Pursuant to Executive Order 12866 (FR Doc. 93-24523, September 30, 1993), this interim final rule with request for comment is an economically significant regulatory action, since it results in an annual effect on the economy of $100 million or more. The administrative record is available for public inspection in Room 5831 South Building, USDA, 14th and Independence Avenue, SW., Washington, DC. Pursuant to Executive Order 12866, NRCS conducted an economic analysis of the potential impacts associated with this program. A summary of the economic analysis can be found at the end of this preamble and a copy of the analysis is available upon request from the Director, Financial Assistance Programs Division, Natural Resources Conservation Service, Room 5237S, Washington, DC 20250-2890 or electronically at: http://www.nrcs.usda.gov/programs/eqip/ under the EQIP Rules and Notices with Supporting Documents title.

Section 2904(c) of the Food, Conservation, and Energy Act of 2008 requires that the Secretary use the authority in section 808(2) of title 5, United States Code, which allows an agency to forego SBREFA's usual 60-day Congressional Review delay of the effective date of a major regulation if the agency finds that there is a good cause to do so. NRCS hereby determines that it has good cause to do so in order to meet the Congressional intent to have the conservation programs, authorized or amended by Title II, in effect as soon as possible. Accordingly, this rule is effective upon filing for public inspection by the Office of the Federal Register.

Executive Order 13175 requires agencies to consult and collaborate with tribes, if policies or actions have substantial direct effects on tribes. NRCS has determined that this regulation does not have a substantial direct effect on tribes, since these regulatory provisions are required by statute, and these provisions do not impose unreimbursed compliance costs or preempt Tribal law. As a result, consultation is not required.

The interim final rule will not have a significant environmental impact on small entities. NRCS has determined that the Regulatory Flexibility Act does not apply.

Availability of the Environmental Assessment (EA) and Finding of No Significant Impact (FONSI). A programmatic environmental assessment has been prepared in association with this rulemaking. The analysis has determined that there will not be a significant impact to the human environment and as a result an Environmental Impact Statement is not required to be prepared (40 CFR part 1508.13). The EA and FONSI are available for review and comment for 30 days from the date of publication of this interim final rule in the Federal Register . A copy of the EA and FONSI may be obtained from the following Web site: http://www.nrcs.usda.gov/programs/Env_Assess/ . A hard copy may also be requested from the following address and contact: National Environmental Coordinator, Natural Resources Conservation Service, Ecological Sciences Division, 1400 Independence Ave., SW., Washington, DC 20250. Comments from the public should be specific and reference that comments provided are on the EA and FONSI. Public comment may be submitted by any of the following means: (1) E-mail comments to NEPA2008@wdc.usda.gov , (2) e-mail to egov Web site— http://www.regulations.gov , or (3) written comments to: National Environmental Coordinator, Natural Resources Conservation Service, Ecological Sciences Division, 1400 Independence Ave., SW., Washington, DC 20250.

NRCS has determined through a Civil Rights Impact Analysis that the interim final rule discloses no disproportionately adverse impacts for minorities, women, or persons with disabilities. Increased payment rates and advance payment for historically underserved producers, coupled with the national target of setting aside five percent of EQIP funds for socially disadvantaged farmers and ranchers and an additional five percent of EQIP funds for beginning farmers and ranchers is expected to increase participation among these groups. The data presented indicates producers who are members of the protected groups have participated in NRCS conservation programs at parity with other producers. Extrapolating from historical participation data, it is reasonable to conclude that NRCS programs, including EQIP, will continue to be administered in a non-discriminatory manner. Outreach and communication strategies are in place to ensure all producers will be provided the same information to allow them to make informed compliance decisions regarding the use of their lands that will affect their participation in USDA programs. EQIP applies to all persons equally regardless of their race, color, national origin, gender, sex, or disability status. Therefore, the EQIP rule portends no adverse civil rights implications for women, minorities and persons with disabilities.

Section 2904 of the 2008 Act provides that the promulgation of regulations and the administration of Title II of this Act shall be made without regard to chapter 35 of Title 44 of the United States Code, also known as the Paperwork Reduction Act. Therefore, NRCS is not reporting recordkeeping or estimated paperwork burden associated with this interim final rule.

NRCS is committed to compliance with the Government Paperwork Elimination Act, which requires Government agencies, in general, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. To better accommodate public access, NRCS has developed an online application and information system for public use.

This interim final rule has been reviewed in accordance with Executive Order 12988, Civil Justice Reform. The provisions of this interim final rule are not retroactive. The provisions of this interim final rule preempt State and local laws to the extent that such laws are inconsistent with this interim final rule. Before an action may be brought in a Federal court of competent jurisdiction, the administrative appeal rights afforded persons at parts 614, 780, and 11 of this title must be exhausted.

The Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994, Title III, section 304, requires that for each proposed major regulation with a primary purpose to regulate issues of human health, human safety, or the environment, USDA is to publish an analysis of the risks addressed by the regulation and the costs and benefits of the regulation. NRCS has determined that such a risk assessment does not apply to this interim final rule. NRCS recognizes that although such assessments can be quite helpful, the Act pertains only to a rule that has been designated as a “proposed major regulation.” NRCS does not consider “interim final” or “final” rules as falling into the category of proposed major regulations.

NRCS assessed the effects of this rulemaking action on State, local, and Tribal governments, and the public. This action does not compel the expenditure of $100 million or more in any one year (adjusted for inflation) by any State, local, or Tribal governments, or anyone in the private sector; therefore, a statement under section 202 of the Unfunded Mandates Reform Act of 1995 is not required.

Pursuant to Executive Order 12866, Regulatory Planning and Review, the Natural Resources Conservation Service (NRCS) has conducted a benefit-cost analysis (BCA) of the Environmental Quality Incentives Program (EQIP) as formulated for the Interim Final Rule. This requirement provides decision makers with the opportunity to develop and implement a program that is beneficial, cost effective, and that minimizes negative impacts to health, human safety, and the environment. Congress passed amendments to the program that requires the Secretary of Agriculture, within 90 days after the enactment of the EQIP amendments, to promulgate regulations necessary to carry out the program.

In considering alternatives for implementing EQIP, the United States Department of Agriculture (USDA) followed the legislative intent to optimize environmental benefits, address natural resource concerns and problems, establish an open participatory process, and provide flexible assistance to producers who apply appropriate conservation measures that enable the satisfaction of Federal and State environmental requirements. Because EQIP is a voluntary program, the program will not impose any obligation or burden upon agricultural producers who choose not to participate. The program has been authorized by the Congress at $7.325 billion over the five-year period beginning in fiscal year (FY) 2008 through FY 2012, with annual amounts of $1.2 billion for FY 2008, $1.337 billion in FY 2009, $1.45 billion in FY 2010, $1.588 billion in FY 2011, and $1.75 billion in FY 2012.

The EQIP technical and financial assistance facilitates the adoption of conservation practices that, when installed or applied to technical standards, can mitigate degradation of the environment. These actions are not limited to their beneficial impacts on resource conditions on-site, but produce significant off-site environmental benefits for the public-at-large, such as the reduction of non-point source water pollution, leading to enhancements to freshwater and marine water quality and fish habitat, improved aquatic recreation opportunities, and reduced sedimentation of reservoirs, streams, and drainage channels; more efficient irrigation water usage; improved air quality by reducing wind erosion; an increase in carbon stored in the soil, leading to reduced atmospheric amounts of carbon; reduced pollution of surface and ground water, leading to enhanced drinking water supplies; reduced flood damages; conserved energy; and enhancements to wildlife habitat. Most of these factors are taken into consideration in the transfer benefit values used in this analysis.

Other significant environmental impacts have an appearance of being solely a private benefit, such as: The maintenance of the long-term productivity of the resource base, improved grazing productivity, more efficient crop use of animal waste and fertilizer and the fostering of energy conservation. However for this analysis, these impacts are considered as public benefits in that they have also have impacts in input and output markets, i.e. increasing the availability of those inputs at lower prices and/or for use in other sectors of the economy. This analysis did not utilize a social welfare impact model or general equilibrium model that would show these final producer and consumer welfare changes (brought about by changes in inputs used and output levels of EQIP participants). Thus, the economic impacts estimated in this analysis by these changes should be considered as first approximations of possible social welfare gains in input and output markets. In this analysis, the benefit categories which could be construed as having a high component of private benefit are clearly identified.

There is another group of benefits derived from EQIP which can not be empirically estimated at this time. As explained in the body of the report, there are also many conservation practices for which economic benefit estimates are not available. For example, the benefits derived from the remaining five percent of the EQIP funds used for 23 practices for which monetary benefits are important but could not easily be estimated (over half of these remaining funds were for the Pest Management Practice—595). As a result, they are not included in the quantitative estimates of benefits. In addition, many other environmental impacts were not included in this economic analysis because no clear conversion methods of the environmental impacts to economic terms were available. For additional information on these environmental impacts, see the NEPA environmental assessment for this regulation. In the future, nationally consistent estimates of beneficial environmental outcomes resulting from conservation practices and systems will be possible through the use of the results from the interagency Conservation Effects Assessment Project (CEAP). CEAP was established to develop a scientific understanding and methodology for estimating the environmental benefits and effects of conservation practices on agricultural landscapes at national, regional, and watershed scales. CEAP will become a science-based plan designed to help meet the conservation and technology challenges of the future through a coordinated multi-agency assessment, research, and outreach-extension program to translate science into practice. CEAP has been underway since 2003, and is composed of multiple components focusing on cropland, grazing land, wetlands, and wildlife, and watersheds. Initial CEAP results will be available for the cropland component in FY2009. Some results from the wetlands, wildlife, and watershed assessment components are already available at: http://www.nrcs.usda.gov/technical/nri/ceap/ . These results are expected to improve the Agency's ability to report on long-term conservation benefits being delivered by programs, such as EQIP.

Despite these limitations in our ability to estimate environmental benefits, the new EQIP is expected to have a substantial effect on the environment due to expanded funding compared with a baseline of continuing EQIP at an annual funding level of roughly $1 billion. Resource treatments are estimated to increase protection for an additional 3.9 million acres for sheet and rill water erosion reduction, 3.9 million acres for wind erosion reduction improving air quality, 5.6 million acres for improved fertilizer management, 2.0 million acres for net irrigation water reduction, 17.5 million acres for grazing land productivity, and 2.8 million acres of improved wildlife habitat. Also, the waste from an additional 1.3 million animal units will be treated under the new program directly improving water quality. Using these quantity changes plus benefit transfer values derived from the literature, total benefits are estimated at $10.4 billion for EQIP with the 2008 Act expanded funding allocation. Throughout the analysis, benefit estimates are compared to $10.4 billion total costs which include both the EQIP funds and costs borne by participants, producing a net benefit of approximately $57 million above total costs.

In developing the BCA for EQIP, it is necessary to identify a baseline for comparison. The baseline for this analysis is EQIP as reauthorized in the 2002 Act with FY 2007 funding levels. In the 2002 Act, EQIP funding for FY 2005 through FY 2008 was capped at roughly $1 billion until the 2008 Act was passed when additional funding was provided. The actual FY 2007 funding level of $978 million is used as the baseline.

Public costs quantified in this analysis are the total TA and FA assistance funds outlined in the Congressional Budget Office's (CBO) scoring of the 2008 Act. Private costs are out-of-pocket costs paid voluntarily by participants. As stated above, the quantifiable benefits are a subset of the environmental benefits that accrue to the types of practices implemented through EQIP. Available data and literature support benefits in the following benefit categories:

• Animal waste management (leading to improved water quality through better management) 1/  1 ;

• Sheet and rill water erosion (reducing soil erosion);

• Grazing land productivity (increasing yields) 1/;

• Irrigation water use (reducing quantity used);

• Air quality (through reduced wind erosion);

• Fertilizer use (reduced fertilizer expense through nutrient management not associated with animal waste) 1/;

• Wildlife habitat (enhanced wildlife viewing and hunting);

• Energy use (reduced energy consumption associated with conservation tillage practices); and,

• Carbon sequestration (higher soil carbon levels associated with conservation tillage and grassland practices).

In order to conduct the analysis, certain assumptions were made based on the available data.

• The practice mix for the current (2007-base) and the new EQIP is the same. The new rule places additional emphasis on energy, organic practices, and forest management; however, due to the lack of benefit data for these types of practices, their associated benefits are not included in this analysis. 2

• Quantifiable and per-unit benefits are constant and based on national average estimates.

• Technical assistance costs incurred by NRCS are based on the full workload associated with implementing EQIP and take into consideration projected average contract sizes.

• Average annual and net present value calculations use discount factors of seven and three percent, which are recommended by the Office of Management and Budget (OMB). All tables are presented using the seven percent discount rate. The analysis is also calculated using the three percent discount rate (see table 9).

• Environmental benefits generated in the animal waste management benefit category were adjusted downward by 42 percent to account for mandatory regulatory requirements associated with large concentrated animal feeding operations (CAFOs). This reduction is necessary to avoid any double counting of benefits attributed to EPA's CAFO regulations. The total CAFO-related costs associated with conservation practices were reduced by 23 percent

• Other than large CAFOs meeting EPA regulatory requirements, the adoption of conservation practices by EQIP participants is assumed to be solely attributed to their participation in EQIP.

The EQIP benefit-cost analysis assumes that the basic program features of EQIP created in 2002 (the “current program”) remains the same, but is funded at higher funding allocations as a result of the 2008 Act.

The summary table below shows the estimated values of each benefit category and the estimated costs associated with EQIP for the “current” (2007-base) and “new” (with increased funding) scenario. Under the assumption that the current program continues at level funding, the expected present value of benefits over the period of FY 2007 to FY 2012 is estimated at $7.1 billion, with $0.5 billion coming from improved animal waste management and $6.6 billion from improved land treatment. Expected net benefits are estimated at $39 million above total costs, including producer costs, other non-federal costs, and federal (EQIP) costs.

With expanded funding, the estimated present value of benefits over the period of FY 2007 to FY 2012 was $10.4 billion with $0.8 billion coming from improved animal waste management and $9.6 billion from land treatment. Estimated net benefits were $57 million above total costs. This provides $18 million in additional net benefits due to the expansion of EQIP funds in the 2008 Farm Bill over the roughly $1.0 billion annual baseline funding.

The Commodity Credit Corporation (CCC) is not required by 5 U.S.C. 553 or by any other provision of law, to publish a notice of proposed rulemaking with respect to the subject matter of this rule. Section 2904 of the 2008 Act requires regulations to be published within 90 days after the date of enactment and authorizes the CCC to promulgate an interim final rule effective upon publication with an opportunity for notice and comment. CCC has determined that an interim final rule is necessary to expedite the effective date of rulemaking in order to meet the intent of section 2904.

The 2008 Act has reauthorized and amended the Environmental Quality Incentives Program, which had been added to the Food Security Act of 1985 (1985 Act) (16 U.S.C. 3801 et seq .) by the Federal Agriculture Improvement and Reform Act of 1996 (1996 Act) (16 U.S.C. 3839aa). The program is implemented under the general supervision and direction of the Chief of NRCS, who is a Vice President of the Commodity Credit Corporation (CCC).

Through EQIP, NRCS provides assistance to farmers and ranchers to conserve and enhance soil, water, air, and related natural resources on their land. Eligible lands include cropland, grassland, rangeland, pasture, wetlands, nonindustrial private forest land, and other agricultural land on which agricultural or forest-related products, or livestock are produced and natural resource concerns may be addressed. Participation in the program is voluntary.

Under EQIP, NRCS will provide assistance in a manner that will promote agricultural production, forest management, and environmental quality as compatible goals; optimize environmental benefits; and help farmers and ranchers meet Federal, State, and local environmental requirements. NRCS will offer a consolidated and simplified program throughout the Nation using the technical services of NRCS and technical service providers. NRCS first allocated $130 million in EQIP funds in 1996. Since the program began, NRCS has entered into 314,000 contracts with farmers and ranchers to apply conservation practices on approximately 143 million acres. The Agency has evaluated twelve years of program implementation and has assessed opportunities to improve program administration. The changes in this interim final rule are the result of this evaluation and the statutory changes authorized by the 2008 Act.

In summary, these changes include, but are not limited to:

• Extending EQIP's implementation through fiscal year 2012.

• Adding or revising the following terms and associated definitions: “agricultural land,” “estimated income foregone,” “forest management plan,” “integrated pest management,” “legal entity,” “local working group,” “National Organic Program,” “nonindustrial private forest land,” “operation and maintenance agreement,” “organic system plan,” “payment,” “person,” “socially disadvantaged farmer or rancher,” and “technical assistance.”

• Reaffirming EQIP's eligible lands to include nonindustrial private forest lands.

• Providing payments for conservation practices related to organic production and for conservation practices related to the transition to organic production.

• Providing payments up to 75 percent of the estimated costs associated with planning, design, materials, equipment, installation, labor, management, maintenance, or training, or up to 100 percent of the estimated income foregone by a producer to implement particular conservation practices.

• Giving the State Conservationist, as delegated by the Chief, discretion to accord great significance to a conservation practice that the Secretary determines promotes residue management, nutrient management, air quality management, invasive species management, pollinator habitat, animal carcass management technology, or pest management.

• Limiting payments to $20,000 per year or $80,000 during any six-year period for persons or legal entities who receive payments for conservation practices related to organic production or the transition to organic production.

• Authorizing NRCS to cancel or otherwise nullify a contract if a producer who is receiving payments for conservation measures related to organic production is not pursuing organic certification or is not in compliance with the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq. ).

• Requiring NRCS to prioritize applications: (1) Based on overall cost-effectiveness, (2) based on how effectively and comprehensively the project addresses the designated resource concern or resource concerns, (3) that best fulfill the purposes of EQIP, and (4) that improve conservation practices or systems in place at the time the contract offer is accepted or that will complete a conservation system. (Note: Items 2 and 3 are included in the existing EQIP regulations.)

• Requiring applications of similar crop or livestock operations to be grouped together for evaluation purposes.

• Requiring NRCS to consider a plan developed in order to acquire a permit under a water or air quality regulatory program as equivalent to a plan of operations, if the plan contains elements equivalent to those required in a plan of operations. Section 2506 of the 2008 Act amends § 1240E(b) of the 1985 Act to require the Secretary, to the maximum extent practicable to eliminate duplication of planning activities.

• Requiring a forest management plan when the EQIP plan of operations addresses forestland.

• Lowering the payment limitation for participants from $450,000 to $300,000 during any six-year period, except for projects having special environmental significance, in such cases the payments will be limited to $450,000.

• Providing payments, through the Conservation Innovation Grants Program (CIG), to producers to implement practices to address air quality concerns from agricultural operations and to meet Federal, State, and local regulatory requirements.

• Creating criteria to evaluate an acceptable watershed-wide project for the purpose of implementing water conservation or irrigation practices on newly irrigated lands.

• Providing an increased payment rate to historically underserved producers that include limited resource, beginning, and socially disadvantaged farmers or ranchers.

• Providing advance payments, of up to 30 percent of the anticipated costs to be incurred for the purpose of purchasing materials or services to implement a conservation practice, to historically underserved producers.

• Establishing a national target to set aside five percent of EQIP funds for socially disadvantaged farmers or ranchers and an additional five percent of EQIP funds for beginning farmers or ranchers.

The fundamental purpose of the program, assisting farmers and ranchers to implement conservation practices to provide environmental benefits, has not changed. Revisions to the program have focused primarily on expanding participation among traditionally underserved populations, including organic growers; limiting payments to $300,000 per legal entity or person, except for environmentally significant projects; streamlining the application and ranking process; and expanding practices and activities that are eligible for payment under EQIP. The interim final rule also includes changes to streamline program implementation and make the participant's contract responsibilities clearer and more transparent.

The 2008 Act added a provision to EQIP which dedicates funding under the Conservation Innovation Grants program (CIG) to address air quality specifically. Section 1240H of the 1985 Act, as amended by section 2509 of the 2008 Act, authorizes the Secretary to provide payments to producers to implement practices, including innovative practices, to address air quality concerns from agricultural operations. NRCS will use these dedicated funds to assist producers in adopting and implementing existing and innovative practices to address air quality concerns. Eligible practices will meet NRCS Field Office Technical Guide (FOTG) standards or interim practice standards, approved by the State Conservationist, in consultation with the State Technical Committee. Section 1240B(b) of the 1985 Act specifies that payments are limited to “implementing practices.” Payments for stand-alone equipment that have beneficial impacts on air quality are not authorized; however, payments for conservation practices may include consideration of the costs authorized for equipment that is deemed an essential component of a conservation practice included in the FOTG. NRCS welcomes comments and suggestions on new innovative practices that may be approved for payment, such as but not limited to, improvements in mobile or stationary equipment, including engines, and the use of slow and controlled release fertilizers. NRCS also welcomes comment about how the CIG air quality provisions should be implemented.

The regulation is organized into three subparts: Subpart A—General Provisions; Subpart B—Contracts and Payments; Subpart C—General Administration. The basic structure of the regulation has not changed. However, NRCS proposes amending several sections in Subparts A and B to make the regulation consistent with the requirements of the 2008 Act amendments, streamline processes and procedures, and increase transparency of the program, particularly as it relates to a participant's contract responsibilities. Below is a summary of each section. The summary of Subpart C is limited, since a majority of the changes in Subpart C are minor.

Section 1466.1, “Applicability,” is revised as follows:

Section 1466.1 sets forth the purpose, scope, and objectives of EQIP. In paragraph (a), NRCS clarifies the program's purposes to include forest management. Paragraph (a) also reaffirms the original statutory intent, ensuring EQIP continues to provide assistance to farmers and ranchers to address soil, water and air quality; wildlife habitat; surface and groundwater conservation; and related natural resource concerns. This interim final rule reiterates the statutory intent that EQIP purposes are to be achieved by implementing conservation practices, and includes a new reference to energy conservation on eligible land.

NRCS added paragraph (b) to clarify where EQIP assistance is available. EQIP continues to be available to eligible persons or legal entities in all 50 States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United States, American Samoa, and the Commonwealth of the Northern Mariana Islands.

Section 1466.2, “Administration,” describes the roles of NRCS, State Technical Committees, and local working groups. Paragraph (b) of § 1466.2, which required consultations between the Farm Service Agency (FSA) and NRCS has been deleted, since a 2003 decision by the Secretary authorizes NRCS to administer EQIP in its entirety.

NRCS continues to administer EQIP at the State and local levels. Determinations related to eligible practices and payment rates are made at the State level, in consultation with the State Technical Committee. State Technical Committees and local working groups are bodies that provide advice to the State Conservationist and designated conservationist on technical and programmatic matters related to the implementation of the 1985 Act's conservation programs. State Technical Committees and local working groups consist of representatives from Federal, State, Tribal, and local governments, as well as nongovernmental organizations and individuals, who have conservation expertise.

