This rule is issued under Marketing Order No. 985 (7 CFR Part 985), as amended, regulating the handling of spearmint oil produced in the Far West (Washington, Idaho, Oregon, and designated parts of Nevada and Utah), hereinafter referred to as the “order.” This order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Order 12866.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, salable quantities and allotment percentages may be established for classes of spearmint oil produced in the Far West. This proposed rule would establish the quantity of spearmint oil produced in the Far West, by class, which may be purchased from or handled for producers by handlers during the 2006-2007 marketing year, which begins on June 1, 2006. This rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

Pursuant to authority in §§ 985.50, 985.51, and 985.52 of the order, the Committee, with all eight members present, met on October 5, 2005, and recommended salable quantities and allotment percentages for both classes of oil for the 2006-2007 marketing year. The Committee unanimously recommended the establishment of a salable quantity and allotment percentage for Scotch spearmint oil of 878,205 pounds and 45 percent, respectively. For Native spearmint oil, the Committee unanimously recommended the establishment of a salable quantity and allotment percentage of 1,007,886 pounds and 46 percent, respectively.

This rule would limit the amount of spearmint oil that handlers may purchase from, or handle for, producers during the 2006-2007 marketing year, which begins on June 1, 2006. Salable quantities and allotment percentages have been placed into effect each season since the order's inception in 1980.

The U.S. production of Scotch spearmint oil is concentrated in the Far West, which includes Washington, Idaho, and Oregon and a portion of Nevada and Utah. Scotch spearmint oil is also produced in the Midwest states of Indiana, Michigan, and Wisconsin, as well as in the States of Montana, South Dakota, North Dakota, and Minnesota. The production area covered by the marketing order currently accounts for approximately 75 percent of the annual U.S. sales of Scotch spearmint oil.

When the order became effective in 1980, the Far West had 72 percent of the world's sales of Scotch spearmint oil. While the Far West is still the leading producer of Scotch spearmint oil, its share of world sales is now estimated to be about 54 percent. This loss in world sales for the Far West region is directly attributed to the increase in global production. Other factors that have played a significant role include the overall quality of the imported oil and technological advances that allow for more blending of lower quality oils. Such factors have provided the Committee with challenges in accurately predicting trade demand for Scotch oil. This, in turn, has made it difficult to balance available supplies with demand and to achieve the Committee's overall goal of stabilizing producer and market prices.

The marketing order has continued to contribute to price and general market stabilization for Far West producers. The Committee, as well as spearmint oil producers and handlers attending the October 5, 2005, meeting estimated that the 2005 producer price of Scotch oil would maintain an average of $12.50 per pound. However, this producer price is below the cost of production for most producers as indicated in a study from the Washington State University Cooperative Extension Service (WSU), which estimates production costs to be between $13.50 and $15.00 per pound.

This low level of producer returns has caused a reduction in acreage. When the order became effective in 1980, the Far West region had 9,702 acres of Scotch spearmint. The Committee estimates that the 2005-2006 acreage of Scotch spearmint will be about 6,096 acres. Based on the reduced Scotch spearmint acreage, the Committee estimates that production for the 2005-2006 marketing season will be about 802,639 pounds.

The Committee recommended the 2006-2007 Scotch spearmint oil salable quantity (878,205 pounds) and allotment percentage (45 percent) utilizing sales estimates for 2006-2007 Scotch spearmint oil as provided by several of the industry's handlers, as well as historical and current Scotch spearmint oil sales levels. The Committee is estimating that about 850,000 pounds of Scotch spearmint oil, on average, may be sold during the 2006-2007 marketing year. When considered in conjunction with the estimated carry in of 17,651 pounds of oil on June 1, 2006, the recommended salable quantity of 878,205 pounds results in a total available supply of Scotch spearmint oil next year of about 895,856 pounds.

The recommendation for the 2006-2007 Scotch spearmint oil volume regulation is consistent with the Committee's stated intent of keeping adequate supplies available at all times, while attempting to stabilize prices at a level adequate to sustain the producers. Furthermore, the recommendation takes into consideration the industry's desire to compete with less expensive oil produced outside the regulated area.

Although Native spearmint oil producers are facing market conditions similar to those affecting the Scotch spearmint oil market, the market share is quite different. Over 90 percent of the U.S. production of Native spearmint is produced within the Far West production area. Also, most of the world's supply of Native spearmint is produced in the United States.

The supply and demand characteristics of the current Native spearmint oil market, combined with the stabilizing impact of the marketing order, have kept the price relatively steady between $9.10 and $9.40 per pound over the last five years (2000-2004). The Committee considers this level too low for the majority of producers to maintain viability. The WSU study referenced earlier indicates that the cost of producing Native spearmint oil ranges from $10.26 to $10.92 per pound.

Similar to Scotch, the low level of producer returns has also caused a reduction in Native spearmint acreage. When the order became effective in 1980, the Far West region had 12,153 acres of Native spearmint. The Committee estimates that the 2005-2006 acreage of Native spearmint is about 5,195 acres. Based on the reduced Native spearmint acreage, the Committee estimates that production for the 2005-2006 marketing season will be about 650,234 pounds.

The Committee recommended the 2006-2007 Native spearmint oil salable quantity (1,007,886 pounds) and allotment percentage (46 percent) utilizing sales estimates for 2006-2007 Native oil as provided by several of the industry's handlers, as well as historical and current Native oil sales levels. The Committee is estimating that about 1,062,500 pounds of Native spearmint oil, on average, may be sold during the 2006-2007 marketing year. When considered in conjunction with the estimated carry-in of 50,000 pounds of oil on June 1, 2006, the recommended salable quantity of 1,007,886 pounds results in a total available supply of Native spearmint oil next year of about 1,057,886 pounds.

The Committee's method of calculating the Native spearmint oil salable quantity and allotment percentage continues to primarily utilize information on price and available supply as they are affected by the estimated trade demand. The Committee's stated intent is to make adequate supplies available to meet market needs and improve producer prices.

The Committee believes that the order has contributed extensively to the stabilization of producer prices, which prior to 1980 experienced wide fluctuations from year to year. According to the National Agricultural Statistics Service, for example, the average price paid for both classes of spearmint oil ranged from $4.00 per pound to $11.10 per pound during the period between 1968 and 1980. Prices since the order's inception (1980-2004) have generally stabilized at an average price of $9.84 per pound for Native spearmint oil and $12.80 per pound for Scotch spearmint oil.

The Committee based its recommendation for the proposed salable quantity and allotment percentage for each class of spearmint oil for the 2006-2007 marketing year on the information discussed above, as well as the data outlined below.

(A) Estimated carry-in on June 1, 2006—17,651 pounds. This figure is the difference between the revised 2005-2006 marketing year total available supply of 922,651 pounds and the estimated 2005-2006 marketing year trade demand of 905,000 pounds.

(B) Estimated trade demand for the 2006-2007 marketing year—850,000 pounds. This figure is based on input from producers at five Scotch spearmint oil production area meetings held in September 2005, as well as estimates provided by handlers and other meeting participants at the October 5, 2005, meeting. The average estimated trade demand provided at the five production area meetings was 850,500 pounds, whereas the average handler trade demand ranged from 750,000 to 900,000 pounds. The average of sales over the last five years was 736,991 pounds.

(C) Salable quantity required from the 2006-2007 marketing year production—832,349 pounds. This figure is the difference between the estimated 2006-2007 marketing year trade demand (850,000 pounds) and the estimated carry-in on June 1, 2006 (17,651 pounds).

(D) Total estimated allotment base for the 2006-2007 marketing year—1,951,567 pounds. This figure represents a one-percent increase over the revised 2005-2006 total allotment base. This figure is generally revised each year on June 1 due to producer base being lost due to the bona fide effort production provisions of § 985.53(e). The revision is usually minimal.

(E) Computed allotment percentage—42.7 percent. This percentage is computed by dividing the required salable quantity by the total estimated allotment base.

(F) Recommended allotment percentage—45 percent. This recommendation is based on the Committee's determination that the computed 42.7 percent would not adequately supply the potential 2006-2007 market.

(G) The Committee's recommended salable quantity—878,205 pounds. This figure is the product of the recommended allotment percentage and the total estimated allotment base.

(H) Estimated available supply for the 2006-2007 marketing year—895,856 pounds. This figure is the sum of the 2006-2007 recommended salable quantity (878,205 pounds) and the estimated carry-in on June 1, 2006 (17,651 pounds).

(A) Estimated carry-in on June 1, 2006—50,000 pounds. The Committee's estimated carry-in reflects anticipated increases to the salable quantity and allotment percentage that may be needed to meet demand in 2005-2006.

(B) Estimated trade demand for the 2006-2007 marketing year—1,062,500 pounds. This figure is based on input from producers at the six Native spearmint oil production area meetings held in September 2005, as well as estimates provided by handlers and other meeting participants at the October 5, 2005, meeting. The average estimated trade demand provided at the six production area meetings was 1,062,500 pounds, whereas the average handler estimate was 1,050,000 pounds.

(C) Salable quantity required from the 2006-2007 marketing year production—1,012,500 pounds. This figure is the difference between the estimated 2006-2007 marketing year trade demand (1,062,500 pounds) and the estimated carry-in on June 1, 2006 (50,000 pounds).

(D) Total estimated allotment base for the 2006-2007 marketing year—2,191,056 pounds. This figure represents a one percent increase over the revised 2005-2006 total allotment base. This figure is generally revised each year on June 1 due to producer base being lost due to the bona fide effort production provisions of § 985.53(e). The revision is usually minimal.

(E) Computed allotment percentage—46.2 percent. This percentage is computed by dividing the required salable quantity by the total estimated allotment base.

(F) Recommended allotment percentage—46 percent. This is the Committee's recommendation based on the computed allotment percentage, the average of the computed allotment percentage figures from the six production area meetings (46.4 percent), and input from producers and handlers at the October 5, 2005, meeting.

(G) The Committee's recommended salable quantity—1,007,886 pounds. This figure is the product of the recommended allotment percentage and the total estimated allotment base.

(H) Estimated available supply for the 2006-2007 marketing year—1,057,886 pounds. This figure is the sum of the 2006-2007 recommended salable quantity (1,007,886 pounds) and the estimated carry-in on June 1, 2006 (50,000 pounds).

The salable quantity is the total quantity of each class of spearmint oil, which handlers may purchase from, or handle on behalf of producers during a marketing year. Each producer is allotted a share of the salable quantity by applying the allotment percentage to the producer's allotment base for the applicable class of spearmint oil.

The Committee's recommended Scotch and Native spearmint oil salable quantities and allotment percentages of 878,205 pounds and 45 percent, and 1,007,886 pounds and 46 percent, respectively, are based on the Committee's goal of maintaining market stability by avoiding extreme fluctuations in supplies and prices, and the anticipated supply and trade demand during the 2006-2007 marketing year. The proposed salable quantities are not expected to cause a shortage of spearmint oil supplies. Any unanticipated or additional market demand for spearmint oil, which may develop during the marketing year, can be satisfied by an increase in the salable quantities. Both Scotch and Native spearmint oil producers who produce more than their annual allotments during the 2006-2007 marketing year may transfer such excess spearmint oil to a producer with spearmint oil production less than his or her annual allotment or put it into the reserve pool until November 1, 2006.

This proposed regulation, if adopted, would be similar to regulations issued in prior seasons. Costs to producers and handlers resulting from this rule are expected to be offset by the benefits derived from a stable market and improved returns. In conjunction with the issuance of this proposed rule, USDA has reviewed the Committee's marketing policy statement for the 2006-2007 marketing year. The Committee's marketing policy statement, a requirement whenever the Committee recommends volume regulations, fully meets the intent of § 985.50 of the order. During its discussion of potential 2006-2007 salable quantities and allotment percentages, the Committee considered: (1) The estimated quantity of salable oil of each class held by producers and handlers; (2) the estimated demand for each class of oil; (3) the prospective production of each class of oil; (4) the total of allotment bases of each class of oil for the current marketing year and the estimated total of allotment bases of each class for the ensuing marketing year; (5) the quantity of reserve oil, by class, in storage; (6) producer prices of oil, including prices for each class of oil; and (7) general market conditions for each class of oil, including whether the estimated season average price to producers is likely to exceed parity. Conformity with the USDA's “Guidelines for Fruit, Vegetable, and Specialty Crop Marketing Orders” has also been reviewed and confirmed.

The establishment of these salable quantities and allotment percentages would allow for anticipated market needs. In determining anticipated market needs, consideration by the Committee was given to historical sales, as well as changes and trends in production and demand. This rule also provides producers with information on the amount of spearmint oil that should be produced for the 2006-2007 season in order to meet anticipated market demand.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility.

There are eight spearmint oil handlers subject to regulation under the order, and approximately 59 producers of Scotch spearmint oil and approximately 91 producers of Native spearmint oil in the regulated production area. Small agricultural service firms are defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $6,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000.

Based on the SBA's definition of small entities, the Committee estimates that 2 of the 8 handlers regulated by the order could be considered small entities. Most of the handlers are large corporations involved in the international trading of essential oils and the products of essential oils. In addition, the Committee estimates that 19 of the 59 Scotch spearmint oil producers and 21 of the 91 Native spearmint oil producers could be classified as small entities under the SBA definition. Thus, a majority of handlers and producers of Far West spearmint oil may not be classified as small entities.

The Far West spearmint oil industry is characterized by producers whose farming operations generally involve more than one commodity, and whose income from farming operations is not exclusively dependent on the production of spearmint oil. A typical spearmint oil-producing operation has enough acreage for rotation such that the total acreage required to produce the crop is about one-third spearmint and two-thirds rotational crops. Thus, the typical spearmint oil producer has to have considerably more acreage than is planted to spearmint during any given season. Crop rotation is an essential cultural practice in the production of spearmint oil for weed, insect, and disease control. To remain economically viable with the added costs associated with spearmint oil production, most spearmint oil-producing farms fall into the SBA category of large businesses.

Small spearmint oil producers generally are not as extensively diversified as larger ones and as such are more at risk from market fluctuations. Such small producers generally need to market their entire annual crop and do not have the luxury of having other crops to cushion seasons with poor spearmint oil returns. Conversely, large diversified producers have the potential to endure one or more seasons of poor spearmint oil markets because income from alternate crops could support the operation for a period of time. Being reasonably assured of a stable price and market provides small producing entities with the ability to maintain proper cash flow and to meet annual expenses. Thus, the market and price stability provided by the order potentially benefit the small producer more than such provisions benefit large producers. Even though a majority of handlers and producers of spearmint oil may not be classified as small entities, the volume control feature of this order has small entity orientation.

This proposed rule would establish the quantity of spearmint oil produced in the Far West, by class, that handlers may purchase from, or handle for, producers during the 2006-2007 marketing year. The Committee recommended this rule to help maintain stability in the spearmint oil market by avoiding extreme fluctuations in supplies and prices. Establishing quantities to be purchased or handled during the marketing year through volume regulations allows producers to plan their spearmint planting and harvesting to meet expected market needs. The provisions of §§ 985.50, 985.51, and 985.52 of the order authorize this rule.

Instability in the spearmint oil sub-sector of the mint industry is much more likely to originate on the supply side than the demand side. Fluctuations in yield and acreage planted from season-to-season tend to be larger than fluctuations in the amount purchased by buyers. Demand for spearmint oil tends to be relatively stable from year-to-year. The demand for spearmint oil is expected to grow slowly for the foreseeable future because the demand for consumer products that use spearmint oil will likely expand slowly, in line with population growth.

Demand for spearmint oil at the farm level is derived from retail demand for spearmint-flavored products such as chewing gum, toothpaste, and mouthwash. The manufacturers of these products are by far the largest users of mint oil. However, spearmint flavoring is generally a very minor component of the products in which it is used, so changes in the raw product price have no impact on retail prices for those goods.

Spearmint oil production tends to be cyclical. Years of large production, with demand remaining reasonably stable, have led to periods in which large producer stocks of unsold spearmint oil have depressed producer prices for a number of years. Shortages and high prices may follow in subsequent years, as producers respond to price signals by cutting back production.

The significant variability is illustrated by the fact that the coefficient of variation (a standard measure of variability; “CV”) of Far West spearmint oil production from 1980 through 2003 was about 0.24. The CV for spearmint oil grower prices was about 0.13, well below the CV for production. This provides an indication of the price stabilizing impact of the marketing order.

Production in the shortest marketing year was about 49 percent of the 25-year average (1.846 million pounds from 1980 through 2004) and the largest crop was approximately 167 percent of the 25-year average. A key consequence is that in years of oversupply and low prices the season average producer price of spearmint oil is below the average cost of production (as measured by the Washington State University Cooperative Extension Service).

The wide fluctuations in supply and prices that result from this cycle, which was even more pronounced before the creation of the marketing order, can create liquidity problems for some producers. The marketing order was designed to reduce the price impacts of the cyclical swings in production. However, producers have been less able to weather these cycles in recent years because of the decline in prices of many of the alternative crops they grow. As noted earlier, almost all spearmint oil producers diversify by growing other crops.

In an effort to stabilize prices, the spearmint oil industry uses the volume control mechanisms authorized under the order. This authority allows the Committee to recommend a salable quantity and allotment percentage for each class of oil for the upcoming marketing year. The salable quantity for each class of oil is the total volume of oil that producers may sell during the marketing year. The allotment percentage for each class of spearmint oil is derived by dividing the salable quantity by the total allotment base.

Each producer is then issued an annual allotment certificate, in pounds, for the applicable class of oil, which is calculated by multiplying the producer's allotment base by the applicable allotment percentage. This is the amount of oil for the applicable class that the producer can sell.

