monthly and formulations are altered continuously. In addition, the industry resists revealing their formulations as required in the application, because they are closely guarded trade secrets.

There should be no concern over the need to reapply for each change in formulation or revealing details about a formulation. The application process is written to alleviate the need to reapply every time a formulation changes. A group of mixtures may be exempted within a single application. Formulations having identical function and containing the same listed chemical(s) can be part of the same group. However, not all formulations are required to have the same non-listed chemicals to be included in a group. This approach will eliminate the need for persons to reapply every time a formulation changes.

DEA will allow for partial disclosure in the application process of a complex chemical formulation. DEA has learned that formulations used by the food and flavoring industries sometimes contain several chemicals at a concentration of less than one-percent. DEA will accept an application without the need to reveal each chemical present at less than one-percent. DEA will work with the applicant to obtain enough information to make a decision while minimizing the amount of detail necessary to process the application.

DEA notes that information designated as confidential or proprietary will be treated accordingly. The release of confidential business information that is protected from disclosure under Exemption 4 of the Freedom of Information Act, 5 U.S.C. 552(b)(4), is governed by section 310(c) of the CSA (21 U.S.C. 830(c)) and the Department of Justice procedures set forth in 28 CFR 16.7. DEA has a longstanding history of protecting such information from unauthorized disclosure.

12. Comment stating that mixtures of List II solvent chemicals are useful to traffickers regardless of the concentration of listed chemical: One comment pointed out how chemical mixtures containing List II solvent chemicals can be useful to traffickers regardless of the concentration. The List II solvent chemicals are acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene. They are referred to as solvent chemicals because they are liquids generally used to dissolve substances.

The comment argues that mixtures of these chemicals will have the same chemical properties that make the pure List II solvent chemicals desirable to traffickers. The reason for this is that different liquids are miscible (i.e. susceptible of being mixed) if they have similar chemical properties that are related to their behavior as solvents. The commenter stated that if they mix, the resultant blend must have chemical properties similar to the pure List II solvent chemical, otherwise, they would not mix in the first place. Therefore, the blend could possibly dissolve whatever the listed chemical could dissolve. Likewise, if the solvent properties of different liquids are dissimilar they may not mix when brought together.

A well-known example of this behavior is that of oil and water. The solvent properties for oil and water are different. Oil dissolves different substances than water. When brought in contact, they form separate layers. However, mixing water with vinegar, for example, causes the two liquids to blend as one. They have similar solvent properties. The resulting blend would be expected to dissolve whatever the water would dissolve.

The commenter stated that the same is true for the List II solvent chemicals. Mixing them with other liquids may cause separation or result in a single blend. If they blend, it means that the mixture has some liquid properties that are similar to the listed solvent chemical. However, the resultant blend is not exactly the same as the pure listed chemical.

DEA agrees with the comment in principle. However, the higher the concentration of listed chemical(s), the more likely it will be that the blend will more closely mimic the properties of the listed chemical(s). This means that not all mixtures containing List II chemical solvents are equally likely to be used in illicit laboratories. Thus, regulating all mixtures that contain any amount of a List II solvent chemical is unnecessary to reasonably prevent diversion. Further, solvent chemicals are mostly a concern because they are used in cocaine and heroin processing, which occurs outside the United States. Therefore, instead of regulating all chemical mixtures containing List II solvent chemicals, DEA will exempt all such domestic and import transactions containing the List II solvents acetone, ethyl ether, 2-butanone, and toluene from the definition of regulated transaction as discussed earlier. The List II chemical methyl isobutyl ketone is not included here because its transactions are already excluded. Because a chemical mixture regulated due to the presence of a List II solvent chemical is expected to mimic the solvent properties of the listed chemical, the threshold will be calculated based on the amount of the entire mixture and not just the amount of listed chemical in the mixture.

13. Comment stating that traffickers can use twenty-percent solutions of hydrochloric acid or sulfuric acid: One comment mentioned that both hydrochloric and sulfuric acids are used to isolate methamphetamine. For this purpose, a 20 percent solution of either is sufficient to carry out an illicit manufacturing operation.

In response, DEA notes that domestic and import transactions in these acids have been excluded from the definition of regulated transactions pursuant to 21 CFR 1310.08. Only transactions to designated countries identified in that section are defined as regulated transactions. Those provisions also apply to mixtures of these chemicals. DEA notes that acids dissolved in water, alcohol solutions, or other pure solvents, are not regarded as chemical mixtures. Therefore, DEA decided not to lower the concentration limit for these acids.

14. Comment stating that multifunctional formulations containing sulfuric acid should be an exempt category: One comment requested that formulations containing sulfuric acid should be exempt when used in industrial applications. DEA regards this category as too broad and, if enacted, will create a loophole for unscrupulous persons to traffic in mixtures of sulfuric acid that could be used in illicit laboratories. Therefore, DEA has determined that this category is inappropriate for exemption.

These types of mixtures, if not useful to traffickers, may be exempt pursuant to Section 1310.13 (i.e. the application process). Several such mixtures may be exempt as a group under a single application, provided the different formulations have the same basic function. DEA notes that domestic transactions in sulfuric acid and, therefore, its mixtures, are not regarded as regulated transactions pursuant to Section 1310.08(a). Section 1310.08(b) regulates only above threshold transactions to certain designated countries. In addition, if a person consumes a chemical mixture, then that person is an end user. End users are not regarded as regulated persons and are not subject to chemical regulatory controls.

15. Comment expressing concern that iodine concentration limit is high and does not capture mixtures being used by traffickers: One comment believes that the proposed rule does not adequately address the regulation of iodine. The DEA has decided to address iodine issues under separate rulemaking.

The comment points out that the most common method for the production of methamphetamine on the West Coast utilizes seven-percent iodine solution. The comment states that non-traditional customers purchasing large quantities of seven-percent iodine solution have inundated retailers in Oregon, Washington, California, and Louisiana. Another comment stated that clandestine laboratories often use either iodine crystals or a seven-percent iodine tincture as a source for iodine crystals.

Seven-percent iodine solution and tincture are regarded as chemical mixtures subject to this final rule but are a viable source of iodine crystals. Iodine crystals can be readily extracted from these chemical mixtures and used in the illicit manufacture of methamphetamine or amphetamine. DEA agrees that regulatory action is necessary to prevent the illicit use of iodine readily obtained from these sources.

At the time that the NPRM was being drafted, the DEA did not regard iodine chemical mixtures as an important source of iodine crystals. Since publication of the NPRM, the use of iodine chemical mixtures as a source for iodine crystals increased dramatically. The El Paso Intelligence Center (EPIC) maintains a database on clandestine laboratories seized by Federal, State, and local law enforcement agencies. Although the database does not account for all seizures in clandestine laboratories, it serves as an indicator of what is being used by traffickers.

In 1998, the year in which the NPRM was published, EPIC reported 10 incidences of iodine tincture out of 1,485 for all sources of diverted iodine found in illicit methamphetamine laboratories. In 1999, 2000, 2001, and 2002, the number of iodine tincture seizures compared to the number of all forms of diverted iodine reported by EPIC is 71 out of 2,888; 397 out of 3,432; 1,147 out of 4,734; and 1,619 out of 4,921, respectively. These statistics show that iodine tincture is a significant source of iodine crystals for the illicit manufacture of methamphetamine.

Based on the comments to the NPRM and the documented diversion of certain chemical mixtures containing iodine, the DEA determined that the proposed concentration limit for iodine is relatively high compared to the concentration found in chemical mixtures useful to traffickers. To address adequately the diversion of iodine, DEA must consider new approaches other than what was proposed. Therefore, the regulation of iodine chemical mixtures is being addressed in a separate NPRM. This will give persons an opportunity to comment on any approach DEA suggests.

16. Request for exemption of crime labs from quantitative analysis of mixtures: One comment stated that city and county laboratories in California perform qualitative analysis for only controlled substances. The commenter requested that local crime laboratories be exempt from requirements to analyze the contents of non-controlled substances or reporting of mixtures.

DEA has no role in determining such policy. How state and local crime laboratories handle their analysis is based on their own policy. Because this rulemaking does not impose mandatory testing, exemption is not necessary.

17. Request for exemption of adhesive intermediates under the category of paints/coatings: One comment questioned whether solutions that are intermediates for the manufacture of adhesives are exempt under the category of paints and coatings. These adhesive intermediates are formulated as a vehicle for further additions of chemical ingredients that will eventually form an adhesive. DEA determined that if these solvent mixtures contain listed chemicals above the concentration limit, they are regarded as regulated chemicals. They are not “fully formulated” as required to be exempt under the category of paints and coatings and, therefore, not automatically exempt.

DEA decided not to exempt all chemical mixtures that are used to form adhesives because that would include solvent systems containing listed chemicals in any concentration. Unscrupulous persons could then distribute solvent blends rich in List II chemicals to traffickers unchecked. Adhesive mixtures that contain listed chemicals are regarded as exempt when they are completely formulated and have less risk of diversion. If not exempt, distributions are regulated only if distributed at or above threshold quantities.

DEA does not impose recordkeeping or reporting requirements for listed chemicals that are consumed in a manufacturing process (21 CFR 1310.03(a)). If the blend is converted to an adhesive on-site, then transactions in it are not regulated and, because the listed chemical is consumed, recordkeeping and reporting requirements are not required. In addition, as stated previously, DEA is exempting, on an interim basis, domestic and import transactions of mixtures containing the List II solvent chemicals that are a concern to this interest.

18. Inks as part of the category of paints and coatings: One comment requested the inclusion of inks in the category of paints and coatings by changing the category to paints, coatings, and inks. The commenter expressed concerns that the public will not recognize inks as being within the category of paints and coatings.

DEA recognizes that inks may be overlooked within Section 1310.12(d)(2), which identifies the category of paints and coatings as being exempt chemical mixtures. It was the intention of DEA to have inks included in this category. The preamble of the original NPRM (63 FR 49510) states that completely formulated inks are included in this category.

DEA determined that adding inks as a new category in addition to the existing category of paints and coatings is not appropriate. Inks are already included within the category of coatings. This situation will be corrected by adding a sentence to section 1310.12(d)(3): “Included in this category are clear coats, topcoats, primers, varnishes, sealers, adhesives, lacquers, stains, shellacs, inks, and temporary protective coatings.” In this way, all products intended to be included in the category of paints and coatings will be apparent.

19. Request for allowance of a concentration variation of 2 percent absolute and 10 percent nominal: One comment suggested that DEA allow a plus or minus concentration range of 10 percent nominal and 2 percent absolute rather than require a new application for exemption for each and every mixture. This range is to reflect variation in raw material and inaccuracies in the manufacturing process.

The exemption application process already allows for a range of concentrations without the need to reapply, as long as this concentration range is specified in the approved application. Therefore, the suggested variation is not necessary to prevent the need for reapplication. (Please note, however, that any concentration greater than the established range for exemption would cause the mixture to be subject to the regulatory provisions of the CSA.)

For non-exempt mixtures, the concentration limit (as specified in the Table of Concentration Limits) is established as a maximum concentration of listed chemical that a chemical mixture may contain to be automatically exempt. Mixtures containing more than this established limit are regarded by DEA as regulated chemicals. Manufacturers that produce chemical mixtures having the listed chemical near the concentration limit are responsible for knowing whether the actual concentration exceeds the limit.

List I chemicals compose the largest number of listed chemicals, but only a few have been identified that are routinely used in chemical mixtures. Mixtures containing those List I chemicals are utilized by a small number of industries. DEA identified food flavoring manufacturers, fragrance manufacturers, and a segment of the dietary supplements industry as the main commercial sectors that utilize mixtures containing List I chemicals.

The food flavoring and fragrance manufacturing sectors handle most chemical mixtures containing List I chemicals being addressed in this rulemaking. The chemicals of concern to these interests, at the proposed concentration limits, are benzaldehyde, anthranilic acid, and phenylacetic acid. None of the remaining List I chemicals were mentioned in the comments, except those associated with some dietary supplements. The comments pertaining to dietary supplements containing Ephedra were addressed in a separate final rule (68 FR 23195, May 1, 2003).

