Copies of the Governors' certifications and the Commission's decision may be reviewed at the NRC Web site http://www.nrc.gov .

The NRC Strategic Plan, Fiscal Year 2000-Fiscal Year 2005, included among NRC performance goals for nuclear reactor safety, a performance goal for reducing unnecessary regulatory burden on stakeholders. Similarly, the NRC Strategic Plan Fiscal Year 2004-Fiscal Year 2009 includes as an Effectiveness Strategy improving NRC regulations by adding needed requirements and eliminating unnecessary requirements. The Strategic Plan defines unnecessary regulatory burden as requirements that go beyond what is necessary and sufficient to provide reasonable assurance that the public health and safety, environment, and common defense and security will be protected.

To reduce unnecessary regulatory burden, the NRC issued a proposed rule on September 22, 2006 (71 FR 55382), to revise 10 CFR 19.13, “Notifications and Reports to Individuals,” 10 CFR 20.1905, “Exemptions to Labeling Requirements,” and 10 CFR 20.2104, “Determination of Prior Occupational Dose.” The NRC also proposed to revise the definition of TEDE in 10 CFR 20.1003, “Definitions,” and 10 CFR 50.2, “Definitions,” to be consistent with current Commission policy.

The NRC received 16 comment letters in response to the proposed rule. The commenters included a number of individuals; industry organizations; and power reactor, uranium recovery, and fuel facility licensees. A discussion of the issues raised by the commenters and the Commission's response is covered below in Section III.

This final rule includes four principal amendments. These revisions are intended to reduce unnecessary regulatory burden on NRC and Agreement State licensees without affecting the level of protection for either the health and safety of workers and the public, or for the environment. In finalizing this rule, no revisions were made to the regulatory language that was published in the proposed rule (71 FR 55382; September 22, 2006).

The first amendment revises paragraphs (b) and (d) of 10 CFR 19.13 and 10 CFR 20.2205, “Reports to Individuals of Exceeding Dose Limits.”

Under 10 CFR 19.13(b), licensees must make dose information available to workers as shown in records maintained by the licensees. The final rule revises 10 CFR 19.13(b) so that licensees must provide an annual report to each individual monitored of the dose received in that monitoring year if (1) the individual's occupational dose exceeds 1 millisievert (mSv) (100 millirem (mrem)) TEDE or 1 mSv (100 mrem) to any individual organ or tissue; or (2) the individual requests his or her annual dose report. However, the NRC will not require licensees to provide unsolicited annual dose reports to those individuals whose annual dose does not exceed these limits. The criterion of 1 mSv (100 mrem) applies to the whole body, to any individual organ or tissue, to the lens of the eye, to the skin of the whole body, and to the skin of the extremities. If the dose to any one of these exceeds the criterion during a monitoring year, then the licensee must provide a dose report to the individual for that year.

The criterion of 1 mSv (100 mrem) was selected because it meets the Commission's regulatory objective to provide a significant reduction in administrative and reporting burdens on licensees. In addition, it is consistent with the occupational dose threshold for requiring instruction to workers under 10 CFR 19.12, “Instruction to Workers.” As discussed in the Supplementary Information to the proposed rule, recent occupational radiation exposure data submitted to the NRC under 10 CFR 20.2206, “Reports of Individual Monitoring,” indicates that about 80 percent of the individuals monitored annually received a TEDE that did not exceed 1 mSv (100 mrem). Based upon this information, the final rule will result in a significant reduction in administrative and reporting burdens on licensees.

The final rule does not change the Commission's requirements in 10 CFR Part 20, “Standards for Protection Against Radiation,” for monitoring, recordkeeping, or reporting to the Commission. Therefore, the final rule will not affect the level of protection for either the health and safety of workers and the public or for the environment.

Under the existing regulatory framework, the requirement to inform individuals of their routine annual doses, when determined through the results of individual monitoring and when such a report is provided to the Commission, appears multiple times in the regulations. This requirement appears in 10 CFR 19.13(d) through the reference to 10 CFR 20.2206, “Reports of Individual Monitoring.” It also appears in 10 CFR 20.2205 through the reference to 10 CFR 20.2206. To improve regulatory efficiency, this final rule removes the reference to 10 CFR 20.2206 in 10 CFR 19.13(d) and 10 CFR 20.2205, and consolidates the requirement to report annual dose to the individual into a single requirement in 10 CFR 19.13(b).

The NRC will also revise NRC Form 3, “Notice to Employees,” to instruct workers on how the licensee is to provide dose annually to workers consistent with the final rule.

The second amendment revises the definition of TEDE in 10 CFR 20.1003 and 10 CFR 50.2. Under the final rule, TEDE means the sum of the effective dose equivalent (for external exposures) and the committed effective dose equivalent (for internal exposures). The revised definition of TEDE will allow licensees to substitute “effective dose equivalent (EDE)” for “deep-dose equivalent (DDE)” for external exposures. Conforming changes are also made to 10 CFR 1201, “Occupational Dose Limits for Adults.”

This revision will clarify and make the definition of TEDE consistent with Commission policy, as discussed in Regulatory Issue Summary (RIS) 2002-06, “Evaluating Occupational Dose for Individuals Exposed to NRC-Licensed Material and Medical X-Rays,” dated April 16, 2002, and subsequently clarified in RIS 2003-04, “Use of the Effective Dose Equivalent in Place of the Deep Dose Equivalent in Dose Assessments,” dated February 13, 2003, and RIS 2004-01, “Method for Estimating Effective Dose Equivalent From External Radiation Sources Using Two Dosimeters,” dated February 17, 2004. This policy explains that the EDE is the primary quantity in the definition of TEDE for external exposures but that licensees are required to use the DDE in place of the EDE when measuring dose from external exposure, unless the EDE is determined by a dosimetry method approved by the NRC.

In addition, 10 CFR 20.1201, paragraph (c) will be revised to add the requirement that when the external exposure is determined by measurement with an external personal monitoring device, the DDE must be used in place of the EDE, unless the EDE is determined by a dosimetry method approved by the NRC. In many external exposure monitoring situations, determining EDE from external exposures may not be practicable. The added administrative burden associated with determining EDE may not be warranted, or an applicable dosimetry method for determining EDE may not exist. The revised wording to 10 CFR 20.1201(c) clarifies that licensees can still use DDE in place of EDE for the external exposure in demonstrating compliance with the TEDE dose limit, consistent with the existing regulatory framework; however, the DDE must be for the part of the whole body receiving the highest exposure.

The final rule will not affect the level of protection for either the health and safety of workers and the public or for the environment because the revised definition of TEDE does not decrease the ability to determine dose.

The NRC will also revise NRC Form 4, “Cumulative Occupational Dose History,” and NRC Form 5, “Occupational Dose Record for a Monitoring Period,” so that the licensee can enter either the DDE or EDE in Field 11 which currently is labeled “Deep Dose Equivalent (DDE).” In addition, the instruction sheets for completing both forms will be revised to clarify the method to be used to fill in Field 11, “Deep Dose Equivalent (DDE).” Until these forms are revised, licensees should enter in Field 11 the EDE from external exposure if this dose is assessed by means other than a single dosimeter worn by the exposed individual. Otherwise, the DDE is to be entered.

The third amendment revises 10 CFR 20.1905 by adding an exemption for containers holding licensed material (other than sealed sources that are either specifically or generally licensed) within nuclear power facilities licensed under 10 CFR Part 50, “Domestic Licensing of Production and Utilization Facilities,” or 10 CFR Part 52, “Early Site Permits; Standard Design Certifications; and Combined Licenses for Nuclear Power Plants,” providing certain conditions are met. Licensees of these facilities need not label containers holding licensed material that are within an area posted under 10 CFR 20.1902, “Posting Requirements,” if the containers are conspicuously marked (to indicate that they may contain licensed material) commensurate with the radiological hazard and are accessible only to individuals who have sufficient instruction to minimize radiation exposure while handling or working in the vicinity of the containers. However, the final rule does require the containers to be appropriately labeled under the requirements of 10 CFR 20.1904, “Labeling Containers,” before being removed from the posted area.

Under the existing regulatory framework, some nuclear power reactor licensees interpreted 10 CFR 20.1904 to mean that they had to label all containers in a posted area, whether they contained licensed material or not, because every container has the potential for internal contamination. This conservative interpretation of the current regulations put an undue burden on these licensees. Thus, the final revision to 10 CFR 20.1905 requires containers to be conspicuously marked commensurate with the radiological hazard. The final rule exempts the licensee from providing detailed labeling information such as the radionuclide or radionuclides present, an estimate of the quantity of radioactivity, the date for which the activity is estimated, radiation levels, types of materials, and mass enrichment as required under 10 CFR 20.1905. One purpose of adding conspicuous markings on the containers is to indicate the potential for generating airborne contamination or high radiation dose rates if the containers were opened or mishandled. For example, these containers could be conspicuously marked by using a color-coding system to indicate high, medium, or low levels of activity or hazard. Containers such as 55-gallon steel drums holding contaminated gloves and booties could be marked with a color that represents low levels of activity or low potential for airborne contamination. At nuclear power facilities, containers located within a posted area are accessible only to individuals who have had instruction under 10 CFR 19.12 and who have been assigned a radiation work permit to control their activities. Consequently, workers will be instructed on the handling of marked containers before workers are given access to these containers.

The container marking system under this rule will reduce licensee administrative and information collection burdens, but serve the same health and safety functions as the current labeling requirements. Therefore, the final rule will not affect the level of protection for either the health and safety of workers and the public or for the environment.

The fourth amendment removes the provision in 10 CFR 20.2104(a)(2) that requires licensees to attempt to obtain the records of cumulative occupational radiation dose for each worker requiring monitoring under 10 CFR 20.1502, “Conditions Requiring Individual Monitoring of External and Internal Occupational Dose.” Since the revision to 10 CFR part 20 (56 FR 23391; May 21, 1991), cumulative lifetime dose is no longer used in Part 20, except for cases involving planned special exposures. That revision made it unnecessary for licensees to attempt to obtain lifetime exposures for workers who are not participating in a planned special exposure program. This issue was discussed further in the Supplementary Information to the proposed rule (71 FR 55382; September 22, 2006).

The final rule does not change the criterion under 10 CFR 20.1206, “Planned Special Exposures,” that requires licensees to ascertain the exposure history of an individual's prior lifetime doses as required by 10 CFR 20.2104(b) before permitting an individual to participate in a planned special exposure.

The Commission believes that the final amendment to 10 CFR 20.2104(a)(2) will result in a significant reduction in administrative and information collection burdens on licensees. The final rule will not affect the level of protection for either the health and safety of workers and the public or for the environment, because the requirements to determine an individual's occupational radiation dose received during the current year or cumulative radiation dose prior to permitting a planned special exposure have not been amended.

In 10 CFR 20.2104, paragraphs (c) and (d) will also be revised to correct the omission of a reference to paragraph (b) in this section regarding planned special exposures. Paragraph (b) requires that prior to permitting an individual to participate in a planned special exposure, the licensee must determine the internal and external doses from all previous planned special exposures, and all doses in excess of the limits (including doses received during accidents and emergencies) received during the lifetime of the individual. This revision adds into paragraphs (c) and (d) that licensees obtain complete records of the worker's current and previously accumulated occupational dose in complying with the provisions of 10 CFR 20.2104(b).

The NRC received 16 comment letters in response to the proposed rule. The commenters included a number of individuals; industry organizations; and power reactor, uranium recovery, and fuel facility licensees. The majority of commenters supported NRC's approach. The significant comments discussed below are arranged by subject. No changes to the proposed rule language were made as a result of the comment letters.

Ten commenters specifically addressed this issue. All agreed with the concept that there should be a defined dose threshold above which licensees are required to provide an annual dose report to monitored individuals. However, some took issue with the threshold proposed by the NRC.

Comment. Two commenters stated that in order to provide comfort or build trust, more employees are given dosimeters than necessary, and that the effort to provide dosimetry to individuals should not be complicated by a need to provide annual dose reports.

Response. The Commission's requirements on when to provide dosimetry to a worker are separate from the requirements to provide annual dose reports to workers. As explained in the Supplementary Information accompanying the proposed rule, the NRC agrees that many individuals required to be monitored receive very low doses but that, under the current regulations, employers still had to generate and provide reports of doses far below the regulatory limits in 10 CFR 20.1201(a).

Comment. One commenter said that there should be a reporting requirement at the termination of employment or if the employee develops a medical condition which could affect the employee's ability to receive occupational exposure because individuals seeking new employment need to be notified of their dose so that they can inform their new employer.

Response. 10 CFR 19.13(e) currently requires that a licensee provide at the request of a worker who is terminating employment with the licensee, a written report of the radiation dose received by that worker from the operations of the licensee during the current year or fraction thereof. Exposures received as part of medical procedures are not reported to the worker as part of the occupational exposure received at a licensed facility. In the case of a medical condition which could affect the worker's ability to receive occupational exposure, it is the worker's responsibility to notify the licensee of any condition that may interfere with the worker's duties. One example is a woman declaring her pregnancy in order to be exposed to a reduced dose level during the pregnancy. Therefore, the commenter's concerns are addressed by the current regulations.

Comment. One commenter believed that the criteria for reporting annual dose should be based on a percentage of the applicable limits to preserve the graded approach to controlling exposure that the NRC promotes in risk informed regulations, and recommended that licensees should not be required to report occupational doses to workers when their annual dose is less than 10 percent of the applicable dose limits.

Response. The NRC disagrees with basing the criteria on a percentage of the applicable limits. As explained in the Supplementary Information accompanying the proposed rule, the approach used is simpler because there is one reporting threshold instead of three (i.e., the whole body, lens of the eye, and skin of the whole body or skin of any extremity) and results in the same reduction in burden.

Comment. One commenter said that it is not clear why the NRC selected 1 mSv (100 mrem) to be identical with the criterion for requiring instruction to workers under 10 CFR 19.12. This commenter saw no advantage in using the same criterion for notification and instruction. This commenter also took issue with the NRC's position in the Supplementary Information to the proposed rule that raising the threshold from the proposed value of 1 mSv (100 mrem) would not significantly reduce administrative and information collection burdens on licensees. Another commenter believed it to be more logical to use 5 mSv (500 mrem) which is the threshold for requiring individual monitoring of external dose.

Response. The NRC disagrees with these commenters. An analysis of the occupational radiation exposure data in NUREG-0713, Volume 26, (“Occupational Radiation Exposure at Commercial Nuclear Power Reactors and Other Facilities 2004” December 2005), indicates that about 80 percent (i.e., 94,534 individuals) of the 122,322 monitored individuals received a TEDE that did not exceed 1 mSv (100 mrem). Furthermore, 61,725 of the monitored individuals received no measurable exposure. Therefore, the threshold of 1 mSv (100 mrem) meets the Commission's regulatory objective of providing a significant reduction in administrative and reporting burden on licensees without adversely impacting public health and safety. The analysis also indicates that raising the threshold from 1 mSv (100 mrem) to 5 mSv (500 mrem) would not further reduce significantly administrative and reporting burdens on licensees.

Comment. A commenter objected to using a threshold of 1 mSv (100 mrem) for providing annual dose reports to workers because it results in different requirements for a facility where individuals are monitored and for a facility where individuals are not monitored. The commenter believed that the rule provides a strong incentive for a licensee to cease monitoring workers who might exceed 1 mSv (100 mrem) in a year but are unlikely to exceed 5 mSv (500 mrem), the level of exposure for which licensees are required to provide individual monitoring of external occupational dose under 10 CFR 20.1502.

Response. The NRC disagrees with the commenter's assertion that the threshold for reporting results in different requirements for licensed facilities. The Commission's requirements for recordkeeping and reporting of dose depend only on the licensee's decision to provide or to not provide individual monitoring. The NRC also disagrees with the commenter's assertion that the rule provides incentive for a licensee to cease monitoring workers who might exceed 1 mSv (100 mrem) in a year but are unlikely to exceed 5 mSv (500 mrem). The NRC believes that licensees will choose to continue to provide monitoring to these individuals for operational convenience because this practice helps alleviate worker concerns of a possible significant exposure.

Comment. One commenter recommended allowing licensees to choose a reporting criteria that is either the proposed requirement of 1 mSv (100 mrem) or some optimal intermediate administrative threshold that best relates to the licensee's conditions and practices.

Response. The NRC finds it unacceptable to allow licensees to select the threshold value because it will result in a nonuniform approach to providing reports to individuals.

Comment. One commenter recommended that both the reporting requirements and the monitoring requirements use the same dose criteria so as to not compromise programs for using dosimeters to confirm compliance. This commenter also stated that 1 mSv (100 mrem) per year is below the detection limit for thermoluminescence detectors that are used for dosimeter wear periods that are less than a month.

Response. The NRC disagrees with using the same dose criteria because the requirements for monitoring, recordkeeping, and reporting address different aspects of the licensee's operations. The Commission's requirements for recordkeeping and reporting of dose depend only on the licensee's decision to provide or to not provide individual monitoring.

Regarding the commenter's concern that 1 mSv (100 mrem) per year is below the detection limit for thermoluminescence detectors, the reporting requirements reflect entries on NRC Form 5, which is the form currently used by licensees to obtain the annual dose information that is reported to the workers. Where monitoring was provided but the dose was not measurable, the licensee can enter “ND” for “Not Detectable” on NRC Form 5.

Comment. Two commenters stated that the final rule language needs to explicitly state that the reporting threshold applies to the whole body, to the lens of the eye, to the skin of the whole body, and the skin of the extremities.

Response. The NRC believes that the final rule language in 10 CFR 19.13(b) requires no further clarification. Requiring licensees to provide an annual report to each individual when the individual's occupational dose exceeds 1 mSv (100 mrem) TEDE or 1 mSv (100 mrem) to any individual organ or tissue is inclusive of the dose to any part of the body. If any dose value as reported on NRC Form 5 exceeds 1 mSv (100 mrem), then an annual dose report must be provided to the monitored individual. In addition, the revision to the reporting requirements in 10 CFR 19.13(b) does not change the methods for calculating doses to an individual.

Comment. One commenter stated that the Commission should consider a two-tiered threshold: (1) 100 mrem for whole body and lens of the eye, and (2) 1,000 mrem for extremities/organ, because there is a 10-fold difference in the dose limits involved. The commenter also believed that this approach would result in major administrative savings for medical and research workers.

Response. The NRC disagrees with this comment. Several approaches were evaluated for establishing a threshold value above which licensees are required to provide an annual dose report to a monitored individual. The approach selected for the final rule has the merit of simplicity while also achieving the intended aim of reducing unnecessary regulatory burden. The regulatory analysis conducted for the final rule (Section X, below) shows that the 1 mSv (100 mrem) annual reporting threshold by itself results in a significant burden reduction for licensees as a whole.

Five commenters specifically addressed this issue. Most of these commenters agreed with the proposed revision to the definition of TEDE in 10 CFR 20.1003 and 10 CFR 50.2.

Comment. One commenter stated that the NRC has no basis to approve dosimetry methods for determining the effective dose equivalent and recommended allowing use of the effective dose equivalent when the methodology is in accordance with a nationally recognized standard or the radiation control agency with jurisdiction.

Response. The NRC disagrees that there is no basis to approve dosimetry methods, and has published guidance on acceptable dosimetry methods in RIS 2004-01, “Method for Estimating Effective Dose Equivalent From External Radiation Sources Using Two Dosimeters,” RIS 2003-04, “Use of the Effective Dose Equivalent in Place of the Deep Dose Equivalent in Dose Assessments,” and RIS 2002-06, “Evaluating Occupational Dose for Individuals Exposed to NRC-Licensed Material and Medical X-Rays.” Further guidance will be provided, as warranted, when additional methods are determined acceptable by the NRC.

Comment. One commenter said that the Supplementary Information to the proposed rule did not address how the change to the definition of TEDE is consistent with the recommendations of the International Commission on Radiological Protection (ICRP) and the National Council on Radiation Protection and Measurements (NCRP).

Response. Total Effective Dose Equivalent (TEDE) in 10 CFR Part 20 is defined as the sum of two dosimetrically different quantities: The deep-dose equivalent (DDE) for external exposure and the effective dose equivalent (EDE) for internal exposure. This approach is not consistent with the basic radiation protection premise that risk is directly proportional to dose. The DDE is not, in many cases, proportional to risk and is often a poor indicator of the risk arising from radiation exposure. This approach of using mixed quantities to define the TEDE is also not consistent with the recommendations of national and international advisory groups such as the NCRP and the ICRP. These groups quantify the total dose by adding the EDEs for both internal and external exposures. The use of mixed quantities has caused significant difficulties to NRC licensees, and has led the Commission to permit substitution of EDE in place of DDE when calculating the TEDE, provided the dose from external exposure is not based on measurements using personnel dosimetry. This provision allows for the fact that the EDE cannot be measured in the field, and when measurements are necessary as the basis for quantifying the dose from external exposures, the DDE may be used as a surrogate quantity that was defined in such a manner that its magnitude provides a conservative numerical estimate for the EDE. The final redefinition of TEDE implements this policy formally, a policy that is now in effect and is being used by NRC licensees.

Comment. One commenter stated that NRC Forms 4 and 5 need to be revised because of the change to the definition of TEDE, and that the NRC provide options in guidance for reporting EDE versus DDE and for making appropriate calculations of the total organ dose equivalent and TEDE.

Response. The NRC agrees with the comment. NRC Forms 4 and 5 will be revised to reflect the changes to the definition of TEDE. In addition, the instruction sheets for completing both forms will be revised to clarify the method to be used to fill in Field 11, “Deep Dose Equivalent (DDE).” Guidance for estimating the EDE and DDE is provided in numerous NRC guidance documents.

Four commenters specifically addressed this issue. All of the commenters disagreed with the approach taken by the NRC in the proposed rule to limit the exemption to labeling requirements under 10 CFR 20.1905 to nuclear power reactor licensees, and believed that additional categories of licensees should be granted the exemption to labeling requirements for containers holding licensed material.

Comment. Two commenters stated that the container labeling exemption should be granted to university and medical licensees. One commenter indicated that power reactors have more types of radioactivity and a great range of activity because of the mixtures of fission and activation products, while university and medical areas have pure and well-defined materials used under controlled conditions, mostly employing low quantities of materials with short half lives. The commenter indicated that therefore a dichotomy in the rules for nuclear power plants and other licensees is unjustified. The other commenter stated that the current exemptions in 10 CFR 20.1905 pertain to labeling of containers with applicability to all licensees, and that limiting this exemption to nuclear power facilities for the reasons stated in the Supplementary Information to the proposed rule demonstrates an incomplete understanding of the safety measures in large medical and research facilities. The commenter stated if an undue burden has been placed on the nuclear power industry because of an overly conservative interpretation of the rules, the NRC should specifically be tasked to broaden that interpretation, not exempt a single licensee category from a rule applicable to all other licensees.

Response. The NRC disagrees with granting the exemption from labeling requirements to university and medical licensees. The burden imposed on nuclear power plant licensees by the current regulation is due to an overly conservative interpretation because of the existence of a large number of structures in a protected area of a nuclear power plant that may be inappropriately considered to be containers holding licensed material, such as cable trays, and containers holding contaminated tools or protective clothing. This situation does not exist at other types of licensed facilities. In addition, although the NRC agrees with the commenter that university and medical licensees implement stringent radiation control programs, the level of redundancy in protective measures in these programs is not as extensive as that found at nuclear power plants. The NRC believes that removing one such measure at nuclear power plants, i.e., labeling containers holding licensed material, will be compensated for by the redundancy in their radiation protection programs. Such extensive redundancy is not normally found in university and medical radiation protection programs.

Comment. Two commenters recommended that the container labeling exemption be granted to all licensees under 10 CFR part 70, “Domestic Licensing of Special Nuclear Material.” One of these commenters believed that all Part 70 licensees now have this provision in their licenses. This commenter also noted that a Part 70 licensee's variance in radiological hazards is comparable to that of a Part 50 or Part 52 license.

