Science and Technology (S&T) Programs has been performing voluntary laboratory services under the Agricultural Marketing Act of 1946, as amended, for the AMS commodity programs (Fruit and Vegetable, Cotton, Livestock and Seed, Poultry, Dairy, and Tobacco) and applicable customers in these industries since its inception on August 17, 1988. Before that, voluntary laboratory testing was provided for a user fee by AMS under the various commodity programs. The current standard hourly rate of $45.00 and the premium hourly rate of $67.50 have been in effect since publication in the Federal Register on October 27, 2000 (65 FR 64302). The standard fee rate for laboratory services will be $60.00 per hour for the remainder of fiscal year 2007, and will increase to $63.00 per hour in fiscal year 2008, and $67.00 per hour in fiscal year 2009. The premium hourly fee rates will also be adjusted for fiscal years 2007 through 2009. An increase in the premium hourly rates over the three fiscal years for laboratory services performed on holidays, appeal samples, and overtime basis is also needed since Science and Technology laboratory personnel may be required to work extended hours of service at the time and a half pay or the double hourly pay to accommodate clients. This is due to stakeholder demand for immediate test results. Generally, the processing of all laboratory samples is continuous over a 24/7 timeframe due to the recent introduction of automated equipment.

The AMS laboratory testing programs are voluntary, user fee services, conducted under the authority of the Agricultural Marketing Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq. ). The AMA authorizes the Secretary of Agriculture to provide Federal analytical testing services that facilitate marketing and trade. In addition, consumers may be able to determine the quality and wholesomeness characteristics of a commodity or product through laboratory testing. This allows agricultural products to be assigned official AMS grade designations or to meet specifications. The AMA also requires that reasonable fees be collected from the users of the services to cover as nearly as possible the costs of maintaining the programs.

With this rulemaking, AMS will amend its regulations to provide for annual hourly fee rate increases for laboratory services over three years (FYs 2007 through 2009) in one action. AMS will continue to perform a yearly cost analysis to determine whether the voluntary hourly fee rates established for its user-fee-supported laboratory service programs are adequate to cover expenses. The most recent review determined that the existing fee schedules and tables of individual tests or services, which have been in place since October 27, 2000, will not generate sufficient revenues to recover operating costs.

A more flexible user fee system, using set hourly rates for multiple fiscal years, is established by this rulemaking to ensure that AMS properly recovers its full costs for providing laboratory services, and that all stakeholders are charged reasonable fees. By enacting a three year fee increase instead of a single year fee increase, AMS will help ensure that the fee increases are effective at the beginning of each fiscal year (October 1).

In addition, the existing fee schedules and tables in 7 CFR, part 91, § 91.37 will be removed. The analytical tests listed in the tables are not specific to individual commodity testing requirements or stakeholder needs. The current tables do not represent the actual operational costs to perform single tests and newer methodologies. Laboratory services are provided for five types of analytical testing: Microbiological, physical, residue chemistry, proximate analysis for composition, and biomolecular testing. AMS must recover the costs of providing these services. The new hourly fee rates will recover these costs, and none of the fees collected for testing services referenced in this final rule are used for a biotechnology verification program specified in Federal Register Notice (67 FR 50853), August 6, 2002.

AMS calculated its actual costs for fiscal years 2001 through 2006 and its projected increases in salaries and inflation in fiscal years 2007 through 2009. The increases in salaries for fiscal year 2006 as the base year and the succeeding out years are from the Office of Management and Budget's (OMB) multi-year “Economic Assumptions” tables. The Federal pay raise for calendar years 2002, 2003, and 2004 were 4.6 percent, 4.1 percent and 4.1 percent, respectively. This information comes from Table 11-1, “Economic Assumptions”, of the Office of Management and Budget's Fiscal Year 2005 Budget which is available at http://www.whitehouse.gov/omb/budget/fy2005/econ.html . The average fiscal year pay raise for Federal employees in calendar years 2005 and 2006 was 3.5 percent effective January 2005 and 3.1 percent effective January 2006. The average combined national and locality pay raise is estimated to be 2.2 percent for fiscal years 2007, 2008, and 2009. Inflation for fiscal year 2006 is 2.1 percent. Inflation for fiscal year 2007 is estimated to be 2.2 percent. Inflation for fiscal year 2008 is estimated to be 2.1 percent. Inflation for fiscal year 2009 is estimated to be 2.1 percent. These estimates for inflation percent can be obtained from Table 12-1, “Economic Assumptions”, of the OMB's Fiscal Year 2007 Budget which is available at http://www.whitehouse.gov/omb/budget/fy2007/econ.html.

The Agency will initiate another rulemaking to adjust any fee established, only if estimated increases for pay and inflation do not adequately cover the Agency's costs of providing the services. The cost of providing laboratory services includes both direct and overhead costs. Direct costs include the cost of salaries, employee benefits, operation cost and infrastructure cost. The Agency is able to estimate the employee benefits attributable to overtime work and has included these in the fee calculations.

With this action, the AMS will amend its regulations to provide for three annual fee increases in one action. Table 1 shows the summary of the current rates and the new hourly fee rates for fiscal years 2007 through 2009 for the four different types of services (regular laboratory, appeal, overtime, and legal holiday work) that Science and Technology Programs employees perform.

In order to project the hourly fee rates for the laboratory program services for fiscal years 2007 through 2009, the current fiscal year 2006 is used as a base. The total base time hourly fee rate calculation (Table 2) for fiscal year 2006 begins with the actual salaries for fiscal year 2005 ($2,787,474) and adds the fiscal year 2006 pay raises (3.1 percent) and add other fiscal year 2006 pay adjustments ($119,500) for within-grade pay step increases for General Schedule (GS) salaries, promotion pay costs, and new employee position pay costs. Table 2 contains footnotes 1-7 that provide the common mathematical formula used to calculate the apportioned rate for each fee charge category for fiscal year 2006. The formula uses the actual cost or projected cost in dollars for the applicable fiscal year for each individual fee charge category divided by the available program hours and further divided by the number of laboratory service program employees. The formula derives the apportioned fee rate for each fee charge category (salaries with pay adjustment, benefits, operational costs, infrastructure cost, program administrative overhead and agency overhead). The same formula that is used in Table 2 and that is indicated in its footnotes is also applied in the other tables to derive each category unit rate with the different actual costs or variable projected costs to be inserted in the formula equation for the applicable fiscal year.

Table 3 through Table 5 show the calculation of the total standard hourly fee rates to be rounded off for fiscal years 2007 through 2009.

Table 6 through Table 9 show the calculation of the total appeal and total overtime hourly fee rates to be rounded off for fiscal years 2006 through 2009. These tables incorporate the differentials in costs associated with the necessity of laboratory personnel to work extended hours of service at the time and a half pay doing either overtime or appeal sample testing.

Table 10 through Table 13 show the calculation of the total legal holiday hourly fee rates to be rounded off for fiscal years 2006 through 2009. These tables incorporate the differentials in costs associated with the necessity of laboratory personnel to work extended hours of service at the double hourly pay rate doing sample testing on a Federal holiday or a designated day for the Federal holiday.

The Agency must recover the actual cost of services for multiple fiscal years covered by this rule. These fee increases are essential for the continued sound financial management of the Agency's budget. In order to enhance the transparency of the hourly fee rates in the aforementioned Tables 3 through 13 for fiscal year 2007, fiscal year 2008 and fiscal year 2009, a description is provided of each fee charge category. Federal salaries with national and locality pay adjustments and choices in benefits are made available on an annual basis by the Office of Personnel Management (OPM). Operational costs include expenses for rents, communications, utilities, medical examinations, safety equipment, sample preparation equipment, training, trash and hazardous waste disposal, travel and transportation costs. Communication expenditures include costs for photocopying, printing, e-mailing, Internet services, telephone, and faxing equipment. There have been large capital improvement expenditures in the laboratories in recent years. These expenditures include costs for the Food Emergency Response Network (FERN) and the capital improvements for the Environmental Management Systems (EMS) in accordance with the applicable mandates for Federal laboratories of Executive Order 13148 of April 21, 2000, Greening the Government Through Leadership in Environmental Management (65 FR 24593). These capital improvement costs are included in the normal operations of the Science and Technology field service laboratories. In addition, operational costs include expenses for office and laboratory supplies, chemicals, reagents, security and guard services, waste removal, robots, cleaning and internal building maintenance, billing and collection services, and a Laboratory Information Management System (LIMS). Infrastructure costs are mainly laboratory instruments and capital equipment with service and maintenance contracts and replacement spare parts. Infrastructure expenses include consumable supply costs associated directly with the proper operation of analytical instruments and laboratory equipment. Stakeholders demand that AMS provide cost effective and timely product testing requiring modern and sometimes automated instrumentation. These instruments are expensive and undergo equipment capitalization for determining costs. Equipment capitalization is the determined cost per year to replace the equipment after its useful service life has been established. Infrastructure costs include database acquisitions and maintenance for e-business. Infrastructure costs include large computer hardware and software expenses. Agency and Program overhead is the pro-rated share, attributable to a particular service, of the agency's management and support costs. Management and administrative support costs include the costs of providing budget and accounting services, regulatory services, investigative and enforcement services, debt-management services, personnel services, public information services, legal services, statistical services, and other general program and agency management services of support activities above the local laboratory level. Overhead expenditures are allocated across the Agency for each direct hour of laboratory service.

AMS no longer uses the Billings and Collections System (BLCO) for billings and collections through the National Finance Center (NFC) in New Orleans, LA. The Agency now uses the “accounts receivable” functions in Foundation Financial Information System (FFIS) as the document feeder system for customer billings and the collections now come through our lockbox. Accordingly, § 91.42 will be updated to reflect these changes. The regulations also are updated to identify current facility addresses.

This rule will also remove and reserve 7 CFR Part 92. Part 92 is obsolete because it relates to the mandatory testing of imported tobacco for prohibited pesticide residues and the statutory requirement for such testing has been removed by the Fair and Equitable Tobacco Reform Act of 2004 (7 U.S.C. 518). The tests had been conducted by Science and Technology (S&T) Programs for the AMS Tobacco Program, which sampled imported tobacco and administered the program for imported tobacco.

AMS published a proposed rule on September 22, 2006 (71 FR 55369), stating that it was proposing changing fees for laboratory services for FYs 2007 through 2009. AMS provided for a 30 day comment period, ending October 23, 2006. AMS received no comments.

This rule has been reviewed under Executive Order 12866. Although not economically significant, this rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget (OMB).

An economic analysis follows to review the impacts on laboratory customers of the new revisions in AMS voluntary user fees for laboratory services. The economic analysis provides a cost-benefit analysis as required by Executive Order 12866 and an analysis of the potential economic effects on small entities as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ). In accordance with 5 U.S.C. 604, AMS has prepared a final Regulatory Flexibility Analysis for this rule.

Regulations must be designed in the most cost-effective manner possible to obtain the objective of a sustainable cost recovery program while imposing the least burden on society. AMS has prepared a Regulatory Impact Assessment (RIA) consisting of a statement of the need for the rulemaking action, an examination of alternative approaches, and an economic analysis of the benefits and costs.

The AMS laboratory testing programs are voluntary, user fee services conducted under the authority of the Agricultural Marketing Act of 1946 (AMA), as amended (7 U.S.C. 1621, et seq. ). The AMA authorizes the Secretary of Agriculture to provide Federal analytical testing services that facilitate marketing and trade. The AMA also requires that reasonable fees be collected from the users of the services to cover as nearly as practicable the costs of maintaining the programs.

Science and Technology (S&T) Programs of AMS regularly reviews its user-fee-financed laboratory service programs to determine if the fee levels are adequate. The most recent review determined that the existing fee schedule, effective October 27, 2000 (65 FR 64302) will not generate sufficient revenues to recover operating costs. For fiscal year 2005 the Science and Technology program reported a $702,000 deficit at the current fee levels. The Science and Technology program costs and revenues for fiscal year 2005 were $6,393,000 and $5,691,000, respectively. Program costs for fiscal year 2006 were projected at $6,602,000 and revenues were projected at $5,834,000 for a deficit of $768,000. With this action, the Agency expects to collect an estimated $6,521,000, $7,186,000, and $7,553,000 in fiscal years 2007 through 2009 respectively, to cover the cost of routine laboratory services, appeal requests, overtime, and holiday services for Science and Technology customers and other program stakeholders.

Alternatives to the rate increase were considered by the Agency. One alternative to this rule would be to make no changes to the current user fees. As a result, AMS would not recover the full cost of program activities and services would have to be reduced or terminated. Were this to happen, the users of AMS laboratory services would be unable to meet certain AMS program requirements, would find it more difficult to meet foreign government or importer testing requirements, and would lose the opportunity to support their marketing efforts with what they believe to be preferred government laboratory test results. Consequently, AMS does not consider this alternative to be reasonable.

Another alternative considered would be to calculate the fee increases needed over the next three year period and then spread this overall increase evenly in annual increments. Because the increases are necessary to cover on-going costs, e.g. , rent, salaries and benefits, and equipment replacement, and financial stability needs to be maintained for this program, adequate funds must be generated immediately, rather than spread over a three year period. Thus, AMS does not consider this alternative to be reasonable.

To ensure full costs are being covered as they are incurred, the preferred alternative is to match fee increases with expected costs on an annual basis over the next three years. This alternative will assure costs are appropriately covered and that laboratory testing services remain available as program customers request them. With this action, the Agency expects to collect an estimated $6,521,000, $7,186,000, and $7,553,000 in fiscal years 2007 through 2009, respectively, to cover the cost of routine laboratory services, appeal requests, overtime, and holiday services.

Under this rule AMS will continue to offer laboratory testing services under the Agricultural Marketing Act of 1946 as amended, to facilitate marketing and allow products to obtain grade designations or meet marketing standards. As such, the program provides a viable option for a wide variety of clients by delivering scientific and analytical support services to the agricultural community and provides a valuable resource for those businesses and industries that wish to use a USDA shield.

Further, by having a three year fee increase instead of a single year fee increase, the Agency will help ensure that the fee increases are effective at the beginning of each fiscal year on October 1. An increase over three fiscal years will permit customers and other program stakeholders an opportunity to plan for annual changes in costs of laboratory service and to incorporate them into their budgetary plans.

For analytical purposes, projected collections are based on calculations using an effective date of January 1, 2007 for the fiscal year 2007 user fees. There are essentially three rate increases being changed for the basic laboratory services—$45 to $60 or 33.3 percent in fiscal year 2007, $60 to $63 or 5.0 percent in fiscal year 2008 and $63 to $67 or 6.4 percent in fiscal year 2009. The rate increases for overtime and appeals are $67.50 to $71 or 5.2 percent, $71 to $74 or 4.2 percent, and $74 to $78 or 5.4 percent in fiscal years 2007, 2008, and 2009, respectively. The rate increases for holiday service are $67.50 to $82 or 21.5 percent, $82 to $85 or 3.7 percent, and $85 to $89 or 4.7 percent in fiscal years 2007, 2008, and 2009, respectively. This is a voluntary program and the costs to each user would be proportional to their use of laboratory services each year. The increased fees will cover inflation and national and locality pay raises and replacement of equipment and other infrastructure improvements.

Under the Regulatory Flexibility Act, the impact of this rule on small businesses must be analyzed. There are 811 current users of AMS laboratory testing services. Such users of services include food processors, handlers, growers, Federal and State government agencies, and exporters. Many of these users are small entities under the criteria established by the Small Business Administration (13 CFR 121.201). Any decision by stakeholders and customers to discontinue the use of the laboratory services because of increased fees would not hinder food processors or other industry members from marketing their products.

For the following cost analysis, certain assumptions are used. First, base year data is actual fiscal year 2006 amount billed for voluntary services performed for the public. Second, seven percent of the total amount billed represents overtime costs and five percent represents costs related to appeals. Third, the calculated amounts in fiscal year 2007 are using the base year data as if the base year was fiscal year 2006. Fourth, each of the 811 customers had the exact same tests, using the same amount of time, and thus were billed the exact same amount. This customer is the “average” laboratory customer.

Table 14 sets the total levels for the dollar ($) amounts billed in the base year (Fiscal Year 2006).

Table 15 presents the base year costs and estimates costs in fiscal year 2007, fiscal year 2008, and fiscal year 2009 for the “average” laboratory customer. The base year values are derived by dividing basic laboratory services, overtime costs, and appeal costs by 811. The values for fiscal years 2007, 2008, and 2009 are derived multiplying each year by the appropriate percentage rate.

After the third increase, the customer will pay an additional average of $852 for all laboratory services. This is a 44.96 percent increase over the base year. The percentage increase for the basic laboratory services is 49.0 percent, overtime is 15.8 percent, and an appeal sample is 15.8 percent.

Table 16 presents the base year costs and estimates costs in fiscal years 2007, 2008, and 2009 for a “large business” laboratory customer. While the numerical values increase significantly, the percentages are the same. Even though the “large business” customer is paying $359,333 more then what was paid for the same services in the base year, the increase is still approximately 44.9 percent above what was billed in the base year.

The same is true for a “small business” customer. Table 17 presents the costs associated with a customer billed $29,000. Again the total difference between the billing in fiscal year 2009 and the base year is significantly smaller than the billing of an “average” customer, but the percentage increase is still near 44.9 percent.

This final rule is issued under Marketing Order No. 981, as amended (7 CFR part 981), regulating the handling of almonds grown in California, hereinafter referred to as the “order.” The 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. This rule is not intended to have retroactive effect. 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. Such 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.

