[Federal Register Volume 70, Number 96 (Thursday, May 19, 2005)]
[Notices]
[Pages 28975-28979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-9973]


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SMALL BUSINESS ADMINISTRATION

RIN: 3245-AF21


Small Business Innovation Research Program Policy Directive

AGENCY: U.S. Small Business Administration.

ACTION: Notice of proposed amendments to Policy Directive.

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SUMMARY: This document proposes amendments to the Small Business 
Innovation Research (SBIR) Program Policy Directive. These proposed 
amendments reflect the requirements that the Executive Order, 
Encouraging Innovation in Manufacturing, imposes on the Small Business 
Administration (SBA) and the Federal agencies that participate in the 
SBIR program. This document also provides guidelines and directives to 
Federal agencies for the general conduct of the program as it relates 
to implementing the Executive Order.

DATES: Public comments on the proposed amendments to the SBIR Policy 
Directive must be received on or before June 20, 2005.

ADDRESSES: You may submit comments, identified by RIN 3245-AF21, by any 
of the following methods. (1) The Federal eRulemaking portal: 
www.regulations.gov; (2) e-mail at [email protected] (include RIN in 
the subject line of the message); (3) mail, addressed to Edsel M. 
Brown, Jr., Assistant Administrator for Technology, Office of 
Technology, Office of Policy, Planning, and Liaison; Office of 
Government Contracting and Business Development, U.S. Small Business 
Administration, 409 3rd Street, SW., Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT: Edsel M. Brown, Jr., Office of 
Technology, Office of Policy, Planning, and Liaison, Office of 
Government Contracting and Business Development, at (202) 205-6450 or 
at [email protected].

SUPPLEMENTARY INFORMATION: In 1982, Congress enacted the Small Business 
Innovation Development Act of 1982 (SBIDA), Public Law 97-219 (codified 
at 15 U.S.C. 638), which established the SBIR Program. The statutory 
purpose of the Small Business Innovation Research (SBIR) Program is to 
strengthen the role of innovative small business concerns (SBCs) in 
Federally-funded research and research and development (R/R&D).
    The SBIR Program is a phased process, uniform throughout the 
Federal Government, of soliciting proposals and awarding funding 
agreements for R/R&D to meet stated agency needs or missions. To 
stimulate and foster scientific and technological innovation, including 
increasing commercialization of Federal R/R&D, the program must follow 
a uniform competitive process of three phases: Phase I, Phase II, and 
Phase III.
    SBIDA requires the SBA to ``issue Policy Directives for the general 
conduct of the SBIR programs within the Federal Government.'' 15 U.S.C. 
638(j)(1). SBA proposes to amend the most recent SBIR Policy Directive 
which was published on September 24, 2002, at 67 FR 60072-60098.
    On February 24, 2004, the President signed Executive Order 13329, 
``Encouraging Innovation in Manufacturing.'' The purpose of the 
Executive Order is to ensure that Federal Government agencies and 
departments properly and effectively assist the private sector in its 
manufacturing innovation efforts through the use of the SBIR and the 
Small Business Transfer Technology (STTR) Programs. Pursuant to the 
Executive Order, the SBA is required to:
    (1) Establish, after consultation with the Director of the Office 
of Science and Technology Policy (OSTP), formats and schedules for 
submission of reports by the heads of departments and agencies; and (2) 
issue to departments and agencies guidelines and directives (in 
addition to the formats and schedules) as the SBA Administrator 
determines from time to time are necessary to implement the Executive 
Order, after such guidelines and directives are submitted to the 
President, through the Director of OSTP, and are approved by the 
President.
    In addition, the Executive Order requires the heads of the agencies 
and departments with one or more SBIR or STTR programs to perform the 
following: (1) To the extent permitted by law and in a manner 
consistent with the mission of that department or agency, give high 
priority within such programs to manufacturing-related research and 
development to advance innovation in manufacturing through small 
business; and (2) to submit reports annually to the Administrator of 
the SBA and the Director of the OSTP concerning the efforts of such 
departments or agencies in implementing the Executive Order. SBA 
proposes to amend the SBIR Policy Directive in order to fulfill its 
responsibilities under Executive Order 13329 and to provide the 
guidelines and requirements that the participating agencies and 
departments need to implement the provisions of the Executive Order as 
set forth above.