Response. The NRC disagrees that there is a need to extend the exemption from labeling requirements to include Part 70 licensees. Currently, only Part 70 licensees subject to Subpart H requirements have a license condition that provides the exemption from the labeling requirements of this rule. The Commission has determined that for the remainder of the Part 70 licensees, this license condition is not required. The existing labeling requirements are not a burden to these licensees because they handle few containers holding radioactive material.

Comment. One commenter suggested that the exemption be expanded to include containers removed from a posted area as long as the container is under continuous direct or electronic surveillance while in transit between one posted area to another.

Response. The exemption from labeling requirements suggested by the commenter is already provided in 10 CFR 20.1905(c). That regulation specifies that a licensee is not required to label containers attended by an individual who takes the precautions necessary to prevent the exposure of individuals in excess of the limits established by 10 CFR Part 20.

Ten commenters addressed this issue. Most of the commenters agreed with removing the provision in 10 CFR 20.2104(a)(2) that requires licensees to attempt to obtain the records of cumulative occupational radiation dose for each worker requiring monitoring under 10 CFR 20.1502.

Comment. Two commenters suggested that the cost savings to licensees from the revision to 10 CFR 20.2104 have been underestimated. Specifically, these commenters recommended that the NRC consider the savings to those licensees who will no longer have to provide prior dose records to a requesting licensee, stating that the savings of not having to provide prior dose records is $20 per new employee. This estimate is based on an assumption of a savings of $10 per request and on the fact that two licensees would be requested to provide the records per new employee.

Response. The NRC agrees with the comments and the regulatory analysis for the final rule found in Section X has been revised to use the suggested values.

Comment. One commenter expressed a concern that it is essential for the licensee to obtain current year dose records.

Response. The NRC agrees with the need for a licensee to determine and record the dose for an individual during the current year. The final rule does not revise the requirements in 10 CFR 20.2104(a) that require a licensee to determine the occupational radiation dose received by an individual during the current year. The final rule removes only the requirement that licensees attempt to obtain cumulative exposure records for workers, i.e., exposure records for previous years, unless these individuals are being authorized to receive a planned special exposure.

Comment. One commenter suggested that an additional revision be made to 10 CFR 19.13 to remove the language in paragraph (a) regarding using an individual's social security number as an appropriate identifier for reports. This commenter was concerned about the risk of identity theft.

Response. Based on recent Office of Management and Budget guidance, Federal agencies, including the NRC, are reviewing their uses of Social Security Numbers (SSNs) with the goal of eliminating unnecessary uses of SSNs. However, revision of 10 CFR 19.13(a) to remove the language specific to using the individual's social security number as an identifier is outside the scope of this rulemaking.

Comment. One commenter believed that removing the requirement in 10 CFR 20.2104(a)(2) to attempt to obtain the records of cumulative occupational radiation dose would eliminate lifetime dose records and the ability to do any retrospective, low dose occupational risk assessments.

Response. As explained in the Supplementary Information accompanying the proposed rule, occupational exposures were initially restricted by the cumulative lifetime dose received and, under certain circumstances, an individual could receive as much as 0.12 Sv (12 rems) in a year. However, following revision to 10 CFR Part 20 (56 FR 23391; May 21, 1991), cumulative lifetime dose is no longer used in the Commission's regulations to restrict occupational exposures. The reduced occupational dose limit of 0.05 Sv (5 rems) per year in the current 10 CFR 20.1201(a)(1)(i) essentially accomplishes the same goal as the previous dose limit of 0.03 Sv (3 rems) per calendar quarter constrained by the then age-dependent, cumulative lifetime dose limit. (The goal is an average cumulative dose rate of 0.05 Sv (5 rems) per year to the individual.) Therefore, it is no longer necessary for licensees to obtain records of cumulative occupational dose. However, 10 CFR Part 20 still requires licensees to maintain records of individual monitoring results and to submit to the NRC an annual report of the results of individual monitoring. The ability to do a retrospective dose assessment is not affected by this final rule. The revision to 10 CFR 20.2104(a)(2) does not change the Commission's requirements for monitoring individuals or for maintaining records of doses received by individuals at licensed facilities. Thus, the dose records for individuals whose exposure histories span more than one licensed facility will still be available for risk assessments.

Comment. One commenter stated that removing the requirement in 10 CFR 20.2104(a)(2) will not reduce future burden on licensees because if the NRC implements the proposed International Commission on Radiological Protection (ICRP) recommendation on dose limits averaged over several years, then licensees will need to reconstruct a worker's prior dose records.

Response. A change in this area would not affect the ability of licensees to implement dose averaging if the Commission were to decide to adopt this practice in the future. The revision does not remove the requirement to record and report the doses received by monitored workers, rather, it simply removes the requirements for each licensee to compile the exposure history of each worker as recorded on FORM 5s unless the worker is being authorized to receive a planned special exposure. Should another purpose develop (such as dose averaging) that would justify such data compilation, it would be as easy to do as for a planned special exposure, because the records would still be available.

Comment . One commenter stated that the rule should be expanded to not require a licensee to obtain a worker's dose records prior to permitting the worker to participate in a planned special exposure, but to require the worker to retrieve this data. The commenter believed that this would alleviate an administrative burden on the licensee.

Response . This comment is outside the scope of this rulemaking. The final rule does not address the methods used to obtain a worker's dose history when that dose history is required prior to permitting the worker to participate in a planned special exposure. The final rule only removes the requirement for a licensee to obtain the records of cumulative occupational radiation dose except when authorizing a planned special exposure.

This final rule amends 10 CFR 19.13, 20.1003, 20.1201, 20.1905, 20.2104, 20.2205, and 50.2.

Paragraph (b) is revised to require a licensee to provide an annual dose report to an individual when the individual's occupational dose exceeds 1 mSv (100 mrem) TEDE or 1 mSv (100 mrem) to any individual organ or tissue, or when the individual requests a report of the individual's annual dose, and that all dose records shall be made available to workers onsite.

In order to consolidate the requirement to report annual dose to the individual into a single requirement in 10 CFR 19.13(b), paragraph (d) is revised to remove the reference to 10 CFR 20.2206.

In 10 CFR 20.1003, the definition of Total Effective Dose Equivalent (TEDE) is revised to state that TEDE is the sum of the effective dose equivalent (for external exposures) and the committed effective dose equivalent (for internal exposures).

Paragraph (c) is revised to add the requirement that when the external exposure is determined by measurement with an external personal monitoring device, the deep-dose equivalent must be used in place of the effective dose equivalent, unless the effective dose equivalent is determined by a dosimetry method approved by the NRC.

A new paragraph (g) is added to 10 CFR 20.1905 to provide an exemption for containers holding licensed material (other than sealed sources that are either specifically or generally licensed) that are in an area posted under the requirements of 10 CFR 20.1902 at a nuclear power facility. The final rule does not require the licensee to label the container according to 10 CFR 20.1904 if it is conspicuously marked (such as by color coding) commensurate with the radiological hazard and accessible only to individuals who have sufficient instruction to minimize radiation exposure while handling or working in the vicinity of the containers. The final rule also requires that the container must be appropriately labeled as required by 10 CFR 20.1904 before being removed from the posted area. This exemption to the labeling requirements for containers holding licensed material does not apply to non-power reactor and materials licensees, or for sealed sources.

Paragraph (a)(2) is removed to delete the requirement that licensees attempt to obtain the records of cumulative occupational radiation dose. The introductory text of paragraph (a) and paragraph (a)(1) are combined and designated as paragraph (a). Paragraphs (c) and (d) are also revised to add a reference to paragraph (b) in this section regarding planned special exposures.

Section 20.2205 is revised to remove the reference to 10 CFR 20.2206, in order to consolidate the requirement to report annual dose to the individual into a single requirement in 10 CFR 19.13(b).

In 10 CFR 20.1003, the definition of Total Effective Dose Equivalent (TEDE) is revised to state that TEDE is the sum of the effective dose equivalent (for external exposures) and the committed effective dose equivalent (for internal exposures).

Under the “Policy Statement on Adequacy and Compatibility of Agreement State Programs,” approved by the Commission on June 30, 1997, and published in the Federal Register (62 FR 46517; September 3, 1997), this rule is a matter of compatibility between NRC and the Agreement States, thereby providing consistency among the Agreement States and the NRC's requirements. The NRC analyzed the rule in accordance with the procedure established in Part III, “Categorization Process for NRC Program Elements,” of Handbook 5.9 to Management Directive 5.9, “Adequacy and Compatibility of Agreement State Programs” (which may be viewed at http://nrc-stp.ornl.gov/ ). The NRC has determined that the compatibility categories for the sections amended in this rule are the same as for the sections in the existing regulations, except for the new exemption (g) added to 10 CFR 20.1905.

The revisions to 10 CFR 19.13 and 20.2205 are classified as Compatibility Category C. A Compatibility Category C designation means the Agreement State should adopt the essential objectives of the requirement to avoid conflicts, duplications, or gaps.

The revisions to 10 CFR 20.1003 and 20.1201(c) are classified as Compatibility Category A. A Compatibility Category A designation means the requirement is a basic radiation protection standard or related definition, sign, label, or term necessary for a common understanding of radiation protection principles. Agreement State requirements designated Compatibility Category A should be essentially identical to NRC requirements.

The new exemption (g) added to 10 CFR 20.1905 is classified as Compatibility Category NRC. A Compatibility Category NRC designation means the Agreement State should not adopt the requirement for purposes of compatibility. These are NRC program elements that address regulatory items that cannot be relinquished to Agreement States under the Atomic Energy Act or provisions of the regulations in title 10 of the CFR.

The revision to 10 CFR 20.2104(a) is classified as Compatibility Category D. A Compatibility Category D designation means the Agreement State is not required to adopt the requirement for compatibility.

The NRC is making the documents identified below available to interested persons through one or more of the following methods.

Public Document Room (PDR). The NRC Public Document Room is located at 11555 Rockville Pike, Rockville, Maryland.

NRC's Agency-wide Documents Access and Management System (ADAMS). The NRC's PARS Library is located at www.nrc.gov/reading-rm/adams.html .

The NRC staff contact (NRC Staff). Stewart Schneider, U.S. Nuclear Regulatory Commission, Mail Stop O-12D3, Washington, DC 20555-0001; telephone (301) 415-4123; sxs4@nrc.gov .

Copies of NUREGs may be purchased from The Superintendent of Documents, U.S. Government Printing Office, Mail Stop SSOP, Washington, DC 20402-0001; Internet: bookstore.gpo.gov ; (202) 512-1800. Copies are also available from the National Technical Information Service, Springfield, VA 22161-0002; http://www.ntis.gov ; 1-800-553-6847 or, locally, (703) 605-6000. Some publications in the NUREG series are included in the document collections in the Electronic Reading Room on NRC's Web site at http://www.nrc.gov/reading-rm.html .

The National Technology Transfer and Advancement Act of 1995, Pub. L. 104-113, requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless using such a standard is inconsistent with applicable law or is otherwise impractical. In this final rule, the NRC is revising requirements for the reporting of annual dose to workers, the definition of Total Effective Dose Equivalent (TEDE), the labeling of certain containers holding licensed material, and the determination of cumulative occupational radiation dose. This regulatory action does not constitute the establishment of a standard that contains generally applicable requirements.

The NRC has determined that the amendments to 10 CFR parts 19, 20, and 50 are the types of actions described in categorical exclusion 10 CFR 51.22(c). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this regulatory action. Specifically, the revision to 10 CFR 19.13(b) to limit the routine reporting of annual doses to workers comes under the categorical exclusion in 10 CFR 51.22(c)(1), which covers all revisions to 10 CFR part 19. The amendments to the definition of TEDE in 10 CFR 20.1003 and 10 CFR 50.2 and to 10 CFR 20.1201(c) to add the requirement that the effective dose equivalent be determined by a dosimetry method approved by the NRC come under the categorical exclusion in 10 CFR 51.22(c)(2) because these revisions are of a minor nature and do not substantially modify existing regulations. For the amendments to 10 CFR 20.1905 to revise the requirements for labeling containers and to 10 CFR 20.2104 to remove the requirement to obtain lifetime exposure records, these revisions involve recordkeeping requirements and thus come under the categorical exclusion in 10 CFR 51.22(c)(3)(ii). Finally, because the amendment to 10 CFR 20.2205 involves a reporting requirement, this revision comes under the categorical exclusion in 10 CFR 51.22(c)(3)(iii).

This final rule amends information collection requirements contained in 10 CFR Parts 19, 20, and 50, and NRC Form 4 that are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). These requirements were approved by the Office of Management and Budget, approval numbers 3150-0044, 3150-0014, 3150-0011, and 3150-0005. The changes to 10 CFR Parts 19, 20, and 50, and NRC Form 4 do not contain a new or amended information collection requirements. Existing requirements were approved by the Office of Management and Budget, approval number(s) 3150-0044, 3150-0014, 3150-0011, and 3150-0005.

Because the rule will reduce the burden for existing information collection requirements, the public burden for the information collections in 10 CFR parts 19 and NRC Form 4 is expected to be decreased by 235 and 44 hours per licensee, respectively. This reduction includes the time required for reviewing instructions, searching existing data sources, gathering and maintaining the data needed and completing and reviewing the information collection. Send comments on any aspect of these information collections, including suggestions for further reducing the burden, to the Records and FOIA/Privacy Services Branch (T-5 F52), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, or by Internet electronic mail to INFOCOLLECTS@NRC.GOV ; and to the Desk Officer, Office of Information and Regulatory Affairs, NEOB-10202, (3150-0044, 3150-0014, 3150-0011, and 3150-0005) Office of Management and Budget, Washington, DC 20503.

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

The Commission has prepared a regulatory analysis on this final rule and has included it in this Federal Register notice. The analysis examines the costs and benefits of the alternatives considered by the Commission. The Commission requested public comment on the draft regulatory analysis for the proposed rule (71 FR 55382; September 22, 2006). Two comments were received on the draft regulatory analysis and are discussed above in Section III. These comments were considered and the regulatory analysis revised appropriately.

The NRC has determined that the regulations in 10 CFR 19.13, 20.1003, 20.1201, 20.1905, 20.2104, and 50.2 impose an undue regulatory burden on licensees. The final rule makes these regulations consistent with current Commission policy and reduces administrative and information collection burdens on NRC and Agreement State licensees. The final rule amends certain requirements for notification of workers, revises the definition of Total Effective Dose Equivalent (TEDE), amends certain container labeling requirements, and removes the requirement that licensees attempt to obtain the records of cumulative occupational radiation dose for certain individuals. These revisions do not affect the level of protection for either the health and safety of workers and the public or for the environment.

This regulatory analysis evaluates the savings and costs of two regulatory alternatives. The following subsections describe these two alternatives.

The no-action alternative is the status quo had this rule not been promulgated. Under that alternative, licensees would have been required to: (1) Provide annual dose reports to all monitored individuals, (2) determine the TEDE by summing the deep-dose equivalent (for external exposures) and the committed effective dose equivalent (for external doses), (3) use the current exemptions to labeling requirements for containers holding licensed material, and (4) attempt to obtain the records of lifetime occupational radiation dose for all individuals. The no-action alternative is the baseline for analyzing the rule alternative. The no-action alternative does not accomplish the stated objective.

Under the rule alternative, the NRC is revising its regulations in 10 CFR parts 19, 20, and 50 for: (1) Reporting dose to workers, (2) the definition of TEDE, (3) the labeling of certain containers holding licensed material, and (4) the requirement that licensees attempt to obtain the records of cumulative occupational radiation dose for all individuals. This alternative makes the regulations consistent with current Commission policy and reduces administrative and information collection burdens on NRC and Agreement State licensees. Because this action is being taken to ease burden, the rulemaking process is the only regulatory option appropriate to make the changes effective.

The attributes that the rule could affect were identified by using the list of potential attributes provided in Chapter 5 of NUREG/BR-0184, “Regulatory Analysis Technical Evaluation Handbook” (January 1997).

Industry Implementation . This attribute is affected by three of the four principal revisions: The revisions to the requirements for the annual dose reports to workers, the labeling of containers holding licensed material, and the attempt to obtain the records of cumulative occupational radiation dose for an individual. In implementing these changes, licensees will incur the costs of revising procedures.

Industry Operation . This attribute is affected by three of the four principal revisions. Licensees will realize savings by only having to provide annual dose reports to individuals when their dose exceeds 1 mSv (100 mrem), by not having to label containers holding licensed material (except sealed sources that are already labeled) in a posted area in a nuclear power facility, and by not having to ascertain the exposure history of an individual's prior lifetime doses except to permit an individual to participate in a planned special exposure.

NRC Implementation . The NRC will incur costs to make minor revisions to NRC Form 3, “Notice to Employees,” to account for the revisions to the reporting of annual dose to workers. In addition, the NRC will incur costs to make minor revisions to NRC Form 4, “Cumulative Occupational Dose History,” and NRC Form 5, “Occupational Dose Record for a Monitoring Period,” and their instructions, to account for the revision to the definition of TEDE.

Regulatory Efficiency . All four of the principal revisions will enhance regulatory efficiency. The revisions are intended to reduce administrative and information collection burdens on NRC and Agreement State licensees without affecting the level of protection for either the health and safety of workers and the public or for the environment.

The incremental savings and costs of the regulatory action are analyzed relative to the baseline described in Section 2.1 of this regulatory analysis. The savings come from any desirable changes in the affected attributes, while the costs come from any undesirable changes in the affected attributes.

Under Office of Management and Budget guidance and NUREG/BR-0058, “Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory Commission,” Revision 4 (September 2004), the results of the analysis are presented using a discounted flow of funds at a 3 and 7 percent real discount rate.

Under 10 CFR 20.2206, seven categories of NRC licensees are required to submit to the NRC annual radiation exposure reports for monitored individuals: Commercial nuclear power reactors; industrial radiographers; fuel processors (including uranium enrichment), fabricators and reprocessors; manufacturers and distributors of byproduct material; independent spent fuel storage installations; facilities for land disposal of low-level waste; and geologic repositories for high-level waste. (No NRC licensees are currently involved in operating low-level waste disposal facilities or geologic repositories for high-level waste.) In addition, 10 CFR 20.2206(b) requires that licensees submit annual reports using NRC Form 5 or electronic media containing all the information required by NRC Form 5. For the above licensees, the value-impact analysis uses the occupational exposure data maintained in the NRC's Radiation Exposure Information and Reporting System (REIRS) database (NUREG-0713, Volume 26, “Occupational Radiation Exposure at Commercial Nuclear Power Reactors and Other Facilities 2004” (December 2005)). While more recent data has been issued, the values have not changed significantly from those used in the regulatory analysis for the proposed rule. To simplify the analysis, the seven categories of licensees are consolidated into two groups. The first group contains only commercial nuclear power reactor licensees (nuclear power reactor licensees) and the second group contains all of the other licensee categories listed above (REIRS materials licensees).

The seven categories of licensees specified in 10 CFR 20.2206 do not include all NRC licensees. Most NRC licensees (e.g., hospitals, medical facilities, universities, radiological services, disposal) are not required to submit annual radiation exposure reports for monitored individuals. These licensees (non-REIRS materials licensees) constitute the third group of licensees for whom a value-impact analysis was done. This group contains both Agreement State and NRC licensees. For this group of licensees, the NRC has no records of the number of monitored individuals or the annual doses they received (except in the rare case of an overexposure). Based on professional judgment, the NRC assumes that 500,000 individuals are monitored annually by non-REIRS materials licensees. In addition, it is assumed that about 70 percent of them receive an annual dose that does not exceed 1 mSv (100 mrem). This factor is derived from the data in NUREG-0713 for REIRS materials licensees and is assumed to apply to non-REIRS materials licensees.

The following assumptions and data were used to assess the incremental values and impacts associated with the regulatory action.

• Based on NUREG-0713, the number of nuclear power reactor licensees is 104 (NRC licensees only).

• Based on NUREG-0713, the number of REIRS materials licensees is 123 (NRC licensees only).

• Based on NUREG-1350, Volume 17, “NRC Information Digest: 2005-2006 Edition” (July 2005), there are approximately 17,298 Agreement State licensees. While more recent data has been issued, the values have not changed significantly from those used in the regulatory analysis for the proposed rule.

• The number of non-REIRS materials licensees (Agreement State and NRC licensees) was estimated as follows. A review of the NRC Licensing Tracking System database in October 2005 indicated that a total of 4,517 materials licensees are administered by the NRC. While more recent data has been issued, the values have not changed significantly from those used in the regulatory analysis for the proposed rule. Correcting for the 123 REIRS materials licensees in the database and accounting for Agreement State licensees, the total number of Agreement State and NRC licensees designated as non-REIRS materials licensees is approximately 21,692 licensees (17,298 Agreement State licensees + 4,517 NRC materials licensees−123 REIRS materials licensees).

• The number of NRC licensees designated as non-REIRS materials licensees is 4,394 licensees (4,517 NRC materials licensees−123 REIRS materials licensees).

• Based on NUREG-0713, the number of individuals working for all nuclear power reactor licensees is 110,290.

• The average number of individuals working at each of the 104 nuclear power plants is estimated to be 1,060.

• Based on NUREG-0713, the number of individuals working for all REIRS materials licensees is 12,032.

• Based on professional judgment, the NRC assumes that 500,000 individuals are monitored annually by non-REIRS materials licensees (Agreement State and NRC licensees).

• Based on NUREG-0713, 70 percent of the individuals monitored by nuclear power reactor licensees receive an annual dose that does not exceed 1 mSv (100 mrem).

• Based on NUREG-0713, 80 percent of the individuals monitored by REIRS materials licensees receive an annual dose that does not exceed 1 mSv (100 mrem).

• Based on NUREG-0713 and professional judgment, the NRC assumes that 80 percent of the individuals monitored by non-REIRS materials licensees receive an annual dose that does not exceed 1 mSv (100 mrem).

• The NRC estimates that procedural revisions will require 20 hours for each of the 104 nuclear power plants.

• For REIRS and non-REIRS materials licensees, the time needed to revise procedures ranges from 2 to 20 hours, depending on the size of the facility. This analysis uses 10 hours as the average time to revise procedures for these licensees.

• For nuclear power reactor licensees, it is assumed that the average life remaining for power reactor facilities is 49 years. For 3 and 7 percent real discount rates, the analysis uses present value multiplication factors of 25.50 and 13.77, respectively, following the guidance in NUREG/BR-0184.

• For REIRS and non-REIRS materials licensees, it is assumed that the average life remaining for the facilities is 20 years. For 3 and 7 percent real discount rates, the analysis uses factors of 14.9 and 10.6, respectively, following the guidance in NUREG/BR-0184.

Nuclear power reactor licensees.

In implementing the regulatory action, nuclear power reactor licensees will incur a one-time cost to revise procedures. The NRC estimates it will take 20 hours to revise the procedures for each of the 104 nuclear power plants. Assuming a staff rate of $105 per hour, the one-time cost of implementing the regulatory action will be $2,100 per nuclear power plant (20 hours × $105/hour) and $220,000 for the nuclear power industry (104 licensees × $2,100/licensee).

With respect to industry operation, there will be a savings from not having to provide unsolicited annual dose reports (NRC Form 5) to workers when their doses do not exceed 1 mSv (100 mrem). As discussed in the regulatory analysis for the proposed rule (71 FR 55382; September 22, 2006), the NRC estimated the annual savings to be $3,000 per nuclear power plant and $310,000 for the nuclear power industry ($3,000 × 104 licensees). For a flow of funds at a 3 percent real discount rate, the estimated savings per nuclear power plant and for the nuclear power industry are $77,000 ($3,000 × 25.50) and $8 million ($310,000 × 25.50), respectively. For a flow of funds at a 7 percent real discount rate, the estimated savings per nuclear power plant and for the nuclear power industry are $41,000 ($3,000 × 13.77) and $4.3 million ($310,000 × 13.77), respectively.