This final rule adds outgoing quality control requirements under the administrative rules and regulations of the order. This rule provides for a mandatory program to reduce the potential for Salmonella bacteria in almonds. This action will help ensure that quality almonds are available for human consumption. This action was unanimously recommended by the Board at a meeting on August 22, 2006.

Section 981.42(b) of the order provides authority for the Board to establish, with approval of the Secretary, such minimum quality and inspection requirements applicable to almonds to be handled or to be processed into manufactured products, as will contribute to orderly marketing or be in the public interest. In such crop year, no handler shall handle or process almonds into manufactured items or products unless they meet the applicable requirements as evidenced by certification acceptable to the Board. The Board, with approval of the Secretary, may establish rules and regulations necessary and incidental to the administration of this provision.

In 2001, a Salmonella outbreak was identified in Canada, which was linked to a specific retailer, traced back to raw almonds sold in bulk bins, and ultimately traced back to the handler and the grower. The Salmonella strain was extremely unusual and had not previously been associated with contamination in a non-animal product. Three orchards where the almonds were produced were identified, and samples gathered from the orchards contained Salmonella. With oversight by the California Department of Health Services (CDHS), procedures were implemented by the grower, huller/sheller, and handler to specify how the almonds from those orchards were to be processed using a treatment to reduce the potential for Salmonella before the almonds were moved into commercial channels. The Board initiated an extensive research program to help understand the occurrence of Salmonella in almond orchards.

The Board also initiated an education program for the industry regarding Good Agricultural Practices (GAPs), Good Manufacturing Practices (GMPs), and Sanitation Standard Operating Procedures (SSOPs). GAPs provide guidelines to growers on how to minimize potential biological hazards during the production and harvesting of almonds. GMPs define procedures to be used by handlers to allow almonds to be processed, packed, and sold under sanitary conditions. SSOPs help to ensure a clean and sanitary environment in the packing facility. Together, these practices and procedures provide a framework for a Hazard Analysis Critical Control Point (HACCP) program for the industry to proactively eliminate or minimize potential sources of Salmonella contamination.

In the spring of 2004, a second Salmonella outbreak occurred in Oregon that was linked to raw almonds purchased at a particular retailer. The Salmonella strain was very similar to that identified in 2001. One handler had been the supplier to the retailer, and the handler initiated a voluntary recall of 5 million pounds of almonds sold in the U.S. The Food and Drug Administration (FDA) subsequently announced that the almonds had been exported to eight countries. The handler then initiated a full recall of the suspect almonds produced, packed, and shipped, increasing the recall to approximately 15 million pounds.

In the summer of 2004, the Board unanimously approved a voluntary action plan that called for treating all almonds to reduce the potential for Salmonella. Handlers were encouraged to treat the almonds prior to shipment, or ship the almonds to a manufacturer who agreed to treat the almonds. The Board continued to fund research on various technologies that could be used to help reduce the potential for Salmonella in almonds.

To further its efforts in providing a high quality product to consumers, in August 2006, the Board recommended that a mandatory treatment program be implemented under the order, pursuant to authority provided in § 981.42(b). Specifically, handlers must subject their almonds to a process that achieves a minimum 4-log reduction in Salmonella bacteria prior to shipment. The program provides for an exemption for handlers who ship untreated almonds under a direct verifiable (DV) program to manufacturers within the U.S., Canada, or Mexico who agree to treat the almonds accordingly. The program also provides for an exemption for handlers who ship untreated almonds to locations outside of the U.S., Canada, or Mexico. All containers of untreated almonds shipped under the two exemptions must be prominently identified with the term “unpasteurized.”

Under the program, handlers must subject their almonds to a treatment process or processes that achieve in total a minimum 4-log reduction of Salmonella bacteria, or ship their almonds under one of the two exemptions cited above. The rule only affects those who meet the definition of “handler” in § 981.13 of the order (thus exempting growers selling through roadside stands). Log reduction describes how much bacterial contamination is reduced by a treatment process. A 4-log reduction decreases bacteria by a factor of 10,000 (4 zeros). One treatment process that independently achieves a minimum 4-log reduction may be used, or a combination of different treatments may be used that collectively achieve a minimum 4-log reduction (“hurdle” technologies).

The Board initially supported a 5-log reduction, which is FDA's performance standard. However, the Board subsequently funded research with the University of California, Davis, in conjunction with Rutgers University, whereby a risk assessment model was developed using data from the two Salmonella outbreaks, as well as data from an industry pathogen survey. 1 The risk assessment model demonstrated that a minimum 4-log reduction provides an appropriate level of consumer protection. Thus, the Board concluded that a 4-log reduction was an appropriate standard for almonds.

Treatment processes for handlers must utilize technologies that have been determined to achieve a minimum 4-log reduction of Salmonella bacteria in almonds, pursuant to a letter of determination issued by the FDA, or acceptance by a scientific review panel as identified by the Board (known as the Technical Expert Review Panel, or TERP).

The FDA reviews studies utilizing specific protocols and treatment parameters, and issues a letter of determination when it determines that a process has sufficiently demonstrated its effectiveness to achieve a 5-log reduction of Salmonella in almonds. To-date, FDA has issued letters of determination for propylene oxide (PPO), oil roasting, blanching, and for a moist heat process.

The TERP will evaluate various treatment technologies against specific criteria, based on recommendations provided by the National Advisory Committee on Microbiological Criteria in Food (NACMCF). The NACMCF was formed in 1988 under Departmental Regulation 1043-28, and provides impartial, scientific advice to Federal food safety agencies for use in the development of an integrated national food safety systems approach from farm to final consumption to assure the safety of domestic, imported, and exported foods. It is co-sponsored by USDA's Food Safety and Inspection Service, the FDA, the Center for Disease Control and Prevention, the National Marine Fisheries Service, and the Department of Defense Veterinary Service Activity.

While the TERP will not “recommend” or “approve” technologies, its review will ensure that technologies utilized by the industry have been evaluated against specific science-based criteria demonstrating the technology's ability to deliver a lethal treatment for Salmonella in almonds. Documentation and data must be provided to the TERP (by a company pursuing TERP acceptance for its technology) for review to ensure that the technologies are consistently achieving the minimum 4-log reduction.

The TERP, initially formed by the Board in the fall of 2004 to review treatment technologies, consists of four scientists, with a representative from the FDA serving as an ex-officio member. The TERP has been evaluating various technologies and treatments for the almond industry, and to-date, the TERP has accepted steam and moist heat treatments as acceptable for achieving the Board's Salmonella reduction goals. Membership on the TERP must be approved annually by the Board prior to the beginning of each crop year, or more frequently if needed during the crop year, for example, to fill a vacancy on the panel.

Under the program, unless handlers ship their almonds to a Board-approved DV user (described later in this document), or ship their almonds to locations outside of the U.S., Canada, or Mexico, handlers must subject their almonds to a treatment process or processes prior to shipment either at their handling facility (on-site), or at an off-site treatment facility located within the production area (California). An off-site facility may or may not be affiliated with another handler. Transportation of almonds by a handler to an off-site treatment facility will not be considered a shipment.

Handlers may only use, or transport their almonds to off-site treatment facilities that use treatment processes that have been “validated” by a Board-approved process authority. Validation means that the treatment technology and equipment utilized have been demonstrated to achieve the minimum 4-log reduction. The use of process authorities is modeled after process authorities as cited in the “Guide to Inspections of Low Acid Canned Food Manufacturers” (Guide) ( http://www.fda.gov ). Treatment technology and equipment that have been modified to the point where operating parameters such as time, temperature, or volume, change must be revalidated.

For purposes of this document, a process authority is a person that has expert knowledge of appropriate processes for the treatment of almonds as described above, and meets other criteria as specified by the Board. Such criteria include the following: (1) Knowledge about the equipment used for the treatment process; (2) experience in conducting appropriate studies to determine the ability of the equipment to deliver the appropriate treatment (such as heat penetration or heat distribution studies); and (3) the ability to determine that sufficient data has been gathered to identify the critical factors needed to ensure the quality of the final product. Process authorities must submit an application to the Board on ABC Form No. 51, “Application for Process Authority for Almonds,” and be approved by the TERP. Should the applicant disagree with the TERP's decision concerning approval, it may appeal the decision in writing to the Board, and ultimately to USDA. Additionally, the TERP may revoke any approval for cause. The TERP must notify the process authority in writing of the reasons for revoking the approval. If the process authority disagrees with the TERP's decision, he/she may appeal the decision in writing to the Board, and ultimately to USDA. A process authority whose approval has been revoked must submit a new application to the TERP and await approval.

As explained later in this document, process authorities may also “establish” treatment processes for manufacturers under the DV program. The procedures and criteria for process authorities who establish treatment processes are identical to those for process authorities who validate such processes. “Establish” means that the treatment processes and protocols have been evaluated to ensure the technology's ability to deliver a lethal treatment for Salmonella in almonds to achieve a minimum 4-log reduction.

To ensure compliance with the mandatory program, handlers will be subject to verification by the Federal or Federal-State Inspection Service (inspection agency) and review by Board staff. Handlers may use either an on-site (traditional) or an audit-based verification program. Each handler must decide which verification program will be the most cost-effective for his or her operation. All handlers must submit a treatment plan to the Board for the upcoming crop year by May 31. The crop year runs from August 1 through July 31 of the subsequent year. The plan will be reviewed by the Board in conjunction with the inspection agency to ensure such plans are complete and auditable. The plan will be approved by the Board and must address specific parameters for the handler to ship almonds. Such parameters include, but are not limited to, the following: (1) The location of treatment plant; (2) the name and address of off-site treatment facility (custom processor), if appropriate; (3) a statement regarding whether treatment processes have been accepted by the TERP and/or “determined” by the FDA; (4) a statement regarding validation of treatment technology and equipment by a Board-approved process authority; (5) a statement whether untreated almonds will be exported; (6) a statement whether the handler will use the DV program; (7) a description or flow chart explaining how raw, untreated almonds enter and flow through the handler facility, and how the product would flow through the treatment process, including post treatment, packing, and/or storage; (8) a list of all treatments that will be used on the almonds (including, for example, number of blanching lines, etc.); (9) a description of how treated product will be differentiated and segregated from untreated product to ensure maintenance of treated product integrity; (10) a list of procedures regarding how interhandler transfers will be tracked; and (11) an explanation by handlers using a combination of processes to achieve a minimum 4-log reduction, that the processes occur in an appropriate sequence in sufficiently close proximity to ensure that the integrity of the treated product is maintained between processes.

Almonds sent by a handler for treatment to an off-site facility affiliated with another handler will be subject to the approved treatment plan utilized at that off-site facility. Handlers must follow their own approved treatment plans for almonds sent to an off-site facility that is not affiliated with another handler.

Additionally, an off-site treatment facility that does not handle almonds, pursuant to § 981.16, must provide access to the inspection agency and Board staff for verification of treatment and review of treatment records. A treatment process at an off-site facility that has been validated by a Board-approved process authority is deemed to be approved by the Board for handler use. The Board may revoke any such approval for cause. The Board must notify the off-site treatment facility of the reasons for revoking the approval. Should the off-site facility disagree with the Board's decision, it may appeal the decision in writing to USDA. Handlers may treat their almonds only at off-site treatment facilities that have been deemed to be approved by the Board.

Under an on-site verification program, handlers must cause the inspection agency to verify that their almonds were subjected to a treatment process that was validated by a Board-approved process authority. Such handlers must submit, or cause to be submitted, a verification report to the Board. The inspection agency must physically observe the treatment process to issue such a report. It is the handler's responsibility to arrange for inspection agency verification. An on-site program is comparable to a traditional in-line or lot inspection program.

Under an audit-based verification program, handlers will be subject to periodic audits conducted by the inspection agency. The inspection agency will verify that handlers were following the treatment parameters and protocols specified in their approved treatment plans. Audit frequency will be tied to handler performance. Handlers will be provided with written audit reports specifying deficiencies. Handlers who do not comply with an audit-based verification program will be required to revert to an on-site verification program. Audit reports will be provided to the Board to facilitate program compliance.

Interhandler transfers of almonds may or may not be treated prior to transfer. Handlers receiving untreated almonds from another handler will be responsible for treating the product. Handlers receiving treated almonds from another handler must have procedures outlined in their treatment plan addressing how the integrity of the treated almonds will be maintained. In all instances involving interhandler transfers, it will be the responsibility of the receiving handler to ensure that the almonds are treated prior to shipment and to maintain documentation to that effect. As provided in § 981.455, handlers must submit an ABC Form No. 7, “Interhandler Transfer of Almonds,” to the Board when they are involved in interhandler transfers.

Handlers will be required to maintain records and documentation that will be subject to audit by the inspection agency and the Board for the purpose of verifying compliance with the regulation. Consistent with § 981.70 of the order regarding handler records and verification, records must be maintained for 2 full years following the end of a crop year. Such records must identify lots from the point of treatment forward to the point of shipment by the handler. Lot identification must also provide the ability to differentiate treated from untreated product. Additionally, off-site treatment facilities located within the production area that provide the service of treating almonds for handlers, but are not handlers themselves, must maintain treatment records for 2 full years following the end of a crop year and make such records available to the Board.

Handlers may ship untreated almonds directly to Board-approved manufacturers (DV users) within the U.S., Canada, or Mexico for further processing under the Direct Verifiable or DV program. The Board will issue a DV user code to an approved manufacturer. Handlers must reference this code on all documentation accompanying the lot. This will help the Board track DV shipments and facilitate compliance with the program. Handlers must also identify each container of such almonds with the term “unpasteurized.” Container means a box, bin, bag, carton, or any other type of receptacle used in the packaging or handling of bulk almonds. The lettering must be on one outside principal display panel, at least 1/2 inch in height, clear and legible. If a third party is involved in the transaction, the handler must provide sufficient documentation to the Board to track the shipment from the handler's facility directly to the approved DV user. While a third party may be involved in such transactions, shipments to a third party and then to a manufacturing location are not permitted under the DV program. Almonds under the DV program must be shipped directly from handlers to approved manufacturing locations.

Manufacturers wanting to participate in the DV program must submit an application to the Board on ABC Form No. 52, “Application for Direct Verifiable (DV) Program for Further Processing of Untreated Almonds,” and be approved by the TERP. Should the applicant disagree with the TERP's decision concerning approval, it may appeal the decision in writing to the Board, and ultimately to USDA. Additionally, the TERP may revoke any approval for cause. The TERP must notify the manufacturer in writing of the reasons for revoking the approval. If the manufacturer disagrees with the TERP's decision, it may appeal the decision in writing to the Board, and ultimately to USDA. A manufacturer whose approval has been revoked must submit a new application to the TERP and await approval.

Similar to handlers, manufacturers must subject the almonds to a treatment process or processes using technologies that achieve in total a minimum 4-log reduction of Salmonella bacteria as determined by the FDA or accepted by the TERP. Additionally, manufacturers may use treatment processes that have been “established” by a Board-approved process authority. As previously stated, “established” means that the process authority has evaluated the treatment processes and protocols to ensure the technology's ability to deliver a lethal treatment for Salmonella in almonds to achieve a minimum 4-log reduction. The Board recommended this option to address manufacturers' concern regarding the process to seek TERP acceptance of their treatments, which could involve providing data on their proprietary processes to the TERP (i.e., specific time and temperature data for special equipment). DV users must submit with their application to the TERP documentation to verify that their treatment technology and equipment have been validated by a Board-approved process authority. Such documentation may include, but not be limited to, a letter from a process authority certifying the validation. The documentation must be sufficient to demonstrate that the treatment processes and equipment achieve a 4-log reduction in Salmonella bacteria.

Manufacturers must also do the following: (1) Identify the manufacturing locations where treatment will occur; (2) have their treatment technology and equipment validated by a Board-approved process authority. Treatment technology and equipment that have been modified to the point where operating parameters such as time, temperature, or volume, change must be revalidated; (3) maintain all records regarding validation and verification of treatment methods, processing, and product traceability for 2 years, and make such records available for review by the Board; and (4) ship untreated almonds (due, for example, to a manufacturer overbuying) to a handler, to another approved DV user, to locations outside the U.S., Canada, or Mexico (containers must remain identified with the term unpasteurized), or dispose of such almonds in non-edible channels.

Further, DV users will be audited by a Board-approved auditor within 1-2 months after the start of treatments, and at least once every 12 months thereafter. The cost of the DV audit shall be borne by the manufacturer. Such audits will determine if: (1) The DV user utilized appropriate treatment processes; (2) the DV user has a letter issued by a Board-approved process authority that validated that the treatment achieves a 4-log reduction of Salmonella; (3) personnel and procedures used at the facility ensure that treatment parameters were followed; and (4) records are retained for two years that document the treatment of almonds, or that any untreated almonds were properly disposed of as outlined above. A summary audit report of the DV user will be sent to the Board within 10 days of the audit. DV user auditors must submit an application to the Board on ABC Form No. 53, “Application for Direct Verifiable (DV) Program Auditors,” and be approved by the TERP. Should the applicant disagree with the TERP's decision concerning approval, it may appeal the decision in writing to the Board, and ultimately to USDA. Additionally, the TERP may revoke any approval for cause. The TERP must notify the DV auditor in writing of the reasons for revoking the approval. If the DV auditor disagrees with the TERP's decision, it may appeal the decision in writing to the Board, and ultimately to USDA. A DV auditor whose approval has been revoked must submit a new application to the TERP and await approval.