By November 1 of each year, the Committee identifies any oil that individual producers have produced above the volume specified on their annual allotment certificates. This excess oil is placed in a reserve pool administered by the Committee.

There is a reserve pool for each class of oil that may not be sold during the current marketing year unless USDA approves a Committee recommendation to make a portion of the pool available. However, limited quantities of reserve oil are typically sold to fill deficiencies. A deficiency occurs when on-farm production is less than a producer's allotment. In that case, a producer's own reserve oil can be sold to fill that deficiency. Excess production (higher than the producer's allotment) can be sold to fill other producers' deficiencies. All of this needs to take place by November 1.

In any given year, the total available supply of spearmint oil is composed of current production plus carry-over stocks from the previous crop. The Committee seeks to maintain market stability by balancing supply and demand, and to close the marketing year with an appropriate level of carryout. If the industry has production in excess of the salable quantity, then the reserve pool absorbs the surplus quantity of spearmint oil, which goes unsold during that year, unless the oil is needed for unanticipated sales.

Under its provisions, the order may attempt to stabilize prices by (1) limiting supply and establishing reserves in high production years, thus minimizing the price-depressing effect that excess producer stocks have on unsold spearmint oil, and (2) ensuring that stocks are available in short supply years when prices would otherwise increase dramatically. The reserve pool stocks grown in large production years are drawn down in short crop years.

An econometric model was used to assess the impact that volume control has on the prices producers receive for their commodity. Without volume control, spearmint oil markets would likely be over-supplied, resulting in low producer prices and a large volume of oil stored and carried over to the next crop year. The model estimates how much lower producer prices would likely be in the absence of volume controls.

The Committee estimated the trade demand for the 2006-2007 marketing year for both classes of oil at 1,912,500 pounds, and that the expected combined carry-in will be 67,651 pounds. This results in a combined salable quantity needed of 1,844,849 pounds. Therefore, with volume control, sales by producers for the 2006-2007 marketing year would be limited to 2,959,453 pounds (the recommended salable quantity for both classes of spearmint oil).

The recommended salable percentages, upon which 2006-2007 producer allotments are based, are 45 percent for Scotch and 46 percent for Native. Without volume controls, producers would not be limited to these allotment levels, and could produce and sell additional spearmint. The econometric model estimated a $1.49 decline in the season average producer price per pound (from both classes of spearmint oil) resulting from the higher quantities that would be produced and marketed without volume control. The Far West producer price for both classes of spearmint oil was $9.40 for 2004, which is below the average of $10.85 for the period of 1980 through 2004, based on National Agricultural Statistics Service data. The surplus situation for the spearmint oil market that would exist without volume controls in 2006-2007 also would likely dampen prospects for improved producer prices in future years because of the buildup in stocks.

The use of volume controls allows the industry to fully supply spearmint oil markets while avoiding the negative consequences of over-supplying these markets. The use of volume controls is believed to have little or no effect on consumer prices of products containing spearmint oil and will not result in fewer retail sales of such products.

The Committee discussed alternatives to the recommendations contained in this rule for both classes of spearmint oil. The Committee discussed and rejected the idea of recommending that there not be any volume regulation for both classes of spearmint oil because of the severe price-depressing effects that would occur without volume control.

The Committee considered various alternative levels of volume control for Scotch spearmint oil, including increasing the percentage to a less restrictive level, or decreasing the percentage. After considerable discussion the Committee unanimously determined that 878,205 pounds and 45 percent would be the most effective salable quantity and allotment percentage, respectively, for the 2006-2007 marketing year.

The Committee also considered various alternative levels of volume control for Native spearmint oil. After considerable discussion the Committee unanimously determined that 1,007,886 pounds and 46 percent would be the most effective salable quantity and allotment percentage, respectively, for the 2006-2007 marketing year.

As noted earlier, the Committee's recommendation to establish salable quantities and allotment percentages for both classes of spearmint oil was made after careful consideration of all available information, including: (1) The estimated quantity of salable oil of each class held by producers and handlers; (2) the estimated demand for each class of oil; (3) the prospective production of each class of oil; (4) the total of allotment bases of each class of oil for the current marketing year and the estimated total of allotment bases of each class for the ensuing marketing year; (5) the quantity of reserve oil, by class, in storage; (6) producer prices of oil, including prices for each class of oil; and (7) general market conditions for each class of oil, including whether the estimated season average price to producers is likely to exceed parity. Based on its review, the Committee believes that the salable quantity and allotment percentage levels recommended would achieve the objectives sought.

Without any regulations in effect, the Committee believes the industry would return to the pronounced cyclical price patterns that occurred prior to the order, and that prices in 2006-2007 would decline substantially below current levels.

As stated earlier, the Committee believes that the order has contributed extensively to the stabilization of producer prices, which prior to 1980 experienced wide fluctuations from year-to-year. National Agricultural Statistics Service records show that the average price paid for both classes of spearmint oil ranged from $4.00 per pound to $11.10 per pound during the period between 1968 and 1980. Prices have been consistently more stable since the marketing order's inception in 1980, with an average price (1980-2004) of $12.80 per pound for Scotch spearmint oil and $9.83 per pound for Native spearmint oil.

During the period of 1998 through 2004, however, large production and carry-in inventories have contributed to prices below the 25-year average, despite the Committee's efforts to balance available supplies with demand. Prices have ranged from $8.00 to $11.00 per pound for Scotch spearmint oil and between $9.10 and $10.00 per pound for Native spearmint oil.

According to the Committee, the recommended salable quantities and allotment percentages are expected to achieve the goals of market and price stability.

As previously stated, annual salable quantities and allotment percentages have been issued for both classes of spearmint oil since the order's inception. Reporting and recordkeeping requirements have remained the same for each year of regulation. These requirements have been approved by the Office of Management and Budget under OMB Control No. 0581-0065. Accordingly, this rule would not impose any additional reporting or recordkeeping requirements on either small or large spearmint oil producers and handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to compliance with the Government Paperwork Elimination Act (GPEA), which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

In addition, the Committee's meeting was widely publicized throughout the spearmint oil industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the October 5, 2005, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit information on the regulatory and informational impacts of this action on small businesses.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/fv/moab.html. Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

A 30-day comment period is provided to allow interested persons the opportunity to respond to this proposal. This comment period is deemed appropriate so that a final determination can be made prior to June 1, 2006, the beginning of the 2006-2007 marketing year. All written comments timely received will be considered before a final determination is made on this matter.

For the reasons set forth in the preamble, 7 CFR Part 985 is proposed to be amended as follows:

The FAA invites interested persons to join in this rulemaking by filing written comments, data, or views. We also invite comments about the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel about this proposed rulemaking. The docket is available for public inspection before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. You may also review the docket using the Internet at the Web address in the ADDRESSES section.

Privacy Act: Using the search function of our docket Web site, anyone can find and read the comments received into any of our dockets. This includes the name of the individual sending the comment (or signing the comment for an association, business, labor union). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78) or you may visit http://dms.dot.gov.

Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change this proposal because of the comments we receive.

If you want the FAA to acknowledge receipt of your comments on this proposal, include with your comments a preaddressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it to you.

Do not file in the docket information that you consider to be proprietary or confidential business information. Send or deliver this information directly to the person identified in the FOR FURTHER INFORMATION CONTACT section of this document. You must mark the information that you consider proprietary or confidential. If you send the information on a disk or CD ROM, mark the outside of the disk or CD ROM and also identify electronically within the disk or CD ROM the specific information that is proprietary or confidential.

Under 14 CFR 11.35(b), when we are aware of proprietary information filed with a comment, we do not place it in the docket. We hold it in a separate file to which the public does not have access, and place a note in the docket that we have received it. If we receive a request to examine or copy this information, we treat it as any other request under the Freedom of Information Act (5 U.S.C. 552). We process such a request under the DOT procedures found in 49 CFR part 7.

You can get an electronic copy using the Internet by:

(1) Searching the Department of Transportation's electronic Docket Management System (DMS) Web page ( http://dms.dot.gov/search );

(2) Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies; or

(3) Accessing the Government Printing Office's Web page at http://www.access.gpo.gov/su_docs/aces/aces140.html.

You can also get a copy by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue, SW., Washington, DC 20591, or by calling (202) 267-9680. Make sure to identify the docket number, notice number, or amendment number of this rulemaking.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in subtitle VII, part A, subpart I, section 40117. Under that section, the FAA, by delegation, is charged with prescribing regulations to impose a passenger facility fee to finance an eligible airport-related project. This regulation is within the scope of that authority because Vision 100 requires the FAA to change the PFC program. Many proposals in this document are taken from Vision 100.

On March 23, 2005, the FAA published a final rule (2005 final rule) to create a 3-year pilot program for non-hub airports to test new application and application approval procedures for the passenger facility charge (PFC) program (70 FR 14928). The final rule contains several changes designed to streamline the PFC application and amendment procedures for all PFC applications and amendments to improve the entire PFC program.

The FAA published the 2005 final rule to address Congressional mandates in the Vision 100—Century of Aviation Reauthorization Act (Vision 100). The non-hub pilot program, with the PFC application streamlining procedures, however, was only one of six mandates specified in Vision 100. The FAA separated the non-hub program and related changes from the other mandates because Congress had required the FAA to publish proposed rules on the pilot program within 180 days of enactment of Vision 100.

This rulemaking addresses the remaining mandates in Vision 100. These mandates include:

(1) Making low-emission airport vehicles and ground support equipment eligible for PFC funding,

(2) Using PFCs to pay debt service on projects that are “not an eligible airport-related project” when there is a financial need at an airport,

(3) Clarifying the PFC status of military charters,

(4) Structuring PFC account requirements for carriers in bankruptcy, and

(5) Making eligible the use of PFC revenue as local share for projects under the air traffic modernization cost-sharing program.

In addition, the FAA is proposing other changes, two of which would streamline benefits beyond those contained in the 2005 final rule. These proposed changes would:

(1) Provide for the electronic filing of notices and reports;

(2) Provide a process for periodic review and change of the carrier compensation level; and

(3) Modify the content and due date for some public agency reports and notices.

The NPRM is divided into three parts:

(1) Changes mandated by Vision 100;

(2) Changes associated with technological improvements; and

(3) Changes to streamline PFC procedures, codify PFC policies, or address issues or questions about the PFC program.

Section 121 of Vision 100 establishes a voluntary program to reduce airport ground emissions at commercial service airports in air quality nonattainment and maintenance areas (49 U.S.C. 40117(a)(3) and (b)(5)). This program makes the cost of new or converted equipment or vehicles eligible for PFC funding. The intent of the program is not to cause the premature retirement of existing equipment or vehicles, but to provide incentives to buy replacements or to convert existing equipment to meet lower emissions standards. The program helps airports meet their obligations under the Clean Air Act (42 U.S.C. 7501(2)) and helps regional efforts to meet health-based National Ambient Air Quality Standards. The program goal is to reduce the amount of regulated pollutants and other harmful air emissions produced by ground transportation sources at airports. The program also supports efforts to increase U.S. energy independence by emphasizing domestically produced alternative fuels that are substantially nonpetroleum based. The program provides public agencies with financial and regulatory incentives to increase their investment in proven low-emission technology. Use of alternative fuel vehicles and other low-emission technologies that are particularly suited to the airport environment are highly encouraged.

To address Vision 100, the proposed rule would add the definition of “ground support equipment” to § 158.3. Ground support equipment includes vehicles used for operations and maintenance of aeronautical activities, but does not include vehicles used to meet safety, security, and snow removal requirements. Baggage tugs, belt loaders, cargo loaders, forklifts, fuel trucks, lavatory trucks, and pushback tractors are among the types of vehicles that fit the definition of ground support equipment. In addition, battery recharging and alternate fueling stations are eligible under this program.

The low-emission vehicle program provides a funding mechanism to acquire low-emission technology, which often is more costly than conventional technology. The proposed rule would modify § 158.13 by setting the maximum allowable cost for certain low-emission technology projects. For new vehicle purchases, public agencies may only use PFC revenue for the added cost of the low emission technology above the cost of a conventional emission vehicle. For vehicles being converted to low-emission technology, public agencies may only use PFC revenue for the reasonable cost of the conversion.

The proposal would add paragraph (b)(8) to § 158.15 to provide the eligibility requirements for low-emission vehicle projects. To be eligible, the airport must be located in an FAA and Environmental Protection Agency designated air quality nonattainment or maintenance area. In addition, the airport must receive emission credits for completing the project from the appropriate State air quality agency.

Eligible projects must either (1) convert existing vehicles powered by diesel or gasoline engines to low-emission technology or the use of cleaner burning fuels, or (2) buy new vehicles that include low-emission technology or use cleaner burning fuels.

Interested parties are directed to the following Web site to obtain guidance on determining the eligibility of projects and how benefits to air quality must be demonstrated: http://www.faa.gov/arp/environmental/VALE/Index.cfm.

Section 122 of Vision 100 amended the statute to permit an exception to use PFC revenue to pay the debt service costs of airport-related projects that otherwise are not PFC-eligible if the public agency can show a financial need (49 U.S.C. 40117(b)(6)). The FAA expects that a public agency seeking relief under this provision wants to restore its financial stability and health. A proposed new definition, “Financial need,” would be added to § 158.3. This definition would tie the financial need of a public agency to its ability to meet operational and debt obligations and maintain at least a 2-month reserve fund. Such financial need typically results from a series of events that cumulatively weaken the financial condition of the public agency. The FAA defines “financial need” based on information collected from several airports regarding their capital reserve funds and broadly accepted principles of airport financial fitness.

Proposed paragraph (e) to § 158.13 would provide an exception permitting the use of PFC revenue to pay debt service costs for a noneligible project.

Proposed new § 158.18 would provide for the use of PFC revenue to pay debt service cost for noneligible projects. Financial need is based on severe financial constraints suffered by the airport or public agency. This adverse financial position usually results from one or more events beyond the reasonable control of the public agency, resulting in a financial crisis for the airport. These events may include:

(1) The bankruptcy of an air carrier serving the airport that results in rejecting leases for a significant portion of all air carrier gates at that airport;

(2) Significantly reduced service by one or more air carriers that accounts for a major portion of the enplaned passenger traffic at the airport; or

(3) Other dramatic changes in air carrier service patterns that undermine the ability of the public agency to pay for airport development already constructed.

Other events, such as natural disasters, may also create a financial need for the public agency.

A public agency should show that its financial recovery plan makes use of all available resources. The FAA would authorize an airport or public agency to impose a PFC under this paragraph only for the period necessary to cure the airport's or agency's financial need. Furthermore, the FAA expects the public agency to use any revenue saved by this PFC to return the airport to a state of financial fitness in as quick a period as possible. For example, use of the saved revenue to incur additional non-aeronautical debt or development costs would not return the airport to a state of financial fitness.

A public agency applying for PFC revenue under this provision must use the application procedures in § 158.25 and document its financial position by providing information regarding:

(1) A change in passenger enplanements for a carrier;

(2) Negative actions taken on the public agency's bond rating;

(3) The inability of the public agency to meet bond payments and associated requirements;

(4) Alternative sources of revenue available to the public agency, such as grant funds, state funds, concession revenue, vehicle parking fees, aircraft parking fees, other non-aviation fees, fuel taxes, and revenue from any other operators using the airport. (The submitted information must address whether these fees can be raised to create more revenue for the airport);

(5) The impact of any necessary increases to the rate base or landing fees for concession and carrier revenue because of the loss of revenue from a change in economic circumstances (e.g., the bankruptcy or financial troubles of a carrier);

(6) Actions taken by the public agency to reduce cost, such as operational changes, personnel actions, or capital project postponement;

(7) The source(s) of revenue currently used to pay bond cost;

(8) The current airport fee structure and methodology used to calculate rates and charges;

(9) The affect of the loss of an air carrier or adding a new carrier on the current fee structure;

(10) The planned use of revenue saved by using PFCs to pay the debt service and how this use will aid the return to financial fitness; and

(11) Any other information the public agency believes will document the financial need of the airport.

The FAA will use the procedures in § 158.27 to analyze the information submitted by the public agency, and then issue its decision on a case-by-case basis under § 158.29.

Section 123(c) of Vision 100 amended the PFC statute to prohibit collecting PFCs from passengers on military charter flights (49 U.S.C. 400117(e)(2)). Proposed paragraph (a) (6) to § 158.9 would clarify that passengers who do not pay directly for the air transportation due to Department of Defense charter arrangements or payments will not pay PFCs.

Section 124 of Vision 100 added specific requirements to protect PFC revenue from creditors when air carriers file for bankruptcy protection after the date of enactment of Vision 100 (49 U.S.C. 40117 (m) (1-7)). Through this provision, Congress has specifically recognized and protected the trust fund status of PFC revenue and prohibited air carriers from using PFCs as security with third parties.

Air carriers historically have commingled PFC revenue in accounts with other revenue until it was time to remit the PFC revenue to the various public agencies. Before Vision 100, in situations where an air carrier filed for bankruptcy protection and owed PFC remittances, public agencies had difficulties recovering past due PFCs. In part, these difficulties arose because the PFC revenue was commingled and, thus, difficult for bankruptcy courts to identify and public agencies to recover. Section 124 prohibits the commingling of PFC revenue with other revenue for air carriers in bankruptcy. In addition, section 124 requires that air carriers in bankruptcy set up separate PFC accounts to handle PFC transactions—receipt of revenue from passengers and issuance of remittance to public agencies. This provision should enable bankruptcy courts to more easily identify PFC revenue for remittance to public agencies.

