Executive Order 12866

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

The Catalog of Federal Domestic Assistance (CFDA) Program number assigned to the Community Connect Grant Program is 10.863. The Catalog is available on a subscription basis from the Superintendent of Documents, the United States Government Printing Office, Washington, DC 20402-9325; telephone (202) 512-1800.

This program is not subject to the requirements of Executive Order 12372, “Intergovernmental Review of Federal Programs,” as implemented under USDA's regulations at 7 CFR part 3015.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. The Agency has determined that this rule meets the applicable standards provided in section 3 of the Executive Order. In addition, all state and local laws and regulations that are in conflict with this rule will be preempted, no retroactive effect will be given to this rule, and, in accordance with Sec 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)), administrative appeal procedures, if any, must be exhausted before an action against the Department or its agencies may be initiated.

The policies contained in this rule do not have any substantial direct effect on 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. Nor does this final rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with states is not required.

Pursuant to 5 U.S.C. 553(a)(2), this final rule related to grants is exempt from the rulemaking requirements of the Administrative Procedure Act (5 U.S.C. 551 et seq. ), including the requirement to provide prior notice and an opportunity for public comment. Because this final rule is not subject to a requirement to provide prior notice and an opportunity for public comment pursuant to 5 U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are inapplicable.

This final rule contains no Federal mandates (under the regulatory provision of Title II of the Unfunded Mandates Reform Act of 1995) for State, local, and tribal governments or the private sector. Therefore, this final rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act of 1995.

This final rule has been examined under Agency environmental regulations at 7 CFR part 1794. The Administrator has determined that this action is not a major Federal action significantly affecting the environment. Therefore, in accordance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ), an Environmental Impact Statement or Assessment is not required.

This rule contains no new reporting or recordkeeping burdens under OMB control number 0572-0127 that would require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

The USDA Rural Development Utilities Programs (the Agency) improve the quality of life in rural America by providing investment capital, in the form of loans and grants, for the deployment of rural telecommunications infrastructure. Financial assistance is provided to rural utilities; municipalities; commercial corporations; limited liability companies; public utility districts; Indian tribes; and cooperative, nonprofit, limited-dividend, or mutual associations. In order to achieve the goal of increasing economic opportunity in rural America, the Agency finances infrastructure that enables access to a seamless, nation-wide telecommunications network. With access to the same advanced telecommunications networks of its urban counterparts, especially broadband networks designed to accommodate distance learning, telework and telemedicine, rural America will see improving educational opportunities, health care, economies, safety and security, and ultimately higher employment. Of particular concern to the Agency are communities where broadband service is not available and where population densities are such that the cost of deployment to them is high and build-out of infrastructure is unlikely. The Agency is committed to ensuring rural communities will have access to affordable, reliable, advanced communications services, comparable to those available throughout the rest of the United States, to provide a healthy, safe and prosperous place to live and work.

The Community Connect Grant Program was started as a Pilot Program with the Fiscal Year 2002 budget and has been funded ever since through the appropriations process. After administering the program as a pilot program for two years, the Agency proposed rules for the program, and on July 28, 2004, the current rules were published, and the program was formally implemented. Since then more than 670 requests for grant funds totaling over $410 million were requested through Fiscal Year 2006. Of those requests, 129 were granted for $57 million to bring broadband service to 129 communities in 26 states and Puerto Rico.

While the Agency is proud of the results achieved in the Community Connect Grant Program thus far, it believes that the overall effectiveness of the program can be improved by modifying the existing rules. Through these changes, the Agency is increasing eligibility criteria to include communities that clearly meet the intent of the program. Specifically, this rule will: (1) Add the Rand McNally Atlas as a community locator; (2) change the income measure for eligibility from a national comparison to a state comparison; and (3) clarify the items that are eligible to be considered as operating expenses.

1. Adding the Rand McNally Atlas as a community locator. Currently the regulation states that a project must serve an incorporated or unincorporated town, village, or borough recognized in the latest decennial census of the Bureau of the Census to be eligible for funding. While this program has been successful in reaching much of rural America, the Agency recognizes that areas not identified in the 2000 census are excluded from funding. It is advisable to add another resource, updated more frequently than the decennial census and including communities not found in the census, to identify rural communities. The Agency therefore adds the Rand McNally Atlas as a resource to identify rural communities. It is anticipated that the addition of the Rand McNally Atlas as a community locator will increase the number of communities eligible for funding.

2. Change the income measure from a national comparison to a state comparison. Rural communities that would otherwise be eligible for grant funding have been previously excluded because their per capita personal income is relatively high in comparison to the national average. However, using the communities median household income compared to their state's median household income, these communities would qualify as economically challenged. Given the variable cost of living among the states, the comparison of state statistics is a better indicator of economic distress. The intent of this program is to allow all rural communities without broadband service facing economic hardship to fairly compete for funding. By comparing a community's median household income to their state's median household income, all rural economically challenged communities may compete fairly for funding.

3. Clarify the items that are eligible to be considered as operating expenses. Currently the regulation states that operating expenses incurred in providing broadband transmission service to critical facilities is an eligible purpose and that the salaries and administrative costs associated with these expenses may be limited by the Agency. Through the course of this program, applicants have not clearly understood what operating expenses are eligible. Many applicants have requested funds for ineligible operating expenses and had to be eliminated from the grant competition. To assist the applicant with better understanding what operating expenses are considered eligible, the Agency is specifically defining the eligible operating expenses.

Other corresponding changes were made throughout the regulation to reflect the addition of the Rand McNally Atlas and the change to state income measures.

The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA, therefore, finds that good cause exists for making these special conditions effective upon issuance.

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel about these special conditions. You can inspect the docket before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays.

We will consider all comments we receive by the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

If you want us to let you know we received your comments on these special conditions, send us a pre-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you.

On March 15, 2004, Centex Aerospace, Inc. applied for a supplemental type certificate for the Cirrus Model SR22 to install a full authority digital engine control in the Cirrus Model SR22. CenTex Aerospace, Inc. plans to install a Teledyne Continental Motors model IOF-550-N engine in the Cirrus Design Corporation Model SR-22 airplane. This type certified engine, approved under FAA Type Certificate E3SO; Revision 7, dated February 4, 2002, incorporates Full Authority Digital Electronic Controls (FADEC) fuel and ignition control system. Even though the engine control system is certificated as part of the engine and does not interface or share data with any of the airplane systems, the installation of an engine with an electronic control system requires evaluation due to critical environmental effects and possible effects on or by other airplane systems. For example, indirect effects of lightning, radio interference with other airplane electronic systems, shared engine and airplane data and power sources.

The Cirrus Model SR22 is currently approved under Type Certificate No. A00009CH. The Cirrus Model SR22 is a 3,400 pound single-engine, four-place, fixed-gear airplane powered by a 310 hp reciprocating engine. It has a conventional tractor configuration and uses composites for the structure. Some unique features of the SR-22 include sidestick controls and a ballistic recovery system, and a single combination throttle/propeller control lever.

Under the provisions of § 21.101, Centex Aerospace, Inc. must show that the Cirrus Model SR22, as changed, continues to meet the applicable provisions of the regulations incorporated by reference in Type Certificate No. A00009CH, or the applicable regulations in effect on the date of application for the change. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in Type Certificate No. A00009CH are as follows:

In addition, if the regulations incorporated by reference do not provide adequate standards regarding the change, the applicant must comply with certain regulations in effect on the date of application for the change.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 23, § 23.1309) do not contain adequate or appropriate safety standards for the Model SR22 because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

The FAA issues special conditions, as defined in § 11.19, under § 11.38 and they become part of the type certification basis under § 21.101.

Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would also apply to the other model.

The Centex Aerospace Inc. modified Cirrus Model SR22 will incorporate the following novel or unusual design features:

An engine that includes an electronic control system with Full Authority Digital Engine control (FADEC) capability.

Many advanced electronic systems are prone to either upsets or damage, or both, at energy levels lower than analog systems. The increasing use of high power radio frequency emitters mandates requirements for improved high intensity radiated fields (HIRF) protection for electrical and electronic equipment. Since the electronic engine control system used on the Centex Aerospace, Inc. modified Cirrus Design Corporation Model SR22 will perform critical functions, provisions for protection from the effects of HIRF should be considered and, if necessary, incorporated into the airplane design data. The FAA policy contained in Notice 8110.71, dated April 2, 1998, establishes the HIRF energy levels that airplanes will be exposed to in service. The guidelines set forth in this notice are the result of an Aircraft Certification Service review of existing policy on HIRF, in light of the ongoing work of the Aviation Rulemaking Advisory Committee (ARAC) Electromagnetic Effects Harmonization Working Group (EEHWG). The EEHWG adopted a set of HIRF environment levels in November 1997 that were agreed upon by the FAA, the Joint Aviation Authorities (JAA), and industry participants. As a result, the HIRF environments in this notice reflect the environment levels recommended by this working group. This notice states that a FADEC is an example of a system that should address the HIRF environments.

Even though the control system will be certificated as part of the engine, the installation of an engine with an electronic control system requires evaluation due to the possible effects on or by other airplane systems (e.g., radio interference with other airplane electronic systems, shared engine and airplane power sources). The regulatory requirements in 14 CFR part 23 for evaluating the installation of complex systems, including electronic systems, are contained in § 23.1309. However, when § 23.1309 was developed, the use of electronic control systems for engines was not envisioned; therefore, the § 23.1309 requirements were not applicable to systems certificated as part of the engine (reference § 23.1309(f)(1)). Also, electronic control systems often require inputs from airplane data and power sources and outputs to other airplane systems (e.g., automated cockpit powerplant controls such as mixture setting). Although the parts of the system that are not certificated with the engine could be evaluated using the criteria of § 23.1309, the integral nature of systems such as these makes it unfeasible to evaluate the airplane portion of the system without including the engine portion of the system. However, § 23.1309(f)(1) again prevents complete evaluation of the installed airplane system since evaluation of the engine system's effects is not required.

Therefore, special conditions are issued for the Centex Aerospace, Inc. modified Cirrus Design Corporation Model SR22 to provide HIRF protection.

As discussed above, these special conditions are applicable to the Centex Aerospace, Inc. modified Cirrus Design Corporation Model SR22. Should Centex Aerospace, Inc. apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. A00009CH, to incorporate the same novel or unusual design feature, the special conditions would apply to that model as well.

This action affects only certain novel or unusual design features on one model of airplane. 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. Therefore, because a delay would significantly affect the certification of the airplane, which is imminent, 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.

Discussion

On April 20, 2007, we issued a proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) to include an AD that would apply to M7 Aerospace LP SA226 and SA227 series airplanes equipped with certain pitch trim actuators. This proposal was published in the Federal Register as a notice of proposed rulemaking (NPRM) on April 30, 2007 (72 FR 21171). The NPRM proposed to supersede AD 98-19-15 R1 and AD 2000-03-17 with a new AD that would retain all of the actions of the previously referenced ADs but limit the part numbers of the pitch trim actuators that can be used for replacement. The NPRM also proposed placing a life limit on Barber-Coleman pitch trim actuators P/N 27-19008-001, P/N 27-19008-002, P/N 27-19008-004, and P/N 27-19008-005. The NPRM proposed to require you to use the service information described previously to perform these actions.

We provided the public the opportunity to participate in developing this AD. We received no comments on the proposal or on the determination of the cost to the public.

We have carefully reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial corrections. We have determined that these minor corrections:

• Are consistent with the intent that was proposed in the NPRM for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM.

We estimate that this AD affects 307 airplanes in the U.S. registry.

This AD requires pitch trim actuators to have a combination of inspections, overhaul, and/or replacement. We have presented the fleet cost as the lowest cost based on all airplanes needing the inspection and the highest cost based on all airplanes needing the overhaul. The actual fleet cost will be somewhere between the lowest and highest fleet cost presented. We have no way of determining the number of airplanes needing replacement. (See below for airplane replacement cost.)

We estimate the following costs to do the inspection or overhaul:

We estimate the following costs to do any necessary replacements that are required through the actions of this AD. We have no way of determining the number of airplanes that may need this replacement:

The replacement estimate is based on replacing the pitch trim actuator with a new Simmonds-Precision P/N DL5040M8 pitch trim actuator. If the pitch trim actuator is replaced with a different P/N FAA-approved pitch trim actuator or a zero-timed FAA-approved pitch trim actuator the cost to the owner/operator could be less.

The estimated costs represented in the above actions include the costs associated with AD 98-19-15 R1, AD 2000-03-17, and the costs of this AD. The added cost impact this AD imposes upon an owner/operator over that already required by AD 98-19-15 R1 and AD 2000-03-17 is the eventual replacement of the pitch trim actuator if the airplane currently has installed a Barber-Coleman pitch trim actuator P/N 27-19008-001, P/N 27-19008-002, P/N 27-19008-004, or P/N 27-19008-005.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

We are issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701, “General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this AD.

We have determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

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

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

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and

3. Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

We prepared a summary of the costs to comply with this AD (and other information as included in the Regulatory Evaluation) and placed it in the AD Docket. You may get a copy of this summary by sending a request to us at the address listed under ADDRESSES . Include “Docket No. FAA-2006-25927; Directorate Identifier 2006-CE-52-AD” in your request.

In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976, the date of enactment of the Medical Device Amendments of 1976 (the amendments), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless the device is classified or reclassified into class I or class II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807) of FDA's regulations.

Section 513(f)(2) of the act provides that any person who submits a premarket notification under section 510(k) of the act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device in class III under section 513(f)(1) of the act, request FDA to classify the device under the criteria set forth in section 513(a)(1) of the act. FDA shall, within 60 days of receiving such a request, classify the device by written order. This classification shall be the initial classification of the device type. Within 30 days after the issuance of an order classifying the device, FDA will publish a notice in the Federal Register announcing such classification (section 513(f)(2) of the act).

In accordance with section 513(f)(1) of the act, FDA issued an order on November 7, 2005, classifying the absorbable poly(hydroxybutyrate) surgical suture produced by recombinant DNA technology in class III because it was not substantially equivalent to a device that was introduced or delivered for introduction into interstate commerce for commercial distribution before May 28, 1976, or a device that was subsequently reclassified into class I or class II. On May 12, 2006, after Tepha, Inc., had received CDRH's response to an April 7, 2006, appeal from the company, Tepha, Inc., submitted a petition under section 513(f)(2) of the act requesting classification of the device. The manufacturer recommended that the device be classified into class II (Ref. 1).

In accordance with section 513(f)(2) of the act, FDA reviewed the petition in order to classify the device under the criteria for classification set forth in 513(a)(1) of the act. Devices are to be classified into class II if general controls, by themselves, are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the petition, FDA determined that the device type, absorbable poly(hydroxybutyrate) surgical suture produced by recombinant DNA technology, can be classified into class II because special controls, in addition to general controls, are adequate to provide reasonable assurance of the safety and effectiveness of the device and that there is sufficient information to establish special controls to provide such assurance.

The device type is assigned the generic name, “absorbable poly(hydroxybutyrate) surgical suture produced by recombinant DNA technology,” and is identified as an absorbable surgical suture made of material isolated from prokaryotic cells produced by recombinant DNA technology. The device is intended for use in general soft tissue approximation and ligation.

FDA has identified the risks to health associated with this type of device as: Improper selection and use, suture breakage, adverse tissue reaction, and infection. The special control FDA is establishing is a special controls guidance document that FDA believes will aid in mitigating the potential risks to health, as described in table 1 of this document.

FDA believes that special controls, in addition to general controls, address the risks to health identified above and provide reasonable assurances of the safety and effectiveness of the device type. Thus, on February 8, 2007, FDA issued an order to the petitioner classifying the device into class II. FDA is codifying this classification at 21 CFR 878.4494.

Following the effective date of the final classification rule, manufacturers will need to address the issues covered in the special controls guidance. However, the manufacturer need only show that its device meets the recommendations of the guidance or in some other way provides equivalent assurance of safety and effectiveness.

Section 510(m) of the act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k) of the act, if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, however, FDA has determined that premarket review of the requirements as outlined in § 807.87 will provide reasonable assurance of the safety and effectiveness of the device. Thus, persons who intend to market this type of device must submit to FDA a premarket notification, prior to marketing the device, which contains information about the device they intend to market.

The agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Thus, neither an environmental assessment nor an environmental impact statement is required.

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

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because classification of this device into class II will relieve manufacturers of the cost of complying with the premarket approval requirements of section 515 of the act (21 U.S.C. 360e), and may permit small potential competitors to enter the marketplace by lowering their costs, the agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $122 million, using the most current (2005) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

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

This final rule contains no collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 is not required. The guidance for this final rule references previously approved collections of information found in FDA regulations. These collections of information are subject to review by the OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

The following reference has been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday.