Only one comment addressed issues relating to the List I chemicals benzaldehyde, anthranilic acid, and phenylacetic acid. This comment was submitted by an industry group representing both the Flavor and Extract Manufacturers Association of the United States and the Fragrance Materials Association of the United States (food flavoring and fragrance manufacturing sectors).

DEA originally proposed concentration limits of 35 percent for benzaldehyde, and 20 percent for anthranilic acid and phenylacetic acid. The concentration limit for benzaldehyde was proposed higher than the 20 percent proposed for most other precursor chemicals because DEA was aware that the food flavoring manufacturers used benzaldehyde in complex formulations not likely to be diverted. The comment from this interested party expressed the opinion that their formulations are not likely to be diverted even if the concentration limits for benzaldehyde, anthranilic acid, and phenylacetic acid are set at 85 percent, 50 percent, and 40 percent, respectively.

After a thorough review of the comments, DEA is finalizing concentration limits of 50 percent for benzaldehyde, 50 percent for anthranilic acid and 40 percent for phenylacetic acid. The DEA concluded that chemical mixtures containing lower concentrations of these chemicals do not present a significant risk of diversion. (For a discussion on what DEA considered in order to exempt this interest, see under Comments.)

This concentration limit is expected to exempt the majority of List I chemical mixtures identified by DEA. Most, if not all, mixtures in anthranilic acid and phenylacetic acid are expected to be exempt because available products are formulated whereby they are not useful to traffickers.

No comments were received concerning other List I chemicals being addressed in this rulemaking. Therefore, DEA concludes that the concentration limits proposed for the remaining List I chemicals are not a major concern to industry. Finalizing regulations based on the proposed concentration limits for these chemicals is not expected to increase significantly the number of new registrants. Chemical mixtures that do not qualify for automatic exemption can be considered for exemption based on the application process (21 CFR 1310.13; finalized at 68 FR 23195).

The List II chemicals being addressed in this rulemaking are acetone, ethyl ether, 2-butanone (methyl ethyl ketone), methyl isobutyl ketone, toluene, acetic anhydride, benzyl chloride, hydrochloric acid, sulfuric acid, potassium permanganate, and iodine. The first five chemicals are used as solvents and, based on the comments, are responsible for the majority of chemical mixtures addressed by this rulemaking. The chemicals acetic anhydride and benzyl chloride have limited use as solvents and have not been the subject of any comment. The remaining List II chemicals are reagents. DEA received comments on iodine, hydrochloric acid, and sulfuric acid. Iodine is being addressed under a separate rulemaking. The types of mixtures containing the remaining chemicals are limited and will not significantly add to the number of newly regulated transactions. There were no comments received for mixtures containing potassium permanganate.

The List II solvent chemicals acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene are mostly a concern to DEA because of their use in the illicit production of cocaine. Suspicious shipments of mixtures containing List II solvents to cocaine producing areas have been identified by DEA. Additionally, diversion of chemical mixtures for the illicit production of cocaine in foreign countries has been established by DEA.

DEA continually monitors the chemical composition of seized cocaine hydrochloride samples. The DEA laboratory system is able to detect the trace quantities of solvents present in seized cocaine hydrochloride, which is a “street form” of cocaine. Such solvents are utilized in the final stage of cocaine production whereby cocaine base is converted to cocaine hydrochloride. Recent data indicates that a broader range of solvents and solvent combinations are being used in cocaine processing. This laboratory data supports intelligence information that chemical mixtures are used in the illicit production of cocaine hydrochloride.

DEA is aware of chemical mixtures containing List II solvent chemicals and solid material. The solids may be dissolved, suspended, emulsified, or in some way formulated into the liquid component. These mixtures are used by different industries to formulate silicones, paints, adhesives, polymers, and various related materials. DEA realizes that, in general, mixtures formulated with solids will not likely be used “as is” in the production of a controlled substance, including cocaine. However, recovery of the listed chemical ( e.g. , distillation) may allow the mixture to be used by traffickers. Traffickers, especially those involved in the illicit production of cocaine, are known to recycle solvents by distillation.

After considering all comments, DEA has decided to exempt domestic and import transactions of all mixtures containing acetone, ethyl ether, 2-butanone, and toluene, unless they contain other listed chemicals above the concentration limit.

Since the NPRM did not discuss this exemption for domestic and import transactions, the public did not have the opportunity to comment on the exclusion of these transactions from the definition of a regulated transaction. To avoid unnecessary burdens on affected companies during the pendency of proceedings in this matter, DEA has decided to implement this exemption on an interim basis, with a request for comments. DEA will then publish a final rulemaking regarding this exemption after a review of such comments. (See Section V for further discussion of this interim exemption). Because of their identified potential for use in illicit cocaine production, as discussed above, this rulemaking will not automatically exempt by regulation export transactions in these mixtures.

Distributions of hydrochloric acid (except domestic distributions of anhydrous hydrogen chloride) and sulfuric acid are regulated only as exports to certain geographical regions. Domestic transactions in sulfuric acid and hydrochloric acid (except anhydrous hydrogen chloride) are excluded from the recordkeeping and reporting requirements of the CSA pursuant to 21 CFR 1310.08(a). Therefore, their chemical mixtures are also excluded.

Anhydrous hydrogen chloride, which is regulated domestically, has not been identified as part of any chemical mixture. These chemicals are used in synthetic chemistry and to stabilize materials in solution, both in legitimate industries and illicit operations. Formulations of sulfuric acid have been identified that are used in papermaking, treatment of industrial water cooling systems, and for treating oil wells.

Although one comment informed DEA that chemical mixtures at the proposed concentration limit of 20 percent for hydrochloric acid could be used in the illicit production of methamphetamine, DEA is not lowering this concentration limit. Methamphetamine production is mostly a domestic concern while domestic transactions in hydrochloric acid are not regulated.

DEA regards any concentration of hydrogen chloride dissolved in an inert carrier, such as water or alcohol, as a regulated chemical under the heading of hydrochloric acid. The 20 percent concentration limit pertains to hydrochloric acid mixed with an additional non-listed chemical. The concentration limit is determined by taking the weight of hydrogen chloride in the mixture and does not include the weight of the carrier solvent.

DEA received only one comment on mixtures containing sulfuric acid. Only exports to South American countries and Panama above threshold are regulated transactions. The comment did not state if their mixtures are for export to these specific regions. The mixtures, as described in the comment, may be suitable for a group exemption by the application process. DEA concludes that newly regulated mixtures containing hydrochloric acid or sulfuric acid will be minimal at the concentration limits proposed.

Iodine and potassium permanganate are List II chemicals that function as reagents. Reagents are chemicals that cause, or help to cause, a chemical reaction to occur. Iodine and potassium permanganate are important in methamphetamine and cocaine production, respectively.

Iodine is found in a variety of formulations. Strong iodine solution and strong iodine tincture contain seven-percent iodine and are regarded as chemical mixtures. DEA proposed a 20 percent concentration limit for iodine but was informed, by comment, that seven-percent solutions are being diverted for their iodine content. In addition, DEA has documented the use of seven-percent iodine mixtures as a source for iodine crystals in clandestine methamphetamine production. Chemical mixtures containing iodine are being addressed under a separate NPRM to allow adequate comment on the regulation of iodine desirable to traffickers.

DEA has not identified mixtures of potassium permanganate being diverted for illicit drug production or being formulated in a concentration greater than the proposed 15 percent. DEA has determined that legitimately produced chemical mixtures containing less than 15 percent potassium permanganate do not have a significant potential for diversion. Therefore, the concentration limit for potassium permanganate was proposed to be 15 percent. No comments were received to suggest that there are any chemical mixtures containing greater than 15 percent potassium permanganate.

The List II chemicals acetic anhydride and benzyl chloride may be regarded as precursor chemicals. Precursors are substances that are chemically modified to become part of the final product. Acetic anhydride is important in the production of heroin while benzyl chloride can be used to make methamphetamine. These chemicals also have limited use as solvents. No comments were received regarding these chemicals and DEA has not identified them as being routinely used in chemical mixtures. The concentration limit for acetic anhydride and benzyl chloride was proposed to be 20 percent and is being finalized at the 20 percent limit.

A chemical mixture that is regulated because it contains a List I chemical will be treated as a List I chemical. Transactions that meet or exceed the cumulative monthly threshold for the listed chemical shall be regulated transactions. Persons interested in handling a regulated mixture must comply with the following:

Registration. Any person who manufactures or distributes a regulated mixture, or proposes to engage in the manufacture or distribution of a regulated mixture containing a List I chemical, shall obtain a registration pursuant to the CSA (21 U.S.C. 822). Regulations describing registration for list I chemical handlers are set forth in 21 CFR part 1309.

Separate registration is required for retail distribution, non-retail distribution, importing, and exporting. A separate registration is required for each principal place of business at one general physical location where List I chemicals are distributed, imported, or exported by a person (21 CFR 1309.23). Effective February 14, 2005, any person distributing, importing, or exporting any amount of a regulated mixture will become subject to the registration requirement under the CSA. DEA recognizes, however, that it is not possible for persons who are subject to the registration requirement to immediately complete and submit an application for registration and for DEA to immediately issue registrations for those activities. Therefore, in order to allow continued legitimate commerce in regulated mixtures, DEA is establishing in 21 CFR 1310.09 a temporary exemption from the registration requirement for persons desiring to engage in activities with regulated mixtures that are subject to registration requirements, provided that DEA receives a properly completed application for registration on or before February 14, 2005. The temporary exemption for such persons will remain in effect until DEA takes final action on their application for registration.

Any person whose application for exemption is subsequently rejected by DEA must obtain a registration with DEA. A temporary exemption from the registration requirement will also be provided for these persons, if DEA receives a properly completed application for registration on or before 30 days following the date of official DEA notification that the application for exemption has not been approved. The temporary exemption for such persons will remain in effect until DEA takes final action on their registration application.

The temporary exemption applies solely to the registration requirement; all other chemical control requirements, including recordkeeping and reporting, are effective on January 14, 2005. Therefore, all transactions of the chemical mixture will be regulated, if at or above threshold, while an application for registration or exemption is pending. This is necessary because not regulating these transactions could result in increased diversion of chemicals desirable to drug traffickers.

Additionally, the temporary exemption does not suspend applicable federal criminal laws relating to the regulated mixture, nor does it supersede state or local laws or regulations. All handlers of a regulated mixture must comply with applicable state and local requirements in addition to the CSA regulatory controls.

Records and Reports. The CSA (21 U.S.C. 830) requires certain records to be kept and reports to be made involving listed chemicals. Regulations describing recordkeeping and reporting requirements are set forth in 21 CFR 1310. A record must be made and maintained for two years after the date of a regulated transaction involving a List I chemical. Only a distribution, receipt, sale, importation, or exportation of a regulated mixture at or above the established threshold is a regulated transaction (21 CFR 1300.02(b)(28)).

Each regulated bulk manufacturer of a regulated mixture shall submit manufacturing, inventory and use data on an annual basis (21 CFR 1310.05(d)). Bulk manufacturers producing the mixture solely for internal consumption, e.g. , formulating a non-regulated mixture, are not required to submit this information. Existing standard industry reports containing the required information are acceptable, provided the information is readily retrievable from the report.

21 CFR 1310.05 requires that each regulated person shall report to DEA any regulated transaction involving an extraordinary quantity, an uncommon method of payment or delivery, or any other circumstance that causes the regulated person to believe that the listed chemical will be used in violation of the CSA.

Security: All applicants and registrants shall provide effective controls against theft and diversion of chemicals as described in 21 CFR 1309.71.