Section-by-Section Analysis

    Section 2 of the SBIR Policy Directive contains a summary of the 
legislative provisions applicable to the SBIR Program. SBA is proposing 
to amend this section to include an overview of the requirements 
imposed by Executive Order 13329 and to amend the section heading to 
more accurately reflect the scope of the section.
    Section 3 of the SBIR Policy Directive sets forth definitions 
pertinent to the SBIR program. SBA proposes to add a definition for 
``Manufacturing-related'' research and development. The definition was 
initially developed by the OSTP, the National Institute of Standards 
and Technology, and the National Science Foundation and was reviewed by 
the National Science and Technology Council. The definition encompasses 
research and development that improves existing methods or processes, 
including machine technologies, systems technologies, and environmental 
or societal technologies. In addition, to facilitate the proper 
placement of this new definition, it will be necessary to redesignate 
several paragraphs in section 3.
    Section 4 of the Policy Directive includes a description of the 
structure and purpose of Phases I, II, and III of the SBIR Program and 
the standards for evaluating grant proposals. In section 4(a)(2) of the 
Policy Directive, SBA is proposing to add that agencies may, to the 
extent permitted by law, give additional consideration to 
manufacturing-related proposals.

[[Page 28976]]

    Section 9 of the Policy Directive sets forth the responsibilities 
of the participating agencies and departments under the SBIR Program. 
In the amendments to the Policy Directive, SBA is proposing to add 
those responsibilities imposed by Executive Order 13329. Specifically, 
as amended, the SBIR Policy Directive will require agencies and 
departments to develop an Action Plan for the implementation of 
Executive Order 13329, identifying procedures used for giving priority 
to manufacturing-related R&D and provide information regarding 
Executive Order 13329 on their SBIR Web site. In addition, the SBA 
proposes deleting a dated reference to the National Critical 
Technologies panel.
    Section 10 of the Policy Directive discusses the content, 
structure, and submission requirements for the report that each 
participating agency and department must submit to the SBA by March 15 
of each year. SBA proposes to amend section 10(a) to make electronic 
reporting of agencies' annual report mandatory and amend section 10(b) 
to add the requirement for each agency and department to also report on 
its activities related to the implementation of Executive Order 13329. 
In addition, the SBA proposes deleting a dated reference to the 
National Critical Technology topic number.
    Section 11 of the Policy Directive sets forth SBA's 
responsibilities with respect to the SBIR program. SBA proposes to 
amend this section to delete a dated reference to the National Critical 
Technology panel.
    Finally, in order to clarify the reporting requirements, SBA 
proposes to reformat Appendix II, changing the description in some 
fields, and adding fields that were not previously listed. SBA proposes 
consolidating the file format to a single file and numbering all fifty-
eight (58) fields required for reporting. SBA has identified those 
fields which are mandatory for all records, mandatory for STTR 
projects, and mandatory for Phase II projects. SBA also proposes 
renaming the field formerly named ``Minority'' as ``Socially and 
Economically Disadvantaged Small Business.'' As described in the most 
recent publication of the SBIR policy directive, the STTR 
reauthorization legislation, Public Law 107-50, requires collection of 
information on awardees' HUBZone certification. However, the 
requirement was omitted from the Appendix as a reporting field. To 
rectify this, SBA proposes adding ``HUBZone Certified'' as field 12.

Paperwork Reduction Act

    SBA has determined that the proposed amendments to the SBIR Policy 
Directive, as a result of Executive Order 13329, do not impose 
additional reporting or recordkeeping requirements under the Paperwork 
Reduction Act, 44 U.S.C. Chapter 35.