In order to provide an estimate of the “hourly” burden reduction, the NRC performed the following analysis. The NRC estimates it will take 5 minutes (0.083 hour) for a licensee to prepare an annual dose report for each worker. Using the 2004 data in NUREG-0713, it was determined that about 80 percent of the monitored individuals had an annual dose that did not exceed 1 mSv (100 mrem). It is further assumed that 90 percent of this population will not request an annual dose report. Assuming an average of 1,060 workers per nuclear power plant, the annual burden reduction from implementing the regulatory action is estimated to be 63 hours per nuclear power plant (1,060 workers × 0.083 hour × 0.8 × 0.9) and the total annual industry burden reduction is 6,600 hours (63 hours/licensee × 104 licensees).

REIRS materials licensees .

In implementing the regulatory action, REIRS materials licensees will incur a one-time cost to revise procedures. The NRC estimates it will take 10 hours to revise the procedures for each of the 123 REIRS materials licensees. Assuming a staff rate of $105 per hour, the one-time cost of implementing the regulatory action will be $1,050 per licensee (10 hours × $105/hour) and $130,000 for all licensees in this category (123 licensees × $1,050/licensee).

With respect to industry operation, using the 2004 data in NUREG-0713, it was determined that 8,254 workers (about 70 percent of the monitored individuals) had an annual dose that did not exceed 1 mSv (100 mrem). Assuming these workers are equally distributed among the 123 licensees in this group, about 67 workers per licensee will not receive an annual dose report. It is further assumed that 90 percent of this population will not request an annual dose report (NRC Form 5). The NRC estimates a savings of $10 per worker not receiving a dose report. Thus, the estimated annual savings is $600 per licensee (67 workers/licensee × $10/worker × 0.9) and $74,000 for all licensees in this category ($600/licensee × 123 licensees). For a flow of funds at a 3 percent real discount rate, the estimated savings per licensee and for all licensees in this category are $9,000 ($600 × 14.9) and $1.1 million ($74,000 × 14.9), respectively. For a flow of funds at a 7 percent real discount rate, the estimated savings per licensee and for all licensees in this category are $7,000 ($670 × 10.6) and $780,000 ($74,000 × 10.6), respectively.

In order to provide an estimate of the “hourly” burden reduction, the NRC performed the following analysis. The NRC estimates it will take 5 minutes (0.083 hour) for a licensee to prepare an annual dose report for each worker. Assuming that 90 percent of the 67 workers per licensee will not request a dose report, the annual burden reduction from implementing the regulatory action is estimated to be 5 hours per licensee (67 workers × 0.083 hour × 0.9) and 620 hours for all licensees in this category (5 hours/licensee × 123 licensees).

Non-REIRS materials licensees.

In implementing the regulatory action, non-REIRS materials licensees will incur a one-time cost to revise procedures. The NRC estimates it will take 10 hours to revise the procedures for each of the 21,692 non-REIRS materials licensees. Assuming a staff rate of $105 per hour, the one-time cost of implementing the regulatory action will be $1,050 per licensee (10 hours × $105/hour) and $23 million for all licensees in this category (21,692 licensees × $1,050/licensee).

With respect to industry operation, the NRC assumes 500,000 monitored workers, 21,692 non-REIRS licensees, 23 workers per licensee, and a savings of $10 for each worker who does not receive a dose report. In addition, the previously defined factor of 70 percent for REIRS materials licensees is used to estimate the fraction of workers who will not receive an annual dose report (NRC Form 5). Thus, 16 workers per licensee are assumed to not receive an annual dose report. It is further assumed that 90 percent of this population will not request an annual dose report. The estimated annual savings is $140 per licensee (16 workers/licensee × $10/worker × 0.9) and $3 million for all licensees in this category ($140/licensee × 21,692 licensees). For a flow of funds at a 3 percent real discount rate, the estimated savings per licensee and for all licensees in this category are $2,000 ($140 × 14.9) and $45 million ($3 million × 14.9), respectively. For a flow of funds at a 7 percent real discount rate, the estimated savings per licensee and for all licensees in this category are $1,500 ($140 × 10.6) and $32 million ($3 million × 10.6), respectively.

In order to provide an estimate of the “hourly” burden reduction, the NRC performed the following analysis. The NRC estimates it will take 5 minutes (0.083 hour) for a licensee to prepare an annual dose report for each worker. Assuming that 90 percent of the 16 workers per licensee will not request a dose report, the annual burden reduction from implementing the regulatory action is estimated to be 1.2 hours per licensee (16 workers × 0.083 hour × 0.9) and 26,000 hours for all licensees in this category (1.2 hours/licensee × 21,692 licensees). For NRC licensees only, the total annual burden reduction is estimated to be 5,300 hours (1.2 hours/licensee × 4,394 NRC licensees).

The costs and savings associated with the revised definition of TEDE are minimal. The revision clarifies that the TEDE is defined in terms of the effective dose equivalent (for external exposures) and the committed effective dose equivalent (for internal exposures). This revision eliminates the need for licensees to repeatedly request guidance from the NRC and, in some cases, to request a license amendment to clarify the definition.

The revision to 10 CFR 20.1905, “Exemptions to labeling requirements,” applies only to nuclear power reactor licensees. These licensees will incur one-time implementation costs to revise procedures. The NRC estimates it will take 20 hours to revise the procedures for each of the 104 nuclear power plants. Assuming a staff rate of $105 per hour, the one-time cost of implementing the regulatory action will be $2,100 per licensee (20 hours × $105/hour) and $220,000 for the nuclear power industry (104 licensees × $2,100/licensee).

With respect to industry operation, as discussed in the regulatory analysis for the proposed rule (71 FR 55382; September 22, 2006), the NRC estimated an annual savings of $30,000 per nuclear power plant from using the exemption to labeling requirements for containers holding licensed material within a posted area. For the entire nuclear power industry, the NRC estimates a savings of $3.1 million (104 licensees × $30,000/licensee). For a flow of funds at a 3 percent real discount rate, the estimated savings per nuclear power plant and for the nuclear power industry are $770,000 ($30,000 × 25.50) and $79 million ($3.1 million × 25.50), respectively. For a flow of funds at a 7 percent real discount rate, the estimated savings per nuclear power plant and for the nuclear power industry are $410,000 ($30,000 × 13.77) and $43 million ($3.1 million × 13.77), respectively.

In order to provide an estimate of the “hourly” burden reduction, the NRC performed the following analysis. Using an annual savings of $30,000 per nuclear power plant and a staff rate of $105 per hour, the annual burden reduction from implementing the regulatory action is estimated to be 290 hours per plant ($30,000/licensee ÷ $105/hour) and the total annual industry burden reduction is 30,000 hours (290 hours/licensee × 104 licensees).

Nuclear power reactor licensees.

In implementing the regulatory action, nuclear power reactor licensees will incur a one-time cost to revise procedures. The NRC estimates it will take 20 hours to revise the procedures for each of the 104 nuclear power plants. Assuming a staff rate of $105 per hour, the one-time cost of implementing the regulatory action will be $2,100 per nuclear power plant (20 hours × $105/hour) and $220,000 for the nuclear power industry (104 licensees × $2,100/licensee).

With respect to industry operation, there will be a savings from not having to obtain the records of cumulative occupational radiation dose (NRC Form 4) for a worker, unless these individuals are being authorized to receive a planned special exposure. As discussed in the regulatory analysis for the proposed rule (71 FR 55382; September 22, 2006), the NRC estimated the annual savings to be $8,500 per nuclear power plant and $880,000 for the nuclear power industry ($8,500 × 104 licensees). Based on NUREG-0713, each nuclear power plant will annually obtain the dose records for 230 workers. Also, based on public comment, the NRC assumes that each worker has previously worked for two other licensees and that these licensees will incur costs to provide the worker's dose record to the requesting nuclear power plant licensee. The average cost to each licensee to provide a dose record is estimated to be $10. Thus, the estimated savings from not having to obtain the dose records for each worker is $60 (($8,500/nuclear power plant ÷ 230 workers) + (2 × $10/licensee providing the dose record)). 1 The estimated annual savings is $14,000 per nuclear power plant ($60/worker × 230 workers) and $1.5 million for the nuclear power industry ($14,000 × 104 licensees). For a flow of funds at a 3 percent real discount rate, the estimated savings per nuclear power plant and for the nuclear power industry are $360,000 ($14,000 × 25.50) and $38 million ($1.5 million × 25.50), respectively. For a flow of funds at a 7 percent real discount rate, the estimated savings per nuclear power plant and for the nuclear power industry are $190,000 ($14,000 × 13.77) and $21 million ($1.5 million × 13.77), respectively.

In order to provide an estimate of the “hourly” burden reduction, the NRC performed the following analysis. Using an annual savings of $14,000 per nuclear power plant and a staff rate of $105 per hour, the annual burden reduction from implementing the regulatory action is estimated to be 130 hours per plant ($14,000/licensee ÷ $105/hour) and the total annual industry burden reduction is 14,000 hours (130 hours/licensee × 104 licensees).

REIRS materials licensees.

In implementing the regulatory action, REIRS materials licensees will incur a one-time cost to revise procedures. The NRC estimates it will take 10 hours to revise the procedures for each of the 123 REIRS materials licensees. Assuming a staff rate of $105 per hour, the one-time cost of implementing the regulatory action will be $1,050 per licensee (10 hours × $105/hour) and $130,000 for all licensees in this category (123 licensees × $1,050/licensee).

With respect to industry operation, using the 2004 data in NUREG-0713, the number of individuals working for REIRS materials licensees is 12,032. Assuming these workers are equally distributed among the 123 licensees in this group, there are about 98 workers per licensee. For this analysis, the NRC assumes that 20 percent of all workers will be affected and that 0.5 hours is required by each REIRS materials licensee (i.e., the requesting licensee) to complete, review, and authorize each NRC Form 4, “Cumulative Occupational Dose History.” Based on public comment, the NRC assumes that each worker has previously worked for two other licensees and that these licensees will incur costs to provide the worker's dose record to the requesting licensee. The average cost to each licensee to provide a dose record is estimated to be $10. Using a staff rate of $105 per hour for the requesting licensee, the estimated savings from not having to request the dose records (including the responses) for each worker is $75 (($105/hour × 0.5 hour/licensee requesting the dose record) + (2 × $10/licensee providing the dose record)). 2 The NRC is not aware of any licensee having authorized a planned special exposure. For this analysis, it is assumed that 99 percent of the NRC Forms 4 will not be needed as the basis for authorizing a planned special exposure. Thus, the estimated annual savings to industry is $180,000 (98 workers/licensee × $75/worker × 0.2 × 0.99 × 123 licensees). For a flow of funds at a 3 percent real discount rate, the estimated savings for industry is $2.7 million ($180,000 × 14.9), respectively. For a flow of funds at a 7 percent real discount rate, the estimated savings for industry is $1.9 million ($180,000 × 10.6).

In order to provide an estimate of the “hourly” burden reduction, the NRC performed the following analysis. The annual burden reduction from implementing the regulatory action is estimated to be 10 hours per licensee ((98 workers/licensee × 0.5 hour/worker × 0.2 × 0.99) + (2 × 0.10 hour/licensee providing the dose record)) and 1,200 hours for industry (10 hours/licensee × 123 licensees).

Non-REIRS materials licensees.

In implementing the regulatory action, non-REIRS materials licensees will incur a one-time cost to revise procedures. The NRC estimates it will take 10 hours to revise the procedures for each of the 21,692 non-REIRS materials licensees. Assuming a staff rate of $105 per hour, the one-time cost of implementing the regulatory action will be $1,050 per licensee (10 hours × $105/hour) and $23 million for all licensees in this category (21,692 licensees × $1,050/licensee).

With respect to industry operation, the analysis assumes 500,000 individuals working under 21,692 non-REIRS licensees and an even distribution of workers per licensee (23 workers/licensee). The NRC also assumes that 20 percent of all workers will be affected and that 0.5 hours is required to complete, review, and authorize each NRC Form 4. Based on public comment, the NRC assumes that each worker has previously worked for two other licensees and that these licensees will incur costs to provide the worker's dose record to the requesting licensee. The average cost to each licensee to provide a dose record is estimated to be $10. Using a staff rate of $105 per hour for the requesting licensee, the estimated savings from not having to request the dose records (including the responses) for each worker is $75 (($105/hour × 0.5 hour/licensee requesting the dose record) + (2 × $10/licensee providing the dose record)). 3 The NRC is not aware of any licensee having authorized a planned special exposure. For this analysis, it is assumed that 99 percent of the NRC Forms 4 will not be needed as the basis for authorizing a planned special exposure. Thus, the estimated annual savings to industry is $7.4 million (23 workers/licensee × $75/worker × 0.2 × 0.99 × 21,692 licensees). For a flow of funds at a 3 percent real discount rate, the estimated savings for industry is $110 million ($7.4 million × 14.9). For a flow of funds at a 7 percent real discount rate, the estimated savings for industry is $78 million ($7.4 million × 10.6).

In order to provide an estimate of the “hourly” burden reduction, the NRC performed the following analysis. The annual burden reduction from implementing the regulatory action is estimated to be 2.5 hours per licensee ((23 workers/licensee × 0.5 hour/worker × 0.2 × 0.99) + (2 × 0.10 hour/licensee providing the dose record)) and 54,000 hours for industry (2.5 hours/licensee × 21,692 licensees). For NRC licensees only, the total annual burden reduction is estimated to be 11,000 hours (2.5 hours/licensee × 4,394 NRC licensees).

Annual dose report to workers.

The NRC will incur costs to make minor revisions to NRC Form 3, “Notice to Employees,” to account for the revision to the reporting of annual dose to workers under 10 CFR 19.13(b). The one-time cost for this task is estimated to be $34,000 (320 staff-hours at $105 per hour). This is the only impact to the NRC for this action.

Definition of Total Effective Dose Equivalent (TEDE).

The NRC will incur costs to make minor revisions to NRC Form 4, “Cumulative Occupational Dose History,” and NRC Form 5, “Occupational Dose Record for a Monitoring Period,” and their instructions, to account for the revision to the definition of TEDE. The one-time cost to revise NRC Forms 4 and 5 and their instructions is estimated to be $34,000 (320 staff-hours at $105 per hour). This is the only impact to the NRC for this action.

Labeling Containers.

The NRC will incur no implementation or operating impacts due to the revision to the exemptions to labeling requirements for containers holding licensed material under 10 CFR 20.1905.

Cumulative Occupational Radiation Dose.

The NRC will incur no implementation impacts due to the revision to remove the requirement that licensees attempt to obtain cumulative occupational radiation dose records for workers unless these individuals are being authorized to receive a planned special exposure.

With respect to NRC operation, there will be a savings from not having inspectors review the information on NRC Form 4, or its equivalent, and supporting records maintained by licensees. For nuclear power reactor licensees, it is estimated that 1 hour of inspection time is spent reviewing such records at each of the 104 nuclear power plants. Assuming an NRC staff rate of $105 per hour, the estimated annual savings to the NRC is $11,000 (1 hour × 104 licensees × $105/hour). For a flow of funds at 3 and 7 percent real discount rates, the estimated savings to the NRC are $280,000 ($11,000 × 25.50) and $150,000 ($11,000 × 13.77), respectively. The annual burden reduction to the NRC from implementing the regulatory action is estimated to be 104 hours (1 hour × 104 licensees).

For each of the 123 REIRS materials licensees, it is estimated that 6 minutes (0.1 hour) of inspection time is spent reviewing NRC Form 4, or its equivalent, and supporting records. The NRC is not aware of any licensee having authorized a planned special exposure. For this analysis, it is assumed that 99 percent of the NRC Forms 4 will not need to be inspected as the basis for authorizing a planned special exposure. Assuming an NRC staff rate of $105 per hour, the estimated annual savings to the NRC is $1,300 (0.1 hour × 123 licensees × $105/hour × 0.99). For a flow of funds at 3 and 7 percent real discount rates, the estimated savings to the NRC are $19,000 ($1,300 × 14.9) and $14,000 ($1,300 × 10.6), respectively. The annual burden reduction to the NRC from implementing the regulatory action is estimated to be 12 hours (0.1 hour × 123 licensees × 0.99).

For each of the 4,394 NRC licensees designated as non-REIRS materials licensees, it is estimated that 6 minutes (0.1 hour) of inspection time is spent reviewing NRC Form 4, or its equivalent, and supporting records. As discussed above, it is assumed that 99 percent of the NRC Forms 4 will not need to be inspected as the basis for authorizing a planned special exposure. Assuming an NRC staff rate of $105 per hour, the estimated annual savings to the NRC is $46,000 (0.1 hour × 4,394 licensees × $105/hour × 0.99). For a flow of funds at 3 and 7 percent real discount rates, the estimated savings to the NRC are $685,000 ($46,000 × 14.9) and $490,000 ($46,000 × 10.6), respectively. The annual burden reduction to the NRC from implementing the regulatory action is estimated to be 435 hours (0.1 hour × 4,394 licensees × 0.99).

The Agreement States will incur no implementation or operating impacts due to the revisions to the reporting of annual dose to workers, the definition of TEDE, or the labeling of containers holding licensed material. For the revisions to the reporting of annual dose to workers and the definition of TEDE, the only impacts are to the NRC to revise NRC Forms 3, 4, and 5. Also, because the revision to the labeling of containers applies only to nuclear power plants licensed by the NRC, there are no impacts to the Agreement States for this action.

Cumulative Occupational Radiation Dose.

For each of the 17,298 Agreement State licensees designated as non-REIRS materials licensees, it is estimated that 6 minutes (0.1 hour) of inspection time is spent reviewing NRC Form 4, or its equivalent, and supporting records. As discussed above, it is assumed that 99 percent of the NRC Forms 4 will not need to be inspected as the basis for authorizing a planned special exposure. Assuming an Agreement State staff rate of $105 per hour, the estimated annual savings to the Agreement States is $180,000 (0.1 hour × 17,298 licensees × $105/hour × 0.99). For a flow of funds at 3 and 7 percent real discount rates, the estimated savings to the Agreement States are $2.7 million ($180,000 × 14.9) and $1.9 million ($180,000 × 10.6), respectively. The annual burden reduction to the Agreement States from implementing the regulatory action is estimated to be 1,700 hours (0.1 hour × 17,298 licensees × 0.99).

Because each revision to the Commission's regulations will reduce burden on licensees, which is the objective of this rulemaking, the costs and benefits have been aggregated for this analysis. The results of the NRC's value-impact assessment for industry implementation and operation are summarized in the following table.

The results of the NRC's value-impact assessment for NRC implementation and operation are summarized in the following table.

The results of the NRC's value-impact assessment for Agreement States implementation and operation are summarized in the following table.

The results of the NRC's assessment of annual burden reduction in hours per licensee and industry are summarized in the following table.

The results of the NRC's assessment of annual burden reduction in hours per NRC and Agreement States are summarized in the following table.

The total implementation cost to the NRC for the regulatory action is $68,000. The total operating impact to the NRC for a flow of funds at 3 and 7 percent real discount rates is an estimated savings of $980,000 and $650,000, respectively.

There are no implementation impacts to the Agreement States for the regulatory action. The total operating impact to the Agreement States for a flow of funds at 3 and 7 percent real discount rates is an estimated savings of $2.7 million and $1.9 million, respectively.

The net present value of the regulatory action is $237 million at a 3 percent real discount rate [industry operation ($280 million) + NRC operation ($980,000) + Agreement State Operation (2.7 million)]—[NRC implementation ($68,000) + industry implementation ($47 million)]. The net present value of the regulatory action is $135 million at a 7 percent real discount rate [industry operation ($180 million) + NRC operation ($650,000) + Agreement State Operation (1.9 million)]—[NRC implementation ($68,000) + industry implementation ($47 million)].

The total reduction in annual burden from implementing the regulatory action is estimated to be 132,000 hours [industry (130,000 hours) + NRC (550 hours) + Agreement States (1,700 hours)].

The net present value of this regulatory action is $237 million and $135 million for 3 and 7 percent real discount rates, respectively. The total industry reduction in annual burden from implementing the regulatory action is estimated to be 132,000 hours. These savings are obtained by reducing administrative and information collection requirements on licensees. The Commission is implementing this rule because the changes improve the effectiveness of the Commission's regulations and reduce unnecessary regulatory burden without affecting the level of protection for either the health and safety of workers and the public or for the environment.

The final rule will become effective 30 days after its publication in the Federal Register . No impediments to the implementation of the recommended alternative have been identified.

As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), the Commission certifies that this rule will not have a significant economic impact upon a substantial number of small entities. Although three of the changes (i.e., the reporting of annual dose to workers, the definition of TEDE, and the determination of cumulative occupational radiation dose) in the final rule pertain to all 21,692 licensees regulated by the NRC and Agreement States, licensees, including the affected small entities, could elect to continue their current practices and remain in compliance with the final regulations. Licensees will incur the costs of changing their procedures only if they determine that the changes will be cost effective; therefore, the NRC has determined that the changes will not have a significant economic impact on licensees defined as small entities. The change related to labeling containers affects only licensees authorized to operate nuclear power reactors. These licensees do not fall within the scope of the definition of “small entities” in the Regulatory Flexibility Act or the scope of the size standards established by the NRC in 10 CFR 2.810.

The NRC has determined that the backfit rule does not apply to this rule and that a backfit analysis is not required for this rule because these amendments do not involve any provisions that would impose backfits as defined in 10 CFR chapter I.

In accordance with the Congressional Review Act of 1996, the NRC has determined that this action is a major rule and has verified this determination with the Office of Information and Regulatory Affairs of OMB.

Our objectives in this final rule are to:

• Extend the time for System institutions to prepare and distribute their annual reports to shareholders from 75 calendar days to 90 calendar days; and

• Promote high quality and timely reporting and disclosure by System institutions to shareholders and the FCA.

Part 620, Disclosure to Shareholders, establishes the requirements for financial reports for Farm Credit banks and associations. In pertinent part, § 620.4 establishes the time requirement for System institutions to prepare and provide to their shareholders an annual report. System institutions have historically distributed or made annual reports available to shareholders in hard copy.

In December 2006, the FCA published a final rule amending § 620.4 to require that System institutions provide annual reports to shareholders within 75 calendar days from the close of the fiscal year. Prior to that time, System institutions had a 90-day deadline. The FCA noted that significant technological developments had occurred over the past decade that had increased the market's appetite for timelier disclosures of financial information. Consistent with changing industry practices, the FCA believed that accelerated reporting would improve information flow and facilitate shareholder and investor decisionmaking. The rule became effective on February 16, 2007. Compliance with the final rule would take effect by the start of the fiscal year immediately following the effective date of the rule. Thus, the 2007 annual report was to be the first annual report distributed under the accelerated filing requirements.

After the rule became final, System institutions raised several concerns regarding the new 75-day filing requirement. Specifically, System institutions stated that they believed the 75-day requirement only applied to the electronic filing of the report with the FCA and not to the report provided to shareholders. They also collectively stated that it would be burdensome for them to comply with the 75 calendar day accelerated distribution requirement for the annual report to shareholders because of the prohibitive costs and time needed for: (1) The external audit and review process; (2) the audit committee review; and (3) the printing and distribution of the annual report. Furthermore, System institutions indicated that the accelerated filing requirement could adversely affect the timeliness, accuracy, and high quality that have been standard with such disclosures.

After reviewing the System's concerns, we published a proposed rule in the Federal Register on August 14, 2007, with a 30-day comment period that ended on September 13, 2007. See 72 FR 45390, Aug. 14, 2007. The proposed rule would allow a System institution up to 90 calendar days from the close of its fiscal year to prepare and provide a copy of the annual report to shareholders, while retaining the 75 calendar day accelerated filing requirement to send an electronic copy of the report to us. To ensure accelerated disclosure, the proposed rule would require that each System institution: (1) Send the report electronically to the FCA within 75 calendar days from the close of the institution's fiscal year and, at the same time, publish a copy of its annual report on its Web site; and (2) provide prior written notification to its shareholders that the institution will publish its annual report on the institution's Web site when the report is sent electronically to the FCA. Furthermore, we stated that the copy of the annual report provided to the shareholders must be substantively identical with the annual report sent to the FCA.