Imports/Exports. All import/exports and brokered transactions of regulated mixtures shall comply with the CSA (21 U.S.C. 957 and 971). Regulations for importation and exportation of List I chemicals are described in 21 CFR 1313. Separate registration is necessary for each activity (21 CFR 1309.22).

Administrative Inspection. Places, including factories, warehouses, or other establishments and conveyances, where regulated persons may lawfully hold, manufacture, or distribute, dispense, administer, or otherwise dispose of a regulated mixture or where records relating to those activities are maintained, are controlled premises as defined in 21 CFR 1316.02(c). The CSA (21 U.S.C. 880) allows for administrative inspections of these controlled premises as provided in 21 CFR 1316 Subpart A.

A chemical mixture that is regulated because it contains a List II chemical will be treated as a List II chemical. Transactions that meet or exceed the cumulative monthly threshold for the listed chemical shall be regulated transactions. The regulatory requirements for regulated chemical mixtures containing List II chemicals are the same as for regulated chemical mixtures containing List I chemicals, except that registration requirements do not apply. Therefore, the same requirements for records and reports, imports/exports (except that pertaining to 21 U.S.C. 957), and administrative inspection, as outlined above, apply to handlers of List II regulated chemical mixtures.

Persons who submit an application for exemption (Section 1310.13) and whose application is pending or subsequently rejected by DEA must comply with all chemical control requirements, including recordkeeping and reporting, effective on January 14, 2005. Therefore, all transactions of the chemical mixture will be regulated, if at or above threshold, while an application for exemption is pending or awaiting correction. This is necessary because not regulating these transactions could result in increased diversion of chemicals desirable to drug traffickers.

This rulemaking will affect only persons who manufacture, distribute, import, or export chemical mixtures containing listed chemicals that DEA determined are useful to traffickers for the illicit production of controlled substances. DEA received comments on only a few specific listed chemicals. Therefore, DEA concludes that the concentration limits proposed in the NPRM for the remaining majority of listed chemicals were acceptable to chemical handlers.

The goal of this rulemaking is to deny traffickers unregulated access to useful chemical mixtures while minimizing the burden on legitimate industry. This final rule seeks to target those chemical mixtures having the greatest potential for illicit use.

Comments to the NPRM informed DEA of ways to provide additional regulatory relief to the affected industry. DEA determined that some of these suggested changes would not compromise law enforcement objectives. Based on this new information, this final rule exempts the vast majority of potentially regulated chemical mixtures without compromising the needs of law enforcement. Certain chemical mixtures that are a concern to the paints and coatings industries, the food flavoring industries, fragrance manufacturers, the silicone industries, ink manufacturers, and others are being identified by regulation as exempt from CSA regulatory controls. Because DEA is able to adjust some of its proposed regulations based on information received in the comments, those persons who trade in chemical mixtures containing listed chemicals should be minimally impacted or not affected at all by this rulemaking.

Of those persons whose mixtures are regulated, only those who distribute above the threshold for the listed chemical(s) are regulated transactions (21 U.S.C. 802(39)(A)). A threshold is a quantity of chemical, as specified in 21 CFR 1310.04. Distributions at or above the specified threshold amount are regulated transactions. Thresholds are determined by totaling the amount of chemical in all distributions to the same person within a calendar month.

Persons who obtain a regulated chemical but do not distribute the chemical are end users. End users are not subject to CSA chemical regulatory control provisions such as registration or recordkeeping requirements. Some examples of end users are those who chemically react the listed chemical and change it into a non-listed chemical or formulate it into an exempt chemical mixture.

The CSA authorizes DEA, pursuant to 21 U.S.C. 802(39)(A)(iii), to remove certain transactions in listed chemicals from the definition of a regulated transaction that are unnecessary for enforcement of the CSA. Based on comments to the Federal Register proposed rule “Exemption of Chemical Mixtures” (63 FR 49506), DEA identified certain transactions in mixtures of acetone, ethyl ether, 2-butanone, and toluene that are unlikely sources for diversion. DEA was informed that tens of thousands of domestic transactions in these chemical mixtures occur annually. DEA has determined that the regulation of domestic and import transactions in mixtures containing the chemicals acetone, ethyl ether, 2-butanone, and toluene are unnecessary for enforcement of the CSA and should be removed from the definition of a regulated transaction.

Since the NPRM to this rulemaking did not discuss this exemption, the public did not have the opportunity to comment on the exclusion of these transactions from the definition of a regulated transaction. However, DEA has determined that good cause exists under the Administrative Procedure Act (5 U.S.C. 553 et seq. ) (APA) to forgo a notice of proposed rulemaking on these exemptions. The APA states that an agency may forego a Notice of Proposed Rulemaking if it is impracticable, unnecessary, or contrary to the public interest.

If this rulemaking did not exempt these transactions upon publication, DEA would need to establish the exemption by notice and comment. If exemption of these transactions were delayed, affected parties would need to implement a system of recordkeeping and reporting for all these regulated transactions. This would involve several thousand transactions annually in chemical mixtures that otherwise may not be regulated if the exemptions became effective immediately.

If a proposed rule were published in the Federal Register to exclude these transactions from the definition of regulated transactions, each affected entity might find it necessary to establish compliance procedures although the requirement might prove to be only temporary. To avoid unnecessary burdens on affected companies during the pendency of proceedings in this matter, DEA has decided to include as part of this rulemaking an interim rule, with request for comment, that removes these transactions from the definition of a regulated transaction.

DEA, pursuant to 21 U.S.C. 802(39)(A)(v), is finalizing provisions to identify exempt chemical mixtures. The chemical mixtures being addressed are those that contain one or more of the 27 listed chemicals given in the Table of Concentration Limits. A Final Rule establishing provisions that exempt chemical mixtures containing ephedrine, N-methylephedrine, N-methylpseudoephedrine, norpseudoephedrine, phenylpropanolamine, and pseudoephedrine was published in a separate rulemaking (68 FR 23195, May 1, 2003).

Provisions to exempt chemical mixtures in the listed chemicals gamma-butyrolactone, red phosphorus, white phosphorus, and hypophosphorous acid (and its salts) are not being finalized at this time. These chemicals were not regulated when the NPRM “Exemption of Chemical Mixtures” (63 FR 49506) was published. Therefore, regulations addressing their mixtures were not proposed. DEA is treating mixtures containing these listed chemicals as exempt until promulgation of regulations that identify exempt chemical mixtures in these chemicals.

To identify exempt chemical mixtures, a concentration limit is placed on each chemical, or combination of chemicals, which determines the mixture's regulatory status. Categories of exempt chemical mixtures are also defined. In addition, DEA can determine that a mixture is exempt via an application process (Section 1310.13).

Comments to the NPRM informed DEA that a substantial number of chemical mixtures that are not useful to traffickers could potentially be regulated if the proposed rule were finalized as written. DEA determined that the regulation of these chemical mixtures is not necessary for enforcement of the CSA. Therefore, DEA decided to exempt these chemical mixtures from regulatory controls by identifying new concentration limits and exemption of certain types of transactions.

DEA notes that the List II solvent chemicals acetone, ethyl ether, 2-butanone, methyl isobutyl ketone, and toluene contribute to the largest number of potentially regulated chemical mixtures of List II chemicals. To limit the number of potentially regulated chemical mixtures to those necessary for enforcement of the CSA, DEA decided to define all domestic and import transactions of mixtures in these List II solvent chemicals as exempt transactions. This exemption applies to all persons that handle these chemical mixtures and not only to those who are represented in the comments. Although effective upon publication of this final rule, DEA is accepting post- promulgation comments regarding this regulation.

The regulated industry only expressed concerns through comments to the NPRM with respect to three List I chemicals, anthranilic acid, benzaldehyde, and phenylacetic acid. The food flavoring and fragrance industries use these chemicals, as discussed by a single comment representing both the Flavor and Extract Manufacturers Association of the United States, and the Fragrance Materials Association of the United States. No other List I chemicals were addressed in the comments, therefore, DEA concludes that no other List I chemicals are a concern to handlers of chemical mixtures at the concentration limits proposed.

The concentration limits are being increased for the List I chemicals anthranilic acid and phenylacetic acid to the levels suggested by comment. Based on the comment, this increase is expected to exempt all chemical mixtures in anthranilic acid and phenylacetic acid identified by DEA that are not at substantial risk of diversion. However, DEA decided that traffickers could use chemical mixtures containing over 50 percent benzaldehyde, although a comment suggested that even higher concentrations would not be diverted. Therefore, DEA increased the concentration limit of benzaldehyde from 35 percent to 50 percent to regulate only those chemical mixtures identified by DEA as necessary for enforcement of the CSA. Therefore, some commercially available chemical mixtures in benzaldehyde are expected to be regulated.

Benzaldehyde is a chemical used in food flavorings. The comment states that the number of persons that manufacture or use flavors is 97. Provided the number of persons that will be newly registered to handle chemical mixtures in benzaldehyde is 97, the initial total registration cost would be $57,715, based on the current new application fee of $595.00 for each company. The total annual re-registration cost, based on the present renewal fee of $477.00 for each company, would be $46,269. In addition to the specific dollar cost, the registration requirement would require an annual reporting burden of approximately 48.5 hours. This is based on the estimated one-half hour required to complete and submit an application for registration or re-registration.

The comment stated that 66 members of the commenting industry association manufacture or sell fragrances. Assuming that all persons involved with the manufacture of food flavorings or fragrances (163) must register for each of the three chemicals, the combined current estimated cost for all new application fees is $290,955.

DEA adopted those suggestions that will not adversely impact enforcement of the CSA while eliminating the greatest number of transactions in List I and List II chemical mixtures identified by DEA. Only three List I chemicals and four List II chemicals contribute to the largest number of potential newly regulated chemical mixtures.

The remaining listed chemicals addressed in the rulemaking were not addressed in the comments and make up only a small number of new potentially regulated chemical mixtures. DEA does not anticipate a significant number of regulated chemical mixtures due to the remaining listed chemicals. For those chemical mixtures that fall within the regulatory parameters, the manufacturer can obtain exempt status for a chemical mixture by the application process. Once a chemical mixture has been granted exempt status by application, all down-stream activities in that unaltered mixture are exempt.

Therefore, in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Deputy Administrator has reviewed this regulation and by approving it certifies that this regulation will not have a significant economic impact upon a substantial number of small entities.

This regulation has been drafted and reviewed in accordance with Executive Order 12866, Section 1(b), Principles of Regulation. DEA has determined that this rule is a “significant regulatory action” under Executive Order 12866, Section 3(f), Regulatory Planning and Review, and accordingly this rule has been reviewed by the Office of Management and Budget.

This regulation meets the applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988.

This rulemaking does not preempt or modify any provision of state law; nor does it impose enforcement responsibilities on any state; nor does it diminish the power of any state to enforce its own laws. Accordingly, this rulemaking does not have federalism implications warranting the application of Executive Order 13132.

This rule will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $114 million or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

This Final Rule requires that persons handling nonexempt chemical mixtures containing a List I chemical must register with DEA to handle the regulated mixture. Persons will register using DEA Form 510 “Application for Registration under Domestic Chemical Diversion Control Act of 1993” addressed in OMB information collection 1117-0031. As it is not possible for DEA to determine the number of persons whose chemical mixtures might be exempted from regulation by one of the three criteria established for exempting such mixtures, it is not possible for DEA to quantify at this time the number of persons affected by the requirement of registration. As information regarding the number of persons registering with DEA due to this rule becomes available, DEA will adjust its collection of information accordingly.

The PBGC's regulations prescribe actuarial assumptions—including interest assumptions—for valuing and paying plan benefits of terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974. The interest assumptions are intended to reflect current conditions in the financial and annuity markets.

Three sets of interest assumptions are prescribed: (1) A set for the valuation of benefits for allocation purposes under section 4044 (found in Appendix B to part 4044), (2) a set for the PBGC to use to determine whether a benefit is payable as a lump sum and to determine lump-sum amounts to be paid by the PBGC (found in Appendix B to part 4022), and (3) a set for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using the PBGC's historical methodology (found in Appendix C to part 4022).