The proposed rule would add a definition of “covered air carrier” to § 158.3. The new definition states that a covered air carrier is an air carrier that has filed for bankruptcy protection or has had an involuntary proceeding started against it after December 12, 2003.

In addition, the proposed rule would modify paragraph (b) of § 158.49, which allows air carriers to commingle PFC revenue with an air carrier's other sources of revenue, so that this paragraph does not apply to covered air carriers.

A new paragraph (c) would be added to § 158.49 requiring a covered air carrier segregate the PFC revenue into a designated PFC account when it enters bankruptcy protection. A covered air carrier would be required to set up the PFC account dedicated solely to PFCs, with a deposit equal to the average month's balance, based on the air carrier's past 12 months of PFC collections net of any credits or handling fees allowed by law. A covered air carrier would be required to ensure the account balance never falls below this initial fixed deposit amount (“PFC Reserve”). Besides the method proposed in this rulemaking, the FAA considered requiring the covered air carrier to keep a rolling balance in the designated PFC account. This rolling balance was based on an average of the previous 12 month's collections recalculated monthly as a method to calculate an amount that would be a fair account balance. The monthly recalculation would have captured situations where an airport served by the air carrier started PFC collections or increased its level of PFC collections after the PFC account was established. However, the FAA eventually concluded that recalculation on a rolling basis would be too burdensome on the covered air carrier and difficult for the FAA and the public agencies to monitor.

The FAA recognizes that a covered air carrier may change its route structure during its bankruptcy and this change in route structure may, in turn, effect the average PFCs collected. Therefore, under the proposal a covered air carrier would be permitted to recalculate and reset the PFC Reserve and daily PFC amount on each successive anniversary date of its bankruptcy petition.

Proposed paragraph (c) to § 158.49 would allow a covered air carrier to deposit ticket sales revenue to its general operating account before separating the types of revenue. The proposal requires the covered air carrier to sweep its general operating account at least once a business day to take the PFC revenue initially deposited in this account and redeposit it in the PFC account. Through recent experience, the FAA has discovered that not all covered air carriers can judge the PFC collections on a daily basis. Accordingly, under the proposal, a covered air carrier that cannot accurately move the PFC revenue daily may elect to deposit into the PFC account daily, an estimated amount based on 1/30th of the PFC Reserve balance. A covered air carrier that sweeps with the estimated amount will be required to reconcile the PFC account for accuracy no later than the 20th of each month. This provision allows the covered air carrier to have an accurate PFC balance in place at the time of required PFC remittances.

The proposed paragraph reiterates Congress' mandate to protect the trust fund status of PFC revenue. Even if the covered air carrier fails to follow the procedures in this paragraph, this trust fund status shall not be defeated by an inability of any party to identify and trace precise amounts of PFC revenue in the air carrier's accounts. The proposed paragraph also prohibits a covered air carrier and its agents from granting a security or other interest in the PFC revenue to a third party.

Proposed paragraph (c) also provides that, if a public agency is forced to incur costs to recover PFC revenue because the covered air carrier failed to comply with these new PFC revenue-handling procedures, the covered air carrier is required to compensate the public agency for its costs. This provision applies to costs incurred by a public agency in pursuit of PFCs owed if a covered air carrier fails to make its PFC payments under the statute or rule (49 U.S.C. 40117(m)(4).

Proposed paragraph (b) to § 158.53 would state that a covered air carrier is entitled to keep the interest portion of the compensation only as long as the air carrier follows the procedures in § 158.49.

Proposed paragraph (b) to § 158.65 would require that, besides reporting to the public agencies, covered air carriers must send a copy of their quarterly report to the FAA. Covered air carriers also will be required to send a PFC account statement to the FAA on the fifth day of the month. The account statement will include the balance of their PFC account, the balance of their PFC reserve amount, total PFC funds deposited, and total PFC funds dispersed. This monthly report allows the FAA to monitor the covered air carrier's compliance with the requirements of § 158.49. The monthly report must continue while a covered air carrier remains in a bankruptcy proceeding.

Section 183 of Vision 100 set up a program to allow cost sharing of air traffic modernization projects (49 U.S.C. 44517(a)). This program is intended to improve aviation safety and the mobility of the Nation's air transportation system by encouraging non-Federal investment in critical air traffic control equipment and software. Under this program the FAA may make grants to eligible sponsors to pay a portion of the cost of FAA-approved projects to procure and install air traffic facilities and equipment. The program is intended to allow sponsors to achieve accelerated deployment of eligible facilities and equipment and to help expand aviation infrastructure. The sponsor may fund the non-Federal portion of the project costs through various methods including the use of PFC revenue.

If a public agency wishes to use PFC revenue to pay for all or a portion of the non-Federal share of the project, the public agency must first obtain authority to impose a PFC and use PFC revenue under the procedures in §§ 158.25 or .30.

Currently, paragraph (d) of § 158.13 allows the use of PFC revenue to pay for the non-Federal share of costs for a project funded under the Federal airport grant program. This paragraph will be renumbered as paragraph (g) and expanded to include the FAA's “program to permit cost-sharing of air traffic modernization projects.”

A new proposed paragraph (8) to § 158.15(b) would list a project approved under the FAA's program to allow cost sharing of air traffic modernization projects as PFC-eligible.

Major examples of technological improvements since the PFC program inception in 1990 are the use of electronic or paperless airline ticketing, the use of electronic mail to send documents, and web sites to post information.

The existing procedures for collection of PFCs from passengers were developed based on the assumption that ticket issuance would require a physical transaction, including the issuance of a paper airline ticket and a physical ticket issuance. Today, passengers can buy airline tickets using many methods, including the internet, and many air carriers no longer issue paper tickets. Furthermore, airline code-sharing and global alliances that have expanded ticketing options were not widely in place in 1990.

Currently, carriers have several options for PFC collection if the ticket is issued outside the U.S., including non-collection of any PFCs if the carrier does not serve a point in the U.S. Furthermore, airline code-sharing and global alliances, which were not common in 1990, have grown and created the potential for mistakenly administered and mishandled PFCs. A person living in the United States may buy airline tickets for domestic travel over the internet from a foreign carrier. Such transactions may confuse foreign carriers, especially those who do not have significant operations in the U.S., when determining the proper procedures to follow. To address these issues, the FAA is proposing several changes to part 158.

The proposal would define the “point of issuance of airline tickets” in § 158.3 to include electronic and other ticketing mediums. The definition of “air travel ticket” would be expanded to bring the definition in line with the varying methods of ticketing, including electronic records, boarding passes, and any other ticketing medium. In reference to a passenger's itinerary, the word “complete” would be removed since today's passengers may obtain documents, including a receipt showing the PFCs paid on each leg of their itinerary.

Proposed paragraph (a) of § 158.47 would clarify that U.S. and foreign air carriers must follow the requirements of § 158.45 when the itinerary is for travel within the U.S. regardless of the location of the ticket issuance.

The second technological improvement addressed by this proposal is the submission of information. Current air carrier quarterly reporting requirements in part 158 provide public agencies with information about PFC revenue remitted to the public agency, refunded to passengers, and retained by the air carrier. Air carrier quarterly reports allow public agencies to monitor their collections and identify any discrepancies in a timely manner.

The FAA has developed a national PFC database that stores information on PFC application and project approvals. Before issuing a final rule, the FAA expects to develop modules to collect the same types of information directly from the public agencies and air carriers for quarterly reports.

A comment submitted to the NPRM that was the basis of the 2005 final rule suggested the FAA eliminate the monthly and quarterly reports filed by air carriers to public agencies and, instead, create an air carrier annual report with currently required information. Since this comment was outside the scope of that notice, the FAA stated that it would consider the comment for inclusion in a future rulemaking.

Part 158 includes an air carrier reporting requirement to provide public agencies with information about the amount of PFC revenue remitted to the public agency, refunded to passengers, and retained by the carrier. The FAA determined that a quarterly report allows public agencies to monitor their collections and identify any discrepancies in a timely manner.

Paragraph (a) of proposed § 158.20 would permit public agencies and air carriers to send required documents such as letters, reports, and certifications of agreement/disagreement by e-mail, facsimile, courier, or regular mail. Paragraph (b) provides that public agencies and air carriers may use the PFC national database to post their quarterly reports. Thus, the FAA will not require public agencies and air carriers using this database to use U.S. Postal Services to send their quarterly reports to interested parties.

To accommodate the interests of as many public agencies as possible, the FAA will maintain the requirement in § 158.65 that the air carriers provide quarterly reports or input into the national PFC database. A public agency will be able to view these reports any time.

As the PFC program has developed, the FAA has recognized the need to streamline its existing policies. The discussions below identify certain areas where we are proposing changes to the current rule. Section 158.3 would redefine or add several definitions for terms currently in use. The first two definition changes result from new terms introduced with the nonhub program. The third new definition claries existing FAA policy.

• “Approved project” would be revised to ensure that projects acknowledged under the non-hub program are included in the definition. Under the non-hub program, the FAA “acknowledges” the notice of intent and the projects contained therein. However, there are many sections of part 158 that are applicable to projects being financed with PFC revenue and, thus, are applicable to both approved and acknowledged projects.

• “Notice of intent (to impose a PFC or use PFC revenue)” is a term used in the non-hub PFC authorization procedures. Public agencies receiving PFC authorization under the non-hub procedures must comply with all rules of the PFC program outside the authorization procedures in § 158.25. PFC authorizations for these other applications are identified as PFC applications and part 158 makes many references to “PFC application” or just “application.” Rather than adding the term “notice of intent” at every location where the term “application” is used, the FAA is proposing to add a definition of “notice of intent.” The proposed definition would include a statement to clarify that, except for those sections of part 158 that deal with specific authorization procedures, the terms “notice of intent” and “application” should be used interchangeably.

• The FAA has been approving collection of PFC revenue to pay for a public agency's cost of administering its PFC program based on the existing definition of the allowable costs in part 158. However, part 158 does not include a definition of the types of costs covered under PFC administrative support costs. Adding a definition for “PFC administrative support costs” would clarify the types of costs that public agencies should identify as PFC administrative support costs.

About 10 years ago, the FAA adopted a policy of advising public agencies to apply for PFC administrative support costs as a separate project. This policy has allowed the FAA to monitor more closely the public agency's costs and review the scope of work. However, not all public agencies have complied with this policy. Some public agencies include their administrative support costs within their development projects, resulting in inaccurate cost estimates for both the development projects and the administrative costs. The proposed rule would add paragraph (b) to § 158.13 providing that public agencies may use PFC revenue to pay for allowable PFC administrative support costs. The new paragraph would direct that public agencies treat PFC administrative support costs as a separate and distinct PFC project in a PFC application or notice of intent.

The PFC program is available to States, territories, Commonwealths, and possessions of the United States. Initially, the Trust Territory of the Pacific Islands was a territory of the U.S. and, thus, was eligible to participate in the PFC program. The Compact of Free Association between the U.S., Marshall Islands, and Federated States of Micronesia provided that newly independent States would be eligible to participate in Federal programs, such as the PFC program, for 15 years after adopting the Compact. The 15-year period ended in 2001, and the Marshall Islands and Federated States of Micronesia are no longer eligible to participate in the PFC program. Therefore, the definition for “State” would be redefined to remove the Trust Territory of the Pacific Islands.

This proposal changes the current title of § 158.30 to “PFC Authorization at Non-Hub Airports.” This proposed change clarifies that PFC authorizations at non-hub airports relate to size of airport and not to aircraft pilots at non-hub airports. The sunset provision in paragraph (h) remains in effect (49 U.S.C. 40117(l)(7)).

The proposed editorial changes in § 158.31 clarify the intent of the original language.

Proposed paragraphs (a)(2), (c)(1), and (c)(2) of § 158.33 would clarify the term “charge effective date.” A public agency may only collect on one PFC decision at a time meaning the charge effective date for a subsequent application must be on or after the charge expiration date for the current application.

The FAA wrote § 158.33 to require public agencies to take certain actions within a prescribed period of time after the charge effective date of an application. However, a literal reading of the current regulation could lead to the belief that, for example, a project approved for collection in 2005 in an application with a charge effective date of 2016 need not be implemented for 11 years. The FAA interprets the timelines in § 158.33 with regard to the start of collections for an application as being either the charge effective date or the date the application was approved.

Section 158.37 requires a public agency to consult with air carriers and provide notice and the opportunity for public comment if the public agency is seeking to increase the PFC amount of a project by more than 25 percent of the originally approved amount. While the FAA believes the 25 percent threshold is reasonable, an excess of amendments could overburden the consultation and comment processes, requiring consultation for insignificant amounts. For example, the FAA has approved several projects for amounts of $1,000 or less. Under the current rules, an increase of $250 to a $1,000 project would trigger the need for consultation and public comment.

The FAA examined the existing universe of PFC projects and concluded that over 75 percent of these projects have a PFC cost below $1 million. Generally, these projects have well-established costs. Increases are often sought because of changes in quantities or differences in estimated or actual costs. Furthermore, the FAA rarely receives substantive comments from air carriers or the public on projects with PFC costs below $1 million. This proposed rule would modify § 158.37 to provide a minimum dollar threshold. For projects with originally approved amounts at or above this threshold, an increase of more than 25 percent would trigger the need for consultation and public comment. For projects with originally approved amounts below this threshold, public agencies will not need to consult with air carriers and provide the opportunity for public comment, regardless of the percentage increase in costs proposed. Paragraphs (b)(1)(i)(A), (b)(1)(ii)(C), (b)(1)(ii)(D), and (b)(5) would be modified to address this proposed threshold.

This proposed rule would clarify the language in paragraph (a) of § 158.39 by adding “earned thereon” after “ * * * plus interest.” A public agency must include the PFC principal and the interest earned thereon in determining whether it has collected the total amount of PFC revenue authorized.

Proposed paragraph (d) of § 158.39 would delete “under § 158.25(c)” from the second sentence. As discussed earlier in the notice of intent definition, “notice of intent” may be used interchangeably with “PFC application.”

Currently, paragraph (b)(3) of § 158.43 requires a public agency to set its charge effective date as the first day of a month at least 60 days from the date the notice was sent to air carriers. Since its beginning, however, air carriers have developed procedures for programming new PFC collections at airports and are able to perform this programming in 30 days. This proposal would change the requirement to 30 days in paragraph (b)(3) of § 158.43.

Current FAA policy requires at least 30 days notice to allow air carriers enough time to reprogram their systems. However, public agencies continue to make changes with less than 30 days notice. Occasionally, this results in the FAA not processing the change and the public agency's collection is either prematurely stopped or extended a month beyond the intended expiration date. The proposed rule would modify paragraph (c) of § 158.43 to require that public agencies notify air carriers and the FAA at least 30 days before changing the charge expiration date.

The proposed rule would modify paragraphs (a)(3) of § 158.45 and (c)(4) of § 158.47 to clarify that failure to travel on a nonrefundable or expired airline ticket is not a change in itinerary. Ticket purchasers holding nonrefundable or expired tickets are not entitled to a refund of any associated PFCs if the ticket purchaser is not entitled to any fare refund.

The PFC statute requires the FAA set up a uniform collection compensation amount reflecting the “average reasonable and necessary expenses” of the air carriers' collection and handling of the PFC (49 U.S.C. 40117 (i)(2)(C)). A periodic review of the collection compensation rate is fair and reasonable because of changing air carrier PFC handling costs. The costs may include handling, reporting, escrow, collecting, and remittance fees. The proposed rule would provide for periodic review outside the formal rulemaking process.

In the future, the FAA plans periodically to publish a notice in the Federal Register asking that air carriers voluntarily provide data on their costs associated with the PFC program. Proposed paragraph (c) of § 158.53 would include a list of the 11 categories of cost data the FAA tentatively has determined represent the incremental costs directly associated with PFC collection, handling, remittance, reporting, recording keeping, and auditing by air carriers. If the FAA determines a new level is warranted, we would publish a second Federal Register notice seeking public comment. We would publish a third notice in the Federal Register providing a final determination.

The FAA has developed its national PFC database and identified the need for national consistency in the information reported. This database allows public agencies to input the revenue received on either a monthly or quarterly basis. The FAA chose the actual revenue received method rather than accrual basis method because actual basis is more closely tied to when PFC collections are completed. This proposal would modify paragraph (a) of § 158.63 to clarify that public agencies must report revenue actually received from the air carriers rather than on an accrual basis.

Currently, large and medium hub airports are required to file their annual PFC revenue forecasts by August 1. The FAA set the August 1 date based on when it usually received its first estimates on airport enplanements and, thus, could make the first estimates on AIP apportionments for the upcoming fiscal year. The FAA streamlined its process for gathering enplanement data and now makes its AIP apportionment estimates about July 1. The proposal would modify paragraph (c) of § 158.63 to specify July 1 as the date that large and medium hub airports report their forecast PFC revenue for the upcoming Federal fiscal year.

This proposal would delete § 158.97, Special rule for transitioning airports, which expired at the end of Federal fiscal year 2004.

Experience has shown that most PFC projects are physically completed long before they are financially completed. This contrasts with AIP grant projects where the financial completion of the project follows quickly after the project's physical completion. This proposal would modify assurance 10 of part B of Appendix A to part 158 to add “physical and financial” before “completion” in the first sentence to clarify the time public agencies need to retain their records.

The proposal would also update several authorization citations.

Proposed changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs each Federal agency to propose or adopt a regulation only on a reasoned determination the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Agreements Act also requires agencies to consider international standards and, where appropriate, use them as the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation.)