We believed that the bifurcated approach resolved any ambiguities from the prior rulemaking and appropriately addressed the System's concerns of providing attractive, high quality, annual reports to shareholders, while meeting the goal of accelerated filing and disclosure.

We received comments on the proposed rule from four System institutions, the Federal Farm Credit Banks Funding Corporation (Funding Corporation) on behalf of the System's Accounting Standards Workgroup, two System banks, and a System association. Overall, commenters generally supported the proposed rule, but expressed some concerns and suggested several changes to the proposed rule. We address the substantive comments below.

The Funding Corporation stated that it believed that not all associations have Web sites and wanted the FCA to clarify what such an institution should do.

We discovered that two small associations do not appear to have an online presence. We agree with the commenter that there is a question of how these institutions will comply with the rule. Because there are only two System institutions without a Web site, we do not believe that we need to change the rule as proposed. For these two institutions only, they could: (1) Develop their own Web sites; (2) publish their annual report on another Web site that is available to the shareholders without an access cost; or (3) make it available by other equivalent means. For example, these two institutions could determine whether they could publish their annual reports on the district bank's or the Farm Credit Council's Web site. The institutions would still be required to comply with all other provisions of the rule, including providing a notice to their shareholders where the annual report will be made available and sending a substantively identical copy of the annual report to both the FCA and the shareholders. Also, we note that under § 620.2(b), each institution must make its annual report available for public inspection at the institution and at the FCA office where the report is filed.

We received identical comments from two commenters on § 620.4(a)(3), which requires each System institution to provide prior written notification to its shareholders that the institution will publish its annual report on its Web site when the report is sent electronically to the FCA. Commenters asserted: (1) That the requirement to provide prior written notification to shareholders would be unreasonably burdensome and not confer any potential benefits to shareholders; and (2) it was unclear how often written notification must be provided.

As to the first comment, we have assessed the potential benefits of enhanced shareholder decisionmaking versus the costs of providing timelier financial and operating disclosures. Although associations may have some added burden from prior written notification, we fully expect that any such added burden to be minimal and far outweighed by the benefits to shareholders. As discussed below, System institutions have many options on how to comply with the requirement of prior written notification.

As to the second comment on how often written notice is required, we again state that written notice must occur only once. In the proposed rule, we stated that the prior written notice must be prominent and conspicuous so that there is effective shareholder notice. This means that a System institution must provide each shareholder effective notice only one time. Institutions have the flexibility to determine the most appropriate or cost-effective way(s) to implement this requirement, including written notification in the Annual Meeting Information Statement, in the preceding fiscal year annual report, when a loan is made, sending a postcard to all shareholders, or including the notice with correspondence to shareholders ( e.g. , annual tax statements, newsletters, etc.)

Commenters also questioned the need to require System institutions to notify shareholders of the Web site availability of annual reports. The commenters stated that posting annual reports on an institution's Web site does not fulfill the regulatory obligation to deliver the reports to shareholders. Finally, they further stated that the individuals most likely to use early Web site access to the annual reports are those who would consult the Web site for information anyway.

We believe that the accelerated filing and posting on the Web site of the annual report improves information flow and facilitates shareholder and investor decisionmaking. The use of the Internet and electronic reporting have become industry standards. Although requiring a System institution to post annual reports on its Web site does not fulfill all regulatory obligations, it does facilitate achieving the desired objective of timelier disclosures and improved information flow between associations and their shareholders and investors. Accordingly, a System institution should also include the Web site address with the written notification.

Two commenters said that the proposed rule requires that notice be provided to “shareholders and other interested persons,” but does not define the term “other interested persons.” The commenters suggested that we either define or delete this term.

We agree with the commenters that, as currently written, the term “other interested persons” may be unclear. Thus, we are eliminating reference to that term. The final rule will require that notice be provided to “shareholders.”

Section 620.4 establishes the requirement for each System institution to prepare and provide a copy of its annual reports to its shareholders. Existing paragraph (a) of this section requires that each System institution prepare and provide to its shareholders an annual report within 75 days of the end of its fiscal year. In the proposed rule, we proposed to revise § 620.4 to require that each institution of the Farm Credit System: (1) Prepare and send us an electronic copy of its annual report within 75 calendar days of the end of its fiscal year; (2) publish a copy of its annual report on its Web site when it sends us the electronic copy; (3) provide prior written notification to its shareholders and other interested persons that the institution will publish its annual report on the institution's Web site when it is sent electronically to us; and, (4) within 90 calendar days of the end of its fiscal year, prepare and provide to its shareholders an annual report that is substantively identical to the copy of report that it sent to us.

After careful consideration of the substantive comments received, we adopt the modified provisions as final.

We are not making a technical amendment because there is no need for it.

Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ), the FCA hereby certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Each of the banks in the System, considered together with its affiliated associations, has assets and annual income in excess of the amounts that would qualify them as small entities. Therefore, System institutions are not “small entities” as defined in the Regulatory Flexibility Act.

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPs, Takeoff Minimums and/or ODPs. The complete regulatory description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in the Federal Register expensive and impractical. Furthermore, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA forms is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs and the effective dates of the SIAPs, the associated Takeoff Minimums, and ODPs. This amendment also identifies the airport and its location, the procedure, and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPs and Takeoff Minimums and ODPs, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPs contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPs and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedure before adopting these SIAPs, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Since the development of the CGMP regulations in 1962, FDA has balanced the need for easily understood minimum standards with the need to encourage innovation and the development of improved manufacturing technologies. We strive to give manufacturers latitude to determine how to achieve the level of control necessary for CGMP compliance, recognizing that, in some instances, more direction from FDA is necessary to provide a uniform standard for the entire industry or because of the potential for harm, or the narrow range of acceptable means to accomplish a particular CGMP objective. FDA periodically reassesses and revises the CGMP regulations to accommodate advances in technology that further safeguard the drug manufacturing process and the public health. As technology and scientific knowledge related to CGMP evolve, so does understanding of the material, equipment, and process variables, as well as the operational procedures and oversight methods that must be defined and controlled to achieve assurance of drug product quality.

In 1996, as part of this reassessment process, FDA proposed a significant revision to the CGMP regulations for finished pharmaceuticals to clarify certain manufacturing, quality control, and documentation requirements, and to ensure that the regulations more accurately encompass current industry practice (61 FR 20103, May 3, 1996) (1996 proposed rule). Subsequently, as a part of the risk-based pharmaceutical CGMPs for the 21st century initiative, FDA created a CGMP Harmonization Analysis Working Group (CGMP Working Group) to analyze related CGMP requirements in effect in the United States and internationally, including those related to quality systems. The CGMP Working Group compared parts 210 and 211 (21 CFR parts 210 and 211) to the GMPs of the European Union (EU), as well as other FDA regulations (e.g., the Quality Systems Regulation, 21 CFR part 820) to identify the differences and consider the value of supplementing or changing the current regulations. Based on the CGMP Working Group's analysis, we decided to take an incremental approach to modifying parts 210 and 211 (see http://www.fda.gov/cder/gmp/gmp2004/GMP_finalreport2004.htm#_Toc84065744 ).

Because of this change in approach, FDA decided not to finalize the 1996 proposed rule. Therefore, elsewhere in this issue of the Federal Register , we are publishing a notice withdrawing the 1996 proposed rule.

This direct final rule is intended to clarify and modernize the CGMP regulations, as well as harmonize the regulations with international GMP requirements and other FDA regulations. This direct final rule represents the first increment of modifications to parts 210 and 211. We believe that these updating changes are noncontroversial.

This rule deletes from § 211.48(a) the current requirement of adherence to a specific U.S. Environmental Protection Agency (EPA) water standard and instead simply requires that the plumbing system contain water that is “safe for human consumption.” In an effort to improve harmonization with foreign regulations (particularly the European Union and Japan) and to make the U.S. regulation more consistent with that of the United States Pharmacopeia standard, which is satisfied by compliance with the regulations of the European Union (EU) and Japan, this revision requires that water supplied by the plumbing system and used to prepare water for pharmaceutical purposes be “safe for human consumption,” and continues the requirement that it “be supplied under continuous positive pressure in a plumbing system free of defects that could contribute contamination to any drug product.” Compliance with the standards set forth in the regulations currently prescribed by the EPA would be acceptable under this revision, as would compliance with the standards set forth in the current regulations of the EU or Japan for potable water used to prepare water for pharmaceutical purposes.

The current regulations related to aseptic processing have not been updated to reflect current industry standards and practices. In September 2004, we issued “Guidance for Industry: Sterile Drug Products Produced by Aseptic Processing—Current Good Manufacturing Practice” (see http://www.fda.gov/cder/guidance/5882.fnl.htm” ). The issuance of this document was the culmination of several years of work, including soliciting input from external stakeholders, such as described below.

In 2002, we began work on a draft guidance that was intended to replace the 1987 Guideline on Sterile Drug Products Produced by Aseptic Processing. A concept paper was presented to FDA's Advisory Committee on Pharmaceutical Science on October 22, 2002, for comment. Among other things, the Committee recommended that we work with the Pharmaceutical Quality Research Institute (PQRI) for resolution of major issues. The PQRI Aseptic Processing Working Group (Aseptic Processing Working Group), composed of members from FDA, industry, and academia, was formed to provide scientifically based input targeting specific aseptic processing topics (e.g., media fills). PQRI performed a survey of the industry on these topics, the results of which were presented to the Aseptic Processing Working Group for consideration. The Aseptic Processing Working Group also considered scientific publications and other regulatory documents in preparing recommendations concerning specific aseptic processing topics. These recommendations were discussed by the Aseptic Processing Working Group on February 27 and 28, 2003 ( www.pqri.org/commworking/minutes/mtc.asp ) and presented to the Manufacturing Subcommittee of FDA's Advisory Committee on Pharmaceutical Science on May 22, 2003.

In its September 2003, “Pharmaceutical CGMPs for the 21st Century—A Risk-Based Approach: Second Progress Report and Implementation Plan,” FDA announced the issuance of the draft guidance. See http://www.fda.gov/cder/gmp/2ndProgressRept_Plan.htm . At the time, the agency noted that the guidance was intended to clarify regulatory expectations, including relevant regulatory standards for sterile drug products. FDA believed the guidance would help reduce the incidence of manufacturing problems with sterile drug products and related drug shortages. The guidance was also consistent with agency efforts to harmonize with international regulatory standards and develop more science-based guidance documents. As noted previously, FDA issued the final guidance in September 2004.

After the GMP Harmonization Analysis Working Group completed its formal analysis comparing parts 210 and 211 with the GMPs of the EU as well as with other FDA current good manufacturing practice regulations, it recommended that part 211 be modernized by adding more clarification about aseptic processing in an effort to harmonize with current industry standards and practices. Therefore, we are now amending several regulations related to aseptic processing to clarify the regulatory requirements to reflect currently accepted industry practice as well as, in some cases, to harmonize with international regulatory standards. The revision to § 211.113(b) applies specifically to validation of aseptic processes, but the revisions to the other four sections discussed below apply, as appropriate, to both aseptic and other types of processes and operations. These revisions clarify and reflect longstanding agency interpretation of these regulations and industry practices. The agency notes that these clarifications of the regulations with respect to aseptic processing do not affect the applicability of the final guidance issued in September 2004. The guidance's recommendations on the ways in which manufacturers can satisfy certain aseptic processing regulatory requirements still apply.

Section 211.67(a) Equipment cleaning and maintenance is being revised to add the phrase “and/or sterilized” after the word “sanitized” in the current regulation. This change updates the terminology to reflect the fact that, in the context of sterile drug products, the appropriate form of sanitization would be sterilization. This is consistent with our interpretation of this regulation for more than 20 years and reflects the currently accepted industry practice.

Section 211.84(d)(6) Testing and approval or rejection of components drug product containers, and closures, is being revised to change the phrase “that is liable to microbiological contamination,” to “with potential for microbiological contamination.” We believe this revision provides additional clarity without changing the meaning or intent of the regulation.

Section 211.94(c) Drug product containers and closures is being revised to clarify that validation is required for the processes used to remove pyrogenic properties (depyrogenation processes). The revision reflects currently accepted industry practice and the agency's longstanding interpretation of this regulation. To assure that certain drug products are suitable for their intended use, drug product containers and closures are required to be sterilized and depyrogenated to remove microbial contamination and pyrogens or endotoxin. It has been longstanding industry practice to validate the sterilization and depyrogenation processes used for drug product containers and closures to assure consistent removal of microbial contamination and pyrogens or endotoxin. Lack of evidence of such validation and inadequacies in the validation studies have been cited in FDA actions throughout the years based on this regulation. Accordingly, this rule simply clarifies § 211.94(c) by adding a new sentence at the end which states; “Such depyrogenation processes shall be validated.”

Paragraph (a) of § 211.110 Sampling and testing of in-process materials and drug products is being revised to include bioburden process control procedures and tests, where appropriate. The existing regulation provides five examples of control procedures and tests that must be addressed, where appropriate, to monitor the output and to validate the performance of manufacturing processes that may be responsible for causing variation in the characteristics of in-process material and drug product. The existing regulation also acknowledges that the examples are not an all inclusive list of necessary process control procedures and tests. For in-process materials and drug products that are produced by aseptic processing, testing for bioburden is a well established industry standard to ensure that the finished dosage form will be sterile and that the process is not shifting from established limits that may affect control. The revised regulation will add bioburden testing as the sixth example of process control procedures.

Paragraph (b) of § 211.113 Control of microbiological contamination is being revised to include validation of aseptic processes for drug products that are purported to be sterile. The current regulation mentions only validation of sterilization processes, not aseptic processes. Even before 1987, when the Guideline for Sterile Drug Products Produced by Aseptic Processing was issued, industry routinely conducted validation studies that substituted microbiological media for the actual product to demonstrate that its aseptic processes were validated. These parts of validation studies are often referred to as media fills. We believe that this revision clarifies existing practices and serves to harmonize the CGMP requirements with Annex 1 of the EU GMPs, which requires such validation.

Our current regulations for filters used in processing liquid injectable products need to be updated. The current regulations require manufacturers, before using asbestos-containing filters, to submit proof to FDA that an alternative filter will or is more likely to result in product contamination. However, we are not aware that asbestos filters are currently commercially manufactured for pharmaceutical use or that they are currently used in the production of pharmaceuticals. Indeed, their use would no longer be considered a good manufacturing practice. Therefore, we are revising §§ 210.3(b)(6) and 211.72 to remove an outdated regulation permitting limited use of asbestos-containing filters. This revision also provides consistency with international standards.

We removed from the definition of “non-fiber releasing filter,” the statement that “All filters composed of asbestos are deemed to be fiber-releasing filters”; because the revised regulation does not permit any use of asbestos-containing filters. Thus, this sentence is no longer necessary. Because other nonasbestos, fiber-releasing filters may still be used, the revised regulation retains the current requirement that allows the use of fiber-releasing filters only when necessary, and only if another filter is also used specifically to reduce the amount of shed fibers in the finished pharmaceutical.

It is noteworthy that the current CGMP regulation at paragraph (a) of § 211.65 Equipment construction , requires equipment, including filters, to be constructed so that “surfaces that contact components, in-process materials, or drug products shall not be reactive, additive, or absorptive so as to alter the safety, identity, strength, quality, or purity of the drug product beyond the official or other established requirements.” We are not changing this requirement, which also restricts the amount and type of objectionable particulates in drug products resulting from contact with equipment.

Under the current CGMP regulations, several regulations include requirements that certain activities be performed by one person and checked as specified by a second person. Section 211.101(c) requires that each container of component dispensed for use in manufacturing be examined by a second person to assure that it was released by the quality control unit, that the weight or measure is correct as stated in the batch production records, and that the containers are properly identified. Section 211.101(d) requires that each component shall be added to the batch by one person and verified by a second person. Section 211.103 requires that specified yield calculations shall be performed by one person and independently verified by a second person. Section 211.182 requires that the persons performing and double-checking the cleaning and maintenance of major equipment shall date and sign or initial equipment logs indicating that the work was performed. Finally, § 211.188(b)(11) requires that batch production and control records shall include identification of the persons performing and directly supervising or checking each significant step in the operation.

When the CGMP regulations were amended in 1978, FDA issued § 211.68, which provides that automatic, mechanical, or electronic equipment or other types of equipment, including computers, or related systems that will perform a function satisfactorily, may be used in the manufacture, processing, packing, and holding of a drug product, subject to certain requirements that the controls used are designed to assure proper performance of such equipment, to assure that changes to records are made only by authorized personnel, to check the input and output for accuracy, and to provide for appropriate backup of data.

FDA has periodically been asked whether the requirements for verification by a second individual in §§ 211.101(c) and (d), 211.103, 211.182, and 211.188(b)(11) are applicable in situations where operations are performed by various types of automated equipment rather than by an individual. When these regulations were adopted in 1978, the preamble addressed this issue in response to several comments about the second checking requirements of § 211.101 for charge-in of components when automated systems are used. We specifically noted that the use of automated systems is permitted under section 211.68 and that the requirement of 211.101 would be met if the second individual verifies that the automated system is working properly (43 FR 45013 to 45087 at 45051, September 29, 1978). Thus, in this situation, the first individual is replaced by a machine or other automated process, and only one person is necessary to verify that the automated system is functioning as intended.

Due to periodic questions received by FDA about the performance and checking requirements required by §§ 211.101(c) and (d), 211.103, 211.182, and 211.188(b)(11) when the operations are performed by automated equipment, such as the widespread and increasing use of computer-controlled operations, we are revising these sections. The revisions will clarify our long-standing interpretation and policy that verification by a second individual may not be necessary when automatic equipment is used under § 211.68. Rather, in these situations, only one person is needed to verify that the automated equipment is functioning adequately. In cases where there is an operator for the automated equipment, the verifying individual may be, but is not required to be, the operator.

Thus, we are amending §§ 211.101(c) and (d), 211.103, 211.182, and 211.188(b)(11) to indicate that the use of automated equipment under § 211.68 may eliminate the need for verification by a second individual and that in those situations only one person is needed to verify that the automated equipment is functioning properly. In addition, we are amending section 211.68 to provide a consistent clarification of this point.

We are revising § 211.82(b) by replacing the phrase “as appropriate” by the phrase “whichever is appropriate” to eliminate any ambiguity in the regulation and to emphasize that it is, in fact, accepted industry practice to conduct some testing or examination before the components, drug product containers, or closures are released from quarantine.

We are revising § 211.84(c)(1) by replacing the phrases “where necessary, by appropriate means” with “when necessary in a manner to prevent introduction of contaminants into the component.” This change will clarify that the act of cleaning is done for a particular purpose, to prevent the introduction of contaminants, and must be done unless such cleaning is not necessary to prevent such an introduction of contaminants.

In addition, two editorial changes are being made to § 211.84(d)(3) by replacing the word “conformance” with “conformity” and “procedure” with “specifications.” Similarly, two minor editorial changes are being made to the first sentence of § 211.160(b)(1) by replacing the word “conformance” with “conformity” and “appropriate” with “applicable.” We believe that these revisions provide clarity without changing the meaning or intent of the regulations.

In the Federal Register of November 21, 1997 (62 FR 62466), FDA published a notice of availability of a guidance document that explains when and how we intend to employ direct final rulemaking. We have determined that this rule is appropriate for direct final rulemaking because we believe that it includes only noncontroversial amendments and we anticipate no significant adverse comments. Consistent with our procedures on direct final rulemaking, FDA is publishing elsewhere in this issue of the Federal Register a companion proposed rule to revise the CGMP regulations for finished pharmaceuticals. The companion proposed rule provides a procedural framework within which the rule may be finalized in the event that the direct final rule is withdrawn as a result of any significant adverse comments. The comment period for the direct final rule runs concurrently with the companion proposed rule. Any comments received in response to either of these rules will be considered as comments to the other.

We are providing a comment period on the direct final rule of 75 days after the date of the publication in the Federal Register . If we receive any significant adverse comments, we intend to withdraw this direct final rule before its effective date by publication of a notice in the Federal Register . A significant adverse comment is defined as a comment that explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach, or would be ineffective or unacceptable without a change. In determining whether an adverse comment is significant and warrants terminating a direct final rulemaking, we will consider whether the comment raises an issue serious enough to warrant a substantive response in a notice-and-comment process in accordance with section 553 of the Administrative Procedure Act (5 U.S.C. 553). Comments that are frivolous, insubstantial, or outside the scope of the rule will not be considered significant or adverse under this procedure. A comment recommending a regulation change in addition to those in the rule would not be considered a significant adverse comment unless the comment states why the rule would be ineffective without the additional change. In addition, if a significant adverse comment applies to an amendment, paragraph, or section of this rule and that provision can be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subjects of a significant adverse comment.

If any significant adverse comments are received during the comment period, FDA will publish, within 30 days after the close of the comment period, a notice of significant adverse comment and will withdraw the direct final rule. If we withdraw the direct final rule, any comments received will be applied to the proposed rule and will be considered in developing a final rule using the usual notice-and-comment procedures.

If FDA receives no significant adverse comments during the specified comment period, FDA intends to publish a document confirming the effective date of the direct final rule within 30 days after the comment period ends.

FDA has examined the impacts of this direct final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this direct final rule is not a significant regulatory action as defined by the Executive order, because the rule generally either clarifies the agency's longstanding interpretation of, or increases latitude for manufacturers in complying with, preexisting CGMP requirements. The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because this direct final rule does not impose any new regulatory obligations, the agency certifies that it would 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 direct final rule to result in any 1-year expenditure that would meet or exceed this amount.

The purpose of this direct final rule is to update the codified language to reflect current practice and to harmonize requirements in the CGMP regulations with international GMP requirements and other FDA regulations. It would not impose any additional requirements; therefore, industry would not incur incremental compliance costs for these changes.

Issuing these clarifying amendments to the CGMP regulations will not have a significant impact on the human environment. Therefore, an environmental impact statement is not required.

FDA has analyzed this direct 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.

The provisions of this direct final rule contain requirements that were submitted for review and approval to the Director of the Office of Management and Budget (OMB), as required by section 3507(d) of the Paperwork Reduction Act of 1995. The requirements were approved and assigned OMB control number 0910-0139.

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

In a document published in the Federal Register on February 13, 2007 (72 FR 6696), VA proposed to amend VA's medical regulations that were established under the authority of 38 U.S.C. 1729 and that are set forth in 38 CFR 17.101 (referred to below as “the regulations”). The regulations establish methodologies for determining reasonable charges for medical care or services provided or furnished by VA to certain veterans. VA proposed to make the changes described in the SUMMARY portion of this document.

VA provided a 30-day comment period that ended March 15, 2007. Two comments were received. One comment did not directly express agreement or disagreement with the proposed rule, but provided information about Medicare requirements. We reviewed that information and determined that the proposed rule is consistent with those Medicare provisions. Accordingly, we are making no change from the proposed rule based on that comment. We discuss below the second comment, and include background concerning provisions of the proposed rule related to that comment.

Under the provisions of 38 U.S.C. 1729, VA has the right to recover or collect reasonable charges for such medical care and services from a third party to the extent that the veteran or a provider of the care or services would be eligible to receive payment for:

1. A nonservice-connected disability for which the veteran is entitled to care (or the payment of expenses of care) under a health plan contract;

2. A nonservice-connected disability incurred incident to the veteran's employment and covered under a worker's compensation law or plan that provides reimbursement or indemnification for such care and services; or

3. A nonservice-connected disability incurred as a result of a motor vehicle accident in a State that requires automobile accident reparations (no-fault) insurance.

However, consistent with the statutory authority in 38 U.S.C. 1729(c)(2)(B), a third-party payer liable for such medical care and services under a health plan contract has the option of paying, to the extent of its coverage, either the billed charges or the amount the third-party payer demonstrates it would pay for care or services furnished by providers other than entities of the United States for the same care or services in the same geographic area.