Notice of Proposed Policy Directive; Small Business Innovation Research 
Program

    To: The Directors, Small Business Innovation Research Program
    Subject: Executive Order 13329, ``Encouraging Innovation in 
Manufacturing,'' Revisions to the Small Business Innovation Research 
Program Policy Directive.
    1. Purpose. Section 9(j)(3) of the Small Business Act (15 U.S.C. 
638(j)(3)) requires the U.S. Small Business Administration (SBA) 
Administrator to modify the Small Business Innovation Research (SBIR) 
Program Policy Directive as required for the general conduct of the 
SBIR Program within the Federal Government.
    2. Authority. This proposed Policy Directive is issued under the 
authority of 15 U.S.C. 638(j).
    3. Procurement Regulations. The Federal Acquisition Regulations may 
need to be modified to conform to the requirements of the 
Reauthorization and a final Policy Directive. Regulatory provisions 
that pertain to the areas of SBA responsibility will require approval 
of the SBA Administrator or designee. The Office of Technology, Office 
of Policy, Planning, and Liaison, Office Government Contracting/
Business Development, SBA, is the appropriate office for coordinating 
such regulatory provisions.
    4. Personnel Concerned. All Federal Government personnel who are 
involved in the administration of the program, including those involved 
with the issuance and management of funding agreements of the SBIR 
Program and the establishment of goals for small business concerns 
(SBCs) in research or research and development procurements or grants.
    5. Distribution. Federal Government agencies and departments 
participating in the SBIR Program and those required to establish small 
business research development goals as directed by section 9 of the 
Small Business Act (15 U.S.C. 638(j)).
    6. Originator. Office of Technology, Office of Policy, Planning, 
and Liaison, Office of Government Contracting and Business Development, 
SBA.
    7. Dates. The SBIR Program is authorized through September 30, 
2008. A final Policy Directive will be effective when issued as final 
in the Federal Register.
    Authorized By: Allegra McCullough
    Associate Deputy Administrator, Government Contracting/Business 
Development, U.S. Small Business Administration
    For the reasons set forth in the preamble, SBA proposes to amend 
the SBIR Policy Directive as follows:
    1. Revise the heading of Sec.  2 to read as follows:

Relevant Legal Provisions

    2. Amend Sec.  2 by adding a new paragraph (g) to read as follows:
    (g) Under Executive Order 13329, ``Encouraging Innovation in 
Manufacturing,'' Federal agencies have an important role in helping to 
advance innovation, including innovation in manufacturing, through 
small businesses. Agencies must give high priority to SBIR projects 
that are focused on manufacturing related R&D, in a manner consistent 
with the missions of the agencies and the purpose of the SBIR program. 
Participating agencies must report annually to the SBA Administrator 
and the Director of the Office of Science and Technology Policy on its 
efforts to carry out Executive Order 13329. The Executive Order directs 
the SBA to establish formats and schedules for this reporting and to 
issue guidelines and directives as necessary to implement the Executive 
Order.
    3. Amend section 3 by redesignating paragraphs (s) through (gg) as 
(t) through (hh) and adding new paragraph (s) to read as follows:
    (s) Manufacturing-related. Activities that relate to manufacturing 
processes, equipment and systems, or manufacturing workforce skills and 
protection including, unit process level technologies; machine level 
technologies; systems level technologies; and environmental or societal 
level technologies.
    4. Amend section 4(a)(2) by adding the following after the second 
sentence:
    The proposal evaluation process shall also, to the extent permitted 
by law and in a manner consistent with the mission of the agency and 
the purpose of the SBIR program, give consideration to manufacturing-
related research.
    5. Amend section 9(a)(2) by deleting ``(i) the National Critical 
Technologies panel (or its successor) in reports required under 42 
U.S.C. 6683, or (ii).''
    6. Amend section 9 to add paragraphs (g) and (h) to read as 
follows:
    (g) To the extent permitted by the law, and in a manner consistent 
with the mission of that agency and the purpose of the SBIR program, 
each participating

[[Page 28977]]