Section 1466.3, “Definitions,” sets forth definitions for terms used throughout this regulation. Several new definitions have been added, such as: “estimated income foregone,” “forest management plan,” “integrated pest management,” “National Organic Program,” “nonindustrial private forest land,” “operation and maintenance agreement,” “organic system plan,” and “socially disadvantaged farmer and rancher.” Other definitions have been revised to accommodate requirements of the 2008 Act including: “agricultural land,” “animal waste management facility,” “Conservation Innovation Grants,” “conservation practice,” “legal entity,” “local working group,” “participant,” “payment,” “person,” “producer,” and “technical assistance,” while others have been revised in an effort to make them consistent with other NRCS-administered programs, such as “agricultural operation,” “applicant,” “cost-effectiveness,” “EQIP plan of operations,” “liquidated damages,” “Natural Resources Conservation Service,” “operation and maintenance,” “priority resource concern,” “resource concern,” and “wildlife.” The remaining definitions, “historically underserved producer,” “livestock,” “Regional Conservationist,” “State Conservationist,” and “technical service provider,” have been revised in an effort to simplify and clarify definitions within the rule. Specifically, the following definitions have been amended:

The definition of “agricultural land” is revised to include those areas identified by EQIP's authorizing legislation as eligible land. The definition added the term “grassland” to clarify that such lands are eligible for EQIP assistance. The definition also further defined agricultural lands to include lands on which agricultural and forest-related products, or livestock are produced. Agricultural lands may include cropped woodland, marshes, incidental areas included in the agricultural operation, and other types of agricultural land used for production of livestock. Incidental areas are areas, within the agricultural operation that is receiving conservation treatment, which may not be grazed or cropped. Such areas may include, but are not limited to, pivot corners, access roads, and streambanks.

NRCS revises the definition of “agricultural operation” to make it consistent with other conservation programs administered by NRCS. “Agricultural operation” is defined as a “parcel or parcels of land whether contiguous or noncontiguous, which the producer is listed as the operator or owner/operator in the FSA record system, which is under the effective control of the producer at the time the producer applies for contract, and that is operated by the producer with equipment, labor, management, and production, forestry, or cultivation practices that are substantially separate from other operations.”

The definition of “animal waste management facility” is clarified to state that such a facility will be implemented within the context of a Comprehensive Nutrient Management Plan and is consistent with the Field Office Technical Guide.

The definition of “applicant” is revised to include the 2008 Act's added terminology. Specifically, the term “individual,” is replaced with the term “person,” and the word “legal” is inserted prior to “entity” to reflect these changes. “Applicant” is defined as follows: “a person, legal entity, joint operation, or tribe that has an interest in an agricultural or forestry operation, as defined in part 1400 of this chapter, who has requested to participate in EQIP.”

NRCS requests public comment on the current definition of “at-risk species.” As currently defined, “at risk species means any plant or animal species as determined by the State Conservationist, with advice from the State Technical Committee, to need direct intervention to halt its population decline.” Specifically, NRCS seeks public comment on how to tailor the definition to better assist species in greatest need.

The term, “beginning farmer and rancher,” remains the same as the definition included in the final rule published on May 30, 2003 (68 FR 32337), as defined by 7 U.S.C. 1991(a). Throughout the text, the term has become a subset of the “historically underserved producer” term to reduce the number of times it and other associated terms are cited in the regulation.

NRCS also revises the “Conservation Innovation Grants” definition to accommodate the 2008 Act's clarification that forest management is considered agricultural production under EQIP. NRCS defines “Conservation Innovation Grants” as “competitive grants made under EQIP to individuals, and governmental and non-governmental organizations to stimulate and transfer innovative technologies and approaches, to leverage Federal funds, and to enhance and protect the environment, in conjunction with agricultural production and forest management.” The term “transfer” is added to show that one of the purposes of the Conservation Innovation Grants is to transfer innovation to the private sector.

The definition, “conservation practice,” is changed to reflect the 2008 Act's expansion of the definition of “conservation practice” beyond structural and land management practices, to include forest management and vegetative practices, as well as other practices that achieve the program purposes and positive environmental outcomes, like comprehensive nutrient management plans, forest management plans, and other plans determined acceptable by the Chief. NRCS has built upon the statutory examples of planning activities that are comprehensive in nature, such as agricultural energy management plans, dryland transition plans, integrated pest management plans, and other planning activities that meet FOTG requirements, approved by the NRCS State Conservationist, in consultation with the State Technical Committee. NRCS requests comments from the public on what type of comprehensive planning activities should be eligible for payment under EQIP. Throughout this regulation, the term “conservation practice” replaces the terms “structural practices” and “land management practices,” except where “structural practices is specifically mentioned.”

Within the definition of “contract,” NRCS replaces the terms “individual” and “entity” with the term, “participant.” “Contract” means “a legal document that specifies the rights and obligations of any participant in the program.” An EQIP contract is a binding cooperative agreement for the transfer of assistance from USDA to the participant to share in the costs in applying the conservation practices.

The term, “cost-share payments” is removed to reflect the amended statutory language. To comply with the statutory change, the terms, “cost-share payments” and “incentive payments” have been merged to form one definition, entitled “payments,” which means financial assistance provided to the participant for estimated costs incurred performing or implementing conservation practices, including costs for: Materials, equipment, labor, design and installation, maintenance, management, or training, as well as the estimated income foregone by the participant for designated conservation practices. The term “payment” replaces the terms “cost-share payments” and “incentive payments” throughout the regulation.

NRCS revises the definition of “cost-effectiveness.” The term “cost-effectiveness” means the “least-costly option for achieving a given set of conservation objectives.”

The term, “entity,” is replaced by the term, “legal entity,” to reflect the definitions outlined in the amendments to Section 1201 of the 1985 Act by Section 2001 of the 2008 Act.

The definition of “estimated income foregone” is added to clarify how producers will be compensated in accordance with Section 1240B(d) of the 1985 Act. As defined, “ estimated income foregone means an estimate of the net income loss associated with the adoption of a conservation practice, including a change in land use or land taken out of production or the opportunity cost associated with the adoption of a conservation practice. This shall not include losses of income due to disasters or other events unrelated to the conservation practice.”

The definition, “EQIP plan of operations,” is revised to clarify for applicants, participants, and the public that an operation and maintenance agreement and EQIP plan of operations are components of the EQIP contract.

NRCS includes the acronym, “FOTG,” in the definition of “field office technical guide” and also removes the term, “treatment,” and replaces it with the inclusive term, “conservation practices,” which is defined in § 1466.3. NRCS defines “Field Office Technical Guide (FOTG)” as follows: “the official local NRCS source of resource information and interpretations of guidelines, criteria, and requirements for planning and applying conservation practices and conservation management systems. It contains detailed information on the conservation of soil, water, air, plant, and animal resources applicable to the local area for which it is prepared.”

NRCS adds a definition for the term, “forest management plan,” into § 1466.3 as a result of requirements included in the amendments to Section 1240E of the 1985 Act by Section 2506 of the 2008 Act. A forest management plan means a site-specific plan that is prepared by a professional resource manager and approved by the State Conservationist. The plan, which is compatible with the participant's objectives, identifies and describes actions to be taken by the participant to enhance soil, water, air, fish, and wildlife resources on such land.

Section 1240E, as amended by Section 2506 of the 2008 Act, requires a forest management plan , when the EQIP plan of operations addresses nonindustrial private forest land. The amendment gives discretion to the Secretary to determine the types of forest management plans that are eligible for EQIP payment. Indian forest lands, administered by the Bureau of Indian Affairs (BIA), have requirements for the implementation of forest management activities and these standards will be utilized when developing a forest management plan on BIA-administered land. NRCS has included the guidelines for a forest management plan within the “forest management plan” definition, but has given further discretion to the appropriate State Conservationist. A forest management plan may be a forest stewardship plan, as defined in the Cooperative Forestry Assistance Act of 1978, or another site-specific plan that contains elements equivalent to those of a forest management plan , approved by State Conservationist, in consultation with the State Forester or the BIA, where Indian forest lands and the associated natural resources are administered by BIA. The plan will comply with Federal, State, Tribal, and local laws, regulations, and permit requirements. NRCS is requesting public comment on other types of forest management plans that may be considered to be eligible for EQIP payment.

The term “historically underserved producer” combines the terms “beginning farmer or rancher” , “limited resource farmer or rancher” and “socially disadvantaged farmer or rancher” and their respective definitions into one term to simplify terms within the interim final rule. Definitions for “beginning farmer and rancher” and “limited resource farmer and rancher” remain the same as those definitions outlined in EQIP's final rule published on May 30, 2003. However, the definition for “socially disadvantaged farmer or rancher” has been added in accordance with the 2008 Act which sought to expand EQIP participation to be more inclusive of farmers and ranchers who have been subjected to racial or ethnic prejudices because of their identity as a member of a group, without regard to their individual qualities. This definition originates from Section 2501(g) of the Food, Agricultural, Conservation, and Trade Act of 1990, which defines “socially disadvantaged.”

NRCS removes the term, “incentive payments.” To reflect the statutory language, NRCS merges the terms “cost share payments” and “incentive payments” into one single term, entitled “payments.” “Payment” means financial assistance provided to the participant for estimated costs incurred performing or implementing conservation practices, including costs for: Materials, equipment, labor, design and installation, maintenance, management, or training, as well as the estimated income forgone by the participant for designated practices.

NRCS inserts the term, “integrated pest management,” into § 1466.3 as result of changes made by Section 2001 of the 2008 Act to Section 1201(a)(16) of the 1985 Act. The definition is the same as the statutory definition which defines integrated pest management as “a sustainable approach to managing pests by combining biological, cultural, physical, and chemical tools in a way that minimizes economic, health, and environmental risks.”

NRCS replaces the term, “land management practice,” with the more inclusive term, “conservation practice,” to reflect statutory changes. In accordance with the 2008 Act amendments, the term, “conservation practice,” is expanded beyond structural and land management practices, to include forest management and vegetative practices, as well as other practices that fulfill the program purposes, like comprehensive nutrient management plans, forest management plans, and other plans determined to be acceptable by the Chief. NRCS has expanded the definition of conservation practice to include planning activities that are comprehensive and holistic in nature, such as agricultural energy management plans, dryland transition plans, integrated pest management plans, and other assessment and planning activities that meet FOTG requirements, approved by the NRCS State Conservationist in consultation with the State Technical Committee.

The term, “legal entity,” replaces the term, “entity,” to reflect the definition set out in amendments by Section 2001 of the 2008 Act.

The term, “limited resource farmer and rancher,” remains the same as the definition included in the former program regulation, with an accommodation made to increase the level of gross farm sales from $100,000 to $155,200. Throughout portions of the text, the term has become a subset of the “historically underserved producer,” in order to reduce the number of times it and other associated terms are recited in the regulation.

The term, “liquidated damages,” is revised to clarify when and under what circumstances liquidated damages are collected. Liquidated damages is defined as a “sum of money stipulated in the EQIP contract that the participant agrees to pay NRCS if the participant fails to adequately complete the terms of the contract. The sum represents an estimate of the technical assistance expenses incurred by NRCS to service the contract, and reflects the difficulties of proof of loss and the inconvenience or non-feasibility of otherwise obtaining an adequate remedy.”

The term, “livestock,” is simplified and reflects the definition contained in the 2008 Act. It is the responsibility of the Chief to determine livestock operations that are eligible for EQIP assistance. The decisionmaking authority resides with the Chief in order to ensure consistency among States.

The term, “local working group,” has been revised. Local working groups are defined in 7 CFR part 610.

The term, “National Organic Program,” has been inserted to implement the 2008 Act's amendments related to conservation practices associated with organic production or for conservation practices related to the transition to organic production. The National Organic Program is a national program which regulates the standards for any farm, wild crop harvesting, or handling operation that wants to sell an agricultural product as organically produced. The National Organic Program is administered by the Agricultural Marketing Service.

The term, “Natural Resources Conservation Service,” has been inserted to define the USDA agency that has responsibility for administering EQIP.

The term, “nonindustrial private forest land” has been inserted based on the definition in the 2008 Act amendments. Nonindustrial private forest land is rural land, as determined by the Secretary, that has existing tree cover or is suitable for growing trees; and is owned by any nonindustrial private individual, group, association, corporation, Indian tribe, or other private legal entity that has definitive decision-making authority over the land.

NRCS revises the definition of “operation and maintenance” to clarify that participants are expected to maintain EQIP-funded conservation practices for the conservation practice's lifespan, as set forth in the operation and maintenance agreement. By maintaining the conservation practice for its lifespan, the participant ensures that the conservation practice will function for its intended use and will not cause harm or damage to the environment.

NRCS adds the term, “operation and maintenance agreement,” to describe the document that, in conjunction with the EQIP plan of operations, specifies the Agency expectation that participants will operate and maintain conservation practices installed with EQIP assistance.

NRCS adds the term, “organic system plan,” which is defined as a management plan for organic production or for an organic handling operation that has been agreed to by the producer or handler and the certifying agent. The Organic System Plan includes written plans concerning all aspects of agricultural production or handling.

NRCS revises the definition, “participant,” to reflect the 2008 Act's statutory definition of “person” and “legal entity.” A participant is a person, joint venture, legal entity, or tribe who is receiving payment or is responsible for implementing the terms and conditions of an EQIP contract.

The term, “payment,” has been added and replaces the terms “cost share payments” and “incentive payments.” The term, “payment,” means financial assistance provided to the participant for estimated costs incurred performing or implementing conservation practices, including costs for: Materials, equipment, labor, design and installation, maintenance, management, or training, as well as the estimated income foregone by the participant for designated conservation practices. The term “payment” replaces the terms, “cost share payments” and “incentive payments” throughout the text.

The definition for “person” is revised to reflect the requirements of part 1400 of this chapter, the regulation which details CCC's payment limitation policies.

NRCS revises the term “priority resource concern” to align program terminology with other conservation programs administered by NRCS.

The term “producer” has been expanded to reflect the 2008 Act's amendments to EQIP so that “producer” now means a person or legal entity or joint operation who is engaged in agricultural production or forestry management. The term, “livestock,” is removed from this definition, because the term, “agricultural production,” is inclusive of livestock operations.

The term, “Regional Assistant Chief,” has replaced the term, “Regional Conservationist.” In 2004, the NRCS reorganized, eliminated six Regional Conservationist positions, and created three Regional Assistant Chief positions. This definition has been revised to reflect that change.

The term, “resource concern,” replaces the term, “related resource concern,” in an effort to streamline program terminology with other conservation programs administered by NRCS.

NRCS inserts the term, “socially disadvantaged farmer or rancher,” and its associated definition. A “socially disadvantaged farmer or rancher” is a farmer or rancher who has been subjected to racial or ethnic prejudices because of their identity as a member of a group without regard to their individual qualities. The definition for “socially disadvantaged farmer or rancher,” which includes members of Indian tribes, has been added in accordance with the 2008 Act which sought to expand EQIP participation to be more inclusive of farmers and ranchers who have been subjected to racial or ethnic prejudices. This definition originates from Section 2501(g) of the Food, Agricultural, Conservation, and Trade Act of 1990, which defines “socially disadvantaged.”

NRCS revises the definition of “State Conservationist” to clarify that the former State Conservationist of Hawaii position has become the director of the Pacific Islands.

NRCS revises the term, “technical assistance,” to mirror the definition provided in the amendments by Section 2001 of the 2008 Act.

NRCS revises the definition, “technical service provider (TSP),” to clarify that TSPs are used to provide technical services to program participants, in lieu of or on behalf of NRCS. A TSP is “an individual, private-sector entity, or public agency certified by NRCS to provide technical services to program participants in lieu of or on behalf of NRCS.”

NRCS revises the term, “wildlife,” to make the definition consistent with definitions used in the other cost-share programs administered by NRCS.

Section 1466.4, “National priorities,” has been amended to address comments made by the public. On March 23, 2005, NRCS published a Request for Public Comments (70 FR 14578) soliciting comments from the public on which resource concerns should be given national priority. NRCS sought public feedback in order to ensure that the stated national priorities reflected the most pressing natural resource needs while providing emphasis to off-site environmental benefits. NRCS received written comments from 85 individuals, agencies, and non-governmental organizations. In addition, NRCS held numerous public listening forums in which the public was invited to comment on the priorities. After consideration of the public input, NRCS determined that the former program's national priorities adequately address the natural resource issues that were foremost identified, as no emerging issues of significance surfaced as a result of the feedback. However, as a result of public feedback and the need for clarification in the program, the first priority has been separated into two concerns, one for water quality, to include concentrated animal feeding operation (CAFO) as well as non-point source pollution, and a separate priority for water conservation, to address the quantity of ground and surface water available.

Section 1466.5, “National allocation and management,” addresses national allocations and national program accountability. Overall, the changes in this section were changes in terminology, rather than changes in policies and procedures. NRCS replaces the terms, “beginning farmers and rancher” and “limited resource producer,” with the term, “historically underserved producer.” NRCS has revised its allocation process to integrate all performance-based funding with initial allocations each year. This change eliminates the need for a national reserve; therefore, the “national reserve” reference is removed.

Section 1466.6, “State allocation and management,” is an existing section that describes State Conservationists' responsibilities in the allocation of funds and the implementation of the program. This section was revised in an effort to streamline terminology among NRCS-administered programs and make existing terminology consistent with the 2008 Act amendments.

Section 1466.7, “Outreach activities,” describes how NRCS will establish special program outreach activities at the national, State, and local levels. While NRCS has made efforts to extend its outreach to limited resource, beginning, and socially disadvantaged farmers and ranchers that include tribes, this section is revised to clarify the Agency outreach activities, and to specifically emphasize the need to provide assistance to “socially disadvantaged farmers or ranchers” as defined in § 1466.3 and the 2008 Act amendments.

Section 1466.8, “Program requirements,” sets forth land and applicant eligibility and the amount of EQIP funding to be used for livestock production, beginning farmers and ranchers, and socially disadvantaged farmers and ranchers. Producer associations and farmer cooperatives may submit applications, plans, and other necessary program materials on behalf of producers. However, eligibility and contract requirements still apply to any participant as set forth in § 1466.8. Specifically, § 1466.8 is revised as follows:

In paragraph (a) the term “nonindustrial private forest land” is included. Within this paragraph, NRCS eliminates the term, “land use adjustments,” leaving the more inclusive term, “conservation practices.” In paragraph (b)(2), NRCS replaces the term “farming operation” with the term “agricultural operation,” which is defined in § 1466.3. In paragraph (b)(4), a participant may substitute a plan developed for the purposes of acquiring an air or water quality permit for an EQIP plan of operations, provided the former plan contains elements equivalent to those elements required by an EQIP plan of operations.

NRCS moves provisions in § 1466.24 to § 1466.8 to better organize the participant's requirements. As a result, paragraph (b)(6) is inserted in § 1466.8, which requires a person or legal entity to submit to NRCS its tax identification or unique identifier number when applying for EQIP assistance. Where applicable, American Indians, Alaska Natives, and Pacific Islanders may use another unique identifier for each individual eligible for payment.

NRCS revises paragraph (c) to further clarify EQIP's working landscape to include non-industrial private forestland, and other land on which agricultural products, forest-related products, and livestock are produced. These areas are identified in the 2008 Act's amendment of eligible lands and in the program's purposes. Other agricultural lands include cropped woodland, marshes, incidental areas included in the agricultural operation, and other types of agricultural land used for production of livestock. Within paragraph (c), NRCS also clarifies that publicly owned land is eligible if it is an actively managed component of the agricultural and forestry operation and the conservation practice contributes to an improvement in an identified resource concern that is located on private land. To demonstrate adequate control of the land, members of Indian tribes should provide valid Tribal documentation and or documentation from the BIA. The BIA may assist NRCS with acquiring the appropriate authorization from the “certified” owners.

Within paragraph (c), the term, “operating unit” is replaced with the term, “agricultural operation,” and the term, “natural,” was eliminated in an effort to create consistent terminology among the conservation programs administered by NRCS.

Paragraph (e) has been inserted to ensure that five percent of the funds will be allocated to assist socially disadvantaged farmers or ranchers and an additional five percent of the funds will be allocated to assist beginning farmers or ranchers. In implementing the statutory change, NRCS considered three ways to allocate funds to meet the 2008 Act's requirements: (1) Issuing the allocations at the National level to defined geographic areas, where such groups are prevalent; (2) issuing the allocations to each State; or (3) establishing a national target that conforms to the statutory language, but providing States flexibility to designate money to each specified group based on potential demand in a given State. Under Option 3, NRCS pools the money and establishes a ten percent target for each State, enabling State Conservationists to designate money to the specified groups based on potential demand. NRCS has selected Option 3 to ensure that nationwide these groups of producers will benefit from EQIP assistance. Similar to EQIP's national livestock target, overall State-level percentages will be tracked at the national level to ensure that the amended national goals are met.

The effect of allocating the funds at the State level, with the targets being monitored at the national level will be threefold: (1) Funds will be provided to applicants who may be in the greatest need for additional assistance; (2) priority resource concerns may be better addressed; and (3) NRCS will assure that the national targets for these groups are met.

Section 1466.9, “EQIP plan of operations,” describes the requirements of the EQIP plan of operations, which is a component of the EQIP contract. Producers will be required to develop and apply a plan of operations that addresses identified priority resource concerns. The producer develops the plan of operations with the assistance of NRCS or other public or private technical service providers. The majority of this section has remained the same, with the following exceptions:

Paragraph (a) is revised to accommodate for the expansion of the term, “conservation practice,” which includes conservation planning activities. All conservation practices must be carried out in accordance with NRCS technical guidance. This technical guidance includes, but is not limited to, the NRCS FOTG, National Planning Procedures Handbook, General Manual 180, Part 409, Conservation Planning Policy, and other appropriate technical guidance as determined by the State Conservationist or designated conservationist.

Paragraph (c)(2) is revised by adding the term, “natural resource,” when listing a participant's potential objectives. Specifically (c)(2) is revised as follows: “To the extent practicable, the quantitative or qualitative goals for achieving the participant's conservation, natural resource, and environmental objectives.”

Paragraph (d) of the former program regulation is moved to paragraph (b) of this interim final rule to clarify the participant's responsibilities as they relate to the EQIP plan of operations. Paragraph (b) states that it is the participant's responsibility to implement the EQIP plan of operations.

Paragraph (c) details the elements required in an EQIP plan of operations. Paragraph (c)(3) is also revised to accommodate the expansion of the term “conservation practice” by the 2008 Act amendments, which now includes activities such as conservation planning, design, and installation. An EQIP plan of operations may be made up of one or more conservation practices such as those activities listed above, in addition to structural, land management, vegetative, and forestry practices. Paragraph (c)(4) is revised to clarify that the EQIP plan of operations must include operation and maintenance, as well as timing and sequence of conservation practices.

Paragraph (e) is added to ensure that producers who address forestland in their EQIP plan of operations develop and implement a forest management plan that is approved by the State Conservationist. As defined in § 1466.3, a forest management plan is a site-specific plan that is compatible with the participant's objectives and identifies and describes actions to be taken by the participant to conserve and enhance soil, water, air, fish, and wildlife resources on such land. The forest management plan should be developed to comply with Federal, State, Tribal, and local laws, regulations, and permit requirements.

NRCS inserts paragraph (f) to specify criteria to evaluate acceptable watershed-wide projects for the purposes of implementing water conservation or irrigation practices on newly irrigated lands, in accordance with section 1240B(h) of the 1985 Act. In determining an acceptable watershed-wide project, the State Conservationist will ensure:

• The project area has a current, comprehensive water resource assessment;

• The project plan has demonstrated effective water conservation and management strategies; and

• The project sponsors have consulted with relevant State, Tribal, and local agencies.