The Board recommended including Mexico and Canada as part of the DV program for compliance purposes. The Board was concerned that handlers could circumvent the regulation by shipping untreated almonds to Mexico or Canada, then, bring them back into the U.S. and sell them in normal market channels.

Handlers may also ship untreated almonds directly to locations outside the U.S., Canada, or Mexico, provided that each container of such almonds is prominently identified with the term unpasteurized. The lettering must be on one outside principal display panel, at least 1/2 inch in height, clear and legible. Again, if a third party is involved in the transaction, the handler must provide sufficient documentation to the Board to track the shipment from the handler's facility directly to the importer in the foreign country.

Accordingly, a new paragraph (b) regarding outgoing quality control and a mandatory program to reduce the potential for Salmonella bacteria contamination in almonds is added to § 981.442 of the order's administrative rules and regulations.

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 final regulatory flexibility analysis. Comments concerning the impact of the rule on small entities are discussed in the Analysis of Comments section below.

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 approximately 6,000 producers of almonds in the production area and approximately 115 handlers subject to regulation under the marketing order. Additionally, the Board estimates there will be about 25 process authorities, 53 almond manufacturers, 50 DV program auditors, and 20 off-site California treatment facilities (non-handlers) impacted by this rule. Small agricultural producers are defined by the Small Business Administration (13 CFR 121.201) as those having annual receipts of less than $750,000, and small agricultural service firms are defined as those whose annual receipts are less than $6,500,000.

Data for the most recently completed crop year indicate that about 52 percent of the handlers shipped under $6,500,000 worth of almonds. Dividing average almond crop value for 2003-2005 reported by the National Agricultural Statistics Service (NASS) ($2.043 billion) by the number of producers (6,000) yields an average annual producer revenue estimate of about $340,000. Based on the foregoing, about half of the handlers and a majority of almond producers may be classified as small entities. While data regarding the size of process authorities, almond manufacturers, DV program auditors, and off-site treatment facilities (non-handlers) is not available, it may be assumed that some process authorities, almond manufacturers, DV program auditors, and off-site California treatment facilities (non-handlers) may be classified as small entities.

The almond industry's 6,000 growers produce approximately 1 billion pounds annually (kernel weight basis). Industry members expect production to increase by 50 percent in the next 3-5 years, due to a significant amount of newly planted acreage that will come into production.

Although the Board currently projects that that there are about 115 handlers, handler number estimates can vary over time. Recent surveys have yielded estimates ranging from 112 (see Table 1) to 117 (see Table 2). Handlers ultimately market their almonds to customers in the U.S. and abroad. As shown in Table 1, the Board estimates that about 27 of 112 handlers handle more than 10 million pounds each, and cumulatively handle 82 percent of the crop.

According to data provided by the Board, about 30 percent of California almonds are sold domestically (about 300 million pounds). An estimated 20 percent of the domestic shipments are in the form of manufactured product—blanched, sliced, diced, or otherwise further processed using thermal treatments. About 70 percent of California almond production is exported to more than 80 countries worldwide. Mexico and Canada account for approximately 5 percent of export shipments. The quantities shipped by companies handling almonds vary considerably. However, a limited number of handlers are responsible for the majority of domestic and export shipments as shown in Table 2 below. Table 2 shows that 16 handlers are responsible for 90 percent of domestic shipments. Many of the same handlers are among the 38 that are responsible for 90 percent of exports. About 79 of an estimated 117 handlers are responsible for the remaining 10 percent of export shipments.

This rule adds a new paragraph (b) for outgoing quality control under § 981.442 of the order's administrative rules and regulations, whereby a mandatory program to reduce the potential for Salmonella bacteria in almonds will be implemented under the order. Specifically, handlers must subject their almonds to a treatment process that achieves a minimum 4-log reduction in Salmonella bacteria prior to shipment. The program exempts handlers who ship untreated almonds under a direct verifiable (DV) program to manufacturers within the U.S., Canada, or Mexico who agree to treat the almonds accordingly. The program also exempts handlers who ship untreated almonds to locations outside of the U.S., Canada, or Mexico. All containers of untreated almonds shipped under the exemptions must be prominently identified with the term “unpasteurized.” Authority for the program is provided in § 981.42(b) of the order.

According to the Board, the costs to individual handlers to comply with the program will vary considerably depending on their markets and treatment method(s) chosen. Handlers may: (1) Install new equipment in their processing lines to treat the almonds prior to shipment into commercial channels; (2) outsource to another handler or an off-site facility within California for treatment; (3) transfer their untreated product to another handler who will treat the almonds prior to shipment; (4) ship their untreated almonds to Board-approved DV users or to locations outside of the U.S., Canada, or Mexico; or (5) use a combination of these approaches.

In a handler survey conducted by the Board in March 2005 (to which 116 handlers handling almonds at that time responded), 86 handlers (74 percent) have their own facilities and/or equipment to process almonds; the remainder have almonds processed on their behalf. Of those handlers with their own facilities and/or equipment, 66 (77 percent of 86) indicated they planned to install equipment to treat almonds while the remaining 20 indicated they would outsource to a third party, or custom processor. Again, the overall economic impact of the program will vary based on the approach selected. Smaller handlers may choose to defer purchasing equipment and send their almonds to an off-site facility for treatment until more cost effective technologies are available.

Costs will also vary by treatment method. Some handlers may choose to install PPO chambers at their facilities. Handler sources estimate that typical installation costs for a PPO chamber range from $500,000 to $1,250,000. As with other technologies, overall cost will depend upon how much infrastructure is in place in the processing facility as well as the desired capacity of the chambers. Actual treatment cost for handlers treating their own product is approximately $0.03 per pound, varying with volume and efficiencies. PPO treatment is currently available in the industry on a contract basis at $0.04-$0.05 per pound (including transportation to the facility).

Regarding steam technologies, handler sources estimate the following equipment costs for in-line steam systems designed to treat almonds at varying capacities from 1,000 pounds to over 30,000 pounds of almonds per hour:

While treatment equipment costs will be the most significant outlay, there will also be capital expenditures associated with additional conveyance equipment, boilers, cooling systems, bins, and possible expansion or construction of new buildings. Handler sources estimate these costs to be an additional 50 percent of the treatment equipment costs cited in Table 3, depending on capacity needs, and assuming maximum throughput.

A typical system of 10 million pound annual capacity will be equivalent to 22,000 pounds per hour, which falls in the 20,000 to 30,000 pound per hour range in Table 3. The treatment equipment costs for that capacity range from $525,000 to $800,000. With an additional 50 percent for cost of other related equipment and facility expansion, the costs range from $787,500 to $1,200,000. Handler sources suggest that a figure near the upper end of that range, $1,125,000, is a good point estimate of the cost for a 10,000,000 pound per year treatment line.

An important step in assessing the financial impact of the mandatory treatment program on handlers is to estimate the annualized equipment cost and operating cost of treating the almonds to prevent Salmonella contamination. This can be illustrated by additional computations, with 10,000,000 pounds per year serving as a representative level of treatment capacity, as shown in Table 4, third line of column A. Table 4 also shows a range of costs across different levels of handler treatment capacity.

To obtain the annual unit cost for installing a 10 million pound capacity treatment line (an expenditure of $1,125,000 in column B), the first step is to obtain the annualized equipment cost. The parameters recommended by the handlers were a 5 year equipment life and a 5 percent cost of capital. The annual equipment use factor (4.3295) is the present value of a $1 annuity for 5 years at 5 percent. Dividing the total equipment expenditure of $1,125,000 by 4.3295 yields an annualized equipment cost estimate of $259,845 (column C). Dividing this figure by the annual 10,000,000 pound capacity yields a cost per pound estimate of 2.6 cents (column E). If the treatment line ran at half capacity, the equipment costs per pound would double to 5.2 cents (column D).

This method of computing annualized equipment cost does not account for the tax implications of annual equipment depreciation or for the salvage value at the end of the equipment's useful life. In addition, the useful life of many pieces of equipment may well be over 5 years.

Ongoing operational costs (electricity, etc.) are estimated by handlers to range from $0.0027 to $0.0043 per pound, depending on the system. The midpoint of this range ($0.0035) appears in column F.

The key results from Table 4 are the cost estimates per pound of almonds treated, including both annualized equipment costs and operating costs. The highest cost is 7.25 cents per pound for the smallest handler (2 million pounds treated annually) operating at 50 percent capacity (column G). The lowest cost estimate is 2.25 cents per pound for a handler treating 20 million pounds per year operating at full capacity (column H). These costs can be put in context by comparing them to almond grower prices as reported each year by the NASS. For 2003 to 2005, grower prices averaged $2.07 per pound, computed by dividing the value of production for those three years by the three-year quantity of production. The treatment cost estimates per pound in Table 4 range from 3 percent to 1 percent of the 2003-2005 average grower price, and represent an even smaller proportion of the prices paid to handlers when selling to almond users further down the marketing chain.

A key aspect of handler costs is the proportion of total capacity at which a new production line will operate. Operating at higher capacity spreads the equipment cost across a wider base. For a small handler, investing in equipment with this level of capacity may only be viable economically if the costs are spread over their entire production run, rather than only applying costs to a small portion of their production run. If they do not intend to run their entire production through the treatment process, it may be more viable to outsource the treatment. Costs of contract processing ( i.e. , batch operations for steam processes or PPO treatment) are estimated to range from $0.04 to $0.05 per pound. This estimate includes additional costs associated with transporting almonds to a custom facility ($0.01 to $0.015 per pound). For medium-sized and larger handlers, it may be more cost effective to construct a treatment processing line, particularly if they intend to immediately put a significant portion of their production through the process.

Handler sources estimate that the cost of setting up a new oil roast line is $300,000 to $600,000, with operating costs of $0.06 to $0.10 per pound. A blanching line may cost upward of $1,500,000 to $2,500,000 with an operating cost of approximately $0.12 to $0.22 per pound. It is unlikely that handlers will select these technologies unless they are already providing custom processed, value-added products to their customers.

Regarding compliance and oversight costs, it is anticipated that handlers who do not currently have thorough recordkeeping procedures in place will likely have to invest approximately 40-80 person-hours to develop their treatment plan. However, once this document has been created, it will be updated on an annual basis, which will likely involve less time. Validation of treatment systems is estimated to cost from $1,000 to $3,000 per line, depending upon the complexity of the equipment utilized. Treatment technology and equipment that have been modified to the point where operating parameters such as time, temperature, or volume, change must be revalidated. Validation costs are expected to be borne by handlers, as well as DV users and off-site treatment facilities (non-handler). DV audit costs will be borne by DV users.

Handler verification costs may vary, depending on whether the handler is under an on-site program or an audit-based program. The fee for an on-site program will be a minimum charge of $44.00 per hour (with 1 hour required to treat 44,000 pounds), or $0.204 per hundredweight, whichever is greater. The former is equivalent to $1.00 per thousand pounds treated. For an audit-based program, the fee will be a minimum $78.00 per hour. Travel time for both programs will be charged at $44.00 per hour and $0.34 per mile. Verification costs may also be charged to off-site treatment facilities (non-handler); however, such costs may be passed on to the respective handlers using the facility.

Examples of estimated handler verification costs are provided in Tables 5 and 6 below:

The benefits associated with the mandatory program are the avoided costs of a Salmonella outbreak. These costs may vary depending on several factors, including the quantity of product recalled, impact on consumer sales, lost customer confidence, insurance costs, and possible litigation. Using 2003-2005 average almond crop value as the basis, a loss of 5 percent would be equal to approximately $102 million.

The Board considered various alternatives and options to a mandatory treatment program. One option was to take no action. However, the Board concluded that this was not in the best interest of the industry nor consumers. The Board believes that the industry should provide consumers with a quality product. Taking no action when there are viable alternatives could be significant in terms of the financial well being of the industry should another outbreak occur that was linked to almonds.

The Board also considered continuing its voluntary action plan alone, without proposing a mandatory program. However, surveys conducted by the Board indicate that not all handlers are implementing the action plan. Thus, the Board concluded that a mandatory program is in the best interest of the industry and consumers.

The Board also considered the effectiveness of testing for Salmonella prior to shipment. During the 2001 and 2004 outbreaks, significant amounts of testing occurred at the orchard level, in hulling and shelling facilities, and at retail. However, it was determined by the CDHS, University of California, Davis, and other pathogen experts that testing cannot be relied upon as the only measure to ensure that almonds are Salmonella free. Thus, the Board concluded that testing alone was not a viable alternative.

The Board also explored the merits of requiring alternative log reductions. As previously mentioned, the Board initially supported a 5-log reduction, which was FDA's performance standard. However, a risk assessment model demonstrated that a minimum 4-log reduction could provide an appropriate level of consumer protection compared to a 5-log reduction. Thus, the Board concluded that a minimum 4-log reduction was an appropriate standard for almonds.

The Board also explored the merits of whether the DV program should be temporary, whereby all almonds would be treated at the handler level prior to shipment. The Board submitted an initial proposal to USDA in February 2006 that would have ultimately required handlers to treat all almonds prior to shipment, with the DV program being temporary. However, concerns were raised by various parties, including manufacturers, handlers, and foreign countries, regarding the temporary nature of the DV program, and the requirement that all exported almonds be treated prior to shipment. The Board ultimately revised its proposal to remove the proviso regarding discontinuance of the DV program, to allow untreated almonds to be shipped to locations outside the U.S., Canada, or Mexico, and to require that all containers of untreated almonds be prominently identified with the term “unpasteurized.”

This action imposes additional reporting and recordkeeping burden on California almond handlers, process authorities, almond manufacturers, DV program auditors, and off-site treatment facilities. Process authorities, manufacturers, and DV auditors must submit respective applications to the Board. Almond handlers must submit treatment plans to the Board. In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), these new forms and a sample “Handler Treatment Plan” were submitted to the Office of Management and Budget (OMB) and have been approved under OMB Control No. 0581-0242, Almonds Grown in California. Specific burdens for the three new applications and handler treatment plan are addressed in the section below titled Paperwork Reduction Act . ABC Form No. 7, “Interhandler Transfer of Almonds,” has previously been approved by OMB under OMB Control No. 0581-0178, “Vegetable and Specialty Crop Marketing Orders. 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. Finally, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this rule.

The AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Additionally, the meetings were widely publicized throughout the California almond industry and all interested persons were invited to attend the meetings and participate in deliberations on all issues. Between the summer of 2004 and the Board's August 2006, meeting, this issue was addressed at an estimated 12 Board meetings, 18 Food Quality and Safety Committee meetings, and well over 20 task force meetings. All of these meetings were public meetings and all entities, both large and small, were able to express views on this issue. Additionally, the Board issued about 35 updates to handlers regarding its voluntary action plan and progress towards its recommended mandatory program.

A proposed rule concerning this action was published in the Federal Register on December 6, 2006 (71 FR 70683). Copies of the rule were also mailed or sent via facsimile to all almond handlers. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 45-day comment period ending January 22, 2007, was provided for interested persons to respond to the proposal. Eighteen comments were received. Of the 18 comments, 3 supported the rule with no changes, 7 supported the rule with modification, 3 were opposed, and the remaining 5 comments raised other issues. The comments are addressed in the following paragraphs.

The three comments which supported the rule with no changes were submitted by a grower cooperative/ handler/marketer; a grower/handler; and a trade association representing almond hullers and shellers. One commenter believes the rule is necessary to prevent Salmonella from reaching the consuming public via California almonds. Another of the commenters summarized his company's experience in a Salmonella outbreak and recall. He contends that, based on his company's experience with treatments, there has been no noticeable impact on product shelf-life, roasting, or flavor to consumers. He added that his raw almond business has increased since implementing 100 percent treatment with no increase in quality complaints. The third commenter believes that the livelihood of the industry is at risk if it does not proceed immediately to mitigate the presence of Salmonella in its product. All of the commenters supported implementation of the rule as soon as possible.

The seven comments which supported the rule with modification were submitted by the Board; a trade association representing food, beverage, and consumer product companies; a trade association representing confectionary manufacturers, suppliers, buyers, and brokers; a chocolate and confectionary manufacturer; a processor/marketer of nut products; a handler; and a grower/handler.

Four of the commenters addressed the proposed reporting requirements. Three of these comments expressed concern with an annual submission of an application for DV users. Two suggested that, once the DV user has been approved by the Board and is on an approved list, there is no reason to remove the entity except for cause, or at the request of the DV user. Another suggested that, if a DV user does not change its treatment technology, and if a problem has not been identified by the DV auditor, there is no reason for DV users to reapply annually to the Board. Two commenters suggested that the initial approval for process authorities and DV auditors should be sufficient, adding that agency approval is not required under regulations governing production of low-acid canned foods, which is the source of the process authority concept.

The Board commented that the DV user and auditor applications were designed so that once the entity is originally approved, it would only have to reconfirm participation in subsequent years. A new or modified application would only be necessary in cases where new procedures, equipment, or processing locations have been introduced.

Based on the comments received, USDA has determined that modifications to the proposed rule regarding reporting requirements are warranted. Process authorities, DV users, and DV auditors must submit an initial application to the Board. For subsequent crop years, such approved entities with changes in the information contained in their initial application must submit a new, revised application to the Board for review and approval prior to the start of the crop year. Approved applicants with no changes to their initial application must send the Board a letter, signed and dated, indicating that there are no changes to the application the Board has on file. In the new § 981.442(b)(3) regarding the application for process authorities, § 981.442(b)(6)(i) regarding the application for DV users, and § 981.442(b)(6)(i)(D) regarding the application for DV auditors are revised accordingly. The revised reporting burdens are addressed in the section below titled Paperwork Reduction Act .