Accordingly, this amendment (1) adds to Appendix B to part 4044 the interest assumptions for valuing benefits for allocation purposes in plans with valuation dates during January 2005, (2) adds to Appendix B to part 4022 the interest assumptions for the PBGC to use for its own lump-sum payments in plans with valuation dates during January 2005, and (3) adds to Appendix C to part 4022 the interest assumptions for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using the PBGC's historical methodology for valuation dates during January 2005.

For valuation of benefits for allocation purposes, the interest assumptions that the PBGC will use (set forth in Appendix B to part 4044) will be 4.10 percent for the first 20 years following the valuation date and 4.75 percent thereafter. These interest assumptions (in comparison to those in effect for December 2004) represent an increase of 0.30 percent for the first 20 years following the valuation date and a decrease of 0.25 percent for all years thereafter.

The interest assumptions that the PBGC will use for its own lump-sum payments (set forth in Appendix B to part 4022) will be 3.00 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. These interest assumptions represent an increase (from those in effect for December 2004) of 0.25 percent for the period during which a benefit is in pay status and are otherwise unchanged.

For private-sector payments, the interest assumptions (set forth in Appendix C to part 4022) will be the same as those used by the PBGC for determining and paying lump sums (set forth in Appendix B to part 4022).

The PBGC has determined that notice and public comment on this amendment are impracticable and contrary to the public interest. This finding is based on the need to determine and issue new interest assumptions promptly so that the assumptions can reflect, as accurately as possible, current market conditions.

Because of the need to provide immediate guidance for the valuation and payment of benefits in plans with valuation dates during January 2005, the PBGC finds that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication.

The PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this amendment, the Regulatory Flexibility Act of 1980 does not apply. See 5 U.S.C. 601(2).

On October 21, 2004, we published a notice of proposed rulemaking (NPRM) entitled Drawbridge Operation Regulation; Mississippi River, Iowa and Illinois in the Federal Register (69 FR 61770). We received no comment letters on the proposed rule. No public meeting was requested, and none was held.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective in less than 30 days after publication in the Federal Register . This drawbridge requires critical repairs and annual maintenance that necessitate it to remain in the closed-to-navigation position for 89 consecutive days. Navigation on the waterway consists primarily of commercial tows and recreational watercraft that will not be significantly impacted due to the reduced navigation in winter months. Thus, it is in the public's interest to complete these repairs during the winter months. To keep the closure within the primary winter months this rule must go into effect by December 15, 2004. Additionally, the closure dates were included in the NPRM, and no comments were received objecting to the dates.

On August 12, 2004, the Department of Army, Rock Island Arsenal, requested a temporary change to the operation of the Rock Island Railroad & Highway Drawbridge across the Upper Mississippi River, Mile 482.9, at Rock Island, Illinois to allow the drawbridge to remain in the closed-to-navigation position for 89 consecutive days for critical repairs and annual maintenance. Navigation on the waterway consists primarily of commercial tows and recreational watercraft and will not be significantly impacted due to the reduced navigation in winter months. Presently, the draw opens on signal for passage of river traffic. The Rock Island Arsenal requested the drawbridge be permitted to remain closed-to-navigation from 7 a.m., December 15, 2004, until 8 a.m., March 15, 2005.

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

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

The Coast Guard expects that this temporary change to operation of the Rock Island Railroad & Highway Drawbridge will have minimal economic impact on commercial traffic operating on the Upper Mississippi River. This temporary change has been written in such a manner as to allow for minimal interruption of the drawbridge's regular operation.

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

This proposed rule will have a negligible impact on vessel traffic. The primary users of the Upper Mississippi River in Rock Island, Illinois are commercial towboat operators. With the onset of winter conditions most activity on the Upper Mississippi River is curtailed and there are few, if any, significant navigation demands for opening the draw span.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-800-REG-FAIR (1-800-734-3247).

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

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

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

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

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

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

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

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

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Commandant Instruction M16475.1D, which guides the Coast Guard in complying with National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (32)(e) of the Instruction, from further environmental documentation.

Paragraph (32)(e) excludes the promulgation of operating regulations or procedures for drawbridges from the environmental documentation requirements of the National Environmental Policy Act (NEPA). Since this regulation would alter the normal operating conditions of the drawbridge, it falls within this exclusion. A “Categorical Exclusion Determination” is available in the docket for inspection or copying where indicated under ADDRESSES .

NARA published a proposed rule on September 17, 2004, at 69 FR 56015, for a 60-day public comment period. We received two comments, both from Federal agencies. One comment expressed no concerns about the proposed rule. The second comment supported the changes outlined in the proposed rule. Therefore, we are making no changes in this final rule.

This final rule is not a significant regulatory action for the purposes of Executive Order 12866 and has been reviewed by the Office of Management and Budget (OMB). As required by the Regulatory Flexibility Act, it is hereby certified that this final rule will not have a significant impact on a substantial number of small entities because this rule applies to Federal agencies. This final rule does not have any federalism implications.

Under the formula mandated by 38 U.S.C. 3015(h), the Secretary must increase the full-time rates of basic educational assistance payable under the Montgomery GI Bill—Active Duty (MGIB) program each fiscal year. For Fiscal Year (FY) 2005 the increase is 2%, which is the percentage by which the total of the monthly Consumer Price Index-W for July 1, 2003, through June 30, 2004, exceeds the total of the monthly Consumer Price Index-W for July 1, 2002, through June 30, 2003. The Veterans Benefits Act of 2003 amended 38 U.S.C. 3015(h) to provide that during FY 2005 through FY 2013, the Secretary must round down the increased rate to the next lower whole dollar. The full-time basic educational assistance rates in this document at 38 CFR 21.7136(b)(1), (c)(1), and 38 CFR 21.7137(a)(1) are rounded down to the nearest dollar.

It should be noted that 2% increase does not affect all educational assistance payable under the MGIB. The 2% increase applies only to the basic educational assistance rate. The increase does not apply to additional amounts payable by the Secretary of Defense to individuals with skills or a specialty in which there is a critical shortage of personnel (so-called “kickers”). Veterans who previously had eligibility under the Veterans’ Educational Assistance program (Vietnam Era GI Bill) receive monthly payments that are in part based upon basic educational assistance and in part based upon the rates payable under the Vietnam Era GI Bill. Only that portion attributable to basic educational assistance is increased. In addition, the increase does not apply to additional amounts payable for dependents.

38 U.S.C. 3015(a) and (b) require that the Department of Veterans Affairs (VA) pay part-time students at appropriately reduced rates. Since the first student became eligible for assistance under the MGIB in 1985, VA has paid three-quarter-time students and one-half-time students at 75% and 50% of the full-time institutional rate, respectively. Students pursuing a program of education at less than one-half but more than one-quarter time have had their payments limited to 50% or less of the full-time institutional rate. Similarly, students pursuing a program of education at one-quarter time or less have had their payments limited to 25% or less of the full-time institutional rate. Changes are made consistent with the authority and formula described in this paragraph.

In addition, since 38 U.S.C. 3032(c) requires that monthly rates payable to veterans in apprenticeship or other on-the-job training must be set at a given percentage of the full-time rate, the apprenticeship or on-the-job training rates have been accordingly increased effective October 1, 2004.

The changes set forth in this final rule are effective from the date of publication, but the changes in the rates are applied in accordance with the applicable statutory provisions discussed above. Thus, the Department of Veterans Affairs began paying the increased rates for training pursued after September 30, 2004.

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

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

The initial and final regulatory flexibility analyses requirements of sections 603 and 604 of the Regulatory Flexibility Act, 5 U.S.C. 601-612, are not applicable to this rule, because a notice of proposed rulemaking is not required for this rule. Even so the Secretary of Veterans Affairs hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act. This final rule directly affects only individuals and does not directly affect small entities. Therefore, this final rule is also exempt pursuant to 5 U.S.C. 605(b) from the initial and final regulatory flexibility analyses requirements of sections 603 and 604.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more (adjusted annually for inflation) in any given year. This rule would have no such effect on State, local, or tribal governments, or the private sector.

The Catalog of Federal Domestic Assistance numbers for the program affected by this final rule is 64.124.

Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.

When submitting comments, remember to:

1. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

2. Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

3. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

4. Describe any assumptions and provide any technical information and/or data that you used.

5. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

6. Provide specific examples to illustrate your concerns, and suggest alternatives.

7. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

8. Make sure to submit your comments by the comment period deadline identified.

Do not submit this information to EPA through regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

EPA is taking direct final action to approve the delegation of certain NESHAPs to LDEQ. With this delegation, LDEQ has the primary responsibility to implement and enforce the delegated standards.

Section 112(l) of the CAA and 40 CFR part 63, Subpart E, authorizes EPA to delegate authority to any state or local agency which submits adequate regulatory procedures for implementation and enforcement of emission standards for hazardous air pollutants. The hazardous air pollutant standards are codified at 40 CFR part 63.

EPA previously approved LDEQ's program for the delegation of certain NESHAP standards in 40 CFR part 63 on March 26, 2004 (69 FR 15687), Section 112(l) of the CAA enables EPA to approve State air toxics programs or rules to operate in place of the Federal air toxics program or rules. 40 CFR part 63, Subpart E (Subpart E) governs EPA's approval of State rules or programs under Section 112(l).

EPA will approve an air toxics program if we find that:

(1) The State program is “no less stringent” than the corresponding Federal program or rule;

(2) The State has adequate authority and resources to implement the program;

(3) The schedule for implementation and compliance is sufficiently expeditious; and

(4) The program otherwise complies with Federal guidance.

In order to obtain approval of its program to implement and enforce Federal section 112 rules as promulgated without changes (straight delegation), only the criteria of 40 CFR 63.91(d) must be met. 40 CFR 63.91(d)(3) provides that interim or final Title V program approval will satisfy the criteria of 40 CFR 63.91(d) for part 70 sources.

As part of its Title V submission, LDEQ stated that it intended to use the mechanism of incorporation by reference to adopt unchanged Federal section 112 into its regulations. This applied to both existing and future standards as they applied to part 70 sources. 59 FR 43797 (August 25, 1994) and 60 FR 17750 (April 7, 1995). On September 12, 1995, EPA promulgated final full approval of the State's operating permits program effective October 12, 1995. 60 FR 42296. Under 40 CFR 63.91(d)(2), once a state has satisfied up-front approval criteria, it needs only to reference the previous demonstration and reaffirm that it still meets the criteria for any subsequent submittals. LDEQ has affirmed that it still meets the up-front approval criteria.

In addition, EPA stated in Section XIII of the March 26, 2004, delegation (69 FR 15687) that LDEQ will only need to send a letter of request to EPA Region 6 for future NESHAP delegations where LDEQ has adopted the part 63 regulations into State rules through incorporation by reference. The letter must reference the previous up-front approval demonstration and reaffirm that it still meets the up-front approval criteria. EPA will respond in writing to the request stating that the delegation request is either granted or denied. If the request is approved, the effective date of the delegation will be the date of our response letter to LDEQ. EPA received LDEQ's delegation request letter on September 21, 2004, and responded by letter on October 18, 2004, that the request for delegation was approved.

EPA received requests to update the NESHAP delegation on September 21, 2004. LDEQ requested the EPA to update the delegation of authority for the following:

A. NESHAPs (40 CFR part 63 standards) through July 1, 2003.

LDEQ's request was for delegation of certain NESHAP for all sources (both part 70 and non-part 70 sources). The request includes revisions of the NESHAP standards adopted unchanged into Louisiana Administrative Code (LAC) Title 33:III, Chapter 51, Subchapter C, section 5122—Incorporation by Reference of 40 CFR part 63 as it Applies to Major Sources; and Chapter 53, Subchapter B, section 5311—Incorporation by Reference of 40 CFR part 63 as it Applies to Area Sources. For the part 63 NESHAPs, this includes the NESHAPs set forth in Table 1 below. The effective date of the Federal delegation for the part 63 standards below is the date of EPA's response to LDEQ's delegation request letter.