NRCS proposes to use the watershed assessments and State, Tribal, and local agency consultation in order to ensure that conservation practices implemented under EQIP are not in conflict with Federal, State, Tribal, and local water laws. The additional criteria also help to ensure that conservation practices are not applied to the detriment of other resource concerns within that watershed. For example, additional criteria may include, but is not limited to: Concurrence by State and local water management agencies that the anticipated activities will not be a detriment to existing resources; concurrence from State fish and wildlife agencies that the land can be irrigated with no detriment to in-stream flow for aquatics; and verification that the appropriate water permits have been acquired. NRCS is interested in comments on the criteria for determining acceptable watershed-wide projects, particularly with respect to what should be included in a comprehensive water resource assessment and what should be considered in determining effective water conservation and management strategies at the watershed scale .

Section 1466.10, “Conservation practices,” describes how NRCS determines eligible conservation practices. The State Conservationist determines which conservation practices are eligible for payment and the maximum payment rates in the State. The State Conservationist may limit practice eligibility in some localities depending on the resource concerns. Throughout this section, to reflect statutory changes, NRCS replaces terms, such as “structural and land management practices,” and “cost-share and incentive payments,” with more inclusive terms, like “conservation practices” and “payments,” respectively.

NRCS deletes the former program regulation's paragraph (b), which prohibits payments for practices applied before application for participation has been made and combines it with paragraph (c), since a practice applied prior to application is a practice applied prior to contract approval. Payments will not be made for a conservation practice that was applied prior to program application or contract approval, unless a waiver is granted by the State Conservationist or designated conservationist prior to implementation of the conservation practice.

In paragraph (c), NRCS adds the term, “water conservation,” to clarify EQIP's purposes, as follows: “A participant will be eligible for payments for water conservation and irrigation related conservation practices only on land that has been irrigated for two of the last five years prior to application for assistance.”

To reflect the 2008 Act's expansion of the term, “conservation practices,” NRCS includes the term, “management approaches,” in paragraph (d). NRCS revises paragraph (d) as follows: “Where new technologies or management approaches that provide a high potential for optimizing environmental benefits have been developed, NRCS may approve interim conservation practice standards that incorporate new technologies and provide financial assistance for pilot work to evaluate and assess the performance, efficacy, and effectiveness of the new technology or management approach.”

Section 1466.11, “Technical services provided by qualified personnel not affiliated with USDA,” was added in the 2003 final rule to address technical assistance provided by non-USDA personnel. NRCS is authorized to use Federal, State, or local agencies, or private entities to provide technical assistance. As determined by the State Conservationist, NRCS may contract with private vendors or enter cooperative agreements with other Federal, State, or local entities for services related to EQIP implementation.

Throughout this section, the term, “technical services,” replaces the phrase, “and other assistance,” to make this regulation consistent with the 2008 Act's amendment that added the definition of “technical services.” Section 1201(a)(25) of the 1985 Act, as amended by Section 2001 of the 2008 Act, defines “technical services” as “conservation planning, technical consultation, and assistance with design and implementation of conservation practices.” In light of this statutory change, § 1466.11(b) is revised as follows: “Participants may use technical services from qualified personnel of other Federal, State, and local agencies, Indian tribes, or individuals who are certified as TSPs by NRCS.”

Using the same rationale as applied to paragraph (b), paragraph (c) is revised as follows: “Technical services provided by qualified personnel not affiliated with USDA may include, but are not limited to: Conservation planning; conservation practice survey, layout, design, installation, and certification; information, education; and training for producers.”

Section 1466.20, “Application for contracts and selecting offers from producers,” is revised to split into two separate paragraphs, (a) “application acceptance” and (b) “selecting offer,” to better clarify these policies. The revisions to this section are a result of both statutory and streamlining changes.

Paragraph (a) clarifies that EQIP applications will be accepted throughout the year, with the State Conservationist or designated conservationist ranking applications at selected times throughout the year. Paragraphs (a)(2) and (3) have been inserted to enable the State Conservationist to group and rank applications that share similar resource objectives, economic status, cultural, or sociological backgrounds. In the case of paragraph (a)(2), the 2008 Act amendment requires the State Conservationist or designated conservationist, where practicable, to group applications based on the type of agricultural operation and rank accordingly. NRCS may extend this idea beyond agricultural operations to encourage the State Conservationist or designated conservationist to establish Statewide, area-wide, or local ranking pools. Applications may be grouped within ranking pools, which may be created to address a specific resource concern, a specific geographic area, a specific type of agricultural operation, or a specific group of applications that complete conservation systems. Spatially, ranking pools may be centered around a wildlife migration corridor, watershed, airshed, or other area of special significance. In the case of ranking pools, applications that meet the criteria established by the State Conservationist or designated conservationist, with advice from the State Technical Committee and local working group, where appropriate, will be evaluated against other applications that meet the same criteria. Each application will be ranked accordingly within that ranking pool or grouping of applications.

The ranking pools streamline conservation program delivery, enabling producers to receive conservation assistance in a more expedited manner. For example, the State Conservationist may announce an initiative to protect a specific at-risk species or a resource, such as a municipal water supply, and designate a specified funding amount available to producers within the State or a designated region. Applicants may apply by proposing specific conservation practices that would create habitat for this at-risk species or protect the drinking water source. Applications that address this specific resource concern within the State or region would be evaluated against other applications and funded accordingly.

Paragraph (b) details how applications will be prioritized. When selecting EQIP applications, the State Conservationist or designated conservationist, with advice from the State Technical Committee or local working group, respectively, will develop a ranking process to prioritize applications for funding that addresses national, State, Tribal, and local priority resource concerns. NRCS will select applications that fulfill the program purposes, address the priority resource concern and offer significant environmental benefit. In developing this ranking process, NRCS will expand its focus to include energy conservation, in addition to the traditional resource concerns that include: Soil, water and air quality; wildlife habitat; and surface and groundwater conservation. To reflect the statutory intent and ensure both timely and effective conservation improvements, NRCS has expanded the selection criteria to give priority to applications that:

• Indicate a willingness by the applicant to complete all conservation practices in an expedited manner;

• Effectively and comprehensively address the designated resource concern or resource concerns; and

• Improve existing conservation practices or improve and complete a conservation system. To be eligible for higher ranking for this criterion, these existing practices or systems shall be in place at the time the contract offer is accepted.

For applications that include water conservation or irrigation efficiency conservation practices, the 2008 Act amendment also requires NRCS to give priority to applications that demonstrate a reduction in water use by the agricultural operation. As a condition of receiving a higher ranking within the grouping of water conservation applications, the producer agrees not to use any associated water savings to bring new land under irrigation production, excluding incidental land needed for efficient operations. A producer who brings new land under irrigation production may be excluded from this condition, if the producer is participating in a watershed-wide project that will effectively conserve water. In evaluating whether a watershed-wide project is acceptable, the State Conservationist will ensure that:

• The project area has a current, comprehensive water resource assessment;

• The project plan has demonstrated effective water management strategies; and

• The project sponsors have consulted relevant State, Tribal, and local agencies.

Section 1466.20 also addresses contract approval authority. NRCS is revising § 1466.20 to require the appropriate Regional Assistant Chief to approve all contracts that exceed $150,000 and are up to $300,000.

Section 1466.21, “Contract requirements,” identifies elements contained within an EQIP contract and the responsibilities of the participant who is party to the EQIP contract. This section also addresses EQIP contract funding limitations. To receive payment, an applicant must enter into an EQIP contract. Generally, the EQIP contract identifies all conservation practices to be implemented, their timing and sequence, and the operation and maintenance needed to maintain the conservation practice for its lifespan. As a condition of receiving EQIP payments for forestry-related practices, the 2008 Act amendments require a participant to have a forest management plan. To address this requirement, NRCS revises paragraph (b) to state that the participant must implement a forest management plan when the EQIP plan of operations addresses nonindustrial private forest land. The forest management plan will be developed in accordance with the NRCS FOTG requirements and will comply with Federal, State, Tribal, and local laws, regulations, and permits.

NRCS continues to use a contract funding limitation to manage the program. In the past, NRCS has limited the contract amount to reflect the person/legal entity payment limitation. Prior to the 2008 Act, the contract and payment limitations were each $450,000. NRCS retains the practice of limiting the contract amount to the person/legal entity payment limitation for ease in recordkeeping and for facilitating situations where a waiver up to $450,000 may be granted. As required by the 2008 Act, paragraph (d) is revised to reduce the contract funding limitation from $450,000 to $300,000. NRCS also specifies in paragraph (d) that this contract funding limitation may be waived for projects of special environmental significance. Projects of special environmental significance must meet the following criteria, as determined by the Chief:

• Site-specific evaluation documents have been completed, documenting that the project will have substantial positive impacts on critical resources in or near the project area ( e.g. , impaired water bodies, at-risk species, drinking water supplies, or air quality attainment);

• The project clearly addresses a national priority and State, Tribal, or local priorities; and

• The project assists the participant in complying with Federal, State, Tribal, and local regulatory requirements.

NRCS is also extending the policy of establishing a contract funding limitation to organic contracts. Participants who wish to enter into “organic-only” contracts are subject to a statutory annual payment limitation of $20,000 per year or $80,000 during any six-year period. These contract limitations will be instituted for ease in recordkeeping. However, participants who operate both organic and non-organic operations will be encouraged to have separate contracts for their non-organic and organic operations. Producers wanting to implement practices outside of their organic operations may enter into another contract, but will be subject to the overall $300,000 person or legal entity payment limitation for all EQIP contracts. Both certified organic producers and those transitioning to an organic production system will have equal access for priority assistance. NRCS will encourage applicants to consolidate those conservation practices most directly related to organic production into a single contract to optimize the use of funding within both the annual and six-year payment limits.

Section 1466.22, “Conservation practice operation and maintenance,” addresses the participant's responsibility for conservation practice operation and maintenance. Paragraphs (a) through (e) are revised to clarify that the O&M agreement is part of the EQIP contract. The O&M agreement specifies the terms and conditions under which the participant must operate and maintain the conservation practices installed with EQIP assistance. This section also clarifies that NRCS may periodically inspect conservation practices to ensure they are being maintained for the conservation practice lifespan as detailed in the O&M agreement. In the event that NRCS finds that a participant is not operating and maintaining practices for the specified lifespan during the contract duration, NRCS may request a refund of payments in accordance with the EQIP contract. If a conservation practice is continuing to function for the conservation purposes for which it was installed, NRCS may choose to not request a payment refund. NRCS has created an O&M agreement to articulate the Agency's expectation that the participant is responsible for maintaining each conservation practice. NRCS has developed this O&M agreement for two reasons: (1) To increase the transparency of a participant's contract responsibilities; (2) to ensure these conservation practices are maintained for the length of time for which they were designed and created.

Section 1466.23, “Payment rates and levels,” formerly addressed cost-share rates, incentive payment levels, and payment eligibility. Incentive payments have been removed in accordance with the 2008 Act amendments. In the place of incentive payments, participants will receive payments for estimated costs incurred or income foregone in implementing a practice. The terms “cost-share payments” and “incentive payments” have been replaced throughout this section with the more inclusive term, “payments.” Specifically, NRCS has revised the following paragraphs:

The original paragraph (c) becomes paragraph (a); as a result, paragraphs are realigned accordingly. NRCS revises paragraph (a) to clarify how eligible conservation practices will be selected. In developing a list of conservation practices eligible for payment, the State Conservationist, in consultation with the State Technical Committee, will examine the cost-effectiveness, implementation efficiency, and longevity of the conservation practice. NRCS will select a conservation practice based on the number of resource concerns the conservation practice will address or how comprehensively the conservation practice will address the resource concern and its ability to assist producers in meeting regulatory requirements.

NRCS revises paragraph (b) to specify that payment rates will be established by the State Conservationist or designee, with advice from the State Technical Committee or local working group. In determining the payment rate, NRCS will use the guidance found in paragraph (c), in addition to examining the cost of implementing a practice.

Paragraphs (c)(1) and (2) are revised to allow participants to receive: (i) Up to 75 percent of the estimated costs incurred by implementing a conservation practice, (ii) up to 100 percent of the estimated income foregone by participant for implementing a practice, or both (i) and (iii) where a producer incurs both costs in implementing a conservation practice and foregoes income related to practice implementation. When determining estimated income foregone, the State Conservationist, as specified in section 1240B(d)(3) of the 1985 Act, may provide a higher payment rate, provided the rate does not exceed 100 percent, to the following conservation practices: residue management, nutrient management, air quality management, invasive species management, pollinator habitat, animal carcass management technology, or pest management. In accordance with this paragraph, a producer simultaneously may receive payments for performing a practice, as well as income foregone for implementing such a practice.

For participants who are identified as historically underserved producers, in accordance with § 1466.3, NRCS may award the applicable payment rate and an additional payment rate that is not less than 25 percent above the applicable payment rate, provided this increase does not exceed 90 percent of the estimated incurred costs associated with the conservation practice.

NRCS also revises paragraph (c)(3) to clarify that payments made to a participant will be reduced proportionately below the rate established by the State Conservationist or designated conservationist to the extent that the total financial contributions for a conservation practice from other sources exceed 100 percent of the estimated costs incurred for implementing or performing the conservation practice.

Paragraph (c)(4) is inserted to reflect Congress's intent to provide payments for conservation practices that assist producers in organic production or transition to organic production. Paragraph (c)(4) also clarifies that payments may not be made to cover the costs associated with acquiring the actual organic certification.

NRCS removes the former program regulations' reference to NRCS providing incentive payments, in accordance with the 2008 Act, which also removed references to incentive payments. NRCS will reimburse participants for estimated costs incurred and income foregone in accordance with § 1466.23(c).

NRCS adds paragraph (e) to enable NRCS to adjust payment for conservation practices scheduled after the year of contract obligation. Inflation, higher fuel costs, and increased labor impact the cost of implementing a conservation practice. This provision provides the Agency flexibility to compensate participants based on the increased costs.

Section 1466.24, “EQIP payments,” provides direction on payment eligibility and payment limitations. Section 1240G of the 1985 Act, as amended by Section 2508 of the 2008 Act limits payments to persons, joint operations, or legal entities to $300,000 during any six-year period, except for projects having special environmental significance. For projects of special environmental significance, payments will be limited to $450,000 (during any six-year period). In order to ensure that no individual will receive more than $300,000 (unless a waiver up to $450,000 is granted), NRCS will track all EQIP funds paid and attributable to any individual by the social security identification number or unique identification number. To participate in EQIP, the person or legal entity's application must contain all members or beneficiaries, their tax identification numbers, and the percentage interest of each member or beneficiary. The BIA, as a fiduciary, may assist NRCS in distributing funds to individual Indians or Indian tribes. With regard to contracts on Indian land, payments exceeding the payment limitation may be made to the Tribal participant if an official of BIA or a Tribal official certifies in writing that no one individual, directly or indirectly, will receive more than the limitation.

For the purposes of applying the payment limitation and in accordance with the 2008 Act, the six-year period will include those payments made in fiscal years 2009 through 2014. NRCS will honor payment and contract limits that exceed $300,000 for those persons, joint operations, and legal entities that entered into a contract with NRCS prior to October 1, 2008. Contracts entered into prior to October 1, 2008, are governed by the payment limitations contained within the 2002 Act. The 2002 Act limited payments and contracts to $450,000. The 2008 Act reduced the payment limit to $300,000. NRCS will apply these new statutory and regulatory limitations, beginning with fiscal year 2009 contracts and will ensure that no new participants exceed the $300,000 limit during the effectiveness of the 2008 Act. Contracts entered into prior to October 1, 2008 are not affected by the revision in payment limitation. Specifically, the following provisions have been changed in this section.

Paragraph (a) is revised to reduce the person, joint operation, or legal entity payment limitation from $450,000 to $300,000. This payment limitation applies to the six-year period, following a participant entering into a contract with NRCS, starting the year the contract is signed. Payments received for technical assistance shall be excluded from this limitation. The person, joint operation, or legal entity payment limitation may be waived for projects of special environmental significance. Projects of special environmental significance must meet the following criteria, as determined by the Chief:

• The project will have substantial positive impacts on critical resources in or near the project area ( e.g. , impaired water bodies, at-risk species, or air quality attainment);

• The project clearly addresses a national and State, Tribal, or local priorities; and

• The project assists the participant in complying with Federal, State, or local regulatory requirements.

Paragraph (c) is inserted to reflect the 2008 Act's limitation on payments to a person or legal entity, directly or indirectly, for conservation practices related to organic production. Payments for practices related to organic production shall not exceed $20,000 per year or $80,000 during any six-year period. This limitation excludes payments related to technical assistance and pertains only to conservation practices applied related to organic production. A producer may receive additional payments and is not subject to the organic payment limitation for conservation practices performed outside of those related to organic production, provided the sum total of all payments received does not exceed $300,000 (unless a waiver is granted for an environmentally significant project).

NRCS revises paragraph (d) to reflect the statutory requirement that participants who wish to receive payments for conservation practices related to organic production or the transition to organic production must carry out an organic system plan, as defined in section 1466.3, or develop and implement conservation practices for certified organic production that are consistent with an organic system plan and with EQIP's purposes. NRCS will offer conservation planning assistance to producers with an interest in organic production as authorized in section 1240B(i) of the 1985 Act, as amended by section 2503 of the 2008 Act.

Paragraph (d) is further revised to enable the Agency to provide advance payments to historically underserved producers, as provided in the 2008 Act amendments. Prior to this revision, EQIP policy required a participant to certify that a conservation practice had been completed before NRCS approved or issued payments. However, due to financial hardship by some applicants, the 1985 Act has been amended to enable “historically underserved producers” to receive advance payments up to 30 percent of the amount needed to implement a conservation practice for the purpose of purchasing needed materials or services. The advance payments will assist participants who lack financial resources to participate in the program.

Paragraph (d)(6) addresses the provisions related to the Adjusted Gross Income Limitation as it applies to conservation programs. Section 1001D of the Food Security Act of 1985, as amended by section 1604 of the 2008 Act, provides that a person, joint operation, or legal entity shall not be eligible to receive any payments from conservation programs under Title XII of the 1985 Act and section 524(b) of the Federal Crop Insurance Act (7 U.S.C. 1524(b)), which includes EQIP, during a crop, fiscal, or program year, if the average adjusted gross income of the individual, joint operation, or legal entity exceeds $1,000,000, unless not less than 66.66 percent of the average adjusted gross income of the person, joint operation, or legal entity is average adjusted gross farm income. This provision of the 1985 Act will be implemented in accordance with part 1400 of this chapter. Since NRCS will be making a commitment for payments under an EQIP contract for a period of time into the future, NRCS will make a one-time eligibility determination in accordance with part 1400 of this chapter. These limitations do not extend to federally recognized Indian tribes.

Paragraph (d)(12) is revised to reflect the expansion of the term “conservation practice.” NRCS or other Technical Service Providers must certify that the conservation practice has been carried out in accordance with NRCS technical guidance. This technical guidance includes, but is not limited to, the NRCS FOTG, National Planning Procedures Handbook, General Manual 180, Part 409, “Conservation Planning Policy,” and other technical guidance as determined by the State Conservationist or designated conservationist.

Section 1466.24(d)'s provisions related to depriving tenants and sharecroppers of EQIP payments is moved to § 1466.35, since the provision pertains directly to misrepresentation, scheme, and device, which is addressed in § 1466.35.

Section 1466.25, “Contract modifications and transfers of land,” is revised to clarify the participant's contract responsibilities as they relate to loss of control of the land and the obligations incurred by the transferee. In detailing these obligations, NRCS also states that the participant and transferee assume the obligations not only of the contract, but also the O&M agreement. This section also promulgates NRCS's pre-existing policy by adding paragraph (e), which specifies that if a conservation practice fails through no fault of the participant, the State Conservationist may issue payments to re-establish the practice.

Section 1466.26, “Contract violations and termination,” addresses the procedures that NRCS should take when a violation has occurred or a contract termination is needed. Specifically, § 1466.26 is revised as follows:

Paragraph (a) has been inserted to promulgate existing contract requirements and specify that the State Conservationist may terminate a contract when it is in the public interest, when the participant fails or refuses to correct a contract violation, or when a termination is needed as a result of conditions beyond the participant's control. The State Conservationist may unilaterally terminate an agreement when a termination is in the public interest, the participant refuses to correct a violation, or the participant is unable to comply with the contract terms. In the event a contract is terminated, the State Conservationist has the ability to retrieve all or a proportion of the payments. When a participant claims that the reason for the violation is a form of hardship, the claim must be documented and have existed after the participant entered into the contract. When a participant makes a hardship claim, the participant will provide documentation that details the hardship and for how long the hardship has existed and why the hardship has prevented fulfilling requirements of the contract. Examples of hardship include: Natural disasters, major illness, farm or ranch building destruction, bankruptcy, and public interest ( e.g. , military service, public utilities' easement or condemnation of land, or environmental and archeological concerns).

Paragraph (e) notifies potential EQIP participants that NRCS has the ability to collect liquidated damages. Paragraph (e) also gives notice to the public that participants who violate EQIP contracts may be determined ineligible for future NRCS-administered conservation program funding. For clarity, the following provisions are moved to paragraph (e), “If NRCS terminates a contract, the participant will forfeit all rights for future payments under the contract and may be required to pay liquidated damages as prescribed in the contract, and refund all or part of the payments received, plus interest.” NRCS also revises paragraph (e)(2) to provide flexibility to either reduce or waive the amount of liquidated damages.

NRCS adds paragraph (e)(2)(i) to clarify that proof of hardship must be documented, and such hardship must have occurred after the contract was signed by both parties.

NRCS adds paragraph (f) to provide that a contract, under which a producer is receiving payments for conservation practices related to organic production, may be terminated, if the State Conservationist, in consultation with the State Technical Committee, determines that the producer is not pursuing organic certification or is decertified.

Section 1466.27, “Conservation Innovation Grants,” is amended to stipulate that NRCS will not reimburse the grantee for indirect costs. The bulk of CIG's policies and procedures were revised on January 3, 2005, and promulgated in § 1466.27. To locate information about this program, consult the NRCS Web site at: http://www.nrcs.usda.gov/programs/cig/ .

Section 1466.31, “Compliance with regulatory measures,” is revised by adding the term, “permits,” to clarify that it is the participant's responsibility to obtain necessary permits before commencing or carrying out conservation practices.

Section 1466.32, “Access to operating unit,” is revised to notify potential EQIP applicants that an authorized NRCS representative may enter an operating unit or tract for the purpose of confirming compliance with program requirements during the term of the contract. NRCS will continue to provide the participant with notice, prior to entering the property.

Section 1466.33, “Equitable relief,” remains unchanged.

Section 1466.34 is revised to add the term, “legal entity,” to clarify that legal entities shall be subject to the same provisions as persons.

Section, 1466.35, “Misrepresentation and scheme or device,” is revised to insert the following clause from § 1466.24, “Adopted any scheme or device for the purpose of depriving any tenant or sharecropper of the payments to which such person would otherwise be entitled under the program.”

Section 1466.36, “Environmental Credits for Conservation Improvements,” is added to clarify NRCS's interest in environmental credits. NRCS recognizes that environmental benefits will be achieved by implementing conservation practices funded through EQIP, and that environmental credits may be gained as a result of implementing activities compatible with the purposes of an EQIP contract. NRCS asserts no direct or indirect interest in these credits. However, NRCS retains the authority to ensure that operation and maintenance requirements for EQIP-funded improvements are met, consistent with § 1466.21 and § 1466.22. Where activities may impact the land under an EQIP contract, participants are highly encouraged to request an O&M compatibility determination from NRCS prior to entering into any credit agreements.