Three of the comments raised various issues regarding process authorities. One issue concerned the release of proprietary information regarding manufacturers' processes. Two commenters suggested adding language to the regulatory text that clarifies, as the preamble does, the role of process authorities in establishing technologies for manufacturers, in particular, the protection this option provides regarding proprietary data under the DV program. The commenters want to ensure that disclosure of data on manufacturers' proprietary processes is not required for determination of acceptance by the TERP of manufacturers' treatment processes. The Board commented that process authorities for DV users must provide reports to the Board that contain sufficient content to describe the verification methodologies that were used to establish that the treatment processes and technologies achieve a minimum 4-log reduction in Salmonella bacteria. The Board contends that the TERP would not require information regarding manufacturers' proprietary manufacturing processes.

As previously stated, manufacturers' use of treatment processes established by process authorities was included in the regulation to address concerns regarding the release of data on manufacturers' proprietary processes to the TERP. Modification of the regulatory text to address this is not warranted. However, USDA concurs that the Board needs documentation to ensure that processes established by process authorities achieve a 4-log reduction in Salmonella bacteria. Accordingly, § 981.442(b)(6)(i)(C) is revised to specify that DV users must provide documentation with their DV application to the TERP to verify that their treatment technology and equipment have been validated by a Board-approved process authority. Such documentation may include, but not be limited to, a letter from such process authority certifying the validation. Finally, such documentation must be sufficient to demonstrate that the treatment processes and equipment achieve a 4-log reduction in Salmonella bacteria. The revised reporting burden regarding DV users is addressed in the section below titled Paperwork Reduction Act .

Two commenters requested that the rule be clarified to specify that process authorities may be employees of a manufacturer, which is similar to process authorities for low-acid canned foods. USDA concurs, but notes that it is essential to ensure that process authorities act in a neutral, unbiased manner for both manufacturers and handlers. Accordingly, paragraph (b)(3) in § 981.442 has been modified to specify that process authorities may be employees of the entity for which they are conducting validation.

The rule has also been clarified to specify that DV auditors may not be employees of manufacturers they are auditing. It is important that a third party perform the audit to ensure the integrity of the DV program. Accordingly, paragraph (b)(6)(i)(D) in § 981.442 has been modified to specify that DV auditors may not be employees of the entity for which they are conducting an audit.

Two commenters also suggested adding language to the regulatory text that clarifies, as the preamble does, the criteria that process authorities must meet in order to be approved by the TERP. This criteria includes the following: (1) Knowledge about the equipment used for the treatment process; (2) experience in conducting appropriate studies to determine the ability of the equipment to deliver the appropriate treatment (such as heat penetration or heat distribution); and (3) able to determine that sufficient data has been gathered to identify the critical factors needed to ensure the quality of the final product. Accordingly, paragraph (3) in the new § 981.442(b) has been modified accordingly.

The Board commented that the rule be clarified to specify that persons, not an organization, must submit applications for approval as process authorities. It is the Board's intent that persons, not organizations, be approved process authorities. The Board wants to ensure that persons conducting validation are qualified to do so. USDA concurs with the comment. Paragraph (3) in the new § 981.442(b) has been modified accordingly.

The Board also commented that the rule be clarified to specify that, under the DV program, almonds must be shipped by handlers directly to approved manufacturer locations where such almonds will be treated. The Board contends that, without direct shipment, it would be impossible to ensure that almonds were being shipped to a facility where treatment would occur. Indirect shipments to third parties could lose identity and be difficult to track. USDA concurs with the comment. While a third party may be involved in the transaction, shipments to a third party and then to a manufacturing location are not permitted under the DV program. Paragraph (b)(6)(i) of § 981.442 has been modified accordingly.

Related to the issue of direct DV shipments, one commenter stated that two small roasters indicated to him they would like to see the rule revised to allow use of a custom vendor under the DV program. USDA assumes this means that the almonds would be shipped outside the production area to a non-manufacturing entity or third party for treatment. Based on the reasons stated in the preceding paragraph regarding the need to track shipments to approved manufacturer locations, the comment is denied.

Two commenters provided recommendations regarding the frequency of USDA audits for handlers under the audit-based verification program. In its comment, the Board agreed that audit frequency be tied to handler performance, and suggested that, during the first year, audits be conducted during month 1, 3, 6, and 12. If all procedures are in place and documentation is accurate, in the second year, audits should only be conducted once every 6 months. Another commenter suggested that two audits be conducted for the first year, but less frequently in subsequent years when the program is ongoing unless equipment changes are made to the technology used by the handler; the commenter suggested audits every 24 months in subsequent years.

USDA has taken these suggestions under consideration in development of its handler audit plan. However, handler audit frequency is not a part of the regulatory text of this rule. Accordingly, no changes have been made to the proposed rule based on these comments.

One commenter requested that the Board (TERP) provide process authorities critical ranges, or minimum standards, for variables and conditions that are critical to PPO and other treatment processes. USDA understands that it is the Board's intent to make this information available to process authorities and other interested parties ( i.e. , equipment manufacturers, handlers, or scientists). Paragraph (b)(3) of § 981.442 is modified accordingly.

Related to validation, one commenter stated that, to-date, there is no surrogate organism for validating dry roasting processes. This is correct. USDA understands that the Board continues to fund research for non-pathogenic surrogates that could be used for validating both moist and dry heat treatment processes. Until these are available, validation for moist and dry heat processes must be done with Salmonella bacteria. Validation with live Salmonella is not necessary for PPO, blanching, or oil roasting because the Board has developed specific protocols and parameters for these processes.

Two commenters suggested that the rule be modified to specify time frames for the approval of process authorities; one suggested a 45-day time frame for approval, and one suggested a 30-day time frame for approval, and 2 weeks for appeals. One of the commenters also suggested time frames for approval of applications for DV users and DV auditors—30 day time frame for approval, and 2 weeks for appeals.

Timely review of these applications is important. USDA will work with the Board to ensure quick review and response. However, it is not necessary to specify time frames within the regulation. Thus, these comments are denied.

One commenter suggested that DV users be audited no more than once every 2 years. Although not specified in the regulatory language, the preamble indicates that DV users will be audited within 1-2 months after the start of treatments, and at least once every 12 months thereafter. An annual audit of DV users is appropriate to maintain the integrity of the mandatory program. Thus, the comment is denied.

Three commenters expressed concern with the impact of treatments on the quality, shelf-life, and/or sensory characteristics of almonds. One contends that the Board's quality research is still ongoing. Another contends that treated and untreated almonds should be comparable in terms of taste, nutritional composition, product performance, color, appearance, and shelf-life; the commenter requested that the Board or TERP require extensive product testing of any potential new technology to assure the consuming public that such almonds are materially unchanged in regard to their eating quality.

In early 2006, the Board allocated $1 million towards a project to ensure that appropriate treatment resulted in no significant degradation of the almonds. The Board formed a team comprised of manufacturers, handlers, technical experts, and Board staff to develop the parameters of the research project and evaluate the results. Control almonds were compared with almonds that were subjected to PPO and two different moist heat treatments. Control and treated almonds were also roasted. The Board indicated it its comments that the team met in January 2007 and reviewed the following findings. There were no indications to-date of significant degradation or product deterioration when comparing treated samples with control samples. Data presented by a confectionary manufacturer regarding a pilot trial with treated, consumer ready product indicated that the product chemistry does not present any evidence of degradation in raw or roasted almonds. Also, as mentioned earlier, one commenter who was involved in a recall contends that, based on his company's experience with treatments, there has been no noticeable impact on product shelf-life, roasting, or flavor to consumers. No changes have been made to the proposed rule based on these comments.

One commenter expressed concern with the treatment cost estimates in the proposed rule. Costs for steam and PPO treatments were estimated between $0.02—$0.07 per pound. The commenter represents confectionary companies and contends that costs to its members would be slightly higher, depending on broker fees and the volume of almonds purchased. The commenter estimates that there could be an additional cost of $0.05 to $0.10 per pound for treated almonds purchased by small and medium confectionary companies that purchase lesser volumes of almonds through brokers.

While costs to these buyers could be slightly higher if they purchased treated almonds, the benefits of this rulemaking action outweigh the costs. Additionally, confectionary companies will still be able to purchase untreated almonds. No changes have been made to the proposed rule based on this comment.

Several of the comments addressed PPO. One commenter contends that PPO is not permitted to-date in Canada, the European Union (EU), or Mexico. While it is true that PPO is not permitted in the EU and Canada, it is permitted in Mexico. Regarding shipments to the EU, under the mandatory program, handlers may ship almonds untreated to the EU, provided such almonds are labeled “unpasteurized.” Almonds shipped to Canada can be treated with one of the other available technologies, or can be shipped untreated to DV users in that country. No changes have been made to the proposed rule based on these comments.

One of the commenters stated that they support pasteurization, but believe it should not be at the handler level, and questioned the authority to impose such a requirement through this rulemaking. The commenter contends that the safety of almond-containing products can be assured by treating almonds after they leave control of the handler, and that later treatment furthers food safety objectives by affording less opportunity for re-contamination of almonds. The commenter argues that only treated almonds should be sold to those who plan to sell them to consumers as raw or natural almonds.

USDA is implementing this rulemaking action under the quality control authority contained in the almond marketing order. Under the Act, the authorizing statute for all marketing orders, regulations may only be implemented at the handler level. Thus, no changes have been made to the proposed rule based on this comment.

One of the commenters indicated his support for 100 percent pasteurization for all almonds. He stated that, given the food safety risks, available control technologies and protocols, he strongly encourages USDA to make almond pasteurization mandatory for all almonds.

As stated earlier in this rule, the Board's initial proposal to USDA in February 2006 would have ultimately required handlers to treat all almonds prior to shipment. However, concerns were raised by various parties, including manufacturers, handlers, and foreign countries, regarding the temporary nature of the DV program, and the requirement that all exported almonds be treated prior to shipment. The Board ultimately revised its proposal to remove the proviso regarding discontinuance of the DV program, to allow untreated almonds to be shipped to locations outside the U.S., Canada, or Mexico, and to require that all containers of untreated almonds be prominently identified with the term “unpasteurized.”

Although this rule does not mandate treatment for all California almonds, it will help to ensure consumers receive a good quality product, while at the same time addressing global customer needs. No changes will be made to the rule based on this comment.

One commenter asked for USDA's assistance in getting PPO approved for use in all export markets. The commenter also asked USDA to pursue avenues to provide $3-$5 million to the almond industry over the next 5 years for research to continue development of additional food safety issues, including aflatoxin and pasteurization. These requests are outside the scope of this rulemaking action. Thus, no changes have been made to the proposed rule based on this comment.

The three comments opposed to the rule were submitted by small handlers and one was submitted by an agricultural consultant. All of the commenters contend that the rule will put small handlers out of business. One small handler said that 40 percent of his shipments are brown skin, and 60 percent are manufacturered. Almost all of his sales are domestic, with some product shipped to Canada and Mexico. Two commenters said that their businesses were geared toward providing product to buyers and consumers quickly. Both of these commenters contend that the technologies are too expensive for small handlers. Both also expressed concern with the cost of contracting out for treatment. One stated that having product treated ahead of time is problematic because one may not know the container-size that buyers want prior to treatment. Concern was also expressed with the quality of treated almonds, stating that there are only two methods of treatment to-date—PPO and steam (moist heat). One commenter also contends that consumers should have a choice to buy raw or processed almonds, and that labeling almonds as non-pasteurized would be acceptable to many.

USDA has evaluated the impact of this rulemaking action on small handlers. There is an added expense for handlers who ship primarily domestic to entities that are not DV users. Their almonds must be treated prior to shipment. Such handlers must evaluate their own business situation to determine the merits of investing in treatment equipment or contracting out for treatment. As previously stated, PPO treatment is currently available on a contract basis at $0.04-$0.05 per pound (including transportation to the facility). Also, the Board continues to fund research projects to develop additional treatment methods. USDA understands the challenges facing small handlers; however, USDA is also concerned about the impact of another Salmonella outbreak linked to almonds on the industry as a whole. USDA supports the Board's proposal for a mandatory treatment program for almonds.

The concern raised regarding the impact of treatments on the quality of almonds was addressed earlier in this document. Preliminary results of a comprehensive study conducted by the Board in conjunction with manufacturers and handlers, has shown no significant degradation in the quality or shelf-life of almonds. Again, no changes have been made to the proposed rule based on concerns regarding quality.

In response to the comment that consumers should have a choice to buy raw or processed almonds, and the suggestion that almonds be labeled as non-pasteurized, USDA assumes that the commenter means labeling at the consumer level. The Act provides authority for requirements under a marketing order at the handler level, not the consumer level. Thus, no changes have been made to the proposed rule based on this comment.

Two comments were submitted by a small handler and a collective group of three handlers/growers requesting delayed implementation of the rule. The proposed rule stated that the mandatory program would take effect on August 1, 2007, the start of the 2007-08 crop year, with handlers submitting their treatment plans for 2007-08 by May 1, 2007. The three growers/handlers raised concerns about available treatment capacity, and contend that it is logistically impossible to implement the program by August 1, 2007. They expressed concern with potentially only a 3-month lag between publication of the final rule and implementation of the program. The small handler requested delayed implementation until issues for small handlers are addressed guaranteeing that they will not be forced out of business.

Regarding capacity, the commenters contend that more technologies are needed and believe that, once the rule becomes mandatory, more companies will likely submit protocols to TERP for review acceptance. The commenters summarized their understanding of available technologies, and contend that the mandatory program would restrict commerce due to insufficient capacity. The comment contends the following. There are three moist heat processes accepted by the TERP. The latest process (A) recently received “approval” for one chamber, and is operating at one facility in central California. Another process (B) has been TERP-accepted with no systems built, and the third (C) has three systems in place primarily for private use, and limited capacity for outside custom volume. Regarding PPO, the commenters contend there are limited facilities in California. The largest facility available is in Nevada, outside the production area of California. They contend that, due to capacity constraints, only a fraction of the needed PPO space is available. The comment also raises concerns regarding fees and availability for custom treatment, particularly if the time frame between publication of the final rule and implementation of the program is only 3 months. If a handler were going to build his/her own facility, the comment estimates that construction and validation could take more than 1 year.

In response to concerns regarding technology and available capacity, the comment is correct in that there are three moist heat processes accepted to-date by the TERP. However, as shown below in Table 7, moist heat capacity is estimated at a minimum 652 million pounds. The comment is correct that one chamber for Process A in central California has been validated and is in operation (100 million pound capacity). However, that machine has two other chambers to be validated. Once validation is completed, an additional 200 million pounds of capacity will be available. Regarding process B, the comment is incorrect that a machine has not yet been built. In fact, a machine has been built and is being installed (88 million pound capacity). For process C, one machine is operational, and in-plant validation is starting on two additional machines (another 176 million pounds in capacity).

Regarding PPO, the comment is correct in that handlers must treat their almonds within the production area of California. However, the comment is incorrect that PPO capacity in California is limited. Board data indicates available PPO capacity within California of at least 250 million pounds. Thus, total capacity from moist heat and PPO is estimated at over 800 million pounds. Additional machines and equipment are likely to be built in the future. Raw domestic almond shipments (240 million pounds) and shipments to Canada and Mexico (36.7 million pounds) total about 276 million pounds. Thus, there will be more than sufficient capacity to treat all of this production. No changes have been made to the proposed rule due to concerns regarding capacity.

In response to the suggestion that implementation of the program be delayed, USDA believes this has merit. USDA concurs that sufficient time is needed between publication of the final rule and implementation of the mandatory program. Once the final rule is published, the Board must circulate applications to prospective process authorities, DV users, and DV auditors. Time is needed for application submission, review, and approval. Treatment technology and equipment must be validated by Board-approved process authorities. Handlers must develop and submit treatment plans to USDA and the Board for review and approval. Small handlers without treatment equipment must arrange for outsourcing treatment and may have to make adjustments in their business practices. For example, they may have to treat their almonds ahead of time, work with their customers to assess their needs regarding container size, etc. earlier than in the past, or perhaps try to develop new customers that could qualify as DV users.

USDA has determined that about a 5-month lag time between publication of the final rule and implementation of the program is appropriate. USDA assessed the merits of waiting another complete crop year for implementation, August 2008, and believes that such a delay would not be warranted. USDA considered a September 1, 2007, date for implementation. New crop shipments begin September 1, so this date would ensure that 2007-08 crop almonds are covered under the program. Accordingly, in the new § 981.442(b), the introductory text in paragraph (b) is modified to specify a September 1, 2007, implementation date, and paragraph (b)(4)(i) is modified to specify that, for the 2007-08 crop year, handler treatment plans must be submitted by May 31, 2007, rather than May 1, 2007.

Another commenter contends that the DV program is the only viable and rational option to adopt and maintain, and supports the labeling of untreated product shipped to approved DV users within the U.S., Canada, and Mexico, and outside these areas, provided product is labeled. The commenter does not support 100 percent treatment for all almonds when only 5 percent of almonds are consumed raw. In response, the rule provides for a DV program, labeling of untreated product, and does not require all almonds to be treated prior to shipment.

Another commenter suggested that the word “pasteurized” or “unpasteurized” on containers be both in English and in the language used by the receiving country. The Board addressed this concern in its comment. The Board contends that translating the word “unpasteurized” on containers is not feasible because it is not always clear what the final destination will be. The Board suggests that all markings on containers be in English for ease of translation if so required by the country into which the goods will enter. USDA concurs with the Board. Regarding the word “pasteurized,” the regulation does not require treated containers of almonds to be labeled. No changes have been made to the proposed rule based on this comment.