This document contains final regulations that amend 26 CFR part 1 by modifying and clarifying the rules relating to the disclosure of reportable transactions under section 6011. This document also contains final regulations that amend 26 CFR parts 20, 25, 31, 53, 54, and 56 by modifying the rules for purposes of estate, gift, employment, and pension and exempt organizations excise taxes that require the disclosure of listed transactions by certain taxpayers on their Federal tax returns under section 6011.

The American Jobs Creation Act of 2004, Public Law 108-357, (118 Stat. 1418), (AJCA) was enacted on October 22, 2004. The AJCA revised sections 6111 and 6112, thereby necessitating changes to the rules under section 6011. On November 1, 2006, the IRS and Treasury Department issued a notice of proposed rulemaking and temporary and final regulations under sections 6011, 6111, and 6112 (REG-103038-05, REG-103039-05, REG-103043-05, TD 9295) (the November 2006 regulations). The November 2006 regulations were published in the Federal Register (71 FR 64488, 71 FR 64496, 71 FR 64501, 71 FR 64458) on November 2, 2006.

The IRS and Treasury Department received written public comments responding to the proposed regulations and held a public hearing regarding the proposed rules on March 20, 2007. After consideration of the comments received and the comments made at the hearing, the proposed regulations are adopted as revised by this Treasury decision. These final regulations generally retain the provisions of the proposed regulations but include some modifications based on the recommendations made in the public comments.

Nine written comments were received in response to the NPRM. All comments were considered and are available for public inspection upon request.

The proposed regulations identified transactions of interest as a new reportable transaction category. As stated in the preamble to the proposed regulations, a transaction of interest is a transaction that the IRS and Treasury Department believe has a potential for tax avoidance or evasion, but for which the IRS and Treasury Department lack enough information to determine whether the transaction should be identified specifically as a tax avoidance transaction. These final regulations adopt the language in the proposed regulations regarding transactions of interest without modification. This language provides that a transaction of interest is a transaction that is the same as or substantially similar to one of the types of transactions that the IRS has identified by notice, regulation, or other form of published guidance as a transaction of interest. These final regulations also retain the language in the proposed regulations that provide that a taxpayer's participation in a transaction of interest will be determined in the published guidance which identifies the transaction of interest.

Several commentators requested more specificity and guidance on the definition of what constitutes a transaction of interest. Specifically, the commentators recommended that the term “participation,” for purposes of determining whether a taxpayer participated in a transaction of interest, be defined in the regulations rather than in the published guidance identifying the transaction of interest. The commentators also requested that the published guidance describing a transaction of interest be crafted in a clear and specific manner, thereby enabling taxpayers to determine whether they participated in a transaction of interest. One commentator also recommended providing a list of factors in the regulations that the IRS would consider when identifying a transaction of interest. Further, several commentators requested that the IRS and Treasury Department provide notice to taxpayers that the IRS and Treasury Department are considering designating a particular transaction as a transaction of interest and requesting comments prior to publishing guidance identifying a transaction as a transaction of interest.

The IRS and Treasury Department believe that providing a specific definition for the transactions of interest category in the regulations would unduly limit the IRS and Treasury Department's ability to identify transactions that have the potential for tax avoidance or evasion. In order to maintain flexibility in identifying a transaction of interest, the description of a transaction of interest will be provided in the published guidance that identifies the transaction of interest. The published guidance identifying a transaction of interest will provide taxpayers with the information necessary to determine whether a particular transaction is the same as or substantially similar to the transaction described in the published guidance and to determine who participated in the transaction.

The IRS and Treasury Department do not believe that the regulations should be amended to include language requiring the IRS and Treasury Department to provide advance notice for transactions of interest as suggested by the commentators. However, the IRS and Treasury Department may choose to publish advance notice and request comments in certain circumstances. The determination of whether to provide advance notice and a request for comments will be made on a transaction by transaction basis.

The proposed regulations also provide that upon publication of the final regulations, the transactions of interest category of reportable transaction will apply to transactions entered into on or after November 2, 2006. These final regulations adopt the effective date stated in the proposed regulations.

The preamble to the proposed regulations provides that when the IRS and Treasury Department have gathered enough information to make an informed decision as to whether a particular transaction of interest is a tax avoidance type of transaction, the IRS and Treasury Department may take one or more actions, including removing the transaction from the transaction of interest category in published guidance, designating the transaction as a listed transaction, or providing a new category of reportable transaction. Several commentators recommended that the period during which a transaction may be considered a transaction of interest be limited to twenty-four months, unless the IRS and Treasury Department affirmatively act to extend the designation for an additional twenty-four months with no limit on the number of permissible extensions. One commentator suggested that the length of the period be limited to twenty-four months, with no extensions.

The IRS and Treasury Department believe that limiting the length of time a transaction may be designated a transaction of interest would be contrary to the purpose of the transactions of interest category of reportable transaction and would hinder the ability of the IRS and Treasury Department to efficiently and effectively gather the necessary information to determine whether a particular transaction is a tax avoidance type of transaction. Accordingly, these final regulations do not adopt these suggestions.

The proposed regulations provide that if a taxpayer who is a partner in a partnership, a shareholder in an S corporation, or a beneficiary of a trust receives a timely Schedule K-1 less than 10 calendar days before the due date of the taxpayer's return (including extensions) and, based on receipt of the timely Schedule K-1, the taxpayer determines that the taxpayer participated in a reportable transaction, the disclosure statement will not be considered late if the taxpayer discloses the reportable transaction by filing a disclosure statement with the Office of Tax Shelter Analysis (OTSA) within 45 calendar days after the due date of the taxpayer's return (including extensions). Several commentators requested that the proposed regulations not limit relief to taxpayers who receive a timely Schedule K-1 before the due date of their return. Others believed the 45 day disclosure period was too short. One commentator recommended that the provision apply to late disclosures that were inadvertent or non-abusive. One commentator recommended that the 10 day period be extended to 30 days and the 45 day disclosure period be extended to 90 days. With respect to the date the disclosure period begins, two commentators commented that the disclosure period should begin on the date the taxpayer receives the timely Schedule K-1.

The IRS and Treasury Department agree that the 45 day disclosure period should be extended. These final regulations extend the disclosure period to 60 calendar days. The IRS and Treasury Department believe that this additional period will provide taxpayers with ample time to review the entity's return and comply with any administrative and regulatory requirements before filing their disclosure statement. It should be noted that if a taxpayer receives a timely Schedule K-1 after the due date of the taxpayer's return (including extensions), the taxpayer will have received the timely Schedule K-1 less than 10 calendar days before the due date of the return and will have 60 calendar days after the due date of the taxpayer's return (including extensions) to file the disclosure statement.

Several commentators have suggested that the disclosure obligations of owners of a pass-through entity that participates in a reportable transaction be amended to provide that only certain owners of the pass-through entity are required to disclose their participation in the reportable transaction. One commentator suggested that an owner of a pass-through entity should be removed from this disclosure obligation when (1) the owner did not know and should not have known that the pass-through entity engaged in the reportable transaction; and (2) the pass-through entity failed to disclose timely its participation in the reportable transaction on its return to OTSA. The commentator also recommends that if the owner knew or reasonably should have known of the pass-through entity's participation in the reportable transaction, the owner should be required to file a disclosure statement even if the pass-through entity did not disclose the transaction to the owner. A different commentator suggested that an owner of a pass-through entity not be required to disclose the owner's participation in a reportable transaction, even if the owner knew or should have known of the pass-through entity's participation in the reportable transaction.

Several commentators also suggested adopting a de minimis ownership rule exempting taxpayers owning less than a certain percentage of the pass-through entity from the disclosure requirements. One commentator suggested exempting owners of 5 percent or less of the outstanding interests in the pass-through entity that participates in a reportable transaction.

The IRS and Treasury Department are aware that certain partners, shareholders, and beneficiaries may file income tax returns that reflect the tax consequences, tax benefits, or tax strategy of a reportable transaction even though the taxpayer is unaware that the pass-through entity engaged in the reportable transaction. The IRS and Treasury Department recognize the concerns of the commentators. In light of the potential monetary penalties for failing to disclose participation in a reportable transaction and in order to maintain flexibility in determining who should be subject to the disclosure requirements for a particular transaction, these final regulations amend the proposed regulations to add language providing flexibility to the IRS and Treasury Department to issue other provisions for disclosure under § 1.6011-4 in published guidance.

Under the proposed regulations if a transaction becomes a listed transaction or a transaction of interest after the filing of a taxpayer's tax return (including an amended return) reflecting the taxpayer's participation in the listed transaction or transaction of interest and before the end of the period of limitations for assessment of tax for any taxable year in which the taxpayer participated in the listed transaction or transaction of interest, then a disclosure statement must be filed, regardless of whether the taxpayer participated in the listed transaction or transaction of interest in the year the transaction became a listed transaction or a transaction of interest, with OTSA within 60 calendar days after the date on which the transaction became a listed transaction or a transaction of interest. The proposed regulations also provide that the Commissioner may determine the time for disclosure of listed transactions and transactions of interest in the published guidance identifying the transaction.

Many commentators suggested that the current rule, which requires the disclosure of subsequently identified listed transactions on the taxpayer's next filed tax return be retained in light of the potential monetary penalties and potential administrative burden due to the shortened disclosure period. One commentator recommended that the taxpayer be required to file the disclosure statement by the later of the taxpayer's next filed tax return or within 60 calendar days after the date on which the transaction becomes a listed transaction or transaction of interest.

A critical factor in the ability to analyze a particular transaction is the ability to have the necessary information available in a timely manner. Thus, requiring taxpayers to file a disclosure statement with OTSA in a timely manner is essential. Because the IRS and Treasury Department recognize that compliance within 60 calendar days may be burdensome in certain circumstances, the proposed regulations are amended to provide that taxpayers have 90 calendar days to disclose their participation in a subsequently identified listed transaction or transaction of interest.

Due to changes in section 901 and based on comments received, the IRS and Treasury Department have determined that the brief asset holding period reportable transaction category is no longer necessary. These final regulations therefore remove this category as a reportable transaction category.

Before the enactment of the AJCA, section 6111 provided that tax shelter organizers were required to provide investors in tax shelters the registration number for the tax shelter. Section 301.6111-1T, Q&A 55, requires investors to report the registration number of the tax shelter to the IRS on Form 8271, “Investor Reporting of Tax Shelter Registration Number”, and attach the Form 8271 to any return on which any deduction, loss, credit, or other tax benefit attributable to the tax shelter is claimed. Because only a few investors must still file Form 8271 for pre-AJCA section 6111 tax shelters and because the IRS already is aware of these transactions, the IRS and Treasury Department have decided that investors are no longer required to file Forms 8271 otherwise due on or after August 3, 2007. The Form 8271 will be obsoleted. Taxpayers required to file Form 8886, “Reportable Transaction Disclosure Statement”, pursuant to § 1.6011-4(d), and Form 8271 with respect to the same transaction only need to report the registration number on Form 8886.

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 also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 35) do not apply. The disclosure statement referenced in these regulations has been made available for public comment and any update to the disclosure statement will be made available for public comment in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal authors of these regulations are Charles D. Wien, Michael H. Beker, and Tolsun N. Waddle, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development.

Paperwork Reduction Act

The collections of information contained in this final regulation have been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1686. Responses to these collections of information are mandatory. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number assigned by the Office of Management and Budget.

The estimated annual burden per recordkeeper for the collection of information in § 301.6112-1 is 100 hours and the estimated number of recordkeepers is 500.

Comments concerning the accuracy of these burden estimates and suggestions for reducing these burdens should be sent to Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224, and to the Office of Management and Budget, Attn: Desk Officer for the Department of Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503.

Books and records relating to these collections of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax information are confidential, as required by 26 U.S.C. 6103.

This document contains final regulations that amend 26 CFR part 301 by amending the rules relating to the list maintenance requirements of material advisors with respect to reportable transactions under section 6112.

The American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat. 1418), (AJCA) was enacted on October 22, 2004. Section 815 of the AJCA amended section 6112 to provide that each material advisor (as defined in section 6111, as amended by the AJCA) with respect to any reportable transaction is required to maintain a list (in such manner as the Secretary may by regulations prescribe) identifying each person with respect to whom the advisor acted as a material advisor with respect to the transaction, and containing other information as the Secretary may by regulations require. Section 815 of the AJCA is effective for transactions with respect to which material aid, assistance, or advice is provided after October 22, 2004. Prior to the amendments to section 6111 made by the AJCA, the definition of material advisor was in § 301.6112-1 of the Procedure and Administration Regulations.

On November 1, 2006, the IRS and Treasury Department issued a notice of proposed rulemaking and temporary and final regulations under sections 6011, 6111, and 6112 (REG-103038-05, REG-103039-05, REG-103043-05, TD 9295) (the November 2006 regulations). The November 2006 regulations were published in the Federal Register (71 FR 64488, 71 FR 64496, 71 FR 64501, 71 FR 64458) on November 2, 2006.

The IRS and Treasury Department received written public comments responding to the proposed regulations and held a public hearing regarding the proposed rules on March 20, 2007. After consideration of the comments received and comments made at the hearing, the proposed regulations are adopted as revised by this Treasury decision. These final regulations generally retain the provisions of the proposed regulations but include some modifications based on recommendations in the public comments.

The proposed regulations provided that each material advisor must prepare and maintain a list for each reportable transaction. The proposed regulations also provided that each list must include three components: An itemized statement, a description of the transaction, and documents. Further, the proposed regulations provided that each material advisor responsible for maintaining a list must, upon written request by the IRS, make each component of the list available to the IRS by furnishing each component of the list to the IRS within 20 business days from the day on which the request is provided. The proposed regulations stated that each component of the list must be furnished to the IRS in a form that enables the IRS to determine without undue delay or difficulty the information required to be on the list. If any component of the list is not in such form, the material advisor will not be considered to have complied with the list maintenance provisions of section 6112 and the regulations thereunder.

Several commentators recommended that the proposed regulations should provide the IRS with flexibility to determine, based on the amount of information required, a production schedule that will be sufficient to avoid the imposition of penalties. Two commentators suggested providing a phased disclosure procedure. One commentator recommended that the 20 business days begin after the advisor had an adequate opportunity to gather the required information. Another commentator recommended amending the proposed regulations to provide a substantial compliance standard.

The IRS and Treasury Department believe that providing the IRS the ability to determine an alternative production schedule will benefit both taxpayers and the IRS. These final regulations remove the language regarding the period for furnishing a list or the components of the list to the IRS because that period will be addressed in forthcoming published guidance under section 6708. In addition, an alternative schedule for furnishing the list or the components of the list will be addressed in published guidance under section 6708.

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 also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that the collection of information in these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based upon the fact that most of the information is already required to be reported under the current regulations; the clarifications and new information required by the final regulations add little or no new burden to the existing requirements. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal authors of these regulations are Charles D. Wien, Michael H. Beker, and Tolsun N. Waddle, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development.

Background

This document contains final regulations that amend 26 CFR part 301 by providing rules relating to the disclosure of reportable transactions by material advisors under section 6111.

The American Jobs Creation Act of 2004, Public Law 108-357 (118 Stat. 1418), (AJCA) was enacted on October 22, 2004. Section 815 of the AJCA amended section 6111 to require each material advisor with respect to any reportable transaction to make a return (in such form as the Secretary may prescribe) setting forth: (1) Information identifying and describing the transaction; (2) information describing any potential tax benefits expected to result from the transaction; and (3) such other information as the Secretary may prescribe. Section 6111(a), as amended, also provides that the return must be filed not later than the date specified by the Secretary. Section 6111(b)(1), as amended, provides a definition for the term material advisor and includes as part of that definition a requirement that the material advisor derive certain threshold amounts of gross income that the Secretary may prescribe. The AJCA amendments to section 6111 also authorize the Secretary to prescribe regulations that provide: (1) That only one person shall be required to meet the requirements of section 6111(a) in cases in which two or more persons would otherwise be required to meet such requirements; (2) exemptions from the requirements of section 6111; and (3) rules as may be necessary or appropriate to carry out the purposes of section 6111. Section 815 of the AJCA is effective for transactions with respect to which material aid, assistance, or advice is provided after October 22, 2004.

In response to the AJCA, the IRS and Treasury Department issued interim guidance on section 6111 in Notice 2004-80 (2004-2 CB 963); Notice 2005-17 (2005-1 CB 606); Notice 2005-22 (2005-1 CB 756); and Notice 2006-6 (2006-5 IRB 385) (see § 601.601(d)(2)). On November 1, 2006, the IRS and Treasury Department issued a notice of proposed rulemaking and temporary and final regulations under sections 6011, 6111, and 6112 (REG-103038-05, REG-103039-05, REG-103043-05, TD 9295) (the November 2006 regulations). The November 2006 regulations were published in the Federal Register (71 FR 64488, 71 FR 64496, 71 FR 64501, 71 FR 64458) on November 2, 2006.

The IRS and Treasury Department received written public comments responding to the proposed regulations and held a public hearing regarding the proposed rules on March 20, 2007. After consideration of the comments received and comments made at the hearing, the proposed regulations are adopted as revised by this Treasury decision. These final regulations generally retain the provisions of the proposed regulations but include some modifications based on recommendations in the public comments.