In conducting these analyses, the FAA has determined this proposed rule (1) has benefits that justify its costs, is not a “significant regulatory action” as defined in section 3(f) of Executive Order 12866 and is not “significant” as defined in the DOT's Regulatory Policies and Procedures; (2) would not have a significant economic impact on a substantial number of small entities; (3) would not have an effect on international trade; and (4) would not impose an unfunded mandate on State, local, or tribal governments, or on the private sector. These analyses, available in the preliminary regulatory evaluation supporting today's rule, are summarized below.

Vision 100 mandates some changes to the PFC process that are not subject to the FAA's discretion. Changes other than those prescribed by Vision 100 are discretionary and the costs and cost savings are estimated in the table below.

The PDMA (Public Law 100-293) was enacted on April 22, 1988, and was modified by the PDA (Public Law 102-353, 106 Stat. 941) on August 26, 1992. The PDMA, as modified, amended the Federal Food, Drug, and Cosmetic Act (the act) to establish restrictions and requirements relating to various aspects of human prescription drug marketing and distribution. Among other things, the PDMA prohibited, with certain exceptions, the sale, purchase, or trade (or offer to sell, purchase, or trade) of prescription drugs that were purchased by hospitals or other health care entities. Section 503(c)(3)(A)(ii)(I) of the act (21 U.S.C. 353(c)(3)(A)(ii)(I)). Section 503(c)(3) also states that “[f]or purposes of this paragraph, the term ‘entity’ does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law * * *.”

In the Federal Register of March 14, 1994 (59 FR 11842), we issued a proposed rule to implement those PDMA sections that were not implemented by the final rule of September 14, 1990, that set forth Federal guidelines for State licensing of wholesale drug distributors (55 FR 38012). The proposed rule contained provisions on prescription drug reimportation; wholesale distribution of prescription drugs by unauthorized distributors; the resale of prescription drugs by hospitals, health care entities, and charitable institutions; and distribution of prescription drug samples. After consideration of comments, we issued a final rule in the Federal Register of December 3, 1999 (64 FR 67720) (“the final rule”), with an effective date of December 4, 2000.

After publication of the final rule, we received many letters on, and held several meetings to discuss the implications of, the final regulations for registered blood establishments that distribute blood-derived products and provide health care as a service to hospitals and patients. According to comments received before the final rule took effect, implementing the final rule as published would interfere with longstanding relationships between blood centers and other health care providers such as hospitals, hemophilia treatment centers, and other providers.

The blood establishment industry asserted that the regulations, particularly the definition of “health care entity” in § 203.3(q) (21 CFR 203.3(q)), would, to the detriment of the public health, severely inhibit its ability to provide medical care and services and might disrupt the distribution of blood derivatives, to what may be otherwise unserved or inadequately served segments of the public. Specifically, § 203.20 (21 CFR 203.20) of the final rule as written states, in relevant part, that no person may sell, purchase, or trade, or offer to sell, purchase, or trade any prescription drug that was purchased by a health care entity (§ 203.20(a)).

“ Health care entity ” is defined in § 203.3(q) as any person that provides diagnostic, medical, surgical, or dental treatment, or chronic or rehabilitative care, but does not include any retail pharmacy or wholesale distributor. That definition specifically states that, “A person cannot simultaneously be a ‘health care entity’ and a retail pharmacy or wholesale distributor.” “ Wholesale distributor ” is defined in § 203.3(dd) (21 CFR 203.3(dd)) as any person engaged in wholesale distribution of prescription drugs, and “ wholesale distribution ” is defined in § 203.3(cc) (21 CFR 203.3(cc)) as “distribution of prescription drugs to persons other than a consumer or patient * * *.” The final rule made clear that those definitions should be interpreted to mean that an establishment that meets the definition of a health care entity would not be allowed to engage in wholesale distribution. The Federal Register of December 3, 1999, stated “The agency declines to revise the definition of health care entity or otherwise revise the proposed rule to permit health care entities to engage in the wholesale distribution of blood derivatives or other prescription drug products.” (64 FR 67720 at 67726).

Thus, under the final rule as written, blood establishments functioning as health care entities would not be allowed to engage in wholesale distribution of prescription drugs except for blood and blood components intended for transfusion, which are exempted from the regulations under § 203.1 (21 CFR 203.1). As discussed in the preamble to the final rule (64 FR 67720 at 67725 to 67727), blood derivatives are not blood components. Therefore, should the final rule go into effect as written, registered blood establishments that qualify as health care entities could not distribute blood derivatives.

Blood derivatives that are prescription drugs include the following: Albumin, antihemophilic factor, Factor IX Complex, alpha-1 anti-tripsin, and immune globulin. Therefore, under the rule as written, a blood center could not resell blood derivatives to entities other than consumers or patients and simultaneously provide health care, such as medical services associated with those products.

On May 3, 2000, we delayed until October 1, 2001, the effective date of several provisions of the final rule and reopened the administrative record, giving interested persons until July 3, 2000, to submit written comments (65 FR 25639). This delay extended to the definition of “ health care entity ” in § 203.3(q), as applied to the wholesale distribution of blood derivatives by health care entities. The purpose of delaying the effective date for these provisions was to give us time to obtain more information about the possible consequences of implementing these provisions and to further evaluate the issues involved (65 FR 25639 at 25641).

On September 19, 2000, we announced a public hearing to discuss certain requirements of the final rule (65 FR 56480), including the provisions relating to the distribution of blood derivatives by entities that meet the definition of “health care entity.” We held the public hearing to develop an adequate factual basis to use to determine whether it is in the public health interest to modify or change the requirements in the final rule (65 FR 56480 at 56483).

We developed a list of questions to promote a more useful discussion at the public hearing. These questions related to: The distribution systems available for blood derived products; the effect of the final rule on these distribution systems, including adverse public health consequences or economic costs; whether excluding blood derived products from the final rule's restrictions would increase the risk of distribution of counterfeit, expired, adulterated, misbranded, or otherwise unsuitable products; and the pricing of blood-derived products sold to health care entities (65 FR 56480 at 56483) with regard to blood derivatives, as well as other unrelated issues associated with wholesale distribution of drugs. This proposed rule addresses only blood derivatives and does not address the other stayed requirements in the final rule relating to wholesale distribution of prescription drugs by distributors that are not authorized distributors of record (69 FR 8105, February 23, 2004).

The public hearing was held on October 27, 2000, and comments were accepted until November 20, 2000. In the Federal Register of March 1, 2001, we announced our decision to further delay until April 1, 2002, the applicability of § 203.3(q) to the wholesale distribution of blood derivatives by health care entities (66 FR 12850). Further delays of effective dates followed until December 1, 2006, to give us additional time to consider whether regulatory changes are appropriate and, if so, to initiate such changes (67 FR 6645, February 13, 2002; 68 FR 4912, January 31, 2003; 69 FR 8105, February 23, 2004).

We now propose to amend the regulations. The proposed amendments are narrow and would allow certain registered blood establishments that qualify as health care entities to distribute blood derivatives.

In response to the final rule, we received numerous comments arguing that blood establishments should be allowed to continue performing both functions of providing health care services and distributing blood derivatives. Some comments asserted that although the distribution of derivatives and the provision of health care services are small parts of a blood establishment's activities, they are vital to serving public health needs.

At the October 2000 public hearing, we heard from four interested parties on this subject. Comments asserted that we had reached the wrong conclusion with respect to restrictions on blood establishments' activities. In addition to restating earlier objections made in response to the proposed rule, the comments presented new objections and new information, including more detailed descriptions of the health care services they provide and the derivatives they distribute. They also offered several potential regulatory solutions.

We received no comments taking the position that the regulations should remain unchanged. We received from a national trade organization that represents blood establishments additional comments about the scope of products they distribute for treating blood-related disorders, which include drugs that are not blood derivatives. The comment stated the exemption should extend to any distribution of blood-related products by blood centers, not just to blood derivatives because blood centers also distribute blood-related products not always from human sources. In this proposed rule, we are seeking additional information on the distribution of other prescription drug products by registered blood establishments.

We have considered all comments and have changed our position from that expressed in the preamble discussion in the December 3, 1999, final rule (64 FR 67720). We now propose to allow certain registered blood establishments that qualify as health care entities to distribute blood derivatives. We are distinguishing blood derivatives from other prescription drugs when sold, purchased, or traded (or offered to sell, purchase, or trade) by a registered blood establishment that qualifies as a health care entity, provided all health care services offered by the establishment are related to its activities as a registered blood establishment.

Our current proposal modifies part 203 (21 CFR part 203) to allow a registered blood establishment  1 that provides health care services and that also distributes blood derivatives to continue in both capacities, as long as the blood establishment does not provide health care services unrelated to its activities as a registered blood establishment.

We have changed our position from that discussed in the preamble to the final rule (64 FR 67720 at 67726) because of new information and a better understanding of the industry and how the final rule, if enforced, might affect the public health. For example, according to testimony at the public hearing held on October 27, 2000, “more than 15 percent of all U.S. blood derivative products are distributed by community and Red Cross blood centers, with Red Cross alone accounting for 10 percent.”  2 Those blood centers qualify as health care entities because, in addition to collecting blood and plasma and distributing blood derivatives, they also provide certain health care services to the hospitals and health care entities they serve, including therapeutic phlebotomy, plasma exchange, stem cell and cord blood collection and processing, and medical expertise on the appropriate use of the blood derivatives they distribute. 3 According to the testimony, the majority of local hospitals do not have that kind of medical expertise, and as a practical matter could not obtain and maintain such expertise. 4

Prohibiting community and Red Cross blood centers that qualify as health care entities from distributing blood derivatives would have a particularly high impact on certain segments of patients. For example, the Red Cross testified that “85 percent of their anti-hemophilic factor is supplied directly to health care entities. They stated that implementation of the final rule would deny hemophilia patients access to this product because many treatment centers are smaller entities that are not supported by large distributors.”  5 Additionally, the Red Cross stated that “15 percent of their IVIG (intravenous immunoglobulin) products and 10 percent of their albumin product are provided directly to healthcare providers and account for 26,000 to 69,000 infusions annually.”  6

We now propose to amend § 203.22 (21 CFR 203.22), which contains exclusions from the sales restrictions in § 203.20 (21 CFR 203.20). Proposed new paragraph (h) provides a limited exception for registered blood establishments that qualify as a health care entity. Under the proposed exclusion, the sales restrictions in § 203.22 would not apply to the sale, purchase, or trade of (or the offer to sell, purchase, or trade) any blood derivatives by a registered blood establishment that qualifies as a health care entity as long as all of the health care services that it provides are related to its activities as a registered blood establishment. The following are examples of such health care services: therapeutic hemapheresis, therapeutic phlebotomies, plasma exchange, and transfusion services. For clarification, a registered blood establishment's ordinary donor screening activities for donor suitability (e.g., measuring a donor's temperature, blood pressure, and hematocrit or hemoglobin) are not considered health care services for the purposes of § 203.3(q).

A registered blood establishment that provides any health care services unrelated to its activities as a registered blood establishment would not be eligible for the exclusion. For example, if a registered blood establishment provides health care services such as administering antibiotics to treat a respiratory infection unrelated to transfusion medicine, we do not consider this to be a health care service related to the operation of a blood establishment. Therefore, the blood establishment would not be permitted to distribute blood derivatives. Without that limit on the exclusion, the rule would encourage hospitals and other health care entities to register as blood establishments strictly to take advantage of this exception. Allowing such entities that are not primarily blood establishments to distribute blood derivatives could raise the same concerns that the PDMA was intended to address. The prohibition against sales by health care entities was prompted in part because of the temptation for such entities to sell for-profit drugs acquired at below-wholesale prices.

The proposed exclusion in § 203.22 applies only to the distribution of blood derivatives by a registered blood establishment and not by other entities. The regulations implementing the PDMA, as modified, would continue to apply to these other entities.

Although the public hearing and additional comments received on the final rule provided us with an adequate factual basis to determine whether the requirements in the final rule should be modified in the interest of public health, new information provided with respect to the function of registered blood establishments indicates that additional input is needed. We are seeking information about the functions of registered blood establishments to assist us in making a decision whether further modification of the final rule is necessary in the interests of public health.

Proposed § 203.22(h) includes an “exclusion” that would allow certain registered blood establishments that qualify as health care entities to distribute blood derivatives. In consideration of the issues that the industry raised, we seek comments on whether this exclusion should be expanded to allow registered blood establishments that also provide health care services to distribute drugs other than blood derivatives that might be used to treat blood disorders. We are seeking information that includes, but is not limited to, the number of entities affected; how often drugs used to treat blood disorders are distributed by registered blood establishments and whether the nature of this practice is critical; and, any negative impact on public health if the exclusion allows only for the distribution of blood derivatives. Actual numbers, statistics, and examples would help us determine the best course of action. In addition, we seek comments on whether hemophilia treatment centers, which are health care entities but are not registered blood establishments, should be included within the scope of this exception.

FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the proposed rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the agency tentatively concludes that the proposed rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

FDA tentatively concludes that this proposed rule contains no collections of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA) is not required.

FDA has examined the impacts of the proposed rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this proposed rule is not a significant regulatory action as defined by the Executive order.

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this rule proposes a narrow revision that is intended to maintain the status quo, the agency certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities. Therefore, under the Regulatory Flexibility Act, no further analysis is required.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $115 million, using the most current (2003) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this proposed rule to result in any 1-year expenditure that would meet or exceed this amount.

Interested persons may submit to the Division of Dockets Management (see ADDRESSES ) written or electronic comments regarding this document. Submit a single copy of electronic comments or two paper copies of any mailed comments, except that individuals may submit one paper copy. Comments are to be identified with the docket number found in brackets in the heading of this document. Received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

The Coast Guard previously published three documents with requests for comments regarding the petition for a rulemaking by the City of Fall River, MA, on the subject of thermal and vapor dispersion exclusion zones for marine spills of LNG [see 69 FR 63979, Nov. 3, 2004; 70 FR 11912, March 10, 2005; 70 FR 36363, June 23, 2005]. Supplementary information was posted and made available in the docket (see “Viewing the Notice”). We received and reviewed 91 comments. After reviewing the comments and reaching a decision, we wrote a letter back to the petitioner denying the petition (also available in the docket).

The comments in support of establishing exclusion zones around transiting LNG ships focused on the consequences of a major LNG spill in close proximity to a densely populated urban area, particularly Fall River, MA.

The comments in opposition to the establishment of the aforementioned exclusion zones cited the proven safety record of the LNG industry, the robust safety features designed into LNG ships, and the effective safety and security procedures that have already been established by regulation and industry best practices and guidelines.

Taking into account the proven safety record of the LNG ships, we determined exclusion zone regulations are not needed because we already implemented policy (on June 14, 2005) through our Navigation and Vessel Inspection Circular (NVIC) 05-05, Guidance on Assessing the Suitability of a Waterway for Liquefied Natural Gas (LNG) Marine Traffic. This NVIC established a comprehensive process for a Waterway Suitability Assessment (WSA) to be completed and then reviewed and validated by the Coast Guard, in consultation with stakeholders at the port, to ensure all safety and security issues relating to the marine transportation of LNG for a proposed waterfront LNG facility are addressed.

Viewing the Notice: To view the notice and related documents, go to http://dms.dot.gov at any time, click on “Simple Search,” enter the last five digits of the docket number for this notice (19615), and click on “Search.” You may also visit the Docket Management Facility in room PL-401 on the Plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Section 7331 of title 38, United States Code (U.S.C.), directs the Secretary of Veterans Affairs to promulgate regulations to ensure that, to the maximum extent practicable all patient care carried out under the authority of title 38 is accomplished with the informed consent of the patient or the patient's surrogate. These VA medical regulations, set forth at 38 CFR 17.32 and titled “Informed Consent”, were published in the Federal Register as a final rule on October 2, 1997 (62 FR 53961).

The proposed rule would amend VA medical regulations on informed consent and bring VA practice in line with broader community standards of care. Specifically, it would allow VA to designate appropriately trained health care professionals, ( e.g. advance practice nurses and physician assistants) to conduct the informed consent discussion and sign the consent form. These changes will be documented in a revision to VHA Handbook 1004.1, Informed Consent for Clinical Treatments and Procedures. Any future expansion of the categories of designated health care professionals will be communicated to the field by the Under Secretary for Health's Office.

In the years since the informed consent regulation was first published, the way in which VA delivers health care to veterans has changed dramatically. In the past most VA health care was provided primarily in an inpatient setting and the informed consent discussion was conducted by the physician treating the patient. Today there is more of a team approach to clinical care. Other highly trained health care professionals work with the treating practitioner to educate patients and respond to their questions about the potential risks and benefits of and alternatives to the recommended treatment or procedure.

Under the current definition of practitioner, residents may obtain the informed consent and sign the consent form even if they are not clinically privileged. This rule would extend that exception to other appropriately trained health care professionals, e.g. , advanced practice nurses and physician assistants, if designated by the VA health care facility to perform this role. Allowing these health care professionals, in addition to residents, to complete the informed consent process by signing the form does not preclude discussion about the recommended treatment or procedure with the treating practitioner. Nor does it eliminate the responsibility of that practitioner to ensure that patients receive necessary information to make informed decisions and that these decisions are then appropriately documented in the health record.

We are also making nonsubstantive changes to make the terminology used in the regulation consistent with current Department practice. These include changing “health-care” to “health care” and “medical record” to “health record” throughout the section.

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 issuing any rule that may result in an 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.