Another commenter contends that the industry's concern regarding California almonds being shipped back into the U.S. from Canada and Mexico is unfounded. He contends that freight costs and difficulties with getting the goods through customs would prohibit transshipments. The Board discussed this issue in depth prior to making its recommendation to treat Canada and Mexico similar to the U.S. under the mandatory program. The Board concluded that transshipments could be a problem. USDA concurs with the Board. The comment is denied.

The proposed rule published on December 6, 2006, provided for a 60-day comment period on the reporting requirements contained in the rule. That period ended on February 5, 2007. Four comments were received that concern reporting requirements and are addressed in the Analysis of Comments section above. Based on these comments, the reporting burdens were revised for the applications for process authorities, DV users, and DV program auditors. These entities must submit an initial application to the Board. For subsequent years, rather than submitting new applications, approved applicants with no changes to their initial applications must send the Board a letter, signed and dated, indicating there are no changes to the application the Board has on file. Additionally, DV users must submit with their application documentation to verify that their treatment technology and equipment were validated by a Board-approved process authority, and to demonstrate appropriate treatment processes. The revised reporting burdens are as follows.

Regarding ABC Form No. 51, “Application for Process Authority for Almonds,” it is estimated that it will take a process authority about 2 hours per response (same as proposal) for the first year of regulation, but only .25 hours per response each year thereafter (a reduction of 1.75 hours), and that 25 process authorities will respond. Thus, the total annual reporting burden for the form is estimated at 50 hours (same as proposal) for the first year of regulation, and 6.25 hours for each year thereafter (a reduction of 43.75 hours).

Regarding ABC Form No. 52, “Application for Direct Verifiable (DV) Program for Further Processing of Untreated Almonds,” it is estimated it will take a manufacturer about 1.5 hours per response (.5 hours more than initially proposed) for the first year of regulation. The additional .5 hours addresses the time for DV users to include documentation with their application to verify that their treatment technology and equipment were validated by a Board-approved process authority. It is estimated that it will take a manufacturer only .25 hours per response each year thereafter, and that 53 manufacturers will respond each year. Thus, the total annual reporting burden for the form is estimated at 79.5 hours (26.5 hours more than initially proposed) for the first year of regulation, and 13.25 hours for each year thereafter (a reduction of 66.25 hours).

Regarding ABC Form No. 53, “Application for Direct Verifiable (DV) Program Auditors,” it is estimated it will take a DV auditor about 1 hour per response for the first year of regulation, but only .25 hours per response (a reduction of .75 hours) each year thereafter, and that 50 auditors will respond. Thus, the total annual reporting burden for the form is estimated at 50 hours for the first year of regulation, and 12.5 hours for each year thereafter (a reduction of 37.5 hours).

As previously stated, in accordance with the PRA, the information collection was submitted to the OMB and was approved under OMB Control No. 0581-0242, Almonds Grown in California.

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.

After consideration of all relevant matters presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

Pursuant to 5 U.S.C. 553, it is also found and determined that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register because handler treatment plans for the 2007-08 crop year are due to the Board and USDA by May 31, 2007, and mandatory compliance with this rule begins September 1, 2007. Handlers are aware of this action which was unanimously recommended at a public meeting. Additionally, a 45-day comment period was provided for in the proposed rule, and all comments received were addressed herein.

The final special conditions with a request for comments were published on February 1, 2007 (72 FR 4618). No comments were received. These amended final special conditions remove requirement language that is not necessary for jet airplanes.

On February 15, 2005, Aviation Technology Group (ATG); 8001 South InterPort Boulevard, Suite 310; Englewood, Colorado 80112-5951, applied for a type certificate for their new Model 100 Javelin airplane in accordance with the airworthiness standards in 14 CFR, part 23. The Javelin is a two-place, twin engine, turbofan-powered light jet airplane with a planned maximum operating altitude of 45,000 feet. Part 23 regulations in effect on the date of ATG's application do not contain adequate or appropriate safety standards for a small, high performance jet airplane such as the Javelin. In accordance with Small Airplane Directorate policy, the safety standards for flight performance, flight characteristics and operational limitations that the Federal Aviation Administration (FAA) finds necessary to establish an acceptable level of safety for this type of airplane are presented in this special condition.

Final special conditions with request for comments were issued on January 24, 2007, and were published on February 1, 2007. The comment period closed March 5, 2007, and no comments were received. However, the original issue contained requirement language that is not necessary for jet airplanes, and this amendment removes that language.

Under the provisions of 14 CFR, part 21, § 21.17, ATG must show that the Model 100 meets the applicable provisions of part 23, as amended by Amendment 23-1 through 23-55 thereto. If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR, part 23) do not contain adequate or appropriate safety standards for the ATG Model 100 series because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions, as appropriate, as defined in § 11.19, are issued in accordance with § 11.38, and become part of the type certification basis in accordance with § 21.17(a)(2).

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, the special conditions would also apply to the other model under the provisions of § 21.101(a)(1).

In addition to the applicable airworthiness regulations and special conditions, the Model 100 must comply with the part 23 fuel vent and exhaust emission requirements of 14 CFR, part 34 and the part 23 noise certification requirements of 14 CFR, part 36; and the FAA must issue a finding of regulatory adequacy pursuant to § 611 of Public Law 92-574, the “Noise Control Act of 1972.”

ATG intends to certificate the Javelin in both utility and acrobatic categories. The ATG Javelin Model 100 will incorporate the following novel or unusual design features:

• Two-place, tandem configuration.

• Maximum takeoff weight of approximately 6,900 pounds.

• Design cruise speed of 500 knots calibrated airspeed.

• Two Williams FJ33-4A-18M turbofan engines with dual channel FADEC controls.

• Major airframe components constructed of carbon fiber composite materials.

• Hydraulically boosted flight control system with floor-mounted control sticks.

• Integrated avionics including Avidyne displays, autopilot, and flight management system.

Novel features on the ATG Model 100 include rear mounted turbine engines embedded in the fuselage, boosted controls, and high-speed, high-altitude acrobatic capability.

As discussed above, these special conditions are applicable to the ATG Model 100 series. Should ATG apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well under the provisions of § 21.101(a)(1).

This action affects only certain novel or unusual design features on ATG Model 100 series airplanes. It is not a rule of general applicability and affects only the applicant who applied to the FAA for approval of these features on the airplane.

The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. For this reason, the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

Several 14 CFR, part 23 paragraphs have been replaced by or supplemented with special conditions. These special conditions have been numbered to match the 14 CFR, part 23 paragraphs they replace or supplement. Additionally, many of the other applicable part 23 paragraphs cross-reference paragraphs that are replaced by or supplemented with special conditions. It is implied that the special conditions associated with these paragraphs must be applied. This principal applies to all part 23 paragraphs that cross-reference paragraphs associated with special conditions.

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for the ATG Model 100 series airplanes.

Instead of compliance with § 23.45, the following apply:

(a) Unless otherwise prescribed, the performance requirements of this part must be met for—

(1) Still air and standard atmosphere; and

(2) Ambient atmospheric conditions.

(b) Performance data must be determined over not less than the following ranges of conditions—

(1) Airport altitudes from sea level to 10,000 feet; and

(2) Temperature from standard to 30° C above standard, or the maximum ambient atmospheric temperature at which compliance with the cooling provisions of § 23.1041 to § 23.1047 is shown, if lower.

(c) Performance data must be determined with the cowl flaps or other means for controlling the engine cooling air supply in the position used in the cooling tests required by § 23.1041 to § 23.1047.

(d) The available propulsive thrust must correspond to engine power, not exceeding the approved power, less—

(1) Installation losses; and

(2) The power absorbed by the accessories and services appropriate to the particular ambient atmospheric conditions and the particular flight condition.

(e) The performance, as affected by engine power or thrust, must be based on a relative humidity:

(1) Of 80 percent at and below standard temperature; and

(2) From 80 percent, at the standard temperature, varying linearly down to 34 percent at the standard temperature plus 50 °F.

(f) Unless otherwise prescribed, in determining the takeoff and landing distances, changes in the airplane's configuration, speed, and power must be made in accordance with procedures established by the applicant for operation in service. These procedures must be able to be executed consistently by pilots of average skill in atmospheric conditions reasonably expected to be encountered in service.

(g) The following, as applicable, must be determined on a smooth, dry, hard-surfaced runway—

(1) Not applicable;

(2) Accelerate-stop distance of SC 23.55;

(3) Takeoff distance and takeoff run of SC 23.59; and

(4) Landing distance of SC 23.75.

(h) The following also apply:

(1) Unless otherwise prescribed, the applicant must select the takeoff, enroute, approach, and landing configurations for the airplane.

(2) The airplane configuration may vary with weight, altitude, and temperature, to the extent that they are compatible with the operating procedures required by paragraph (h)(3) of this section.

(3) Unless otherwise prescribed, in determining the critical-engine-inoperative takeoff performance, takeoff flight path, and accelerate-stop distance, changes in the airplane's configuration, speed, and power must be made in accordance with procedures established by the applicant for operation in service.

(4) Procedures for the execution of discontinued approaches and balked landings associated with the conditions prescribed in SC 23.67(c)(4) and SC 23.77(c) must be established.

(5) The procedures established under paragraphs (h)(3) and (h)(4) of this section must—

(i) Be able to be consistently executed by a crew of average skill in atmospheric conditions reasonably expected to be encountered in service;

(ii) Use methods or devices that are safe and reliable; and

(iii) Include allowance for any reasonably expected time delays in the execution of the procedures.

Instead of compliance with § 23.51, the following apply:

(a) Not applicable.

(b) Not applicable.

(c) The following apply:

(l) V 1 must be established in relation to V EF as follows:

(i) V EF is the calibrated airspeed at which the critical engine is assumed to fail. V EF must be selected by the applicant but must not be less than 1.05 V MC determined under § 23.149(b) or, at the option of the applicant, not less than V MCG determined under § 23.149(f).

(ii) The takeoff decision speed, V 1 , is the calibrated airspeed on the ground at which, as a result of engine failure or other reasons, the pilot is assumed to have made a decision to continue or discontinue the takeoff. The takeoff decision speed, V 1 , must be selected by the applicant but must not be less than V EF plus the speed gained with the critical engine inoperative during the time interval between the instant at which the critical engine is failed and the instant at which the pilot recognizes and reacts to the engine failure, as indicated by the pilot's application of the first retarding means during the accelerate-stop determination of SC 23.55.

(2) The rotation speed, V R , in terms of calibrated airspeed, must be selected by the applicant and must not be less than the greatest of the following:

(i) V 1 ;

(ii) 1.05 V MC determined under § 23.149(b);

(iii) 1.10 V S1 ; or

(iv) The speed that allows attaining the initial climb-out speed, V 2 , before reaching a height of 35 feet above the takeoff surface in accordance with SC 23.57(c)(2).

(3) For any given set of conditions, such as weight, altitude, temperature, and configuration, a single value of V R must be used to show compliance with both the one-engine-inoperative takeoff and all-engines-operating takeoff requirements.

(4) The takeoff safety speed, V 2 , in terms of calibrated airspeed, must be selected by the applicant so as to allow the gradient of climb required in SC 23.67(c)(1) and (c)(2) but must not be less than 1.10 V MC or less than 1.20 V S1 .

(5) The one-engine-inoperative takeoff distance, using a normal rotation rate at a speed 5 knots less than V R , established in accordance with paragraph (c)(2) of this section, must be shown not to exceed the corresponding one-engine-inoperative takeoff distance, determined in accordance with SC 23.57 and SC 23.59(a)(1), using the established V R . The takeoff, otherwise performed in accordance with SC 23.57, must be continued safely from the point at which the airplane is 35 feet above the takeoff surface and at a speed not less than the established V 2 minus 5 knots.

(6) The applicant must show, with all engines operating, that marked increases in the scheduled takeoff distances, determined in accordance with SC 23.59(a)(2), do not result from over-rotation of the airplane or out-of-trim conditions.

Instead of compliance with § 23.53, the following apply:

(a) Not applicable.

(b) Not applicable.

(c) Takeoff performance, as required by SC 23.55 through SC 23.59, must be determined with the operating engine(s) within approved operating limitations.

Instead of compliance with § 23.55, the following apply:

The accelerate-stop distance must be determined as follows:

(a) The accelerate-stop distance is the sum of the distances necessary to—

(1) Accelerate the airplane from a standing start to V EF with all engines operating;

(2) Accelerate the airplane from V EF to V 1 , assuming the critical engine fails at V EF ; and

(3) Come to a full stop from the point at which V 1 is reached.

(b) Means other than wheel brakes may be used to determine the accelerate-stop distances if that means—

(1) Is safe and reliable;

(2) Is used so that consistent results can be expected under normal operating conditions; and

(3) Is such that exceptional skill is not required to control the airplane.

Instead of compliance with § 23.57, the following apply:

The takeoff path is as follows:

(a) The takeoff path extends from a standing start to a point in the takeoff at which the airplane is 1,500 feet above the takeoff surface at or below which height the transition from the takeoff to the enroute configuration must be completed; and

(1) The takeoff path must be based on the procedures prescribed in SC 23.45;

(2) The airplane must be accelerated on the ground to V EF at which point the critical engine must be made inoperative and remain inoperative for the rest of the takeoff; and

(3) After reaching V EF , the airplane must be accelerated to V 2 .

(b) During the acceleration to speed V 2 , the nose gear may be raised off the ground at a speed not less than V R . However, landing gear retraction must not be initiated until the airplane is airborne.

(c) During the takeoff path determination, in accordance with paragraphs (a) and (b) of this section—

(1) The slope of the airborne part of the takeoff path must not be negative at any point;

(2) The airplane must reach V 2 before it is 35 feet above the takeoff surface, and must continue at a speed as close as practical to, but not less than V 2 , until it is 400 feet above the takeoff surface;

(3) At each point along the takeoff path, starting at the point at which the airplane reaches 400 feet above the takeoff surface, the available gradient of climb must not be less than 1.2 percent for two-engine airplanes; and

(4) Except for gear retraction and automatic propeller feathering, the airplane configuration must not be changed, and no change in power that requires action by the pilot may be made, until the airplane is 400 feet above the takeoff surface.

(d) The takeoff path to 35 feet above the takeoff surface must be determined by a continuous demonstrated takeoff.

(e) The takeoff path from 35 feet above the takeoff surface must be determined by synthesis from segments; and

(1) The segments must be clearly defined and must be related to distinct changes in configuration, power, and speed;

(2) The weight of the airplane, the configuration, and the power must be assumed constant throughout each segment and must correspond to the most critical condition prevailing in the segment; and

(3) The takeoff flight path must be based on the airplane's performance without utilizing ground effect.

Instead of compliance with § 23.59, the following apply:

The takeoff distance and, at the option of the applicant, the takeoff run, must be determined.

(a) Takeoff distance is the greater of—

(1) The horizontal distance along the takeoff path from the start of the takeoff to the point at which the airplane is 35 feet above the takeoff surface as determined under SC 23.57; or

(2) With all engines operating, 115 percent of the horizontal distance from the start of the takeoff to the point at which the airplane is 35 feet above the takeoff surface, determined by a procedure consistent with SC 23.57.

(b) If the takeoff distance includes a clearway, the takeoff run is the greater of—

(1) The horizontal distance along the takeoff path from the start of the takeoff to a point equidistant between the liftoff point and the point at which the airplane is 35 feet above the takeoff surface as determined under SC 23.57; or

(2) With all engines operating, 115 percent of the horizontal distance from the start of the takeoff to a point equidistant between the liftoff point and the point at which the airplane is 35 feet above the takeoff surface, determined by a procedure consistent with SC 23.57.

Instead of compliance with § 23.61, the following apply:

The takeoff flight path must be determined as follows:

(a) The takeoff flight path begins 35 feet above the takeoff surface at the end of the takeoff distance determined in accordance with SC 23.59.

(b) The net takeoff flight path data must be determined so that they represent the actual takeoff flight paths, as determined in accordance with SC 23.57 and with paragraph (a) of this section, reduced at each point by a gradient of climb equal to 0.8 percent for two-engine airplanes.

(c) The prescribed reduction in climb gradient may be applied as an equivalent reduction in acceleration along that part of the takeoff flight path at which the airplane is accelerated in level flight.

Instead of compliance with § 23.63, the following apply:

(a) Compliance with the requirements of §§ 23.65, SC 23.67, 23.69, and SC 23.77 must be shown—

(1) Out of ground effect; and

(2) At speeds that are not less than those at which compliance with the powerplant cooling requirements of §§ 23.1041 to 23.1047 has been demonstrated; and

(3) Unless otherwise specified, with one engine inoperative, at a bank angle not exceeding 5 degrees.

(b) Not applicable.

(c) Not applicable.

(d) Compliance must be shown at weights as a function of airport altitude and ambient temperature within the operational limits established for takeoff and landing, respectively, with—

(1) SC 23.67(c)(1), SC 23.67(c)(2), and SC 23.67(c)(3) for takeoff; and

(2) SC 23.67(c)(3), SC 23.67(c)(4), and SC 23.77(c) for landing.

Instead of compliance with § 23.66, see SC 23.67.

Instead of compliance with § 23.67, the following apply:

(a) Not applicable.

(b) Not applicable.