Nine written comments were received in response to the NPRM. All comments were considered and are available for public inspection upon request.

The proposed regulations provide that a material advisor must provide a reportable transaction number to all taxpayers and material advisors to whom the material advisor makes or provides tax statements. Many commentators commented that the requirement to provide the reportable transaction number to all taxpayers and material advisors to whom the material advisor makes or provides tax statements is overly broad and suggested, instead, that the reportable transaction number only be required to be furnished to those for whom the taxpayer acted as a material advisor. One commentator recommended that the regulation be amended to remove the obligation to provide a reportable transaction number. Another commentator recommended that a material advisor should be required to provide the reportable transaction number to taxpayers only in the case of marketed transactions. The commentator also commented that in a purely one-on-one, non-abusive transaction, the use of the reportable transaction number may infringe upon the attorney-client relationship.

The IRS and Treasury Department attempted to balance the need for disclosure of reportable transactions with the resulting burden imposed upon taxpayers. The IRS and Treasury Department do not believe that requiring a material advisor to provide a reportable transaction number to certain taxpayers and material advisors imposes an undue burden upon taxpayers in light of the benefit to tax administration. However, the IRS and Treasury Department recognize that requiring the reportable transaction number to be provided to all persons for whom the material advisor made a tax statement may be unnecessary. Therefore, these final regulations state that a material advisor is required to provide a reportable transaction number to all taxpayers and material advisors for whom the material advisor acts as a material advisor.

The proposed regulations provide, in general, that a lower threshold amount of gross income applies in the case of a reportable transaction when substantially all of the tax benefits are provided to natural persons (looking through any partnerships, S corporations, or trusts). The IRS and Treasury Department received comments asking for clarification of the term “substantially all of the tax benefits.”

The final regulations provide that the determination of whether the lower threshold amount applies is based on the facts and circumstances. Generally, unless the facts and circumstances prove otherwise, if 70 percent or more of the tax benefits from a reportable transaction are provided to natural persons (looking through any partnerships, S corporations, or trusts) then substantially all of the tax benefits will be considered to be provided to natural persons.

The proposed regulations provide that a material advisor who is required to file a disclosure statement must also disclose the identity of other material advisors. Two commentators recommended that these final regulations be amended to provide that a material advisor must provide the identity of other material advisors only if the material advisor has actual knowledge of such other material advisors.

After carefully considering the recommendation by the commentators, these final regulations provide that a material advisor must provide the identities of any material advisor(s) who the material advisor knows or has reason to know acted as a material advisor with respect to the transaction.

The proposed regulations provide that if more than one material advisor is required to disclose a reportable transaction under section 6111, the material advisors may designate by written agreement a single material advisor to disclose the transaction. The designation of one material advisor to disclose the transaction does not relieve the other material advisors of their obligation to disclose the transaction to the IRS in accordance with section 6111, if the designated material advisor fails to disclose the transaction to the IRS in a timely manner. One commentator recommended that a good faith participation in a designation agreement be treated as if the non-designated material advisor has satisfied the advisor's obligations under section 6111 and/or section 6112. The commentator also suggested that if the previous recommendation is not adopted, that these final regulations prohibit designation agreements entirely.

These final regulations do not adopt the recommendation of the commentator. The purpose of the designation agreement language is to reduce the burden on material advisors in complying with the disclosure and list maintenance regulations while balancing the need of the IRS and Treasury Department to receive the necessary information described in sections 6111 and 6112. The designation agreement allows material advisors, if they choose, to have one material advisor comply with the disclosure and list maintenance obligations rather than multiple advisors maintaining duplicative lists. Inherent in the language is the assumption that the designated material advisor will comply with the requirements. Absolving the non-designated material advisors from the obligations listed in sections 6111 and 6112 for good faith designation agreements would require the IRS to determine whether the designation agreement was entered into in good faith and would increase the burdens on tax administration.

Before the enactment of the AJCA, section 6111 provided that tax shelter organizers were required to provide investors in tax shelters the registration number for the tax shelter. Section 301.6111-1T, Q&A 55, requires investors to report the registration number of the tax shelter to the IRS on Form 8271, “Investor Reporting of Tax Shelter Registration Number”, and attach the Form 8271 to any return on which any deduction, loss, credit, or other tax benefit attributable to the tax shelter is claimed. Because only a few investors must still file Form 8271 for pre-AJCA section 6111 tax shelters and because the IRS already is aware of these transactions, the IRS and Treasury Department have decided that investors are no longer required to file Forms 8271 otherwise due on or after August 3, 2007. The Form 8271 will be obsoleted. However, these final regulations continue to require that material advisors must provide the reportable transaction number to all taxpayers and material advisors for whom the material advisor acts as a material advisor.

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 also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the provisions of the Regulatory Flexibility Act (5 U.S.C. chapter 35) do not apply. The return referenced in these regulations will be made available for public comment in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal authors of these regulations are Charles D. Wien, Michael H. Beker, and Tolsun N. Waddle, Office of the Associate Chief Counsel (Passthroughs and Special Industries). However, other personnel from the IRS and Treasury Department participated in their development.

The Administrative Procedure Act, as amended by the Freedom of Information Act, requires publication of certain policies and procedures and other information concerning the Department of the Army in the Federal Register . The policies and procedures covered by this part fall into that category. The Army has changed the publications and policies, thus requiring the rules in the Federal Register to be updated. The Department of the Army published a proposed rule in the Federal Register on May 10, 2007 (72 FR 26576) with the comment period ending on July 9, 2007. The Department of the Army received no comments on the proposed rule.

The Department of the Army has determined that the Regulatory Flexibility Act does not apply because the rule does not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601-612.

The Department of the Army has determined that the Unfunded Mandates Reform Act does not apply because the rule does not include a mandate that may result in estimated costs to State, local, or tribal governments in the aggregate, or the private sector, of $100 million or more.

The Department of the Army has determined that the National Environmental Policy Act does not apply because the rule does not have an adverse impact on the environment.

The Department of the Army has determined that the Paperwork Reduction Act does not apply because the rule does not involve collection of information from the public.

The Department of the Army has determined that Executive Order 12630 does not apply because the rule does not impair private property rights.

The Department of the Army has determined that, according to the criteria defined in Executive Order 12866, this rule is not a significant regulatory action. As such, the rule is not subject to Office of Management and Budget review under section 6(a)(3) of the Executive Order.

The Department of the Army has determined that, according to the criteria defined in Executive Order 13045, this rule does not apply.

The Department of the Army has determined that, according to the criteria defined in Executive Order 13132, this rule does not apply because it will not have a substantial effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

Regulatory Information

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B) and 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for not publishing a NPRM and for making this rule effective less than 30 days after publication in the Federal Register . Publishing a NPRM would be contrary to public interest since immediate action is necessary to ensure the safety of commercial and recreational vessels in the vicinity of the events on the date and times this rule will be in effect. If normal notice and comment procedures were followed, this rule would not become effective until after the date of the event.

On July 2, 2001, the Coast Guard published a final rule (66 FR 34822) modifying the regulations in 33 CFR 100.1301 for the safe execution of the Seattle Seafair Unlimited Hydroplane races on the waters of Lake Washington. This special local regulation (SLR) provides for a regulated area to protect spectators while providing unobstructed vessel traffic lanes to ensure timely arrival of emergency response craft. Movements are regulated for all vessels in the area as described under 33 CFR 100.1301 or unless otherwise regulated by the COTP or his designee. This temporary final rule is required to increase the length of time affected by the regulation.

For more than 50 years Seafair on Lake Washington has been a Pacific Northwest tradition, entertaining millions of people over that period. However, this entertaining event involves risks to both spectators and participants. During Seafair, the marine congestion associated with the number of boats, swimmers, and spectators on shore challenges even the most experienced seaman. These conditions necessitate the maintenance of a regulated area to protect spectators while providing unobstructed vessel traffic lanes to ensure timely arrival of emergency response craft.

The Coast Guard is establishing this regulation to protect vessels and persons from the hazards associated with the fallout of burning embers that will be generated by the fireworks display in this year's Seafair and to promote safety for spectators and participants through consistency in enforcement periods. The regulated area is also intended to protect boaters from the hazards associated with excessive vessel congestion associated with Seafair's activities.

This rule will control the movement of all vessels in a regulated area on Lake Washington as indicated in section 2 of this Temporary Final Rule. This rule adds four hours to the effective time period each day of enforcement of the existing SLR to accommodate the addition of a fireworks display for this year's Seafair and to promote safety for spectators and participants through consistency in enforcement periods.

The Coast Guard, through this action, intends to promote the safety of personnel and vessels in the area. The regulated areas will be enforced by the U.S. Coast Guard. The Captain of the Port may be assisted in the enforcement of the regulations by other federal, state, or local agencies.

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

We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation is unnecessary. This change slightly modifies existing safety regulations and should not effect the economic activities of any Seafair participant or spectator. The regulation is established for the benefit and safety of the recreational boating public, and any negative recreational boating impact is offset by the benefits of allowing the fireworks event to occur. This rule is effective from 8 p.m. until 11:59 p.m. on August 2-5, 2007. For the above reasons, the Coast Guard does not anticipate any significant economic impact.

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

This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit this portion of Lake Washington during the time this regulation is in effect. The regulations will not have a significant economic impact due to its short duration and small area. Because the impacts of this rule are expected to be so minimal, the Coast Guard certifies under 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) that this temporary rule will not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action by the Coast Guard.

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

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

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) governs the issuance of Federal regulations that require unfunded mandates. An unfunded mandate is a regulation that requires a State, local, or tribal government or the private sector to incur direct costs without the Federal Government's having first provided the funds to pay those costs. This rule would not impose an unfunded mandate.

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

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

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

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

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

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

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

We have analyzed this rule under Commandant Instruction M16475.1D, and Department of Homeland Security Management Directive 5100.1, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that there are not factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(h), of the Instruction, from further environmental documentation. Under figure 2-1, paragraph (34)(h), of the Instruction, an “Environmental Analysis Check List” and a “Categorical Exclusion Determination” are not required for this rule.

This rule provides temporary regulatory relief to states, tribes, and local governments with “authorized programs” as defined in 40 Code of Federal Regulations (CFR) § 3.3. Any such authorized program that operates an “existing electronic document receiving system” as defined in 40 CFR Section 3.3 will have an additional year to submit an application to revise or modify its authorized program to meet the requirements of 40 CFR part 3. Specifically, this direct final rule amends 40 CFR 3.1000(a)(3) by extending the October 13, 2007, deadline to October 13, 2008.

EPA is publishing this rule without a prior proposed rule because the Agency views this as a noncontroversial action and anticipates no adverse comment. This action merely extends the current due date for submitting applications under CROMERR for authorized programs with existing electronic document receiving systems, and imposes no additional requirements beyond those imposed by the underlying final rule (70 FR 59848, October 13, 2007). Based on what EPA has learned in our consultations with states, the Agency does not believe that extending the current deadline by one year for authorized programs to submit their applications to EPA for approval of their existing electronic reporting systems will negatively impact compliance with CROMERR and will benefit both authorized programs and EPA.

Additionally, in the “Proposed Rules” section of today's Federal Register , EPA is publishing a separate proposed rule to consider adoption of the time extension contained in this direct final rule should the Agency receive relevant adverse comments regarding this direct final rule. EPA will not institute a second comment period on this action. Any parties interested in commenting on this direct final rule or the proposed rule listed elsewhere in today's Federal Register must do so at this time. For further information about commenting on this rule, see the ADDRESSES section of this document.

If EPA receives relevant adverse comment, the Agency will publish a timely withdrawal in the Federal Register informing the public that this direct final rule will not take effect. EPA will address all public comments in any subsequent final rule based on the proposed rule.

This action will affect states, tribes, and local governments that have an authorized program as defined in 40 CFR 3.3 and also have an existing electronic document receiving system, as defined in 40 CFR 3.3. For purposes of this rulemaking, the term “state” includes the District of Columbia and the United States territories, as specified in the applicable statutes. That is, the term “state” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of Northern Marina Islands, and the Trust Territory of the Pacific Islands, depending on the statute.

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

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

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

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

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

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

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

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

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

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

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

This action is not a “significant regulatory action” under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO. This direct final rule merely extends the regulatory schedule for submitting applications under CROMERR for authorized programs with existing electronic document receiving systems. There are no costs associated with this rule.

This action does not impose any information collection burden. This action merely extends the current due date for submitting applications under CROMERR for authorized programs with existing electronic document receiving systems, and imposes no additional requirements. However, the Office of Management and Budget (OMB) has previously approved the information collection requirements contained in the existing regulations (40 CFR part 3) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned OMB control number 2025-0003, EPA ICR number 2002.03. A copy of the OMB approved Information Collection Request (ICR) may be obtained from Susan Auby, Collection Strategies Division; U.S. Environmental Protection Agency (2822T); 1200 Pennsylvania Ave., NW., Washington, DC 20460 or by calling (202) 566-1672. The ICR is also available electronically in http://www.regulations.gov .

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

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

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

For purposes of assessing the impacts of this final rule on small entities, a small entity is defined as: (1) A small business that meets the definition for small businesses based on SBA size standards at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000 (Under the RFA definition, States and tribal governments are not considered small governmental jurisdictions.); and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the possibility of economic impacts of today's final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. The small entities directly regulated by this direct final rule are small governmental jurisdictions. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on small entities.” Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

This direct final rule merely extends the current regulatory schedule for submitting applications under CROMERR for authorized programs with existing electronic document receiving systems. EPA has therefore concluded that today's final rule will relieve regulatory burden for all affected small entities.

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

Today's rule contains no federal mandates (under the regulatory provisions of Title II of the UMRA) for state, tribe, or local governments or the private sector. This action merely extends the current due date for submitting applications under CROMERR for authorized programs with existing electronic document receiving systems, and imposes no additional requirements. EPA has determined that this rule does not contain a federal mandate that may result in expenditures of $100 million or more for states, tribes, and local governments, in the aggregate, or the private sector in any one year. Thus, today's action is not subject to the requirements in Sections 202 and 205 of UMRA.

EPA has also determined that this action contains no regulatory requirements that might significantly or uniquely affect small governments, as described in the UMRA, and thus this rule is not subject to the requirements in Section 203 of UMRA.

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

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action merely extends the current due date for submitting applications under CROMERR for authorized programs with existing electronic document receiving systems, and imposes no additional requirements. Thus, Executive Order 13132 does not apply to this rule.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.”

EPA has concluded that this final rule does not have tribal implications. It will neither impose substantial direct compliance costs on tribal governments, nor preempt Tribal law. This action merely extends the current due date for submitting applications under CROMERR for authorized programs with existing electronic document.

Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997) applies to any rule that (1) is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation.

This final rule is not subject to Executive Order 13045 because it is not an economically significant action as defined by Executive Order 12866 and it does not establish an environmental standard intended to mitigate health or safety risks. This action merely extends the current regulatory schedule for submitting applications under CROMERR for authorized programs with existing electronic document receiving systems, and imposes no additional requirements.

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

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

Today's action does not involve technical standards. EPA's compliance with 12(d) of the National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113, 12(d) (15 U.S.C. 272 note)) has been addressed in the preamble of the underlying final rule (70 FR 59848, October 13, 2007).

Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. This direct final rule merely extends the current regulatory schedule for submitting applications under CROMERR for authorized programs with existing electronic document receiving systems.

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). This rule will become effective on October 2, 2007.

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

MDEQ submitted the requested rule revisions on March 31, 2006.

MDEQ held a public hearing for the rule revisions on October 31, 2005, and did not receive any adverse comments.

The State has requested the following revisions: Changes to Part 6, Emission Limitations and Prohibitions—Existing Sources of Volatile Organic Compound Emissions; and changes to Part 10, Intermittent Testing and Sampling. The revisions are described in more detail below.

MDEQ is requesting the amendment of Part 6, R336.1627, in order to replace the MDEQ Vapor Tightness Test (VTT) method with EPA Method 27. The MDEQ VTT method is not an acceptable substitution for the leak test required by the U.S. Department of Transportation (U.S. DOT). Therefore, tank trucks must undergo VTT using both state and federal test methods. As written, EPA Method 27 is more stringent than the leak test required by MDEQ, satisfying both U.S. DOT and MDEQ standards.

In addition, MDEQ is requesting an amendment to test submittal requirements in order to provide consistency between U.S DOT and MDEQ requirements with regard to the time period within which tank trucks must be tested. The amendment would require delivery vessels to perform the VTT within one year of the date of the previous test, rather than the existing, narrow time period of April 1 to June 30. Under the amendment, the results of the test would be submitted to MDEQ within 30 days of test completion. Upon successful completion of the required testing, the vessel would be deemed provisionally certified providing the department does not invalidate the certification by issuing disapproval within 45 days of receipt of the results.