agency must give priority in the SBIR program to manufacturing-related 
research and development, including the following:
    (1) Unit process level technologies that create or improve 
manufacturing processes, including:
    (i) Fundamental improvements in existing manufacturing processes 
that deliver substantial productivity, quality, or environmental 
benefits; or
    (ii) Development of new manufacturing processes, including new 
materials, coatings, methods, and associated practices.
    (2) Machine level technologies that create or improve manufacturing 
equipment, including:
    (i) Improvements in capital equipment that create increased 
capability (such as accuracy or repeatability), increased capacity 
(through productivity improvements or cost reduction), or increased 
environmental efficiency (safety, energy efficiency, environmental 
impact); or
    (ii) New apparatus and equipment for manufacturing, including 
additive and subtractive manufacturing, deformation and molding, 
assembly and test, semiconductor fabrication, biologics, biomaterials, 
vaccines or drug production, and nanotechnology.
    (3) Systems level technologies for innovation in the manufacturing 
enterprise, including:
    (i) Advances in controls, sensors, networks, and other information 
technologies which improve the quality and productivity of 
manufacturing cells, lines, systems, and facilities;
    (ii) Innovation in extended enterprise functions critical to 
manufacturing, such as quality systems, resource management, supply 
change integration, and distribution, scheduling and tracking; or
    (iii) Technologies that enable integrated and collaborative product 
and process development, including computer-aided and expert systems 
for design, tolerancing, process and materials selection, life-cycle 
cost estimation, rapid prototyping, and tooling.
    (4) Environmental or societal level technologies that improve 
workforce abilities, productivity, and manufacturing competitiveness, 
including:
    (i) Technologies for improved workforce health and safety, such as 
human factors and ergonomics; or
    (ii) Technologies that aid and improve workforce manufacturing 
skill and technical excellence, such as educational systems 
incorporating improved manufacturing knowledge and instructional 
methods.
    (h) Agencies must develop an Action Plan for implementing Executive 
Order 13329, which identifies activities used to give priority in the 
SBIR program to manufacturing-related research and development. These 
activities should include adding information on the Executive Order to 
the agency's SBIR program website.
    7. Amend Sec.  10(a) to read as follows:
    (a) Annual Report Due Date and Format. Reporting must be on an 
annual basis and will be for the period ending September 30 of each 
fiscal year. The report must be submitted to SBA by March 15 of each 
year. For example, the report for FY 2005 (October 1, 2001-September 
30, 2004) must be submitted to SBA by March 15, 2006. SBA encourages 
agencies to submit their annual report before the March 15 due date. 
The report must be submitted electronically to [email protected], and 
a single hard copy should be sent to the address noted in Section 5(b). 
The award information contained in the annual report must be validated 
and complete upon submission to SBA on March 15.
    8. Amend Sec.  10(b) by deleting paragraph 12 and redesignating 
paragraphs 13 and 14 as 12 and 13 and adding paragraph 14 to read as 
follows:
    (14) Report on the specific activities undertaken to implement 
Executive Order 13329, including, for example, solicitation notices and 
new topics; additional proposal evaluation criteria or procedures; 
internet-based activities to promulgate the Executive Order, and any 
other activities in support of the Executive Order. The Report shall 
include a description of all significant alternatives considered to 
implement the Executive Order, detailing the factual, policy, and legal 
reasons for selecting the alternative(s) adopted and the factual, 
policy, and legal reasons for rejecting the other significant 
alternatives considered.
    9. Amend Sec.  11(a) by deleting ``the National Critical 
Technologies panel (or its successor) and''.
    10. Amend Appendix II to read as follows:

                Tech-Net Data Fields For All Agency SBIR/STTR Annual Data Submissions to the SBA
----------------------------------------------------------------------------------------------------------------
             Field name                  Required code             Type           Width         Description
----------------------------------------------------------------------------------------------------------------
1. Program Identification..........  MA..................  Numeric............          1  SBIR/STTR Award
                                                                                            Program Identifier
                                                                                            (0=STTR; 1=SBIR).
2. Company.........................  MA..................  Char...............         80  Company Name.
3. Company Division................  ....................  Char...............         80  Company Division.
4. Street1.........................  MA..................  Char...............         80  Street Address 1.
5. Street2.........................  ....................  Char...............         80  Street Address 2.
6. City............................  MA..................  Char...............         40  City.
7. State...........................  MA..................  Char...............          2  State.
8. Zip.............................  MA..................  Numeric............          5  Zip.
9. Zip4............................  MA..................  Numeric............          4  Zip + 4.
10. Socially and Economically        MA..................  Numeric............          1  Socially and
 Disadvantaged Small Business.                                                              Economically
                                                                                            Disadvantaged Small
                                                                                            Business indicator
                                                                                            (Allowable values: 0
                                                                                            = yes; 1 = no).
11. Women..........................  MA..................  Numeric............          1  Women-owned company
                                                                                            indicator (Allowable
                                                                                            values: 0 = yes; 1 =
                                                                                            no).
12. HUBZone Certified..............  MA..................  Numeric............          1  HUBZone Certified
                                                                                            Small Business
                                                                                            Concern (Allowable
                                                                                            values: 0 = yes; 1 =
                                                                                            no).
13. Contact First..................  MA..................  Char...............         40  Company Official
                                                                                            contact first name.
14. Contact Last...................  MA..................  Char...............         40  Contact last name.
15. Contact Middle Initial.........  ....................  Char...............          1  Contact middle
                                                                                            initial (One
                                                                                            character only--no
                                                                                            periods or full
                                                                                            names).
16. Contact Title..................  ....................  Char...............         40  Contact Official
                                                                                            title.
17. Contact Phone..................  MA..................  Char...............         10  Contact Official
                                                                                            phone (Ten
                                                                                            characters only, for
                                                                                            example 9999999999).