EPA cannot delegate to a State any of the Category II Subpart A authorities set forth in 40 CFR 63.91(g)(2). These include the following provisions: § 63.6(g), Approval of Alternative Non-Opacity Standards; § 63.6(h)(9), Approval of Alternative Opacity Standards; § 63.7(e)(2)(ii) and (f), Approval of Major Alternatives to Test Methods; § 63.8(f), Approval of Major Alternatives to Monitoring; and § 63.10(f), Approval of Major Alternatives to Recordkeeping and Reporting. In addition, some MACT standards have certain provisions that cannot be delegated to the States [ e.g. 40 CFR 63.106(b)]. 1 Therefore, any MACT standard that EPA is delegating to LDEQ that provides that certain authorities cannot be delegated are retained by EPA and not delegated. Furthermore, no authorities are delegated that require rulemaking in the Federal Register to implement, or where Federal overview is the only way to ensure national consistency in the application of the standards or requirements of CAA Section 112. Finally, Section 112(r), the accidental release program authority, is not being delegated by this approval.

All of the inquiries and requests concerning implementation and enforcement of the excluded standards in the State of Louisiana should be directed to the EPA Region 6 Office.

In addition, this delegation to LDEQ to implement and enforce certain NESHAPs does not extend to sources or activities located in Indian country, as defined in 18 U.S.C. 1151. Under this definition, EPA treats as reservations, trust lands validly set aside for the use of a Tribe even if the trust lands have not been formally designated as a reservation. Consistent with previous federal program approvals or delegations, EPA will continue to implement the NESHAPs in Indian country because LDEQ has not adequately demonstrated its authority over sources and activities located within the exterior boundaries of Indian reservations and other areas in Indian country.

In approving this delegation, LDEQ will obtain concurrence from EPA on any matter involving the interpretation of section 112 of the CAA or 40 CFR part 63 to the extent that implementation, administration, or enforcement of these sections have not been covered by EPA determinations or guidance.

We retain the right, as provided by CAA section 112(l)(7), to enforce any applicable emission standard or requirement under Section 112. EPA also has the authority to make certain decisions under the General Provisions (Subpart A) of part 63. We are granting LDEQ some of these authorities, and retaining others, as explained in Sections VI and VII above. In addition, EPA may review and disapprove of State determinations and subsequently require corrections. ( See 40 CFR 63.91(g) and 65 FR 55810, 55823, September 14, 2000.)

Furthermore, we retain any authority in an individual emission standard that may not be delegated according to provisions of the standard. 2 Also, listed in the footnotes of the part 63 delegation table at the end of this rule are the authorities that cannot be delegated to any State or local agency which we therefore retain.

In delegating the authority to implement and enforce these rules and in granting a waiver of EPA notification requirements, we require LDEQ to input all source information into the Aerometric Information Retrieval System (AIRS) for both point and area sources, as applicable. LDEQ must enter this information into the AIRS system and update the information by September 30 of every year. LDEQ must provide any additional compliance related information to EPA, Region 6, Office of Enforcement and Compliance Assurance within 45 days of a request under 40 CFR 63.96(a).

In receiving delegation for specific General Provisions authorities, LDEQ must submit to EPA Region 6 on a semi-annual basis, copies of determinations issued under these authorities. For part 63 standards, these determinations include: applicability determinations (63.1); approval/disapprovals of construction and reconstruction [63.5(e) and (f)]; notifications regarding the use of a continuous opacity monitoring system [63.6(h)(7)(ii)]; finding of compliance [63.6(h)(8)]; approval/disapprovals of compliance extensions [63.6(i)]; approvals/disapprovals of minor [63.7(e)(2)(i)] or intermediate [63.7(e)(2)(ii) and (f)] alternative test methods; approval of shorter sampling times and volumes [63.7(e)(2)(iii)]; waiver of performance testing [63.7(e)(2)(iv) and (h)(2), (3)]; approvals/disapprovals of minor or intermediate alternative monitoring methods [63.8(f)]; approval of adjustments to time periods for submitting reports (63.9 and 63.10); and approvals/disapprovals of minor alternatives to recordkeeping and reporting [63.10(f)].

Additionally, EPA's Emission Measurement Center of the Emissions Monitoring and Analysis Division must receive copies of any approved intermediate changes to test methods or monitoring. (Please note that intermediate changes to test methods must be demonstrated as equivalent through the procedures set out in EPA method 301.) This information on approved intermediate changes to test methods and monitoring will be used to compile a database of decisions that will be accessible to State and local agencies and EPA Regions for reference in making future decisions. (For definitions of major, intermediate and minor alternative test methods or monitoring methods, see 40 CFR 63.90). The LDEQ should forward these intermediate test methods or monitoring changes via mail or facsimile to: Chief, Source Categorization Group A, EPA (MD-19), Research Triangle Park, NC 27711, Facsimile telephone number: (919) 541-1039.

EPA must oversee LDEQ's decisions to ensure the delegated authorities are being adequately implemented and enforced. We will integrate oversight of the delegated authorities into the existing mechanisms and resources for oversight currently in place. If, during oversight, we determine that LDEQ made decisions that decreased the stringency of the delegated standards, then LDEQ shall be required to take corrective actions and the source(s) affected by the decisions will be notified, as required by 40 CFR 63.91(g)(1)(ii). We will initiate withdrawal of the program or rule if the corrective actions taken are insufficient.

All of the information required pursuant to the Federal NESHAP (40 CFR part 63) should be submitted by sources located outside of Indian country, directly to the LDEQ at the following address: Office of Environmental Services, P.O. Box 4313, Baton Rouge, LA 70821-4313. The LDEQ is the primary point of contact with respect to delegated NESHAPs. Sources do not need to send a copy to EPA. EPA Region 6 waives the requirement that notifications and reports for delegated standards be submitted to EPA in addition to LDEQ in accordance with 40 CFR 63.9(a)(4)(ii) and 63.10(a)(4)(ii).

In the future, LDEQ will only need to send a letter of request to EPA, Region 6, for those NESHAP regulations that LDEQ has adopted by reference. The letter must reference the previous up-front approval demonstration and reaffirm that it still meets the up-front approval criteria. We will respond in writing to the request stating that the request for delegation is either granted or denied. If a request is approved, the effective date of the delegation will be the date of our response letter. A Federal Register will be published to inform the public and affected sources of the delegation, indicate where source notifications and reports should be sent, and to amend the relevant portions of the Code of Federal Regulations showing which NESHAP standards have been delegated to LDEQ.

The public was provided the opportunity to comment on the proposed approval of the program and mechanism for delegation of Section 112 standards, as they apply to part 70 sources, on August 24, 1994, for the proposed interim approval of LDEQ's Title V operating permits program; and on April 7, 1995, for the proposed final approval of LDEQ's Title V operating permits program. In EPA's final full approval of Louisiana's Operating Permits Program (60 FR 47296), the EPA discussed the public comments on the proposed delegation of the Title V operating permits program. The public was also given the opportunity to comment on the delegation of authority to Louisiana for National Emission Standards for Hazardous Air Pollutants on March 26, 2004 (69 FR 15687 and 69 FR 15755), and received no public comments on the delegation of authority. In this action, the public is given the opportunity to comment on the approval of LDEQ's request for delegation of authority to implement and enforce certain Section 112 standards for all sources (both part 70 and non-part 70 sources) which have been adopted by reference into Louisiana's state regulations. However, the Agency views the approval of these requests as a noncontroversial action and anticipates no adverse comments. Therefore, EPA is publishing this rule without prior proposal. However, in the “Proposed Rules” section of today's Federal Register publication, EPA is publishing a separate document that will serve as the proposal to approve the program and delegation of authority described in this action if adverse comments are received. This action was effective on October 18, 2004, without further notice unless the Agency receives relevant adverse comments by January 14, 2005.

If EPA receives adverse comments, we will publish a timely withdrawal in the Federal Register informing the public the rule will not take effect. We will address all public comments in a subsequent final rule based on the proposed rule. The EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if we receive adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of an adverse comment.

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

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

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

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

Under Section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 14, 2005. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

This is a summary of the Commission's Order on Reconsideration, in CC Docket No. 96-45, FCC 04-237, released November 29, 2004. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC 20554.

1. In this Order on Reconsideration, we address various petitions for reconsideration filed in response to the rules adopted in the First Report and Order, 62 FR 32862, June 17, 1997, in CC Docket No. 96-45 and the Fourth Order on Reconsideration, 63 FR 02093, January 13, 1998, in CC Docket Nos. 96-45, 96-262, 94-1, 91-213, 95-72. We grant, in part, a petition filed by American Public Communications Council (APCC). Based on the record before us, we deny petitions filed by APCC, AT&T, Cellular Telecommunications and Internet Association (CTIA), Lan Neugent and Greg Weisiger (LN/GW), Mobile Satellite Ventures (MSV), National Public Radio (NPR), Puerto Rico Telephone Company (PRTC), Rural Telephone Coalition (RTC), Southern Educational Communications Association (SECA), United States Telecommunications Association (USTA), Wireless Cable Association (WCA), and Wyoming Public Service Commission (Wyoming Commission); these petitions either raise no facts which have not previously been presented to the Federal Communications Commission (Commission) or are moot. We make minor clarifications to our rules based on the issues raised in these petitions as needed.

2. In this Order on Reconsideration, the Commission addresses petitions for reconsideration of the Commission's First Report and Order and Fourth Order on Reconsideration to the extent described below.

3. We deny MSV's petition for reconsideration of our determination regarding the eligibility of pure resellers to receive universal service support. MSV's petition does not rely on facts that have not previously been presented to the Commission. Rather, MSV merely wishes to argue its different interpretation of the statute. As the Commission already concluded, the statute expressly mandates that, in order to be eligible for universal service subsidies, a carrier must use its “own facilities” or a combination of its own facilities and another carrier's services in the provision of supported services. Resellers providing resold services from facilities-based carriers do not use their “own facilities” to provide the supported services. As such, pure resellers cannot receive support consistent with this statutory requirement.

4. Moreover, we decline to adopt MSV's request to conclude that advertising in a nationally circulated publication satisfies, per se, the statutory requirement to advertise the availability of supported services under section 214(e)(1)(B). In the First Report and Order, the Commission declined to adopt nationwide standards for interpreting section 214(e)(1)(B), because it agreed with the Joint Board that states are in a better position to evaluate local conditions and establish advertising guidelines appropriate for the state. MSV has presented no facts that were not previously considered by the Commission at that time. Accordingly, we deny MSV's petition for reconsideration.

5. We deny RTC's petition for reconsideration. RTC has presented no facts that have not already been presented to the Commission or that warrant reconsideration of the Commission's earlier determinations.

6. We conclude that the issues raised in RTC's supplemental comments concerning § 54.305 of the Commission's rules have already been addressed in the Rural Task Force Order, 66 FR 30080, June 5, 2001. RTC has presented no facts that were not already considered at that time. Moreover, RTC's assertion that the rule ignores the need for rural carriers to upgrade facilities they have acquired from non-rural carriers disregards the Commission's amendment of § 54.305 to provide additional funds in such instances. Finally, we note that the Commission recently asked the Joint Board to review whether to retain or modify § 54.305 and we expect that the Joint Board and the Commission will address this issue in that proceeding based on a fresh record. We therefore deny RTC's request.

7. We conclude that PRTC has presented no facts that were not previously considered by the Commission or would lead us to reconsider the Commission's decision in the First Report and Order not to treat PRTC as a rural carrier. PRTC simply reiterated previous arguments rejected by the Commission. We also note that PRTC raised similar arguments requesting to be treated as a rural carrier in response to the Ninth Report and Order, 64 FR 67416, December 1, 1999, which the Commission denied. We therefore deny PRTC's request for reconsideration of this issue. We note that we do not address at this time PRTC's petition for clarification and/or reconsideration of the Remand Order, 68 FR 69622, December 15, 2003, or its request in an ex parte letter, filed on June 6, 2003, that the Commission create a separate category of “non-rural insular” carriers for purposes of intrastate high-cost support.