MDEQ is requesting the amendment of Part 10, Intermittent Testing and Sampling, to incorporate Method 27 by reference at R336.2004, and to amend R336.2005, the reference test method used to detect gasoline vapor leaks by a combustible gas detector. The amendment to R336.2005 removes the VTT component, but leaves the reference test method to detect gasoline vapor leaks by a combustible gas detector intact. Method 27, which is more stringent than the existing state VTT method, is incorporated in R336.2004.

We are approving revisions to the Michigan SIP in two areas: (1) To amend R336.1627 of Part 6, Emission Limitations and Prohibitions—Existing Sources of Volatile Organic Compound Emissions; Delivery Vessels; Vapor Collection Systems, by replacing the MDEQ VTT method with EPA Method 27, and to adopt the U.S. DOT annual VTT requirement and test submittal requirements; and, (2) to amend Part 10, Intermittent Testing and Sampling, through incorporating Method 27 by reference at R336.2004, and to amend R336.2005, the reference test method used to detect gasoline vapor leaks by a combustible gas detector.

The main revisions to R336.1627 are the replacement of its VTT test with Method 27 and the requirement to test the delivery vessel within one year of the previous test. Both of these revisions are consistent with EPA guidance. In addition, the following factors add to the effectiveness of this rule: (1) the testing stations are certified by the Michigan Department of Transportation and the tests that are performed at these stations are spot checked by the MDEQ; (2) the MDEQ has a history of reviewing all test results, and rejects those that are inadequate, within 30 days; and, (3) the Michigan gasoline terminals do not accept any tank trucks that are not certified to be in compliance with R336.1627, and are prohibited from accepting uncertified trucks due to the emission limitations found in 40 CFR part 60, subpart XX, which cover the same sources through limits on loading racks at bulk liquid gasoline terminals constructed or modified after December 17, 1980, that deliver liquid product into gasoline tank trucks. These regulations require that a gasoline terminal owner or operator not reload gasoline delivery vessels without documentation indicating that a VTT has been performed.

Michigan rule R336.1627 provides that the vessel is deemed to have passed the gasoline vapor leak detection test if Michigan does not notify the owner or operator of the vessel of the vessel's failure to pass the test within 45 days. EPA strongly discourages the use of default approvals. However, we find this rule to be approvable due to the special circumstances described above and also because recertification is required within a year. Nevertheless, should Michigan revise its rules to remove the safeguards described above, EPA will require the State to revise this section of the SIP.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the state plan if relevant adverse written comments are filed. This rule will be effective October 2, 2007 without further notice unless we receive relevant adverse written comments by September 4, 2007. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. The EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. If we do not receive any comments, this action will be effective October 2, 2007.

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 energy action,” this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001).

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 (59 FR 22951, 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 approves 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. 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 October 2, 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).)

Table of Contents I. What is the Background for the Actions? II. What Actions are EPA Taking? III. Why Are We Taking These Actions? IV. What Are the Effects of These Actions? V. Final Action VI. Statutory and Executive Order Reviews I. What is the Background for the Actions?

On September 29, 2006, Kentucky, through the KDAQ, submitted a request to redesignate Boyd County to attainment for the 8-hour ozone standard, and for EPA approval of the Kentucky SIP revision containing a maintenance plan for Boyd County. In an action published on May 11, 2007 (72 FR 26759), EPA proposed to approve the redesignation of Boyd County to attainment. EPA also proposed approval of Kentucky's plan for maintaining the 8-hour NAAQS as a SIP revision, and proposed to approve the 2018 state  1 MVEBs for Boyd County that were contained in the maintenance plan. EPA received no comments on the May 11, 2007, proposal. Today's rule is EPA's final action following the May 11, 2007, proposed rule.

Today, EPA is also providing information on the status of the Agency's transportation conformity adequacy determination for the new state MVEBs for the year 2018 that are contained in the maintenance plan for Boyd County. The maintenance plan establishes the following state MVEBs for Boyd County.

EPA's adequacy public comment period on these budgets (as contained in Kentucky's submittal) began on June 21, 2006, and closed on July 23, 2006. No comments were received during EPA's adequacy public comment period. Through this Federal Register notice, EPA is finding the 2018 state MVEBs, as contained in Kentucky's submittal, adequate. These MVEBs meet the adequacy criteria contained in the Transportation Conformity Rule. The new state MVEBs must be used for future transportation conformity determinations.

Various aspects of EPA's Phase 1 8-hour ozone implementation rule were challenged in court and on December 22, 2006, the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit Court) vacated EPA's Phase 1 Implementation Rule for the 8-hour Ozone Standard (69 FR 23951, April 30, 2004). South Coast Air Quality Management Dist. v. EPA, 472 F.3d 882 (DC Cir. 2006). On June 8, 2007, in response to several petitions for rehearing, the DC Circuit Court clarified that the Phase 1 Rule was vacated only with regard to those parts of the Rule that had been successfully challenged. Therefore, the Phase 1 Rule provisions related to classifications for areas currently classified under subpart 2 of title I, part D of the CAA as 8-hour nonattainment areas, the 8-hour attainment dates and the timing for emissions reductions needed for attainment of the 8-hour ozone NAAQS, remain effective. The June 8th decision left intact the Court's rejection of EPA's reasons for implementing the 8-hour standard in certain nonattainment areas under subpart 1 in lieu of subpart 2. By limiting the vacatur, the Court let stand EPA's revocation of the 1-hour standard and those anti-backsliding provisions of the Phase 1 Rule that had not been successfully challenged. The June 8th decision affirmed the December 22, 2006, decision that EPA had improperly failed to retain measures required for 1-hour nonattainment areas under the anti-backsliding provisions of the regulations: (1) Nonattainment area New Source Review (NSR) requirements based on an area's 1-hour nonattainment classification; (2) Section 185 penalty fees for 1-hour severe or extreme nonattainment areas; and (3) measures to be implemented pursuant to section 172(c)(9) or 182(c)(9) of the CAA, on the contingency of an area not making reasonable further progress toward attainment of the 1-hour NAAQS, or for failure to attain that NAAQS. The June 8th decision clarified that the Court's reference to conformity requirements for anti-backsliding purposes was limited to requiring the continued use of 1-hour MVEBs until 8-hour budgets were available for 8-hour conformity determinations, which is already required under EPA's conformity regulations. The Court thus clarified that 1-hour conformity determinations are not required for anti-backsliding purposes.

For the reasons set forth in the proposal action for Boyd County, EPA does not believe that the Court's rulings alter any requirements relevant to this redesignation action so as to preclude redesignation, and do not prevent EPA from finalizing this redesignation. EPA believes that the Court's December 22, 2006, and June 8, 2007, decisions impose no impediment to moving forward with redesignation of Boyd County to attainment. Even in light of the Court's decisions, redesignation is appropriate under the relevant redesignation provisions of the CAA and longstanding policies regarding redesignation requests.

With respect to the requirement for transportation conformity under the 1-hour standard, the Court in its June 8th decision clarified that for those areas with 1-hour MVEBs in their 1-hour maintenance plans (in this instance, Boyd County), anti-backsliding requires only that those 1-hour budgets must be used for 8-hour conformity determinations until replaced by 8-hour budgets. To meet this requirement, conformity determinations in such areas must continue to comply with the applicable requirements of EPA's conformity regulations at 40 CFR part 93.

EPA is taking final action to approve Kentucky's redesignation request and to change the legal designation of Boyd County from nonattainment to attainment for the 8-hour ozone NAAQS. The entire bi-state Huntington-Ashland 8-hour ozone nonattainment area is comprised of one county in Kentucky (Boyd County) and two West Virginia Counties (Cabell and Wayne Counties). This final action addresses only Boyd County. EPA has already taken action on the redesignation request and maintenance plan for the West Virginia portion of this area in a separate action. EPA is also approving Kentucky's 8-hour ozone maintenance plan for Boyd County (such approval being one of the CAA criteria for redesignation to attainment status). The maintenance plan is designed to help keep Boyd County in attainment for the 8-hour ozone NAAQS through 2018. These approval actions are based on EPA's determination that Kentucky has demonstrated that Boyd County has met the criteria for redesignation to attainment specified in the CAA, including a demonstration that the entire bi-state Huntington-Ashland Area has attained the 8-hour ozone standard. EPA's analyses of Kentucky's 8-hour ozone redesignation request and maintenance plan are described in detail in the proposed rule published May 11, 2007 (72 FR 26759).

Consistent with the CAA, the maintenance plan that EPA is approving today also includes 2018 state MVEBs for NO X and VOCs for Boyd County. In this action, EPA is approving these 2018 MVEBs. For regional emission analysis years that involve years prior to 2018, the applicable budgets, for the purpose of conducting transportation conformity analyses, are the 1-hour ozone maintenance plan state MVEBs. For regional emission analysis years that involve the year 2018 and beyond, the applicable budgets, for the purpose of conducting transportation conformity analyses, are the new 2018 MVEBs. EPA is finding adequate and approving the Boyd County MVEBs for NO X and VOCs in this action. MVEBs for Cabell and Wayne Counties in West Virginia were found adequate and approved through a separate action.

EPA has determined that the entire bi-state Huntington-Ashland Area has attained the 8-hour ozone standard and has also determined that Kentucky has demonstrated that all other criteria for the redesignation of Boyd County from nonattainment to attainment of the 8-hour ozone NAAQS have been met. See, section 107(d)(3)(E) of the CAA. EPA is also taking final action to approve the maintenance plan for Boyd County as meeting the requirements of sections 175A and 107(d) of the CAA. Furthermore, EPA is finding adequate and approving the new 2018 state MVEBs contained in Kentucky's maintenance plan because these MVEBs are consistent with maintenance for the entire bi-state Huntington-Ashland Area. In the May 11, 2007, proposal to redesignate Boyd County, EPA described the applicable criteria for redesignation to attainment and its analysis of how those criteria have been met. The rationale for EPA's findings and actions is set forth in the proposed rulemaking and summarized in this rulemaking.

Approval of the redesignation request changes the official designation of Boyd County, Kentucky for the 8-hour ozone NAAQS, found at 40 CFR Part 81. The approval also incorporates into the Kentucky SIP a plan for maintaining the 8-hour ozone NAAQS in Boyd County through 2018. The maintenance plan includes contingency measures to remedy future violations of the 8-hour ozone NAAQS, and establishes state MVEBs for the year 2018 for Boyd County. In a separate action, EPA has already approved 8-hour ozone MVEBs for the West Virginia portions (Cabell and Wayne Counties) of this area.

After evaluating Kentucky's redesignation request, EPA is taking final action to approve the redesignation and change the legal designation of Boyd County, Kentucky from nonattainment to attainment for the 8-hour ozone NAAQS. Through this action, EPA is also approving into the Kentucky SIP the 8-hour ozone maintenance plan for Boyd County, which includes the new state 2018 MVEBs of 1.18 tpd for VOCs, and 1.30 tpd for NO X . Within 24 months from the publication date for this final rule, the Kentucky transportation partners will need to demonstrate conformity to these new MVEBs pursuant to 40 CFR 93.104(e) as effectively amended by section 172(c)(2)(E) of the CAA as added by the Safe, Accountable, Flexible, Efficient Transportation Equity Act—A Legacy for Users (SAFETEA-LU), which was signed into law on August 10, 2005. EPA has taken action on the West Virginia SIP through a separate rulemaking, and the transportation partners are currently using the West Virginia 8-hour ozone MVEBs.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (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 affects the status of a geographical area, does not impose any new requirements on sources or allow a state to avoid adopting or implementing other requirements, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. 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 and because the Agency does not have reason to believe that the rule concerns an environmental health risk or safety risk that may disproportionately affect children.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the Commonwealth 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 CAA. 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 CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 2, 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) of the CAA.)

Under the ESA, 16 U.S.C. 1531 et seq. , NMFS has the responsibility to implement programs to conserve marine life listed as endangered or threatened.

All sea turtles that are found in U.S. waters are listed as either endangered or threatened under the ESA. The Kemp's ridley ( Lepidochelys kempii ), leatherback ( Dermochelys coriacea ), and hawksbill ( Eretmochelys imbricata ) sea turtles are listed as endangered. Loggerhead ( Caretta caretta ), green ( Chelonia mydas ), and olive ridley ( Lepidochelys olivacea ) sea turtles are listed as threatened, except for breeding colony populations of green sea turtles in Florida and on the Pacific coast of Mexico and breeding colony populations of olive ridleys on the Pacific coast of Mexico, which are listed as endangered. While some sea turtle populations have shown signs of recovery, many populations continue to decline.

Incidental take, or bycatch, in fishing gear is one of the main sources of sea turtle injury and mortality nationwide. Section 9 of the ESA prohibits the take (including harassing, harming, pursuing, hunting, shooting, wounding, killing, trapping, capturing, or collecting or attempting to engage in any such conduct), including incidental take, of endangered sea turtles. Pursuant to section 4(d) of the ESA, NMFS has issued regulations extending the prohibition of take, with exceptions, to threatened sea turtles (50 CFR 223.205 and 223.206). Section 11 of the ESA authorizes the issuance of regulations to enforce the prohibitions against take. NMFS may grant exceptions to the take prohibitions with an incidental take statement or an incidental take permit issued pursuant to section 7 or 10, respectively, of the ESA. To do so, NMFS must determine that the activity that will result in incidental take is not likely to jeopardize the continued existence of the affected listed species. In some cases, NMFS has been able to make this determination because the fishery is conducted with a modified gear or modified fishing practice that NMFS has been able to evaluate. However, for some Federal fisheries and most state fisheries, NMFS has not granted an exception primarily because we lack information about fishery-turtle interactions. Therefore, any incidental take of sea turtles in those fisheries is unlawful as it has not been exempted from the ESA prohibition on take.

The most effective way for NMFS to learn more about sea turtle-fishery interactions is to place observers aboard fishing vessels. NMFS issues this regulation to establish procedures through which each year NMFS will identify, pursuant to specified criteria and after notice and opportunity for comment, those fisheries in which the agency intends to place observers. NMFS and/or interested cooperating entities will pay the direct costs for observers. These include observer salary and insurance costs. NMFS may also evaluate other potential direct costs, should they arise. Once selected, a fishery will be eligible to be observed for five years without further action by NMFS. This will enable NMFS to develop an appropriate sampling protocol to investigate whether, how, when, where, and under what conditions incidental takes are occurring; to evaluate whether existing measures are minimizing or preventing interactions; and to determine whether additional measures are needed to implement ESA take prohibitions and conserve turtles.

Prior to this final rule, NMFS established a regulatory procedure to place observers on vessels contingent upon a determination by the NMFS Assistant Administrator that the unauthorized take of sea turtles may be likely to jeopardize their continued existence (50 CFR 223.206(d)(4)). In that regulation, NMFS limited observer coverage requirements within a fishery to 30 days, with the possibility of renewal for additional periods of 30 days each. NMFS has used this procedure to address immediate observer needs, such as when fishery activity and relatively high sea turtle strandings have occurred simultaneously in a particular area. However, these temporary observer requirements are designed to respond to acute problems, and not to implement monitoring programs that yield statistically rigorous information, which is one of the purposes of this rule. Further, because 30 days does not always provide the opportunity to investigate the cause of an event, such as elevated sea turtle strandings, and renewing the measure for additional 30-day periods can be time-consuming and result in lost opportunities to monitor a critical event, through this rule, NMFS is extending the number of days the observer coverage requirements under 50 CFR 223.206(d)(4) may remain effective from 30 to 180 days, with a possible 60-day extension. The combined 240 days is consistent with the emergency regulatory provision in section 4(b)(7) of the ESA.

As a condition of exempting incidental take from the ESA take prohibition in certain fisheries, NMFS has also implemented observer coverage or monitoring requirements under the authority of the ESA on a fishery-by-fishery basis, such as in the shrimp trawl, summer flounder trawl, Virginia pound net, and other fisheries. These requirements were implemented only after data from strandings, temporary observer coverage, or other sources indicated that prohibited sea turtle takes were occurring in those fisheries.

NMFS has also placed observers on vessels in federally-managed fisheries under the Magnuson-Stevens Fishery Conservation and Management Reauthorization Act, as amended in 1996 and 2006 (Magnuson-Stevens Act), and the Marine Mammal Protection Act, as amended in 1994 (MMPA), to document fish bycatch and incidental mortality and serious injury of marine mammals, respectively. The Magnuson-Stevens Act authorizes NMFS to require observers on fisheries managed under a Federal fishery management plan, while the MMPA allows NMFS to require observers in both Federal and non-federal commercial fisheries depending on the level of interaction between fisheries and marine mammals.