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521). The existing information collections associated with the informed consent process have been approved by OMB under control number 2900-0583.

The Department of Veterans Affairs (VA) has examined the economic implications of this proposed rule as required by Executive Order 12866. Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). Executive Order 12866 classifies a rule as significant if it meets any one of a number of specified conditions, including: having an annual effect on the economy of $100 million, adversely affecting a sector of the economy in a material way, adversely affecting competition, or adversely affecting jobs. A regulation is also considered a significant regulatory action if it raises novel legal or policy issues.

The VA concludes that this proposed rule is a significant regulatory action under the Executive Order since it raises novel legal and policy issues under Section 3(f)(4). The VA concludes, however, that this proposed rule does not meet the significance threshold of $100 million effect on the economy in any one year under Section 3(f)(1). The VA requests comments regarding this determination, and invites commenters to submit any relevant data that will assist the agency in estimating the impact of this rulemaking.

The Secretary hereby certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. The rule will affect only individuals and will not directly affect any small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance numbers and titles are 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; and 64.011, Veterans Dental Care.

For the reasons set out above, VA proposes to amend 38 CFR part 17 to read as follows:

Throughout this document whenever “we” or “us” is used, we mean EPA. This supplementary information section is arranged as follows:

This action applies to anyone who would participate in the public rulemaking process in Minnesota. This proposal may be of particular interest to parties who prefer notification of MPCA rulemakings and hearings through printed media, such as the newspaper, versus electronic media such as postings on the internet.

This proposal does not seek to limit the public participation process; rather, it is an effort to eliminate unnecessary public hearings and save MPCA time and resources. MPCA has identified a number of different types of SIP revisions that have received little, if any, public interest in the past and, when public hearings were held, no one attended these hearings. These public hearings are, therefore, viewed as consuming both valuable time and resources that the MPCA could utilize better on other projects. For these types of revisions, the state has revised its procedures to provide that public hearings will not automatically be held. Rather, the public will be provided the opportunity to request a public hearing and a hearing will be held only if requested. This revision regarding public hearings will not affect the public's ability to submit written comments on any SIP revision.

Also, MPCA has requested that when a public hearing that meets specific requirements has already been held in the state that this would be found to be the equivalent of a SIP public hearing.

1. Submitting CBI. Do not submit this information to EPA through www.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.

2. Tips for Preparing Your Comments. When submitting comments, remember to:

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

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

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

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

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

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

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

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

3. Additional Instructions for Specific Comments. EPA is soliciting specific comments on MPCA's use of the internet to inform the public of upcoming rulemakings and public hearings. In the past, before computer usage was as widespread as it is today, states would inform the public of upcoming public hearings by placing advertisements in the newspaper. Now that the use of computers and the internet is considered commonplace, we would like feedback on whether it is appropriate to no longer advertise upcoming rulemakings and public hearings in a printed format and to shift to an all electronic notification through use of internet publication. Additional information regarding these practices will follow in this notice. It is important we receive comments on this aspect of proposal because it may impact our proposed approval of the alternative public hearing processes submitted by MPCA.

EPA is proposing to, under 40 CFR 51.102(g), approve an alternative public participation process that would apply to certain SIP revisions in the state of Minnesota. The goal of this new process is to preserve time and resources of the MPCA by eliminating automatic public hearings for the types of SIP revisions that have historically generated little, if any, public interest. This process, however, preserves the opportunity for the public to request a SIP public hearing.

Currently, 40 CFR 51.102 and Clean Air Act section 110(a)(2) and 110(l) require the state to hold public hearings for all SIP revisions prior to submitting such revisions to EPA for approval. This is true for all SIPs regardless of how minor the action or how little public interest has been expressed on the SIP revision under consideration. Under federal regulations found at 40 CFR 51.102(g)(2), alternative procedures may be approved provided they still ensure adequate public notification and public participation.

On December 7, 2005, the MPCA requested that its SIP be amended to incorporate alternative public participation procedures into the Minnesota SIP. The MPCA has identified limited types of SIP revisions that, historically, have received little, if any, public interest and when public hearings have been held for these SIP revisions, no one attended. For these types of SIP revisions, MPCA would instead offer the opportunity for a public hearing. Under this alternative method of public participation, only one request would be necessary and a public hearing would be held.

MPCA has also requested that when a state public hearing has been held on an MPCA rulemaking, that can be considered the equivalent of a SIP public hearing, when measured against the criteria for a SIP public hearing as provided at 40 CFR 51.102(d)-(f) [see the discussion on the use of electronic notification of rulmakings and public hearing in section II. C. of this notice], and where the public was notified that such rule would be submitted as a SIP revision, then a public hearing for SIP purposes only need not be held.

Included in MPCA's SIP amendment request were two exhibits. Exhibit 1 is a table describing the various types of SIP submittals that are made by the state. In the table, each SIP revision category is described and a reason is given why a public hearing should automatically be held or why an automatic public hearing is not necessary but the opportunity to request a public hearing still exists. The phrase “Administrative Permit Amendments” is used in Exhibit 1 and Exhibit 2 identifies how that phrase is defined by Minnesota Rules.

While Exhibit 1 describes all of the various SIP revisions that MPCA might make, for the purposes of this rulemaking we will discuss only: (1) the categories for which MPCA is requesting that public hearings would be held only if requested and (2) the category for which MPCA believes the equivalent of a SIP public hearing has already been held which obviates the need for a public hearing for SIP purposes only.

In these instances, MPCA indicates that the public will have the opportunity to request a public hearing. The MPCA will schedule a tentative hearing, but stating in the public notice document (which is published in the Minnesota State Register in an online format only) that the hearing will not be held if there are no affirmative requests for it to be held.

1. Purely Administrative Changes—MPCA gives the examples of correcting typographical or grammatical errors. There is a presumption that this is not a change that would be of public concern as it is not substantive.

2. De minimis change to a “secondary” compliance requirement—Here, MPCA defines “secondary” requirement as a requirement that supports a “primary” requirement for a National Ambient Air Quality Standard (NAAQS). “Primary” requirements include, but are not limited to, restrictions such as an emission limit or fuel usage limit. An example of de minimis change to a “secondary” requirement could include, a change to a monitoring or testing method that is within the scope of the method and does not adversely impact the accuracy or precision of the method ( e.g., increasing sample volume above the minimum required by the method in order to ensure an adequate detection limit is achieved.) There is a presumption of no public interest in these types of SIP revisions because the changes described here are “ de minimis ” and should not adversely affect compliance with the primary NAAQS.

3. Changes categorized as “administrative amendments” under MPCA's operating permit rules—MPCA included, as Exhibit 2, the portion of the Minnesota Rules that define “administrative amendments.” Minn. R. 7077.1400, subp. 1, as reproduced below, defines the term “administrative amendments” as including the following actions:

• An amendment to correct a typographical error;

• An amendment to change the name, mailing address, or telephone number of any person identified in the permit, or that reflects a similar minor administrative change at the permitted facility. A change in the stationary source's location of operation is not covered by this item;

• An amendment requiring the permittee to comply with additional, more frequent, or expanded, testing, monitoring, recordkeeping, or reporting requirements;

• An amendment to eliminate monitoring, recordkeeping, or reporting requirements if: (1) The requirements are rendered meaningless because the only emissions to which the requirements apply will no longer occur; (2) the change is to eliminate one validated reference test method for a pollutant and source category in order to add another; (3) the requirements are redundant to or less strict than other existing requirements; (4) the requirements are technically incorrect and their elimination does not affect the accuracy of the data generated or of the monitoring information recorded or reported; or, (5) the piece of equipment to which the monitoring, record keeping, or reporting requirement applies no longer exists or has been permanently disabled from use at the stationary source.

• An amendment reflecting a change in ownership or operational control of a stationary source where the agency determines that no other change in the permit is necessary, provided that a written agreement containing a specific date for transfer of permit responsibility, coverage, and liability between the current and new permittee has been submitted to the agency;

• An amendment to incorporate into a permit the requirements from preconstruction review permits issued by the agency, incorporate into a permit the requirements from standards adopted under Code of Federal Regulations, title 40, part 63, as amended (National Emission Standards for Hazardous Air Pollutants for Source Categories), or to lower the plantwide emission limits in permits with Plantwide Applicability Limits to reflect the impact of standards adopted under Code of Federal Regulations, title 40, part 63, as amended;

• An amendment to clarify the meaning of a permit term;

• An amendment to extend a deadline in a permit by no more than 120 days, provided that the agency may only extend a deadline established by an applicable requirement described in part 7007.0100, subpart 7, items A to K, if the agency has been delegated authority to make such extensions by the administrator. Notwithstanding the previous sentence, the agency may do an administrative amendment to extend a testing deadline in a permit up to 365 days if the agency finds that the extension is needed to allow the permittee to test at worst case conditions as required by part 7017.2025, subpart 2;

• An amendment to remove any condition from a permit which was based on an applicable requirement that has been repealed, but only if the permit condition: (1) Is neither required nor replaced by another applicable requirement; and, (2) was not established for a specific facility to protect human health and the environment, to prevent pollution, as a mitigation measure in an environmental impact statement, or to obtain a negative declaration in an environmental assessment worksheet;

• An amendment to correct or update a citation to an applicable requirement where the corresponding permit condition is not changed; and,

• An amendment to include operating conditions that ensure that waste combustors emit mercury at less than 50 percent of the applicable standard.

These “administrative amendments” either do not substantively change the SIP or they actually strengthen the SIP ( e.g., require more frequent testing, reporting or recordkeeping) and are not expected to generate public interest.

4. Unit or plant permanently shut down—In this case, all SIP conditions have become obsolete because the unit or facility no longer exists and these SIP conditions no longer apply. We agree that if the unit or facility no longer exists, an automatic public hearing is not necessary to remove those SIP conditions that no longer apply.

5. Non-controversial update to an existing maintenance plan—This would be a “technical change” ( e.g., 10-year update to a maintenance plan) with no substantive compliance or inventory changes.

6. Incorporation of federal rule by reference into state rule—In these cases, the federal rules have already been through public notice and comment. Also, the state's incorporation by reference is likely to be in response to a Federal Register noticed delegation or a memorandum of agreement that dictates that MPCA must incorporate the rule in order to administer the federal program.

7. Rulemaking where a state public hearing has been offered but no one was interested—For some rulemakings, MPCA will hold non-mandatory meetings to discuss the merits of the rulemaking and to invite comment on draft or proposed rule language when ready. At the commencement of every rulemaking, state law requires MPCA to publish a Notice of Request for Comments (the State Register is currently published online only). This occurs before a rule has been drafted and is intended to inform potentially interested persons of the likely subject matter of the rule that the MPCA is considering. The Notice is published in the State Register (which is available only via the Internet), posted on the MPCA's website and physically mailed to all persons that have previously requested to be kept informed of such proposals. The Notice does not specify meeting dates but invites public participation generally.

During the public participation process, requests for a state public hearing (different than a SIP public hearing) can be made. If any request for a state public hearing is made, then MPCA has committed to hold a public hearing on the SIP because public interest has been expressed. However, if no requests for a state public hearing are made or if such requests are withdrawn, then a SIP public hearing will only be held if requested.

In these instances, a public hearing that would meet the criteria in 40 CFR 51.102(d)-(f) for a SIP public hearing [see the discussion on the use of electronic notification of rulmakings and public hearing in section II.C. of this notice] has already been held as part of the procedure for some other MPCA action. Minnesota has requested that we approve this process under 40 CFR 51.102(g) as equivalent to the public hearing requirement in 40 CFR 51.102. In the past, the state has held separate SIP public hearings to satisfy the requirements of the Clean Air Act, specifically noting that the materials available for the public to comment on would be submitted for inclusion in the SIP. MPCA has noted that in the future if a state public hearing will be held, MPCA will include language in rule proposal notices that specifies which rule changes will be submitted to EPA as a SIP revision. If this is done, the state public hearing would also serve as the SIP public hearing.

Below is a table summarizing the hearing procedures for SIP submittals for the state of Minnesota under this new process.

EPA is particularly interested in your opinion on the use of electronic notification, via the internet, of rulemakings and public hearings. 40 CFR 51.102(d)-(f) describe the specific requirements states must meet in conducting public hearings for SIP submittals. However, 40 CFR 51.102(g) provides that alternative procedures may be approved provided they still ensure adequate public notification and public participation. The following provisions of 40 CFR 51.102(d) may be impacted by the use of electronic notice:

(d) Any hearing required by paragraph (a) of this section will be held only after reasonable notice, which will be considered to include, at least 30 days prior to the date of such hearing(s):

(1) Notice given to the public by prominent advertisement in the area affected announcing the date(s), time(s), and place(s) of such hearing(s);

(2) Availability of each proposed plan or revision for public inspection in at least one location in each region to which it will apply, and the availability of each compliance schedule for public inspection in at least one location in the region in which the affected source is located.

Currently, the MPCA does not use printed media to inform the general public of upcoming rulemakings or public hearings. This is different from the more common and accepted practice of states publishing notices in newspapers, or other widely available printed media, in the area affected by the rulemaking. In the past, the MPCA would use the newspaper and the State Register as a means of publishing such public notices. MPCA has discontinued using newspaper notices and, as of July 1, 2004, the Minnesota State Register is no longer printed in a hardcopy format and can only be accessed on the internet. The Minnesota State Register does offer an additional tailored subscription service but there is a $180 annual fee associated with this service. Access to the Minnesota State Register is otherwise free assuming a person already has access to the internet.

At the beginning of the rulemaking process, MPCA will publish a Notice of Request for Comments in the Minnesota State Register which is only available online. At this point in time, a rule or rule language has not yet been drafted and the Notice of Request for Comments serves to inform potentially interested parties of the likely subject matter of the rule that MPCA is considering. This notice also appears on the MPCA's website and notification is also mailed to those parties that have expressed interest in rulemakings of this type. This initial notice helps generate a more extensive list of interested parties than the MPCA may already have. In many cases the MPCA will invite these parties to meetings to discuss the merits of MPCA's rulemaking and to comment on draft or proposed rule language when ready.

In past practice, the MPCA would have published these notices in the Minnesota State Register when it was in print and the Minnesota State Register was available at any public library. Copies of draft or proposed rule language would be available at MPCA offices.

It is MPCA's current practice to then publish a Notice of Intent to Adopt online in the State Register. It is at this point the rule, as well as a detailed statement of basis, is now made available on the MPCA's Web site for public review and comment.

The argument can be made that, because our society is now highly computerized, making all of these documents available electronically is as accessible to the public, if not more so, than it was in the past when these documents were actually printed. For example, in the past if someone was interested in environmental rules he or she could go to the library to read the State Register. Now that same person can go to the same library and access the State Register online to view the same type of information once carried in the printed version of the Minnesota State Register. Since the use of home computers and access to the internet is widespread, a person can now access the Minnesota State Register from home whether they live in Minnesota or not.

We would like your comments on whether electronic notification of upcoming rulemakings and public hearings is an acceptable alternative to printed notice which ensures public notice and participation. It is important for us to hear your comments now as we will consider all of them before rendering a final decision on this matter and we will not be reproposing on this in the future.

In summary, we are proposing to approve under 40 CFR 51.102(g) MPCA's request to allow the above-identified types of SIP revisions to forego automatic public hearings. Instead the public would be offered the opportunity to request a public hearing on these SIP revisions. Approval of this alternative public participation process is allowed under the Code of Federal Regulations Title 40 Part 51 at 51.102(g). We believe that the requirements found in 40 CFR 51.102(g) have been met. Sections 110(a)(2) and 110(l) of the Clean Air Act require public hearings on all SIP revisions before they are submitted to the EPA. We believe that the process that MPCA has submitted for approval preserves the opportunity for the public to request the same public hearing and does not curtail the public participation process. Additionally, where MPCA provides a state public hearing that meets the requirements of 51.102(d)-(f), including effective electronic notice [see the discussion on the use of electronic notification of rulemakings and public hearing in section II. C. of this notice], and notifies the public that the rule changes will be submitted as a SIP revision, then such process is consistent with 40 CFR 51.102 and can be approved under 40 CFR 51.102(g). We are also soliciting specific comments on the use of electronic notice of MPCA rulemakings and hearings. Public comments on the use of electronic notice of hearings and rulemakings may impact the EPA's approval of the proposed alternative public hearing processes.

Under Executive Order 12866 ( 58 FR 51735 , September 30, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget.

This proposed 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. ).

This proposed action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this proposed 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 proposes to approve pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This 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 proposes to approve a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act.

This proposed 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 proposed 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.

Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” 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).

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), 15 U.S.C. 272, requires Federal agencies to use technical standards that are developed or adopted by voluntary consensus to carry out policy objectives, so long as such standards are not inconsistent with applicable law or otherwise impractical. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Absent a prior existing requirement for the state to use voluntary consensus standards, EPA has no authority to disapprove a SIP submission for failure to use such standards, and it would thus be inconsistent with applicable law for EPA to use voluntary consensus standards in place of a program submission that otherwise satisfies the provisions of the Clean Air Act. Therefore, the requirements of section 12(d) of the NTTA do not apply.

This proposal addresses local rules VCAPCD 74.14 and YSAQMD 2.21. In the Rules and Regulations section of this Federal Register , we are approving these local rules in a direct final action without prior proposal because we believe these SIP revisions are not controversial. However, if we receive adverse comments, we will publish a timely withdrawal of the direct final rule and address the comments in subsequent action based on this proposed rule. 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.

We do not plan to open a second comment period, so anyone interested in commenting should do so at this time. If we do not receive adverse comments, no further activity is planned. For further information, please see the direct final action.