(c) The following apply:

(1) Takeoff; landing gear extended. The steady gradient of climb at the altitude of the takeoff surface must be measurably positive for two-engine airplanes with—

(i) The critical engine inoperative;

(ii) The remaining engine(s) at takeoff power;

(iii) The landing gear extended, and all landing gear doors open;

(iv) The wing flaps in the takeoff position(s);

(v) The wings level; and

(vi) A climb speed equal to V 2 .

(2) Takeoff; landing gear retracted. The steady gradient of climb at an altitude of 400 feet above the takeoff surface must be not less than 2.0 percent of two-engine airplanes with—

(i) The critical engine inoperative;

(ii) The remaining engine(s) at takeoff power;

(iii) The landing gear retracted;

(iv) The wing flaps in the takeoff position(s);

(v) A climb speed equal to V 2 .

(3) Enroute. The steady gradient of climb at an altitude of 1,500 feet above the takeoff or landing surface, as appropriate, must be not less than 1.2 percent for two-engine airplanes with—

(i) The critical engine inoperative;

(ii) The remaining engine(s) at not more than maximum continuous power;

(iii) The landing gear retracted;

(iv) The wing flaps retracted; and

(v) A climb speed not less than 1.2 V S1 .

(4) Discontinued approach. The steady gradient of climb at an altitude of 400 feet above the landing surface must be not less than 2.1 percent for two-engine airplanes with—

(i) The critical engine inoperative;

(ii) The remaining engine(s) at takeoff power;

(iii) Landing gear retracted;

(iv) Wing flaps in the approach position(s) in which V S1 for these position(s) does not exceed 110 percent of the V S1 for the related all-engines-operating landing position(s); and

(v) A climb speed established in connection with normal landing procedures but not exceeding 1.5 V S1 .

Instead of compliance with § 23.73, the following apply:

(a) Not applicable.

(b) Not applicable.

(c) The reference landing approach speed, V REF , must not be less than the greater of 1.05 V MC , determined in § 23.149(c), and 1.3 V SO .

Instead of compliance with § 23.77, the following apply:

(a) Not applicable.

(b) Not applicable.

(c) Each airplane must be able to maintain a steady gradient of climb of at least 3.2 percent with—

(1) Not more than the power that is available on each engine eight seconds after initiation of movement of the power controls from the minimum flight idle position;

(2) Landing gear extended;

(3) Wing flaps in the landing position; and

(4) A climb speed equal to V REF , as defined in SC 23.73(c).

Instead of compliance with § 23.177, the following apply:

(a) The static directional stability, as shown by the tendency to recover from a wings-level sideslip with the rudder free, must be positive for any landing gear and flap position appropriate to the takeoff, climb, cruise, approach, and landing configurations. This must be shown with symmetrical power up to maximum continuous power, and at speeds from 1.2 V S1 up to V FE , V LE , or V FC /M FC (as appropriate). The angle of sideslip for these tests must be appropriate to the type of airplane. At larger angles of sideslip, up to that at which full rudder is used or a control force limit in § 23.143 is reached, whichever occurs first, and at speeds from 1.2 V S1 to V O , the rudder pedal force must not reverse.

(b) The static lateral stability, as shown by the tendency to raise the low wing in a sideslip, must be positive for all landing gear and flap positions. This must be shown with symmetrical power up to 75 percent of maximum continuous power at speeds above 1.2 V S1 in the takeoff configuration(s) and at speeds above 1.3 V S1 in other configurations, up to V FE , V LE , or V FC /M FC (as appropriate) for the configuration being investigated, in the takeoff, climb, cruise, and approach configurations. For the landing configuration, the power must be that necessary to maintain a 3 degree angle of descent in coordinated flight. The static lateral stability must not be negative at 1.2 V S1 in the takeoff configuration, or at 1.3 V S1 in other configurations. The angle of sideslip for these tests must be appropriate to the type of airplane, but in no case may the constant heading sideslip angle be less than that obtainable with a 10 degree bank or, if less, the maximum bank angle obtainable with full rudder deflection or 150 pound rudder force.

(c) Paragraph (b) of this section does not apply to acrobatic category airplanes certificated for inverted flight.

(d) In straight, steady slips at 1.2 V S1 for any landing gear and flap positions, and for any symmetrical power conditions up to 50 percent of maximum continuous power, the aileron and rudder control movements and forces must increase steadily, but not necessarily in constant proportion, as the angle of sideslip is increased up to the maximum appropriate to the type of airplane. At larger slip angles, up to the angle at which the full rudder or aileron control is used or a control force limit contained in § 23.143 is reached, the aileron and rudder control movements and forces must not reverse as the angle of sideslip is increased. Rapid entry into, and recovery from, a maximum sideslip considered appropriate for the airplane must not result in uncontrollable flight characteristics.

Instead of compliance with § 23.201(e), the following apply:

(e) Compliance with the requirements of this section must be shown under the following conditions:

(1) The flaps, landing gear, and speedbrakes in any likely combination of positions and altitudes appropriate for the various positions.

(2) Thrust—

(i) Idle; and

(ii) The thrust necessary to maintain level flight at 1.6 V S1 (where V S1 corresponds to the stalling speed with flaps in the approach position, the landing gear retracted, and maximum landing weight).

(3) Trim at 1.4 V S1 or the minimum trim speed, whichever is higher.

Instead of compliance with § 23.203(c), the following apply:

(c) Compliance with the requirements of this section must be shown under the following conditions:

(1) The flaps, landing gear, and speedbrakes in any likely combination of positions and altitudes appropriate for the various positions.

(2) Thrust—

(i) Idle; and

(ii) The thrust necessary to maintain level flight at 1.6 V S1 (where V S1 corresponds to the stalling speed with flaps in the approach position, the landing gear retracted, and maximum landing weight).

(3) Trim at 1.4 V S1 or the minimum trim speed, whichever is higher.

Instead of compliance with § 23.251, the following apply:

(a) The airplane must be demonstrated in flight to be free from any vibration and buffeting that would prevent continued safe flight in any likely operating condition.

(b) Each part of the airplane must be shown in flight to be free from excessive vibration under any appropriate speed and thrust conditions up to V DF /M DF . The maximum speeds shown must be used in establishing the operating limitations of the airplane in accordance with special condition SC 23.1505.

(c) Except as provided in paragraph (d) of this special condition, there may be no buffeting condition, in normal flight, including configuration changes during cruise, severe enough to interfere with the control of the airplane, to cause excessive fatigue to the crew, or to cause structural damage. Stall warning buffeting within these limits is allowable.

(d) There may be no perceptible buffeting condition in the cruise configuration in straight flight at any speed up to V MO /M MO , except that stall warning buffeting is allowable.

(e) With the airplane in the cruise configuration, the positive maneuvering load factors at which the onset of perceptible buffeting occurs must be determined for the ranges of airspeed or Mach number, weight, and altitude for which the airplane is to be certified. The envelopes of load factor, speed, altitude, and weight must provide a sufficient range of speeds and load factors for normal operations. Probable inadvertent excursions beyond the boundaries of the buffet onset envelopes may not result in unsafe conditions.

Instead of compliance with § 23.253, the following apply:

(a) Speed increase and recovery characteristics. The following speed increase and recovery characteristics must be met:

(1) Operating conditions and characteristics likely to cause inadvertent speed increases (including upsets in pitch and roll) must be simulated with the airplane trimmed at any likely cruise speed up to V MO /M MO . These conditions and characteristics include gust upsets, inadvertent control movements, low stick force gradient in relation to control friction, passenger movement, leveling off from climb, and descent from Mach to airspeed limit altitudes.

(2) Allowing for pilot reaction time after effective inherent or artificial speed warning occurs, it must be shown that the airplane can be recovered to a normal altitude and its speed reduced to V MO /M MO , without:

(i) Exceptional piloting strength or skill;

(ii) Exceeding V D /M D , V DF /M DF , or the structural limitations; and

(iii) Buffeting that would impair the pilot's ability to read the instruments or control the airplane for recovery.

(3) There may be no control reversal about any axis at any speed up to V DF /M DF . Any reversal of elevator control force or tendency of the airplane to pitch, roll, or yaw must be mild and readily controllable, using normal piloting techniques.

(b) Maximum speed for stability characteristics , V FC /M FC . V FC /M FC is the maximum speed at which the requirements of § 23.175(b)(1), special condition SC 23.177, and 23.181 must be met with flaps and landing gear retracted. It may not be less than a speed midway between V MO /M MO and V DF /M DF except that, for altitudes where Mach number is the limiting factor, M FC need not exceed the Mach number at which effective speed warning occurs.

In the absence of specific requirements for out-of-trim characteristics, apply the following:

(a) From an initial condition with the airplane trimmed at cruise speeds up to V MO /M MO , the airplane must have satisfactory maneuvering stability and controllability with the degree of out-of-trim in both the airplane nose-up and nose-down directions, which results from the greater of the following:

(1) A three-second movement of the longitudinal trim system at its normal rate for the particular flight condition with no aerodynamic load (or an equivalent degree of trim for airplanes that do not have a power-operated trim system), except as limited by stops in the trim system, including those required by § 23.655(b) for adjustable stabilizers; or

(2) The maximum mis-trim that can be sustained by the autopilot while maintaining level flight in the high speed cruising condition.

(b) In the out-of-trim condition specified in paragraph (a) of this special condition, when the normal acceleration is varied from +1 g to the positive and negative values specified in paragraph (c) of this special condition, the following apply:

(1) The stick force versus g curve must have a positive slope at any speed up to and including V FC /M FC ; and

(2) At speeds between V FC /M FC and V DF /M DF , the direction of the primary longitudinal control force may not reverse.

(c) Except as provided in paragraph (d) and (e) of this special condition, compliance with the provisions of paragraph (a) of this special condition must be demonstrated in flight over the acceleration range as follows:

(1) −1 g to +2.5 g; or

(2) 0 g to 2.0 g, and extrapolating by an acceptable method to −1 g and +2.5 g.

(d) If the procedure set forth in paragraph (c)(2) of this special condition is used to demonstrate compliance and marginal conditions exist during flight test with regard to reversal of primary longitudinal control force, flight tests must be accomplished from the normal acceleration at which a marginal condition is found to exist to the applicable limit specified in paragraph (b)(1) of this special condition.

(e) During flight tests required by paragraph (a) of this special condition, the limit maneuvering load factors, prescribed in §§ 23.333(b) and 23.337, need not be exceeded. Also, the maneuvering load factors associated with probable inadvertent excursions beyond the boundaries of the buffet onset envelopes determined under SC 23.251(e), need not be exceeded. In addition, the entry speeds for flight test demonstrations at normal acceleration values less than 1 g must be limited to the extent necessary to accomplish a recovery without exceeding V DF /M DF .

(f) In the out-of-trim condition specified in paragraph (a) of this special condition, it must be possible from an overspeed condition at V DF /M DF to produce at least 1.5 g for recovery by applying not more than 125 pounds of longitudinal control force using either the primary longitudinal control alone or the primary longitudinal control and the longitudinal trim system. If the longitudinal trim is used to assist in producing the required load factor, it must be shown at V DF /M DF that the longitudinal trim can be actuated in the airplane nose-up direction with the primary surface loaded to correspond to the least of the following airplane nose-up control forces:

(1) The maximum control forces expected in service, as specified in §§ 23.301 and 23.397.

(2) The control force required to produce 1.5 g.

(3) The control force corresponding to buffeting or other phenomena of such intensity that is a strong deterrent to further application of primary longitudinal control force.

Unless it can be shown that a lift or longitudinal trim device that affects the takeoff performance of the aircraft would not give an unsafe takeoff configuration when selected out of an approved takeoff position, a takeoff warning system must be installed and meet the following requirements:

(a) The system must provide to the pilots an aural warning that is automatically activated during the initial portion of the takeoff roll if the airplane is in a configuration that would not allow a safe takeoff. The warning must continue until—

(1) The configuration is changed to allow safe takeoff, or

(2) Action is taken by the pilot to abandon the takeoff roll.

(b) The means used to activate the system must function properly for all authorized takeoff power settings and procedures and throughout the ranges of takeoff weights, altitudes, and temperatures for which certification is requested.

In addition to paragraphs (a), (b), (c), and (d), the following apply:

(e) The rejected takeoff brake kinetic energy capacity rating of each main wheel brake assembly must not be less than the kinetic energy absorption requirements determined under either of the following methods—

(1) The brake kinetic energy absorption requirements must be based on a conservative rational analysis of the sequence of events expected during a rejected takeoff at the design takeoff weight.

(2) Instead of a rational analysis, the kinetic energy absorption requirements for each main wheel brake assembly may be derived from the following formula—

In addition to paragraphs (a), (b), (c), and (d), the following apply:

(e) In addition, the airspeed indicating system must be calibrated to determine the system error during the accelerate-takeoff ground run. The ground run calibration must be obtained between 0.8 of the minimum value of V 1 , and 1.2 times the maximum value of V 1 considering the approved ranges of altitude and weight. The ground run calibration must be determined assuming an engine failure at the minimum value of V 1 .

(f) Where duplicate airspeed indicators are required, their respective pitot tubes must be far enough apart to avoid damage to both tubes in a collision with a bird.

Instead of compliance with § 23.1505(a), the following apply:

(a) The maximum operating limit speed (V MO /M MO -airspeed or Mach number, whichever is critical at a particular altitude) is a speed that may not be deliberately exceeded in any regime of flight (climb, cruise, or descent), unless a higher speed is authorized for flight test or pilot training operations. V MO /M MO must be established so that it is not greater than the design cruising speed V C /M C and so that it is sufficiently below V D /M D or V DF /M DF , to make it highly improbable that the latter speeds will be inadvertently exceeded in operations. The speed margin between V MO /M MO and V D /M D or V DF /M DF may not be less than that determined under § 23.335(b) or found necessary in the flight test conducted under SC 23.253.

Instead of compliance with § 23.1583, the following apply:

The Airplane Flight Manual must contain operating limitations determined under this part 23, including the following—

(a) Airspeed limitations . The following information must be furnished:

(1) Information necessary for the marking of the airspeed limits on the indicator as required in § 23.1545, and the significance of each of those limits and of the color coding used on the indicator.

(2) The speeds V MC , V O , V LE , and V LO , if established, and their significance.

(3) In addition, for turbine powered airplanes—

(i) The maximum operating limit speed, V MO /M MO and a statement that this speed must not be deliberately exceeded in any regime of flight (climb, cruise or descent) unless a higher speed is authorized for flight test or pilot training;

(ii) If an airspeed limitation is based upon compressibility effects, a statement to this effect and information as to any symptoms, the probable behavior of the airplane, and the recommended recovery procedures; and

(iii) The airspeed limits must be shown in terms of V MO /M MO instead of V NO and V NE .

(b) Powerplant limitations. The following information must be furnished:

(1) Limitations required by § 23.1521.

(2) Explanation of the limitations, when appropriate.

(3) Information necessary for marking the instruments required by § 23.1549 through § 23.1553.

(c) Weight. The airplane flight manual must include—

(1) The maximum weight; and

(2) The maximum landing weight, if the design landing weight selected by the applicant is less than the maximum weight.

(3) Not applicable.

(4) The maximum takeoff weight for each airport altitude and ambient temperature within the range selected by the applicant at which—

(i) The airplane complies with the climb requirements of SC 23.63(d)(1); and

(ii) The accelerate-stop distance determined under SC 23.55 is equal to the available runway length plus the length of any stopway, if utilized; and either:

(iii) The takeoff distance determined under SC 23.59(a) is equal to the available runway length; or

(iv) At the option of the applicant, the takeoff distance determined under SC 23.59(a) is equal to the available runway length plus the length of any clearway and the takeoff run determined under SC 23.59(b) is equal to the available runway length.

(5) The maximum landing weight for each airport altitude within the range selected by the applicant at which—

(i) The airplane complies with the climb requirements of § 23.63(d)(2) for ambient temperatures within the range selected by the applicant; and

(ii) The landing distance determined under § 23.75 for standard temperatures is equal to the available runway length.

(6) The maximum zero wing fuel weight, where relevant, as established in accordance with § 23.343.

(d) Center of gravity. The established center of gravity limits.

(e) Maneuvers. The following authorized maneuvers, appropriate airspeed limitations, and unauthorized maneuvers, as prescribed in this section.

(1) Not applicable.

(2) Not applicable.

(3) Acrobatic category airplanes. A list of approved flight maneuvers demonstrated in type flight tests, together with recommended entry speeds and any other associated limitations.

(4) Not applicable.

(5) Not applicable.

(f) Maneuver load factor. The positive limit load factors in g's, and, in addition, the negative limit load factor for acrobatic category airplanes.

(g) Minimum flight crew. The number and functions of the minimum flight crew determined under § 23.1523.

(h) Kinds of operation. A list of the kinds of operation to which the airplane is limited or from which it is prohibited under § 23.1525, and also a list of installed equipment that affects any operating limitation and identification as to the equipment's required operational status for the kinds of operation for which approval has been given.

(i) Maximum operating altitude. The maximum altitude established under § 23.1527.

(j) Maximum passenger seating configuration. The maximum passenger seating configuration.

(k) Allowable lateral fuel loading. The maximum allowable lateral fuel loading differential, if less than the maximum possible.

(l) Baggage and cargo loading. The following information for each baggage and cargo compartment or zone—

(1) The maximum allowable load; and

(2) The maximum intensity of loading.

(m) Systems. Any limitations on the use of airplane systems and equipment.

(n) Ambient temperatures. Where appropriate, maximum and minimum ambient air temperatures for operation.

(o) Smoking. Any restrictions on smoking in the airplane.