Secondary to collecting information on fish and marine mammal bycatch through placement of observers on fishing vessels via these statutes, NMFS has also collected data on sea turtle interactions in fisheries. Nonetheless, actions taken under the MMPA and Magnuson-Stevens Act do not provide sea turtle bycatch information on a sufficiently comprehensive basis. The Magnuson-Stevens Act only provides NMFS authority to require observers on vessels in fisheries managed under a Federal fishery management plan (16 U.S.C. 1853(b)(8)). Thus, the authority primarily covers fisheries operating in Federal waters, and not state fisheries where sea turtle interactions also occur. The MMPA allows NMFS to require observers on commercial fisheries that have been listed on the annual List of Fisheries as Category I (where incidental mortality and serious injury of marine mammals is considered “frequent”) and Category II (where incidental mortality and serious injury of marine mammals is considered “occasional”), but not Category III (where there is a remote likelihood of or no known incidental mortality and serious injury of marine mammals) (16 U.S.C. 1387), under which the majority of fisheries are listed. Furthermore, the List of Fisheries applies to commercial fisheries, and observers are not placed on recreational vessels, which in some cases use identical gear to commercial fishermen that is known to incidentally take sea turtles. Given that some state, recreational, and Category III fisheries may cause incidental take of sea turtles, neither the Magnuson-Stevens Act nor the MMPA provides broad enough authority to monitor fisheries that may incidentally take sea turtles. Additionally, monitoring programs established under the Magnuson-Stevens Act or MMPA are designed primarily to optimize observation of fish or marine mammal bycatch, respectively, and may only collect sea turtle bycatch information secondarily. This is not optimal since the sampling regime for other species may not adequately cover times and areas where sea turtle interactions are most likely to occur. Thus, to obtain the most representative data on sea turtle takes in various fisheries, NMFS needs to design sampling programs based on sea turtle distribution and abundance and directed toward those gear types and fisheries that are a priority concern for sea turtle recovery.

NMFS has also relied on using voluntary observer coverage to obtain data in several non-federally managed fisheries. For example, from November 1 - 20, 1999, 56 dead sea turtles washed ashore in a small area of Pamlico Sound, North Carolina, in the vicinity of Hatteras and Ocracoke Inlets (64 FR 70196, December 16, 1999). Thirty-five of the sea turtles were Kemp's ridleys, the most endangered species of sea turtle. Many sink gillnet fishing vessels were operating in the vicinity. North Carolina state observers were placed on a limited number of the gillnet boats to monitor sea turtle interactions. Because both state and NMFS' observer placement was voluntary, many of the fishermen elected not to carry observers, which resulted in limited information on sea turtle interactions in areas where the interactions were most likely to occur. Adequate sampling occurred only after North Carolina received an ESA section 10(a)(1)(B) incidental take permit (67 FR 67150, November 4, 2002) and observer coverage was a requirement of the permit. These events in North Carolina highlight that a voluntary observer program limits the extent of coverage and hinders the collection of reliable data.

Sea turtle takes have been documented for numerous gear types/fisheries along the Atlantic, Gulf of Mexico, and Pacific coasts. Both commercial and recreational fisheries in state and federal waters use gear types that may incidentally take sea turtles. Data available on the extent of sea turtle interactions vary by gear type, area, and season. Nonetheless, certain types of gear are more prone to incidentally capturing sea turtles than others, depending on the way the gear is fished and the time and area within which it is fished.

Fisheries that use trawls, gillnets, seines, pound nets, traps, pots, dredges, longlines, and hook and line, for example, are potential sources of sea turtle take. Incidental take has been documented in these gear types where the distributions of sea turtles and fisheries overlap. For example, alternative monitoring platforms used to monitor the VA pound net fishery revealed that sea turtle takes are a concern in this fishery. As a result, NMFS implemented management measures aimed at reducing sea turtle interactions in pound net leaders in the southern portion of the Chesapeake Bay from May 6-July 15 of each year, when sea turtles are known to be present and sea turtle strandings are known to occur (71 FR 36024, June 23, 2006). NMFS conducted an ESA section 7 consultation on the pound net fishery and determined that the fishery with the management measures was not likely to jeopardize sea turtles and the agency was able to exempt the fishery from the ESA prohibition on take. While these measures may be reducing the number of sea turtle takes in pound nets, sea turtle strandings in the area have continued despite the management measures. Other fisheries, such as inshore gillnet and purse seine fisheries in the area, may also be contributing to the problem and need to be further evaluated.

There are similar examples in other areas around the United States where more comprehensive and targeted observer coverage on fishing vessels is needed to better understand and address the problem of prohibited sea turtle takes incidental to fishing activities, such as the shrimp fishery in the state and Federal waters of the southeast United States and the Gulf of Mexico. This rule would enable NMFS to monitor gear types, such as try nets and skimmer trawls, used in this fishery, which are not currently required to use turtle excluder devices (TEDs) but that have been documented to interact with sea turtles (Epperly et al. 2002; Scott-Denton et al. 2007). Both commercial and recreational pots/traps and gillnets have been documented to interact with sea turtles in U.S. waters (Dwyer et al. 2002; 67 FR 71895, December 3, 2002; NMFS SEFSC Beaufort Laboratory 2007, unpubl. data); therefore, more information is needed on potential sea turtle interactions in these gear types/fisheries to better evaluate them. In addition, long-term, comprehensive coverage is needed to fill information gaps on sea turtle takes in these and other fisheries and gear types.

Thus, through this final rule, NMFS issues ESA regulations to specify that NMFS may place observers on U.S. fishing vessels, either recreational or commercial, operating in U.S. territorial waters, the U.S. exclusive economic zone (EEZ), or on the high seas, or on vessels that are otherwise subject to the jurisdiction of the U.S. Consistent, regular monitoring via placement of observers on fishing vessels is needed to gather data on sea turtle takes and, where necessary, to evaluate existing measures and develop new management measures in certain gear types and/or fisheries to implement the prohibition on take of sea turtles. This action, issued under the authority of the ESA, is a necessary step in the process of implementing the prohibition on take of listed species and to conserve sea turtles listed as threatened or endangered.

The design of any observer program implemented under this rule, including how observers would be allocated to individual vessels, would vary among fisheries, fishing sectors, gear types, and geographic regions and would ultimately be determined by the individual NMFS Regional Office, Science Center, and/or observer program. During the program design, NMFS would be guided by the following standards in the distribution and placement of observers among fisheries identified in annual determinations and vessels in those particular fisheries:

(1) The requirements to obtain the best available scientific information;

(2) The requirement that observers be assigned fairly and equitably among fisheries and among vessels in a fishery;

(3) The requirement that no individual person or vessel, or group of persons or vessels, be subject to inappropriate, excessive observer coverage; and

(4) The need to minimize costs and avoid duplication, where practicable.

Consistent with 16 U.S.C. 1881(b), vessels where the facilities for accommodating an observer or carrying out observer functions are so inadequate or unsafe (due to size or quality of equipment, for example) that the health or safety of the observer or the safe operation of the vessel would be jeopardized, would not be required to take observers under this rule. Nonetheless, per 50 CFR 600.746, a vessel that would otherwise be required to carry an observer, but is inadequate or unsafe for purposes of carrying an observer and for allowing operation of normal observer functions, is prohibited from fishing without observer coverage. Failure to comply with the requirements under this rule may result in civil or criminal penalties under the ESA.

Observer programs designed or carried out in accordance with this regulation would be required to be consistent with existing observer-related NOAA policies and regulations, such as those under the Fair Labor and Standards Act (29 U.S.C. 201 et seq. ), the Service Contract Act (41 U.S.C. 351 et seq. ), Observer Health and Safety regulations (50 CFR 600), and other relevant policies.

The Assistant Administrator for Fisheries, NOAA (AA), in consultation with Regional Administrators and Fisheries Science Center Directors, will make an annual proposed determination identifying which fisheries are required to carry observers, if requested, to monitor potential interactions with sea turtles. Any final determination will be made after an opportunity for public comment. The determination will be based on the best available scientific, commercial, or other information regarding sea turtle-fishery interactions; sea turtle distribution; sea turtle strandings; fishing techniques, gears used, target species, seasons and areas fished; or qualitative data from logbooks or fisher reports.

The AA will use the most recent version of the annually published MMPA List of Fisheries (LOF) as the comprehensive list of commercial fisheries for consideration in addition to known information on non-commercial fisheries in a given area. The LOF includes all known state and federal commercial fisheries that occur in U.S. waters. The categorization scheme of fisheries on the LOF would not be relevant to this process. Unlike the LOF process, recreational fisheries likely to interact with sea turtles on the basis of the best available information may also be included in the determination of fisheries to be monitored under this rule. NMFS will consult with appropriate state or federal fisheries officials and other entities to identify which recreational fisheries should be considered in the annual determination.

Notice of the final determination will be made in writing to individuals permitted for each fishery identified for monitoring. NMFS will also notify state agencies and provide notification through publication in local newspapers, radio broadcasts, and other means, as appropriate. Once included in the final determination, a fishery will remain eligible for observer coverage for five years to enable the design of an appropriate sampling program and to ensure collection of sufficient scientific data for analysis. If NMFS determines that more than five years are needed to obtain sufficient scientific data, NMFS will include the fishery in the AA's annual proposed determination again prior to the end of the fifth year. As part of its annual determination, NMFS will include, to the extent practicable, information on the fisheries or gear types to be sampled, geographic and seasonal scope of coverage, or any other relevant information. A 30-day delay in effective date for implementing observer coverage will follow the annual determination, except for those fisheries included in earlier annual determinations within the previous five years or where the AA has determined that there is good cause pursuant to the Administrative Procedure Act to make the rule effective without a 30-day delay.

The timing of this process should be coordinated to the extent possible with the annual LOF publication process, as specified in 50 CFR 229.8.

NMFS received fourteen substantive comment letters during the comment period on the ESA observer proposed rule. These letters came from commercial fishing industry organizations, conservation organizations, states, and private individuals. In addition, approximately twenty letters of similar content were received from concerned citizens.

Comment 1: Several commenters stated that the flexibility provided in this rule would lead to better understanding of the impact of bycatch on sea turtles, particularly in state waters, where it is currently lacking. Many commenters also agreed with the need to extend the maximum number of monitoring days after declaration of an “emergency” event (e.g., a stranding) from 30 to 180, stating that greater sampling levels would provide more accurate estimates of interaction rates.

Response: For the reasons stated in the preamble, NMFS has decided to proceed with development of a final rule for this action.

Comment 2: One commenter supported the broadest application of this rule, including to all commercial and recreational fishing vessels operating in state and federal waters, as well as U.S. fishing vessels operating outside the territorial seas and exclusive economic zone of the U.S.

Response: Section 9 of the ESA, and its implementing regulations, prohibits the take of endangered or threatened species by any person subject to the jurisdiction of the U.S. Accordingly, this regulation applies to U.S. commercial or recreational fishing vessels, or vessels otherwise subject to the jurisdiction of the U.S., operating in U.S. territorial waters, in the U.S. exclusive economic zone, or on the high seas. NMFS has clarified the preamble and regulatory text to reflect this.

Comment 3: One commenter stated that increasing observer coverage for try nets should not be a priority because: (a) try nets larger than 12 feet require TEDs, and smaller try nets have a low probability of catching a turtle; (b) the shrimp fishery has declined by over 58 percent in recent years due to increasing fuel costs, shrimp imports, and hurricane effects; and there is a moratorium on federal shrimp permits.

Response: The annual determination process specified in this final rule requires NMFS to identify those fisheries it intends to observe. The selection criteria include the extent of overlap between the fishing operation and sea turtle presence, type of gear used, documented or reported interactions, and available funds. Given limited resources, NMFS will prioritize fisheries to observe, including the shrimp fishery and trynets. Factors such as the probability of an interaction, past coverage, and fishing trends will be considered.

Comment 4: Some commenters said the rule does not place adequate emphasis on the need to monitor and observe recreational fisheries, stating that NMFS needs to demonstrate an equal commitment to observe recreational and commercial fisheries. One commenter stated that this rule should not be finalized until a specific process to implement and achieve statistically valid observer coverage in the recreational sector has been identified.

Response: There is a need to address sea turtle bycatch in both recreational and commercial fisheries. For this reason, NMFS is providing a mechanism to monitor recreational fisheries in this rule. Nonetheless, given the diffuse nature of recreational fisheries and the lack of licensing systems in place to track participants in many recreational fisheries, NMFS recognizes that it will take time to get systems in place that allow for better tracking and understanding of the extent and impact of recreational fisheries. NMFS will consult with appropriate state and/or Federal fisheries officials and other entities to identify which recreational fisheries should be considered in the annual determination.

Comment 5: One commenter noted that recreational fisheries have grown enormously in the recent past and in many cases use the same gear as is used in the commercial sector and therefore should be considered a source of sea turtle bycatch.

Response: NMFS has provided a mechanism to monitor sea turtle bycatch in the recreational sector via this rulemaking.

Comment 6: One commenter pointed out that the Regulatory Impact Review correctly notes the revenue cost of lost bunk space. However, the greatest impact of lost bunk space is the increase in physical labor and/or loss of sleep for the crew. Lost bunk space reduces safety of life at sea. National Standard 10 and other provisions of the Magnuson-Stevens Act require promotion of safety at sea. This should be considered under ESA rules as well.

Response: Safety at sea is a critical consideration in placing observers on a vessel. If fewer crew are onboard, the vessel master must accommodate any change in crew capability to ensure safety. NMFS will work closely with the fishing industry, fishery management councils, and states to identify any safety issues that may arise as a result of observer placement under this rule.

Comment 7: One commenter stated that observers themselves should determine the safety of a vessel before making a trip decision.

Response: Observers conduct pre-trip safety checks and decide whether or not to board a vessel, in accordance with 50 CFR 600.746.

Comment 8: One commenter disagreed with the statement, “Vessels too small to accommodate an observer will not be required to take an observer under this rule.” The commenter felt there is no minimum vessel size to take an observer. Observers should be trained to work on small vessels. Small vessels can have a great impact on sea turtles and should not be excluded.

Response: Small vessels can have an impact on sea turtles, and steps should be taken to quantify and address those impacts. Safety for both the observer and crew are serious considerations in observer placement and observers monitoring small vessels receive special training so they are prepared to address those challenges. While the deployment of observers is still seen as one of the most effective approaches, there are other options that may be considered. Recent advances in technology, such as digital video and imaging, have made remote electronic monitoring a viable alternative in some cases. Additionally, alternate platforms have been used successfully to monitor Virginia pound nets and other fisheries.

Comment 9: One commenter supports the requirement that vessel owners should comply with observer health and safety requirements. Alternative monitoring systems (e.g., electronic, remote platforms) should be established for fisheries with exceedingly small vessels to be monitored so that a representative sample of vessels can be maintained.

Response: See response to comment 8.

Comment 10: One commenter noted that the reference to observer safety requirements is incorrect and should be changed to 50 CFR 600.725 and 50 CFR 600.746.

Response: NMFS has changed the reference accordingly.

Comment 11: One commenter requested a mechanism to review the designation of a fishery for monitoring consideration more frequently than after the five-year period of inclusion on the list expires. The commenter contended that observer coverage would not necessarily be warranted after a year or season of coverage showed no turtle interactions.

Response: Due to resource constraints, NMFS will focus the annual determinations on priority fisheries. Nonetheless, NMFS needs the flexibility of a five-year period to monitor a fishery for sea turtle interactions to account for interannual variability in sea turtle bycatch rates and events, as well as in fishing effort. One year of observer coverage that shows no sea turtle interactions would not necessarily rule out that prohibited sea turtle takes occur in the observed fishery, if that year were anomalous for some reason. Furthermore, low take levels in one year or even over several years do not necessarily mean that monitoring of a fishery should discontinue, because changes in fishing or sea turtle distribution or fishing effort may necessitate reconsidering a fishery for monitoring. There will be a comment period associated with each year=s proposed determination of fisheries to monitor, which will provide an opportunity for public input on fisheries proposed for monitoring under this regulation.

Comment 12: One commenter requested that NMFS institute a transparent process based on specific criteria for removing a fishery from the monitoring list after five years. The commenter noted this should be based on whether the fishery is believed to interact with sea turtles rather than an arbitrary time period. A fishery should remain on the list unless NMFS proves it does not interact with sea turtles. Then NMFS should propose de-listing the fishery and open that decision for public comment.

Response: NMFS believes five years will most often enable it to compile necessary information on sea turtle takes in a fishery. If after five years, NMFS feels it needs additional time to monitor the fishery, the rule provides a mechanism to reinstate the five-year period for that particular fishery. The rule states, “If NMFS wishes to continue observations beyond the fifth year, NMFS must include the fishery in the proposed annual determination and seek comment, prior to the expiration of the fifth year.” NMFS will notify the public whether a fishery will be removed from the annual determination, after the fifth year in that year's proposed annual determination, which will be open for public comment.

Comment 13: One commenter recommended the proposed rule include a section explaining fishermen's rights and options related to accommodating observers. The commenter requested that NMFS address the following questions: (a) Will fishers be apprised of how many times they will be required to have observers?; (b) What options exist for vessel owners to select date/times/locations?; What options are there for refusal?; (d) What is the penalty for non-compliance?; and (e) What can/cannot the observer do relative to vessel operations?