Section 2708, “Compliance and Performance”, of the 2008 Act added a paragraph to section 1244(g) of the 1985 Act entitled, “Administrative Requirements for Conservation Programs,” which states the following:

“(g) Compliance and performance.—For each conservation program under Subtitle D, the Secretary shall develop procedures—

“(1) To monitor compliance with program requirements;

“(2) To measure program performance;

“(3) To demonstrate whether long-term conservation benefits of the program are being achieved;

“(4) To track participation by crop and livestock type; and

“(5) To coordinate activities described in this subsection with the national conservation program authorized under section 5 of the Soil and Water Resources Conservation Act of 1977 (16 U.S.C. 2004).”

This new provision presents in one place the accountability requirements placed on the Agency as it implements conservation programs and reports on program results. The requirements apply to all programs under Subtitle D, including the Wetlands Reserve program, the Conservation Security Program, the Conservation Stewardship Program, The Farm and Ranch Lands Protection Program, the Grassland Reserve Program, the Environmental Quality Incentives Program (including the Agricultural Water Enhancement Program), the Wildlife Habitat Incentive Program, and the Chesapeake Bay Watershed initiative. These requirements are not directly incorporated into these regulations, which set out requirements for program participants. However, certain provisions within these regulations relate to elements of section 1244(g) of the 1985 Act and the Agency's accountability responsibilities regarding program performance. NRCS is taking this opportunity to describe existing procedures that relate to meeting the requirements of section 1244(g) of the 1985 Act, and Agency expectations for improving its ability to report on each program's performance and achievement of long-term conservation benefits. Also included is reference to the sections of these regulations that apply to program participants and that relate to the Agency accountability requirements as outlined in section 1244(g) of the 1985 Act.

Monitor compliance with program requirements . NRCS has established application procedures to ensure that participants meet eligibility requirements, and follow-up procedures to ensure that participants are complying with the terms and conditions of their contractual arrangement with the government and that the installed conservation measures are operating as intended. These and related program compliance evaluation policies are set forth in Agency guidance (M_440_512 and M_440_515 ( http://directives.sc.egov.usda.gov/ ).

The program requirements applicable to participants that relate to compliance are set forth in these regulations in § 1466.8, “Program Requirements,” § 1466.9, “EQIP Plan of Operations,” § 1466.21, “Contract requirements,” and § 1466.22, “Conservation practice operation and maintenance.” These sections make clear the general program eligibility requirements, participant obligations for implementing an EQIP plan of operations, participant contractual obligations, and requirements for operating and maintaining EQIP-funded conservation improvements.

Measure program performance . Pursuant to the requirements of the Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 1116) and guidance provided by OMB Circular A-11, NRCS has established performance measures for its conservation programs. Program-funded conservation activity is captured through automated field-level business tools and the information is made publicly available at: http://ias.sc.egov.usda.gov/PRSHOME/ . Program performance also is reported annually to Congress and the public through the annual performance budget, annual accomplishments report, and the USDA Performance Accountability Report. Related performance measurement and reporting policies are set forth in Agency guidance (GM_340_401 and GM_340_403 ( http://directives.sc.egov.usda.gov/ )).

The conservation actions undertaken by participants are the basis for measuring program performance—specific actions are tracked and reported annually, while the effects of those actions relate to whether the long-term benefits of the program are being achieved. The program requirements applicable to participants that relate to undertaking conservation actions are set forth in these regulations in § 1466.9, “EQIP Plan of Operations,” § 1466.21, “Contract requirements,” and § 1466.22, “Conservation practice operation and maintenance.” These sections make clear participant obligations for implementing, operating, and maintaining EQIP-funded conservation improvements, which in aggregate result in the program performance that is reflected in Agency performance reports.

Demonstrate whether long-term conservation benefits of the program are being achieved . Demonstrating the long-term natural resource benefits achieved through conservation programs is subject to the availability of needed data, the capacity and capability of modeling approaches, and the external influences that affect actual natural resource condition. While NRCS captures many measures of “output” data, such as acres of conservation practices, it is still in the process of developing methods to quantify the contribution of those outputs to environmental outcomes.

NRCS currently uses a mix of approaches to evaluate whether long-term conservation benefits are being achieved through its programs. Since 1982, NRCS has reported on certain natural resource status and trends through the National Resources Inventory (NRI), which provides statistically reliable, nationally consistent land cover/use and related natural resource data. However, lacking has been a connection between these data and specific conservation programs. 3 In the future, the interagency Conservation Effects Assessment Project (CEAP), which has been underway since 2003, will provide nationally consistent estimates of environmental effects resulting from conservation practices and systems applied. CEAP results will be used in conjunction with performance data gathered through Agency field-level business tools to help produce estimates of environmental effects accomplished through Agency programs, such as EQIP. In 2006 a Blue Ribbon panel evaluation of CEAP  4 strongly endorsed the project's purpose but concluded “CEAP must change direction” to achieve its purposes. In response, CEAP has focused on priorities identified by the Panel and clarified that its purpose is to quantify the effects of conservation practices applied on the landscape. Information regarding CEAP, including reviews and current status, is available at http://www.nrcs.usda.gov/technical/NRI/ceap/. Since 2004 and the initial establishment of long-term performance measures by program, NRCS has been estimating and reporting progress toward long-term program goals. Natural resource inventory and assessment, and performance measurement and reporting policies set forth in Agency guidance (GM_290_400; GM_340_401; GM_340_403)) ( http://directives.sc.egov.usda.gov/ ).)

Demonstrating the long-term conservation benefits of conservation programs is an Agency responsibility. Through CEAP, NRCS is in the process of evaluating how these long-term benefits can be achieved through the conservation practices and systems applied by participants under the program. The program requirements applicable to participants that relate to producing long-term conservation benefits are described previously under “measuring program performance,” i.e. , § 1466.9, “EQIP Plan of Operations,” § 1466.21, “Contract requirements,” and § 1466.22, “Conservation practice operation and maintenance.”

Track participation by crop and livestock type . NRCS's automated field-level business tools capture participant, land, and operation information. This information is aggregated in the National Conservation Planning database and is used in a variety of program reports, for example in validating the program requirement for ensuring that 60 percent of funds are directed toward conservation practices related to livestock production. Additional reports will be developed to provide more detailed information on program participation to meet congressional needs. These and related program management procedures supporting program implementation are set forth in Agency guidance (M_440_512 and M_440_515).

The program requirements applicable to participants that relate to tracking participation by crop and livestock type are put forth in these regulations in § 1466.8, “Program Requirements,” which makes clear program eligibility requirements, including eligible land and relationship to the production of agricultural, livestock, or forest-related products.

Coordinate these actions with the national conservation program authorized under the Soil and Water Resources Conservation Act (RCA) . The 2008 Act reauthorized and expanded on a number of elements of the RCA related to evaluating program performance and conservation benefits. Specifically, the 2008 Farm Bill added a provision stating,

The program, performance, and natural resource and effects data described previously will serve as a foundation for the next RCA, which will also identify and fill, to the extent possible, data and information gaps. Policy and procedures related to the RCA are set forth in Agency guidance (GM_290_400; M_440_525; GM_130_402) ( http://directives.sc.egov.usda.gov/ ).

The coordination of the previously described components with the RCA is an Agency responsibility and is not reflected in these regulations. However, it is likely that results from the RCA process will result in modifications to the program and performance data collected, to the systems used to acquire data and information, and potentially to the program itself. Thus, as the Secretary proceeds to implement the RCA in accordance with the statute, the approaches and processes developed will improve existing program performance measurement and outcome reporting capability and provide the foundation for improved implementation of the program performance requirements of section 1244(g) of the 1985 Act.

The Office of Management and Budget (OMB) reviewed this interim final rule and determined that this interim final rule is an economically significant regulatory action since it results in an annual effect on the economy of $100 million or more. Pursuant to Executive Order 12866, NRCS conducted a cost-benefit analysis of the Wetlands Reserve Program. The administrative record is available for public inspection in Room 5831 South Building, USDA, 14th and Independence Avenue, SW., Washington, DC. A summary of the economic analysis can be found at the end of this preamble and a copy of the analysis is available upon request from the Director, Easement Programs Division, Natural Resources Conservation Service, Room 6819, Washington, DC 20250-2890 or electronically at: http://www.nrcs.usda.gov/programs/wrp/ under the Program Information title.

The Regulatory Flexibility Act is not applicable to this interim final rule because the Commodity Credit Corporation (CCC) is not required by 5 U.S.C. 553, or by any other provision of law, to publish a notice of proposed rulemaking with respect to the subject matter of this rule.

A programmatic environmental assessment has been prepared in association with this rulemaking. The analysis has determined that there will not be a significant impact to the human environment and as a result an Environmental Impact Statement is not required to be prepared (40 CFR part 1508.13). The Environmental (EA) Analysis and Finding of No Significant Impact (FONSI) are available for review and comment for 60 days from the date of publication of this interim final rule in the Federal Register . A copy of the EA and FONSI may be obtained from the following Web site: http://www.nrcs.usda.gov/programs/Env_Assess/ . A hard copy may also be requested from the following address and contact: National Environmental Coordinator, Natural Resources Conservation Service, Ecological Sciences Division, 1400 Independence Ave., SW., Washington DC 20250. Comments from the public should be specific and reference that comments provided are on the EA and FONSI. Public comment may be submitted by any of the following means: (1) e-mail comments to NEPA2008@wdc.usda.gov , (2) e-mail to e-gov Web site www.regulations.gov , or (3) written comments to: National Environmental Coordinator, Natural Resources Conservation Service, Ecological Sciences Division, 1400 Independence Ave., SW., Washington DC 20250.

NRCS has determined through a Civil Rights Impact Analysis that the issuance of this rule discloses no disproportionately adverse impacts for minorities, women, or persons with disabilities. Copies of the Civil Rights Impact Analysis are available, and may be obtained from the Director, Easement Programs Division, Natural Resources Conservation Service, P.O. Box 2890, Washington, DC 20013-2890, or electronically at http://www.nrcs.usda.gov/programs/WRP .

Section 2904 of the Food, Conservation and Energy Act of 2008 requires that the implementation of this provision be carried out without regard to the Paperwork Reduction Act, Chapter 35 of title 44, United States Code. Therefore, NRCS is not reporting recordkeeping or estimated paperwork burden associated with this interim final rule.

NRCS is committed to compliance with the Government Paperwork Elimination Act and the Freedom to E-File Act, which require government agencies in general and NRCS in particular, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

This interim final rule has been reviewed in accordance with Executive Order 12988, Civil Justice Reform. The provisions of this interim final rule are not retroactive and preempt State and local laws to the extent that such laws are inconsistent with this interim final rule. Before an action may be brought in a Federal court of competent jurisdiction, the administrative appeal rights afforded persons at 7 CFR parts 11, 614, and 780 must be exhausted.

Pursuant to section 304 of the Federal Crop Insurance Reform Act of 1994 (Pub. L. 103-354), NRCS classified this rule as non-major. Therefore, a risk analysis was not conducted.

Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), USDA assessed the effects of this interim final rule on State, local, and Tribal governments, and the public. This rule does not compel the expenditure of $100 million or more by any State, local, or Tribal governments or anyone in the private sector; therefore, a statement under section 202 of the Unfunded Mandates Reform Act is not required.

This interim final rule is a major rule as defined by Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This interim final rule will not result in an annual effect on the economy of $100 million or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based companies to compete in domestic and export markets. However, Section 2904(b) and (c) of the Food, Conservation, and Energy Act of 2008 requires that the Secretary use the authority in section 808(2) of title 5, United States Code, which allows an agency to forego SBREFA's usual 60-day Congressional Review delay of the effective date of a major regulation if the agency finds that there is a good cause to do so. NRCS hereby determines that it has good cause to implement this regulation as an interim final rule and have the rule effective immediately in order to meet the Congressional intent to have the conservation programs authorized or amended by Title II in effect as soon as possible. Accordingly, this rule is effective upon filing for public inspection by the Office of the Federal Register.

E.O. 13132 requires NRCS to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” E.O. 13132 defines the term “Policies that have federalism implications” to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under E.O. 13132, NRCS may not issue a regulation that has federalism implication, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or NRCS consults with State and local officials early in the process of developing the proposed regulation. NRCS shows sensitivity to Federalism concerns by requiring the State Conservationist to meet with and provide opportunities for involvement of State and local governments through the State Technical Committee. This interim final rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government as specified in E.O. 13132. Thus, the Executive Order does not apply to this rule.

This interim final rule has been reviewed in accordance with Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. NRCS has assessed the impact of this interim final rule on Indian Tribal Governments and has concluded that this rule will not negatively affect communities of Indian Tribal governments. The rule will neither impose substantial direct compliance costs on Indian Tribal governments, nor preempt Tribal law.

This interim final rule with request for comment amends the existing Wetlands Reserve Program (WRP) regulations. The Commodity Credit Corporation and the Natural Resources Conservation Service (NRCS), an agency of the United States Department of Agriculture (USDA), publishes this interim final rule with request for comment to incorporate programmatic changes as authorized by amendments in the Food, Conservation, and Energy Act of 2008 (2008 Act). The Commodity Credit Corporation (CCC) and the Natural Resources Conservation Service (NRCS) are not required by 5 U.S.C. 553 or by any other provision of law, to publish a notice of proposed rulemaking with respect to the subject matter of this rule. Section 2904 of the 2008 Act requires regulations to be published within 90 days after the date of enactment and authorizes CCC and NRCS to promulgate an interim final rule effective upon publication with an opportunity for notice and comment. CCC and NRCS have determined that an interim final rule is necessary to expedite the effective date of rulemaking in order to meet the intent of Section 2904 of the 2008 Act.

Pursuant to Executive Order 12866, Regulatory Planning and Review, the Natural Resources Conservation Service (NRCS) has conducted a benefit-cost analysis of the Wetlands Reserve Program (WRP) as formulated for the Interim Final Rule. This requirement provides decision makers with the opportunity to develop and implement a program that is beneficial, cost effective, and that minimizes negative impacts to health, human safety, and the environment. Congress passed amendments to the program that requires the Secretary of Agriculture, within 90 days after the enactment of the WRP amendments, to promulgate regulations necessary to carry out the program.

In considering alternatives for implementing WRP, the United States Department of Agriculture (USDA) followed the legislative intent to optimize environmental benefits, address natural resource concerns and problems, establish an open participatory process, and provide flexible assistance to producers who apply appropriate conservation measures that enable the satisfaction of Federal and State environmental requirements. Because WRP is a voluntary program, the program will not impose any obligation or burden upon agricultural producers who choose not to participate. The program has been authorized by the Congress with an acreage target for program participation. Funding for WRP comes from the Commodity Credit Corporation.

The WRP provides technical and financial assistance to eligible landowners to address wetland, wildlife habitat, soil, water, and related natural resource concerns on private lands in an environmentally beneficial and cost-effective manner. As will be discussed later, WRP program costs are the main costs to consider in this analysis. The WRP is an important tool in restoring and protecting wetlands along with the efforts of other governmental agencies, non-profit organizations, and landowners. Land enrolled in WRP can produce substantial improvements in on-site resource conditions and at the same time substantial off-site environmental benefits for the public-at-large can also accrue. These on site and off-site benefits could include: Creation of high value wetlands, control of sheet and rill erosion as lands are converted form cropland to wetlands, creation and protection of habitat for fish and wildlife, including threatened and endangered species and migrating birds; improving water quality by filtering sediments and chemicals; reducing flooding; recharging groundwater; protecting biological diversity; controlling invasive species with planting of natural vegetation; as well as providing opportunities for educational, scientific, and recreational activities. To some extent, air quality could be improved by reduced wind erosion and by an increase in carbon stored in the soil and reestablished vegetation, leading to reduced atmospheric amounts of carbon. Many of these benefits are difficult to quantify, although several studies have attempted to do so. One such study, published in 2008, found that the “public willingness to pay to enroll an additional acre of typical fresh water marsh in the WRP is about $425 annually.” Capitalizing this benefit flow at a seven percent rate produced a per acre value of over $5,800 for permanent easement agreements; a value of over $5,200 for 30-year easement agreements; and a value of almost $3,000 on 10-year restoration agreements. Using a three percent discount rate, these values become $10,935, $8,330, and $3,625, for the three types of agreements discussed above, respectively. These values take into consideration private benefits that may be derived, such as income from any fishing, hunting fees, and other recreational activities that may be realized by WRP landowners.

The main program costs include the purchase of easements and wetland restoration expenses with the program. Although agricultural production ceases from lands enrolled in WRP, this output effect is expected to be small given that WRP parcels are usually marginal agricultural lands poorly suited for efficient agricultural production. Agricultural production from lands better suited to agricultural use can easily compensate for reduced production from newly enrolled WRP land. Approximately 89.8 percent of the WRP funding has been used for permanent easement projects; about 7.9 percent for 30-year easement projects and about 2.4 percent for restoration cost-share agreement projects. The associated FY 2007 average per acre program costs for these projects were estimated at $3,000 for permanent easements, almost $1,100 for 30-year easements, and nearly $670 for restoration cost-share agreements.

A comparison of total economic benefits and costs related to restoring and protecting wetlands on a “typical acre” suggests that WRP can produce substantial economic net benefits.

The method of analysis for this study relied heavily on program managers' experience and assumptions. For example, the analysis team relied on program managers to identify important variables to consider when developing plausible scenarios. The analysis team took this information and constructed a small spreadsheet model. The current policy scenario for this analysis is program performance similar to those in FY 2007 persisting throughout FY 2009-FY 2012. A key variable in this scenario was the FY 2007 easement acquisition valuation methodology: Primarily by an appraisal of the fair market value of a parcel before the easement was in place minus the fair market value of the parcel after the easement was in place—an approach adopted by NRCS on recommendations from the USDA Inspector General's Office. Program managers felt that the post-FY 2007 valuation methodology was the main driver that caused the appraised value of parcels in many states to fall below the state's geographic cap and in turn causing a shift in program acres across states as compared to past years. These changes shifted WRP acreage from states with relatively low acquisition costs to those with relatively high acquisition costs which increased average national per acre WRP costs significantly. The switch in methodology did not result in NRCS paying more for the same easement than it would have paid under the old methodology, but rather significantly reduced the amount the agency could offer to landowners for an easement in some states, causing landowners to lose interest in the program. The current policy scenario assumes that the FY 2007 valuation method will be employed and drives model results that suggest total national WRP acreage would only increase by 294,200 acres over the FY 2009-FY 2012 period.

The changes in the 2008 Act return the valuation methodology to the valuation practices used before FY 2007. As a result, program mangers expect the distribution of acres enrolled in the program to revert back to its previous pattern. This geographic re-positioning is expected to be associated with lower average easement costs (assumed to be the fair market value of land using the Uniform Standards of Professional Appraisal Practices or an area-wide market analysis) and for geographic caps to be the primary means used to determine compensation rates. With the lower geographic per acre project costs becoming more relevant (assumed to be 25 percent lower than FY 2007 levels and those assumed in the baseline scenario), WRP acreage is expected to increase by 600,000 acres over the FY 2009-FY 2012 period—a substantial increase over the continuation of the existing valuation method.

Because per acre benefits exceed costs regardless of policy scenario assumed, all model results suggest that net benefits from WRP are positive.

This WRP benefit-cost analysis assumes that the major driver in program costs over the FY 2009-FY 2012 period will be the method of easement evaluation. The single discretionary policy item available to NRCS does not alter this result. This item pertains to the creation of the Wetland Reserve Enhancement Program (WREP) that would allow States, non-governmental organizations, or Indian tribes to partner with USDA in the selection and funding of contracts, as long as selected contracts meet the purposes of WRP.

Data on past WRP enrollment suggests that the 2008 Act changes related to easement compensation could lead to lower national average per-acre offer prices paid for easements when compared to pre-fiscal year (FY) 2007. This prediction is dependent upon where acreage is predominantly enrolled. NRCS anticipates that the new compensation methodology will encourage re-establishment of historic enrollment patterns. The assumptions in this analysis suggest the per-acre acre average costs on WRP could be reduced by about 25 percent. Although costs are expected to be reduced, there are no environmental studies to suggest that environmental benefits from such a change will be altered. Additional technical information from such sources as the Conservation Effects Assessment Project, plus empirical data on the nature of the types of environmental benefits being generated on WRP land across the United States would be necessary.

Although benefits of wetlands have been estimated on specific sites in a generalized fashion, researchers of many of these past studies caution in transferring benefits to other areas or to be interpreted as “average” values of a typical wetland type. That caveat notwithstanding, the conclusions of this analysis suggests that the monetary and non-monetary benefits from WRP in restoring and placing easements on wetlands can exceed total program costs.

Wetlands have long been recognized as critical to the environment and ecosystem health. They provide a protective buffer for our towns and cities against floods and storm surges; they are the habitat for hundreds of species; and they connect aquatic and terrestrial ecosystems. The Nation's wetlands provide an array of benefits to society and affect the Nation's economic, ecological, and cultural heritage.

The WRP is a voluntary program providing technical and financial assistance to eligible landowners to restore and protect wetlands. Protecting wetlands provides wildlife habitat, as well as enhancement of soil, water, plants, and related natural resource concerns. Floodplain forests, prairie potholes, and coastal marshes are among the wetlands restored through WRP. More than 2 million acres have been enrolled in WRP since the program's inception.

Title XIV of the Food Agriculture, Conservation, and Trade Act of 1990 (the 1990 Farm Bill), amended the Food Security Act of 1985 to provide for the establishment of the Wetlands Reserve Program. The Secretary of Agriculture delegated responsibility for the WRP to the Agricultural Stabilization and Conservation Service (ASCS), and ASCS published a proposed rule followed by a final rule in 1992. Thereafter, ASCS implemented a pilot program effort in 9 States.

In 1994, ASCS expanded the pilot program implementation of WRP to 20 States and published an interim final rule for the program. Also in 1994, the Department of Agriculture Reorganization Act of 1994 (the Reorganization Act) authorized the establishment of NRCS as the successor agency to the Soil Conservation Service. The Reorganization Act also transferred responsibility for the WRP to NRCS, and NRCS published an interim final rule in June 1995.

Under the NRCS interim final rule, NRCS expanded the program to all 50 States, and made other program adjustments to align WRP with real property acquisition policies. These changes included providing participants with a single payment at easement closing, and the holding of the easement deed by the United States of America in accordance with the Department of Justice Title Standards.

The Federal Agriculture Improvement and Reform Act of 1996 (the 1996 Farm Bill), Public Law 104-387, modified several aspects of WRP, including offering enrollment through a non-easement option, placing equal enrollment priority among the three enrollment methods, and requiring that eligible lands maximize wildlife benefits.

In the August 1996 final rule, NRCS incorporated the changes mandated by the 1996 Farm Bill and responded to comments received to the 1995 interim final rule. The Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill), Public Law 107-171, expanded the ability of the Secretary to grant a waiver for ownership changes due to foreclosure on the land when the owner of the land exercises a right of redemption from the mortgage holder, in accordance with State law, immediately before the foreclosure. NRCS incorporated this non-discretionary change in a direct final rule published in the Federal Register in June 2002.