Except for charges for prescription drugs, the regulations were promulgated to describe methodologies for establishing VA charges that replicate, insofar as possible, the 80th percentile of community charges (see the preamble to VA's proposed rule “Reasonable Charges for Medical Care or Services; 2003 Methodology Changes” published in the Federal Register at 68 FR 56876 (Oct. 2, 2003)). VA's methodologies for determining reasonable charges for prescription drugs are based on VA costs and are described in 38 CFR 17.102.

Prior to the effective date of this final rule, the regulations included provisions for certain discounts to be applied to billed charges. The discounts were intended to reflect industry standards. VA proposed to eliminate discounts for VA billed charges to avoid unintended duplicate discounting. This was necessary because after VA applied discounts to the billed charges, virtually all third party-payers applied the same discounts a second time (discounts are included in industry software), thereby reducing the billed charges below what was intended by the regulations. VA accordingly proposed to make a number of changes to the regulations to eliminate VA discounts, including changing the regulations at § 17.101(f)(5)(ii) to increase the charges for the professional services of the following providers to 100 percent of the amount that would be charged if the care had been provided by a physician:

• Nurse practitioner,

• Clinical nurse specialist,

• Physician Assistant,

• Clinical psychologist,

• Clinical social worker,

• Dietitian, and

• Clinical pharmacist.

The second comment noted that Public Law 109-461 recently added marriage and family therapists to the groups eligible to provide care under the VA healthcare system and requested that this group be added accordingly to the list in § 17.101(f)(5)(ii). The second comment otherwise fully supported the proposed rule.

Section 201 of Public Law 109-461 amended 38 U.S.C. 7401 and 7402 to add provisions under which qualified marriage and family therapists are identified as eligible to provide care under the VA healthcare system. Section 201 also amended 38 U.S.C. 7401 and 7402 to add provisions under which qualified licensed professional mental health counselors are similarly identified as eligible to provide care under the VA healthcare system. VA has concluded that these statutory provisions make it appropriate to make changes from the proposed rule in the final rule to include provisions concerning both categories: Providers that are marriage and family therapists, and providers that are licensed professional mental health counselors. Third party payers apply discounts from the physician rate for marriage and family therapists and for licensed professional mental health counselors, as third party payers similarly do for the other providers included in the lists in current and proposed § 17.101(f)(5)(ii). Accordingly, after considering the second comment, we are making a change from the proposed rule in the final rule by adding marriage and family therapists and licensed professional mental health counselors to the list of providers in § 17.101(f)(5)(ii). Charges for professional services of the providers included in that list will be 100 percent of the amount that would be charged if the care had been provided by a physician.

This final rule is making other changes from the proposed rule that are nonsubstantive. In the § 17.101(g) introductory paragraph, VA proposed to amend a sentence by removing “50 percent” and replacing it with “100 percent”. That sentence says in the current regulations that certain charges “will be 50 percent of the charges otherwise determined as set forth in this paragraph.” This final rule further amends the sentence by removing “otherwise” since that term would no longer be needed.

This final rule also makes a nonsubstantive change from the proposed rule's provisions for the authority citation for 38 CFR part 17, so that the final rule will, as intended by the proposed rule, reflect the current language in the part 17 authority citation.

In addition, the final rule makes nonsubstantive changes from the proposed rule for purposes of clarity or grammar. Other than nonsubstantive changes in capitalization or punctuation, those changes from the proposed rule are in § 17.101(a)(8)(i) to refer to “billing charge” rather than “billable charge”, in § 17.101(a)(8)(iii) to refer to “VA's billing charge” rather than “VA's charge”, in § 17.101(a)(8)(vii) to refer to “the interim charge” to use the same phrase as in the similar context in paragraphs (a)(8)(iv) and (a)(8)(v) of that section, and in § 17.101(a)(8)(vii) to add for clarity “under this section”, which is used in the current regulations in the analogous provisions of § 17.101(a)(8)(v) of the regulations but was not in the proposed rule.

Based on the rationale set forth in the proposed rule and in this document, VA is adopting the provisions of the proposed rule as a final rule with the changes discussed above.

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

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

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 Order classifies a rule as a significant regulatory action requiring review by the Office of Management and Budget if it meets any one of a number of specified conditions, including: Having an annual effect on the economy of $100 million or more, creating a serious inconsistency or interfering with an action of another agency, materially altering the budgetary impact of entitlements or the rights of entitlement recipients, or raising novel legal or policy issues. VA has examined the economic, legal, and policy implications of this rule and has concluded that it is a significant regulatory action under Executive Order 12866.

The Secretary hereby certifies that this rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This rule would affect mainly large insurance companies. The rule might have an insignificant impact on a few small entities that do an inconsequential amount of their business with VA. Accordingly, pursuant to 5 U.S.C. 605(b), this rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are 64.005, Grants to States for Construction of State Home Facilities; 64.007, Blind Rehabilitation Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.012, Veterans Prescription Service; 64.013, Veterans Prosthetic Appliances; 64.014, Veterans State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 64.016, Veterans State Hospital Care; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; and 64.022, Veterans Home Based Primary Care.

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

General conformity is required under section 176(c) of the Clean Air Act (CAA or Act) to prevent the air quality impacts of Federal actions from causing or contributing to a violation of the National Ambient Air Quality Standards (NAAQS) or interfering with the purpose of a SIP. Conformity currently applies to areas that are designated nonattainment, and to certain areas that have been redesignated to attainment after 1990 (maintenance areas).

The general conformity regulation is found in 40 CFR part 93 and provisions related to conformity SIPs are found in 40 CFR 51.390.

In the CAA, Congress recognized that actions taken by Federal agencies could affect states', tribes', and local agencies' abilities to attain and maintain the NAAQS. Section 176(c) of the CAA requires Federal agencies ensure that their actions conform to the applicable SIP for attaining and maintaining the NAAQS. EPA published the General Conformity Regulations in 1993 to cover all Federal actions not related to highway and mass transit funding and approval to implement a portion of section 176(c). The General Conformity Regulations define NAAQS as “those standards established pursuant to section 109 of the Act and include standards for carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter, and sulfur dioxide.” Since 1993, EPA has reviewed and revised the NAAQS for particulate matter to include a new PM 2.5 standard (particulate matter with an aerodynamic diameter of up to 2.5 microns). General conformity requirements are applicable to areas designated nonattainment for this standard, and to certain areas redesignated from nonattainment to attainment (maintenance areas). In July 1997, EPA promulgated a new NAAQS established pursuant to section 109 of the CAA for PM 2.5 . On April 5, 2005, the EPA designated areas as nonattainment for PM 2.5 , and subsequently proposed regulations to implement the new particulate matter standard. Section 176(c)(6) states that the conformity requirements of 176(c) do not apply to an area newly designated nonattainment for a new NAAQS until one year after the designation. The EPA made PM 2.5 designations on April 5, 2005; thus, the applicable general conformity requirements were not effective in these areas until April 5, 2006. The proposed rule published on April 5, 2006, solicited comments on establishing 100 tons per year of PM 2.5 direct or precursor emissions as the de minimis threshold for General Conformity applicability.

On July 17, 2006, EPA published a final rule (71 FR 40420), PM 2.5 De Minimis Emission Levels for General Conformity Applicability, which amended the regulations relating to the CAA requirement that Federal actions conform to the appropriate state, tribal or Federal implementation plan for attaining clean air (“general conformity”). This action revised the tables in subparagraphs (b)(1) and (b)(2) of 40 CFR 51.853 and 40 CFR 93.153 by adding the de minimis emissions levels for PM 2.5 and established the previously proposed 100 tons per year as the de minimis emission level for direct PM 2.5 and each of its precursors in nonattainment and maintenance areas.

The SIP revision submitted to EPA on September 10, 2007, amends the state rule, Conformity of General Federal Actions to State Implementation Plans (10 Code of State Regulations (CSR) 10-6.300), to be consistent with the Federal conformity requirements described above. This revision added de minimis emissions levels for PM 2.5 to the state's rule and updated the state's tables for de minimis emissions levels for direct PM 2.5 and the relevant precursors in nonattainment and maintenance areas.

This Missouri rule implements Section 176(c) of the CAA, as amended (42 U.S.C. 7401-7671q) and regulations under 40 CFR part 51, subpart W, with respect to conformity of general Federal actions to the applicable implementation plan. Missouri rule 10 CSR 10-6.300 at Subsection (2)(B)26.C, was revised to identify precursors of PM 2.5 consistent with the Federal rule. The state rule identifies the following precursors: Sulfur dioxide, nitrogen oxides (unless the state and EPA have determined they are not significant precursors), and volatile organic compounds and ammonia (only where the state or EPA has determined they are significant precursors). Rule 10 CSR 10-6.300, Subsection (3)(B) was revised to add a requirement that a conformity determination must be made for each criteria pollutant or precursor where the total of direct and indirect emissions of the criteria pollutant or precursor in a nonattainment or maintenance area caused by a Federal action would equal or exceed any of the rates in paragraph (3)(B)1. or 2. of the rule. Subsection (3)(B) of 10 CSR 10-6.300 revised tables in subparagraphs (B)1. and (B)2. by incorporating the Federally established 100 tons per year as the de minimis emission level for direct PM 2.5 , and each of its precursors in nonattainment and maintenance areas.

The submittal documents public notice and hearing for this SIP revision in compliance with CAA section 110(l) and 40 CFR 51.102.

We have reviewed the submittal to assure consistency with the current CAA, and EPA regulations (40 CFR part 93 and 40 CFR 51.390) governing state procedures for general conformity and interagency consultation and have concluded that the submittal is approvable. Details of our review are set forth in a technical support document, which has been included in the docket for this action.

Under section 110(k) of the Act, and for the reasons set forth above, EPA is taking action to approve the revision to the Missouri SIP which adds de minimis emissions levels for PM 2.5 and precursors, for general conformity purposes.

We do not expect objection to this approval, so we are finalizing it without proposing it in advance. However, in the Proposed Rules section of this Federal Register , we are simultaneously proposing approval of the same submittal. If we receive adverse comments by January 3, 2008, we will publish a timely withdrawal in the Federal Register to notify the public that the direct final approval will not take effect and we will address the comments in a subsequent final action based on the proposal. If we do not receive timely adverse comments, the direct final approval will be effective without further notice on February 4, 2008. This will incorporate these general conformity procedures into the Federally-enforceable SIP and thereby replace the previous version. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

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

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves state law implementing a Federal standard, 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 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 CAA. 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 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 February 4, 2008. 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).)

I. Background

In FR Doc. 07-4252 of September 5, 2007 (72 FR 51012), there were a number of technical and typographical errors that are identified and corrected in the Correction of Errors section below. The provisions of this correction notice are effective as if they had been included in the final rule published September 5, 2007. Accordingly, the corrections are effective December 4, 2007.

In FR Doc. 07-4252 of September 5, 2007 (72 FR 51012), make the following corrections:

1. On page 51016, 3rd column, 2nd full paragraph, lines 18 and 19, the phrase “productivity bonus or profit share consistent with the special rules” is corrected to read “productivity bonus consistent with the special rules”.

2. On page 51018, 1st column, 3rd full paragraph, line 11, the phrase “other entity.” is corrected to read “other entity).”.

3. On page 51019,

a. First column, 1st partial paragraph,

(1) Line 6, the phrase “proposed rulemaking, we proposed to” is corrected to read, “proposed rulemaking (72 FR 42628), we proposed to”.

(2) Line 11, the phrase “ services', ” is corrected to read “ services,’ ”.

b. Third column, 1st full paragraph, line 12 the phrase “personally refills an implanted pump “is corrected to read “personally refills an implantable pump”.

4. On page 51021, 2nd column, 1st partial paragraph, line 2, the phrase “requirements of a consultation) are not” is corrected to read “requirements of a consultation) is not”.

5. On page 51024, 3rd column, 1st partial paragraph, line 46, the phrase “every 3-years” is corrected to read “every 3 years”.

6. On page 51025, 2nd column, 2nd full paragraph, lines 13 and 14, the phrase “current 90-days” is corrected to read “current 90 days”.

7. On page 51028, 1st column,

a. First full paragraph, lines 21 and 22, the phrase “such arrangements would have been analyzed under the as” is corrected to read “such arrangements would have been analyzed as”.

b. Second full paragraph, line 24, the phrase “market value arrangement) under” is corrected to read “market value compensation arrangement) under”.

8. On page 51032, 3rd column,

a. First full paragraph, line 3, the phrase “at least 8 hour” is corrected to read “at least 8 hours”.

b. Fifth paragraph, lines 8 and 9, the phrase “The in-office ancillary exception” is corrected to read “The in-office ancillary services exception”.

9. On page 51033, 2nd column, 1st full paragraph, lines 11 and 12, the phrase “ordering, or by a member of the group practice when furnished,” with “ordering the DHS, or by a member of the group practice when the DHS is furnished,”.

10. On page 51035, 1st column, 4th paragraph, line 14, the phrase “group practice; or by an entity that is” is corrected to read “group practice; or an entity that is”.

11. On page 51037, 1st column, 1st partial paragraph, lines 4 and 5, the phrase “furnished by the academic medical center” is corrected to read “furnished by the academic medical center as the result of a referral from that physician”.

12. On page 51043, 1st column, 3rd full paragraph, lines 4 and 5, the citation “(69 FR 16084-81605)” is corrected to read “(69 FR 16084-16085)”.

13. On page 51050, 3rd column, 2nd full paragraph, lines 4 through 7, the phrase “people reside in the “hole” zip code, the hospital may recruit a physician to establish a practice into the “hole” zip code.” is corrected to read “inpatients reside in the “hole” zip code, the hospital may recruit a physician to establish a practice in the “hole” zip code”.

14. On page 51055, 1st column, 1st partial paragraph, line 23, the phrase “within 6-months” is corrected to read “within 6 months”.

15. On page 51058,

a. First column, 4th paragraph,

(1) Line 13, the figure “CY-2005” is corrected to read “CY 2005”

(2) Line 14, the phrase “CY-2006, and $329 for CY-2007.” is corrected to read “CY 2006, and $329 for CY 2007.”.

b. Third column, 1st full paragraph, line 2, the figure “CY-2007)” is corrected to read “CY 2007)”.

16. On page 51062, 3rd column, first full paragraph,

a. Lines 26 through 32, the phrase “created by virtue of the ownership interest that does not meet an ownership exception (which, thus, creates a compensation arrangement), in the chain of relationships that runs: hospital-radiology venture-physicians.” is corrected to read “created by virtue of the chain of relationships that runs: hospital (contracts with) radiology venture (owned by) physicians.”

b. Lines 36 through 38, the phrase “With respect to the second indirect compensation arrangement, the inquiry would be whether the compensation” is corrected to read “The inquiry would be whether the compensation”.

17. On page 51063, second column, third full paragraph, line 16, the citation “§ 411.355(q)” is corrected to read “§ 411.357(q)”.

18. On page 51064, 1st column, fourth full paragraph, lines 2 and 3, the phrase “the entitys bona fide medical staff or in the entitys local” is corrected to read “the entity's bona fide medical staff or in the entity's local”.

19. On page 51066, 2nd column, 1st full paragraph, lines 23 through 28, the sentence “(We note that the exception for retention payments applies to federally qualified health centers and rural health clinics in the same manner as it applies to hospitals.)” is corrected to read “(We note that the exception for retention payments applies to remuneration provided by federally qualified health centers and rural health clinics in the same manner as it applies to remuneration provided by hospitals.)”.

20. On page 51068, 1st column, the section heading “ U. Community-Wide Health Information System ” is corrected to read “ U. Community-Wide Health Information Systems ”.

1. On page 51087, 3rd column, 3rd full paragraph, lines 8 through 11, the phrase “For purposes of applying the exceptions in § 411.355 and § 411.357 to arrangements described in paragraphs (c)(1)(i) and (c)(2)(i),” is corrected to read “For purposes of applying the exceptions in § 411.355 and § 411.357 to arrangements in which a physician stands in the shoes of his or her physician organization,”.

2. On page 51091, 1st column, 9th full paragraph, line 5, the phrase “claims submission;” is corrected to read “claims submission.”

3. On page 51093, 2nd column, 9th full paragraph, lines 2 through 4, the phrase “paragraph (e)(1) is also signed by the party to whom the payments are directly made.” is corrected to read “paragraph (e)(1) is also signed by the physician practice.”

4. On page 51094, 2nd column, 8th full paragraph, line 5, the phrase “specifically addressed by another” is corrected to read “specifically excepted by another”.

5. On page 51096, 2nd column,

a. Eleventh paragraph, 1st line, the phrase “(C) A certification that the future” is corrected to read “(C) A statement that the future”.

b. Twelfth paragraph, line 2, the phrase “anticipates relocating his or medical” is corrected to read “anticipates relocating his or her medical”.

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a rule take effect in accordance with section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we can waive this notice and comment procedure if the Secretary finds, for good cause, that the notice and comment process is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons therefore in the notice.

Section 553(d) of the APA ordinarily requires a 30-day delay in effective date of final rules after the date of their publication in the Federal Register . This 30-day delay in effective date can be waived, however, if an agency finds for good cause that the delay is impracticable, unnecessary, or contrary to the public interest, and the agency incorporates a statement of the findings and its reasons in the rule issued.

Therefore, for reasons noted below, we find good cause to waive proposed rulemaking and the 30-day delayed effective date for the corrections in this notice. This notice merely corrects typographical and technical errors in the preamble and regulations text of the September 5, 2007 final rule and does not make substantive changes to the policies that were adopted in the final rule. Therefore, we find that undertaking further notice and comment procedures to incorporate these corrections into the final rule and delaying the effective date of these changes is unnecessary and contrary to the public interest.

Submitting Comments: We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. You can assist us by referencing the file code CMS-2237-IFC and the specific “issue identifier” that precedes the section on which you choose to comment.

Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.cms.hhs.gov/eRulemaking. Click on the link “Electronic Comments on CMS Regulations” on that Web site to view public comments.

Comments received timely also will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.

[If you choose to comment on issues in this section, please include the caption “Background” at the beginning of your comments.]

Case management is commonly understood to be an activity that assists individuals in gaining access to necessary care and services appropriate to their needs. Many individuals, because of their age, condition, illness, living arrangement, or other factors, may benefit from receiving direct assistance in gaining access to services. In the context of this regulation, it is the individual's access to care and services that is the subject of this management—not the individual. Because case management has been subject to so many different interpretations over the years, many Medicaid agencies now refer to case management as “care management,” “service coordination,” “care coordination” or some other term related to planning and coordinating access to health care and other services on behalf of an individual. Because section 1915 of the Social Security Act (the Act) uses the term “case management,” we will use this term throughout this document.

In 1981, the Congress amended the Act to authorize Medicaid coverage of case management services under two provisions. Under section 1915(b) of the Act, States were authorized to develop primary care case management systems in order to direct individuals to appropriate Medicaid services. Under section 1915(c) of the Act, States were authorized to furnish case management as a distinct service under home and community-based services waivers. Case management is widely used under both authorities because of its value in ensuring that individuals receiving Medicaid benefits are assisted in making necessary decisions about the care they need and in locating service providers.

The regulations set forth in this interim final regulation implement in 42 CFR parts 431, 440, and 441 the case management services provisions authorized by sections 1905(a)(19) of the Act and 1915(g) of the Act. The definition of case management in the Deficit Reduction Act was effective on January 1, 2006. The provisions of this rule are effective 90 days after the date of publication of this rule.

Section 9508 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) (Pub. L. 99-272), enacted on April 7, 1986, amended the Act concerning the provision of targeted case management services. Specifically, section 9508 of COBRA added a new section 1915(g) to the Act that—

• Provided that a State may elect to furnish case management, targeted to specified groups, as a service covered under the State plan;

• Defined case management services as services that will assist individuals, eligible under the State plan, in gaining access to needed medical, social, educational, and other services;

• Provided an exception to the statewideness requirement of section 1902(a)(1) of the Act by allowing a State to limit its provision of case management services to individuals who reside in particular geographic areas or political subdivisions within the State;

• Provided an exception to the comparability requirement of section 1902(a)(10)(B) of the Act by allowing a State to furnish case management services to any specific group (targeted case management); and

• Required that there be no restriction on free choice of providers of case management services that would violate section 1902(a)(23) of the Act.

Section 9411(b) of the Omnibus Budget Reconciliation Act of 1986 Pub. L. 99-509, enacted on October 21, 1986, amended section 1915(g) of the Act by clarifying that a State may limit the provision of case management services to individuals with acquired immune deficiency syndrome (AIDS), AIDS-related conditions, or with either. Section 1915(g) of the Act also was amended to clarify that a State may limit case management services to individuals with chronic mental illness.

Section 1895(c)(3) of the Tax Reform Act of 1986 (Pub. L. 99-514), enacted on October 22, 1986, amended the statute to permit States to furnish non-targeted case management services under a State Medicaid plan. This law amended section 1905(a) of the Act by adding a new paragraph (19) that included case management services, as defined in section 1915(g)(2) of the Act, in the list of optional services a State may include in its Medicaid plan (the existing paragraph (19) was redesignated as paragraph (20)).

Section 4118(i) of the Omnibus Budget Reconciliation Act of 1987 (OBRA '87) Pub. L. 100-203, enacted on December 22, 1987, amended section 1915(g)(1) of the Act to allow States to limit the providers of case management services available for individuals with developmental disabilities or chronic mental illness to ensure that the case managers for those individuals are capable of ensuring that those individuals receive needed services.

Section 8435 of the Technical and Miscellaneous Revenue Act of 1988 (Pub. L. 100-647), enacted on November 10, 1988, prohibited the Secretary from denying approval of a State plan amendment to provide case management services on the basis that a State is required to provide those services under State law or on the basis that the State had paid or is paying for those services from other non-Federal revenue sources before or after April 7, 1986. This provision also specified that the Secretary was not required to make payment under Medicaid for case management services that are furnished without charge to the users of such services.

Section 6052 of the Deficit Reduction Act (DRA) of 2005 (Pub. L. 109-171), enacted on February 8, 2006, addresses Reforms of Case Management and Targeted Case Management under Medicaid. This section redefined the term “case management services” to mean services that will “assist individuals eligible under the State plan in gaining access to needed medical, social, educational, and other services” and to include the following components:

• Assessment of an eligible individual to determine service needs, including activities that focus on needs identification, to determine the need for any medical, educational, social, or other services. These activities are defined to include the following:

• Development of a specific care plan based on the information collected through the assessment described above. The care plan specifies the goals of providing case management to the eligible individual and actions to address the medical, social, educational, and other services needed by the eligible individual, including activities such as ensuring the active participation of the eligible individual and working with the individual (or the individual's authorized health care decision maker) and others to develop such goals and identify a course of action to respond to the assessed needs of the eligible individual.

• Referral and related activities to help an individual obtain needed services, including activities that help link the eligible individual with medical, social, educational providers, or other programs and services that are capable of providing needed services, such as making referrals to providers for needed services and scheduling appointments for the individual.

• Monitoring and follow-up activities, including activities and contacts that are necessary to ensure that the care plan is effectively implemented and adequately addresses the needs of the eligible individual. Monitoring and follow-up activities may be with the individual, family members, providers, or other entities. These activities may be conducted as frequently as necessary to help determine such matters as:

Section 6052 of the DRA also clarifies that the term “case management” does not include the “direct delivery of an underlying medical, educational, social, or other service to which an eligible individual has been referred” by adding clause section 1915(g)(2)(A)(iii) of the Act. In addition, with respect to foster care, the statute gives examples of some types of activities that are not covered. With respect to the direct delivery of foster care services, the following activities are not considered to qualify as components of Medicaid case management services:

• Research gathering and completion of documentation required by the foster care program;

• Assessing adoption placements;

• Recruiting or interviewing potential foster care parents;

• Serving legal papers;

• Home investigations;

• Providing transportation;

• Administering foster care subsidies; or

• Making placement arrangements.