Response: An observer is not required to board, or stay aboard, a vessel that is unsafe or inadequate. Written notification of the final annual determination will be mailed to the owners or operators of fishing vessels. In the notification, NMFS will make every effort to provide information on the fishing sector, and temporal and geographic scope of coverage. NMFS will select optimal days, times, and locations to observe the vessel, based on appropriate sampling design and collection of scientific data regarding takes of sea turtles, and will notify fishermen accordingly. Failure to comply with the requirements under this rule may result in civil and/or criminal penalties as prescribed by the ESA. Observers may only observe and record data, and may not be required to perform duties normally performed by crew members.

Comment 14: One commenter said NMFS should consider the social and economic impacts of sea turtle observer coverage under this rule in combination with all other observer coverage requirements (e.g., for fish population assessment, other protected species monitoring) with which fishermen must comply and should establish a maximum cap on total observer trips for individual or groups of vessels at a given homeport.

Response: The standards for placing observers as specified in the final rule will ensure that cumulative social and economic burdens will be minimized. NMFS will ensure that assignment of observers is fair and equitable, and that no individual person or vessel, or group of persons or vessels, is subject to inappropriate, excessive observer coverage. NMFS will also minimize costs and avoid duplication, where practicable.

Comment 15: One state requested that it be directly notified of the annual proposed determination of fisheries eligible for sea turtle bycatch monitoring. Another state offered its help in identifying fisheries that should be targeted for monitoring based on the level of sea turtle interactions.

Response: Effective implementation of this rule will require regular communication and coordination with coastal states. As stated in the regulatory text at § 222.402(b), “The Assistant Administrator shall publish the proposed determination in the Federal Register notice and seek comment from the public. Additionally, NMFS will notify state agencies and provide notification through publication in local newspapers, radio broadcasts, and any other means as appropriate.” NMFS appreciates and encourages assistance from states in identifying fisheries that should be monitored for turtle interactions.

Comment 16: One commenter noted that recent analyses by the state of Florida of 17 years of loggerhead turtle ( Caretta caretta ) nesting data in Florida indicate a 22.3-percent decline in nests during this period. Threats to reproductive adult populations or earlier life stages on feeding grounds (e.g., fishing interactions), as opposed to threats on land, are likely the cause of decline. The commenter contends the doubling of loggerhead strandings in Florida over the past decade supports this claim.

Response: NMFS is concerned about the recent data on loggerhead nesting trends from Florida. The Turtle Expert Working Group, a group of scientists and managers focused on turtle population assessment issues, is currently reviewing the status of loggerhead turtles, including the Florida nesting information, to try to determine the status of the species and sources of the decline. This final rule will allow for more comprehensive monitoring of sea turtle interactions in state, federal, and recreational fisheries and will help identify previously unknown sources of turtle interactions with fishing gear.

Comment 17: One commenter expressed that NMFS is putting the cart before the horse and should first determine and provide statistically valid, accurate scientific data on the actual status and population trends of turtles along the east coast before addressing turtle bycatch. The commenter claimed NMFS needs population information to determine what constitutes a significant take rate for a particular population of sea turtle. The commenter inquired how NMFS will conduct jeopardy determinations and ESA section 7 consultations without population status information.

Response: Section 9 of the ESA prohibits the take (including harassing, harming, pursuing, hunting, shooting, wounding, killing, trapping, capturing, or collecting or attempting to engage in any such conduct), including incidental take, of an endangered species. Additionally, pursuant to section 4(d) of the ESA, NMFS has issued regulations extending the prohibition of take, with exceptions, to threatened sea turtles (50 CFR 223.205 and 223.206). Thus, take of any level is prohibited unless it is specifically exempted from the ESA take prohibition. NMFS also has an obligation under Sec. 4(f)(1) of the ESA to develop and implement recovery plans to promote the conservation and recovery of endangered and threatened species. In collaboration with NMFS scientists and other scientists knowledgeable in sea turtle biology and population structure, NMFS is conducting sea turtle population assessments. For instance, NMFS completed assessments on the Kemp's ridley and loggerhead in 1998 and 2000 (Turtle Expert Working Group, “An Assessment of the Kemp's Ridley and Loggerhead Sea Turtle Populations in the Western North Atlantic,” NOAA Technical Memorandum NMFS-SEFSC-409, 96 pp (1998); Turtle Expert Working Group, “Assessment Update for the Kemp's Ridley and Loggerhead Sea Turtle Populations in the Western North Atlantic,” NOAA Technical Memorandum NMFS-SEFSC-444, 115 pp (2000)), and the leatherback in 2007 (Turtle Expert Working Group, “An Assessment of the Leatherback Population in the Atlantic Ocean,” NOAA Technical Memorandum NMFS-SEFSC-555, 116 pp. (2007)). NMFS is currently reassessing the loggerhead population, given the recent data from Florida. NMFS uses these data and other sources of best available scientific data in ESA section 7 consultations and as the basis for other management decisions.

Comment 18: Commenters recommended that NMFS observers collect as much data as possible on the nature of the sea turtle take, including information on the location, number, time of day, catch per unit effort, and water temperature associated with the take; and the size, genetic identity, general health (e.g., appearance of fibropapillomatosis), and behavior of the sea turtles taken. Collecting information on these parameters will help NMFS limit regulations to the appropriate parameters and not unnecessarily burden fishermen.

Response: It is important to collect all the above information, and NMFS will design observer programs to collect as much relevant information on sea turtles as possible within legal limits in order to best address prohibited sea turtle takes.

Comment 19: One commenter thought it was good to extend the emergency monitoring authority currently in 50 CFR 223.206(d)(4) from 30 to 180 days, with a possible 60-day extension to 240 days, but thought the proposed regulatory language would limit the total amount of time an observer may be deployed, which current regulations do not. The commenter recommends retaining the language in the current regulation so that it does not limit total coverage under this provision to a maximum of 240 days.

Response: The 240-day maximum is consistent with ESA section 4(b)(7) and other emergency regulations that NMFS has promulgated under the ESA. Furthermore, NMFS believes that public notice and comment is appropriate if observer placement requirements are proposed for continuance after the 240-day maximum.

Comment 20: One commenter recommended that observer programs take seasons and water temperatures into account when allocating resources and observers, given that sea turtle distribution can vary seasonally, particularly at higher latitudes.

Response: Sampling designs must reflect the biology and distribution of the species to optimize monitoring of sea turtle bycatch events and increase the precision of the estimates of sea turtle interactions. NMFS' estimates of sea turtle bycatch will be enhanced by this final rule, as it eliminates the reliance on obtaining sea turtle-fishing gear interaction data through observer programs designed to monitor marine mammal or fish bycatch.

Comment 21: One commenter stated that the South Carolina shad gillnet fishery should not be included in the annual determination of fisheries for monitoring because it operates in winter when sea turtles are not present.

Response: The annual determination process specified in this final rule requires NMFS to identify those fisheries it intends to observe given concerns regarding interactions with sea turtles. The selection criteria include the extent of overlap between the fishing operation and sea turtle distribution, type of gear used, documented or reported interactions, incidence of sea turtle strandings in an area where a particular fishery operates, and available funds. Thus, where and when a fishery operates will be a factor in selection for monitoring. While sea turtles, depending on the species, are generally south or further offshore of South Carolina in the winter months, annual variability exists and sea turtles have been documented in South Carolina waters during the winter months. NMFS will work with South Carolina to determine if there is any overlap between the shad gillnet fishery and sea turtle distribution and whether monitoring of this fishery is warranted under this rule.

Comment 22: One commenter noted that sea turtle interactions in try nets and pots/traps are incredibly rare and that observer coverage would have to be extremely high to yield any information. In some fisheries, the occurrence of bycatch is so rare that placing observers would be meaningless. Therefore, NMFS should select fisheries that have a “reasonable chance” of observing an interaction.

Response: As stated in response to Comment 21, the annual determination process specified in this final rule requires NMFS to identify those fisheries it intends to observe given concerns regarding interactions with sea turtles. The selection criteria include the extent of overlap between the fishing operation and sea turtle distribution, type of gear used, documented or reported interactions, incidence of sea turtle strandings in an area where a particular fishery operates, and available funds. Once a fishery is selected, coverage levels are determined based on several factors, including spatial and temporal variability in the fisheries and the distribution of the species being observed. Where warranted, target coverage levels for rare events are much higher than for common events. In some currently observed fisheries (e.g., Hawaii shallow set longline fishery for swordfish) where interactions are rare, the coverage level is 100 percent to allow for accurate information to be collected. For new observer programs, a pilot study is often initiated to provide information on variability of bycatch species within the fishery. The information collected during this pilot study is then used to more accurately determine the target observer coverage necessary to provide accurate bycatch estimates (typically measured as a coefficient of variation around the bycatch estimate). If appropriate, monitoring of catch or bycatch through electronic means or alternate platforms may be evaluated during the pilot study.

Comment 23: NMFS should make every effort to obtain adequate observer coverage for all fisheries on the list, including requesting the appropriate amount of funding in the budget process.

Response: NMFS is committed to achieving adequate observer coverage, and that means making every effort to request, identify, and allocate funds. Part of the decision for placing a fishery on the list is the extent of anticipated funds. However, there are many competing needs for limited funds, and priorities could change over the time a fishery is on the list.

Comment 24: One commenter stated that the rule must specify that the annual review by the Assistant Administrator shall include consideration of applicable past observer coverage before final categorization of a given fishery. Such a pre-listing review, the commenter contends, would exclude many New Jersey gillnet fisheries from listing.

Response: Past monitoring of a particular fishery, and the resulting data and its present applicability, will be taken into consideration in the development of an annual determination of fisheries to be monitored under this rule, as appropriate. However, prior monitoring of a fishery does not necessarily mean it will be excluded from the annual determination if, for example, NMFS needs to obtain additional sea turtle interaction information to improve data accuracy and precision, if fishing practices or effort have changed, or if sea turtle distribution has changed based on environmental conditions.

Comment 25: Some commenters recommended that the annual determination of fisheries to be monitored not be limited by resources as indicated in one of NMFS' criteria for inclusion on the list: “The extent to which NMFS intends to monitor the fishery and anticipates that it will have the funds to do so.” Instead, the determination should be as inclusive as possible, for instance, by including all fisheries with unknown levels of sea turtle interaction, and should be determined by sea turtle conservation needs and priorities rather than available funding.

Response: This process will be driven by the need to identify those fisheries in which sea turtle takes occur, so that existing management measures to reduce sea turtle takes may be evaluated and a determination made as to whether any additional measures may be necessary to implement the prohibition on take of sea turtles. Sea turtle conservation and recovery priorities will also be considered. However, NMFS included this criterion to help prioritize fisheries for monitoring. Additionally, this criterion will assist in notifying the public of NMFS' intent to monitor a given fishery.

Comment 26: One commenter stated that the rule should include a public comment process between proposed and final annual determinations of fisheries to be monitored.

Response: The final rule at § 222.402(b) states: “The Assistant Administrator shall publish the proposed determination and any final determination in the Federal Register . Public comment will be sought at the time of publication of the proposed determination.”

Comment 27: One commenter notes that listing a fishery under the annual determination simply based on similarity to other listed fisheries is inappropriate. This process should occur on a fishery by fishery basis and be examined for temporal and spatial overlap with sea turtles, regional distinctions in fishing practices, and past observer coverage.

Response: In many cases, similarities of fishing gear to gear known to take sea turtles can make it a potential threat to sea turtles if the fishery overlaps with turtles in time and space. Nonetheless, NMFS will take fishing gear deployment or other characteristics (e.g., average tow time of gear) into account, as appropriate, when proposing fisheries in the annual determination. NMFS will also attempt to design observer programs to optimize sea turtle bycatch monitoring, for instance, by deploying observers during seasons and in locations when sea turtle bycatch is believed to be most problematic. This is an important cost-effective measure.

Comment 28: One commenter asked what terms and conditions will be specified in the written annual determination of fisheries to be monitored under this rule.

Response: As stated in § 222.402(b) of the proposed and final rules, “The proposed and final determinations will include, to the extent practicable, information on fishing sector, targeted gear type, target fishery, temporal and geographic scope of coverage, or other information, as appropriate.”

Comment 29: One commenter recommended that NMFS take advantage of other associated and independent assessments of sea turtle bycatch being undertaken by the Strategy for Sea Turtle Conservation and Recovery in Relation to Atlantic and Gulf of Mexico Fisheries (Strategy) and Project GLOBAL at Duke University.

Response: NMFS acknowledges the comment.

Comment 30: One commenter pointed out that the proposed rule does not specify how it will develop sampling programs that yield best available science. It should be clarified that best available science refers to information specifically about sea turtle conservation, including but not limited to, the catch rates of sea turtles in specific gear types, regions, and seasons. Resources should be allocated to yield statistically valid results. The best available science should be explicitly outlined in a published sampling design for each observed fishery that includes methodologies for maximizing precision and accuracy while minimizing bias.

Response: Observer program manuals providing details on data collection protocols are provided on each of the regional observer websites as well as on the National Observer Program (NOP) Web site ( http://www.st.nmfs.gov/st4/nop/Observer_training_resources.html ). The program manuals do not specifically provide information on sampling design, however, the sampling designs for all regional observer programs are published in many different forums, including peer reviewed journals and NMFS stock assessment reports. Sampling designs for all NMFS observer programs are developed to provide statistically valid information and to produce results that will contribute to the body of best available science. The sampling design will vary depending on many factors, including the fishery to be observed, the spatial and temporal variability in the fishery and species observed, and the overall goals of the observer program. Once a fishery is selected for observer coverage, a sampling design will be developed to yield statistically valid results. The issue of minimizing bias was addressed by the National Observer Program through a vessel selection bias workshop held in May 2006. Workshop recommendations to reduce bias included assessing the accuracy of estimated metrics used to compare observed vessels with the general fleet; selecting vessels and trips with equal probability within the sector for which bycatch are to be estimated; and identifying fishing regulations and other factors that may encourage vessel operators to alter fishing behavior when observers are present. These and other recommendations will be implemented by all regional observer programs to evaluate and minimize vessel selection and observer bias. The vessel selection bias workshop report is available online at http://www.st.nmfs.noaa.gov/st4/nop/documents/Vessel_Selection _Bias_Report_final.pdf.

Comment 31: One commenter thought that Science Center Directors should also have authority to require fishing vessels to carry an observer, since many NMFS observer programs are operated out of Science Centers.

Response: As stated in the preamble to the proposed rule at 71 FR 76268 (December 20, 2006), and clarified in this final rule, on an annual basis, the Assistant Administrator, in consultation with Regional Administrators and Science Center Directors, will determine which fisheries NMFS intends to monitor. Thus, Regional Offices and Science Centers, both of which administer observer programs depending on the NMFS region, will be integral to the process of identifying fisheries for monitoring as well as implementing observer coverage once those fisheries have been identified.

Comment 32: One commenter recommended that NMFS delete the statement in the proposed regulatory text, “NMFS will pay direct costs for the observer,” stating that it could preclude the establishment of non-NMFS-funded programs through this regulation.

Response: Partnerships with interested cooperating entities external to NMFS could enhance the potential for obtaining sea turtle bycatch information under this regulation. NMFS has changed the regulatory and preamble text to reflect this.

Comment 33: One commenter asked whether the agency plans to use observer information to implement broad-based measures across similar gear types or specially designed measures for specific fisheries known to interact with sea turtles.

Response: Any management measures to implement the prohibitions of take will be based on the data collected from each fishery and gear type and the recommendations of NMFS and the states in which those fisheries interactions occur. Affected states may elect to develop and apply for an ESA section 10(a)(1)(B) incidental take permit to manage their own fisheries that are known to interact with sea turtles. Alternately, NMFS has implemented ESA regulations in state waters over large geographic areas such as in the shrimp fishery. Any future measures will be fully vetted through the public rulemaking process.

Comment 34: One commenter noted that the proposed rule mentions bycatch as a leading threat to sea turtle populations worldwide but questioned what the other threats to sea turtle populations were and what type of observer programs are applied to those threats. The commenter wondered whether there were equal standards for all industries that threaten sea turtles.

Response: Information on both fishery and non-fishery threats to sea turtles is available in the sea turtle recovery plans at http://www.nmfs.noaa.gov/pr/species/esa/turtles.htm . Generally speaking, threats include coastal construction, poaching, power plant entrainment, and many other activities. Federal agencies whose activities affect sea turtles must consult under ESA section 7. Private and state entities whose activities affect sea turtles consult with NMFS and/or the U.S. Fish and Wildlife Service pursuant to ESA section 7 as a result of applying for a section 10(a)(1)(B) incidental take permit. As a result of those consultations, many agencies, such as the Army Corps of Engineers in their harbor maintenance program, must monitor the effects of their actions. Measures to minimize and mitigate the effects of human activities on sea turtle populations depend on the extent, frequency, and severity of the effect. Given the high level of variability in these factors, standard measures cannot be applied across industries.