The 2008 Act made a number of changes to WRP, including raising the enrollment cap to 3,041,200 acres through 2012; limiting program eligibility to private lands and acreage owned by Indian Tribes; determining the rate of compensation for easements or 30-year contracts enrolled in the program; requiring ownership of the land for 7 years under the easement enrollment option; expanding the ranking criteria; and adding a 30-year contract enrollment option on acreage owned by Indian Tribes. In addition, the 2008 Act revises the authority for the Wetlands Reserve Enhancement Program and a grazing rights pilot within that revised program, and makes agricultural lands flooded from the natural overflow of a closed basin lake or pothole within the Prairie Pothole Region eligible for enrollment without requiring that the land be a farmed wetland or converted wetland.

The 2008 Act incorporated two specific changes limiting the participation of public agencies in the implementation of WRP after September 30, 2008. First, the 2008 Act limited enrollment of eligible land to private land and acreage owned by Indian Tribes. In this manner, lands owned by a State Department of Natural Resources could not be enrolled in the program, even if the operator of those lands was a private individual. Previously, such lands were eligible for enrollment.

Second, Section 1603(f)(6) of the 1985 Act, as amended by Title I of the 2008 Act, provides that a State or local government is not eligible to receive any payment, benefit, or loan under Title XII of the 1985 Act. This prohibition includes WRP easement and restoration payments. Therefore, NRCS identifies how it will address these limitations upon public agency participation dependent upon which stage of the process a project was as of October 1, 2008.

For land that was enrolled in WRP and was owned by a public entity prior to October 1, 2008, NRCS will complete the acquisition and restoration of the project and make appropriate payment to the public entity. The rationale for completing the acquisition and restoration is that a recent change in the NRCS business process, which separates the dates of obligation of acquisition and restoration and thereby results in the obligation for restoration to occur several months later than the obligation for acquisition, has delayed obligation of restoration funds beyond the control of state and local governments. Although restoration funds for the project will not be obligated to such projects until after October 1, 2008, NRCS has determined that restoration payments are appropriate because government entities were eligible to receive restoration payments when the land was enrolled or purchased because the restrictions on public lands eligibility in the WRP statute and on payments to government entities in Section 1603(f)(6) of the 1985 Act, as amended by the 2008 Act, did not go into effect until October 1, 2008. The WRP statute authorizes NRCS to cost-share to the extent the Agency determines that cost-share is appropriate and in the public interest.

For land that was enrolled in WRP and was owned by a private person or legal entity or Indian Tribe prior to October 1, 2008, but on or after October 1, 2008, the private landowner or Tribe transfers ownership of the land to a public entity, NRCS will cancel the enrollment if the easement acquisition has not been completed.

For land that was enrolled in WRP and was owned by a private person or legal entity or Indian Tribe prior to October 1, 2008, but on or after October 1, 2008, the private landowner or Tribe transfers ownership of the land to a public entity, and NRCS has completed the easement acquisition and made payment to the private landowner, NRCS will not cancel the enrollment. The easement will remain in place; and no refund will be sought from the private landowner. However, NRCS will not obligate funds to restore the land encumbered by the easement because NRCS has determined that it is not authorized to make payment to the public entity owner because of the restrictions in Section 1603(f)(6) of the 1985 Act, as amended by the 2008 Act. NRCS will work with the new public entity landowner to encourage the public entity to implement the provisions of the NRCS-approved WRPO at its own expense.

If the private land or acreage owned by an Indian tribe is enrolled after September 30, 2008, and prior to completion of the restoration activities the land is acquired by a public entity, NRCS will not obligate funds for restoring the land encumbered by the easement because NRCS has determined that it is not authorized to make payment to the public entity owner because of the restrictions in Section 1603(f)(6) of the 1985 Act, as amended by the 2008 Act. Further, NRCS will consider failure to complete restoration of the wetlands a violation of the terms of enrollment. As a violation, under the WRP statute, NRCS has the right to have the easement remain in force and to seek a refund of payments made in furtherance of the enrollment. A violation may be avoided if the new public entity landowner implements all provisions of the NRCS-approved WRPO at its own expense.

The 2008 Act amended the Wetlands Reserve Program to:

• Add a new enrollment method for Tribal lands through 30-year contracts;

• Expand land eligibility under WRP to cropland or grassland that was used for agricultural production prior to flooding from the natural overflow of a closed basin lake or pothole, as determined by the Secretary, together (where practicable) with the adjacent land that is functionally dependent on the cropland or grassland;

• Require that an easement cannot be created on land that changed ownership within the previous 7-year period. Previously, the ownership requirement was for 12 months;

• Limit eligible land to private or tribal land;

• Add restoration, protection and enhancement of wetlands as WRP purposes;

• Revise the authority for the Wetlands Reserve Enhancement Program;

• Require NRCS to conduct a survey of the prairie pothole regions to inform the allocation process of WRP funds to that region;

• Base easement compensation on the lowest of three values: The fair market value of the land determined through either an appraisal or market analysis; a geographic cap; or the landowner offer;

• Establish an easement compensation payment schedule depending upon the value of the easement;

• Require a yearly payment limitation for restoration cost-share agreements of $50,000 per year and to clarify that the $50,000 yearly restoration cost-share payment limitation applies to any person or legal entity;

• Extend the existing waiver of the $50,000 yearly payment limitation to 30-year contracts;

• Identify that maintenance is an activity eligible for cost-share assistance;

• Add ranking criteria regarding maximizing environmental benefits; and

• Allow the spraying or mowing of land enrolled in the program if necessary to meet habitat needs of specific wildlife species.

The term “Department” is changed to “NRCS” where it occurs in § 1467.1 and throughout the regulation to clarify that NRCS implements the program and disburses payments to participants. Prior to 2002, the Farm Service Agency (FSA) disbursed WRP payments on behalf of CCC. In 2002, NRCS assumed responsibility for disbursing WRP payments.

The reference to processing outstanding and new applications for enrollment during calendar year 1995 has been removed as moot. There are no longer any outstanding applications from prior to 1995. The reference to the Trust Territories of the Pacific Islands has been removed to reflect more accurately the geographic scope of the program.

Section 1467.2(c) that required concurrence between NRCS and FSA related to WRP policies, priorities and guidelines is removed, reflecting that the program has been delegated to NRCS. NRCS and FSA concurrence remains a program requirement under Section 246 of the Department of Agriculture Reorganization Act (Pub. L. 103-354; 7 U.S.C. 6962(c)). NRCS and FSA will continue its working relationship regarding coordination of WRP policies with FSA activities, especially in the case where CRP and WRP enrollment are impacted by the county acreage cap limitations.

Section 1467.2(d) is re-designated as § 1467.2(c) and revised to clarify that the role of the State Technical Committee is to advise rather than consult with NRCS in program implementation. Given the regulatory connotation associated with consultation requirements under the Endangered Species Act, NRCS determined that the term “advice” better reflects the relationship between NRCS and the State Technical Committees. Additionally, this paragraph is revised to clarify that the advice of the State Technical Committee will be sought in the development of the geographic area rate caps of compensation which is addressed more fully in § 1467.8.

Section 1467.2(e) is re-designated as § 1467.2(d) and revised to clarify that other Federal and State agencies to which NRCS may delegate easement management responsibilities must have the needed authority, expertise, and resources to carry out the responsibilities. This clarification will ensure that this authority is implemented as intended by statute. Throughout WRP program implementation, NRCS has worked in close partnership with other Federal and State agencies regarding management of adjacent and contiguous conservation areas, and will continue to do so.

Section 1467.2(f) is re-designated as § 1467.2(e) and incorporates the term “technical assistance” in the language regarding the use of cooperative agreements to obtain services from other agencies and organizations. “Technical assistance” is defined in section 2001 of the 2008 Act, and is used in this regulation to cover the various forms of assistance that other parties may provide rather than listing specific types of assistance.

Section 1467.2(g) is re-designated as § 1467.2(f) and clarifies that the role of the U.S. Department of the Interior's Fish and Wildlife Service (FWS) is in consultation regarding land eligibility. The additional references to FWS and the Forest Service are removed, because the authority to consult with other Federal or State agencies on issues related to WRP implementation is covered in other parts of the regulation and is redundant here. References to the U.S. Department of the Interior's Fish and Wildlife Service have been changed to “FWS” where it occurs throughout the regulation to streamline terminology.

Section 1467.2 (h) is re-designated as § 1467.2(g) and expands authority for the Chief of NRCS to allocate funding pools to encourage program participation among historically underserved producers as authorized by Section 1244 of the Food Security Act of 1985, as amended (16 U.S.C. 3844).

Definitions of the terms used in this regulation are set forth in § 1467.3 to provide consistent interpretations for the public and for NRCS personnel. These definitions are consistent with statutory changes and with the revisions to 7 CFR part 1467 contained herein.

The term “ Acreage owned by Indian Tribes ” is added to define the term as used by the amendment made by the 2008 Act. The term is defined broadly to include lands held in trust for Indian Tribes, and to increase program accessibility and to allow for the greatest opportunity for Indian Tribal participation in the program through the use of 30-year contracts, which may be more conducive to requirements on trust lands, which are owned by the Tribe, but held in trust by another agency or entity.

The term “ Activity ” is added to define the meaning of the term used in the regulation and refer to maintenance and management activities that are essential parts of a restoration agreement. The statute specifies that cost-share payments may be provided for management and maintenance activities, which does not always involve a full conservation practice.

The term “ Agreement ” is added to specify that it is a legal document that describes the rights and obligations of NRCS and program participants.

The term “ Agricultural commodity ” is revised to reflect the definition provided in § 1201(a)(1) of the Food Security Act of 1985, as amended, providing consistency with other Title XII programs.

The term “ Beginning farmer or rancher ” is added to clarify who is eligible to be enrolled under provisions specific to historically underserved producers, which is referenced under § 1467.2(g).

The term “ Conservation district ” is revised to reflect the definition provided in § 1201(a)(5) of the Food Security Act of 1985, providing consistency with other Title XII programs.

The term “ Conservation practice ” replaces the term “ practice ,” and clarifies that conservation practices implemented in WRP meet NRCS standards and specifications, and provides a consistent definition across all easement programs.

The term “ Contract ” is revised to clarify that it is a legal document that specifies the rights and obligations of NRCS and program participants.

The term “ 30-year Contract ” is added to reflect the statutory addition of the 30-year contract enrollment option for acreage owned by Indian Tribes.

The term “ Converted wetland ” is revised to reflect the definition in § 1201(a)(7) of the Food Security Act of 1985, as amended, providing consistency with other Title XII programs.

The term “ Cost-share payment ” is revised to clarify that payments are made to carry out conservation practices and activities on enrolled lands.

The term “ Department ” is removed. References to “Department” throughout 7 CFR part 1467 are replaced with “NRCS,” the Natural Resources Conservation Service, an agency of the U.S. Department of Agriculture responsible for carrying out the program.

The term “ Easement payment ” is revised to include the consideration paid to an Indian Tribe or to tribal members participating through the 30-year contract option, because the managers expressed that the 30-year contract option would provide the same payment as a 30-year easement, but would not be a real property transaction.

The term “ Easement Restoration Agreement ” is added to specify that an easement restoration agreement will be the agreement used to implement the Wetland Restoration Plan of Operations (WRPO) for easements and 30-year contracts and mechanism for providing cost-share assistance to participants to carry out restoration and maintenance as planned in the WRPO under such enrollments.

The term “ Forest Service ” is removed as it is duplicative to all-inclusive references to “other Federal and State agencies” throughout the regulation.

The term “ Fish and Wildlife Service (FWS) ” replaces the term “U.S. Fish and Wildlife Service” and such term refers to the same agency within the United States Department of the Interior.

The term “ Historically underserved producer ” is added to refer to the specific groups of producers to which the Chief may direct funding through funding pools specifically to encourage participation, and to provide consistency with related conservation programs administered by NRCS.

The term “ Indian Tribe ” is added and adopts the definition in § 4(e) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)).

The term “ Landowner ” is revised to reflect that such term includes legal entities and refines the applicability of the term from the overly broad term “farmland” to eligible land since the 2008 Act amended the WRP statute to limit eligibility to private and Tribal lands, including lands held in trust for Indian tribes. “Remaindermen in a farm property” is removed because remaindermen in a property do not have a current legal ownership of the land.

The term “ Legal entity ” is added to respond to statutory changes, which limit eligible land to private and Tribal land and place a payment limitation to a person or a legal entity. The term “ limited resource farmer or rancher ” is added to clarify who is eligible to be enrolled under provisions specific to historically underserved producers at § 1467.2(g).

The term “ Maintenance ” is added to reflect statutory changes that incorporate maintenance as a cost-sharable activity.

The term “ Natural Resources Conservation Service ” is revised to clarify that NRCS carries out program implementation using the funds, facilities, or authorities of the Commodity Credit Corporation (CCC). In the definition “Department” is replaced with “NRCS” and reference to the Soil Conservation Service is removed.

The term “ Option agreement to purchase ” is added to describe the legal document used to authorize NRCS to proceed with the easement acquisition process and which binds the landowner to sell a conservation easement upon exercise of the option by NRCS.

The term “ Participant ” is added to simplify reference throughout the regulations to persons or legal entities who have been accepted to participate in the program.

The term “ Person ” is revised in response to statutory changes that eliminated governmental entity eligibility under the program. The term “person” now refers only to a natural person, a legal entity, or an Indian Tribe, but does not include governments or their political subdivisions.

The term “ Prairie Pothole Region ” is added to reflect statutory changes requiring an assessment of program demand in the “Prairie Pothole Region” and consideration of those needs in allocation formulas. The definition establishes the geographic scope of the prairie pothole region, as it existed on June 18, 2008.

The term “ Private land ” is added to reflect statutory changes that excluded land owned by State and local governments from being eligible to enroll in the program.

The term “ Restoration Cost-Share Agreement ” is added to clarify that the restoration agreement is the contract used to describe the rights and obligations of participants who have been accepted to participate in the WRP restoration cost-share enrollment option. This agreement is used to carry out the WRPO and to identify the cost-share assistance NRCS will provide to the participant for implementing the conservation practices and activities in the Wetland Restoration Plan of Operations.

The term “ Riparian areas ” is revised to correct the spelling of the word “vegetative.”

The term “ Socially disadvantaged farmer or rancher ” is added to clarify who is eligible to be enrolled under provisions specific to historically underserved producers at § 1467.2(g).

The term “ State technical committee ” is revised to remove unnecessary reference to the State Conservationist as the chair of the committee; this role is established through regulations found at 7 CFR 610.22(a).

The term “ United States Department of Agriculture (USDA) ” replaces the use of the term “U.S. Department of Agriculture.”

The term “ Wetland ” is amended to remove adjacent lands from the definition of wetland for consistency with the statute. Adjacent uplands, while they may be eligible for the program, are technically not wetlands.

The term “ WRP ” has been removed as unnecessary since the term is adequately described in § 1467.1.

The term “ Wetlands Reserve Plan of Operations (WRPO) ” is revised to add the definition of the WRPO and describe the purpose of this conservation plan. In particular, the WRPO is the conservation plan that identifies how the wetland functions and values will be restored, improved, and protected and which is approved by NRCS.

Section 1467.4(a) is revised to incorporate the statutory addition of the 30-year contract enrollment option available only on acreage owned by Indian Tribes. Additionally, § 1467.4(a) is revised to clarify that cost-share assistance under the easement or 30-year enrollment option will be provided through the easement restoration agreement and that cost-share assistance under the restoration cost-share enrollment option will be provided through the restoration cost-share agreement.

Section 1467.4(b) is revised to remove reference to CRP easements with respect to a county cap limitation since this enrollment option is not provided through the existing CRP. Additionally, the 2008 Act removed the ability to waive the 10% limitation of cropland that can be enrolled through an easement option under WRP. Therefore, this paragraph has been revised to reflect the 2008 Act amendments.

Section 1467.4(c) is revised to clarify that eligible program participants are persons or legal entities or Indian Tribes and are subject to the adjusted gross income (AGI) limitation and highly erodible land and wetland compliance provisions of the Food Security Act of 1985, as amended. Indian Tribes are exempted from the AGI and payment limitations by 7 CFR Part 1400.600(g).

Section 1467.4(c)(2) is revised to reflect the statutory change in required ownership period from 12 months to 7 years. NRCS will determine the 7-year ownership requirement at the time NRCS determines the eligibility of the land offered for enrollment. Previously, NRCS measured ownership duration at the time of application. However, NRCS determined that as an eligibility criterion, ownership duration should be determined as part of the eligibility review of a project.

A new § 1467.4(d)) is added to specify that land that is accepted for enrollment in an easement, but is sold or transferred prior to the easement being perfected will be removed from enrollment. The new landowner may file a new application so that all landowner eligibility criteria may be examined and documented appropriately. However, the land eligibility, ranking, and other administrative determinations that relate to the land will remain valid for the remainder of the funding cycle.

Section 1467.4(d) is redesignated as § 1467.4(e) and is revised to reflect the requirement made by the 2008 Act amendments that land must be private land or acreage owned by Indian Tribes to be eligible for WRP.

Section 1467.4(e)(3), formerly § 1467.4(d)(2), is revised to provide the new eligible land category for flooded lands within a closed basin lake or pothole as established by the amendments in the 2008 Act. This change authorizes the enrollment of lands that are currently inundated.

Section 1467.4(e)(4) is revised to add clarity related to lands that may be considered farmed wetland or converted wetland, and conform to revisions made in § 1467.4(e)(3). The lands identified were previously identified in regulation but the revision ties their identification more clearly to statutory criteria.

Section 1467.4(e)(5) Prairie Pothole Region adds new language to provide eligibility criteria for land being enrolled under the new eligibility category of flooded lands in a closed basin located in the Prairie Pothole Region as defined in § 1467.3. The Prairie Pothole Region is defined as the counties designated as part of the Prairie Pothole National Priority Area for CRP as of June 18, 2008. This designation is chosen because it is clearly delineated and is already an established and well-known designation. The 2008 Act amendments require that lands under this section maximize wildlife benefits and wetland values and functions and be restorable. In order for a wetland to be restorable, the soils must be hydric, and the depth of the water cannot exceed 6.5 feet because water over this level is considered open water, not a wetland. The minimum size requirement of 20 contiguous acres is included to focus enrollment on lands that are not eligible under the Conservation Reserve Program Flooded Farmland program, which allows enrollment of parcels under 20 contiguous acres in size.

Section 1467.4(e)(6) restructures language previously under § 1467.4(d)(3)(iii) through (vi) regarding eligibility of lands adjacent to land eligible under § 1467.4(e)(3). The change results in increased cohesiveness in the description of eligible lands and more clearly comports with statutory intent by rewording the existing language. Land identified in this paragraph may include types of land that could be considered eligible under § 1467.4(e)(3). For example, paragraph (e)(6) identifies restored wetlands as eligible adjacent lands. However, some restored wetlands that are not adjacent to eligible land may be identified as farmed wetlands and thus eligible under § 1467.4(e)(3), while other restored wetlands may not have an agricultural history, and thus would only be eligible as adjacent eligible land under paragraph (e)(6). The identification of restored wetlands under paragraph (e)(6) is not intended to preclude the enrollment of restored agricultural wetlands under § 1467.4(e)(3), but to facilitate the enrollment of restored adjacent non-agricultural wetlands if their enrollment furthers the functions and values of eligible agricultural wetlands.

Section 1467.4(e)(7) is revised to clarify that eligible land must be configured with boundaries that allow for efficient management for the program purposes, as determined by NRCS, by changing the term “easement” to “program.”

Section 1467.4(g)(3) is revised by clarifying that land held in trust for Indian Tribes, though owned by an agency of the United States, is not ineligible. Section 1467.4(g)(4) adds language incorporating the statutory change that lands owned by State and local units of government are not eligible for WRP. Section 1467.4(g)(5) also revises the language describing when an existing deed restriction causes land to be ineligible for participation to provide more administrative flexibility to determine whether wetland functions and values are adequately protected by such restrictions. When existing restrictions provide adequate wetland protection benefits, WRP enrollment is superfluous and unnecessary. In Section 1467.4(g)(6) NRCS provides examples of the types of lands where implementation of restoration practices would be undermined due to on-site or off-site conditions.

The requirement that applications must be submitted during an announced period for such submissions is removed from § 1467.5(a), because NRCS provides for continuous enrollment in WRP.

In § 1467.5(b) the term “Department” is replaced with “NRCS.”

NRCS has removed paragraph (c) since the criteria about reduced easement cost as a ranking factor is addressed in revisions made to § 1467.6.

Section 1467.6(a) is removed to eliminate duplicative language related to enrollment priorities from this regulation. Section 1467.6(b) is re-designated as § 1467.6(a) and clarifies that the same ranking considerations apply to all enrollment options. Language is added to reflect additional ranking considerations added to the WRP statute by the 2008 Act. Section 1467.6 now reflects the priorities identified in the WRP statute, including: The conservation benefits of obtaining an easement, or other interest in the land; the cost effectiveness of each easement or other interest in eligible land, so as to maximize the environmental benefits per dollar expended; whether the landowner or another person is offering to contribute financially to the cost of the easement or other interest in the land to leverage Federal funds; the extent to which the purposes of the easement program would be achieved on the land; the productivity of the land; and the on- farm and off-farm environmental threats if the land is used for the production of agricultural commodities.

Section 1467.6(b) is added to reflect existing statutory language that, in consideration of the costs and future agricultural food needs, gives priority to permanent easements over shorter-term easements, and acquiring easements based on habitat value for migratory birds and other wildlife, to the extent practicable. The language was added because it had not been previously clearly addressed in the regulation.

Section 1467.6(c) is revised to include consultation with the State Technical Committee when placing higher priority on specific geographic areas. This change is intended to incorporate State, local, and non-governmental organization input when designating a priority area.

Section 1467.6(d) is revised to remove reference to enrolling eligible lands at any time to achieve the program objectives. WRP operates on a continuous enrollment basis so this language is unnecessary. This paragraph is also revised to clarify that eligible land may be excluded from enrollment if the adjacent land is needed for successful restoration of the property and the adjacent landowner, though willing to participate, is ineligible to participate.

Section 1467.6(e) is added to provide guidelines for the Prairie Pothole Region Assessment and Reallocation as required by the statute. These guidelines and the rationale for the changes are included in the description of the changes to § 1467.4(e)(5).

Section 1467.7 is revised to include changes to the NRCS business process as a result of experience gained in operating the WRP. These revisions require steps related to land valuation, preliminary title work, and all appropriate inquiries and record searches to be completed prior to the offer to the landowner. These steps had previously been performed after the obligation of NRCS funds and resulted in de-obligation of funds when issues related to these steps could not be resolved. These revisions streamline program implementation and are intended to help reduce the number of applicants having to exit the enrollment process due to irresolvable issues, such as title issues and hazardous substance problems.

In addition, § 1467.7 is revised to confirm that land is enrolled in the program when the landowner and NRCS enter into an option agreement to purchase an easement, a 30-year contract, or a restoration cost-share agreement. Previously, when acreage enrollment goals were by calendar year and funding availability by fiscal year, land was enrolled in WRP when the landowner executed a notice of intent to continue in response to the NRCS offer of tentative acceptance into the program. The 2008 Act modified the acreage enrollment goals to be by fiscal year, and thus NRCS determined that it improved administrative consistency to have the time of enrollment to coincide when funds were obligated to a project through the execution of a program agreement.