8. As the Wyoming Commission acknowledged in its supplemental comments, its specific concerns with the Commission's First Report and Order ( i.e. , the 25 percent limit for non-rural carriers described above and the decision to limit funding for the federal high-cost support mechanism to interstate revenues) have been subsequently addressed. In these supplemental comments, the Wyoming Commission makes only general assertions about the continued insufficiency of the federal high-cost support mechanism for non-rural carriers and the affordability of the total bill to be paid by Wyoming consumers. We find that the Wyoming Commission fails to state with particularity the respects in which it believes the action taken should be changed and, therefore, we deny its petition for reconsideration of First Report and Order.

9. We note that since the Wyoming Commission filed its supplemental comments, the Commission has revisited how non-rural carriers receive high-cost support. In the Remand Order, the Commission modified the cost benchmark used to calculate support for non-rural carriers, established a rate review process to assess whether rates in rural areas served by non-rural carriers are reasonably comparable to urban rates nationwide, and concluded that states should be permitted to request further federal action, if necessary, based on a showing that federal and state action together are not sufficient to achieve reasonable comparability. The Commission sought further comment on the procedures for filing and processing state requests for further federal action, as well as additional inducements for state action, including additional targeted federal support. In the Remand Order, the Commission also denied the Wyoming Commission's petition for reconsideration of the Ninth Report and Order, in which the Wyoming Commission raised similar arguments regarding the sufficiency of support for non-rural carriers.

10. We deny SECA's petition for reconsideration of the Fourth Order on Reconsideration. We conclude that SECA failed to present facts that were not previously considered by the Commission or would lead us to reconsider the Commission's findings. Moreover, we note that, subsequent to the filing of SECA's petition for reconsideration, the Commission held that support may be provided under telecommunications service or Internet access for service provider charges for capital investments for WANs. This subsequent action effectively provided SECA an avenue to obtain support for the functionality provided by either a WAN or ITFS technology, thereby largely mooting its petition for reconsideration. Therefore, we deny SECA's request to provide discounts to schools and libraries for either the purchase of WANs or ITSF systems. We note that pursuant to the Third Schools Order and Second Further Notice, 69 FR 6181, February 10, 2004, the issue of WAN's eligibility is currently under consideration by the Commission. SECA's concerns regarding this issue will be considered in that open proceeding.

11. We clarify requirements as set forth herein and otherwise deny USTA's petition for reconsideration in this area. With regard to USTA's request concerning record-keeping responsibility under the schools and libraries program, we note that § 54.501(d)(3) of the Commission's rules provides that service providers shall keep and retain records of rates charged to and discounts allowed for eligible schools and libraries—on their own or as part of a consortium. In the Fifth Schools Order, 69 FR 55097, September 13, 2004, the Commission amended § 54.516 of its rules to require both beneficiaries and service providers to retain all records related to the application for, receipt and delivery of discounted services for a period of five years after the last day of service delivered for a particular Funding Year. As a result, USTA's arguments in its petition concerning record-keeping are now moot.

12. As for the proper allocation of benefits, we note that as part of the application process for the schools and libraries program, an applicant is required to provide specific information on its FCC Form 471 about the eligible services that it has ordered, its cost, and the discount that it is requesting for such services. If the applicant is representing a consortium, the applicant is required to calculate either the specific discount for each member of the consortium or the shared discount for the consortium as a whole. The allocation methodology should be set forth in the contract for services executed with the service provider. If there is no contract for services, as might be the case with some tariffed services, the applicant should provide the service provider with a copy of its allocation methodology. After the applicant has received approval of its request for universal service support, it may notify the provider to begin service. Once the applicant receives service from the provider, the applicant must notify the Administrator to approve the flow of universal service funds to the provider as set forth on its FCC Form 471.

13. We conclude that LN/GW raise no facts that have not previously been considered by the Commission or would warrant expanding the services eligible for discounts under the schools and libraries program at this time. In the First Report and Order, the Commission found that the broad purposes of section 254(h)(2) supported its decision to provide discounts for internal connections and Internet access. After analyzing the statute and the record, the Commission determined that the public interest would not be served at that time by providing discounts for additional non-telecommunications services. We find no reason to depart from the Commission's previous decisions in this area based on the current record. Accordingly, we deny LN/GW's request to redefine or expand the list of services that may be eligible for support under the schools and libraries program at this time. We note, however, that in the Third Schools Order and Second Further Notice the Commission formalized the process for updating the eligible services list, beginning with Funding Year 2005, in order to promote greater transparency of what is eligible for support under the schools and libraries support mechanism. Under the new rule, the eligible services list is open to comment on an annual basis, allowing any party to provide comments concerning the content and application of the eligible services list. As stated above, the issue of the eligibility of WANs is currently under consideration by the Commission, and LN/GW's concerns regarding this issue will be considered in that open proceeding.

14. We deny AT&T's petition to reconsider the universal service contribution methodology. The Commission released an order adopting interim modifications to the contribution methodology in December 2002. In that order, the Commission, among other things, eliminated the lag between the accrual and assessment of universal service contribution obligations as of April 1, 2003, by basing contributions on projected collected end-user telecommunications revenues. The Commission also explicitly rejected a collect-and-remit system. We note, however, that the Commission requested further comment on three specific connection-based proposals. We find that AT&T raises no facts that were not considered and addressed in the Contribution Methodology Order, 67 FR 79525, December 30, 2002. Therefore, we dismiss AT&T's request to eliminate the lag as moot and deny the remainder of its petition.

15. We deny APCC's petition to reconsider the Commission's decision to require payphone service providers to contribute to universal service. APCC's petition does not rely on facts that have not previously been presented to the Commission. APCC merely disagrees with the Commission's policy decision.

16. We clarify, however, that to the extent an independent payphone service provider purchases telecommunications for resale in a payphone service and contributes directly to universal service, it should not be considered an end user for purposes of reporting assessable interstate telecommunications revenues and therefore should not be subject to federal universal service pass-through charges. Allowing such a practice results in a double burden for payphone providers that use resold telecommunications services. As described in more detail in the instructions to the Telecommunications Reporting Worksheet, FCC Form 499, such revenues are considered “carrier's carrier revenues” or “revenues from resellers.” For example, if an independent payphone service provider purchased a payphone line from a local exchange carrier to provide payphone service and contributed directly to universal service for that line, that local exchange carrier should report the payphone line revenues on Line 115, “Telecommunications provided to other universal service contributors for resale” on the FCC Form 499-Q. Accordingly, that local exchange carrier would not be directly assessed on the basis of those payphone line revenues and should not pass through universal service charges for that payphone line to the independent payphone service provider. We, therefore, grant APCC's request for clarification as provided herein.

17. We deny the petitions filed by NPR and WCA, to the extent described herein. Our rules already make clear that all broadcasters, including NPR and ITFS licensees, are not required to contribute to the universal service fund to the extent they provide interstate telecommunications on a non-common carrier basis. Since the release of the Fourth Order on Reconsideration and subsequent Errata, § 54.706(d) has remained unchanged. To reiterate, the Commission found that the public interest would not be served if the Commission were to require broadcasters, including NPR, to contribute to universal service based on the provision of non-common carrier telecommunications. In addition, by specifically mentioning ITFS licensees in its discussion for why broadcasters should not have to contribute to universal service, the Commission intended to treat ITFS licensees in the same manner as other broadcasters for universal service purposes. As such, modification of § 54.706(d) is unnecessary.

18. Although we deny WCA's petition and do not revise our rules to include MDS licensees that lease capacity to wireless cable operators on the list of those entities exempt from universal service obligations, we clarify that MDS licensees are not required to contribute to the universal service fund on the basis of revenues derived from broadcasting services. We further clarify that MDS licensees providing interstate telecommunications to others for a fee on a non-common carrier basis will not be exempt from contribution requirements. Such a result is consistent with section 254(d) of the 1996 Act and §§ 54.706(b) and (c) of the Commission's rules. We find WCA has raised no facts that would prompt us to exempt an MDS licensee that chooses a non-common carrier status but provides services identical to a common carrier licensee, and thus competes with the common carrier, from universal service contribution obligations.

19. We conclude that CTIA has presented no facts that were not previously considered by the Commission or that warrant reconsideration of the Commission's determination that underlying carriers should account for revenues from resellers that fall under the de minimis exemption. Section 254(d) explicitly allows the Commission to exempt carriers or classes of carriers from contribution requirements if their contributions would be de minimis . Moreover, contrary to CTIA's assertions, directing underlying carriers to exclude revenues from de minimis resellers would reduce, rather then enlarge, the total contribution base. We therefore deny CTIA's request for reconsideration of this matter.

20. We clarify, however, that CMRS carriers are required to report revenues derived from providing telecommunications to entities qualifying for the de minimis exemption as end-user revenues on the appropriate lines of the Telecommunications Reporting Worksheet. Nothing in the Commission's rules or implementing orders relieves CMRS carriers of this obligation. We further clarify that our current rules do not require underlying facilities-based carriers or CMRS carriers to identify specifically on the Telecommunications Reporting Worksheet their resale customers qualifying for the de minimis exemption.

21. The Commission will not send a copy of this Order on Reconsideration, in CC Docket No. 96-45, FCC 04-237, released November 29, 2004, pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

22. Pursuant to the authority contained in sections 1-4, 201-205, 218-220, 214, 254, 303(r), 403, and 410 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 218-220, 214, 254, 303(r), 403, and 410, this Order on Reconsideration is adopted. Pursuant to the authority contained in section 405 of the Communications Act of 1934, as amended, 47 U.S.C. 405, and 0.291 and 1.429 of the Commission's rules, 47 CFR 0.291 and 1.429, the petitions for reconsideration and supplemental notices of the petitions for reconsideration of the First Report and Order filed by the American Public Communications Council in CC Docket No. 96-45 is granted, in part, and denied, in part.

23. Pursuant to the authority contained in section 405 of the Communications Act of 1934, as amended, 47 U.S.C. 405, and sections 0.291 and 1.429 of the Commission's rules, 47 CFR 0.291 and 1.429, the petitions for reconsideration and supplemental notices of the petitions for reconsideration of the First Report and Order filed by the AMSC/Mobile Satellite Ventures Subsidiary LLC, AT&T, Puerto Rico Telephone Company, Rural Telephone Coalition, United States Telephone Association, and Wyoming Public Service Commission in CC Docket No. 96-45 are denied.

24. Pursuant to the authority contained in section 405 of the Communications Act of 1934, as amended, 47 U.S.C. 405, and sections 0.291 and 1.429 of the Commission's rules, 47 CFR 0.291 and 1.429, the petitions for reconsideration of the Fourth Order on Reconsideration filed by the Cellular Telecommunications and Internet Association, Lan Neugent and Greg Weisiger, National Public Radio, Southern Education Communications Association, and Wireless Cable Association in CC Docket No. 96-45 are denied.

This is a synopsis of the Commission's Report and Order, MB Docket No. 04-192, adopted December 2, 2004, and released December 7, 2004. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC. This document may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 301-816-2820, facsimile 301-816-0169, or via-e-mail joshir@erols.com.

This document does not contain (new or modified) information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, it does not contain any new or modified “information collection burden for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

The Commission will send a copy of this Report & Order in a report to be sent to Congress and the General Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective is to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DoD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at http://www.acq.osd.mil/dpap/dfars/transf.htm.

This final rule is a result of the DFARS Transformation initiative. The DFARS changes include—

• Consolidation of requirements for reporting violations and suspected violations of certain requirements into a new section at DFARS 203.070. This results in elimination of DFARS sections 203.103, 203.103-2, and 203.104-10; subparts 203.2, 203.3, and 203.4; and sections 203.502 and 203.570-4.