In October 1986, Congress enacted the Program Fraud Civil Remedies Act, Public Law 99-509 (codified at 31 U.S.C. 3801-3812), to establish an administrative remedy against any person who makes a false claim or written statement to any of certain Federal agencies. In brief, it requires the affected Federal agencies to follow certain procedures in recovering penalties (up to $5,000 per claim) and assessments (up to double the amount falsely claimed) against persons who file false claims or statements for which the liability is $150,000 or less. When the Act was enacted, the Corporation for National and Community Service did not exist, and the Act did not apply to the Corporation's predecessor agency, ACTION. However, that Act has since become applicable to the Corporation as a result of amendments to the Inspector General Act, Public Law 103-82, September 21, 1993. Those amendments, inter alia, added the Corporation for National and Community Service as an “establishment” under the Inspector General Act and, by doing so, operated to bring the Corporation within the provisions of the Program Fraud Civil Remedies Act.

The Act requires each affected agency to promulgate rules and regulations necessary to implement its provisions. Following the Act's enactment, at the request of the President's Council on Integrity and Efficiency (PCIE) an interagency task force was established under the leadership of the Department of Health and Human Services to develop model regulations for implementation of the Act by all affected agencies. This action was in keeping with the stated desire of the Senate Governmental Affairs Committee that “the regulations would be substantially uniform throughout the government” (S. Rep. No. 99-212, 99th Cong., 1st Sess. 12 (1985). Upon their completion, the PCIE recommended adoption of the model rules by all affected agencies.

It is the policy of the Corporation to use a plain language style when proposing regulations, and we have done so in this document without making substantive changes to the PCIE model regulations. For the sake of consistency, we relied, to the extent practicable, on plain language regulations issued by the Small Business Administration in 1996. See 61 FR 2691, January 29, 1996

A more detailed discussion of the PCIE's model regulations is found in the promulgations of several of the agencies that adopted them earlier, including those of the Departments of Justice (53 FR 4034; February 11, 1988 and 53 FR 11645; April 8, 1988); Health and Human Services (52 FR 27423; July 21, 1987 and 53 FR 11656, April 8, 1988); and Transportation (52 FR 36968; October 2, 1987 and 53 FR 880, January 14, 1988). Anyone desiring further explanation of the model rules is referred to the cited references. The proposed regulations incorporate, where appropriate, definitions to fit the Corporation's organization. They prescribe the procedure under which false claims and statements subject to the Act will be investigated and reviewed, and the rules under which any ensuing hearing will be conducted.

Under the Act, false claims and statements subject to its provisions are to be investigated by an agency's investigating official. The results of the investigation are then reviewed by an agency reviewing official who determines whether there is adequate evidence to believe that the person named in the report is liable under the Act. Upon an affirmative finding of adequate evidence, the reviewing official sends to the Attorney General a written notice of the official's intent to refer the matter to a presiding officer for an administrative hearing. The agency institutes administrative proceedings against the person only if the Attorney General or the Attorney General's designee approves. Any penalty or assessment imposed under the Act may be collected by the Attorney General through the filing of a civil action, or by offsetting amounts, other than tax refunds, owed the particular party by the Federal government.

The proposed regulations designate the Inspector General or his or her designee as the agency's investigating official. They also designate the General Counsel as the reviewing official. Any administrative adjudication under the Act will be presided over by an Administrative Law Judge and any appeals from the Administrative Law Judge's decision will be decided by the Corporation's Chief Executive Officer or Chief Financial Officer. The proposed regulations designate the Corporation's Chief Financial Officer to act on behalf of the Chief Executive Officer in carrying out the duties and responsibilities of the “authority head” under the regulations.

This proposed rule contains no information collection requirements and therefore is not subject to the requirements of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq. ).

The Corporation has determined that the proposed rule is not an “economically significant” rule within the meaning of E.O. 12866 because it is not likely to result in: (1) An annual effect on the economy of $100 million or more, or an adverse and material effect on a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal government or communities; (2) the creation of a serious inconsistency or interference with an action taken or planned by another agency; (3) a material alteration in the budgetary impacts of entitlement, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) the raising of novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in E.O. 12866. However, it is a significant regulation and has been reviewed by the Office of Management and Budget.

As required by the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the Corporation certifies that this rule, if adopted, will not have a significant economic impact on a substantial number of small entities. This regulatory action will not result in (1) An annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. The proposed rule establishes the procedural mechanism for investigating and adjudicating allegations of false claims or statements made against affected agencies. The proposed rule, by itself, does not impose any obligations on entities including any entities that may fall within the definition of “small entities” as set forth in section 601(3) of the Regulatory Flexibility Act, or within the definition of “small business” as found in Section 3 of the Small Business Act, 15 U.S.C. 632, or within the Small Business Size Standards found in 13 CFR part 121. These obligations would not be created until an order is issued, at which time the person subject to the order would have a right to a hearing in accordance with the regulations. Therefore, the Corporation has not performed the initial regulatory flexibility analysis that is required under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) for major rules that are expected to have such results.

For purposes of Title II of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, as well as Executive Order 12875, this regulatory action does not contain any Federal mandate that may result in increased expenditures in either Federal, State, local, or tribal governments in the aggregate, or impose an annual burden exceeding $100 million on the private sector.

For the reasons stated in the preamble, the Corporation for National and Community Service proposes to add a new Part 2554 to Chapter XXV of Title 45 of the Code of Federal Regulation to read as follows:

The Notice of Proposed Rulemaking ( NPRM ), Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities, Access to Emergency Services ; CG Docket No. 03-123, FCC 05-196, contains proposed information collection requirements subject to the PRA of 1995, Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under section 3507 of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the proposed information collection requirements contained in this document. This is a summary of the Commission's NPRM , FCC 05-196, adopted November 18, 2005, and released November 30, 2005, in CG Docket No. 03-123.

Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415 and 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using: (1) the Commission's Electronic Comment Filing System (ECFS), (2) the Federal Government's eRulemaking Portal, or (3) by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings , 63 FR 24121, May 1, 1998.

• Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking Portal: http://www.regulations.gov. Filers should follow the instructions provided on the Web site for submitting comments.

• For ECFS filers, if multiple docket or rulemaking numbers appear in the caption of this proceeding, filers must transmit one electronic copy of the comments for each docket or rulemaking number referenced in the caption. In completing the transmittal screen, filers should include their full name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number, which in this instance is CG Docket No. 03-123. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions, filers should send an e-mail to ecfs@fcc.gov , and include the following words in the body of the message, “get form <your e-mail address>.” A sample form and directions will be sent in response.

• Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption in this proceeding, filers must submit two additional copies of each additional docket or rulemaking number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although the Commission continues to experience delays in receiving U.S. Postal Service mail). All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• The Commission's contractor will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.

• Commercial mail sent by overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

• U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th Street, SW., Washington, DC 20554.

Pursuant to § 1.1200 of the Commission's rules, 47 CFR 1.1200, this matter shall be treated as a “permit-but-disclose” proceeding in which ex parte communications are subject to disclosure. Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentation and not merely a listing of the subjects discussed. More than a one or two sentence description of the views and arguments presented is generally required. Other requirements pertaining to oral and written presentations are set forth in § 1.1206(b) of the Commission's rules.

People with Disabilities: To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

The NPRM contains proposed information collection requirements. The Commission, as part of its continuing effort to reduce paperwork burdens, invites the general public and the Office of Management and Budget (OMB) to comment on the information collection requirements contained in this document, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. Public and agency comment are due April 3, 2006. Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506 (c)(4), the Commission seeks specific comment on how it may “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

OMB Control Number: 3060-XXXX.

Title: Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities; Access to Emergency Services.

Form No.: N/A.

Type of Review: New collection.

Number of Respondents: 8—(6 of which provides VRS and IP Relay service; 2 of which provides VRS).

Number of Responses: 5,001,022.

Respondents: Business and other for-profit entities; State, Local or Tribal Government.

Estimated Time per Response: 4 to 1,000 hours.

Frequency of Response: Annual and on occasion reporting requirement; Recordkeeping; Third party disclosure.

Total Annual Burden: 21,504 hours.

Total Annual Costs: $0.

Privacy Act Impact Assessment: No impact(s).

Needs and Uses: On November 30, 2005, the Commission released a Notice of Proposed Rulemaking ( NPRM ), CG Docket No. 03-123, which addresses the issue of access to emergency services for Internet-based forms of Telecommunications Relay Services (TRS), namely Video Relay Service (VRS) and Internet-Protocol (IP) Relay Service. The Commission seeks to adopt a means to ensure that such calls promptly reach the appropriate emergency service provider. By doing so, the NPRM seeks comment on various issues: (1) Whether the Commission should require VRS and IP Relay service providers to establish a registration process in which VRS and IP Relay service users provide, in advance, the primary location from which they will be making VRS or IP Relay service calls (the Registered Location), so that a communication assistant (CA) can identify the appropriate Public Safety Answering Point (PSAP) to contact; (2) Should VRS and IP Relay providers be required to register their customers and obtain a Registered Location from their customers so that they will be able to make the outbound call to the appropriate PSAP; (3) whether there are other means by which VRS and IP Relay service providers may obtain Registered Location information, for example, by linking the serial number of the customer VRS or IP Relay service terminal or equipment to their registered location; (4) any privacy considerations that might be raised by requiring VRS and IP Relay service users to provide location information as a prerequisite to using these services; (5) whether, assuming some type of location registration requirement is adopted, the Commission should require specific information or place limits on the scope of information that providers should be able to obtain; (6) whether the Commission should require VRS and IP Relay providers to provide appropriate warning labels for installation on customer premises equipment (CPE) used in connection with VRS and IP Relay services; (7) whether the Commission should require VRS and IP Relay providers to obtain and keep a record of affirmative acknowledgement by every subscriber of having received and understood the advisory that E911 service may not be available through VRS and IP Relay or may be in some way limited by comparison to traditional E911 service; and (8) how the Commission may ensure that providers have updated location information, and the respective obligations of the providers and the consumers in this regard.

In the NPRM , the Commission addresses the issue of access to emergency services for VRS and IP Relay services. TRS, created by Title IV of the Americans with Disabilities Act of 1990 (ADA), enables an individual with a hearing or speech disability to communicate by telephone or other device through the telephone system with a person without such a disability. See 47 U.S.C. 225(a)(3) (defining TRS); 47 CFR 64.601(14). As the Commission has often recognized, 911 service is critical to our nation's ability to respond to a host of crises. See , e.g. , Revision of the Commission's Rules to Ensure Compatibility with Enhanced 911 Emergency Calling Systems , CC Docket No. 94-102, RM-8143, FCC 96-264, First Report and Order, 11 FCC Rcd 18676, 18679, paragraph 5 (July 26, 1996); published at 61 FR 40348 (August 2, 1996), ( E911 First Report and Order ); IP-Enabled Service, E911 Requirements for IP-Enabled Service Providers , WC Docket Nos. 04-36, 05-196, FCC 05-116, First Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd 10245, at 10247-10248, paragraph 4 (June 3, 2005) ( VoIP E911 Order ); published at 70 FR 43323 (July 27, 2005). In the four decades since 911 service was established, Americans largely take for granted, that in the event of an emergency, they can use the telephone to quickly reach the proper authorities and that the first responders will be able to accurately locate them. See VoIP E911 Order , 20 FCC Rcd at 10248-10249, paragraph 6. Because wireline telephones are generally linked to a particular address, emergency calls placed over the traditional Public Switched Telephone Network (PSTN), including direct TTY calls, can usually be routed to the proper PSAP where location information is automatically displayed. When a user dials 911 with a TTY to contact a PSAP, it is not a TRS call and therefore a relay provider is not involved. Such a call is automatically routed to the appropriate PSAP in the same manner as any other 911 PSTN call, and contains the same location and callback information as a voice call to 911. Under Title II of the ADA, PSAPs must be capable of directly receiving TTY calls. See 28 CFR 35.162 (United States Department of Justice regulations implementing Title II of the ADA and requiring telephone emergency services, including 911 services, to provide “direct access to individuals who use [TTY's]”). This is the most reliable way for persons with hearing or speech disabilities to reach emergency services. VoIP E911 Order , 20 FCC Rcd at 10250-10254, paragraphs 12-18. Such direct, automatic access to emergency services through VRS and IP Relay services, however, does not currently exist and, accordingly, solutions must be developed.

Emergency calls made via TRS, rather than by directly calling 911, present unique challenges, because they are connected through a communications assistant (CA), rather than routed directly and automatically to the appropriate PSAP over a network, and the CA must make an outbound voice telephone call to the appropriate PSAP. The CA, therefore, must have a means of determining both (1) where the relay caller is physically located, and (2) the appropriate PSAP that corresponds to that geographic location so the CA can make the outbound telephone call to the PSAP. Because Internet-based calls do not originate on the PSTN, location and callback information is not transmitting and CAs must use other methods to ascertain the callers' location. The Commission accordingly seeks comment on ways in which we may ensure that the CA will be able to call the appropriate PSAP when a VRS or IP Relay service user calls the relay provider and asks the CA to call emergency services. The Commission also seeks comment on whether, and if so, how, requirements ensuring that persons using VRS and IP Relay service will have access to emergency services might affect the TRS funding mechanism. See generally Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket Nos. 90-571 and 98-67, CG Docket No. 03-123, Report and Order, Order on Reconsideration, and Further Notice of Proposed Rulemaking, 19 FCC Rcd 12475, at 12482-12483, paragraphs 7-8 (June 30, 2004) ( 2004 TRS Report and Order ); published at 69 FR 53346 (September 1, 2004) and 69 FR 53382 (September 1, 2004) (overview of TRS funding mechanism).

Title IV of the Americans with Disabilities Act of 1990 (ADA), adding Section 225 to the Communications Act of 1934, requires the Commission to ensure that TRS is available, to the extent possible and in the most efficient manner, to persons with hearing or speech disabilities in the United States. 47 U.S.C. 225(b)(1). The statute requires that TRS offer persons with hearing and speech disabilities telephone transmission services that are “functionally equivalent” to voice telephone services. 47 U.S.C. 225(a)(3).

Initially, TRS was provided via a TTY (text telephone) and the PSTN. In such a “traditional” TRS call, a person with a hearing or speech disability initiates the call by dialing ( i.e. , typing) a telephone number for a TRS facility using a TTY, and then types the number of the party he or she desires to call. The CA, in turn, places an outbound voice call to the called party. The CA serves as the “link” in the conversation, converting all typed TTY messages from the caller into voice messages for the called party, and all voice messages from the called party into typed messages for the TTY user. See generally 2004 TRS Report and Order , 19 FCC Rcd at 12480, paragraph 3, note 18.

In March 2000, the Commission recognized VRS as a form of TRS. See Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket No. 98-67, Report and Order and Further Notice of Proposed Rulemaking, 15 FCC Rcd 5140, 5152-5154, paragraphs 21-27 (March 6, 2000); published at 65 FR 38432 (June 21, 2000) and 65 FR 38490 (June 21, 2000) (Improved TRS Order and FNPRM) (recognizing VRS as a form of TRS); 47 CFR 64.601(17) (defining VRS). VRS requires the use of a broadband Internet connection between the VRS user and the CA, which allows them to communicate in sign language via a video link. The CA, in turn, places an outbound telephone call to a hearing person. During the call, the CA communicates in American Sign Language (ASL) with the deaf person and by voice with the hearing person. Presently, all VRS and IP Relay service calls are compensated from the Interstate TRS Fund. The question of whether the Commission should adopt a mechanism for the jurisdictional separation of costs for these services is pending before the Commission. 2004 TRS Report and Order , 19 FCC Rcd at 12561-12564, paragraphs 221-230 (IP Relay), at 12567, paragraphs 241-242 (VRS). Although the Commission has not made VRS a mandatory service, it has encouraged its development. In the past few years use of VRS has grown tremendously. In January 2002, the first month VRS was generally offered, there were 7,215 minutes of use; in January 2003, there were 128,114 minutes of use; in January 2004, there were 477,538 minutes of use; and in January 2005, there were 1,634,316 minutes of use. There were over 2.2 million minutes of use of VRS in July 2005.

In April 2002, the Commission recognized a second Internet-based form of TRS—IP Relay service. See Provision of Improved Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket No. 98-67, Declaratory Ruling and Second Further Notice of Proposed Rulemaking, 17 FCC Rcd 7779 (April 22, 2002); published at 67 FR 39863 (June 11, 2002) and 67 FR 39929 (June 11, 2002) ( IP Relay Declaratory Ruling and FNPRM ). IP Relay service calls are text-based calls, but the user connects to the TRS facility via a computer (or other similar device) and the Internet, rather than via a TTY and the PSTN. A user establishes a local connection to an Internet service provider using a computer, web phone, personal digital assistant, or other IP-enabled device, selects the Internet address of an IP Relay service provider, and is connected to a CA who handles the call in the same way that TTY-based calls are handled. See generally Provision of Improved Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket No. 98-67, Order on Reconsideration, 18 FCC Rcd 4761, at 4762, paragraph 3, note 11 (March 14, 2003). IP Relay service, like VRS, has become very popular, because the user can make a relay call with any computer (or similar device) connected to the Internet, rather than only with a dedicated TTY.