The DRA also added a new section 1915(g)(2)(B) to the Act, defining the term “targeted case management services” as case management services that are furnished without regard to the requirements of section 1902(a)(1) of the Act, regarding statewide availability of services, and section 1902(a)(10)(B) of the Act, regarding comparability of services. Although the ability to provide these services without regard to section 1902(a)(1) of the Act and section 1902(a)(10)(B) of the Act is not new, this paragraph clarifies that the State can “target” case management services to specific classes of individuals, or to individuals who reside in specified areas of the State (or both).

Section 6052 of the DRA also added a new section 1915(g)(3) to the Act, to clarify that when a case manager contacts individuals who are not eligible for Medicaid, or who are Medicaid eligible but not included in the eligible target population in the State, that contact may qualify as Medicaid case management services. The contact is considered an allowable case management activity when the purpose of the contact is directly related to the management of the eligible individual's care. It is not considered an allowable case management activity if those contacts relate directly to the identification and management of the non-eligible or non-targeted individual's needs and care.

Section 6052 of the DRA added a new section 1915(g)(4) to the Act to discuss the circumstances under which Federal financial participation (FFP) is available for case management or targeted case management services. With a few exceptions described in the following paragraph, in accordance with section 1902(a)(25) of the Act, FFP only is available for the cost of case management or targeted case management services if there are no other third parties liable to pay for those services, including as reimbursement under a medical, social, educational, or other program. When the costs of any part of case management or targeted case management services are reimbursable under another federally funded program, a State is directed to allocate the costs between the other program(s) and Medicaid in accordance with OMB Circular (No. A-87) (or any related or successor guidance or regulations regarding allocation of costs among Federally funded programs) under an approved cost allocation program.

It should be noted that per section 1903(c) of the Act, nothing in this rule would prohibit or restrict payment for medical assistance for covered Medicaid services furnished to a child with a disability because such services are included in the child's Individualized Education Program (IEP) or Individual Family Service Plan (IFSP). Likewise, payment for those services that are included in the IEP or IFSP would not be available when those services are not covered Medicaid services.

Section 6052 of the DRA also clarified, in a new section 1915(g)(5) of the Act, that nothing in section 1915(g) of the Act shall be construed as affecting the application of rules with respect to third party liability under programs or activities carried out under title XXVI of the Public Health Service Act (the HIV Health Care Services Program) or the Indian Health Service.

This rule implements in Federal regulations the statutory provisions permitting coverage of case management and targeted case management as optional services under a State Medicaid plan, in accordance with sections 1905(a)(19) and 1915(g) of the Act, as amended by the DRA, and all other relevant statutory provisions.

[If you choose to comment on issues in this section, please indicate the caption “Provisions of the Interim Final Rule” at the beginning of your comments.]

To incorporate the policies and implement the statutory provisions described above, we are making the following revisions to 42 CFR chapter IV, subchapter C, Medical Assistance Programs.

While the freedom of choice requirement is beneficial to the Medicaid population as a whole, in OBRA '87, the Congress recognized that this requirement might not adequately protect the interests of persons with a developmental disability or chronic mental illness. In several States (or political subdivision), a particular agency may be designated under State law or regulation to serve as the exclusive source of case management services with respect to these populations. Therefore, section 4118(i) of OBRA '87 amended section 1915(g)(1) of the Act to provide States with some latitude to restrict the availability of case management providers to these targeted groups to assure that case management providers are capable of ensuring that Medicaid eligible individuals will receive needed services.

Consistent with section 1915(g) of the Act, as amended by section 4118(i) of OBRA '87, when a target group consists solely of individuals with developmental disabilities or chronic mental illness, including a subgroup of those individuals (for example, children with mental illness), States may limit provider participation to specific persons or entities by setting forth qualifying criteria that assure the ability of the case managers to connect individuals with needed services. We note, however, that a State's decision to restrict case managers for these populations does not impinge on targeted individuals' rights to choose freely among those individuals or entities that the State has found qualified and eligible to provide targeted case management services. Absent a waiver to the contrary, those individuals also maintain their right to choose qualified providers of all other Medicaid services they receive.

We are amending § 431.51 by revising paragraphs (c)(2) and (c)(3) and adding a new paragraph (c)(4) to afford States the option of limiting providers of case management services available to furnish services defined in § 440.169 for targeted groups that consist solely of individuals with developmental disabilities or chronic mental illness. This implements the statutory provisions at section 1915(g)(1) of the Act.

While a State can provide case management services under its State plan to all Medicaid eligible individuals, it is not required to do so. Under section 1915(g)(1) of the Act, a State is not bound by the “statewideness” requirement of section 1902(a)(1) of the Act. (The “statewideness” requirement of section 1902(a)(1) of the Act provides, in part, that the provisions of a State plan be in effect in all political subdivisions of the State.) Thus, States may limit the provision of case management services to any defined location of the State (that is, city, county, community, etc.).

Section 1915(g)(1) of the Act also permits States to target case management services to individuals with particular diseases or conditions, without regard to the “comparability” provision in section 1902(a)(10)(B) of the Act. (The “comparability” provision generally requires States to make Medicaid services available in the same amount, duration, and scope to all individuals within the categorically needy group or covered medically needy group. The comparability provision also requires that the Medicaid services available to any individual in a categorically needy group are not less in amount, duration, and scope than those Medicaid services available to an individual in a medically needy group.) Thus, a State may limit case management services to any specific identifiable group, such as individuals with human immunodeficiency virus (HIV), acquired immune deficiency syndrome (AIDS), AIDS-related conditions, or chronic mental illness. A State's flexibility to target case management services to a specific group sets these services apart from most other services available under the Medicaid program.

In identifying the groups eligible to receive targeted case management services, States are not required to distinguish eligible individuals by traditional Medicaid concepts of eligibility groups (that is, mandatory categorically needy, optional categorically needy, medically needy), although this avenue continues to be available to States, should they choose it. Instead, States may target case management services by age, type or degree of disability, illness or condition, or any other identifiable characteristic or combination of characteristics. There is no limit on the number of groups to whom case management services may be targeted.

We note that the exception to the comparability requirement applies only to the provision of targeted case management services under section 1915(g) of the Act. The comparability requirements of section 1902(a)(10)(B) of the Act continue to apply to all other Medicaid services for which an individual may be eligible, unless these services are subject to comparability exceptions in their own right. In other words, receipt of case management services does not in any way alter an individual's eligibility to receive other services under the State plan.

In § 431.54, we are revising paragraph (a) and adding a new paragraph (g) that includes targeted case management services as an exception to the comparability requirements in § 440.250 and to the statewide operation requirement in § 431.50(b). This implements the targeting provisions at section 1915(g)(1) of the Act.

Consistent with the provisions of section 1915(g)(2) of the Act, as added by the DRA, we will define case management services in § 440.169(a) generally as services that assist individuals eligible under the plan in gaining access to needed medical, social, educational, and other services. The intent of case management is to assist the individual in gaining access to needed services, consistent with the requirements of the law and these regulations. “Other services” to which an individual eligible under the plan may gain access may include services such as housing and transportation.

In § 440.169(b), we define targeted case management services as case management services furnished to particular defined target groups or in any defined locations without regard to requirements related to statewide provision of services or comparability.

The integrated medical direction and management of services furnished to inpatients in a medical institution already includes case management activities. Therefore, including separate coverage for institutionalized individuals will in general, result in duplicative coverage and payment. Individuals with complex and chronic medical needs and individuals transitioning to a community setting after a significant period of time in a hospital, nursing facility, or intermediate care facility for individuals with mental retardation, however, require case management that is beyond the scope of work of institutional discharge planners. These case management services facilitate the process of transitioning individuals from institutional care to community services. For example, individuals may require assistance locating community services. Thus, services we define as case management services for transitioning individuals from medical institutions to the community will be included as a separately covered case management service.

In § 440.169(c), we define case management services for the transitioning of individuals from institutions to the community. Individuals (except individuals ages 22 to 64 who reside in an institution for mental diseases (IMD) or individuals who are inmates of public institutions) may be considered to be transitioning to the community during the last 60 consecutive days (or a shorter period specified by the State) of a covered, long-term, institutional stay that is 180 consecutive days or longer in duration. For a covered, short-term, institutional stay of less than 180 consecutive days, individuals may be considered to be transitioning to the community during the last 14 days before discharge. We use these time requirements to distinguish case management services that are not within the scope of discharge planning activities from case management required for transitioning individuals with complex, chronic, medical needs to the community. As specified in § 441.18(a)(8)(vii)(D) and (E), FFP would not be payable until the date that an individual leaves the institution, is enrolled with the community case management provider, and receiving medically necessary services in a community setting.

In sum, we are defining the case management benefit to include only services to individuals who are residing in a community setting or transitioning to a community setting following an institutional stay.

Our proposed exclusion of FFP for case management services or targeted case management services provided to individuals under age 65 who reside in an IMD or to individuals involuntarily living in the secure custody of law enforcement, judicial, or penal systems is consistent with the statutory requirements in paragraphs (A) and (B) following paragraph section 1905(a)(28) of the Act. The statute indicates that “except as otherwise provided in paragraph (16), such term [medical assistance] does not include (A) any such payments with respect to care or services for any individual who is an inmate of a public institution. An individual is considered to be living in secure custody if serving time for a criminal offense in, or confined involuntarily to, State or Federal prisons, local jails, detention facilities, or other penal facilities. A facility is a public institution when it is under the responsibility of a governmental unit or over which a governmental unit exercises administrative control. Case management services could be reimbursed on behalf of Medicaid-eligible individuals paroled, on probation, on home release, in foster care, in a group home, or other community placement, that are not part of the public institution system, when the services are identified due to a medical condition targeted under the State's Plan, and are not used in the administration of other non-medical programs.

At paragraph (B), following paragraph section 1905(a)(28) of the Act, the statute indicates that medical assistance does not include “any such payments with respect to care or services for any individual who has not attained 65 years of age and who is a patient in an institution for mental diseases.” Paragraph (16) includes in the definition of “medical assistance” “* * * inpatient psychiatric hospital services for individuals under age 21 * * *”. Section 1905(h) of the Act defines “inpatient psychiatric hospital services” to include inpatient services in inpatient settings other than psychiatric hospitals, as specified by the Secretary in regulations. The Secretary has specified in regulations at § 440.160 that such settings include “a psychiatric facility which is accredited by the Joint Commission on Accreditation of Healthcare Organizations, the Council on Accreditation of Services for Families and Children, the Commission on Accreditation of Rehabilitation Facilities, or by any other accrediting organization with comparable standards, that is recognized by the State.” Thus, the term “inpatient hospital services for individuals under age 21” includes services furnished in accredited psychiatric residential treatment facilities, currently known as “PRTFs,” providing inpatient psychiatric services for individuals under age 21 that are not hospitals.

However, the statutory wording of the exception to the IMD exclusion makes it clear that medical assistance includes payment only for inpatient hospital services furnished to residents under age 21 in an inpatient psychiatric hospital or, by regulation, to residents under age 21 in an accredited PRTF. FFP does not extend to other services furnished to individuals under age 21 residing in these settings. However, we are clarifying in this rule that FFP is available for community case management services to transition an individual receiving inpatient psychological services for individuals under age 21 (authorized under section 1905(a)(16) of the Act), after discharge from a medical institution to the community. FFP would not be payable until the date that an individual leaves the institution, is enrolled with the community case management provider, and receiving medically necessary services in a community setting.

At § 440.169(d), we specify that case management includes the following elements specified in section 1915(g)(2)(A)(ii) of the Act:

1. Assessment and periodic reassessment of an eligible individual to determine service needs, including activities that focus on needs identification, to determine the need for any medical, educational, social, or other services. Such assessment activities include:

• Taking client history.

• Identifying the needs of the individual and completing related documentation.

• Gathering information from other sources such as family members, medical providers, social workers, and educators, if necessary, to form a complete assessment of the eligible individual.

Because the statute defines case management services as those services that will assist individuals eligible under the plan in gaining access to needed medical, social, educational, and other services, we believe that an assessment of an individual's needs should be comprehensive and address all needs of the individual. Thus, we are requiring in § 440.169(d)(1) that the assessment be comprehensive in order to address all areas of need, the individual's strengths and preferences, and consider the individual's physical and social environment. Performance of a comprehensive assessment can minimize the need for an individual to be covered under multiple case management plans and have multiple case managers, and can reduce the likelihood of service duplication and inefficiencies.

Assessment includes periodic reassessment to determine whether an individual's needs and/or preferences have changed. At this time, we will not put forth Federal standards for the frequency of reassessment, but recommend that face-to-face reassessments be conducted at least annually or more frequently if changes occur in an individual's condition.

2. Development and periodic revision of a specific care plan based on the information collected through an assessment or reassessment, that specifies the goals and actions to address the medical, social, educational, and other services needed by the eligible individual, including activities such as ensuring the active participation of the eligible individual and working with the individual (or the individual's authorized health care decision maker) and others to develop those goals and identify a course of action to respond to the assessed needs of the eligible individual.

Because the assessment of an individual's needs must be comprehensive, the care plan also must be comprehensive to address these needs. However, while the assessment and care plan must be comprehensive and address all of the individual's needs, an individual may decline to receive services in the care plan to address these needs. Section 1902(a)(23) of the Act requires that recipients have free choice of qualified providers. This means that the individual cannot be required to receive services from a particular provider—or from any provider—if the individual chooses. If an individual declines services listed in the care plan, this must be documented in the individual's case records.

• Referral and related activities (such as scheduling appointments for the individual) to help an individual obtain needed services, including activities that help link eligible individuals with medical, social, educational providers, or other programs and services that are capable of providing needed services to address identified needs and achieve goals specified in the care plan.

• Referral and related activities do not include providing transportation to the service to which the individual is referred, escorting the individual to the service, or providing child care so that an individual may access the service. The case management referral activity is completed once the referral and linkage has been made. It does not include the direct services, program, or activity to which the individual is linked.

• Monitoring and follow-up activities, including activities and contacts that are necessary to ensure that the care plan is effectively implemented and adequately addresses the needs of the eligible individual. Monitoring and follow-up activities may be with the individual, family members, providers, or other entities or individuals. These activities may be conducted as frequently as necessary to help determine whether:

Monitoring may involve either face-to-face or telephone contact. We are requiring that monitoring occur at a frequency established by the State, but no less frequently than annually.

In the course of providing case management services, case managers can use a person-centered approach. A person-centered approach is a process used to develop, implement, and manage a care plan that attempts to fulfill the objectives and personal preferences of the individual or the legal representative of that individual. The process focuses on the person rather than the system; directly involves the person (or the legal representative of that individual) in the plan development, all aspects of implementation and management; and is tailored to meet individualized needs. Varying levels of person-centered planning, including choice not to participate, may be selected by the individual (or by the individual's legal representative). The individual or legal representative can participate throughout all components of case management and direct who may participate in the care plan development process along with the case manager and the individual or the individual's legal representative.

Case management services must be provided by a single Medicaid case management provider. This provision is consistent with the requirement that the case management includes a comprehensive assessment and care plan. Thus, when an individual could be served under more than one targeted case management plan amendment because he falls within the scope of more than one target group (for example when the individual has both mental retardation and a mental illness and the State has target groups for both conditions), a decision must be made concerning the appropriate target group so that the individual will have one case management provider. That provider will be responsible for ensuring that the comprehensive assessment and care plan address the individual's needs stemming from mental retardation and from the mental illness. In doing so, the case management provider must coordinate with service providers in both systems of care to ensure that the individual's needs are met. We intend to provide for a delayed compliance date so that States will have a transition period of the lesser of 2 years or 1 year after the close of the first regular session of the State Legislature that begins after this regulation becomes final before we will take enforcement action on the requirement for one case manager to provide comprehensive services to individuals. We will be available to States as needed for technical assistance during this transition period.

We note that section 1915(g)(2) of the Act specifically defines case management services in terms of services furnished to individuals who are eligible under the State plan. This provision reinforces basic program requirements found in section 1905(a) of the Act that require medical assistance to be furnished only to eligible individuals. An “eligible individual” is a person who is eligible for Medicaid and eligible for case management services (including targeted case management services) as defined in the Medicaid State plan, at the time the services are furnished. Case management as medical assistance under the State plan cannot be used to assist an individual, who has not yet been determined eligible for Medicaid, to apply for or obtain this eligibility. (Those activities may be an administrative expense of the State's operation of its Medicaid program, rather than a medical assistance service.)

While the provision of case management services to non-Medicaid eligible individuals cannot be covered, we are including a regulatory provision at § 440.169(e) to make clear that the effective case management of eligible individuals may require some contact with non-eligible individuals. For instance, in completing the assessment for a Medicaid eligible child for whom targeted case management is available, it may be appropriate for a case manager to interview the child's parents and/or other family members who are not eligible for Medicaid, or who are not, themselves, part of a target population specified in the State plan. Contacts with family members that are for the purpose of helping the Medicaid-eligible individual access services can be covered by Medicaid. It also may be appropriate to have non-eligible family members involved in all components of case management because they may be able to help identify needs and supports to assist the eligible individual in obtaining services, provide case managers with useful feedback, and alert case managers to changes in the individual's needs.

A case manager's contacts with individuals who are not eligible for Medicaid, or who are not included in the group who receives targeted case management services, can be considered allowable activities, eligible for FFP, when the purpose of the contact is directly related to the management of the eligible individual's care. However, these activities will not be considered allowable if they relate directly to the identification and management of the non-eligible, or non-targeted individual's needs and care. Contacts that relate to the case management of non-eligible individuals, that is, assessment of their needs, referring them to service providers, and monitoring their progress, cannot be covered by Medicaid due to the fact they are not Medicaid eligible or not covered under the case management target population. If these other family members or other individuals also are Medicaid eligible and covered under a target group included in the State plan, Medicaid could pay for case management services furnished to them. In addition, these individuals could receive other medically necessary services for which they may qualify.

We will revise § 440.250 by adding a new paragraph (r) to provide for an exception to the comparability requirements under § 440.240 for targeted case management services.

In part 441, subpart A, we will revise § 441.10 to add a new paragraph (m), which provides a statutory basis for the provision of case management and targeted case management services.

At § 441.18(a)(1), we are specifying that, with the exception discussed above at § 431.51, individuals must have the free choice of any qualified provider. Section 9508 of COBRA amended section 1915(g) of the Act to require that there be no restriction on a recipient's free choice of providers, in violation of section 1902(a)(23) of the Act. Based on COBRA's legislative history, we believe the Congress intended that individuals receiving case management services under section 1915(g) of the Act not be locked into designated providers, whether for case management services, or for other services. (See H. Rept. No. 453, 99th Cong., 1st Sess. 546 (1985).) Therefore, except as described in § 441.18(b), individuals eligible to receive case management (or targeted case management) services must be free to choose their case management provider from among those that have qualified to participate in Medicaid and are willing to provide the services.

States must establish qualifications for providers of case management services in the State plan. These qualifications relate to minimum age requirements, education, work experience, training, and other requirements, such as licensure or certification, which the State may establish. The Act does not set any minimum educational or professional qualifications for the provision of case management services. Therefore, States have flexibility to establish qualifications that are reasonably related to the demands of the Medicaid case management services to be furnished and the population being served. For example, it is reasonable to expect that the qualifications for case managers serving children who are ventilator-dependent to be different than those qualifications for case managers serving persons with intellectual disabilities. While the case manager must possess the knowledge and skills to conduct a comprehensive assessment and to assist the individual or the individual's legal representative with the development of a comprehensive care plan, this does not mean that the case manager must have experience with the program requirements of every medical, social, educational, or other program to which an individual may be referred; it means that the case manager must be familiar with the general needs of the population being served and must be able to connect and coordinate with medical, social, educational, and other programs that serve the population. If the case manager also provides other services under the plan, the State must ensure that a conflict of interest does not exist that will result in the case manager making self-referrals.

We are also including at § 441.18(a)(2) and § 441.18(a)(3) provisions to ensure that the provision of case management is neither coerced nor a method to restrict access to care or free choice of qualified providers. The receipt of case management services must be at the option of individuals included in a specific target group. This requirement is also consistent with section 1902(a)(19) of the Act. A recipient cannot be compelled to receive case management services for which he or she might be eligible. Requiring an individual to receive case management services against his or her will would not be in the best interest of the individual and, thus, will violate sections 1902(a)(19) and 1902(a)(23) of the Act. A State also cannot condition receipt of case management services on the receipt of other services since this also serves as a restriction on the individual's access to case management services.

Section 1915(g)(1) of the Act prohibits the use of case management services in any fashion that will restrict an individual's access to other care and services furnished under the State plan, which will violate section 1902(a)(23) of the Act. The purpose of case management services authorized by section 1915(g) of the Act is to help an individual gain access to services, not hinder this access. Permitting case managers to function as gatekeepers under this optional State plan service will allow case managers to restrict access to services—that is, to the extent to which authorization may be denied, access also may be denied. Because this concept is contrary to the statutory definition of case management services, providers of case management services (including targeted case management services) furnished under this section are prohibited from serving as gatekeepers under Medicaid. (States may use a section 1915(b) waiver or primary care case management (PCCM) services under section 1905(a)(25) for this purpose.) Similarly, a State cannot require that an individual receive case management services as a prerequisite for receiving other Medicaid services.

In § 441.18(a)(4), we require that the State's plan provide that case management services will not duplicate payments made to public agencies or private entities under the State plan and other program authorities. In authorizing States to offer case management services, the Congress recognized that there was some potential for duplicate payments. This recognition led to an explicit statement in the legislative history of COBRA that prohibited the duplication of payments. (See H. Rept. No. 453, 99th Cong., 1st Sess. 546 (1985).) The Congress clarified its prohibition on the duplication of funding in section 8435 of the Technical and Miscellaneous Revenue Act of 1988. This provision prohibits the Secretary from denying approval of a case management State plan amendment on the basis that the State is required to provide those services under State law, or on the basis that the State had paid for those services from other non-Federal funds. In other words, the duplication of payment prohibition does not preclude States from using Medicaid to pay for case management services that previously had been funded solely with State and/or local dollars. The amendment also specifies, however, that the Secretary is not required to make payment under Medicaid for case management services that are furnished without charge to users of the services.

When an individual could be served under more than one targeted case management plan amendment because he falls within the scope of more than one target group, a decision must be made concerning the appropriate target group so that the individual will have one case manager responsible for his services and duplicate payment for the same purpose will not be made.

While FFP would not be available for case management services that duplicates payments made under other program authorities, section 1903(c) of the Act provides an exception for medical assistance for covered Medicaid services, including case management services, furnished to a child with a disability because such services are included in an individualized education program or individualized family service plan.

In section 441.18(a)(5), we would require case management services to be provided on a one-to-one basis to eligible individuals by one case manager. We are including this requirement to implement the provisions of section 1915(g)(2)(A)(ii) that sets forth a unified care planning process for case management to respond to the needs of eligible individuals based on a comprehensive assessment. The statute describes a step-by-step process, each component built upon the previous one, to ensure that the care plan is effectively implemented and adequately addresses all of the assessed needs of the eligible individual. Having one case manager is necessary to ensure accountability and coordination in assisting individuals in gaining access to services to address all components of assessed need. Fragmenting the service would reduce the quality of case management; the point of case management is to address the complexities of coordinated service delivery for individuals with medical needs. The case manager should be the focus for coordinating and overseeing the effectiveness of all providers and programs in responding to the assessed need.

We are including § 441.18(a)(6) to prohibit providers of case management services from exercising the State Medicaid agency's authority to authorize or deny the provision of other services under the plan. Although a State Medicaid agency may place great weight on the informed recommendation of a case manager, it must not rely solely on case management recommendations in making decisions about the medical necessity of other Medicaid services that the individual may receive. The decision to authorize the provision of a service must remain with the State Medicaid agency as required by § 431.10(e). Costs related to these activities, such as prior authorization or determination of medical necessity, which are necessary for the proper and efficient administration of the Medicaid State plan, must be claimed as a direct administrative expense by the Medicaid agency and may not be included in the development of a case management rate.