Section 1467.7(c) is revised to clarify that the option agreement to purchase, which becomes the contract for sale when signed by NRCS, stipulates the NRCS and landowner obligations and responsibilities, particularly regarding restoration and future sales. This is necessary, in part, to describe NRCS and landowner responsibilities if the land is sold to a party who is unwilling to assume restoration or is ineligible for NRCS cost-share assistance for restoration. The option agreement to purchase may also include payment schedules for easements valued at more than $500,000, consistent with the payment schedule for such easements authorized by the 2008 Act.

Additionally, this section is expanded to incorporate additional material regarding enrollment through a 30-year contract or a restoration cost-share agreement. In particular, a participant accepts enrollment in the program by signing the 30-year contract or the restoration cost-share agreement.

The existing § 467.7(d) is revised and incorporated into the new § 1467.7(c) described above.

The existing § 1467.7(e) is re-designated as § 1467.7(d) and is revised to clarify under what conditions NRCS may withdraw an offer of enrollment. Sale of the land enrolled prior to easement closing or risk of hazardous substances are added as examples of such conditions.

The caption for § 1467.8 is changed from “Compensation for easements” to “Compensation for easements and 30-year contracts” to reflect the addition by the 2008 Act of the 30-year contract enrollment option for acreage owned by Indian Tribes. The statute requires that compensation for 30-year contracts and 30-year easements be equivalent.

Section 1467.8 is also revised to reflect the statutory easement compensation language in the 2008 Act, which became effective immediately upon enactment. In particular, the 2008 Act provided that NRCS shall pay as compensation the lowest of the following: (i) The fair market value of the land using the Uniform Standards for Professional Appraisal Practices, or based on an area-wide market analysis or survey; (ii) the geographic area rate cap determined under paragraph (a)(4) of this section; or (iii) the landowner offer. The revisions to § 1467.8 implement the new compensation methods, including the equivalence of 30-year contracts and 30-year easements, as required by statute. This section is also revised to clarify the process for setting and approving the geographic area rate cap. The actual method and data sources for determining a geographic rate cap have not changed from the existing regulation. The changes were made to require that the State Technical Committee provide advice on establishment of the caps, and that the caps for each state must be approved by the Chief. In this manner, NRCS may ensure nationwide consistency and equitable treatment of participants across State boundaries. Advice on establishment of the geographic rate cap is limited to the State Technical Committee to ensure consistency among states in developing fair compensation rates which will encourage participation while ensuring prudent investment of the public dollar. Payment schedule and payment limitations are revised to reflect the 2008 Act. This section is also revised to address when a waiver to installment payments is allowed for easements that cost in excess of $500,000. NRCS will make a single payment when such payment will result in the restoration, protection, or enhancement of wetlands on eligible land, unless installment payments are requested by the landowner. Single payments facilitate the administrative efficiency of the program, especially in situations where the landowner must negotiate subordination of mortgages or other liens in order to provide clear title to the easement area.

Section 1467.8(b) contains language related to the acceptance of easement compensation that previously existed at § 1467.8(e). Additionally, this section is revised to incorporate the payment timing and method prescribed by statute.

Section 1467.8(c), previously § 1467.8(f), includes minor changes to provide clarity that reimbursement for surveys are for legal boundary surveys.

Language in the existing regulation at § 1467.8(h) regarding payment limitations is deleted and incorporated in new § 1467.10(a)(3).

Remaining sections have been re-designated to accommodate the above section re-designations.

Section 1467.9, Cost-share Payments, is re-designated as § 1467.10. A new § 1467.9 is added to incorporate provisions for implementing the new Wetlands Reserve Enhancement Program (WREP) created by the statute. WREP provides the authority to enter into agreements with States (or subdivisions), nongovernmental organizations, and Indian Tribes to advance the purposes of WRP. WREP will operate through an announcement of funding in the Federal Register . Proposals will be submitted to the appropriate State Conservationist for initial review, and recommended proposals will be provided to the Chief by the State Conservationists for nationwide ranking and final selection. NRCS believes that WREP will facilitate the identification of unique enrollment opportunities that are of regional or National significance, and thus beyond the normal purview of State-level selection processes. However, selected proposals and associated funding will be provided through the applicable State Conservationists in order to enter into the WREP agreement with the eligible partner.

Section 1467.9(b) includes language for implementing a reserved rights pilot authorized by the statute. Participants in the reserved rights pilot are subject to the general eligibility and program administration requirements established for this part. Under the reserved rights pilot, landowners who wish to reserve grazing rights in the grazing rights pilot deed or 30-year contract must comply with a WRPO which includes the location, timing, intensity, frequency, and duration of grazing. The Managers Report language states that activities occurring under a reserved rights easement or 30-year contract shall be covered by a conservation plan that is developed and approved by NRCS. NRCS intends to compile, evaluate, and make available information acquired through its monitoring of projects enrolled through WREP in general, and the reserved rights pilot specifically, to ascertain the benefits gained through these programmatic options.

The Managers Report also states that NRCS should explore different types of warranty easement deeds consistent with the purposes of the program, which will allow landowners to retain the right to use the land for grazing purposes. The reserved rights pilot will use template deeds and 30-year contracts, which will be made public concurrent with the announcement of availability of the pilot.

Section 1467.9(b)(4) on compensation describes that the value of retained grazing rights will be considered in establishing compensation. The value of the retained grazing rights, set by either a Uniform Standards for Professional Appraisal Practices (USPAP) appraisal or a market survey, is subtracted from the fair market value of the land; in setting geographic area rate caps, a value for grazing rights must be subtracted from the established geographic rate cap for the area.

As mentioned above, § 1467.9 “Cost-share payments” is re-designated as § 1467.10 and revised to incorporate 30-year contracts and to improve readability.

Language is included throughout this section to accommodate the inclusion of maintenance as an activity that is eligible for cost-share. Changes throughout this section clarify that conservation practices and activities, as defined in § 1467.3, are eligible for cost-share. Maintenance is included in the definition of activity under § 1467.3.

Section 1467.10(a)(3) is added to provide language for implementing the $50,000 annual payment limitation for restoration cost-share agreements, consistent with the statutory requirements of the 2008 Act amendments.

Sections 1467.10(b), (c), and (d) are revised to more fully describe the items for which cost-share is available within the WRPO. These items include measures, activities, and components of conservation practices which may be necessary for alleviating problems or improving a conservation treatment, including as a maintenance activity.

Section 1467.10(e) is added to clarify that the participant with the contractual obligation with NRCS will be responsible for completing restoration if land enrolled in WRP is sold to a new landowner who is unwilling, ineligible, or unable to complete the restoration. Eligible new landowners who agree to the transfer of the responsibilities under the easement restoration agreement or restoration cost-share agreement, as applicable, may receive cost-share assistance for restoration if all requirements for payment are met. NRCS will seek refund of payments if the participant with the contractual obligation or the new landowner fail to implement the required restoration as specified in the WRPO.

Section 1467.10, Easement participation requirements, is re-designated as § 1467.11. This section is revised by adding a new § 1467.11(b) to make the requirements also applicable to 30-year contracts. The requirements for participation under the 30-year contract option mirror the easement participation requirements, except where necessary to reflect that the 30-year easement is not a real property right such as an easement but a contractual arrangement between NRCS and an Indian Tribe or tribal member. Additional minor revisions are made to § 1467.11 for administrative clarity and streamlining. This section is also modified to clarify that the restoration of lands enrolled in WRP is the responsibility of the participant.

Section 1467.11(e) is added to include the requirement that for all lands enrolled in WRP, NRCS shall develop a WRPO, which will be implemented by the participant. This WRPO will be signed by both NRCS and the participant. This language is added to further clarify the participant responsibilities when enrolled in the WRP.

Section 1467.11 is re-designated as § 1467.12. This section contains only minor changes to clarify that NRCS is the USDA agency with responsibility for developing the WRPO.

Section 1467.12 is re-designated as § 1467.13, Modifications.

Section 1467.13(a)(4) clarifies that the Chief will approve modifications and under what circumstances modifications may be approved; this language was previously included in the WRP Manual and is now being incorporated in the rule to provide clarification for the level of approval for modifications. The Chief reserves the authority to approve modifications to ensure the long-term integrity of NRCS easements.

Section 1467.13(b) is revised to require agreement and signatures from the participant and NRCS for a modification to the WRPO. These changes will ensure protection of the Federal investment.

Section 1467.13 is re-designated as § 1467.14. Section 1467.14(a) clarifies what constitutes a transfer of land and the impact of the transfer. In cases where the transfer of land meets conditions described under § 1467.4(c)(2), the State Conservationist must cancel the application; however, the new landowner may re-apply so that a determination of landowner eligibility may be made and properly documented. The land eligibility, ranking, and other administrative determinations that relate to the land will remain valid for the remainder of the funding cycle. This revision is made to comply with the 7-year ownership language added by the 2008 Act amendments. Language previously included in the existing regulation under payments to landowners is revised and moved to § 1467.10(e).

Section 1467.14 is re-designated as § 1467.15 and is re-structured to provide separate language for violations of easements, 30-year contracts, and restoration cost-share agreements consistent with the statutory language. New language is also added to provide for cost recovery of payments, plus interest, when agreements or contracts are terminated.

Section 1467.15 is re-designated as § 1467.16 and the term “contract” is added to the list of payment types to reflect the statutory change to include a 30-year contract option for acreage owned by Indian Tribes.

Section 1467.16 is re-designated as § 1467.17.

Section 1467.17 is re-designated as § 1467.18. Section 1467.18(b) is revised to clarify that appeals procedures apply to administrative actions such as determination of eligibility.

Section 1467.18(d) is added to further clarify that enforcement actions taken by NRCS are not subject to review under administrative appeal regulations because a landowner's activities related to easement deed restrictions are subject to rights held by the United States, and thus a landowner cannot be adversely affected in an administrative sense by the enforcement of these Federal rights. This language is consistent with the appeal regulations at 7 CFR part 614 and federal real property law.

Section 1467.18 is re-designated as § 1467.19 and revised at § 1467.19(b) to include 30-year contracts in the list of payment types to reflect the statutory addition of the 30-year contract option for acreage owned by Indian Tribes.

Section 1467.20 is a new section. Section 1467.20(a) is added to address the Secretary's new authority to accept and use contributions. Section 2702 of the 2008 Act authorizes the Secretary to accept and use contributions of non-Federal funds to support the purposes of the program. The statutory language provides that these funds are available to the Secretary without further appropriation and until expended, to carry out the program.

Section 1467.20(b) is added to clarify that the NRCS does not assert any interest in the generation of environmental credits such as carbon, water quality, biodiversity, or wetlands preservation on land enrolled in the program other than to ensure that activities performed by the participant to obtain these credits are not contradictory to the purposes of the program.

Section 2708, “Compliance and Performance”, of the 2008 Act added a paragraph to Section 1244(g) of the 1985 Act entitled, “Administrative Requirements for Conservation Programs,” which states the following:

“(g) Compliance and performance.—For each conservation program under Subtitle D, the Secretary shall develop procedures—

(1) To monitor compliance with program requirements;

(2) To measure program performance;

(3) To demonstrate whether long-term conservation benefits of the program are being achieved;

(4) To track participation by crop and livestock type; and

(5) To coordinate activities described in this subsection with the national conservation program authorized under section 5 of the Soil and Water Resources Conservation Act of 1977 (16 U.S.C. 2004).”

This new provision presents in one place the accountability requirements placed on the Agency as it implements conservation programs and reports on program results. The requirements apply to all programs under Subtitle D, including the Wetlands Reserve program, the Conservation Security Program, the Conservation Stewardship Program, the Farm and Ranch Lands Protection Program, the Grassland Reserve Program, the Environmental Quality Incentives Program (including the Agricultural Water Enhancement Program), the Wildlife Habitat Incentive Program, and the Chesapeake Bay Watershed initiative. These requirements are not directly incorporated into these regulations, which set out requirements for program participants. However, certain provisions within these regulations relate to elements of Section 1244(g) of the 1985 Act and the Agency's accountability responsibilities regarding program performance. NRCS is taking this opportunity to describe existing procedures that relate to meeting the requirements of Section 1244(g) of the 1985 Act, and Agency expectations for improving its ability to report on each program's performance and achievement of long-term conservation benefits. Also included is reference to the sections of these regulations that apply to program participants and that relate to the Agency accountability requirements as outlined in Section 1244(g) of the 1985 Act.

Monitor compliance with program requirements. NRCS has established application procedures to ensure that participants meet eligibility requirements, and follow-up procedures to ensure that participants are complying with the terms and conditions of their contractual arrangement with the government and that the installed conservation measures are operating as intended. These and related program compliance evaluation policies are set forth in Agency guidance (440 CPM_519) ( http://directives.sc.egov.usda.gov/ ).

The program requirements applicable to participants that relate to compliance are set forth in these regulations in § 1467.4, “Program Requirements,” § 1467.10, “Cost-Share payments,” and § 1467.11 “Easement and 30-year contract participation requirements.” These sections make clear the general program eligibility requirements, participant obligations for implementing a WRPO, and participant program obligations.

Measure program performance. Pursuant to the requirements of the Government Performance and Results Act of 1993 (Pub. L. 103-62, Sec. 1116) and guidance provided by OMB Circular A-11, NRCS has established performance measures for its conservation programs. Program-funded conservation activity is captured through automated field-level business tools and the information is made publicly available at: http://ias.sc.egov.usda.gov/PRSHOME/ . Program performance also is reported annually to Congress and the public through the annual performance budget, annual accomplishments report and the USDA Performance Accountability Report. Related performance measurement and reporting policies are set forth in Agency guidance (GM_340_401 and GM_340_403) ( http://directives.sc.egov.usda.gov/ ). The conservation actions undertaken by participants are the basis for measuring program performance-specific actions are tracked and reported annually, while the effects of those actions relate to whether the long-term benefits of the program are being achieved. The program requirements applicable to participants that relate to undertaking conservation actions are set forth in these regulations in § 1467.4, “Program Requirements,” § 1467.10, “Cost-Share payments,” and § 1467.11 “Easement and 30-year contract participation requirements.” These sections make clear participant obligations for implementing, operating, and maintaining WRP-funded conservation improvements, which in aggregate result in the program performance that is reflected in Agency performance reports.

Demonstrate whether long-term conservation benefits of the program are being achieved. Demonstrating the long-term natural resource benefits achieved through conservation programs is subject to the availability of needed data, the capacity and capability of modeling approaches, and the external influences that affect actual natural resource condition. While NRCS captures many measures of “output” data, such as acres of conservation practices, it is still in the process of developing methods to quantify the contribution of those outputs to environmental outcomes.

NRCS currently uses a mix of approaches to evaluate whether long-term conservation benefits are being achieved through its programs. Since 1982, NRCS has reported on certain natural resource status and trends through the National Resources Inventory (NRI), which provides statistically reliable, nationally consistent land cover/use and related natural resource data. However, lacking has been a connection between these data and specific conservation programs. In the future, the interagency Conservation Effects Assessment Project (CEAP), which has been underway since 2003, will provide nationally consistent estimates of environmental effects resulting from conservation practices and systems applied. CEAP results will be used in conjunction with performance data gathered through Agency field-level business tools to help produce estimates of environmental effects accomplished through Agency programs, such as WRP. In 2006 a Blue Ribbon panel evaluation of CEAP strongly endorsed the project's purpose, but concluded “CEAP must change direction” to achieve its purposes. In response, CEAP has focused on priorities identified by the Panel and clarified that its purpose is to quantify the effects of conservation practices applied on the landscape. Information regarding CEAP, including reviews and current status is available at http://www.nrcs.usda.gov/technical/NRI/ceap/ . Since 2004 and the initial establishment of long-term performance measures by program, NRCS has been estimating and reporting progress toward long-term program goals. Natural resource inventory and assessment, and performance measurement and reporting policies set forth in Agency guidance (GM_290_400; GM_340_401; GM_340_403) ( http://directives.sc.egov.usda.gov/ ).

Demonstrating the long-term conservation benefits of conservation programs is an Agency responsibility. Through CEAP, NRCS is in the process of evaluating how these long-term benefits can be achieved through the conservation practices and systems applied by participants under the program. The program requirements applicable to participants that relate to producing long-term conservation benefits are described previously under “measuring program performance,” i.e. , § 1467.4, “Program Requirements,” § 1467.10, “Cost-Share payments,” and § 1467.11 “Easement and 30-year contract participation requirements.”

Track participation by crop and livestock type. NRCS' automated field-level business tools capture participant, land, and operation information. This information is aggregated in the National Conservation Planning database and is used in a variety of program reports. Additional reports will be developed to provide more detailed information on program participation to meet congressional needs. These and related program management procedures supporting program implementation are set forth in Agency guidance (440 CPM 519).

The program requirements applicable to participants that relate to tracking participation by crop and livestock type are put forth in these regulations in § 1467.4, “Program Requirements,” which makes clear program eligibility requirements, including the requirement to provide NRCS the information necessary to implement WRP.

Coordinate these actions with the national conservation program authorized under the Soil and Water Resources Conservation Act (RCA). The 2008 Act reauthorized and expanded on a number of elements of the RCA related to evaluating program performance and conservation benefits. Specifically, the 2008 Farm Bill added a provision stating,

“Appraisal and inventory of resources, assessment and inventory of conservation needs, evaluation of the effects of conservation practices, and analyses of alternative approaches to existing conservation programs are basic to effective soil, water, and related natural resources conservation.”

The program, performance, and natural resource and effects data described previously will serve as a foundation for the next RCA, which will also identify and fill, to the extent possible, data and information gaps. Policy and procedures related to the RCA are set forth in Agency guidance (GM_290_400; M_440_525; GM_130_402) ( http://directives.sc.egov.usda.gov/ ).

The coordination of the previously described components with the RCA is an Agency responsibility and is not reflected in these regulations. However, it is likely that results from the RCA process will result in modifications to the program and performance data collected, to the systems used to acquire data and information, and potentially to the program itself. Thus, as the Secretary proceeds to implement the RCA in accordance with the statute, the approaches and processes developed will improve existing program performance measurement and outcome reporting capability and provide the foundation for improved implementation of the program performance requirements of Section 1244(g) of the 1985 Act.

Please note that all comments received are considered part of the public record and made available for public inspection online at http://www.regulations.gov. Such information includes personal identifying information (such as your name, address, etc.) voluntarily submitted by the commenter.

If you want to submit personal identifying information (such as your name, address, etc.) as part of your comment, but do not want it to be posted online, you must include the phrase “PERSONAL IDENTIFYING INFORMATION” in the first paragraph of your comment. You also must locate all the personal identifying information you do not want posted online in the first paragraph of your comment and identify what information you want redacted.

If you want to submit confidential business information as part of your comment, but do not want it to be posted online, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You also must prominently identify confidential business information to be redacted within the comment. If a comment has so much confidential business information that it cannot be effectively redacted, all or part of that comment may not be posted on http://www.regulations.gov.

Personal identifying information and confidential business information identified and located as set forth above will be placed in the agency's public docket file, but not posted online. To inspect the agency's public docket file in person, you must make an appointment with agency counsel. Please see the “For Further Information Contact” paragraph below for agency counsel's contact information.

The Homeland Security Act of 2002, as amended (HSA), transferred the functions of the former Immigration and Naturalization Service (INS or the Service) to the Department of Homeland Security (DHS). Public Law 107-296, tit. IV, subtits. D, E, F, 116 Stat. 2135, 2192 (Nov. 25, 2002), as amended. The HSA, however, retained the functions of the Executive Office for Immigration Review (EOIR) within the Department of Justice, under the direction of the Attorney General. 6 U.S.C. 521; 8 U.S.C. 1103(g); see generally Matter of D-J-, 23 I&N Dec. 572 (A.G. 2003).

EOIR was created by the Attorney General in 1983 to combine the functions performed by INS special inquiry officers (now immigration judges) and the Board of Immigration Appeals (Board) into a single administrative agency within the Department of Justice, separate from the former INS. 48 FR 8038 (Feb. 25, 1983). This administrative structure separated the administrative adjudication functions from the enforcement and service functions of the former INS, both for administrative efficiency and to foster independent judgment in adjudication. The Office of the Chief Administrative Hearing Officer (OCAHO) and its administrative law judges (ALJs) were added to EOIR in 1987, following enactment of section 274A of the Immigration and Nationality Act (INA), 8 U.S.C. 1324a. See 52 FR 44971 (Nov. 24, 1987).

Because both INS and EOIR were agencies within the Department of Justice at that time, the regulations affecting these agencies were included in the same chapter (chapter I). Most of the immigration regulations were organized by subject, which often resulted in provisions relating to the former INS and to EOIR being intermingled in the same parts and sections.

The enactment of the HSA and its transfer of functions of the former INS to DHS, however, required the creation of a new chapter for the regulations pertaining to EOIR, separate from the DHS regulations. Accordingly, the Attorney General published a rule transferring certain provisions that related to the jurisdiction and procedures of EOIR to a new chapter V of 8 CFR. 68 FR 9823 (Feb. 28, 2003). When the transfer of authority from the former INS to DHS took place in March 2003, the time available did not permit a thorough review of each of the provisions of the regulations where EOIR's and the former INS's responsibilities were intermingled in the same sections. As a result, the Department's rule duplicated in chapter V certain parts and sections of the regulations that related to the responsibilities of both the former INS and EOIR, respectively. The rule also made a number of technical amendments to chapters I and V to ensure that the authorities existing in the former INS and EOIR regulations prior to the transfer of functions to DHS remained in effect.

In particular, 8 CFR part 274a (Control of Employment of Aliens) contained definitional, substantive, and procedural material relevant to both the former INS and the Special Counsel for Immigration-Related Unfair Employment Practices of the Department's Civil Rights Division under 28 CFR 0.53, as well as the predicates to civil penalty proceedings before OCAHO. It was for this reason and out of an abundance of caution that, in 2003, the Attorney General duplicated the existing portions of part 274a, found in chapter I of the regulations, into a new part 1274a, located in chapter V.

The Department had intended to address over time the regulatory overlaps resulting from the 2003 rule by eliminating or substantially reducing any duplicative parts and sections that intermingled EOIR's and the former INS's authority. The expectation was that DHS would revise the regulations in chapter I of 8 CFR by eliminating provisions exclusively relating to the immigration judges', the Board's, and the OCAHO ALJs' respective authorities (since those provisions are properly codified in the regulations governing EOIR), and that the Department would revise the regulations pertaining to EOIR in chapter V by eliminating the duplicative provisions that did not relate exclusively to EOIR's authority.

Based on experience acquired since the transfer of the former INS's substantive immigration authority to DHS, it is apparent that most of the duplicative provisions in part 1274a pertain to matters that are the responsibility of DHS. Accordingly, there is no reason or need for those provisions of part 274a to be reproduced in a separate part 1274a.

Moreover, DHS has begun to implement substantive revisions to part 274a, making clear that the existing duplicative regulatory provisions in part 1274a are not only unnecessary but potentially confusing. Recently, after notice and public comment, DHS is revising 8 CFR 274a.1(l) with respect to an employer's response to receiving notices from the Social Security Administration (SSA) indicating that certain employees' social security numbers as reflected in the employer's records do not match SSA's records. Safe-Harbor Procedures for Employers Who Receive a No-Match Letter, 72 FR 45611 (Aug. 15, 2007) (final rule); 73 FR 15944 (Mar. 26, 2008) (supplemental proposed rule). These regulatory revisions are within DHS' statutory authority under sections 103 and 274A of the INA, and are properly codified in the DHS regulations in 8 CFR part 274a. However, because they do not relate directly to EOIR's authority, these changes would not be incorporated into the provisions of 8 CFR part 1274a.