(p) Types of surface. A statement of the types of surface on which operations may be conducted. (See SC 23.45(g) and SC 23.1587(a)(4) and (d)(4)).

Instead of compliance with § 23.1585, the following apply:

(a) For all airplanes, information concerning normal, abnormal (if applicable), and emergency procedures and other pertinent information necessary for safe operation and the achievement of the scheduled performance must be furnished, including—

(1) An explanation of significant or unusual flight or ground handling characteristics;

(2) The maximum demonstrated values of crosswind for takeoff and landing, and procedures and information pertinent to operations in crosswinds;

(3) A recommended speed for flight in rough air. This speed must be chosen to protect against the occurrence, as a result of gusts, of structural damage to the airplane and loss of control (for example, stalling);

(4) Procedures for restarting any turbine engine in flight, including the effects of altitude; and

(5) Procedures, speeds, and configuration(s) for making a normal approach and landing, in accordance with SC 23.73 and § 23.75, and a transition to the balked landing condition.

(6) Not applicable.

(b) Not applicable.

(c) In addition to paragraph (a) of this section, for all multiengine airplanes, the following information must be furnished:

(1) Procedures, speeds, and configuration(s) for making an approach and landing with one engine inoperative;

(2) Procedures, speeds, and configuration(s) for making a balked landing with one engine inoperative and the conditions under which a balked landing can be performed safely, or a warning against attempting a balked landing;

(3) The VSSE determined in § 23.149; and

(4) Procedures for restarting any engine in flight including the effects of altitude.

(d) Not applicable.

(e) Not applicable.

(f) In addition to paragraphs (a) and (c) of this section, the information must include the following:

(1) Procedures, speeds, and configuration(s) for making a normal takeoff.

(2) Procedures and speeds for carrying out an accelerate-stop in accordance with SC 23.55.

(3) Procedures and speeds for continuing a takeoff following engine failure in accordance with SC 23.59(a)(1) and for following the flight path determined under SC 23.57 and SC 23.61(a).

(g) Information identifying each operating condition in which the fuel system independence prescribed in § 23.953 is necessary for safety must be furnished, together with instructions for placing the fuel system in a configuration used to show compliance with that section.

(h) For each airplane showing compliance with § 23.1353(g)(2) or (g)(3), the operating procedures for disconnecting the battery from its charging source must be furnished.

(i) Information on the total quantity of usable fuel for each fuel tank, and the effect on the usable fuel quantity, as a result of a failure of any pump, must be furnished.

(j) Procedures for the safe operation of the airplane's systems and equipment, both in normal use and in the event of malfunction, must be furnished.

Instead of compliance with § 23.1587, the following apply:

Unless otherwise prescribed, performance information must be provided over the altitude and temperature ranges required by SC 23.45(b).

(a) For all airplanes, the following information must be furnished—

(1) The stalling speeds V SO and V S1 with the landing gear and wing flaps retracted, determined at maximum weight under § 23.49, and the effect on these stalling speeds of angles of bank up to 60 degrees;

(2) The steady rate and gradient of climb with all engines operating, determined under § 23.69(a);

(3) The landing distance, determined under § 23.75 for each airport altitude and standard temperature, and the type of surface for which it is valid;

(4) The effect on landing distances of operation on other than smooth hard surfaces, when dry, determined under SC 23.45(g); and

(5) The effect on landing distances of runway slope and 50 percent of the headwind component and 150 percent of the tailwind component.

(b) Not applicable.

(c) Not applicable.

(d) In addition to paragraph (a) of this section the following information must be furnished—

(1) The accelerate-stop distance determined under SC 23.55;

(2) The takeoff distance determined under SC 23.59(a);

(3) At the option of the applicant, the takeoff run determined under SC 23.59(b);

(4) The effect on accelerate-stop distance, takeoff distance and, if determined, takeoff run, of operation on other than smooth hard surfaces, when dry, determined under SC 23.45(g);

(5) The effect on accelerate-stop distance, takeoff distance, and if determined, takeoff run, of runway slope and 50 percent of the headwind component and 150 percent of the tailwind component;

(6) The net takeoff flight path determined under SC 23.61(b);

(7) The enroute gradient of climb/descent with one engine inoperative, determined under § 23.69(b);

(8) The effect, on the net takeoff flight path and on the enroute gradient of climb/descent with one engine inoperative, of 50 percent of the headwind component and 150 percent of the tailwind component;

(9) Overweight landing performance information (determined by extrapolation and computed for the range of weights between the maximum landing and maximum takeoff weights) as follows—

(i) The maximum weight for each airport altitude and ambient temperature at which the airplane complies with the climb requirements of SC 23.63(d)(2); and

(ii) The landing distance determined under § 23.75 for each airport altitude and standard temperature.

(10) The relationship between IAS and CAS determined in accordance with § 23.1323 (b) and (c).

(11) The altimeter system calibration required by § 23.1325(e).

Section 126 of the Food and Drug Administration Modernization Act of 1997 (FDAMA) (Public Law 105-115) amended section 503(b)(1) of the act (21 U.S.C. 353(b)(1)). Specifically, the previous paragraph (b)(1)(A) of the act was stricken from the act and paragraphs (b)(1)(B) and (b)(1)(C) were redesignated as paragraphs (b)(1)(A) and (b)(1)(B), respectively. This amendment to the act necessitates that FDA revise the corresponding citations in its regulations. FDA is making this change in 21 CFR part 310 (§§ 310.200 and 310.201). These changes are editorial, pertaining only to citations, and do not constitute a change in FDA regulation.

Publication of this document constitutes final action on this change under the Administrative Procedure Act (5 U.S.C. 553). Notice and public procedures are unnecessary because FDA is merely implementing a change in citation to a section of the act as a result of amendment of the act.

Background

On July 13, 2006, a notice of proposed rulemaking (REG-118897-06), United States Dollar Approximate Separate Transactions Method, was published in the Federal Register (71 FR 39604). The notice of proposed rulemaking proposed to amend § 1.985-3(d)(3). No requests for a public hearing were received, and no public hearing was held. The IRS received no comments in response to the notice of proposed rulemaking. The proposed regulation is adopted without change by this Treasury decision.

For taxable years beginning after August 24, 1994, a U.S. taxpayer's QBU that would otherwise be required to use a hyperinflationary currency as its functional currency generally must use the dollar as its functional currency and must compute income or loss under the DASTM method of accounting described in § 1.985-3. See § 1.985-1(b)(2)(ii). Under the DASTM method of accounting, a QBU's income or loss for a taxable year is computed in U.S. dollars and adjusted to account for its DASTM gain or loss. See § 1.985-3(b). A QBU's DASTM gain or loss for a taxable year is determined under § 1.985-3(d) by first computing the QBU's change in net worth from the prior year. In computing the QBU's change in net worth, items whose dollar value fluctuates with changes in exchange rates are translated using the year-end exchange rate while items whose dollar value does not change with exchange rate fluctuations are translated using the exchange rate for the translation period in which the cost of the item was incurred. Specified adjustments are made to the QBU's change in net worth. Under § 1.985-3(d)(3), one of the adjustments requires adding back to the change in net worth transactions that decrease the QBU's net worth without affecting the QBU's income or loss including dividend distributions, certain transfers, and returns of capital from the QBU to its home office or parent corporation. This final regulation provides the translation rate to be used in translating these items into dollars for purposes of computing DASTM gain or loss.

Under § 1.985-3(d)(3), the applicable translation rate to be used generally depends upon whether the dollar value of the item transferred changes with fluctuations in exchange rates. Accordingly, the regulation provides that if the item giving rise to the adjustment is an asset which would be translated under § 1.985-3(d)(5) at the exchange rate for the last translation period of the taxable year if it were on the QBU's year-end balance sheet, the item will be translated at the exchange rate on the date the item is transferred. However, if the item giving rise to the adjustment is an asset which would be translated under § 1.985-3(d)(5) at the exchange rate for the translation period in which the cost of the item was incurred if it were on the QBU's year-end balance sheet, the item will be translated at the same historical rate.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has been determined that sections 553 (b) and (d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do not apply to this regulation, and because this regulation does not impose a collection of information on small entities, the provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of this regulation is Sheila Ramaswamy, Office of Associate Chief Counsel (International). However, other personnel from the IRS and Treasury Department participated in their development.

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

No adverse comments were received. The Sherwin-Williams Company submitted a comment supporting approval of paragraph 3745-21-09 (RR) pertaining to the site specific reasonably available control technology requirements for the Sherwin-Williams aerosol can filling facility in Bedford Heights, Ohio.

Since this comment was supportive of the action being taken there is no need to respond to it.

EPA is approving several VOC rules into the Ohio SIP. These include more stringent solvent degreasing rules, an exemption for its printing rules, a site-specific rule for an aerosol can filling facility, elimination of the fluid catalytic cracking unit limitations for a Marathon Petroleum Company LLC facility, an alternative leak detection and repair program for the Premcor Lima Refinery, a rule requiring the marketing and sale of only low-emitting portable fuel containers, and a rule including the use of high efficiency paint application equipment at auto body refinishing operations.

The primary purpose of the rules that Ohio submitted is to obtain VOC emission reductions. These reductions would partially offset the increase in VOC emissions resulting from elimination of its E-Check program in the Cincinnati and Dayton areas. Ohio EPA has submitted additional VOC and nitrogen oxide emission reduction measures to fully compensate for the resulting increase in emissions. These additional emission reduction measures, as well as other demonstrations needed to remove the E-Check program from the Ohio SIP, will be the subject of future rulemaking actions. This notice also approves several site-specific rule revisions that have been requested by emission sources in Ohio.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget.

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

This action merely approves state law as meeting federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

This action also does not have Federalism implications because it does not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act.

This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

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

This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

Under Section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 29, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See Section 307(b)(2).)

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

On December 28, 2006 (71 FR 78115), we proposed to approve, under the Clean Air Act (CAA or “Act”), two revisions submitted by the Arizona Department of Environmental Quality (ADEQ) of the Arizona State Implementation Plan (SIP). Both SIP revisions relate to Arizona's Basic and Enhanced Vehicle Emissions Inspection/Maintenance (VEI) Programs implemented in the Tucson and Phoenix areas, respectively.

ADEQ submitted the first VEI SIP revision on December 23, 2005 (“VEI SIP Revision”). The VEI SIP Revision submittal includes the SIP revision itself, divided into a non-regulatory portion, “Final Arizona State Implementation Plan Revision, Basic and Enhanced Vehicle Emissions Inspection/Maintenance Programs” (December 2005), and a regulatory portion, House Bill (HB) 2357, as well as supporting materials related to legal authority, adoption, public process and technical analysis.

HB 2357 amends Arizona Revised Statutes (ARS) Section 49-542 by exempting vehicles that are at least 15 years old or are of a unique and rare design and that carry collectible vehicle insurance that restricts the mileage and/or use of the vehicle (“collectible vehicles”) from emission testing in both Area A (i.e., the Phoenix area) and Area B (i.e., the Tucson area). In addition, HB 2357 exempts motorcycles in the Tucson area from emissions testing. Specifically, the amendments to ARS 49-542 are found in paragraphs or subparagraphs (J)(2)(k), (J)(2)(l), (Y), and (Z) of that section of code. The changes to ARS Section 49-542 are self-implementing, which means that they become effective upon EPA approval as a revision to the Arizona SIP.

Among the technical materials included in the VEI SIP Revision submittal package is a report  1 prepared by ADEQ that evaluates the impacts of exempting three vehicle categories (vehicles 25 model years old and older, motorcycles, and collectible vehicles) from the emissions testing requirements on ambient air quality and on the ability of Areas A and B (i.e., Phoenix and Tucson, respectively) to maintain or attain the national ambient air quality standards (NAAQS). The report concluded that the testing and repair of these vehicle categories as a whole does provide a significant air quality benefit. The analysis, however, also identified a subset of vehicle categories (collectible vehicles in Phoenix and Tucson plus motorcycles in Tucson) for which the emissions testing requirement does not provide a significant air quality benefit and for which exemption would not interfere with continued maintenance of the CO NAAQS or progress towards the 8-hour ozone NAAQS. HB 2357 was a Legislative response to the findings in this report.

In consultation with EPA concerning the VEI SIP Revision, ADEQ prepared an updated performance standard evaluation for the VEI program in the Phoenix area to reflect the new exemption for collectible vehicles, and developed new contingency measures that are intended to provide for reinstatement of emissions testing for the newly exempt vehicle categories in the event that a violation of the carbon monoxide NAAQS were to be recorded in the Phoenix or Tucson area. On October 3, 2006, ADEQ adopted and submitted the updated performance standard evaluation and new contingency measures in a second SIP revision, entitled, “Supplement to Final Arizona State Implementation Plan Revision, Basic and Enhanced Vehicle Emissions Inspection/Maintenance Programs, December 2005” (September 2006) (“VEI SIP Supplement”). As part of the submittal of the VEI SIP Supplement, ADEQ documented the public participation process that was conducted by ADEQ prior to adoption and submittal to EPA.

Our December 28, 2006 proposed rule provides our evaluation of these two SIP submittals and our rationale for concluding that the submittals meet all relevant CAA requirements including SIP revision procedural requirements, vehicle inspection and maintenance program requirements, requirements under CAA section 110(l) related to non-interference with attainment and maintenance of the NAAQS, and contingency provision requirements under CAA section 175A(d). Please see our December 28, 2006 proposed rule for more information concerning the SIP revision submittals, our evaluation of them, and our rationale for proposing approval.

Our December 28, 2006 proposed rule provided a 30-day public comment period. We received comments from 40 commenters on our proposed rule during the public comment period. Most were supportive of our proposed action. We are responding to the five commenters who disagreed with our action.

Comment. One commenter agrees with the proposal but states that vehicles 25 years old or older should also be exempt.

Response. Arizona House Bill (HB) 2501, as amended by HB 2294, required ADEQ to evaluate whether vehicles 25 years old and older in combination with collectible vehicles or motorcycles could be exempt from emissions testing. The report concluded that the testing and repair of these vehicle categories as a whole does provide significant air quality benefit. The analysis, however, also identified a subset of vehicle categories (collectible vehicles in Phoenix and Tucson and motorcycles in Tucson) for which the emissions testing requirement does not provide a significant air quality benefit and for which exemption would not interfere with continued maintenance of the CO NAAQS or progress towards the 8-hour ozone NAAQS. HB 2357 (i.e., the regulatory portion of the VEI SIP Revision) was a Legislative response to the findings in this report.

Comment. One commenter suggests various changes to the new statutory exemption for collectible vehicles that would make the exemption less restrictive and thereby allow a greater number of collectors to fall within the exemption.

Response. In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet minimum criteria set by the Clean Air Act or any applicable EPA regulations. Any changes to Arizona law expanding the exemption for collectible vehicles would need first to be introduced as a new bill in the Arizona Legislature. If passed and approved by the Governor, such a statutory change would then need to be submitted by ADEQ to EPA for approval with documentation showing continued compliance with all relevant CAA and EPA requirements including a demonstration of non-interference with the ambient air quality standards under section 110(l) of the CAA.

Comment. One commenter states that motorcycles should not be exempt from the vehicle emissions inspection program in Tucson, unless EPA has solid evidence that very few, if any, motorcycles pose a pollution problem, or that the Tucson inspection program passes essentially all motorcycles, so providing little environmental benefit.

Response. ADEQ's statistics about the VEI program indicate that between 2003 and 2006, from 91.3 to 94.9 percent of motorcycles in the Tucson area passed the vehicle emissions test on their initial pass on an annual basis . These statistics provide further support for our conclusion that exemption of motorcycles from emissions testing requirements of the VEI program would not interfere with attainment or maintenance of the NAAQS in the Tucson area.

Comment. The fourth commenter states that he opposes this type of “reverse regulation” (removing of grandfathering) of old, collectible cars. He states that making people retrofit emissions equipment on older vehicles is infeasible, costly, and that owners are unlikely to comply.

Response. This commenter appears to have misunderstood EPA's action. We are approving an exemption to Arizona's vehicle inspection program for owners of collectible vehicles which meet certain requirements, including collectible insurance which limits the use or annual mileage of the collectible vehicle. We are not requiring existing older vehicles to be retrofit with emissions control technology.

Comment. The fifth commenter states that the law establishing the new exemption for collectible vehicles is poorly crafted in that the requirements of the law, as written by the Arizona legislature, are both vague and do not have sufficient enforcement methods to insure that the net result falls within the assumptions that were made by the ADEQ to validate this exemption. Specifically, the commenter questions the estimate of the number of collectible vehicles used by ADEQ in estimating the emissions impact of the exemption and also questions the methods that will be relied upon to limit the exemption only to qualifying vehicles. Furthermore, the commenter requests additional requirements in the law to limit the possible abuse of the exemption.

Response. As noted above, EPA's role in reviewing SIP submissions is to approve state choices, provided that they meet minimum criteria of the Clean Air Act and EPA's regulations. EPA is not responsible for drafting changes to state laws. Nonetheless, this comment raises questions about the validity of the assumptions underlying the emissions impact analysis and the enforcement methods that will be relied upon to limit the exemptions to qualifying vehicles.