If a State plan provides for case management services (including targeted case management services), the State must require providers to maintain case records that document the information required by § 441.18(a)(7). These case records must document, for each individual receiving case management, the name of the individual; the dates of case management services; the name of the provider agency (if relevant) and person chosen by the individual to provide the case management services; the nature, content, units of case management services received and whether the goals specified in the care plan have been achieved; whether the individual has declined services in the care plan; timelines for providing services and reassessment; and the need for, and occurrences of, coordination with case managers of other programs.

States that opt to furnish case management services must do so by amending their State plans in accordance with § 441.18(a)(8) and § 441.18(a)(9). FFP is not available for case management as a medical assistance service under sections 1905(a)(19) and 1915(g) of the Act in the absence of an approved amendment to the State's Medicaid plan. A State's amendment to its State plan must contain all information necessary for CMS to determine whether the plan can be approved to serve as a basis for FFP. Each amendment must—

• Specify whether case management will be targeted, and if so, define the targeted group (and/or subgroup);

• Identify the geographic area to be served;

• Describe the services to be furnished including types of monitoring;

• Specify the frequency of assessments and monitoring and provide a justification for the frequencies (given that targeted groups may vary in their need for case management services);

• Specify the qualifications of the service providers;

• Specify the methodology under which case management providers will be paid and rates are calculated;

• Specifies if case management services are being provided to Medicaid-eligible individuals who are in institutions to facilitate transitioning to the community. In this case, the amendment must specify if case management services are being provided to individuals with long-term stays of 180 consecutive days or longer or to individuals with short-term stays of less than 180 consecutive days. Furthermore, when States choose to provide case management services to individuals in institutions to facilitate transitioning to the community, the State plan must specify the time period or other conditions under which case management may be provided in this manner. The time period that case management is provided in an institution must not exceed an individual's length of stay. In addition, the State plan must specify the case management activities and include an assurance that these activities are coordinated with and do not duplicate institutional discharge planning; include an assurance that the amount, duration, and scope of the case management activities would be documented in an individual's plan of care which includes case management activities prior to and post-discharge, to facilitate a successful transition to community living; specify that case management is only provided by and reimbursed to community case management providers; specify that FFP is only available to community providers and will not be claimed on behalf of an individual until the individual is discharged from the institution and enrolled in community services; and describe the system and process the State will use to monitor providers' compliance with these provisions.

• In addition, if the State plan provides for targeted case management, the State must submit a State plan amendment for each target group that will receive case management services. A separate amendment also must be submitted for each subgroup within a group if any of these elements differ for that subgroup.

While a State has some flexibility to establish the methodology and rates it will use to reimburse providers of case management or targeted case management services, a State cannot employ a methodology or rate that results in payment for a bundle of services. Per diem rates, weekly rates, and monthly rates represent a bundled payment methodology that is not consistent with section 1902(a)(30)(A) of the Act, which requires that States have methods and procedures to assure that payments are consistent with efficiency, economy, and quality of care. A bundled payment methodology exists when a State pays a single rate for more than one service furnished to an eligible individual during a fixed period of time. The payment is the same regardless of the number of services furnished or the specific costs, or otherwise available rates. Since these bundled (daily, weekly, or monthly) rates are not reflective of the actual types or numbers of services provided or the actual costs of providing the services, they are not accurate or reasonable payments and may result in higher payments than would be made on a fee-for-service basis for each individual service. A bundled rate is inconsistent with economy, since the rate is not designed to accurately reflect true costs or reasonable fee-for-service rates, and with efficiency, since it requires substantially more Federal oversight resources to establish the accuracy and reasonableness of State expenditures. We therefore expect that case management and targeted case management services reimbursed on a fee-for-service basis, as opposed to a capitated basis, will be reimbursed based on units of time. Because of the nature of case management, which can include contacts of brief duration, we believe that the most efficient and economical unit of service is a unit of 15 minutes or less. Accordingly, we are requiring in § 441.18(a)(8)(vi) that the unit of service for case management and targeted case management services be 15 minutes or less.

In § 441.18(b) we require that, if a State limits qualified providers of case management services for target groups with developmental disability or chronic mental illness, in accordance with § 431.51(a)(4), the plan must identify the limitations being imposed on the providers and specify how these limitations enable providers to ensure that individuals within the target groups receive needed services.

At § 441.18(c)(1), we specify that the case management benefit does not include, and FFP is not available for, activities that are an integral component of another covered Medicaid service. To include those activities as a separate benefit will result in duplicate coverage and payment. This activity would not be consistent with proper and efficient operation of the program. For example, when an individual receives services from a physician and the physician refers the individual to a home health agency for services, that referral is integral to the physician's service and FFP will not be available for that activity as a case management service.

Individuals participating in a managed care plan receive case management services as an integral part of the managed care services. This case management is for the purpose of managing the medical services provided by or through the plan and does not extend to helping an individual gain access to social, educational, and other services the individual may need. Thus, an individual receiving services through a managed care plan may also receive case management or targeted case management services when the individual is eligible for those services. For example, an individual with AIDS served by a managed care plan may also be served under a case management plan targeted to persons with AIDS/HIV. However, FFP is not available for case management of medical services that are also managed by the individual's managed care plan. In this situation, it is expected that the Medicaid case manager would coordinate with the managed care plan as appropriate. At § 441.18(c)(2) through § 441.18(c)(5), we set forth limitations authorized by the DRA on the case management benefit. The regulation text at § 441.18(c) includes the statutory principle set forth at section 1915(g)(2)(A)(iii) of the Act providing that the case management benefit does not include services that involve the direct delivery of underlying medical, educational, social, or other services to which an eligible individual has been referred.

The statutory definition of case management established by the DRA draws a distinction between services that assist an individual in accessing needed services and the actual services to which access is gained. Case management services include only those activities that help an individual gain access to needed medical, social, educational, and other services. Case managers can assist individuals in gaining access to needed services, regardless of the funding source of the service to which the individual is referred. By including more than medical care, States can implement a holistic approach to the delivery of services by using case management to identify all of an individual's care needs and coordinate access to services that address these needs.

Case management does not include the actual direct services the individual obtains. For this reason, if a case manager provides a direct service, such as counseling, during the course of a case management visit, the direct service cannot be reimbursed as part of the case management service. This service may be covered under another Medicaid service category, such as rehabilitation services, if the service is covered under the State's Medicaid program, the case management provider also is a qualified provider of that service, and the individual chooses to receive the service from the case manager. The performance of diagnostic tests also is a direct service. While diagnostic tests may provide information that inform the assessment and care development process, they do not constitute an assessment activity under section 1915(g)(2) of the Act that is covered under the case management benefit. These services, however, may be covered under another medical assistance category if provided in the State plan. Similarly, referral and related activities do not include the provision of transportation or escort services, nor do they include the provision of day care services so that an eligible individual with children can access needed services. These are direct services rather than coverable case management activities.

The nature of the case management benefit to “assist eligible individuals to gain access to needed services” and the similarity of its 1985 definition to the purpose of other programs also has led many to confuse the Medicaid benefit with the actual administration of non-Medicaid programs. This is particularly true when a large number or percentage of the participants in these non-Medicaid programs also are eligible for Medicaid (and thus, potentially included in a target group eligible to receive targeted case management services). Concerns in this area have been raised through audits, the review of State plan amendments and by the Government Accountability Office (Report GAO-05-748, entitled “States Use of Contingency Fee Consultants to Maximize Federal Reimbursements Highlights Need for Improved Federal Oversight,” June 2005). The following are examples of targeted case management State plans that were inconsistent with Federal policy, resulting in excessive Federal Medicaid outlays. These examples illustrate the need for the specific definitions and guidance contained in this rule.

• In one State, in fiscal year 2003, the State received an estimated $17 million in Federal reimbursement for targeted case management claims from juvenile justice and child welfare agencies of which about $12 million was for services that were integral to non-Medicaid programs.

• A State agency claimed $86.6 million Federal share in fiscal years 2002 and 2003 for unallowable targeted case management services furnished by a social services agency. Contrary to Federal requirements, the rates charged to Medicaid included social workers' salary costs for child protection and welfare services.

• In a CMS audit of a State's counties that provided targeted case management services, 72 percent of encounters in one county were incorrectly claimed during a 1-year period. These encounters either did not meet the definition of targeted case management at section 1915(g)(2) of the Act or were claimed for clients that were ineligible for Medicaid.

These past abuses and other occurrences of cost shifting from State foster care programs led to the reforms in case management and targeted case management made by section 6052 of the DRA. In the DRA, the Congress specifically precluded the use of the Medicaid case management benefit for the direct delivery of an underlying medical, social, educational, or other service funded by other programs. In addition, the Congress provided examples with respect to foster care of services that are excluded from case management services. The inclusion of examples for foster care does not limit the general prohibition on including the direct services of other programs from case management services under Medicaid as well. For example, the exclusion extends to—

• Child Welfare/Child Protective Services. States provide child protective services to children at risk of abuse or neglect. These services include investigation of allegations of abuse or neglect, identification of risk factors, provision of services to children and families in their own homes, monitoring of at-risk children, placement of children into foster care or adoptive homes, and evaluation of interventions. Child protective services includes development and oversight of a service plan for the child and family with the goal of moving the child toward permanency either through family reunification, adoption, or other permanent living arrangement. Because these services have their own goals'protecting vulnerable children and moving them toward a safe and stable living situation—we believe child protective services are the direct services of State child welfare programs and are not Medicaid case management. These activities of child welfare/child protective services are separate and apart from the Medicaid program. Thus, Medicaid case management services must not be used to fund the services of State child welfare/child protective services workers. Further, Medicaid may not pay for case management services furnished by contractors to the State child welfare/child protective services agency, even if they would otherwise be qualified Medicaid providers, because they are furnishing direct services of the programs of that agency. However, children receiving child welfare/child protective services may still qualify to receive Medicaid targeted case management services, when these services are provided according to the Medicaid State plan program by a qualified Medicaid provider who is not furnishing direct services of other programs. For example, a Medicaid eligible child with a mental disorder receiving child protective services may also qualify to receive case management services targeted to children with mental disorders.

• Parole and Probation. States often use parole and probation as methods by which offenders can be eased back into the mainstream society. The supervision, counseling, and oversight required by these programs assist individuals in learning—or re-learning—how to live within the legal bounds that society places on the behavior of its members. Both parole and probation are, however, functions of the administration of the justice system, and exist independent of the Medicaid program. These functions have their own goals (for example, conformance to law, adherence to conditions imposed by a court) which may coincide with goals of the Medicaid program, but exist separate and independent from it. Because probation and parole functions are necessary and integral components of the administration of another system, we believe that parole and probation functions are the direct services of corrections programs and are not Medicaid case management. Thus, we are prohibiting the use of parole or probation officers (or other employees or contractors of the justice system or court) as case management providers under Medicaid. Individuals who are on parole or probation may still qualify to receive Medicaid case management or targeted case management services for which they otherwise qualify (for example, a Medicaid-eligible individual with a traumatic brain injury could qualify to receive case management targeted to a group of persons with brain injuries). However, claims for Medicaid case management must not include the administration of the State's parole or probation system.

• Public Guardianship. Persons who have been determined to need guardians, because they are found incapable of handling their own affairs, may qualify for Medicaid case management when they are also part of a group to whom this service is provided (for example, persons with developmental disabilities). The public guardianship function, however, is also a State or locally administered activity that is independent of the Medicaid program. There is a fundamental difference between guardians (or conservators, or other similarly appointed individuals) and case managers. Case managers may assist decision-makers in reaching conclusions about the needs of an individual and the services that may best meet those needs, but they do not make these decisions on behalf of that individual. That is the function of a guardian (or conservator, or other similarly appointed individual). Case managers may, therefore, assist guardians and others, in enabling an individual to gain access to needed services, but they may not be used to replace or fund the function of this fundamentally non-Medicaid activity.

• Special Education. The Individuals with Disabilities Education Act (IDEA) ensures every child with a disability has available a free appropriate public education (FAPE) that includes special education and related services. Part B of the IDEA requires the development and implementation of an individualized education program (IEP) that addresses the unique needs of each child aged 3 through 21 with a disability. Part C of the IDEA requires the development and implementation of an individualized family service plan (IFSP) to address the unique developmental needs of an infant or toddler under 3 years of age with a disability. The IEP identifies the special education and related services needed for the child with a disability. An IFSP identifies the early intervention services and other services needed for an infant or toddler with a disability and his or her family.

While some of the services identified on a child's IEP (e.g., a related service such as physical therapy) may be covered under Medicaid, the development, review, and implementation of the IEP is part of a process that is required by Part B of the IDEA. This process should not be confused with Medicaid case management (or targeted case management) services, which also may be needed by the child. Similarly, under Part C, the IFSP may identify a need for case management as well as other services and activities some of which may be covered under Medicaid and others that, while a necessary component of the Part C program, are not covered under Medicaid. One distinction between the IEP and IFSP is that the IFSP process for an infant or toddler with a disability under the age of three requires a service coordinator from the outset, some of whose activities may be Medicaid-funded case management (or targeted case management) services. Case management activities in this context could include taking the infant or toddler's history, identifying service needs, and gathering information from other sources to form a comprehensive assessment. Case management would not include administrative functions that are purely IDEA functions such as scheduling IFSP team meetings, and providing the requisite prior written notice.

An IEP or IFSP may identify the need for case management to coordinate access to a broad range of medical service providers from several disciplines, and also may identify needs for case management to gain access to non-medical services. As with other Medicaid covered services (such as physical, occupational, or speech therapy) identified on the IEP or IFSP, such case management services may be covered under Medicaid when furnished to a Medicaid-eligible child by a Medicaid qualified provider who assists in gaining access to and coordinating all needed services. To facilitate coordinated care, case management is a covered Medicaid service only when a single case manager comprehensively addresses all of the individual's service needs.

• While Medicaid funding could be available for the costs of a Medicaid-qualified case manager who may be operating in a school or early intervention program in assisting IDEA-eligible children in gaining access to needed services, including those identified in their IEP or IFSP, coordinating the provision of those services, and facilitating the timely delivery of services, Medicaid case management services must remain separate and apart from the administration of the IDEA programs. Medicaid may pay for those case management services where IDEA and Medicaid overlap, but not for administrative activities that are required by IDEA but not needed to assist individuals in gaining access to needed services. These would include activities such as writing an IEP or IFSP, providing required notices to parents, preparing for or conducting IEP or IFSP meetings, or scheduling or attending IEP or IFSP meetings. Section 504 of the Rehabilitation Act (RA) of 1973 requires school districts to provide to students with disabilities, appropriate educational services designed to meet the individual needs of such students to the same extent as the needs of students without disabilities are met; that is, to provide an equal opportunity for students with disabilities to participate in or benefit from educational aids, benefits, or services. We are clarifying in this regulation that FFP is not available for any case management activities not included in an IEP or IFSP but performed solely based on obligations under section 504 of the RA to ensure equal access to the educational program or activity.

In accordance with section 1903(c) of the Act, nothing in this rule would prohibit or restrict payment for medical assistance for covered Medicaid services furnished to a child with a disability because such services are included in the child's Individualized Education Program (IEP) or Individual Family Service Plan (IFSP). Likewise, payment for those services that are included in the IEP or IFSP would not be available when those services are not covered Medicaid services. In addition, Medicaid funds must not be used to replace or otherwise supplant funds used for activities related to the administration of the IDEA for infants and young children such as Child Find.

Therefore, at § 441.18(c)(2), we state the general prohibition established by the DRA in section 1915(g)(2)(A)(iii) of the Act on including as Medicaid case management the direct delivery of services, as well as include a list of programs to which we are applying this prohibition in this regulation (parole and probation, public guardianship, special education, child welfare/child protective services, and foster care). We also include in § 441.18(c)(3) the specific statutory examples with respect to foster care—

• Research gathering and completion of documentation required by the foster care program;

• Assessing adoption placements;

• Recruiting or interviewing potential foster care parents;

• Serving legal papers;

• Home investigations;

• Providing transportation;

• Administering foster care subsidies; or

• Making placement arrangements.

These examples of direct delivery of foster care activities are all administrative activities that are integral to the delivery of services through the foster care program. For the reasons discussed above, since the statute cites these administrative activities as examples, rather than as an all-inclusive list, at § 441.18(c)(3), we are interpreting the exclusion of administrative activities to extend to all administrative activities integral to the administration of the foster care program. Other foster care activities subject to this payment exclusion include case management; referral to services; overseeing foster care placements; the training, supervision, and compensation of foster care parents; and attendance at court appearances related to foster care. Since the activities of foster care programs are separate and apart from the Medicaid program, Medicaid case management services must not be used to fund the services of foster care workers. The following is an example of how this payment exclusion will be applied: When a title IV-E eligible child in foster care is referred by a caseworker to the Medicaid program for medical services or mental health services covered by the Medicaid program, that administrative activity neither can be allocated and claimed to the Medicaid program as an administrative expense of the Medicaid program nor can those costs be claimed as a case management medical assistance service. The State may, instead, claim these costs under the title IV-E program to the extent allowable (see 45 CFR 1356.60(c)(2) and ACF Child Welfare Policy Manual Section 8.1B). FFP for the medical services to which a Medicaid-eligible child who resides in foster care was referred would be available under the Medicaid program.

Furthermore, case management activities included under therapeutic foster care programs will be subject to this payment exclusion since these activities are inherent to the foster care program. FFP for medical services to a Medicaid eligible child with medical care needs who resides in therapeutic foster care would still be available, provided all Medicaid requirements were met.

At § 441.18(c)(4), we also apply this exclusion from the definition of case management the administrative activities integral to other non-medical programs, based on the general exclusion from case management of services delivered under other programs in section 1915(g)(2)(A)(iii) of the Act.

At § 441.18(c)(4), we, thus, will exclude from the case management benefit the administrative activities of any other non-medical program, specifically including activities that constitute the administration of special education programs under IDEA, the parole and probation functions conducted by or under the authority of State or local courts or other justice entities, legal services provided by any entity, child welfare/child protective services and activities concerning guardianship of a person or the person's assets performed by or under the auspices of offices of public guardianship, or activities by any individual who has been appointed to perform guardianship, conservatorship (or other similar duties) on behalf of a Medicaid recipient by a court.

It is important to note that the exclusion of Medicaid funding for case management activities that are used in the administration of other non-medical programs does not, in any way, compromise Medicaid recipients' eligibility for medically necessary services under the plan, including medically necessary case management (and targeted case management) services that are not used to administer other programs. Thus, a Medicaid eligible child with a developmental disability, who receives foster care services, will qualify for Medicaid case management services targeted towards individuals with intellectual or other developmental disabilities that are not furnished through the foster care program. Similarly, a Medicaid-eligible child with chronic asthma receiving foster care services will receive medically necessary treatment services for that condition funded by Medicaid. Both of these children, who also receive foster care services, will continue to qualify for Medicaid-funded services. Thus, FFP will be available under the Medicaid program for medically necessary services. Similarly, an adult who tests positive for the human immunodeficiency virus (HIV) and is also on parole may continue to be eligible for medically necessary case management services targeted to individuals with HIV that are not furnished through a non-medical State program or for medically necessary treatment services.

In § 441.18(c)(5)), we clarify that activities that meet the definition in § 440.169 for case management services and under the approved State plan cannot be claimed as administrative activities, under § 433.15(b).

Certain activities may be properly claimed as administrative costs when the activities are directly related to the proper and efficient administration of the Medicaid State plan. Sometimes these activities are commonly referred to, by States and others, as “administrative case management”; although, statute and regulation do not include such terminology. These administrative activities are performed by State agency staff and may involve facilitating access to and coordinating Medicaid program services. Some examples of these administrative activities include Medicaid eligibility determinations and re-determinations; Medicaid intake processing; Medicaid preadmission screening for inpatient care; prior authorization for Medicaid services; utilization review; and Medicaid outreach. These examples are not meant to be all-inclusive and CMS may make determinations regarding whether these or other activities are necessary for the proper and efficient administration of the State plan.

A State may not claim costs for administrative activities for the proper and efficient administration of the State plan if the activities are an integral part or extension of a direct medical service. In addition, unlike case management claimed as a service cost which can extend to coordinating with programs outside of Medicaid, administrative activities are strictly related to enhancing access to Medicaid services.

States may not claim, as administrative activities, the costs related to general public health initiatives, overhead costs, or operating costs of an agency whose purpose is other than the administration of the Medicaid program. Activities directed toward services not included under the Medicaid program, although these services may be valuable to Medicaid beneficiaries, are not necessary for the administration of the Medicaid program, and therefore are not allowable administrative costs. In addition, with regard to any allowable administrative claims, payment may only be made for the percentage of time spent which is actually attributable to Medicaid eligible individuals.

The allocation methodology for costs claimed for the proper and efficient administration of the State plan must be specified in the State's approved public assistance cost allocation plan in accordance with subpart E of 45 CFR part 95 and ASMB C-10.

When the costs of any part of case management or targeted case management are reimbursable under another federally funded program, a State is directed by section 1915(g)(4)(B) of the Act to allocate costs which are reimbursable under the other Federal program in accordance with OMB Circular No. A-87 (or any related or successor guidance or regulations regarding allocation of costs among federally funded programs) under an approved cost allocation program. (OMB Circular No. A-87, which details the cost principles for State, local, and Indian Tribal Governments for the administration of Federal awards, pertains to all Federal agencies whose programs, including Medicaid, are administered by a State public assistance agency.) This requirement is set forth in § 441.18(d). OMB Circular A-87, Attachment A, paragraph C.3.a requires allocation of costs among benefiting cost objectives (programs).

Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document.

Ordinarily, we will publish a notice of proposed rulemaking and afford a period for public comments in accordance with the provisions of the Administrative Procedure Act, 5 U.S.C. 553. Further, we generally provide for final rules to be effective no sooner than 30 days after the date of publication unless we find good cause to waive the delay. Section 6052(b) of the DRA authorizes the Secretary to promulgate regulations to carry out the new statutory provisions at section 1915(g)(2) of the Act “which may be effective and final immediately on an interim basis as of the date of the interim final regulation.” In light of the importance of clarifying the definition of case management and ensuring the fiscal integrity of the Medicaid program, we have elected to use this authority to issue this rule as an interim final rule with comment period. Section 6052(b) of the DRA further provides that there must be a period for receipt of public comments after the date of publication of an interim final rule, and that the Secretary may revise the regulation after completion of the period of public comment. We are complying with this requirement to provide for a period of public comment.

This rule has been determined to be a major rule as defined in the Congressional Review Act, 5 U.S.C. § 804(2). These regulations are effective March 3, 2008.

Under the Paperwork Reduction Act (PRA) of 1995, we are required to provide 30-day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the PRA of 1995 requires that we solicit comment on the following issues:

• The need for the information collection and its usefulness in carrying out the proper functions of our agency.

• The accuracy of our estimate of the information collection burden.

• The quality, utility, and clarity of the information to be collected.

• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.

We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs):

Section 440.169(d) states that case managers assist eligible individuals by providing services such as taking client history; identifying the needs of the individual, and completing related documentation; and gathering information from other sources such as family members, medical providers, social workers, and educators (if necessary) to form a complete assessment of the eligible individual. The case manager must then develop a specific care plan based on the information collected through the assessment.

The burden associated with this requirement is the time and effort put forth by the case manager to gather the information and develop a specific care plan. While this requirement is subject to the PRA, we believe this requirement meets the requirements of 5 CFR 1320.3(b)(2), and as such, the burden associated with this requirement is exempt from the PRA.

Section 441.18(a) requires that if a State plan provides for case management services, as defined in § 440.169, the State must require providers to maintain case records that document for all individuals receiving case management the name of the individual; the date of the case management service; the name of the provider agency and the person providing the case management service; and the nature, content, and units of case management service. Details of what the case records must include are located at § 441.18(a)(7).