Basic 911 service is a forwarding arrangement in which 911 calls are transmitted, based on the caller's location, to a geographically appropriate PSAP. See VoIP E911 Order , 20 FCC Rcd at 10250-10251, paragraph 12. These calls are therefore routed based on the calling party's number, not the called number. See VoIP E911 Order , 20 FCC Rcd at 10251, paragraph 13, note 32. The service does not provide the PSAP, however, with the caller's location information. E911 systems do provide the call taker with the caller's call back number, referred to as Automatic Numbering Information (ANI), and, in many cases, the caller's location information, a capability referred to as Automatic Location Identification (ALI). VoIP E911 Order , 20 FCC Rcd at 10251, paragraph 13. Virtually all wireline local exchange carriers (LECs) and Commercial Mobile Radio Services (CMRS) carriers now provide at least basic 911 service, and in many localities E911 service. VoIP E911 Order , 20 FCC Rcd at 10249-10251, paragraphs 8, 13.

New communications technologies have posed technical and operational challenges to the 911 system. VoIP E911 Order , 20 FCC Rcd at 10249, paragraph 8. For example, the mobility of wireless telephones renders the use of permanent street addresses as a location indicator useless. The person using the telephone could be anywhere in the country, notwithstanding that the wireless telephone number is associated with a particular physical address. Under the Commission's rules, wireless telephone service providers must employ a means of providing real-time location updates to the PSAP. VoIP E911 Order , 20 FCC Rcd at 10252-10253, paragraph 17. Thus, wireless carriers have developed various techniques to provide ANI and ALI to the PSAPs that involve enhancements to the existing wireless E911 network. See generally VoIP E911 Order , 20 FCC Rcd at 10252-10254, paragraphs 16-18 (addressing wireless E911 technical and operational issues).

In 1991, the Commission, pursuant to Congress's direction in Section 225 of the Communications Act, adopted the TRS regulations. See Telecommunication Services for Individuals with Hearing and Speech Disabilities, and the Americans with Disabilities Act of 1990 , CC Docket No. 90-571, FCC 91-213, Report and Order and Request for Comments, 6 FCC Rcd 4657 (July 26, 1991); published at 56 FR 36729 (August 1, 1991) ( TRS I ). These regulations include mandatory minimum standards that govern the provision of TRS. See 47 CFR 64.604. The purpose of these standards is to ensure that TRS users have the ability to access the telephone system in a manner that approximates, as closely as possible, the experience of a voice telephone user consistent with the functional equivalency mandate. One of the mandatory minimum standards requires TRS CAs to handle emergency calls. See 47 CFR 64.604(a)(4); see also, TRS I , 6 FCC Rcd at 4659, paragraph 10. The Commission requires CAs to handle emergency calls like any other TRS calls. See 47 CFR 64.604(a)(4); see also, TRS I , 6 FCC Rcd at 4659, paragraph 10. At the same time, the Commission has “strongly encourage[d] * * * TRS users to access emergency 911 services directly.” See 47 CFR 64.604(a)(4) of the Commission's rules; see also, TRS I , 6 FCC Rcd at 4659, paragraph 10. In other words, the Commission recognized that although TRS users should call 911 on their TTY in the event of an emergency, so that they would be directly connected to a PSAP, TRS providers also were required to handle emergency calls if a person chose to make an emergency call through the TRS center. The final rule provided: “CAs shall handle emergency calls in the same manner as they handle any other TRS calls.” 47 CFR 64.604(a)(3) (1993).

In 1998, the Commission proposed amendments to the TRS mandatory minimum standards and sought comment on various issues to enhance the quality of TRS and broaden the potential universe of TRS users. Telecommunications Services for Hearing-Impaired and Speech Impaired Individuals, and the Americans with Disabilities Act of 1990 , CC Docket No. 90-571, FCC 98-90, Notice of Proposed Rulemaking, 13 FCC Rcd 14187 (May 20, 1998) ( 1998 TRS NPRM ). One of the issues the Commission addressed was access to emergency services. 1998 TRS NPRM , 13 FCC Rcd at 14203, paragraphs 40-41. The Commission noted that despite regulations requiring state and local governments to make emergency services directly accessible to TTY users (for direct TTY to TTY calls), many individuals with hearing and speech disabilities use TRS to contact emergency services. 1998 TRS NPRM , 13 FCC Rcd at 14203, paragraph 41. The Commission also expressed concern that there was “inconsistency and confusion among the states and TRS providers as to how such calls should be handled.” 1998 TRS NPRM , 13 FCC Rcd at 14203, paragraph 40. Accordingly, the Commission sought comment on how TRS providers were handling emergency calls and, more specifically, whether TRS providers should be required to pass a caller's ANI to an emergency services operator. 1998 TRS NPRM , 13 FCC Rcd at 14203, para. 41.

In the Improved TRS Order , the Commission recognized that because some persons continue to make emergency calls via TRS (rather than directly TTY to TTY), it had an “obligation to make relay calls to 911 functionally equivalent to a direct call to 911.” Improved TRS Order and FNPRM , 15 FCC Rcd at 5182-5183, paragraphs 99-100. The Commission modified the TRS emergency call handling rule in two respects. First, the Commission required providers to be able to match the incoming caller's telephone number with the appropriate PSAP electronically, so that the CA can quickly make the outbound call to the PSAP. Improved TRS Order and FNPRM , 15 FCC Rcd at 5182-5184, paragraphs 99-102. Second, the Commission required CAs to pass along the caller's telephone number to the PSAP orally when the caller disconnects before being connected to emergency services. Improved TRS Order and FNPRM , 15 FCC Rcd at 5183-5184, paragraph 101. As a result of these additional requirements, TRS service providers found it necessary to develop new databases of all PSAPs in the country. See Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket No. 98-67, Order, 16 FCC Rcd 4662, 4666, paragraph 12 (February 23, 2001) ( TRS 911 Waiver Order ).

In June 2003, the Commission again addressed TRS access to emergency services. Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket No. 98-67, CG Docket No. 03-123, FCC 03-112, Second Report and Order, Order on Reconsideration, and Notice of Proposed Rulemaking, 18 FCC Rcd 12379, at 12407, paragraph 42 (June 17, 2003); published at 68 FR 50973 (August 25, 2003) and 68 FR 50993 (August 25, 2004) ( TRS Second Improved Report and Order ). The Commission clarified that TRS providers must route emergency TRS calls to the “appropriate” PSAP and required TRS providers to adjust their databases accordingly. TRS Second Improved Report and Order 18 FCC Rcd at 12406-12408, paragraphs 40-42. Because of jurisdictional boundaries, the “appropriate” PSAP is not always the geographically closest PSAP to the calling party. The Commission also addressed handling of wireless emergency TRS calls, noting the difficulty in tracing the location of the wireless caller, and sought comment on how to make such calls functionally equivalent to wireless voice calls. TRS Second Improved Report and Order 18 FCC Rcd at 12408, paragraphs 43-46, and 12433-12434, paragraphs 108-109. In a subsequent order, the Commission further clarified that the “appropriate” PSAP is “either a PSAP that the caller would have reached if he had dialed 911 directly, or a PSAP that is capable of enabling the dispatch of emergency services to the caller in an expeditious manner.” 2004 TRS Report and Order , 19 FCC Rcd at 12559, paragraph 216. The Commission also revisited the issue of routing wireless emergency TRS calls. The Commission determined that implementation of rules in this context would be premature and that it would reconsider the issue at a later time once other E911 requirements had been implemented. 2004 TRS Report and Order , 19 FCC Rcd at 12501-12502, paragraphs 52-54.

As noted above, in March 2000 the Commission recognized VRS as a form of TRS. In December 2001, the Commission granted a two-year waiver of emergency call handling requirements for VRS providers. Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket No. 98-67, Order, 17 FCC Rcd 157, at 161-162, paragraphs 11-14 (December 31, 2001) ( VRS Waiver Order ). The Commission recognized that VRS providers needed additional time to establish PSAP databases, and to adjust new and developing VRS technologies to effectively handle emergency calls made via VRS. VRS Waiver Order , 17 FCC Rcd at 162, paragraph 13. At the same time, VRS providers were required to clearly explain in their promotional materials and on their Web sites the shortcomings of using VRS to place an emergency call. VRS Waiver Order , 17 FCC Rcd at 162, paragraph 14. Subsequently, the Commission has twice extended this waiver, which presently expires on January 1, 2006. See Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket No. 98-67, DA 03-4029, Order, 18 FCC Rcd 26309 (December 19, 2003) (extending waiver until June 30, 2004); 2004 TRS Report and Order , 19 FCC Rcd at 12520-12521, paragraphs 111-112 (extending waiver until January 1, 2006). Most recently, the Commission emphasized that because VRS users gain access to VRS via the Internet, rather than a telephone, VRS providers do not receive the automatic number identification (ANI) of the calling party. As a result, VRS providers cannot identify the caller's location to relay that information to the PSAP. 2004 TRS Report and Order , 19 FCC Rcd at 12522, paragraph 117.

The initial order recognizing IP Relay service as a form of TRS also waived the emergency call handling requirement. IP Relay Declaratory Ruling and FNPRM , 17 FCC Rcd at 7789, paragraph 30. The Commission noted that IP Relay service providers do not receive the ANI of the calling party (because the call is via the Internet), and therefore do not have that information to pass on to a PSAP. IP Relay Declaratory Ruling and FNPRM , 17 FCC Rcd at 7789, paragraph 30. The Commission encouraged providers to work on developing a method to rapidly obtain location information from emergency callers and pass that information on to the appropriate PSAP emergency response center. IP Relay Declaratory Ruling and FNPRM , 17 FCC Rcd at 7789, paragraph 30. In March 2003, the Commission extended this waiver until January 1, 2008, again noting that the technology was not currently available to accurately relay emergency IP Relay service calls to emergency service providers, and to automatically provide the emergency services providers with location information. See generally Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities , CC Docket No. 98-67, FCC 03-46, Order on Reconsideration, 18 FCC Rcd. 4761, at 4766, paragraph 12, and 4770-4771, paragraph 28 (March 14, 2003); published at 68 FR 18826 (April 16, 2003) ( IP Relay Reconsideration Order ).

On June 3, 2005, the Commission required interconnected VoIP providers, by November 28, 2005, to “transmit all 911 calls, as well as a call back number and the caller's ‘Registered Location' for each call, to the PSAP, designated statewide default answering point, or appropriate local emergency authority that serves the caller's Registered Location.” VoIP E911 Order , 20 FCC Rcd at 10266, paragraph 37; see also OMB Grants Emergency Approval of New VoIP E911 Rules Adopted in IP-Enabled Services First Report and Order; Effective Date is July 29, 2005 , WC Docket No. 04-36, Public Notice (July 12, 2005). The Commission also required that all E911 calls be routed through the existing “Wireline E911 Network,” and not to 10-digit NPA-NXX numbers (administrative numbers), and that location or call back information be provided only to the extent that the PSAP, designated statewide default answering point, or appropriate local emergency authority designated to serve a Registered Location is capable of receiving and utilizing the data (such as ALI or ANI). See VoIP E911 Order , 20 FCC Rcd at 10269-10270, paragraph 42 and note 142. Even in those areas where the PSAP is not capable of receiving or processing location or call back information, the Commission concluded that interconnected VoIP providers must transmit all 911 calls to the appropriate PSAP via the Wireline E911 Network. See VoIP E911 Order , 20 FCC Rcd at 10269-10270, paragraph 42. The “Wireline E911 Network” is defined as a “dedicated wireline network that (1) is interconnected with but largely separate from the public switched telephone network, (2) includes a selective router, and (3) is utilized to route emergency calls and related information to PSAPS, designated statewide default answering points, appropriate local emergency authorities or other emergency answering points.” 47 CFR 9.3. Recognizing that “it currently is not always technologically feasible for providers of interconnected VoIP services to automatically determine the location of their end users without end users' active cooperation,” VoIP E911 Order , 20 FCC Rcd at 10271, paragraph 46, the Commission stated that interconnected VoIP providers must obtain from each customer, prior to the initiation of service, the physical location at which the service will first be utilized. VoIP E911 Order , 20 FCC Rcd at 10271, paragraph 46. The Commission ordered interconnected VoIP providers to obtain from each existing customer, by November 28, 2005, the physical location at which the customer is using the service. VoIP E911 Order , 20 FCC Rcd at 10271, at paragraph 46, note 147. The Commission also required providers of interconnected VoIP services that can be utilized from more than one physical location to provide their end users with a method of updating information regarding the user's physical location. VoIP E911 Order , 20 FCC Rcd at 10271, paragraph 46. The most recent location provided to an interconnected VoIP provider by a customer is the “Registered Location.” VoIP E911 Order , 20 FCC Rcd at 10271, paragraph 46. The Commission expected that customers of interconnected VoIP service providers would, in almost all cases, be able to provide their Registered Location in the form of a valid street address. VoIP E911 Order , 20 FCC Rcd at 10271, paragraph 46, note 148. The Commission also emphasized that although it was not requiring interconnected VoIP providers to automatically determine the location of their end users, nothing in the VoIP E911 Order prevents an interconnected VoIP provider from automatically obtaining an accurate location if it is capable of doing so. VoIP E911 Order , 20 FCC Rcd at 10271, at paragraph 46, note 146.

The Commission further found that allowing customers of interconnected VoIP providers to opt in or opt out of E911 service is inconsistent with its obligation to “encourage and support efforts by States to deploy comprehensive end-to-end emergency communications infrastructure and programs.” See VoIP E911 Order , 20 FCC Rcd at 10271-10272, paragraph 47 (quoting Wireless Communications and Public Safety Act of 1999, Public Law Number 106-81, 113 Statute 1286, § 3(b) (1999)). In addition, in order to ensure that customers of interconnected VoIP services are aware of their interconnected VoIP service's actual E911 capabilities, the Commission required that all providers of interconnected VoIP service specifically advise every subscriber, both new and existing, of the circumstances under which E911 service may not be available through the interconnected VoIP service, or may in some way be limited in comparison to traditional E911 service. See VoIP E911 Order , 20 FCC Rcd at 10272-10273, paragraph 48. The Commission also required VoIP providers to obtain and keep a record of affirmative acknowledgement by every subscriber of having received and understood this advisory. See VoIP E911 Order , 20 FCC Rcd at 10272-10273, paragraph 48. Finally, in order to ensure that the advisory is available to all potential users of an interconnected VoIP service, the Commission required interconnected VoIP service providers to distribute to their subscribers stickers or labels warning if E911 service may be limited or unavailable, and to instruct subscribers to place them on or near the equipment used in conjunction with the interconnected VoIP service. See VoIP E911 Order , 20 FCC Rcd at 10272-10273, paragraph 48.

The NPRM seeks comment on the means by which providers of VRS and IP Relay services may determine the appropriate PSAP to contact when they receive an emergency call. As noted above, the Commission has waived the TRS emergency call handling mandatory minimum standard for VRS until January 1, 2006, and for IP Relay service until January 1, 2008. These waivers reflect the recognition that it is not currently technologically feasible for VRS or IP Relay service providers to automatically determine the location of the calling party because the Internet address associated with the incoming “call” to the relay center does not contain identifying information. Because VRS calls can be answered by a CA located in another city or state, if the CA simply dials 911, the CA would reach a PSAP for the area in which the CA (the VRS center) is located, not a PSAP for the area in which the caller is located.

Currently the most reliable way for persons with hearing or speech disabilities to reach emergency services is through the use of TTY directly, rather than through a relay service. Because PSAPs are required to be able to receive direct TTY calls, and such calls contain ANI, the PSAP can determine the location of the caller, even if the caller is unable to communicate after establishing the connection with the PSAP. At the same time, the Commission recognizes that many TRS users now solely rely on VRS, or IP Relay services, which require a broadband Internet connection, or and therefore such users may not have access to a telephone line or a TTY. Such users cannot make a direct call to a PSAP in the event of an emergency. The Commission recognizes that VRS and IP Relay service users, may need to make emergency calls through those services, and will rely on the VRS and IP Relay service providers to relay their calls ( i.e. , make an outbound call) to a PSAP that can respond to the emergency. The Commission seeks to adopt a means of ensuring that such calls promptly reach the appropriate emergency service provider.

User Registration. As noted above, under the new rules for interconnected VoIP services, providers must obtain the primary location from which calls will be placed prior to initiating a customer's service. VoIP providers must also provide a way for users to update that location information. The Commission seeks comment on whether VRS and IP Relay service providers should be required to similarly register their customers—and obtain a Registered Location—so that they will be able to make the outbound call to the appropriate PSAP. The Commission also seeks comment on how such a registration requirement might work for first time users of a particular provider's VRS or IP Relay service. Further, the Commission seeks comment on whether there are other means by which VRS and IP Relay service providers may obtain Registered Location information, for example, by linking the serial number of the customer's VRS or IP Relay service terminal or equipment to that customer's registered location. Because each terminal has a unique identifying number, known as a Media Access Control (MAC) address, this could be used to identify or verify a user profile which contains the registered address. Finally, the Commission seeks comment on whether the same rules should apply to both VRS providers and IP Relay service providers, or whether the different natures of these services warrant different solutions.