• Streamlining of text at DFARS 203.570-1 and 203.570-2 relating to prohibitions on persons convicted of fraud or other defense-contract-related felonies.

• Revision of the clause at 252.203-7001, Prohibition on Persons Convicted of Fraud or Other Defense-Contract-Related Felonies, to remove unnecessary references to first-tier subcontracts in paragraphs (b) and (d). Paragraph (g) of the clause adequately addresses requirements for flow down to first-tier subcontracts.

• Deletion of text at DFARS 203.570-3 relating to internal DoD procedures for waiver of the 5-year period for prohibitions on persons convicted of fraud or other defense-contract-related felonies; and deletion of text at DFARS 209.105-2, 209.406-3, and 209.407-3 containing internal DoD procedures for referral of matters to agency debarment and suspension officials. This text has been relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi.

DoD published a proposed rule at 69 FR 8146 on February 23, 2004. Two sources submitted comments on the proposed rule. A discussion of the comments is provided below:

1. Comment: Section 203.070, which specifies the violations or suspected violations that must be reported, should also include: the Truth in Negotiations Act (19 U.S.C. 2306(f)); the False Claims Act (31 U.S.C. 3729 et seq. ); a reference to FAR 9.406-2(a)(3), which lists causes for debarment; and a reference to FAR 9.407-2(a)(3), which lists causes for suspension.

DoD Response: Do not agree. Since section 203.070 falls within the scope of FAR Part 3 and DFARS Part 203, Improper Business Practices and Personal Conflicts of Interest, the violations listed in section 203.070 are limited to those addressed in FAR Part 3 and DFARS Part 203.

2. Comment: In section 203.070, the reference to “DoDD 7075.5” should be corrected to read “DoDD 7050.5.”

DoD Response: Agree. This correction has been included in the final rule.

3. Comment: In section 203.070(c), the reference to the gratuities clause should be corrected to read “FAR 3.203.”

DoD Response: Agree. This correction has been included in the final rule.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the rule streamlines and clarifies existing DFARS text, with no substantive change in policy.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

A. Background

DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective is to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DoD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at http://www.acq.osd.mil/dpap/dfars/transf.htm.

This final rule is a result of the DFARS Transformation initiative. The DFARS changes include—

○ Revision of DFARS 206.001 to clarify the text.

○ Deletion of text at DFARS 206.202(b) regarding documentation needed to support a DoD determination to exclude a particular source from a contact action in order to establish or maintain an alternative source of supplies or services; and deletion of text at DFARS 206.302-2 containing examples of circumstances under which use of other than full and open competition may be appropriate due to unusual and compelling urgency. This text has been relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi.

○ Deletion of obsolete text at DFARS 206.302-1(b)(4) and deletion of unnecessary text at DFARS 206.303-1(b) and (c) and 206.303-2.

DoD published a proposed rule at 69 FR 8149 on February 23, 2004. DoD received one comment on the proposed rule. The respondent recommended further revision of the text at 206.001 to clarify that the exception from competition authorized by 10 U.S.C. 1091 applies only to contracts awarded to individuals. DoD has included this clarification in the final rule.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the DFARS changes in this rule are limited to clarifying revisions or deletion of text that is unnecessary or internal to DoD.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

DoD published an interim DFARS rule at 69 FR 1926 on January 13, 2004, to implement new Free Trade Agreements with Chile and Singapore, in accordance with the United States-Chile Free Trade Agreement Implementation Act (Public Law 108-77) and the United States-Singapore Free Trade Agreement Implementation Act (Public Law 108-78). Applicable changes to the Federal Acquisition Regulation (FAR) were published in Federal Acquisition Circular (FAC) 2001-19 on January 7, 2004 (69 FR 1051; Interim rule), and in FAC 2001-25 on October 5, 2004 (69 FR 59700; Final rule).

DoD received no comments on the interim DFARS rule. However, the final rule includes the following additional changes:

• Amendment of the trade agreements clauses at DFARS 252.225-7021, 252.225-7036, and 252.225-7045 to remove the statement that United States law will apply to resolve any claim of breach of contract. This statement is no longer necessary, because the final rule published in FAC 2001-25 contains a new FAR clause, 52.233-4, Applicable Law for Breach of Contract Claim, that is prescribed for inclusion in all contracts.

• A minor amendment at DFARS 225.502(c)(i)(B) to clarify that, in acquisitions subject to a Free Trade Agreement, only eligible products of the applicable Free Trade Agreement country are exempt from application of the Buy American Act or Balance of Payments Program evaluation factor ( e.g. , for acquisitions between $25,000 and $58,550, a Mexican end product would be a “NAFTA country end product” but would not be an “eligible product,” in accordance with the thresholds at FAR 25.402).

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Although the rule opens up Government procurement to the products of Chile, and lowers the trade agreements threshold for the products of Singapore, the economic impact on U.S. small businesses will not be significant. DoD applies the trade agreements to only those non-defense items listed at DFARS 225.401-70, and acquisitions below $100,000 that are set aside for small businesses are exempt.

This rule affects the certification and information collection requirements in the provisions at DFARS 252.225-7020 and 252.225-7035, currently approved by the Office of Management and Budget under Clearance Number 0704-0229. The impact, however, is negligible. In the provision at DFARS 252.225-7020, Trade Agreements Certificate, the offeror no longer has to list offers of end products from Chile as nondesignated country end products. However, offers of Chilean end products would have been unlikely, because purchase of foreign products other than eligible products is prohibited by the Trade Agreements Act. In the provision at DFARS 252.225-7035, Buy American Act—Free Trade Agreements—Balance of Payments Program Certificate, the offeror must list all end products that are not domestic end products. The offeror will list products of Chile and Singapore on the list of Free Trade Agreement country end products, rather than the list of “other foreign end products.”

A. Background

This interim rule implements Section 843 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136) and Section 813 of the National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). Section 843 amended the general authority for task and delivery order contracts at 10 U.S.C. 2304a to specify that a task or delivery order contract entered into under that section may cover a total period of not more than 5 years. Section 813 further amended 10 U.S.C. 2304a to permit a total ordering period of not more than 10 years, unless the head of the agency determines in writing that exceptional circumstances necessitate a longer ordering period.

DoD published an interim rule implementing Section 843 of Public Law 108-136 at 69 FR 13478 on March 23, 2004. Twenty-three respondents submitted comments on the interim rule. A discussion of the comments is provided below. This second interim rule implements Section 813 of Public Law 108-375 and incorporates changes made as a result of public comments received on the interim rule published on March 23, 2004. Differences between the first and second interim rules are addressed in the discussion of comments 1, 2, 3, and 7 below.

1. Comment: Ordering period vice period of performance. Twelve respondents expressed concern that the rule did not specify whether the 5-year limit applies to the ordering period or the period of performance. Respondents pointed out that if performance is limited to 5 years, the end result is that this type of contract may only be able to have a base year and 2 or 3 option years to ensure that all work is completed by the end of the fifth year.

DoD Response: The second interim rule incorporates the 10-year limit allowed by Section 813 and clarifies that the limit applies to the ordering period. In making this clarification, DoD determined that it was important to establish a reasonable limit on the period of performance for task or delivery orders issued during the ordering period and established such a limit in the rule at 217.204(e)(iii).

2. Comment: Six-month extension for services. Two respondents raised concerns as to whether the 5-year limit imposed by Section 843 was inclusive of any 6-month extension permitted by the clause at FAR 52.217-8, Option to Extend Services. Another respondent identified the exception at FAR 16.505(c)(2)(ii) for contracted advisory and assistance services that permits such contracts to exceed 5 years by 6 months in certain circumstances. This respondent suggested that the DFARS rule supplement FAR 16.505(c)(2) to clarify whether contracts for advisory and assistance services can be longer than 5 years.

DoD Response: For contracts issued pursuant to 10 U.S.C. 2304a, the ordering period is restricted to a maximum of 10 years unless the head of the agency determines in writing that exceptional circumstances require a longer ordering period. However, the performance period of an order may extend no more than 1 year beyond the 10-year limit or extended limit unless approved by the senior procurement executive. The authority at FAR 16.505(c)(2)(ii), for advisory and assistance services, derives from 10 U.S.C. 2304b and is unaffected by Section 843 or 813, which limit only task or delivery order contracts awarded pursuant to 10 U.S.C. 2304a. The second interim rule clarifies that contracts for advisory and assistance services are governed by the requirements of 10 U.S.C. 2304b and FAR 16.505(c).

3. Comment: Exception for Information Technology. One respondent suggested that the 5-year limit imposed by Section 843 should not apply to information technology contracts and that the rule should be clarified to identify this exception. The respondent identified the Clinger-Cohen Act (Pub. L. 104-106) as the authority for the exception for information technology.

DoD Response: The Clinger-Cohen Act does not provide an exception for information technology. The limits in Sections 843 and 813 apply to all task and delivery order contracts awarded under 10 U.S.C. 2304a, including those for information technology. The second interim rule clarifies this point at 217.204(e)(ii).

4. Comment: Applicability to contracts awarded before the interim rule. One respondent requested that the rule address the applicability of Section 843 to contracts awarded after the enactment of Section 843, but before the issuance of the interim rule. Another respondent assumed that the 5-year limit precluded agencies from placing orders under contracts awarded prior to the enactment of Section 843. Another respondent expressed concern that some of the military departments unilaterally implemented the 5-year limit for existing indefinite-delivery indefinite-quantity contracts or chose to implement the limit for new solicitations issued prior to the effective date of the rule. Two respondents recommended that the background information for the rule state that the 5-year limit is applicable only to contracts that result from solicitations issued on or after March 23, 2004.

DoD Response: Generally, statutes take effect on the date of enactment unless they expressly state a different effective date ( e.g. , “upon implementation in regulations, or 180 days, whichever comes first”). Consistent with FAR 1.108(d), as a matter of policy, the DFARS implementation of the Section 843 limitation was effective for solicitations issued on or after March 23, 2004, the date of publication of the first interim rule. The DFARS implementation of the Section 813 limitation is effective on the date of publication of this second interim rule. In accordance with FAR 1.108(d)(2), contracting officers may amend solicitations issued before the effective date of this second interim rule to incorporate the longer ordering period.

5. Comment: Applicability to existing contracts. One respondent raised questions about the applicability of the 5-year limit to new solicitations issued for new delivery orders to be awarded against existing contracts. Specifically, whether the 5-year limit (1) would apply to the entire contract, including previously awarded delivery orders; (2) would apply to merely the single delivery order and any additional delivery orders solicited after the interim rule; or (3) would not apply. Another respondent questioned whether an existing contract that has a 7-year ordering period but has reached a quantity or dollar ceiling in 5 years could be modified, with a justification and approval, to increase the ceiling. The same respondent questioned whether an existing contract could be modified to extend the ordering period beyond 5 years.

DoD Response: Neither Section 843 nor 813 has retroactive effect. Under Section 813, a contracting officer may exercise existing options and may modify existing contracts to add new options or otherwise extend the ordering period up to 10 years, or longer if authorized by the head of the agency. Additionally, an existing contract may be modified to extend the existing ordering period, provided the justification for the new work is documented in a justification and approval in accordance with FAR 6.304.

6. Comment: Options on Orders and Within Scope Changes. One respondent requested that the rule address the use of option periods attached to task and delivery orders. The respondent suggested that every order should be permitted to contain up to four option periods. Another respondent suggested that within-scope changes could extend the ordering period beyond 5 years and requested that the rule clarify whether the 5-year limit applies to within-scope changes.

DoD Response: Options and modifications may be issued to extend the total ordering period for a contract or an individual order; however, the total ordering period may not exceed 10 years unless authorized by the head of the agency.