Comment 35: One commenter stated that NMFS should not limit its efforts to data collection but should cap and control sea turtle take by setting meaningful bycatch limits that are enforced in a timely manner.

Response: Data collection is integral to implementing the prohibitions of take under the ESA, but is merely one step in the process. This action will also allow NMFS to better address sea turtle conservation and recovery by helping NMFS identify, quantify, and ultimately develop measures, where necessary, to reduce incidental sea turtle take in fishing gear. Voluntary and mandatory self-reporting have limited utility and the current observer requirements do not allow NMFS to sufficiently address sea turtle bycatch, as the preamble describes. To address sea turtle bycatch in fishing gear on a more comprehensive level, NMFS implemented the Sea Turtle Strategy referenced in comment 29 above. The Strategy is seeking to address prohibited sea turtle bycatch on a per-gear basis rather than a target fishery basis. Monitoring undertaken through this final rule will help provide a baseline assessment of fisheries that may be a concern, which, in combination with sea turtle population studies and other information, will help prioritize and focus measures for sea turtle conservation.

Comment 36: One commenter noted that sea turtles in shallow water zones (e.g., along the Atlantic shelf) are highly vulnerable to fisheries, especially those using trawls and dredges.

Response: This final rule will allow for more comprehensive monitoring of sea turtle interactions along the Atlantic shelf and other areas where sea turtles are found.

Comment 37: One commenter suggested NMFS continue to use alternative platforms to monitor fisheries when they are difficult to cover with observers.

Response: See response to comment 8 above.

Comment 38: One commenter questioned who qualifies and provides observers and how observers are authorized before being placed on vessels.

Response: The majority of regional observer programs operate under government contract with private observer service providers. Several programs, including the North Pacific Groundfish Observer Program, West Coast Off-shore hake observer program, and the Northeast sea scallop observer program, obtain observers through NMFS-permitted observer service providers. These providers operate through direct contracts with the fishing vessel and provide qualified observers to NMFS. The observer service providers interview, hire, and deploy the observers on fishing vessels as required either through the government contract or through NMFS regulations for the industry funded programs. NMFS has developed national observer eligibility standards to ensure that all NMFS observers have consistent minimum qualifications, including standards for education and experience, training, conflict of interest, physical condition, communication skills, and citizenship or ability to work legally in the U.S. They will be implemented by all regional observer programs. All regional observer programs provide formal observer training and all observers must pass an exam prior to deployment.

Comment 39: One commenter supported Alternative 3 (“Require Observer Programs in All Incidental Take Permits (Section 10(a)(1)(b)) Related to Fisheries”) of the Draft Environmental Assessment accompanying the proposed rule. The commenter said this alternative would enable the most accurate bycatch monitoring and reporting, improve understanding of recreational and commercial bycatch, and be a critical step toward developing a national comprehensive bycatch program.

Response: NMFS rejected this Alternative because a comprehensive, coast-wide monitoring program is needed as an initial baseline assessment to further address sea turtle bycatch. Under this Alternative, individual states would need to assess and make determinations on whether to apply for an incidental take permit under the ESA. The onset of observer programs may vary greatly, and geographic gaps in coverage may result. Each state's fisheries monitoring program may consist of different protocols for sampling and data collection, which may hinder the ability to compare and analyze data. NMFS believes this final rule will provide a more systematic and comprehensive framework for collecting bycatch data in fisheries of concern than would be achieved under Alternative 3. Nonetheless, this final rule does not preclude the authorities and responsibilities of ESA section 10(a)(1)(b). NMFS will work closely with states in implementing this final rule and on long-term measures to address prohibited takes of sea turtles.

This section details and explains notable changes made to the final rule from the proposed rule.

NMFS has changed language in the preamble and regulatory text to clarify that NMFS and/or interested cooperating entities will pay direct costs for the observer. NMFS made this change in response to a comment, described above, that the rule should not preclude interested cooperating entities from supporting observer coverage for certain fisheries, as appropriate. Such partnerships exist in observer programs around the country and may help enhance coverage levels where needed.

NMFS changed language in the regulatory text at § 222.401 to clarify that the NMFS Assistant Administrator will work with both Science Center Directors and Regional Administrators to identify fisheries that should be observed for sea turtle interactions under this regulation. This is appropriate since observer programs are administered at both the Science Center and Regional office level, depending on the specific region.

NMFS clarified language in the preamble and regulatory text describing the appropriate application of the rule to U.S. fishing vessels operating inside waters of the U.S. (territorial waters and waters within the U.S. EEZ) as well as on the high seas. The rule clarifies that NMFS may place observers on either recreational or commercial U.S. fishing vessels operating within U.S. waters or on the high seas, or on vessels that are otherwise subject to the jurisdiction of the United States.

NMFS corrects an error in § 222.402(b) that states: “In addition, a written notification of the proposed determination will be sent to the addresses specified for the vessel in either the NMFS or state fishing permit application, or to the address specified for registration or documentation purposes, or upon written notification otherwise served on the owners or operators of a vessel” (emphasis added). NMFS intended this step to occur at the final, not proposed, determination stage, where such notification would be more appropriate and cost-effective.

NMFS clarifies in the final rule the exceptions to the 30-day delay in the effective date for implementing observer coverage following a final annual determination. The Classification section of the proposed rule stated, “A 30-day delay in effective date for implementing observer coverage will follow the annual notification, except for those fisheries that were listed in the preceding annual notification or where the AA has determined there is good cause [pursuant to the Administrative Procedure Act] to make the rule effective without a 30-day delay.” NMFS, however, did not include the “good cause” portion of the exception in the regulatory text of the proposed rule due to an oversight. Thus, NMFS adds this exception to the 30-day delay in effective date to the final rule.

NMFS corrects the citation to the observer health and safety requirements in § 222.401 of the final rule.

Dwyer, K.L., C.E. Ryder, and R. Prescott. 2002. Anthropogenic mortality of leatherback sea turtles in Massachusetts waters. 2002. In: Proceedings of the Twenty-Second Annual Symposium on Sea Turtle Conservation and Biology. NOAA Tech Memo. NMFS-SEFSC-503, p.260.

Epperly, S., Avens,L., Garrison, L., Henwood, T., Hoggard, W., Mitchell, J., Nance, J., Poffenberger, J., Sasso, C., Scott-Denton, E., and Yeung, C. 2002. Analysis of sea turtle.

Bycatch in the commercial shrimp fisheries of Southeast U.S. waters and the Gulf of Mexico. NOAA Technical Memorandum NMFS-SEFSC-490, 88p.

National Marine Fisheries Service, Southeast Fisheries Science Center, Beaufort Laboratory. 2007. Sea Turtle Sightings Database, unpublished.

Scott-Denton, Elizabeth; Cryer, Pat; Gocke, Judith; Harrelson, Mike; Nance, James; Smith, Rebecca; and Williams, Jo Anne. CCB-0702. 2007. Incidental capture of sea turtles in the U.S. southeastern shrimp trawl fishery.

An informal Section 7 consultation was prepared for the proposed rule. It found that this action is not likely to adversely affect species listed as threatened or endangered or their associated critical habitat under the ESA.

This action has been determined to be not significant for purposes of Executive Order 12866.

The AA prepared an environmental assessment for this rule, which resulted in a Finding of No Significant Impact. A copy of the EA is available (see ADDRESSES ).

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule would not have a significant impact on a substantial number of small entities. The factual basis for this certification is as follows:

For the purpose of this certification, all fishermen affected by this rule will be considered individual small entities. Given the nature of sampling programs and limited NMFS resources, this rule will likely affect fewer than one hundred fishermen at any given time.

Individual small entities will not be required to incur direct costs for complying with this observer requirement as NMFS and/or cooperating entities will pay the direct costs associated with observer coverage. Direct costs include observer salary and insurance costs. Potential indirect costs to individual small entities required to take observers under this rule may include: lost space on deck for catch, lost bunk space, and lost fishing time due to time needed to process bycatch data. For all these potential indirect costs, it is important to note that, due to limited resources and sampling protocols, effective monitoring will rotate observers among a limited number of vessels in a fishery at any given time. Thus, the potential indirect costs to individual small entities further described below are expected to be minimal since observer coverage would only be required for a small percentage of an individual's total annual fishing time.

Lost space on deck for catch is a potential indirect cost to small entities. The indirect costs would potentially be less room to store catch or to house another active fishermen. However, in accordance with Observer Health and Safety standards, vessels too small to safely accommodate an observer will not be required to take an observer under this rule. Thus, the individuals most likely to be affected by this indirect cost, will not likely be required to accommodate an observer.

Lost bunk space is a potential cost in that a vessel may need to limit the number of working fishermen onboard to accommodate an observer for overnight trips. While this could result in lost fishing effort, and therefore lost catch, this would only be a potential cost to that subset of fishing vessels for which overnight fishing trips are a regular occurrence. Furthermore, given that larger vessels are usually used for fishing involving multi-day trips, the circumstances in which an observer would significantly displace fishing effort due to lost bunk space are not expected to occur with frequency. Thus, for this and the reasons stated above, the potential indirect cost of lost bunk space to individual small entities resulting from this rule is expected to be minimal.

Lost fishing time due to time needed to process sea turtle bycatch data is another potential indirect cost to fishermen of this observer requirement. However, while individually significant, sea turtle bycatch events are generally rare occurrences. Thus, the need to process such data is not expected to occur on a frequent basis, rendering this an insignificant impact on individual fishermen. This rule includes an annual notification process whereby the Assistant Administrator for Fisheries (AA) would make an annual determination identifying which fisheries require observer coverage for the purpose of monitoring potential sea turtle takes. The determination will be based on the best available commercial, biological, and other data. NMFS will publish a proposed notice in the Federal Register for public comment. A 30-day delay in effective date for implementing observer coverage will follow the Federal Register publication of any final annual notification, except for those fisheries that were listed in the preceding annual notification or where the AA has determined that there is good cause pursuant to the Administrative Procedure Act to make the rule effective without a 30-day delay. Annual notification will include, but not be limited to, information on the fisheries to be sampled, geographic and seasonal scope, and level of coverage.

For the reasons stated herein, the rule to establish mandatory observer coverage is not likely to impose a significant economic impact on a substantial number of small entities.

This rule does not contain a collection-of-information requirement subject to the Paperwork Reduction Act.

This rule contains policies with federalism implications as that term is defined in Executive Order 13132. The Assistant Administrator for NMFS notified state environmental management directors of this rule via a formal letter and detailed fact sheet describing the rule. NMFS will continue to solicit input from the appropriate officials of affected state, local, and/or tribal governments to solicit their input on the development of relevant observer programs under this rule.

Administrative Practice and Procedure, Endangered and threatened species, Exports, Imports, Marine mammals.

Endangered and threatened species, Exports, Imports, Transportation.

Several of the background documents for the ALWTRP and the take reduction planning process can be downloaded from the ALWTRP Web site at http://www.nero.noaa.gov/whaletrp/ .

The ALWTRP was developed pursuant to section 118 of the Marine Mammal Protection Act (MMPA) to reduce the incidental mortality and serious injury of three endangered species of whales (right, fin, and humpback) due to incidental interaction with commercial fishing activities. In addition, the measures identified in the ALWTRP would provide conservation benefits to a fourth species (minke), which are neither listed as endangered nor threatened under the Endangered Species Act (ESA). The ALWTRP, implemented through regulations codified at 50 CFR 229.32, relies on a combination of fishing gear modifications and time/area closures to reduce the risk of whales becoming entangled in commercial fishing gear (and potentially suffering serious injury or mortality as a result).

On January 9, 2002, NMFS published the final rule to implement the ALWTRP's DAM program (67 FR 1133). On August 26, 2003, NMFS amended the regulations by publishing a final rule, which specifically identified gear modifications that may be allowed in a DAM zone (68 FR 51195). The DAM program provides specific authority for NMFS to restrict temporarily on an expedited basis the use of lobster trap/pot and anchored gillnet fishing gear in areas north of 40° N. lat. to protect right whales. Under the DAM program, NMFS may: (1) require the removal of all lobster trap/pot and anchored gillnet fishing gear for a 15-day period; (2) allow lobster trap/pot and anchored gillnet fishing within a DAM zone with gear modifications determined by NMFS to sufficiently reduce the risk of entanglement; and/or (3) issue an alert to fishermen requesting the voluntary removal of all lobster trap/pot and anchored gillnet gear for a 15-day period and asking fishermen not to set any additional gear in the DAM zone during the 15-day period.

A DAM zone is triggered when NMFS receives a reliable report from a qualified individual of three or more right whales sighted within an area (75 nm 2 (139 km 2 )) such that right whale density is equal to or greater than 0.04 right whales per nm2 (1.85 km2). A qualified individual is an individual ascertained by NMFS to be reasonably able, through training or experience, to identify a right whale. Such individuals include, but are not limited to, NMFS staff, U.S. Coast Guard and Navy personnel trained in whale identification, scientific research survey personnel, whale watch operators and naturalists, and mariners trained in whale species identification through disentanglement training or some other training program deemed adequate by NMFS. A reliable report would be a credible right whale sighting.

On July 24, 2007, an aerial survey reported three aggregations of right whales, totaling thirty individuals in the proximity of 41° 23′ N latitude and 68° 50′ W longitude. The positions lie approximately 54nm southeast of Chatham, MA. After conducting an investigation, NMFS ascertained that the report came from a qualified individual and determined that the report was reliable. Thus, NMFS has received a reliable report from a qualified individual of the requisite right whale density to trigger the DAM provisions of the ALWTRP.

Once a DAM zone is triggered, NMFS determines whether to impose restrictions on fishing and/or fishing gear in the zone. This determination is based on the following factors, including but not limited to: the location of the DAM zone with respect to other fishery closure areas, weather conditions as they relate to the safety of human life at sea, the type and amount of gear already present in the area, and a review of recent right whale entanglement and mortality data.

NMFS has reviewed the factors and management options noted above relative to the DAM under consideration. As a result of this review, NMFS prohibits lobster trap/pot and anchored gillnet gear in this area during the 15-day restricted period unless it is modified in the manner described in this temporary rule.

The DAM Zone is bound by the following coordinates:

42° 00′ N., 69° 24′ W (NW Corner)

42° 00′ N., 68° 08′ W

40° 58′ N., 68° 08′ W

40° 58′ N., 69° 24′ W

42° 00′ N., 69° 24′ W (NW Corner)

In addition to those gear modifications currently implemented under the ALWTRP at 50 CFR 229.32, the following gear modifications are required in the DAM zone. If the requirements and exceptions for gear modification in the DAM zone, as described below, differ from other ALWTRP requirements for any overlapping areas and times, then the more restrictive requirements will apply in the DAM zone. Special note for gillnet fisherman: A portion of this DAM zone overlaps the year-round Closure Area I for Northeast Multispecies found at 50 CFR 648.81(a). Due to this closure, sink gillnet gear is prohibited from this portion of the DAM zone.

Lobster Trap/Pot Gear

Fishermen utilizing lobster trap/pot gear within the portion of the Northern Nearshore Lobster Waters that overlap with the DAM zone are required to utilize all of the following gear modifications while the DAM zone is in effect:

1. Groundlines must be made of either sinking or neutrally buoyant line. Floating groundlines are prohibited;

2. All buoy lines must be made of either sinking or neutrally buoyant line, except the bottom portion of the line, which may be a section of floating line not to exceed one-third the overall length of the buoy line;

3. Fishermen are allowed to use two buoy lines per trawl; and

4. A weak link with a maximum breaking strength of 600 lb (272.4 kg) must be placed at all buoys.

Fishermen utilizing lobster trap/pot gear within the portion of the Offshore Lobster Waters Area and Great South Channel Restricted Lobster Area that overlap with the DAM zone are required to utilize all of the following gear modifications while the DAM zone is in effect:

1. Groundlines must be made of either sinking or neutrally buoyant line. Floating groundlines are prohibited;

2. All buoy lines must be made of either sinking or neutrally buoyant line, except the bottom portion of the line, which may be a section of floating line not to exceed one-third the overall length of the buoy line;

3. Fishermen are allowed to use two buoy lines per trawl; and

4. A weak link with a maximum breaking strength of 1,500 lb (680.4 kg) must be placed at all buoys.

Fishermen utilizing anchored gillnet gear within the portions of the Other Northeast Gillnet Waters Area, Great South Channel Restricted Gillnet Area, and Great South Channel Sliver Restricted Area that overlap with the DAM zone are required to utilize all the following gear modifications while the DAM zone is in effect:

1. Groundlines must be made of either sinking or neutrally buoyant line. Floating groundlines are prohibited;

2. All buoy lines must be made of either sinking or neutrally buoyant line, except the bottom portion of the line, which may be a section of floating line not to exceed one-third the overall length of the buoy line;

3. Fishermen are allowed to use two buoy lines per string;

4. Each net panel must have a total of five weak links with a maximum breaking strength of 1,100 lb (498.8 kg). Net panels are typically 50 fathoms (91.4 m) in length, but the weak link requirements would apply to all variations in panel size. These weak links must include three floatline weak links. The placement of the weak links on the floatline must be: one at the center of the net panel and one each as close as possible to each of the bridle ends of the net panel. The remaining two weak links must be placed in the center of each of the up and down lines at the panel ends;

5. A weak link with a maximum breaking strength of 1,100 lb (498.8 kg) must be placed at all buoys; and

6. All anchored gillnets, regardless of the number of net panels, must be securely anchored with the holding power of at least a 22 lb (10.0 kg) Danforth-style anchor at each end of the net string.