The Commission recognizes that, in the past, some TRS users have expressed opposition to registration, noting that because voice telephone users did not have to “register” to obtain telephone service, and any such requirement would impose an additional burden on relay users alone. The VoIP E911 Order should allay that concern, since it imposes a similar registration requirement on voice telephone subscribers. The Commission also notes that many VRS and IP Relay service users currently create profiles to assist providers in handling and expediting their calls. See, e.g., http://www.hamiltonrelay.com/internet/ip/profile.html (an example of an IP Relay service provider's profile page that allows users to indicate their preferences concerning matters such as speed dialing and greetings). Accordingly, making similar profiles mandatory through registration, as a condition of using VRS and IP Relay service, may not be unduly intrusive or burdensome. The Commission seeks comment on whether the use of a registration system for VRS and IP Relay service is appropriate and consistent with Section 225's functional equivalency mandate. 47 U.S.C. 225(a)(3). The Commission seeks comment, generally, on any privacy considerations that might be raised by requiring VRS and IP Relay service users to provide location information as a prerequisite to using these services. The Commission also seeks comment on whether the Commission's TRS confidentiality rules are sufficient to address potential concerns related to providing personal information through the Internet. See 47 CFR 64.604(a)(2). The Commission seeks further comment on what measures providers have taken to ensure the privacy and security of relay calls. See, e.g., 2004 TRS Report and Order , 19 FCC Rcd at 12522, paragraph 51; IP Relay Declaratory Ruling and FNPRM , 17 FCC Rcd at 7791, paragraph 38. The Commission also seeks comment on whether, assuming some type of location registration requirement is adopted, the Commission should require specific information or place limits on the scope of the information that providers should be able to obtain.

VRS equipment, because it requires a video screen or television monitor, tends to remain at the same location, while IP Relay service may be accessed through any laptop computer or similar device that connects to the Internet, including handheld wireless devices. The Commission therefore seeks comment on how we might ensure that IP Relay service providers have current location information, i.e. , that the Registered Location is the actual location of the user when making a particular call. In the VoIP E911 Order , the Commission required providers to offer their customers a method of updating their location information. VoIP E911 Order , 20 FCC Rcd at 10271, paragraph 46. The Commission seeks comment on how it may ensure that VRS and IP Relay service providers have updated location information and the respective obligations of the providers and the customers in this regard. Should, for example, users be required to affirmatively acknowledge whether they are at their Registered Location each time they initiate a call, and if they are not at their Registered Location, be prompted or required to provide their present location?

The Commission currently requires TRS providers to include “a clear and bold written statement on their Web sites and any VRS promotional materials explaining the shortcomings and potential dangers of using VRS to place an emergency call using 911,” see Telecommunications Relay Services and Speech-to-Speech Services for Individuals with Hearing and Speech Disabilities, CC Docket No. 98-67, Order, 17 FCC Rcd 157, at 162, paragraph 14 (December 31, 2001) (temporarily waiving mandatory minimum standards); see also 2004 TRS Report and Order , 19 FCC Rcd at 12522-3, paragraphs 116-118 (extending waivers and confirming warning requirement), so that those making a 911 call over TRS facilities understand the implications of placing such a call, particularly in the context of the Commission's encouragement to TRS users to access emergency services directly. As discussed above, the Commission imposed obligations on interconnected VoIP service providers to advise customers of the limitations on E911 service, obtain customer's acknowledgements of such advice, and distribute warning labels to be placed on equipment used in conjunction with interconnected VoIP service. VoIP E911 Order , 20 FCC Rcd at 10272-10273, paragraph 48. In light of these requirements, the Commission seeks comment on whether, and if so, how the Commission's current requirements for VRS and IP Relay service providers should be revised. Should the Commission, for example, require that VRS and IP Relay service providers specifically advise new and existing subscribers of the circumstances under which E911 service may not be available through VRS and IP Relay service or may be in some way limited by comparison to traditional E911 service? Should VRS and IP Relay service providers be required to obtain and keep a record of affirmative acknowledgement by every subscriber of having received and understood this advisory? Should the Commission require VRS and IP Relay service providers to provide appropriate warning labels for installation on CPE used in connection with VRS and IP Relay services? Should receipt of compensation from the interstate TRS Fund be conditioned on compliance with such requirements? What, if any, other requirements should be imposed on VRS and IP Relay service providers in this regard?

In the VoIP E911 Order , the Commission made clear that interconnected VoIP providers must use the Wireline E911 Network in transmitting E911 calls to the appropriate PSAP, and may not use a 10-digit number (so called “administrative numbers”). The Commission seeks comment on whether the same rule should apply to VRS and IP Relay service providers handling emergency calls.

Finally, the Commission seeks comment on whether, VRS and IP Relay service calls could be routed in such a way that they necessarily include a VoIP call, therefore allowing registration for interconnected VoIP calls to satisfy the registration requirement for users of VRS and IP Relay service. Because outbound VRS, IP Relay service, and VoIP calls all use the Internet, the Commission seeks comment on whether, if VRS and IP Relay service users were also VoIP subscribers, their emergency VRS or IP Relay service calls could simultaneously be directed to both the VRS or IP Relay service provider and the emergency service tied to their Registered Location with the VoIP provider. The Commission also seeks comment on any other ways in which the requirements of the VoIP E911 Order may be applied to the use of VRS and IP Relay service to ensure access to emergency services.

PSAP Database. The Commission requires TRS providers to use PSAP databases to determine the appropriate PSAP to call in relaying an emergency call, and in the 2004 TRS Report and Order , the Commission continued to require providers to maintain and update these databases. TRS Second Improved Report and Order , 18 FCC Rcd at 12407-12408, paragraph 42; 2004 TRS Report and Order , 19 FCC Rcd at 12559-12560, paragraph 217. The Commission declined, however, to mandate a single national PSAP database that would be available to all TRS providers, noting that no national database exists for routing 911 calls. 2004 TRS Report and Order , 19 FCC Rcd at 12560, paragraph 218. Are these existing requirements concerning the use of PSAP databases sufficient for VRS and IP Relay service providers handling emergency calls, or should they be modified? The Commission also seeks comment on whether a national database is feasible and appropriate for VRS and IP Relay service providers handling emergency calls. If so, how could such a database be implemented and maintained?

Priority Access to Emergency Calls. During busy periods, the CA may not be immediately available to handle an incoming VRS or IP Relay service call and, as a result, the caller may be put in a queue to wait for the next available CA. Because the “85/10” speed of answer rule applies to IP Relay service, such delays are less of a concern for IP Relay service. See 47 CFR 64.604(b)(2); 2005 VRS Order , 20 FCC Rcd at 10254-10258, paragraphs 19-24. The Commission seeks comment on whether and how VRS and IP Relay service providers may identify incoming calls as emergency calls so that such calls can promptly be directed to a CA without waiting in a queue. The Commission also seeks comment on whether equipment can be modified to permit users to make an emergency call that will be promptly recognized as such by the providers, so that a VRS or IP Relay service user has the ability to make a call that is the equivalent of a 911 voice telephone call.

Multiple Providers. Several VRS and IP Relay service providers currently offer service, giving customers a choice of providers. In contrast, traditional TRS consumers must make intrastate TRS calls through the provider(s) selected by the state as part of the certified state TRS program. The Commission seeks comment on whether VRS and IP Relay service users should be required to register with each provider that they use, or whether a shared database could be established that could be accessed by all providers. The Commission also seeks comment on the advantages or disadvantages of using such a shared database.

Registration and Jurisdictional Separation of Costs. As a general matter, Section 225 of the Communications Act provides that states are responsible for compensating providers for the costs of intrastate TRS, and the Interstate TRS Fund is responsible for compensating providers for the costs of interstate TRS. See 47 U.S.C. 225(d)(3)(B). For traditional TRS calls made via the PSTN, providers can automatically determine if a particular call is interstate or intrastate, and bill either the appropriate state or the Interstate TRS Fund accordingly. For VRS and IP Relay service calls, however, because one leg of the call is via the Internet, it is presently not possible for a provider to determine if a particular call is interstate or intrastate. As a result, presently all VRS and IP Relay service calls are compensated from the Interstate TRS Fund.

In the FNPRM of the 2004 TRS Report and Order , the Commission sought comment on possible means for applying jurisdictional separation of costs to VRS and IP Relay service calls. See 2004 TRS Report and Order , 19 FCC Rcd at 12561-12564, paragraphs 221-230 (IP Relay), 12567, paragraphs 241-242 (VRS). The Commission now seeks comment on whether a registration requirement for emergency call handling could also be used as a mechanism to allocate TRS costs between the interstate and intrastate jurisdictions. See 2004 TRS Report and Order , 19 FCC Rcd at 12567, paragraph 242. The Commission also seeks comment on whether, assuming all VRS and IP Relay service calls continue to be compensated from the Interstate TRS Fund, an exception should be made for emergency VRS and IP Relay service calls, so that they are paid for by the states or the Interstate TRS Fund, depending on the jurisdictional nature of the call. Further, the Commission seeks comment on any other alternatives for funding emergency VRS and IP Relay service calls.

Timelines. The Commission seeks comment on how much time it may reasonably take for providers to implement the solutions proposed in this NPRM. The Commission also seeks comment on whether there continues to be any reason to have separate deadlines for complying with waived mandatory minimum standards for emergency call handling for VRS and IP Relay services. Finally, the Commission asks parties to provide any further information that may illuminate the issues raised in this NPRM .

As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in this Notice of Proposed Rulemaking ( NPRM ). See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public Law Number 104-121, 110 Statute 857 (1996). Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM . The Commission will send a copy of the NPRM , including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). See 5 U.S.C. 603(a).

Under the Commission's regulations, providers of telecommunications relay services (TRS), mandated by Title IV of the Americans with Disabilities Act of 1990, see 47 U.S.C. 225, are required to handle emergency calls from service their customers. 47 CFR 64.604(a)(4). To do so, TRS providers must know the appropriate PSAP to call based on the location of the calling party. Because VRS and IP Relay service use the Internet rather than the PSTN for the leg of the call coming into the relay center, the relay center does not have a means of automatically detecting the location of the calling party. As a result, the emergency call handling requirement is presently waived for VRS and IP Relay service providers. Because of the importance of being able to call emergency services, the NPRM seeks comment on rules the Commission should adopt to ensure that VRS and IP Relay service providers can handle calls seeking access to emergency services and make an outbound call to an appropriate PSAP.

More specifically, the NPRM seeks comment on whether the Commission should adopt a registration process whereby VRS and IP Relay service providers would be required to establish, in advance, the primary location from which the VRS and IP Relay service users will be making calls, so the provider can identify the appropriate PSAP to contact. The NPRM addresses a number of issues concerning how a registration process for VRS and IP Relay service users might be implemented and whether imposing such a requirement would be consistent with Section 225 of the Communications Act. In addition, the NPRM addresses several related issues, including: (1) Whether VRS and IP Relay service calls could be structured in such a way that they necessarily include a VoIP call, so that the registration that is required by the VoIP E911 Order for users of interconnected VoIP service would satisfy the registration requirement for users of VRS and IP Relay service; (2) whether the Commission should adopt new requirements for providers to warn their customers of the limitations of using VRS and IP Relay service to make emergency calls and/or provide warning labels to be placed on equipment; (3) whether the Commission should adopt requirements that establish a national PSAP database; (4) whether it is possible for VRS and IP Relay service providers to recognize incoming calls as emergency calls so that such calls do not have to wait in a queue to be handled; (5) whether customer registration could be accomplished through a shared database, rather than individually databases for each provider; (6) whether the registration requirement could be used to determine whether calls are intrastate or interstate for purposes of jurisdictional separation of costs; and (7) how long it might take for providers to implement a registration process.

The authority for the actions proposed in this NPRM may be found in Sections 1, 4(i) and (j), 201-205, 218 and 225 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (j), 201-205, 218 and 225, and §§ 64.601-64.608, 47 CFR 64.601-64.608 of the Commission's rules.

The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. 5 U.S.C. 603(b)(3). The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 5 U.S.C. 601(6). In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. 5 U.S.C. 601(3). The statutory definition of a small business applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in the Federal Register .” 5 U.S.C. 601(3). A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA. 15 U.S.C. 632.

As noted above, the TRS rule requiring providers to handle emergency calls ( i.e. , to be able to make the outbound call to an appropriate PSAP) is presently waived for VRS and IP Relay service providers. The NPRM seeks comment on whether the Commission should adopt a registration process, or some other means, by which VRS and IP Relay service providers can ensure that can be routed to the appropriate PSAP. The Commission believes that the entities that may be affected by the proposed rules are only those TRS providers that offer IP Relay service and VRS. Neither the Commission nor the SBA has developed a definition of “small entity” specifically directed toward TRS providers. The closest applicable size standard under the SBA rules is for Wired Telecommunications Carriers, for which the small business size standard is all such firms having 1,500 or fewer employees. 13 CFR 121.201 of the Commission's rules, NAICS Code 517110. Currently, there are eight TRS providers that offer VRS and/or IP Relay service, which consist of interexchange carriers, local exchange carriers, other common carriers, and non-profit organizations. Approximately five or fewer of these entities are small businesses under the SBA size standard. See National Association for State Relay Administration (NASRA) Statistics. These numbers are estimates because of recent and pending mergers and partnerships in the telecommunications industry.

The NPRM 's proposed registration requirement, if adopted, would require VRS and IP Relay service providers to obtain from each customer, prior to the initiation of service, the physical location at which the service will first be utilized ( i.e. , the “Registered Location”), and to provide customers a way to update this information. The NPRM also asks whether VRS and IP Relay service calls could be routed in such a way that they necessarily include a VoIP call so that the registration that is required by the VoIP E911 Order for users of interconnected VoIP service would satisfy the registration requirement for users of VRS and IP Relay service. Third, the NPRM asks whether the Commission should impose new or additional requirements on providers to warn their customers of the limitations of using VRS and IP Relay service to make emergency calls, and to provide warning labels to be placed on equipment. Fourth, the NPRM asks whether the Commission should adopt new or additions for PSAP databases and/or require a national PSAP database. Fifth, the NPRM asks whether customer registration can be accomplished through a shared database, rather than individual database for each provider. Finally, the NPRM asks whether registration requirement could be used to determine whether calls are intrastate or interstate for purposes of jurisdictional separation of costs.

The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.” 5 U.S.C. 603(c)(1) through (4).

This NPRM seeks comment on whether the Commission should adopt a registration process, or some other means, by which VRS and IP Relay service providers can ensure that emergency calls can be routed to the appropriate PSAP to contact. The NPRM , however, contemplates alternative means by which the Commission might ensure that VRS and IP Relay service providers can handle emergency calls. As noted, the Commission seeks comment on what ways VRS and IP Relay service providers currently seek to provide emergency services to their customers. Thus, there may be alternatives to direct regulation to achieve the Commission's public policy goals of ensuring the availability of 911 and E911 capability for VRS and IP Relay service users. Accordingly, the Commission seeks comment on such alternatives.

The NPRM asks whether VRS and IP Relay service calls could be routed in such a way that they necessarily include a VoIP call, so that the registration that is required by the VoIP E911 Order for interconnected VoIP users would satisfy the registration requirement for users of VRS and IP Relay service. Because outbound VRS, IP Relay service, and VoIP calls all use the Internet, if VRS and IP Relay service users that were also VoIP subscribers their emergency VRS or IP Relay service calls could simultaneously be directed to both the VRS or IP Relay service provider and the emergency service tied to their Registered Location with the VoIP provider. This alternative approach to ensuring access to emergency services could mitigate any burdens the proposed registration requirement might have on small businesses.

Third, the NPRM asks whether the Commission should impose new or different requirements on providers to warn their customers of the limitations of using VRS and IP Relay service to make emergency calls and/or provide warning labels to be placed on equipment. As noted in the NPRM , TRS providers already are required to advise user to make a direct call to a PSAP in the event of an emergency, rather than use VRS or IP Relay service. Because VRS or IP Relay service may sometimes be the only way for a user to make emergency calls, VRS or IP Relay service providers must be prepare to handle such calls (unless the emergency call handling requirement is waived). There may be a number of alternative ways providers can ensure that VRS and IP Relay service users are informed about the limitations of using these services for emergency calls, and the NPRM broadly seeks comment about such alternatives.

Fourth, the NPRM asks whether the Commission should require a national PSAP database. A single, national PSAP database might be preferable to multiple provider-maintained databases. One alternative under consideration is the creation of voluntary agreements among public safety trade associations, VRS and IP Relay service stakeholders, customers, and state and local E911 coordinators and administrators for VRS and IP Relay service to received enhanced 911 functionality. Promulgation of best practices or technical guidelines ensure that providers could determine an appropriate PSAP for a particular VRS or IP Relay service emergency call. The Commission therefore requests comment on the viability of such alternatives, especially with regard to the impact of each alternative on small businesses.

Fifth, the NPRM asks whether it is possible for providers to recognize incoming calls as emergency calls so that such calls do not have to wait in a queue. Providing such priority access to emergency calls would ensure that VRS and IP Relay service users would promptly reach a CA able to handle their emergency call. The Commission requests comment on alternative options for accomplishing this goal.

Sixth, because VRS and IP Relay service customers can choose from among several VRS and IP Relay service providers, and often use more than one, the NPRM seeks comment on whether any customer registration could be accomplished through a shared database, rather than individual databases for each provider. A shared database would likely be less onerous for providers because every provider would not have to register every customer.

Seventh, the NPRM asks whether registration could be used to determine whether calls are intrastate or interstate for purposes of jurisdictional separation of costs. If so, registration would solve the current compensation problem, the inability to determine if a VRS or IP Relay service call is intrastate or interstate, without putting additional burdens on the providers.

Finally, the NPRM asks how long it might take for providers to implement registration and whether registration could or should be implemented at the same time for VRS and IP Relay service. This question is asked to ensure that providers are not unduly burdened by having to comply with new rules for both services at the same time.

None.

Pursuant to Sections 1, 4(i) and (o), 225, 255, 303(r), 403, 624(g), and 706 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i) and (o), 225, 255, 303(r), 403, 554(g), and 606, this Notice of Proposed Rulemaking is adopted .

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