In addition, the Secretary of Homeland Security and the Attorney General recently published final rules to implement inflation adjustments in the amounts of civil penalties to be imposed under section 274A of the INA. 73 FR 10130 (Feb. 26, 2008).

In order to remove unnecessary redundancies, and to avoid any possible confusion based on changes to part 274a that are not also codified in part 1274a, the Department is removing all but a few provisions in the current part 1274a. This rule also adds a new general provision to section 1274a.1, noting that the substantive and procedural regulations relating to the implementation of the employment verification provisions of section 274A of the INA are contained in 8 CFR part 274a, and that the procedures for hearings before an ALJ relating to civil penalties sought by DHS under section 274A are contained in 28 CFR part 68. This new provision also states that, to the extent they are relevant, the provisions of 8 CFR part 274a are applicable in any adjudicatory proceedings before EOIR.

The only provisions remaining in part 1274a, therefore, are those that may have a direct impact on the authority of the OCAHO ALJs:

• Section 1274a.9(e) and (f) relating to the time allowed for seeking an ALJ hearing to challenge a DHS civil penalty and the consequences for failure to request an ALJ hearing; and

• Section 1274a.10 relating to the penalties to be imposed by an ALJ in a case arising under section 274A of the INA.

This rule revises § 1274a.9(e) and (f) to replace references to the former INS or the Service with references to DHS. This rule also slightly revises the existing language of § 1274a.9(f) for clarity; that is, the rule now expressly states that respondents who fail to make a timely request for a hearing are not entitled to a hearing before an ALJ. The change to § 1274a.10 has already been implemented in the rules published on February 26, 2008.

This action is not a substantive change and does not alter any interpretation of the provisions of the INA or affect the legal rights of any person. The existing regulations codified in 8 CFR part 274a are unaffected by this rule, and the removal of entirely duplicative provisions in part 1274a does not alter the legal status quo.

The substantive and procedural regulations in part 274a and in other parts of the immigration regulations are within the Secretary's authority to promulgate and revise, pursuant to section 103 of the INA, except to the extent that some remaining provisions of the DHS regulations deal directly with the authority of EOIR adjudicators (an overlap that DHS and the Department are working to eliminate as discussed above). As noted, regulatory provisions that go to the powers, procedures, and authority of the immigration judges, the Board, or the ALJs in EOIR are within the Attorney General's exclusive authority. For example, regulatory provisions granting or limiting EOIR's jurisdiction, authorizing EOIR adjudicators to exercise specific authorities, or directing EOIR adjudicators to act in a certain way are properly within the Attorney General's authority to promulgate, rather than DHS's. However, Congress has vested in DHS the authority to promulgate regulations interpreting and applying the provisions of the INA—except insofar as the INA confers authority on the President, the Attorney General, or the Secretary of State—and has vested in the Attorney General the authority to issue binding interpretations on all questions of law pursuant to section 103(a)(1) of the INA.

The premise of this rule that the provisions of part 274a are properly applicable in adjudicatory proceedings before EOIR is not new. The Department previously has made clear that the Attorney General need not personally promulgate immigration regulations in order for those regulations to be applicable in proceedings before EOIR; Attorney General Ashcroft addressed similar issues at the time of the adoption of the rule to reform the Board's adjudicatory processes in 2002, 67 FR 54878 (Aug. 26, 2002).  1 As with any such regulation adopted by an administrative agency pursuant to delegated statutory authority, the substantive or “legislative” regulations adopted by DHS (or by the former INS) within the scope of its delegated authority under the INA are properly deemed to have the “force and effect of law.” Thus, the DHS legislative regulations are properly treated as part of the governing law, not merely as “guidance” or recommendations for EOIR adjudicators to consider. 2

In summary, this interim rule deletes certain unnecessary duplicative provisions in part 1274a and revises the remaining provisions in a way that references applicable regulations in part 274a. The Department and DHS plan to review other duplicated provisions of the immigration regulations in the future to determine whether additional provisions in different parts of the regulations also should be deleted to simplify the Code of Federal Regulations.

The Department of Justice finds that good cause exists for adopting this rule as an interim rule with provision for post-promulgation public comment under 5 U.S.C. 553 because this rule only makes technical amendments to the organization, procedures, and practices of the Department of Justice to improve the organization of the Department regulations and reflects the transfer of functions contemplated by the Homeland Security Act of 2002. Similarly, because this interim rule makes changes in internal delegations and procedures, and is a recodification of existing regulations, this interim rule is not subject to the effective date limitation of 5 U.S.C. 553(d).

Because no notice of proposed rule-making is required for this rule under the Administrative Procedure Act (5 U.S.C. 553), the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) do not apply.

The provisions of the Paperwork Reduction Act of 1995, Public Law 104-13, 44 U.S.C. chapter 35, and its implementing regulations, 5 CFR part 1320, do not apply to this interim rule because there are no new or revised recordkeeping or reporting requirements.

This rule will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This rule will not result in an annual effect on the economy of $100 million or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

This action pertains to agency organization, procedures, and practices and does not substantially affect the rights or obligations of non-agency parties and, accordingly, is not a “rule” as that term is used by the Congressional Review Act (Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)). Therefore, the reporting requirement of 5 U.S.C. 801 does not apply.

This rule has been drafted and reviewed in accordance with Executive Order 12866, section 1(b), Principles of Regulation. The Department has determined that this rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review and accordingly this rule has not been reviewed by the Office of Management and Budget (OMB).

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, the Department of Justice has determined that this rule does not have sufficient federalism implications to warrant a federalism summary impact statement.

This rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform.

I. Objective

The objective of this regulation is to recalculate the CMP inflation adjustments consistent with the FCPIA Act.

The FCPIA Act requires every Federal agency with authority to issue CMPs to enact regulations that adjust its CMPs pursuant to the inflation adjustment formula in section 5(b) of the FCPIA Act. 1 Each Federal agency was required to issue these regulations by October 23, 1996, and adjust them when necessary at least once every 4 years thereafter. Section 6 of the amended FCPIA Act specifies that inflation-adjusted CMPs will apply only to violations that occur after the effective date of the adjustment. The inflation adjustment is based on the percentage increase in the Consumer Price Index (CPI). 2 Specifically, section 5(b) of the FCPIA Act defines the term “cost-of-living adjustment” as “the percentage (if any) for each civil monetary penalty by which (1) the Consumer Price Index for the month of June of the calendar year preceding the adjustment, exceeds (2) the Consumer Price Index for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law.” Furthermore, the increase for each CMP that is adjusted for inflation must be rounded using a method prescribed by section 5(a) of the FCPIA Act.

Section 5.32(a) of the Farm Credit Act provides that any FCS institution or any officer, director, employee, agent, or other person participating in the conduct of the affairs of an FCS institution who violates the terms of a final order issued under section 5.25 or 5.26 of the Farm Credit Act must pay up to $1,000 per day for each day during which such violation continues. Orders issued by FCA under section 5.25 or 5.26 of the Farm Credit Act include temporary and permanent cease-and-desist orders. In addition, section 5.32(h) provides that any directive issued under sections 4.3(b)(2), 4.3A(e), or 4.14A(i) of the Farm Credit Act “shall be treated” as a final order issued under section 5.25 for purposes of assessing a CMP. Section 5.32(a) also states that “[a]ny such institution or person who violates any provision of the [Farm Credit] Act or any regulation issued under this Act shall forfeit and pay a civil penalty of not more that $500 per day for each day during which such violation continues.”

In general, the adjustment calculation is based on the percentage by which the CPI for June 2008 exceeds the CPI for June of the calendar year the CMP was last adjusted. The CMP for violation of the terms of a final order issued under section 5.25 or 5.26 of the Farm Credit Act was last adjusted in 1996. The CMP for a violation of the Farm Credit Act, or a regulation issued under the Farm Credit Act, was last adjusted in 2005. According to the Bureau of Labor Statistics, the CPI for June 1996 and June 2005 was 156.7 and 194.5, respectively. The CPI for June 2008 was 218.815, resulting in a percentage change of 39.64 percent from June 1996 and 12.50 percent from June 2005.

The maximum CMP in § 622.61(a) for a violation of a final order issued under section 5.25 or 5.26 of the Farm Credit Act is currently $1,100. 3

Multiplying $1,100 by 39.64  4 percent results in an increase of $436.04. When that number is rounded as required by section 5(a) of the FCPIA Act, the inflation-adjusted maximum remains $1,100.

The maximum CMP in existing § 622.61(a)(2) for a violation of the Farm Credit Act or regulations issued under the Farm Credit Act is $650. When multiplying the existing CMP amount by 12.50 percent, this results in an increase of $81.25. This increase is rounded to $100 as required by section 5(a) of the FCPIA Act, and the inflation-adjusted maximum increases to $750.

The Flood Disaster Protection Act of 1973, as amended by the Reform Act, requires that FCA assess a CMP for a pattern or practice of committing certain specific actions in violation of the National Flood Insurance Program. 5 Under the Reform Act, which became law in 1994, these CMPs were not to exceed $350 for each violation, and the total amount of penalties assessed for certain violations of the program against any single regulated entity during any calendar year was not to exceed $100,000. 6

The adjustment calculation for these CMPs is based on the percentage by which the CPI for June 2008 exceeds the CPI for June 2005, the calendar the CMPs were last adjusted. As stated above, the CPI for June 2005 was 194.5, and the CPI for June 2008 was 218.815, resulting in a percentage change of 12.50.

Multiplying $385 by 12.50 percent yields a $48.13 increase. This amount is rounded downward to $0.00 under the FCPIA rounding formula. Accordingly, the CMP maximum for each violation will remain $385. Similarly, multiplying the $110,000 total cap by 12.50 percent yields a $13,750 increase. This increase is rounded to $10,000 under the FCPIA rounding formula, bringing the new cap to $120,000 in total penalties that may be assessed under the Reform Act against any single regulated entity during any calendar year.

The FCPIA Act gives Federal agencies no discretion in the adjustment of CMPs for the rate of inflation. Further, these revisions are ministerial, technical, and noncontroversial. For these reasons, the FCA finds good cause to determine that public notice and an opportunity to comment are impracticable, unnecessary, and contrary to the public interest pursuant to the Administrative Procedure Act, 5 U.S.C. 553(b)(B), and adopts this rule in final form. For all of the foregoing reasons, the FCA also finds good cause to determine that this regulation should become effective immediately, pursuant to the Administrative Procedure Act, 5 U.S.C. 553(d).

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.

The Federal Housing Finance Regulatory Reform Act of 2008 (Act) (Pub. L. 110-289), established FHFA as an independent agency of the Federal Government to ensure that the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks (collectively, the Regulated Entities) are capitalized adequately and operate safely and soundly and in compliance with applicable laws, rules and regulations.

On October 10, 2008, the Federal Housing Finance Agency (FHFA) published a proposed rule implementing the Freedom of Information Act (FOIA) (U.S.C. 552) in the Federal Register , establishing procedures for public disclosure of information required to be disclosed under the FOIA and procedures to protect from disclosure business confidential and trade secret information, as appropriate. See 73 FR 60192, October 10, 2008. Interested persons were afforded an opportunity to participate in the rulemaking through submission of written comments on the proposed rule. The comment period closed on November 10, 2008. Though the FHFA received one comment during the 30-day comment period, a modification to the proposed regulation is not necessary. The FHFA's final regulations in this part are identical to those in the proposed rule. This final rule addresses electronically available documents, procedures for making requests, agency handling of requests, records not disclosed, fees, and public reading rooms as well as other related provisions.

In response to the proposed rule, the FHFA received one comment from a Bank. The Bank suggested modifying section 1202.7 to shorten FHFA's response time from 20 working days for standard track requests to 10 working days, further stating, 10 days will best satisfy the twin objectives of providing needed information within a reasonable timeframe while allowing ample time to the FHFA to respond to routine requests.

Due consideration has been given to the comment received. The 20 working days period is a statutory maximum limit in 5 U.S.C. 552. The FHFA anticipates that many standard track requests will be processed within 10 working days. The full statutory period accounts for unforeseen complications that can arise during request review and analysis. Therefore, to provide for the efficient operation of the rule, the FHFA is not adopting the modification suggested by the commenter.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires that a regulation that has a significant economic impact on a substantial number of small entities, small businesses, or small organizations must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation does not have a significant economic impact on a substantial number of small entities 5 U.S.C. 605(b). The FHFA has considered the impact of the final regulations of this part under the Regulatory Flexibility Act and certifies they are not likely to have a significant economic impact on a substantial number of small business entities because the regulation is applicable only to the internal operations and legal obligations of the FHFA.

The final regulations in this part do not contain any information collection requirement that requires the approval of OMB under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ).

The FHFA published a proposed Flood Insurance regulation for public comment in the Federal Register , 73 FR 60198 (October 10, 2008). No comments were received. Accordingly, the proposed regulation is adopted as a final regulation with technical changes as described below under Section II.C. Background, Adjustment of civil money penalties for inflation.

The Housing and Economic Recovery Act of 2008 (HERA), Public Law No. 110-289, 122 Stat. 2654, amended the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq .) (Act) to establish FHFA as an independent agency of the Federal Government. 1 The FHFA was established to oversee the prudential operations of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation (collectively, Enterprises), and the Federal Home Loan Banks (collectively, Regulated Entities) and to ensure that they operate in a safe and sound manner including being capitalized adequately; foster liquid, efficient, competitive and resilient national housing finance markets; comply with the Act and rules, regulation, guidelines and orders issued under the Act, and the respective authorizing statutes of the Regulated Entities; and carry out their missions through activities authorized and consistent with the Act and their authorizing statutes; and, that the activities and operations of the Regulated Entities are consistent with the public interest.

The Office of Federal Housing Enterprise Oversight (OFHEO) and the Federal Housing Finance Board (FHFB) will be abolished one year after enactment of the HERA. However, the Regulated Entities continue to operate under regulations promulgated by OFHEO and FHFB and such regulations are enforceable by the Director of FHFA until such regulations are modified, terminated, set aside, or superseded by the Director of FHFA. 2

The National Flood Insurance Act of 1968  3 and the FDPA, 4 as amended by the National Flood Insurance Reform Act of 1994 (NFIRA), 5 together create a comprehensive National Flood Insurance Program that includes various provisions designed to ensure that structures built in flood plains are covered by statutory minimum amounts of flood insurance. The NFIRA has specific requirements explicitly applicable to the Enterprises. 6 It originally designated OFHEO as the Federal agency responsible for determining compliance of the Enterprises' flood insurance responsibilities and provided OFHEO with the authority to issue any regulations necessary to carry out the applicable provisions of NFIRA. 7 The NFIRA also authorized OFHEO to impose civil money penalties upon an Enterprise that fails to implement procedures reasonably designed to ensure that the loans it purchases comply with the mandatory flood insurance purchase requirements. 8

Section 1161(e) of HERA amended section 102(f)(3)(A) of the FDPA (42 U.S.C. 4012a(f)(3)(a)), by replacing OFHEO with FHFA as the agency responsible for determining compliance of the Enterprises' flood insurance responsibilities. Thus, FHFA issues this regulation to codify the authority and responsibility of FHFA to oversee and enforce the statutory requirements affecting the operations of the Enterprises under the FDPA, and to effect congressionally mandated adjustments to the civil money penalties applicable to violations of that law. This final regulation, when effective, will supersede the OFHEO Flood Insurance regulation at 12 CFR part 1773.

The Enterprises have a key role in the implementation of the Federal government's flood insurance program, particularly with regard to lenders that are not subject to direct supervision by a Federal regulatory agency. The Enterprises use their seller/servicer guidelines and other quality control review procedures to ensure that lenders with whom they contract comply with the applicable flood insurance laws. More specifically, each Enterprise is required to implement procedures reasonably designed to ensure that any mortgage loan that is purchased and is secured by property located in a designated flood hazard area is covered for the term of the loan by flood insurance in an amount at least equal to the lesser of (1) the outstanding principal balance of the loan or (2) the maximum limit of coverage made available for that type of property. 9

The FDPA sets forth the procedures under which the Director of FHFA may impose civil money penalties against an Enterprise and the amounts of these civil money penalties. 10 This regulation adjusts the amounts of these civil money penalties in accordance with the requirements of the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 (Inflation Adjustment Act). 11 The increases in maximum civil money penalty amounts do not mandate the amount of any civil money penalty that FHFA may seek for a particular violation. FHFA continues to determine each civil money penalty on a case-by-case basis in light of the circumstances of the case.

The Inflation Adjustment Act requires Federal agencies that have authority to issue civil money penalties to issue regulations that adjust each civil money penalty that the agency has jurisdiction to administer. The purpose of these adjustments is to maintain the deterrent effect of civil money penalties and promote compliance with the law. The Inflation Adjustment Act requires agencies to make an initial adjustment of their civil money penalties upon the statute's enactment, and to make additional adjustments on an ongoing basis, at least once every four years following the initial adjustment.

Under the Inflation Adjustment Act, the inflation adjustment for each applicable civil money penalty is determined by increasing the maximum civil money penalty amount by a cost-of-living adjustment. As is described in detail below, the Inflation Adjustment Act provides that this cost-of-living adjustment is to reflect the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) since the civil money penalties were last adjusted or established.

The Inflation Adjustment Act directs Federal agencies to calculate each civil money penalty adjustment as the percentage by which the CPI-U for June of the calendar year preceding the adjustment exceeds the CPI-U for June of the calendar year in which the amount of such civil money penalty was last set or adjusted pursuant to law. When OFHEO issued the Flood Insurance regulation in 2001, the maximum civil money amounts of $350 (for each violation) and $100,000 (maximum annual amount for each Enterprise), found at 42 U.S.C. 4012a(f)(5), were adjusted to $385 and $110,000, respectively. 12

OFHEO did not subsequently adjust these civil money penalty amounts. Because FHFA is making this adjustment in calendar year 2009, rather than in 2008 as indicated in the proposed regulation, the inflation amount for each civil money penalty is calculated by comparing the CPI-U for June 2001 (178.000), the calendar year OFHEO last adjusted the civil money penalty, with the CPI-U for June 2008 (218.815), rather than with the CPI-U for June 2007 (208.235). This results in an inflation adjustment of 22.93 percent in 2009, rather than an inflation adjustment of 17.05 percent if the Flood Insurance regulation had been published as final in 2008. For each civil money penalty, the product of this inflation adjustment and the previous maximum penalty amount is then rounded in accordance with the specific requirements of the Inflation Adjustment Act and added to the previous maximum penalty amount to determine the new adjusted penalty amount. 13 Accordingly, the civil money penalty maximum of $385 is increased to $485 for each violation, as was proposed. The civil money penalty maximum of $110,000 is increased to $140,000 in 2009, rather than increased to $130,000 as proposed, for the total assessed penalties against an Enterprise during any calendar year. The increase would apply only to violations which occur after the effective date of this regulation.

This section sets forth the responsibilities of the Enterprises under the FDPA and the procedures to be used by FHFA in any proceeding to assess civil money penalties against an Enterprise under FDPA.

Section 1250.2 sets forth the requirement that each Enterprise is to implement procedures reasonably designed to ensure that properties securing particular loans are properly insured in accordance with the National Flood Insurance Act of 1968, as amended. Consistent with 42 U.S.C. 4012a(4), it also sets forth that the procedures need apply only to loans made, increased, extended, or renewed after September 22, 1995. The section further provides that the procedural requirements do not apply to any loan having an original outstanding principal balance of $5,000 or less and a repayment term of one year or less. 14

Section 1250.3 sets forth procedures under which the Director of FHFA may impose civil money penalties against an Enterprise. The Director may assess a civil money penalty against an Enterprise determined by the Director to have a pattern or practice of purchasing loans in violation of the procedures established pursuant to § 1250.2. The increase applies only to violations which occur after the date the increase takes effect.

The section also sets forth notice and hearing requirements prior to the imposition of civil money penalties. A civil money penalty may be issued only after notice and an opportunity for a hearing on the record has been provided.

In addition, the section sets forth the maximum amount of civil money penalties that may be imposed on an Enterprise under the regulation. A civil money penalty may not exceed the adjusted statutory amount of $485 for each violation and the total amount of penalties assessed against an Enterprise during any calendar year may not exceed the adjusted statutory cap of $140,000.

Furthermore, in accordance with 42 U.S.C. 4012a(f)(8), (9), and (10), § 1250.3 provides that—

(1) Any civil money penalties collected under this section are to be paid into the National Flood Mitigation Fund in accordance with 42 U.S.C. 4104d,

(2) Any civil money penalty is in addition to any civil remedy or criminal penalty otherwise available, and

(3) No penalty may be imposed after the expiration of the four-year period beginning on the date of the occurrence of the violation for which the penalty is authorized.

This regulation does not contain any information collection requirement that requires the approval of OMB under the Paperwork Reduction Act (44 U.S.C. 3501 et seq .).

The Regulatory Flexibility Act (5 U.S.C. 601 et seq .) requires that a regulation that has a significant economic impact on a substantial number of small entities, small businesses, or small organizations must include an initial regulatory flexibility analysis describing the regulation's impact on small entities. Such an analysis need not be undertaken if the agency has certified that the regulation will not have a significant economic impact on a substantial number of small entities. 5 U.S.C. 605(b). The FHFA has considered the impact of the regulation under the Regulatory Flexibility Act. The FHFA certifies that the regulation is not likely to have a significant economic impact on a substantial number of small business entities because the regulation is applicable only to the Enterprises, which are not small entities for purposes of the Regulatory Flexibility Act.

On October 28, 2008, the FAA published in the Federal Register a notice of proposed rulemaking to establish additional controlled airspace at Alamosa, CO, (73 FR 63912). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. With the exception of editorial changes, this rule is the same as that proposed in the NPRM.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9S signed October 3, 2008, and effective October 31, 2008, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designations listed in this document will be published subsequently in that Order.

This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by amending the Class E airspace at Alamosa, CO. Additional controlled airspace is necessary to accommodate IFR aircraft executing a new RNAV (GPS) approach procedure at San Luis Valley Regional Airport/Bergman Field, Alamosa, CO.

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. Therefore, this regulation: (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. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAAs authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106 discusses the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes additional controlled airspace at San Luis Valley Regional Airport/Bergman Field, Alamosa, CO.

Availability of Rulemaking Documents

You can get an electronic copy using the Internet by:

(1) Searching the Federal eRulemaking Portal at http://www.regulations.gov ;

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

(3) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.

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

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. Therefore, any small entity that has a question regarding this document may contact their local FAA official, or the person listed under FOR FURTHER INFORMATION CONTACT . You can find out more about SBREFA on the Internet at our site, http://www.faa.gov/regulations_policies/rulemaking/sbre_act/ .

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

The FAA is authorized to issue this final rule pursuant to 49 U.S.C. 44701. Under that section, the FAA is authorized to establish regulations and minimum standards for other practices, methods, and procedures the Administrator finds necessary for air commerce and national security.