ADEQ estimates that collectible vehicles represent 0.4% to 0.5% of the total tested fleet of vehicles in the Tucson and Phoenix areas, respectively. ADEQ developed these estimates on the basis of a survey conducted by ADEQ in coordination with car clubs in Arizona and information received from two of the four major insurance companies specializing in selling collectible car insurance in Arizona, taking into account the number of such vehicles that are already exempt (i.e., pre-1967 model year vehicles) from emission testing requirements. See appendix 2b (“Technical Support Document, Evaluating Emissions Impacts of Exempting Collectible Vehicles from Vehicle Emissions Inspections”) of Appendix B (“Report on Potential Exemptions from Vehicle Emissions Testing for Motorcycles, Collectible Vehicles and Vehicles 25 Model Years Old and Older”) of the VEI SIP revision. We believe that ADEQ's methods provide a reasonable basis for estimating the number of vehicles that would be newly exempt as “collectible vehicles” under HB 2357 and the corresponding emissions impact from exemption of those vehicles from VEI emissions testing requirements.

We also continue to believe that the compliance enforcement methods, including the collectible vehicle insurance and registration procedures, that will be relied upon to limit the exemption to qualifying vehicles are reasonably calculated to do so. See pages 4-5 and appendix C (“Collectible Vehicle Insurance and Registration Procedures”) of the VEI SIP Revision and our discussion of the compliance enforcement issue in our proposed rule at 71 FR at 78118.

No comments were submitted that change our assessment of the VEI SIP revisions as set forth in our proposed rule. Therefore, pursuant to section 110(k)(3) of the CAA and for the reasons set forth in the proposed rule, EPA is approving the revisions to the Arizona SIP submitted by the State of Arizona on December 23, 2005 and October 3, 2006 concerning the Arizona VEI programs implemented in the Phoenix and Tucson areas because we find that the revisions are consistent with the requirements of the CAA and EPA's regulations.

Specifically, we are approving exemptions from emissions testing requirements for collectible vehicles in the Phoenix area and collectible vehicles and motorcycles in the Tucson area as set forth in the “Arizona State Implementation Plan Revision, Basic and Enhanced Vehicle Emissions Inspection/Maintenance Programs” (December 2005) and ARS Section 49-542 as amended in section 1 of Arizona House Bill 2357, 47th Legislature, 1st Regular Session (2005) and approved by the Governor on April 13, 2005; and the updated performance standard evaluation for the Phoenix area and new contingency measures as set forth in the “Supplement to Final Arizona State Implementation Plan Revision, Basic and Enhanced Vehicle Emissions Inspection/Maintenance Programs, December 2005” (September 2006).

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

This rule also does not have 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 (59 FR 22951, November 9, 2000), nor will it have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely approves changes to state law implementing a Federal requirement, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health and Safety Risks” (62 FR 19885, April 23, 1997), because it finalizes approval of a state rule implementing a Federal Standard.

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 29, 2007. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

You may download this rule from the Department's Docket Management System ( https://dms.dot.gov ) by entering docket number 24708 in the search field or from the Government Printing Office's Federal Register Main Page at http://www.gpoaccess.gov/fr/index.html. Users may also download an electronic copy of this document using a modem and suitable communications software from the GPO Electronic Bulletin Board Service at (202) 512-1661.

The Clean Fuels Formula Grant Program is a transit grant program established pursuant to Section 3008 of the Transportation Equity Act for the 21st Century (TEA-21) as amended, Public Law 105-178, and codified at 49 U.S.C. 5308. This legislation established the basic parameters of the program. Section 3010 of SAFTEA-LU, Public Law 109-59, (2005) changed the grant program from a formula-based to a discretionary grant program.

In SAFETEA-LU, Congress earmarked approximately $18 million in FY 2006 graduating to approximately $22 million in FY 2009 for specific projects. However, during the FY 2006 and FY 2007 appropriations process, Congress transferred the remaining clean fuels program funds not earmarked pursuant to SAFETEA-LU to the Bus and Bus Facilities Program. Thus, there are no discretionary funds available for the Clean Fuels Program to date. The focus of this rulemaking is to revise 49 CFR Part 624 to reflect the amendments made by SAFETEA-LU establishing a discretionary program and ensuring procedures are in place when funding is provided for the program. This final rule also addresses criteria for the allocation of discretionary program funds, issues raised in the NPRM and the comments made in response to the NPRM.

FTA received a total of two comments to this rulemaking. We discuss the comments received and explain any changes made to the regulations in the following paragraphs. FTA considered all comments filed. Each commenter expressed support for the rulemaking while offering recommendations to improve this statutory program. A written copy of each comment is available at the DOT Docket Manager's Web site: http://www.dms.dot.gov.

1. American Public Transportation Association (APTA) indicates that it agrees with FTA's approach to flexible eligibility and selection criteria for implementation of the regulation. APTA suggested that FTA publish proposed annual criteria in conjunction with the annual “apportionment and allowances notice,” which includes FTA programmatic changes. APTA believed that such a procedure would allow public comment on the criteria prior to the Federal Register Notice of Funding Availability, thus permitting the latter announcement to be limited to solicitation of grant applications based on already publicly vetted criteria.

2. Metro Regional Transit Authority of Akron, Ohio (Metro) expresses support for the majority of the proposed changes to the Clean Fuels Grant Program as an improvement to the overall initiative. Metro recommends that the total project cost should be an eligible federal expense for those projects that have an evaluation and dissemination component, in order to encourage additional research and development of alternative fuels. Metro recommends that FTA only fund truly alternative energy sources such as hydrogen fuel cells stating that other projects will continue dependence on fossil fuel and foreign oil.

Metro believes that “clean diesel buses” are not an appropriate expenditure for this program and that these buses should be purchased with Congestion Mitigation Air Quality or section 5307 funds. The Clean Fuels program should focus its limited resources on projects that can be replicated or advance the technology for buses. Another recommendation by Metro is that FTA consider the reporting evaluation proposal as part of the grant process, including a pure science component for each funded project.

In this section, FTA provides a section by section analysis and comments in response where applicable.

As noted in the NPRM, SAFETEA-LU amended the term “recipient” to now include smaller urbanized areas with populations of less than 200,000. Accordingly, we are amending section 624.1 to define eligible applicants as (1) designated recipients, as defined in 49 U.S.C. 5307(a)(2); and (2) recipients in urbanized areas with populations of less than 200,000.

A “designated recipient” is an entity designated to receive Federal urbanized formula funds under 49 U.S.C. 5307, in accordance with the applicable metropolitan and statewide transportation planning processes, by the chief executive officer of a State, responsible local officials, and publicly owned operators of public transportation. For an urbanized area with a population of less than 200,000, however, SAFETEA-LU requires the smaller urbanized area's respective State to act as the recipient.

Further, all recipients must meet one of the following criteria: (1) Be designated as an ozone or carbon monoxide (CO) nonattainment area as established by section 107(d) of the Clean Air Act (42 U.S.C. 7407(d)); or (2) be designated as a maintenance area for ozone or CO. A maintenance area is a previously designated nonattainment area that has been redesignated to attainment status by the U.S. Environmental Protection Agency (EPA).

A commenter indicated that additional criteria not found in the statute should also be considered. FTA is not permitted to expand the selection criteria beyond that found in the statute. For similar reasons, FTA may not restrict vehicles that use clean diesel as an eligible activity as recommended by the commenter. Further, a commenter suggested that an experimental project should receive Federal funds at the 100% level. FTA has no statutory authority to support 100% funding of total project costs of eligible activities. The final rule contains the funding share for eligible projects that complies with the requirements of 49 U.S.C. 5308 and the Clean Air Act.

FTA is amending section 624.3 in paragraph (a) and removes paragraphs (c)(4) and (c)(5) to exclude repowering and retrofitting of pre-1993 buses. Both activities were specifically authorized as eligible projects under TEA-21; however, SAFETEA-LU repealed those provisions. Accordingly, we have determined that such activities cannot be authorized under this program. In addition, we amend paragraph (c) by renumbering the current paragraph (c)(6) as a new (c)(3), and adding new paragraphs (c)(4), (5), and (6) to reflect SAFETEA-LU amendments applicable to eligible projects.

a. We are amending paragraph (a) to reflect the provisions in 49 U.S.C. 5323(i), which SAFETEA-LU amended to include facilities as well as vehicles. Accordingly, the Federal share for eligible projects cannot exceed 90 percent of the net cost to comply with or maintain compliance with the Clean Air Act. Further, the Administrator is authorized to administratively determine the net cost of such equipment or facilities attributable to compliance with the Clean Air Act. FTA has administratively determined that the composite Federal share for vehicles and vehicle related equipment shall be 83 percent. For facilities, however, the 90 percent share would apply to the actual incremental costs of improvements for compliance with the Clean Air Act and recipients would be requested to provide supporting documentation.

We noted in the NPRM that the President's Budget for Fiscal Year 2007 proposed that FTA grants awarded during Fiscal Years 2007 and 2008 should reflect 100 percent of the net capital costs of factory-installed or retrofitted hybrid-electric propulsion systems and any equipment related to such systems. This budget proposal provided for administrative discretion to determine costs attributable to such systems and related-equipment. This provision was not included in the FY 2007 appropriations legislation, and therefore not authorized.

Paragraph (c)(5) of section 624.3 is amended to reflect the statutory mandate under section 5308(c) that not more than 25 percent of the funds available to carry out the clean fuels program each fiscal year may be made available to fund clean diesel buses. On January 18, 2001, EPA published a final rule establishing a comprehensive national control program to regulate heavy-duty vehicles and its fuel as a single system. As part of this program, new emission standards will start to take effect in model year 2007, and will apply to heavy-duty highway engines and vehicles. These standards are based on the use of high-efficiency catalytic exhaust emission control devices or comparably effective advanced technologies. The EPA standards are codified at 40 CFR Parts 69, 80, and 86. (See 66 FR 5001 (January 18, 2001).). Accordingly, FTA interprets “clean diesel” to mean diesel engines certified to meet EPA's heavy-duty engine emissions standards for model-years 2007 and later.

The final rule amends paragraph (c)(6) of section 624.3 to reflect that funds designated for eligible projects will remain available for obligation for three fiscal years, which includes the year of appropriation plus two additional fiscal years.

Since the program is now a discretionary grant program, the pre-application included in Appendix A no longer applies. Accordingly, we are removing Appendix A from Part 624 and revising section 624.5 to reflect that applications will be requested in a Federal Register notice each fiscal year that discretionary funds are provided by Congress for the program. FTA considered a comment to change the procedures but determined that since technological innovations continue to evolve, we believe the criteria for selecting eligible projects should be flexible. Accordingly, we are revising section 624.5 to reflect general criteria for selection of eligible projects. More specific selection criteria may be published in the Federal Register with a Notice of Funding Availability each fiscal year that discretionary funding is provided by Congress for the program.

We retain the current certification process in section 624.7. Each vehicle purchased with a grant under this program will be operated by the grantee using only clean fuels. The certification will be included with the Federal Register notice announcing our annual certifications and assurances. This is consistent with our policy of one-stop filing for all required certifications and assurances. Transit operators planning to apply for the Clean Fuels Grant Program would indicate compliance with this certification when submitting the annual certifications and assurances. Additionally, grantees purchasing or leasing “clean diesel” buses must certify that the buses would be operated using only ultra-low-sulfur diesel fuel.

Since the program is now a discretionary grant program, we are amending section 624.9 by removing the grant formula because it no longer applies. Section 5308, as amended by SAFETEA-LU, requires that a grant under this program be subject to the applicable requirements of 49 U.S.C. 5307. Accordingly, we are amending section 624.9 by inserting the applicable statutory requirements from 49 U.S.C. 5307. Many of these requirements are also contained in FTA Circular 9030.1C, which is available on the FTA website at ( http://www.fta.dot.gov ).

Further, all FTA grants provided under chapter 53 of title 49 of the United States Code are subject to applicable requirements of the FTA Master Agreement (MA), which is incorporated by reference in the grant agreement. Additional project management guidelines and requirements may also be found in FTA Circular 5010.1C. This Circular and the MA are also available on the FTA Web site at ( http://www.fta.dot.gov ).

With respect to the comment on reporting as part of the grant process, FTA is interested in program level evaluation. We will use these reporting components to analyze national programmatic effects. However, we encourage local areas to use criteria that best suits their local needs.

As FTA supports the development and deployment of clean fuel and advanced propulsion technologies for transit buses, we remain interested in collecting relevant information on the operations and performance of these clean fuel technology buses to help assess the reliability, benefits, and costs of certain technologies compared to conventional vehicle technologies. Accordingly, FTA retains the reporting requirements in section 624.11, which require grantees receiving program funds for hybrid electric, battery electric, and fuel cell vehicles to provide information to us on the operations, performance, and maintenance of those vehicles purchased or leased with program funds.

We have determined, however, that semiannual instead of quarterly reporting for the first three years of the useful life of the vehicle is sufficient for this objective; thus, we are providing administrative relief by extending the reporting requirements in section 624.11 from quarterly to semiannually. Submission of data on the operation of the vehicle beyond the three-year period would continue to be voluntary.

Likewise, we encourage transit agencies acquiring other types of alternative fuel buses ( e.g. , compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas (LPG), etc.) to voluntarily report similar information. However, recipients acquiring clean diesel vehicles are not required to report the data requested under section 624.11 because we believe that sufficient information about this technology has been compiled.

FTA will be requesting from the Office of Management and Budget (OMB) under the Paperwork Reduction Act approval to collect information from recipients receiving Federal financial assistance under the Clean Fuels program. We intend to collect information such as vehicle miles traveled, fuel costs, vehicle fuel/energy consumption and oil consumption, road calls or breakdowns resulting from clean fuel and advanced propulsion technology systems, and maintenance costs associated with these systems. Data collected will be used to provide more accurate information to transit agencies for future clean fuel and advanced propulsion vehicle acquisitions.

Under Executive Order 12866, the Department of Transportation (DOT) must examine whether this rule is a “significant regulatory action.” A significant regulatory action is subject to OMB review and the requirements of the Executive Order (E.O.). E.O. 12866 defines “significant regulatory action” as one that is likely to result in a rule that may: (1) Have an annual effect on the economy of $120 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O.

This rule amends an existing grant program and is not expected to impose any new compliance costs. Specifically, we are amending the existing program from a formula program to a discretionary grant program in accordance with section 3010 of SAFETEA-LU. We believe that the industry costs and benefits of the Clean Fuels Grant Program do not warrant designating this as a significant rule under E.O. 12866 because it involves grant application procedures and will not cost more than $120 million annually. Additionally, we provide administrative relief in the reporting criteria by decreasing the reporting period from quarterly to semiannually. For these reasons, we have determined that this rule is a no significant regulatory action under section 3(f) of E.O. 12866. Accordingly, it has not been reviewed by OMB.

This rule has been analyzed in accordance with the principles and criteria contained in E.O. 13132 (Federalism). This rule does not include any provisions that have substantial direct effect on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. Therefore, the consultation and funding requirements of E.O. 13132 do not apply because this rule only sets forth application procedures for an existing formula grant program that has been statutorily amended to a discretionary grant program.

This rule has been analyzed in accordance with the principles and criteria of E.O. 13175 (Consultation and Coordination with Indian Tribal Governments). Because the proposal does not have tribal implications and does not impose direct compliance costs, the funding and consultation requirements of E.O. 13175 do not apply.

The Regulatory Flexibility Act (5 U.S.C. 601-612), requires each agency to analyze regulations and proposals to assess their impact on small businesses and other small entities to determine whether the rule or proposal will have a significant economic impact on a substantial number of small entities.

We evaluated the effects of this rule on small entities and determined that it will not have a significant effect on a substantial number of small entities. This rule imposes no new costs because it merely modifies the application procedures for an existing grant program.

This rule includes information collection requirements subject to the Paperwork Reduction Act. OMB previously approved our information collection request under the Clean Fuels Formula Grant Program, 2132-0560. However, that approval expired on August 31, 2003, because funding was not allocated for the program.

Since Congress may provide funding in future fiscal years, we will submit a new information collection request to OMB. The affected public under this rulemaking remains public transportation providers who apply for Federal funds under this program. Our new information collection request will not include any new reporting requirements. In fact, the rule decreases reporting because we modify the reporting period from quarterly to semiannually.

This rule does not propose unfunded mandates under the Unfunded Mandates Reform Act of 1995. The rule will not result in costs of $100 million or more (adjusted for inflation), in the aggregate, to any of the following: State, local, or Native American tribal governments, or the private sector.

The National Environmental Policy Act of 1969, (42 U.S.C. 4321-4347), requires Federal agencies to consider the consequences of major federal actions and prepare a detailed statement on actions significantly affecting the quality of the human environment. Since this rule promotes the use of clean fuels in vehicles used for public transportation, it potentially may have a positive impact on the environment. Alternatively, there are no significant environmental impacts associated with this proposed rule.

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

The B season allowance of the 2007 TAC of pollock in Statistical Area 620 of the GOA is 8,924 metric tons (mt) as established by the 2007 and 2008 harvest specifications for groundfish of the GOA (72 FR 9676, March 5, 2007). In accordance with § 679.20(a)(5)(iv)(B) the Administrator, Alaska Region, NMFS (Regional Administrator), hereby increases the B season pollock allowance by 1,785 mt, the remaining amount of the A season allowance for pollock in Statistical Area 620. Therefore, the revised B season allowance of the pollock TAC in Statistical Area 620 is therefore 10,709 mt (8,924 mt plus 1,785 mt).

In accordance with § 679.20(d)(1)(i), the Regional Administrator has determined that the B season allowance of the 2007 TAC of pollock in Statistical Area 620 of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 10,659 mt, and is setting aside the remaining 50 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for pollock in Statistical Area 620 of the GOA.

After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of pollock in Statistical Area 620 of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of March 26, 2007.

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

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