7. Comment: Disappointed with Implementation. Two respondents expressed disappointment that DoD rushed to implement Section 843 and that the interim rule provided only the barest coverage. The respondents recommended that the final rule expand the coverage to include key elements from the question and answer document made available on the Defense Procurement and Acquisition Policy Web site.

DoD Response: DoD has a responsibility to promptly implement laws enacted by Congress. It was also necessary to issue an interim rule to ensure consistent implementation within DoD. The second interim rule has been expanded to include key elements regarding applicability from the question and answer document and changes required by the enactment of Section 813.

8. Comment: Program Impacts. Four respondents identified programs or missions that will be impacted by the 5-year limit.

DoD Response: DoD agrees that the 5-year limit may have had an adverse impact on the ability of agencies to accomplish their missions. The second interim rule minimizes the impact to the extent permitted by Section 813.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 604. The analysis is summarized as follows: This interim rule applies to all new DoD solicitations for supplies or services that will result in a task or delivery order contract awarded under the authority of 10 U.S.C. 2304a. It may affect businesses interested in submitting offers for such contracts. The impact on small entities is unknown at this time. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2003-D097.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 813 of the National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). Section 813 provides that the total period of a task or delivery order contract awarded under 10 U.S.C. 2304a may not exceed 10 years, unless the head of the agency determines in writing that exceptional circumstances require a longer contract period. Section 813 became effective upon enactment on October 28, 2004. Comments received in response to this interim rule will be considered in the formation of the final rule.

This final rule authorizes the Director, Small and Disadvantaged Business Utilization (SADBU), of each military department and defense agency to approve mentor firms and mentor-protégé agreements under the DoD Pilot Mentor-Protégé Program. The Director, Office of the Secretary of Defense, SADBU, will retain policy and oversight responsibility for the offices participating in the Program and will remain the principal budget authority for the Program. This rule also updates procedures for implementation of the Mentor-Protégé Program.

DoD published a proposed rule at 69 FR 26533 on May 13, 2004. Two respondents submitted comments on the proposed rule. One respondent expressed support for the rule. The other respondent recommended amendment of the rule to allow service-disabled veteran-owned small business concerns to participate as protégé firms. Statutory authority permitting participation of service-disabled veteran-owned small business concerns as protégé firms was provided in Section 842 of the National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375) on October 28, 2004. DoD will be implementing the new authority provided by Section 842 separately under DFARS Case 2004-D028. Therefore, DoD has adopted the proposed rule published on May 13, 2004, as a final rule without change.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the changes in the rule relate primarily to administrative aspects of the DoD Pilot Mentor-Protégé Program. The basic principles of the Program have not changed.

The information collection requirements of the DoD Pilot Mentor Protégé Program have been approved by the Office of Management and Budget under Control Number 0704-0332 for use through May 31, 2007.

DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective is to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DoD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at http://www.acq.osd.mil/dp/dars/transf.htm.

This final rule is a result of the DFARS Transformation initiative. The changes in this rule—

• Revise DFARS 236.602-1 to remove procedures for establishment of evaluation criteria in the selection of firms for architect-engineer contracts. This text has been relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI), available at http://www.acq.osd.mil/dpap/dars/pgi.

• Remove unnecessary text on preselection boards and selection authorities at DFARS 236.602-2 and 236.602-4.

• Amend DFARS 236.604 to reflect replacement of Standard Form 254, Architect—Engineer and Related Services Questionnaire, with Standard Form 330, Architect-Engineer Qualifications.

DoD published a proposed rule at 69 FR 35568 on June 25, 2004. DoD received no comments on the proposed rule. Therefore, DoD has adopted the proposed rule as a final rule without change.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the changes in the rule represent no substantive change to policy with regard to selection of firms for architect-engineer contracts.

The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

A. Background

DoD published an interim DFARS rule at 69 FR 35532 on June 25, 2004, to implement Section 331 of the National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136). Section 331 amended 10 U.S.C. 2465 to permit the award of contracts for firefighting functions at military installations or facilities, for periods of one year or less, if the functions would otherwise have to be performed by members of the armed forces who are not readily available by reason of a deployment. DoD received no comments on the interim rule. Therefore, DoD has adopted the interim rule as a final rule without change.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because application of the rule is limited to firefighting functions at military installations or facilities for periods of one year or less, when members of the armed forces are not readily available to perform the functions due to a deployment.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

DOE, including the National Nuclear Security Administration (NNSA), owns or sponsors major scientific research and development, and manufacturing facilities throughout the United States that are managed and operated by contractors. DOE permits these contractors to perform non-DOE work for other Federal agencies and non-Federal entities on a fully reimbursable basis when such work is authorized by law and the work requires DOE's unique technologies and capabilities.

Performance of this work is conducted under DOE's Work for Others Program. The Work for Others Program makes available for use special or unique services or facilities that are otherwise unavailable in the private sector. The Work for Others Program requires that funding for Work for Others projects be provided by a non-DOE sponsor. Performance of this work has allowed DOE and its management and operating contractors to assist other Federal agencies in accomplishing their missions and has provided assistance to non-Federal entities to solve complex and challenging technological issues.

DOE allows such work to be conducted by contractors provided that:

(1) DOE's laboratories and facilities do not compete directly with the domestic private sector;

(2) The acceptance and performance of work complies with applicable statutes and regulations;

(3) Work is fully funded by the non-DOE entity requesting work to be performed; and,

(4) The work to be performed is consistent with or complimentary to DOE missions and the missions of the facility where the work will be performed.

The purpose of this rule is to establish a uniform contract clause that will provide authority to DOE's management and operating contractors to perform fully reimbursable work under the terms and conditions set forth in their contracts.

This rule amends Part 970 of the DEAR which governs DOE contracts with entities that manage and operate DOE-owned or -leased facilities. The rule applies to contracts when the contractor performs fully reimbursable work for other Federal agencies and non-Federal entities and does not relate to the expenditure of DOE's appropriated funds. Neither 5 U.S.C. 553 nor 41 U.S.C. 418b require publication of a notice of proposed rulemaking prior to the publication of today's final rule. Nevertheless, comments on today's rule will be accepted. DOE will consider all comments and, if appropriate, may modify the rule.

DOE is also making a technical amendment to 48 CFR Part 909 to identify an NNSA official as the debarment and suspension official for NNSA contracts.

DOE is amending the DEAR as follows:

1. Section 909.403 is being amended to identify a separate debarment and suspension official for contracts awarded by the NNSA.

2. Section 970.1707 is being added to provide information regarding DOE's Work for Others Program including:

(i) A general definition of the program and its activities;

(ii) The purpose for the program;

(iii) Specified requirements that must be satisfied prior to the acceptance and performance of work for others activities; and,

(iv) An instruction directing use of a uniform clause.

3. A standard contract clause is added at 970.5217-1 for use in DOE contracts to authorize the performance of work for non-DOE entities by DOE management and operating contractors and to establish specific conditions under which this work can be approved and performed. These conditions include ensuring that:

(i) DOE's laboratories and facilities do not compete directly with the domestic private sector;

(ii) The acceptance and performance of work complies with applicable statutes and regulations;

(iii) Work is fully funded by the non-DOE entity requesting work to be performed; and,

(iv) The work to be performed is consistent with or complimentary to DOE missions and the missions of the facility where the work will be performed.

This regulatory action has been determined not to be a significant regulatory action under Executive Order 12866, Regulatory Planning and Review (58 FR 51735, October 4, 1993). Accordingly, this rule is not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB).

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, Civil Justice Reform, 61 FR 4729 (February 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction. With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, these regulations meet the relevant standards of Executive Order 12988.

This rule has been reviewed under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. , that requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment and that is likely to have significant economic impact on a substantial number of small entities. Neither 5 U.S.C. 553 nor 41 U.S.C. 418b requires that today's interim final rule be proposed for public comment. Accordingly, no regulatory flexibility analysis has been prepared for this rulemaking.

Section 970.5217-1(g) of this rule will require contractors performing work for others to submit an annual report concerning such work. That reporting requirement is subject to review and approval of the OMB pursuant to the Paperwork Reduction Act, 44 U.S.C. 3105 et seq. As provided in OMB's regulations implementing the Act, DOE published a separate notice in the Federal Register , on February 27, 2004, 69 FR 6910, inviting public comment on the collection of information, after which it would submit the collection of information to OMB for approval pursuant to 5 CFR 1320.10. The public comment period for that notice closed April 27, 2004, and no comments were received. OMB granted approval for this information collection and assigned it a clearance number of 1910-5125.

Pursuant to the Council on Environmental Quality Regulations (40 CFR Parts 1500-1508), DOE has established regulations for its compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ). Pursuant to Appendix A of Subpart D of 10 CFR Part 1021, DOE has determined that today's regulatory action is strictly procedural (Categorical Exclusion A-6). Accordingly, neither an environmental impact statement nor an environmental assessment is required.

Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. DOE has examined today's rule and has determined that it does not preempt State law and does 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. No further action is required by Executive Order 13132.

The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires a Federal agency to perform a detailed assessment of costs and benefits of any rule imposing a Federal Mandate with costs to State, local or tribal governments, or to the private sector, of $100 million or more in any single year. This rulemaking does not impose a Federal mandate on State, local or tribal governments or on the private sector.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a Family Policymaking Assessment for any rule or policy that may affect family well-being. This rule will have no impact on family well being.

As required by 5 U.S.C. 801, DOE will report to Congress promulgation of this rule prior to its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(3).

Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001), requires Federal agencies to prepare and submit to the OIRA a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.

Today's rule is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

The Treasury and General Government Appropriations Act, 2001, 44 U.S.C. 3516, note, provides for agencies to review most disseminations of information to the public under implementing guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed today's notice under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

The Office of the Secretary of Energy has approved issuance of this interim final rule.

NMFS manages the groundfish fishery in the BSAI according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2004 final harvest specification for groundfish of the BSAI (69 FR 9242, February 27, 2004), allocated a directed fishing allowance for Pacific cod of 303 metric tons to catcher vessels 60 feet (18.3 m) LOA and longer using hook-and-line gear in the BSAI. See § 679.20(c)(3)(iii), § 679.20(c)(5), and § 679.20(a)(7)(i)(A) and (C).

In accordance with § 679.20(d)(1)(iii), the Administrator, Alaska Region, NMFS , has determined that the 2004 Pacific cod TAC allocated as a directed fishing allowance to catcher vessels 60 feet (18.3 m) LOA and longer using hook-and-line gear in the BSAI will soon be reached. Consequently, NMFS is prohibiting directed fishing for Pacific cod by catcher vessels 60 feet (18.3 m) LOA and longer using hook-and-line gear in the BSAI.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of Pacific cod specified for catcher vessels 60 feet LOA and longer using hook-and-line gear in the BSAI.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.

NMFS manages the groundfish fishery in the BSAI according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The Administrator, Alaska Region, NMFS, has determined that the initial TACs specified in the 2004 final harvest specifications for groundfish in the BSAI (69 FR 9242, February 27, 2004) for arrowtooth flounder, flathead sole, “other flatfish” and rock sole in the BSAI need to be supplemented from the non-specified reserve in order to account for prior harvest.

Therefore, in accordance with § 679.20(b)(3), NMFS apportions amounts from the non-specified reserve to the TACs for the following species or species groups in the BSAI: 5,000 mt to arrowtooth flounder, 500 mt to flathead sole, 1,900 to “other flatfish” and 4,190 to rock sole. These apportionments are consistent with § 679.20(b)(1)(ii) and do not result in overfishing of a target species because the revised TACs are equal to or less than specifications of acceptable biological catch (69 FR 9242, February 27, 2004).

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA) finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) and 679.20 (b)(3)(iii)(A) as such a requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the apportionment of the reserves. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of December 3, 2004.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

Under § 679.20(b)(3)(iii), interested persons are invited to submit written comments on this action (see ADDRESSES ) until December 29, 2004.

This action is required by 50 CFR 679.20 and is exempt from review under Executive Order 12866.