[[Page 28978]]

 
18. Contact Email Address..........  MA..................  Char...............         50  Contact email
                                                                                            address.
19. Employees......................  MA..................  Numeric............          5  Number of employees.
20. Agency.........................  MA..................  Numeric............          2  Awarding agency (see
                                                                                            below).
21. Branch.........................  MA..................  Number.............          1  Awarding DOD branch
                                                                                            name (see below).
22. Phase 1 Award Year.............  MA..................  Numeric............          4  Phase 1 Year.
23. Phase 1 Projected Total Amount.  MA..................  Numeric............         10  Phase 1 Projected
                                                                                            Total Amount.
24. Phase 2 Award Year.............  M2..................  Numeric............          4  Phase 2 Year (Phase 2
                                                                                            records only).
25. Phase 2 Projected Total Amount.  M2..................  Numeric............         10  Phase 2 Projected
                                                                                            Total Amount (Phase
                                                                                            2 records only).
26. PI First.......................  MA..................  Char...............         40  Principal
                                                                                            Investigator First
                                                                                            Name.
27. PI Last........................  MA..................  Char...............         40  Principal
                                                                                            Investigator Last
                                                                                            Name.
28. PI Middle Initial..............  ....................  Char...............          1  Principal
                                                                                            Investigator middle
                                                                                            initial (one
                                                                                            character only--no
                                                                                            periods or full
                                                                                            names).
29. PI Title.......................  ....................  Char...............         40  Principal
                                                                                            Investigator Title.
30. PI Phone.......................  ....................  Char...............         10  Principal
                                                                                            Investigator phone
                                                                                            (Ten characters
                                                                                            only; for example
                                                                                            9999999999).
31. PI Email Address...............  ....................  Char...............         50  Principal
                                                                                            Investigator email
                                                                                            address.
32. Topic Code.....................  MA..................  Char...............         15  Agency Solicitation
                                                                                            Topic Number.
33. RI TYPE........................  MT..................  Numeric............          1  Type of research
                                                                                            institution (see
                                                                                            below).
34. RI Name........................  MT..................  Char...............         80  Research institution
                                                                                            (STTR only).
35. RI Street 1....................  MT..................  Char...............         80  Research institution
                                                                                            address (STTR only).
36. RI Street 2....................  ....................  Char...............         80  Research institution
                                                                                            address (STTR only).
37. RI City........................  MT..................  Char...............         40  Research institution
                                                                                            city (STTR only).
38. RI State.......................  MT..................  Char...............          2  Research institution
                                                                                            State (STTR only).
39. RI Zip.........................  MT..................  Numeric............          5  Research institution
                                                                                            Zip (STTR only).
40. RI Zip4........................  ....................  Numeric............          4  Research institution
                                                                                            Zip + 4.
41. RI Official First..............  ....................  Char...............         40  Research institution
                                                                                            Official First Name.
42. RI Official Last...............  ....................  Char...............         40  Research institution
                                                                                            Official Last Name.
43. RI Official Initial............  ....................  Char...............          1  Research institution
                                                                                            Official Middle
                                                                                            Initial (One
                                                                                            character only no
                                                                                            periods or full
                                                                                            names).
44. RI Official Phone..............  ....................  Char...............         10  Research institution
                                                                                            Official's phone
                                                                                             (Ten
                                                                                            characters only; for
                                                                                            example,
                                                                                            9999999999).
45. Tracking Number................  MA..................  Char...............         20  Agency key identifier
                                                                                            (Internal number
                                                                                            scheme).
46. TIN/EIN........................  MA..................  Char...............         10  Taxpayer/Employer
                                                                                            Identification
                                                                                            number Prefix with 1
                                                                                            for EIN; 2 for
                                                                                            Social Security
                                                                                            Number. This field
                                                                                            must be exactly 10
                                                                                            digits in size and
                                                                                            must be a valid EIN
                                                                                            or TIN.
47. Contract/Grant Num.............  MA..................  Char...............         20  Agency Award.
48. Solicitation Number............  MA..................  Char...............         20  Solicitation Number.
49. Solicitation Year..............  MA..................  Numeric............          4  Year of the
                                                                                            Solicitation.
50. Title..........................  MA..................  Char...............        800  Title of research
                                                                                            project.
51. Abstract.......................  MA..................  Char...............       1500  Technical Abstract.
52. Results........................  ....................  Char...............       1000  Project anticipated
                                                                                            results.
53. Comments.......................  ....................  Char...............       1000  Project comments.
54. Project Initiator..............  MT..................  Char...............          1  Initiator of STTR
                                                                                            collaborative effort
                                                                                            (Allowable values: S
                                                                                            = Small Business
                                                                                            Concern; R =
                                                                                            Research
                                                                                            Institution) (STTR
                                                                                            only).
55. Technology Used................  MT..................  Char...............          1  SBC or RI originate
                                                                                            any technology used
                                                                                            in the STTR project
                                                                                            (Allowable values: S
                                                                                            = Small Business
                                                                                            Concern; R =
                                                                                            Research
                                                                                            Institution) (STTR
                                                                                            only).
56. Time to establish license        MT..................  Numeric............          2  Time duration to
 agreement (months).                                                                        establish any STTR
                                                                                            license agreement
                                                                                            (STTR only).
57. STTR Proceeds Distribution to    MT..................  Numeric............          2  Allocation of
 SBC (%).                                                                                   proceeds from sale
                                                                                            of STTR technology
                                                                                            (STTR only).
58. STTR Proceeds Distribution to    MT..................  Numeric............          2  Allocation of
 RI (%).                                                                                    proceeds from sale
                                                                                            of STTR technology
                                                                                            (STTR only).
----------------------------------------------------------------------------------------------------------------