The restrictions will be in effect beginning at 0001 hours August 5, 2007, through 2400 hours August 19, 2007, unless terminated sooner or extended by NMFS through another notification in the Federal Register .

The restrictions will be announced to state officials, fishermen, ALWTRT members, and other interested parties through e-mail, phone contact, NOAA website, and other appropriate media immediately upon issuance of the rule by the AA.

In accordance with section 118(f)(9) of the MMPA, the Assistant Administrator (AA) for Fisheries has determined that this action is necessary to implement a take reduction plan to protect North Atlantic right whales.

Environmental Assessments for the DAM program were prepared on December 28, 2001, and August 6, 2003. This action falls within the scope of the analyses of these EAs, which are available from the agency upon request.

NMFS provided prior notice and an opportunity for public comment on the regulations establishing the criteria and procedures for implementing a DAM zone. Providing prior notice and opportunity for comment on this action, pursuant to those regulations, would be impracticable because it would prevent NMFS from executing its functions to protect and reduce serious injury and mortality of endangered right whales. The regulations establishing the DAM program are designed to enable the agency to help protect unexpected concentrations of right whales. In order to meet the goals of the DAM program, the agency needs to be able to create a DAM zone and implement restrictions on fishing gear as soon as possible once the criteria are triggered and NMFS determines that a DAM restricted zone is appropriate. If NMFS were to provide prior notice and an opportunity for public comment upon the creation of a DAM restricted zone, the aggregated right whales would be vulnerable to entanglement which could result in serious injury and mortality. Additionally, the right whales would most likely move on to another location before NMFS could implement the restrictions designed to protect them, thereby rendering the action obsolete. Therefore, pursuant to 5 U.S.C. 553(b)(B), the AA finds that good cause exists to waive prior notice and an opportunity to comment on this action to implement a DAM restricted zone to reduce the risk of entanglement of endangered right whales in commercial lobster trap/pot and anchored gillnet gear as such procedures would be impracticable.

For the same reasons, the AA finds that, under 5 U.S.C. 553(d)(3), good cause exists to waive the 30-day delay in effective date. If NMFS were to delay for 30 days the effective date of this action, the aggregated right whales would be vulnerable to entanglement, which could cause serious injury and mortality. Additionally, right whales would likely move to another location between the time NMFS approved the action creating the DAM restricted zone and the time it went into effect, thereby rendering the action obsolete and ineffective. Nevertheless, NMFS recognizes the need for fishermen to have time to either modify or remove (if not in compliance with the required restrictions) their gear from a DAM zone once one is approved. Thus, NMFS makes this action effective 2 days after the date of publication of this document in the Federal Register . NMFS will also endeavor to provide notice of this action to fishermen through other means upon issuance of the rule by the AA, thereby providing approximately 3 additional days of notice while the Office of the Federal Register processes the document for publication.

NMFS determined that the regulations establishing the DAM program and actions such as this one taken pursuant to those regulations are consistent to the maximum extent practicable with the enforceable policies of the approved coastal management program of the U.S. Atlantic coastal states. This determination was submitted for review by the responsible state agencies under section 307 of the Coastal Zone Management Act. Following state review of the regulations creating the DAM program, no state disagreed with NMFS' conclusion that the DAM program is consistent to the maximum extent practicable with the enforceable policies of the approved coastal management program for that state.

The DAM program under which NMFS is taking this action contains policies with federalism implications warranting preparation of a federalism assessment under Executive Order 13132. Accordingly, in October 2001 and March 2003, the Assistant Secretary for Intergovernmental and Legislative Affairs, Department of Commerce, provided notice of the DAM program and its amendments to the appropriate elected officials in states to be affected by actions taken pursuant to the DAM program. Federalism issues raised by state officials were addressed in the final rules implementing the DAM program. A copy of the federalism Summary Impact Statement for the final rules is available upon request ( ADDRESSES ).

The rule implementing the DAM program has been determined to be not significant under Executive Order 12866.

State and Federal FMPs governing fisheries for the same species may differ in reporting requirements, participation restrictions, and overall strategies to control fishing mortality. These programs may be successful in achieving their objectives only when a vessel fishes in one program, either state or Federal, for an entire permit year, because the management measures are typically based on analyses of fishing effort, and where that effort is expected to take place. Federal regulations are rarely the exclusive authority governing federally permitted commercial fishing vessels. Vessels that have both Federal and state permits are bound by the more restrictive of the regulations in effect. In contrast, vessels without a valid Federal permit can be permitted by a state to fish exclusively in state territorial waters, and such vessels do not have to comply with Federal fishing regulations.

Current regulations require that a federally permitted fishing vessel must abide by Federal fishing regulations, regardless of whether the vessel is fishing in state or Federal waters. However, vessels that delay getting their Federal permit may be authorized to participate exclusively in state water fisheries under state rules and regulations. Although splitting fishing effort between state and Federal waters may have repercussions across all federally managed fisheries, the impact of vessels splitting fishing effort between state and Federal programs is thought to be greatest in Federal fisheries utilizing a fishing effort control program referred to as a days-at-sea (DAS) program, which is common in Federal fisheries management in New England. This type of program limits the amount of days that a federally permitted commercial fishing vessel can fish each year. Under current Federal regulations, a DAS vessel could increase its overall effort by fishing in state waters outside of the DAS program prior to renewal of its Federal DAS permit. Although it is estimated that less than 10 percent of federally permitted vessels currently exploit this inadvertent exception to Federal regulations, there is concern that this practice could expand, especially should further reductions in DAS be necessary. Thus, the purpose of this action is to remove an unintended consequence of having a Federal permit renewal system that effectively allows for a temporary relinquishment, or suspension, of a Federal limited access permit. It was never the intention of the regulations to allow a vessel to participate wholly in a state fishing program, in which it would not otherwise be allowed to participate under the conditions of the Federal limited access permit program for which it was eligible, while the vessel's Federal limited access permits were suspended.

This action applies only to Federal limited access and moratorium commercial fishing vessel permit holders. The terms “limited access” and “moratorium” in regards to Federal permit programs are synonymous. A limited access permit is a permit that an individual has applied for and received based on qualification criteria set forth in the FMP. By applying for and receiving a limited access permit, a vessel owner has agreed to abide by a fishing program that, in turn, grants exclusive fishing privileges. Under current regulations, a Federal limited access permit must be renewed on an annual basis. If the permit is not issued within 1 year of the last day of the permit year for which it was valid, the permit is cancelled and rendered ineligible for renewal. Open access permits, which are not affected by this action, can be applied for with minimum qualification criteria, and received on an annual basis without any deadlines.

Public comment regarding this action was solicited in the proposed rule (72 FR 17085, April 6, 2007). The comment period closed on May 7, 2007.

This action remedies the situation described in the preceding paragraphs by making it a condition, upon issuance of a limited access permit, that the permit holder agrees that the vessel may not fish for or land, in or from Federal or state waters, any species of fish authorized by the permit, unless and until the permit has been issued or renewed in any subsequent permit year, or the permit either has been voluntarily relinquished or otherwise forfeited, revoked, or transferred from the vessel. This condition of the limited access permit is in effect for the entire duration of the permit's renewal eligibility period. For example, if an issued permit expired on April 30, 2006, a vessel owner would have until April 30, 2007, to be reissued the permit. Thus, the vessel owner would be subject to the permit condition through April 30, 2007. By participating in a Federal limited access fishing program, a vessel owner is agreeing to participate wholly in that program and be subject to all of its accompanying regulations until such time that the vessel owner is no longer eligible to renew his/her vessel's limited access permit. This measure impacts the Federal limited access commercial fishing vessel permits issued by the NMFS Northeast Regional Office that are listed in Table 1. Any future limited access permits implemented by the NMFS, Northeast Regional Office, unless otherwise explicitly exempted, are subject to this rule. The second measure included in this action limits the number of vessel replacements allowed during a permit year. This measure is also applicable to all future and current limited access vessels, which are listed in Table 1. These measures are discussed separately below.

Under this action, a commercial fishing vessel that was issued, or is in possession of, a valid Federal limited access fishing permit at the end of the permit year immediately preceding the current permit year, is prohibited from landing any fish managed under 50 CFR part 648 for which the vessel would be authorized under the conditions of the limited access permit(s), unless at least one of the following conditions is met:

• The vessel owner has renewed the Federal limited access permit(s) for the current permit year;

• The vessel owner has voluntarily permanently relinquished the vessel's Federal limited access permit(s); or

• The vessel has been replaced by another vessel and the permit eligibility has moved to the new vessel or was placed into Confirmation of Permit History (CPH).

In other words, a vessel owner who is eligible to renew his/her vessel's Federal limited access permit is prohibited from fishing for and/or possessing any fish for which the vessel would be authorized under the respective limited access permit, from any waters, unless the limited access permit(s) has been renewed or removed from the vessel. All vessel reporting requirements for the limited access permits the vessel is eligible to renew remain in effect unless the limited access permit(s) have been relinquished or transferred to another vessel or CPH. This includes completed fishing vessel trip reports (VTRs) for the entire period that the vessel was issued or eligible to be issued a limited access permit. Since these restrictions are a condition of the issuance of a limited access permit, this rule does not apply to an individual until after an individual has applied for or been issued a limited access permit on or after the effective date of this final rule.

The vessel owner must take an action, as outlined below, regarding the limited access permit for which he/she is eligible at the time the first permit application is submitted for a subsequent permit year. Actions that could be taken are the renewal, relinquishment, or transfer of the limited access permit(s). All limited access permits for which a vessel is eligible must be renewed at the same time. In addition, a vessel that is eligible for a Federal limited access permit may be issued a Federal open access fishing permit only at the same time, or after, the limited access permits have been either renewed, relinquished, or transferred for the given permit year. For example, if a vessel owner eligible for a limited access NE multispecies permit would like to be issued the limited access NE multispecies permit, an open access skate permit, and an open access spiny dogfish permit during a given year he/she must apply for all three permits at the same time, or renew the limited access NE multispecies permit prior to adding the open access skate and dogfish permits. The open access skate and dogfish permits could be applied for together or separately after the limited access NE multispecies permit was renewed. Failure to renew a limited access permit by the end of the permit year will result in the loss of eligibility to renew the permit in subsequent permit years.

Thus, this action commits a limited access vessel to a specific fishery program (state or Federal) prior to engaging in any fishing activities. This measure eliminates an inadvertent exception to Federal regulations that is currently exploited by a minority of vessel owners and/or operators and potentially prevents more vessel owners and/or operators from taking advantage of this situation in the future.

This action allows only one transfer of limited access permits per permit year, unless the vessel being replaced has been rendered inoperable and not repairable, due to unforeseen circumstances. The intent of this measure is to deter vessel owners from moving limited access permits off their primary vessel prior to the start of a permit year and then moving them back onto their primary vessel after the primary vessel has fished part of the permit year in a state waters fishery program. Under this scenario, a vessel owner is prohibited from transferring the permits back onto the secondary vessel prior to the start of the following permit year. The previous vessel replacement measures were implemented in order to give flexibility to vessel owners to purchase and replace a vessel in a timely manner. The action maintains this flexibility while ensuring that the vessel replacement program is not utilized to avoid Federal regulations for a period of time.

NMFS did not receive any public comment on the proposed rule during the comment period.

The regulatory text from the proposed rule has been modified to clarify that the vessel reporting requirements, specifically fishing vessel trip reports, for vessels eligible to renew a limited access permit remain in effect unless the limited access permit(s) have been relinquished, transferred to another vessel, or placed into CPH. This requirement was explicitly stated in the preamble of the proposed rule and repeated again in the preamble of this final rule. This clarification revises the regulatory text in paragraph § 648.7(b)(1)(i).

This action is taken under the authority of the Magnuson-Stevens Act and regulations at 50 CFR part 648. The Regional Administrator determined that management measures contained in this final rule are necessary for the conservation and management of fisheries of the Northeastern United States and that it is consistent with the Magnuson-Stevens Act and other applicable laws.

This final rule has been determined to be not significant for purposes of Executive Order 12866. A description of the reasons why this action is being taken by the Agency and the objectives of this final rule are contained in the preambles of the proposed and final rules. This action does not duplicate, overlap, or conflict with any other Federal rules.

NMFS, pursuant to section 604 of the Regulatory Flexibility Act (RFA), prepared this entire FRFA in support of the management measures contained in this permitting action. The FRFA incorporates the economic impacts summarized in the IRFA and the corresponding RIR that were prepared for this action. A summary of the IRFA was published in the Classification section of the proposed rule and is not repeated here. Copies of the IRFA, FRFA and RIR prepared for this action are available from the Northeast Regional Office (see ADDRESSES ). A description of why this action was taken, the objectives of, and the legal basis for this rule, are contained in the preamble to the proposed rule and this final rule and are not repeated here.

No public comments on the proposed rule were received.

Approximately 3,700 vessels could be affected by this action. In all, these participants generate close to $1 billion annually from the sale of fish and shellfish. The Small Business Administration (SBA) size standard for small commercial fishing entities is $4.0 million in gross receipts and would apply to all limited access permit holders affected by this action.

Data compiled by NMFS from the 2004 fishing year (FY) indicate that 64 vessels delayed their permit renewal and landed fish during the time their Federal permit was invalid. In the same year, eight vessels were replaced that reported landings later in the same fishing year. Thus, this final rule will potentially impact 72 vessels out of over 3,700 federally permitted limited access vessels in the NE Region. An average of 94 percent of vessel owners here renewed their permits by May 1, the start of the permit year for the majority of the fisheries affected, over the last few years. With this level of compliance, only about 370 entities, including the aforementioned vessels that reported landings during this time period, will likely be affected by the permit renewal portion of this action.

In addition to vessels delaying their permit renewal, some vessels are replaced by another fishing vessel during the permit year. Under this circumstance, the former vessel, which now no longer has Federal permits associated with it, may then continue to fish outside of Federal regulations in state waters. Across all limited access fisheries, approximately eight vessels landed fish as a result of replacing a vessel and then continuing to fish with the old vessel in 2004.

This final rule will not alter the current reporting and recordkeeping requirements for commercial fishing vessels in the Northeast Region. The permit regulations promulgated under this rule modifies the timing and reduces the frequency of permit renewal and vessel replacement applications, respectively.

As mentioned previously, all entities to which this final rule applies are considered small entities by SBA size standards. Data show that only a small number of vessels currently exploit the inadvertent exception to Federal regulations that this action rectifies. In developing this rule, NMFS closely examined previous vessel permit renewal and vessel replacement practices to identify a way to achieve the goals of this final rule without disrupting the practices of the majority of Federal commercial fishing vessel permit holders. The other alternative analyzed to achieve the goals of this rule would have introduced a deadline for permit renewal applications and a new “Reserve Permit” if that deadline was missed. Thus, this rule minimizes economic impacts on small entities to the greatest extent practicable.

Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule or group of related rules for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule, and shall designate such publications as “small entity compliance guides.” The agency shall explain the action a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a small entity compliance guide was prepared. Copies of the guide will be sent to all holders of commercial Federal limited access permits. The guide will also be available on the internet at http://www.nero.noaa.gov. Copies of the guide can also be obtained from the Regional Administrator (see ADDRESSES ).

This action does not contain an additional collection-of-information requirement subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). NMFS Northeast Region commercial fishing vessel permit applications and vessel replacement applications are part of the collection of information under OMB Control Number 0648-0202. The current expiration date for OMB Control Number 0648-0202 is November 30, 2009.

Electronic Access

This final rule is accessible via the Internet at the Office of the Federal Register's Web site at http://www.gpoaccess.gov/fr/index.html. Background information and documents are available at the Pacific Fishery Management Council's (Council's) Web site at http://www.pcouncil.org/.

This correction reinstates several limited entry trawl commercial trip limits that were published in a proposed rule on September 29, 2006 (71 FR 57764) and implemented in a final rule on December 29, 2006 (71 FR 78638). Trip limits are an important management measure used in the Pacific Coast groundfish fishery to allow fisheries to access more abundant groundfish stocks while protecting overfished and depleted stocks. The trip limits that are the subject of this correction are contained in Tables 3 (North) and 3 (South) to part 660 subpart G.

Due to a formatting error, these trip limits were inadvertently omitted during the publication of inseason changes on July 5, 2007 (72 FR 36617), which are effective August 1, 2007.