The burden associated with this requirement is the time and effort required for a provider to maintain case records. While this requirement is subject to the PRA, we believe this requirement meets the requirements of 5 CFR 1320.3(b)(2), and as such, the burden associated with this requirement is exempt from the PRA.

If you comment on these information collection and record keeping requirements, please mail copies directly to the following:

[If you choose to comment on issues in this section, please indicate the caption “Regulatory Impact” at the beginning of your comments.]

We have examined the impacts of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.

Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibility of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year).

Section 804(2) of title 5, United States Code (as added by section 251 of Pub. L. 104-121), specifies that a “major rule” is any rule that the Office of Management and Budget finds is likely to result in—

• An annual effect on the economy of $100 million or more;

• A major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or

• Significant adverse effects on competition, employment, investment productivity, innovation, or on the ability of United States based enterprises to compete with foreign based enterprises in domestic and export markets.

The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of $6 million to $29 million in any 1 year. This rule affects only States directly. For purposes of the RFA, we do not consider States or individuals to be small entities. Therefore, the Secretary certifies that this rule will not have a significant economic impact on a substantial number of small entities.

Section 1915(g) of the Act provides for Medicaid coverage of a new optional State plan service, case management services, and permits those services to be targeted. This regulation incorporates that statutory provision in the Federal regulations.

Under section 1915(g) of the Act, States may, without securing a waiver, furnish case management services, or targeted case management services to specified Medicaid groups on a statewide basis or in a particular geographic area of the State by requesting approval of a State plan amendment. If a State elects to furnish case management services (or targeted case management services), FFP will be available to the State to assist individuals receiving Medicaid in gaining access to needed medical, social, educational, and other services. Thus, the Medicaid case management service adds value to services that would otherwise be received through Medicaid and other programs in the absence of Medicaid case management services. For example, case management services provided to women with a high risk pregnancy can prevent low birth weight infants and case management of chronic problems can reduce hospital emergency room visits. Individuals retain the right to select among qualified medical providers of case management (or targeted case management) services.

Ambiguity concerning what services are reimbursable as case management and targeted case management services has resulted in questionable cost shifting of services onto Medicaid, which increases costs. Although the Medicaid program will continue to pay for case management and targeted case management services, this regulation clarifies and conforms to current statutory requirements of the regulatory definition. In fiscal year 2006, Federal and State expenditures for targeted case management services were $2,842 million. Table 1 contains the Federal and State expenditures for targeted case management. These amounts do not reflect changes that may have occurred in other services during the projection period as a result of the provision of case management services.

Section 6052 of DRA 2005 specifies that FFP is only available for case management services or targeted case management services if there are no other third parties liable to pay for those services, including as reimbursement under a medical, social, educational, or other program. Due to this regulation, it is estimated that Federal Medicaid spending on case management and targeted case management services will be reduced by $1,280 million between FY 2008 and FY 2012. This reduction in spending is expected to occur as case management services spending that could be paid for by other third parties or other Federal programs, but received by the States as FFP, will no longer be reimbursable.

Due to this regulation, the Assistant Secretary for Resources and Technology estimates that Federal spending on title IV-E foster care services will increase by $369 million between FY 2008 and FY 2012. This increase is expected to occur because State foster care program expenditures on case management will no longer be reimbursed as Medicaid expenditures and would instead need to be paid by other Federal programs or payment sources.

We are unable to estimate additional net costs/savings that might result from case management under section 1915(g) of the Act for the following reasons. The use of case management services may result in increased access to other services, including those covered under Medicaid. Conversely, provision of case management services may work to lower both Federal and State costs by encouraging the use of cost-effective medical care through transitioning individuals out of institutions, referrals to qualified providers, and by discouraging inappropriate utilization of costly services such as emergency room care for routine procedures. The use of case management services also may eliminate unnecessary care and over-utilization of services. Further, by facilitating early treatment, the use of case management services can preclude the need for more costly “last resort” treatment alternatives.

Because it is estimated that Federal Medicaid spending on case management and targeted case management services will be reduced by $1,280 million between FY 2008 and FY 2012 (and thus the annual effect on the economy is $100 million or more), we have determined that this interim final rule with comment period is a major rule under Executive Order 12866. The Secretary certifies that this rule will not have a significant economic impact on a substantial number of small entities.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Core-Based Statistical Area and has fewer than 100 beds. We have determined that this interim final rule with comment period will not have a significant effect on the operations of a substantial number of small rural hospitals because there will be no change in the administration of the provisions related to small rural hospitals. Therefore, the Secretary certifies that this rule will not have a significant impact on small rural hospitals and, accordingly, we are not preparing an analysis for section 1102(b) of the Act.

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $120 million. This interim final rule with comment period has no consequential effect on State, local, or tribal governments or on the private sector.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. Since this regulation does not impose any costs on State or local governments, the requirements of E.O. 13132 are not applicable.

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf ), in table 2, we have prepared an accounting statement showing the classification of the savings associated with the provisions of this interim final rule with comment period. Tables 2 and 3 provide our best estimate of the savings to the Federal Government as a result of the changes presented in this interim final rule with comment period based on the estimate in the President's FY 2008 Budget that Federal Medicaid spending on case management and targeted case management services will be reduced by approximately $210 million in FY 2008 and will be reduced by $1,280 million between FY 2008 and FY 2012. All savings are classified as transfers from the State Government to Federal Government.

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.

NAFO has established and maintains conservation measures in its Regulatory Area that include one effort limitation fishery as well as fisheries with total allowable catches (TACs) and member nation quota allocations. The principal species managed are cod, flounder, redfish, American plaice, halibut, capelin, shrimp, and squid. At the 2007 NAFO Annual Meeting, the United States received fish quota allocations for three NAFO stocks and an effort allocation for one NAFO stock to be fished during 2008. The species, location, and allocation (in metric tons or effort) of these U.S. fishing opportunities, as found in Annexes I.A, I.B, and I.C of the 2008 NAFO Conservation and Enforcement Measures, are as follows:

Additionally, U.S. vessels may be authorized to fish any available portion of the 385 mt allocation of oceanic redfish in NAFO Subarea 2 and Divisions 1F and 3K available to NAFO members that are not also members of the Northeast Atlantic Fisheries Commission. Fishing opportunities may also be authorized for U.S. fishermen in the “Others” category for: Division 3LNO yellowtail flounder (78 mt); Division 3NO white hake (500 mt); Division 3LNO skates (500 mt); and Division 3O redfish (100 mt). Procedures for obtaining NMFS authorization are specified below.

Expressions of interest to fish for any or all of the U.S. fish quota allocations and “Others” category allocations in NAFO will be considered from U.S. vessels in possession of a valid HSFCA permit authorizing fishing in the NAFO Regulatory Area. All expressions of interest should be directed in writing to Patrick E. Moran (see ADDRESSES ). Letters of interest from U.S. vessel owners should include the name, registration, and home port of the applicant vessel as required by NAFO in advance of fishing operations. In addition, any available information on intended target species and dates of fishing operations should be included. To ensure equitable access by U.S. vessel owners, NMFS may promulgate regulations designed to choose one or more U.S. applicants from among expressions of interest.

Note that vessels issued valid HSFCA permits under 50 CFR part 300 to fish in the NAFO Regulatory Area are exempt from multispecies permit, mesh size, effort-control, and possession limit restrictions, specified in 50 CFR 648.4, 648.80, 648.82 and 648.86, respectively, while transiting the U.S. exclusive economic zone (EEZ) with multispecies on board the vessel, or landing multispecies in U.S. ports that were caught while fishing in the NAFO Regulatory Area, provided:

(1) The vessel operator has a letter of authorization issued by the Regional Administrator on board the vessel;

(2) For the duration of the trip, the vessel fishes, except for transiting purposes, exclusively in the NAFO Regulatory Area and does not harvest fish in, or possess fish harvested in, or from, the U.S. EEZ;

(3) When transiting the U.S. EEZ, all gear is properly stowed in accordance with one of the applicable methods specified in 50 CFR 648.23(b); and

(4) The vessel operator complies with the HSFCA permit and all NAFO conservation and enforcement measures while fishing in the NAFO Regulatory Area.

Expressions of interest in harvesting the U.S. portion of the 2008 NAFO 3M shrimp effort allocation (1 vessel/100 days) will be considered from owners of U.S. vessels in possession of a valid HSFCA permit. All expressions of interest should be directed in writing to Patrick E. Moran (see ADDRESSES ).

Letters of interest from U.S. vessel owners should include the name, registration and home port of the applicant vessel as required by NAFO in advance of fishing operations. In the event that multiple expressions of interest are made by U.S. vessel owners, NMFS may promulgate regulations designed to choose one U.S. applicant from among expressions of interest.

Relevant NAFO Conservation and Enforcement Measures include, but are not limited to, maintenance of a fishing logbook with NAFO-designated entries; adherence to NAFO hail system requirements; presence of an on-board observer; deployment of a functioning, autonomous vessel monitoring system; and adherence to all relevant minimum size, gear, bycatch, and other requirements. Further details regarding these requirements are available from the NMFS Northeast Regional Office, and can also be found in the current NAFO Conservation and Enforcement Measures on the Internet (see ADDRESSES ).

In the event that no adequate expressions of interest in harvesting the U.S. portion of the 2008 NAFO 3L shrimp quota allocation and/or 3M shrimp effort allocation are made on behalf of U.S. vessels, expressions of interest will be considered from U.S. fishing interests intending to make use of vessels of other NAFO Parties under chartering arrangements to fish the 2008 U.S. quota allocation for 3L shrimp and/or the effort allocation for 3M shrimp. Under NAFO rules in effect through 2008, a vessel registered to another NAFO Contracting Party may be chartered to fish the U.S. effort allocation provided that written consent for the charter is obtained from the vessel's flag state and the U.S. allocation is transferred to that flag state. NAFO Parties must be notified of such a chartering operation through a mail notification process.

A NAFO Contracting Party wishing to enter into a chartering arrangement with the United States must be in full current compliance with the requirements outlined in the NAFO Convention and Conservation and Enforcement Measures including, but not limited to, submission of the following reports to the NAFO Executive Secretary: provisional monthly catches within 30 days following the calendar month in which the catches were made; provisional daily catches of shrimp taken from Division 3L; provisional monthly fishing days in Division 3M within 30 days following the calendar month in which the catches were made; observer reports within 30 days following the completion of a fishing trip; and an annual statement of actions taken in order to comply with the NAFO Convention. Furthermore, the United States may also consider a Contracting Party's previous compliance with the NAFO incidental catch limits, as outlined in the NAFO Conservation and Enforcement Measures, before entering into a chartering arrangement.

Expressions of interest from U.S. fishing interests intending to make use of vessels from another NAFO Contracting Party under chartering arrangements should include information required by NAFO regarding the proposed chartering operation, including: the name, registration and flag of the intended vessel; a copy of the charter; the fishing opportunities granted; a letter of consent from the vessel's flag state; the date from which the vessel is authorized to commence fishing on these opportunities; and the duration of the charter (not to exceed six months). More details on NAFO requirements for chartering operations are available from NMFS (see ADDRESSES ). In addition, expressions of interest for chartering operations should be accompanied by a detailed description of anticipated benefits to the United States. Such benefits might include, but are not limited to, the use of U.S. processing facilities/personnel; the use of U.S. fishing personnel; other specific positive effects on U.S. employment; evidence that fishing by the chartered vessel actually would take place; and documentation of the physical characteristics and economics of the fishery for future use by the U.S. fishing industry.

In the event that multiple expressions of interest are made by U.S. fishing interests proposing the use of chartering operations, the information submitted regarding benefits to the United States will be used in making a selection. In the event that applications by U.S. fishing interests proposing the use of chartering operations are considered, all applicants will be made aware of the allocation decision as soon as possible. Once the allocation has been awarded for use in a chartering operation, NMFS will immediately take appropriate steps to notify NAFO and transfer the U.S. 3L shrimp quota allocation and/or the 3M shrimp effort allocation to the appropriate Contracting Party.

After reviewing all requests for allocations submitted, NMFS may decide not to grant any allocations if it is determined that no requests meet the criteria described in this notice. All individuals/companies submitting expressions of interest to NMFS will be contacted if an allocation has been awarded. Please note that if the U.S. portion of the 2008 NAFO 3L shrimp quota allocation and/or 3M shrimp effort allocation is awarded to a U.S. vessel or a specified chartering operation, it may not be transferred without the express, written consent of NMFS.

Regulations governing the summer flounder fishery are found at 50 CFR part 648. The regulations require annual specification of a commercial quota that is apportioned on a percentage basis among the coastal states from North Carolina through Maine. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.100.

The initial total commercial quota for summer flounder for the 2007 calendar year was set equal to 7,789,800 lb (3,533 mt) (71 FR 75134, December 14, 2006). This quota was increased through an emergency action to 10,267,098 lb (4,658 mt) (72 FR 2458, January 19, 2007). The percent allocated to vessels landing summer flounder in Connecticut is 2.25708 percent, resulting in a commercial quota of 231,739 lb (106 mt). The 2007 allocation was reduced to 226,464 lb (103 mt) when research set-aside was deducted and then reduced to 209,994 (96 mt) after the 2006 overages had been applied.

Section 648.101(b) requires the Administrator, Northeast Region, NMFS (Regional Administrator) to monitor state commercial quotas and to determine when a state's commercial quota has been harvested. NMFS then publishes a notification in the Federal Register to advise the state and to notify Federal vessel and dealer permit holders that, effective upon a specific date, the state's commercial quota has been harvested and no commercial quota is available for landing summer flounder in that state. The Regional Administrator has determined, based upon dealer reports and other available information, that Connecticut has harvested its quota for 2007.

The regulations at § 648.4(b) provide that Federal permit holders agree, as a condition of the permit, not to land summer flounder in any state that the Regional Administrator has determined no longer has commercial quota available. Therefore, effective 0001 hours, December 4, 2007, further landings of summer flounder in Connecticut by vessels holding summer flounder commercial Federal fisheries permits are prohibited for the remainder of the 2007 calendar year, unless additional quota becomes available through a transfer and is announced in the Federal Register . Effective 0001 hours, December 4, 2007, federally permitted dealers are also notified that they may not purchase summer flounder from federally permitted vessels that land in Connecticut for the remainder of the calendar year, or until additional quota becomes available through a transfer from another state.

This action is required by 50 CFR part 648 and is exempt from review under Executive Order 12866.

On October 3, 2006, the New England Fishery Management Council (Council) sent NMFS a request to prepare an information collection program for the Atlantic hagfish fishery under the provisions of section 402(a) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). On April 23, 2007, in response to the Council's request, NMFS published a final rule to implement measures to modify the existing reporting and recordkeeping requirements for federally permitted seafood dealers/processors and the observer requirements for participating hagfish vessels in the Federal Register (72 FR 20036). The adjustments made to the at-sea sea sampler/observer coverage regulations at 50 CFR 648.11 through the April 23, 2007, final rule were inadvertently deleted when another final rule that revised the same section of regulations was published in the Federal Register on June 13, 2007 (72 FR 32549). This correcting amendment corrects this error by reinstating language previously added to 50 CFR 648.11, stating that under the hagfish information collection program, any vessel owner/operator that fishes for, catches, or lands hagfish, or intends to fish for, catch, or land hagfish in or from the exclusive economic zone (EEZ) will be required to carry an observer when requested by the Regional Administrator. This language is reinstated so as to maintain the regulatory text implementing Amendment 13 of the Atlantic Sea Scallop Fishery Management Plan.

Pursuant to 5 U.S.C. 553(b)(B), the Assistant Administrator finds good cause to waive prior notice and opportunity for additional public comment for this action because any delay of this action would be contrary to the public interest. As explained above, this rule reinstates regulatory text that had already been implemented but was unintentionally and inadvertently deleted during the implementation of another unrelated rule. Observer coverage is particularly important to determine potentially high discard rates that have been reported to occur in the hagfish fishery in order to determine what management measures may be necessary to reduce such discard. Further, without data collected from the observer program, the status of the stock can not be adequately determined and it is not possible to capture accurately the geographic and seasonal aspects of the fishery, which reflect overseas demand, and ensure that the resource may be sustained for future years. Without this information, future management efforts cannot be developed and, therefore, will be delayed unnecessarily. Such a delay may negatively impact commercial fishermen that fish for hagfish, who have reported that regional depletion in the fishery is occurring. Moreover, pursuant to 5 U.S.C. 553(d), the Assistant Administrator finds good cause to waive the 30-day delay in effective date for the reasons given above. Without data collected from the observer program, the status of the stock can not be adequately determined and it is not possible to capture accurately the geographic and seasonal aspects of the fishery, which reflect overseas demand, and ensure that the resource may be sustained for future years. Without this information, future management efforts cannot be developed and, therefore, will be delayed unnecessarily. Delaying the rule for 30 days may negatively impact fishermen who fish for hagfish and have observed regional depletion occurring in this fishery. In addition, the final rule that had added the subsequently deleted text had already been subjected to a 30-day delay in implementation and, therefore, an additional delay to correct the deletion is unnecessarily duplicative.

Fisheries, Fishing, Reporting and recordkeeping requirements.

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

The Pacific Coast Groundfish FMP and its implementing regulations at title 50 in the Code of Federal Regulations (CFR), part 660, subpart G, regulate fishing for over 90 species of groundfish off the coasts of Washington, Oregon, and California. Groundfish specifications and management measures are developed by the Pacific Fishery Management Council (Council), and are implemented by NMFS. A proposed rule to implement the 2007-2008 specifications and management measures for the Pacific Coast groundfish fishery and Amendment 16-4 of the FMP was published on September 29, 2006 (71 FR 57764). The final rule to implement the 2007-2008 specifications and management measures for the Pacific Coast Groundfish Fishery was published on December 29, 2006 (71 FR 78638). These specifications and management measures were codified in the CFR (50 CFR part 660, subpart G). The final rule was subsequently amended on: March 20, 2007 (72 FR 13043); April 18, 2007 (72 FR 19390); July 5, 2007 (72 FR 36617); August 3, 2007 (72 FR 43193); September 18, 2007 (72 FR 53165); and October 4, 2007 (72 FR 56664).

Changes to current groundfish management measures implemented by this action were recommended by the Council, in consultation with Pacific Coast Treaty Indian Tribes and the States of Washington, Oregon, and California, at its November 5-9, 2007, meeting in San Diego, California. At that meeting, the Council recommended adjusting current groundfish management measures to respond to updated fishery information and other inseason management needs in order to allow access to groundfish without exceeding the 2007 optimum yields (OYs) for the target species or the 2007 OYs for overfished and depleted stocks.

For the remainder of 2007, the Council recommended increasing the 2-month cumulative limits for sablefish in the limited entry non-whiting trawl fishery for large and small footrope trawl gear north of 40°10.00′ N. lat., increasing trip limits for sablefish in the limited entry non-whiting trawl fishery south of 40°10.00′ N. lat., and increasing the open access sablefish daily trip limits between 40°10.00′ N. lat. and 36° N. lat.

The Council also recommended adjusting management measures beginning January 1, 2008; these measures will be implemented in a separate rulemaking.

NMFS has considered the recommendations for the remainder of 2007, and is implementing them as described below. Pacific Coast groundfish landings will be monitored throughout the remainder of the biennium, and further adjustments to trip limits or management measures may be made as necessary to allow achievement of, or to avoid exceeding, optimum yields (OYs).

The Council considered adjustments to 2007 sablefish trip limits in the limited entry non-whiting trawl fishery and in the open access daily trip limit (DTL) fishery. At the Council's November 2007 meeting, an advisory body to the Council, the Groundfish Management Team (GMT), reviewed the best available data on estimates of landed catch and total mortality for the sablefish in the limited entry trawl and open access fisheries. These data, which estimated catch through the end of October, were compared to catch and mortality estimates modeled for these fisheries and were used to update catch predictions through the end of the year. Based on the Pacific Fishery Information Network's (PacFIN's) Quota Species Monitoring (QSM) data, landed catch and total mortality data to date for 2007 have been lower than expected for: sablefish taken with large and small footrope trawl gear north of 40°10′ N. lat.; sablefish taken with trawl gear south of 40°10′ N. lat., and in the open access sablefish DTL fishery north of 36° N. lat. The Council considered increases to sablefish trip limits in these fisheries and the potential impacts on overall catch levels and overfished species.

The most recently updated catch projections for 2007 indicate 89 percent (2,380 mt out of 2,651 mt) of the trawl allocation of sablefish north of 36°, and 77 percent (350 mt out of 456 mt) of the open access allocation of sablefish is expected to be taken through the end of the year. This action would not increase estimated impacts on overfished species because estimated mortality for overfished species for 2007 assume that these sectors will achieve their sablefish allocations. Therefore, the Council recommended and NMFS is implementing: an increase in the limited entry trawl limits for large and small footrope trawl gear north of 40°10.00′ N. lat. from 22,000 lb (9,979 kg) per two months to 30,000 lb (13,608 kg) per two months; an increase in the sablefish trawl trip limits south of 40°10′ N. lat. from 22,000 lb (9,979 kg) per two months to 30,000 lb (13,608 kb) per two months; and an increase in the open access sablefish daily trip limits between 40°10.00′ N. lat. and 36° N. lat. from “300 lb (136 kg) per day, or 1 landing per week of up to 700 lb (318 kg), not to exceed 2,100 lb (953 kg) per two months” to “300 lb (136 kg) per day, or 1 landing per week of up to 1,000 lb (454 kg), not to exceed 3,000 lb (1,360 kg) per two months”, beginning December 1 through the remainder of 2007.

These actions are taken under the authority of 50 CFR 660.370(c) and are exempt from review under Executive Order 12866.

These actions are authorized by the Pacific Coast groundfish FMP and its implementing regulations, and are based on the most recent data available. The aggregate data, upon which these actions are based, are available for public inspection at the Office of the Administrator, Northwest Region, NMFS, (see ADDRESSES ) during business hours.

For the following reasons, NMFS finds good cause to waive prior public notice and comment on the revisions to groundfish management measures under 5 U.S.C. 553(b)(3)(B) because notice and comment would be impracticable and contrary to the public interest. Also for the same reasons, NMFS finds good cause to waive the 30-day delay in effectiveness pursuant to 5 U.S.C. 553(d)(1) and 5 U.S.C. 553(d)(3).

The data upon which these recommendations were based was provided to the Council and the Council made its recommendations at its November 5-9, 2007, meeting in San Diego, California. The Council recommended that these changes be implemented on or as close as possible to December 1, 2007. There was not sufficient time after that meeting to draft this document and undergo proposed and final rulemaking before these actions need to be in effect. For the actions to be implemented in this notice, affording the time necessary for prior notice and opportunity for public comment would be impractical and contrary to the public interest because it would prevent the Agency from managing fisheries using the best available science to approach without exceeding the OYs for federally managed species. The adjustments to management measures in this document affect commercial groundfish fisheries off Washington, Oregon, and California.

Changes to the sablefish cumulative limits for the rest of 2007 in the non-whiting commercial fisheries must be implemented as soon as possible to relieve a restriction by allowing fishermen increased opportunities to harvest available healthy stocks. Changes to sablefish cumulative limits for the following fisheries must be implemented as close as possible to December 1, 2007: (1) limited entry trawl fishery north and south of 40°10.00′ N. lat.; and (2) open access daily trip limit fishery between 40°10.00′ N. lat. and 36° N. lat. It would be contrary to the public interest to wait to implement these trip limit changes until after public notice and comment, because making these regulatory changes as soon as possible relieves an unnecessary regulatory restriction for fisheries that are important to coastal communities. For the same reasons, allowing a 30-day delay in effectiveness would be contrary to the public interest.

Delaying these changes would keep management measures in place that are not based on the best available data, which could risk fisheries exceeding OYs, or deny fishermen access to available harvest. Such delay would impair achievement of one of the Pacific Coast Groundfish FMP objectives of providing for year-round harvest opportunities or extending fishing opportunities as long as practicable during the fishing year.