    Note: Required codes: Required fields are noted by:

MA Mandatory for ALL project
M2 Mandatory for Phase 2 projects
MT Mandatory for STTR projects
Optional field

    Each agency must submit a file that contains all 58 fields for 
each record. Each agency must ensure that data submitted to the SBA 
includes all of the data fields above, even if the field is empty. 
For example, since DOD is the only agency using field 21 
(Branch), other agencies must include a blank field 21 in their data 
submissions.

(Field 1) Program Identification Code
    0 STTR
    1 SBIR
(Field 20) Agency Code
    1 DOD
    2 DOE
    3 NASA
    4 HHS
    5 NSF
    6 DOT
    7 EPA
    8 (No longer used)
    9 ED
    10 USDA
    11 DOC
    12 (No longer used)
    13 (No longer used)
    14 DHS

[[Page 28979]]

    15 HUD
(Field 21) Branch Code
    1 AF
    2 ARMY
    3 MDA
    4 DARP
    5 DTRA
    6 NAVY
    7 OSD
    8 SOCO
    9 NGA
    10 CBD

    If any new codes should be added, please notify SBA's Office of 
Technology.

                  (Field 33) Research Institution Type
------------------------------------------------------------------------
                   Code                      Research institution types
------------------------------------------------------------------------
1.........................................  Nonprofit college or
                                             university.
2.........................................  Domestic nonprofit research
                                             organization.
3.........................................  Federally Funded R&D Center
                                             (FFRDC).
------------------------------------------------------------------------

    The SBA will accept data in only the following formats:
     Tab delimited text files
     Microsoft Excel files
     Microsoft Access files
    If you have any questions regarding Tech-Net Data submissions, 
please contact SBA's Office of Technology at (202) 205-6450 or 
[email protected].

Michael McHale,
Acting Associate Deputy Administrator, Government Contracting/Business 
Development, U.S. Small Business Administration.
[FR Doc. 05-9973 Filed 5-18-05; 8:45 am]
BILLING CODE 8025-01-P