On July 12, 2005, the FAA published Special Federal Aviation Regulation 106 (SFAR 106) entitled, “Use of Certain Portable Oxygen Concentrator Devices On Board Aircraft” (70 FR 40156). SFAR 106 is the result of a notice of proposed rulemaking (NPRM) the FAA published in July 2004 (69 FR 42324) to address the needs of passengers who must travel with medical oxygen. Prior to publication of SFAR 106, passengers in need of medical oxygen during air transportation faced many obstacles when requesting service. Many aircraft operators did not provide medical oxygen service aboard flights, and those that did often provided service at a price that travelers could not afford. Coordinating service between operators and suppliers at airports was also difficult, and passengers frequently chose not to fly because of these difficulties.

New medical oxygen technologies approved by the Food and Drug Administration (FDA) reduce the risks typically associated with compressed oxygen and provide a safe alternative for passengers who need oxygen therapy. Several manufacturers have developed small portable oxygen concentrator (POC) devices that work by separating oxygen from nitrogen and other gases contained in ambient air and dispensing it in concentrated form to the user with an oxygen concentration of about 90%. The POC devices operate using either rechargeable batteries or, if the aircraft operator obtains approval from the FAA, aircraft electrical power.

In addition, the Pipeline and Hazardous Materials Safety Administration (PHMSA) has determined that the POC devices covered by this amendment are not hazardous materials. Thus, they do not require the same level of special handling as compressed oxygen, and are safe for use on board aircraft, provided certain conditions for their use are met.

SFAR 106 permits passengers to carry on and use certain POC devices on board aircraft if the aircraft operator ensures that the conditions specified in the SFAR for their use are met. The devices initially determined acceptable for use in SFAR 106, published July 12, 2005, were the AirSep Corporation's LifeStyle and the Inogen, Inc.'s Inogen One POCs. SFAR 106 was amended on September 12, 2006 (71 FR 53954) to add three additional POC devices, AirSep Corporation's FreeStyle, SeQual Technologies' Eclipse, and Repironics Inc.'s EverGo, to the original SFAR. This final rule adds two additional POC devices, Delphi Medical Systems' RS-00400 and Invacare Corporation's XPO2, that may be carried on and used by a passenger on board an aircraft.

Aircraft operators can now offer medical oxygen service as they did before SFAR 106 was enacted, or they can meet certain conditions and allow passengers to carry on and use one of the POC devices covered in SFAR 106. SFAR 106 is an enabling rule, which means that no aircraft operator is required to allow passengers to operate these POC devices on board its aircraft, but it may allow them to be operated on board. If the aircraft operator allows one of these devices to be carried on board, the conditions in the SFAR must be met.

When SFAR 106 was originally published, the FAA committed to establishing a single standard for all POC devices so that regulations would not apply to specific manufacturers and models of devices. Whenever possible, the FAA tries to regulate by creating performance-based standards rather than approving specific devices by manufacturer. In the case of SFAR 106, the quickest and easiest way to serve both the passenger and the aircraft operator was to allow the use of the devices determined to be acceptable by the FAA in SFAR 106 in a special, temporary regulation. As we stated in the preamble discussion of the final rule that established SFAR 106, “while we are committed to developing a performance-based standard for all future POC devices, we do not want to prematurely develop standards that have the effect of stifling new technology of which we are unaware.” We developed and published SFAR 106 so that passengers who otherwise could not fly could do so with an affordable alternative to what existed before SFAR 106 was published.

We continue to pursue the performance-based standard for all POC devices. This process is time-consuming and we intend to publish a notice in the Federal Register and offer the public a chance to comment on the proposal when it is complete. In the meantime, manufacturers continue to create new and better POC devices, and several have requested that their product also be included as an acceptable device in SFAR 106. These new manufacturers include Delphi Medical Systems and Invacare Corporation. Each of these companies has formally petitioned the FAA for inclusion in SFAR 106 by submitting documentation of the devices to the Federal Docket Management System. That documentation is available at http://www.regulations.gov under the following docket numbers:

1. Delphi Medical Systems—FAA-2008-0261; and

2. Invacare Corporation—FAA-2008-0278.

As stated in Section 2 of SFAR 106, no covered device may contain hazardous materials as determined by PHMSA (written documentation necessary), and each device must also be regulated by the FDA. Each petitioner included technical specifications for the devices in their request for approval, along with the required documentation from PHMSA and the FDA. The petitioners provided the FAA with the required documentation for the following POC devices:

1. Delphi Medical Systems', Model RS-00400; and

2. Invacare Corporation's, Model XPO2.

This amendment to SFAR 106 will include the Delphi Medical Systems' RS-00400 and Invacare Corporation's XPO2 devices in the list of POC devices authorized for use in air commerce. The FAA has reviewed each individual device and accepted the documentation provided by the two manufacturers. That documentation includes letters provided to the manufacturer by PHMSA and the FDA affirming the status of each device as it pertains to the requisites stated in SFAR 106.

After reviewing the applicable FDA safety standards and the PHMSA findings, these two devices were determined by the FAA to be acceptable for use in air commerce.

As stated above, SFAR 106 was published on July 12, 2005. We stated in the preamble of that final rule that the AirSep LifeStyle and Inogen One POC devices were the only known acceptable devices when the rule was published. We also stated in that final rule that “we cannot predict how future products may be developed and work.” We initiated a notice and comment period for the use of POC devices on board aircraft on July 14, 2004 (69 FR 42324) and responded to the comments received in response to that NPRM in the final rule published in 2005. Therefore, it is unnecessary to publish a notice to request comments on this amendment because all issues related to the use of POC devices on board an aircraft have already been discussed. Further notice and comment would also delay the acceptance of the Delphi Medical Systems' RS-00400 and Invacare Corporation's XPO2 POC devices as authorized for use on board aircraft, which would delay their availability for passengers in need of oxygen therapy.

Therefore, I find that notice and public comment under 5 U.S.C. 553(b) is unnecessary and contrary to the public interest. Further, I find that good cause exists for making this rule effective immediately upon publication.

In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to comply with International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA determined that there are no ICAO Standards and Recommended Practices that correspond to these regulations. I find that this action is fully consistent with my obligations under 49 U.S.C. 40105(b)(1)(A) to ensure that I exercise my duties consistently with the obligations of the United States under international agreements.

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the FAA submitted a copy of the new information collection requirements in SFAR 106 to the Office of Management and Budget for its review. OMB approved the collection of this information and assigned OMB Control Number 2120-0702.

This final rule requires that if a passenger carries a POC device on board the aircraft with the intent to use it during the flight, he or she must inform the pilot in command of that flight. Additionally, the passenger who plans to use the device must provide a written statement signed by a licensed physician that verifies the passenger's ability to operate the device, respond to any alarms, the extent to which the passenger must use the POC (all or a portion of the flight), and prescribes the maximum oxygen flow rate.

Please note that an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The Paperwork Reduction Act paragraph in the final rule that established SFAR 106 still applies to this amendment. The availability of two new POC devices will likely increase the availability and options for a passenger in need of oxygen therapy, but the paperwork burden discussed in the original final rule is unchanged. Therefore, the OMB Control Number associated with this collection remains 2120-0702.

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Agreements Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this final rule.

Department of Transportation Order DOT 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits that a statement to that effect and the basis for it to be included in the preamble if a full regulatory evaluation of the cost and benefits is not prepared. Such a determination has been made for this final rule. The reasoning for this determination follows:

This action amends Special Federal Aviation Regulation 106 (SFAR 106), Use of Certain Portable Oxygen Concentrator Devices On Board Aircraft, to allow for the use of the Delphi Medical Systems' RS-00400 and Invacare Corporation's XPO2 portable oxygen concentrator (POC) devices on board aircraft, provided certain conditions in the SFAR are met. This action is necessary to allow additional POC devices deemed acceptable by the FAA to be available to the traveling public in need of oxygen therapy, for use in air commerce. When this rule becomes effective, there will be a total of seven different POC devices the FAA finds acceptable for use on board aircraft, and passengers will be able to carry these devices on board the aircraft and use them with the approval of the aircraft operator.

The FAA has determined that this final rule is not a “significant regulatory action” as defined in section 3(f) of Executive Order 12866, and is not “significant” as defined in DOT's Regulatory Policies and Procedures.

The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.

Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.

However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

This final rule adds Delphi Medical Systems' RS-00400 and Invacare Corporation's XPO2 to the list of authorized POC devices in SFAR 106. Its economic impact is minimal. Therefore, as the Acting FAA Administrator, I certify that this action will not have a significant economic impact on a substantial number of small entities.

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards are not considered unnecessary obstacles to the foreign commerce of the United States, so long as the standards have a legitimate domestic objective, such the protection of safety, and do not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards. The FAA notes the purpose is to ensure the safety of the American public, and has assessed the effects of this rule to ensure that it does not exclude imports that meet this objective. As a result, this rule is not considered as creating an unnecessary obstacle to foreign commerce.

In accordance with the above statute and policy, the FAA has assessed the potential effect of this final rule and has determined that it will impose the same minimal impact on domestic and international entities and thus has a neutral trade impact.

The Unfunded Mandates Reform Act of 1995 (the Act), enacted as Public Law 104-4 on March 22, 1995, is intended, among other things, to curb the practice of imposing unfunded Federal mandates on State, local, and tribal governments. Title II of the Act requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in a $100 million or more expenditure (adjusted annually for inflation) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $136.1 million in lieu of $100 million.

This final rule does not contain such a mandate. Therefore, the requirements of Title II of the Unfunded Mandates Reform Act of 1995 do not apply.

The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. We determined that this action will not have a substantial direct effect on the States, or the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, we have determined that this final rule does not have federalism implications.

In response to the June 1, 1998 Presidential Memorandum regarding the use of plain language, the FAA re-examined the writing style currently used in the development of regulations. The memorandum requires federal agencies to communicate clearly with the public. We are interested in your comments on whether the style of this document is clear, and in any other suggestions you might have to improve the clarity of FAA communications that affect you. You can get more information about the Presidential memorandum and the plain language initiative at http//:www.plainlanguage.gov.

FAA Order 1050.1E identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this rulemaking action qualifies for the categorical exclusion identified in paragraph 312f and involves no extraordinary circumstances.

The FAA has analyzed this final rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355; May 18, 2001). We have determined that it is not a “significant energy action” under the executive order because it is not a “significant regulatory action” under Executive Order 12866, and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

In consideration of the foregoing, the Federal Aviation Administration amends SFAR No. 106 to Chapter II of Title 14, Code of Federal Regulations, as follows:

The EAR imposes license requirements on certain exports and reexports to Iran. These license requirements apply in addition to any requirements for authorization to export or reexport to Iran that are imposed by the Department of the Treasury, Office of Foreign Assets Control (OFAC), which maintains a comprehensive embargo against Iran, as described in the Iranian Transactions Regulations (31 CFR part 560). The EAR license requirements and licensing policy that apply specifically and expressly to Iran are in parts 742 and 746 of the EAR. This rule makes changes to those parts to promote consistency, reduce redundancy and to clarify the role of the Bureau of Industry and Security (BIS) in connection with the enforcement of United States export control policy towards Iran. It establishes a license requirement for reexports of items classified under ten Export Control Classification Numbers (ECCNs) that previously did not require a license for reexport to Iran under the EAR. This rule also adds a new § 744.8 to the EAR that imposes a license requirement on exports and reexports to parties listed by OFAC in Appendix A to 31 CFR Chapter V with the bracketed suffix [NPWMD].

Section 742.8 of the EAR describes the license requirements and licensing policy for items controlled for anti-terrorism (AT) reasons to Iran. Prior to publication of this rule, reexports of items classified under ECCNs 2A994, 3A992.a, 5A991.g, 5A992, 6A991, 6A998, 7A994, 8A992.d, .e, .f, and .g, 9A990.a and .b, 9A991.d and .e, were not subject to license requirements under the EAR when reexported to Iran. In addition, the items controlled under these ECCNs were not treated as “controlled U.S. content” when incorporated into foreign made items being exported from abroad to Iran for purposes of determining whether the foreign made item had sufficient “controlled U.S. content” to be subject to the EAR. This rule revises § 742.8 to make those items subject to reexport license requirements under the EAR and to treat them as “controlled U.S. content.”

This rule also adds ECCNs 1C350, 1C355 and 1C395 to the license requirements paragraph in § 742.8. These three ECCNs contain license requirements that state “anti-terrorism” as a reason for control and that apply to Iran either by name or as part of Country Group E:1. However, prior to publication of this rule, these three ECCNs were not referenced in § 742.8(a). Adding these three ECCNs § 742.8(a) make that section consistent with BIS's policy of stating all anti-terrorism license requirements that apply to Iran in that section.

In addition, this rule moves all descriptions of transactions that are subject to the requirements of section 6(j) of the Export Administration Act and those that are subject to the requirements of section 6(a) of that Act from Supplement No. 2 to part 742 into § 742.8(a)(4). Section 6(j) applies when the Secretary of State determines that the export of an item could make a significant contribution to the military potential of a country that has repeatedly provided support for acts of international terrorism, or could enhance the ability of such country to support acts of international terrorism. BIS may not issue a license for transactions subject to section 6(j) without giving 30 days advance notice to certain committees of Congress. License applications for items controlled to designated terrorist-supporting countries under Section 6(a) are also reviewed to determine whether section 6(j) applies.

Finally, this rule removes all references to “contract sanctity” dates applicable to Iran from Supplement No. 2 to part 742. The “contract sanctity” dates refer to the dates on which reports that are prerequisites to imposing, expanding or extending foreign policy controls pursuant to Section 6 of the Export Administration Act were delivered to Congress. Transactions to fulfill contracts entered into prior to those dates may be subject to the rules that were in effect prior to delivery of the report. Removing the dates from Supplement No. 2 to Part 742 has no effect on the rights of any person to assert that a transaction is subject to earlier rules.

This rule adds a new § 744.8, which imposes a license requirement on certain parties whom the Department of the Treasury, Office of Foreign Assets Control (OFAC) has listed in Appendix A to 31 CFR Chapter V with the bracketed suffix [NPWMD]. OFAC also provides lists of these parties in a variety of data formats at http://www.treas.gov/offices/enforcement/ofac/sdn/index.shtml . OFAC lists such parties pursuant to its authority under Executive Order 13382 of June 28, 2005. Executive Order 13382 blocks the property and interests in property of certain parties determined to be weapons of mass destruction proliferators or their supporters.

This rule complements OFAC's regulatory authority under Executive Order 13382. For transactions requiring authorization from both OFAC and BIS (pursuant to Section 744.8 of the EAR), authorization from OFAC will serve to meet EAR license requirements. However, for exports and reexports involving listed parties in situations where OFAC authorization is not required and where the item being exported or reexported is subject to the Export Administration Regulations, a BIS license must be obtained.

This rule also makes a technical and conforming change by referring to the new § 744.8 in § 744.1(a).

This rule removes from the introductory paragraph of § 746.7, the extensive discussion of the authority of the Department of the Treasury to implement comprehensive trade sanctions against Iran. That discussion has no legal effect for purposes of the EAR and could be a source of confusion.

As noted in the discussion of the revisions to part 742 described above, prior to publication of this rule, reexports of items classified under ECCNs 2A994, 3A992.a, 5A991.g, 5A992, 6A991, 6A998, 7A994, 8A992.d, .e, .f, and .g, 9A990.a and .b, 9A991.d and .e, were not subject to license requirements under the EAR when being reexported to Iran. This rule revises § 746.7 to make those items subject to reexport license requirements.

This rule also adds ECCNs 0A982, 0A985, 0E982, 1C355, 1C395, 2A994, 2D994, 2E994 to the license requirements paragraph in § 746.7. These eight ECCNs contain license requirements that are not based on the Commerce Country Chart, but that apply to Iran either by name or as part of Country Group E:1. BIS's policy is to state all of the Commerce Control List based license requirements that apply to Iran in § 746.7. However, prior to publication of this rule, these eight ECCNs were not referenced in the license requirements paragraph in § 746.7. Adding these eight ECCNs to that license requirements paragraph makes § 746.7 consistent with BIS's policy of stating all license requirements that apply to Iran in that section.

In addition, this rule removes the definition of “U.S. person” from § 746.7 because that term in not used with respect to any BIS license requirements in that section.

This rule also adds a statement of licensing policy to § 746.7 indicating that applications for licenses for transactions for humanitarian reasons or for the safety of civil aviation and safe operation of U.S-origin aircraft will be considered on a case-by-case basis. Applications for other purposes generally will be denied. This addition aligns § 746.7 more closely with OFAC's Iranian Transactions Regulations.

Finally this rule revises for clarity and precision a prohibition against exporting or reexporting items that are subject to the EAR if the transaction is prohibited by the Iranian Transactions Regulations and not authorized by OFAC that, prior to publication of this rule appeared in the introductory paragraph of § 746.7. This rule also moves that statement to its own designated paragraph. BIS is making this change to place emphasis on that prohibition with a view towards enhancing its enforceability.

Consistent with the provisions of section 6 of the Export Administration Act of 1979, as amended (EAA), a foreign policy report was submitted to Congress on January 9, 2009, notifying Congress of the imposition of foreign policy-based licensing requirements reflected in this rule.

Although the EAA expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), which has been extended by successive Presidential Notices, the most recent being that of July 23, 2008, 73 FR 43603 (July 25, 2008), has continued the EAR in effect under the International Emergency Economic Powers Act.

1. This final rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act, unless that collection of information displays a currently valid Office of Management and Budget Control Number. This rule involves a collection of information that has been approved by the OMB under control number 0694-0088, “Simplified Network Application Processing + System (SNAP+) and the Multipurpose Export License Application” which carries a burden hour estimate of 58 minutes to prepare and submit form BIS-748. Miscellaneous and recordkeeping activities account for 12 minutes per submission. BIS believes that this rule will make no change in the number of submissions under this collection or in the estimated burden. Send comments regarding these burden estimates or any other aspect of these collections of information, including suggestions for reducing the burden, to Jasmeet Seehra Office of Management and Budget, by e-mail at jseehra@omb.eop.gov or by fax to (202) 395-7285; and to the Regulatory Policy Division, Bureau of Industry and Security, Department of Commerce, Room 2705, 14th Street and Pennsylvania Ave., NW., Washington, DC 20230.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States (see 5 U.S.C. 553(a)(1)). Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq , are not applicable.

IRBs are “boards, committees, or groups formally designated by an institution to review, to approve the initiation of, and to conduct periodic review of, biomedical research involving human subjects” (see 21 CFR 56.102(g)). An IRB's primary purpose during such reviews is to assure the protection of the rights and welfare of human subjects (id.). FDA's general regulations pertaining to IRBs are at part 56 (21 CFR part 56). (While section 520(g) of the Federal Food, Drug, and Cosmetic Act (“the act”) (21 U.S.C. 360j(g)) refers to “institutional review committees” rather than IRBs, FDA considers institutional review committees to be IRBs and to be subject to the IRB regulations.)

Even though IRBs play an important role in the conduct of clinical investigations regulated by FDA, we have never compiled a comprehensive list of IRBs involved in reviewing clinical investigations regulated by FDA. Existing FDA regulations have required some, but not all, clinical investigators or sponsors of clinical investigations to provide IRB names and addresses to FDA, and the requirements differ slightly among the different types of products regulated by FDA. For example, for human drug products, the sponsor must disclose the name and address of “each reviewing” IRB (see 21 CFR 312.23(a)(6)(iii)(b)). For medical devices, the sponsor must disclose the names and addresses of IRBs that “have been asked or will be asked ” to review the investigation (see 21 CFR 812.20(b)(7)) (emphasis added). For other types of clinical investigations regulated by FDA (such as food additive studies involving human subjects), the regulations do not expressly require the sponsor or the clinical investigator to disclose or keep records showing an IRB's name and address, and they make no distinction between “reviewing IRBs” and IRBs that have been asked or will be asked to review a study.

In 1998, the Department of Health and Human Services' Office of the Inspector General (OIG) issued several reports on IRBs. The OIG sought to identify the challenges facing IRBs and to make recommendations on improving Federal oversight of IRBs. One recommendation was that all IRBs should register with the Federal Government on a regular basis as part of an effort to develop more streamlined, coordinated, and probing means of assessing IRB performance and to enhance the Federal Government's ability to identify and respond to emerging problems before they result in “serious transgressions” (see Office of the Inspector General, Department of Health and Human Services, Institutional Review Boards: a Time for Reform , pages 20 and 21, June 1998).

After reviewing the OIG's recommendation, we concluded that IRB registration would serve several important goals. IRB registration would:

• Enable us to identify more precisely those IRBs reviewing clinical investigations regulated by FDA. At present, much of our knowledge about the identities and numbers of IRBs reviewing clinical investigations regulated by FDA is based on information from persons conducting or sponsoring clinical investigations rather than from IRBs themselves. This information may be obsolete (because there may be no obligation to update the information) or incomplete (because the requirements to report the names and addresses of IRBs are not uniform across all FDA-regulated products);

• Enable us to send educational information and other information to IRBs. Because we lack an accurate list of IRBs, our outreach and educational efforts are not as efficient as they might be. Changes in IRB addresses result in returned mail, and newly formed IRBs may not appear in FDA's mailing lists; and

• Help us identify IRBs for inspection, because we would have a more accurate list of IRBs.

Consequently, FDA, in consultation with the Department of Health and Human Services, Office for Human Research Protections (OHRP), published a proposed rule in the Federal Register of July 6, 2004 (69 FR 40556), that would require IRB registration for IRBs reviewing clinical investigations involving FDA-regulated products. OHRP issued a companion proposed rule which appeared in the Federal Register of July 6, 2004 (69 FR 40584) that would require registration for IRBs reviewing federally supported research. The final OHRP IRB registration rule is published elsewhere in this issue of the Federal Register .

The goal of the two rules is to create a simple, electronic registration system that all IRBs, regardless of whether they review clinical investigations regulated by FDA or federally supported research, can use.

We received over 15 comments in response to the proposed rule. Individuals, IRB members, IRB associations, an IRB accreditation association, government, health, academic or trade associations, a university system, and drug companies submitted comments. In general, the comments supported IRB registration, although some disagreed with specific aspects of the proposal or with other issues that were discussed in the preamble to the proposed rule. To make it easier to identify comments and our responses, the word “Comment,” in parentheses, will appear before the comment's description, and the word “Response,” in parentheses, will appear before our response. We have also numbered each comment to help distinguish between different comments. The number assigned to each comment is purely for organizational purposes and does not signify the comment's value or importance or the order in which it was received.

Proposed § 56.106(a) would require the following IRBs to register:

• Each IRB in the United States that reviews clinical investigations regulated by FDA under sections 505(i) (21 U.S.C. 355(i)) or 520(g) of the act; and

• Each IRB in the United States that reviews clinical investigations that are intended to support applications for research or marketing permits for FDA-regulated products.

The preamble to the proposed rule invited comment on whether there are circumstances in which foreign IRBs should be required or invited to register (see 69 FR 40556 at 40558).

(Comment 1) One comment stated that foreign IRBs are not needed in America.

(Response) The comment may have misinterpreted the preamble. The issue is not whether foreign IRBs should or should not review studies, but rather whether foreign IRBs should be included in the IRB registration system.

(Comment 2) Several comments differed as to whether foreign IRBs should have to register. One comment would require foreign IRBs to register if they review research conducted in the United States; the same comment would give foreign IRBs the option to register if they review research conducted outside the United States that may be used to support a future marketing application in the United States.

Several comments would allow for voluntary registration of foreign IRBs or ethical review committees. Two comments explained that registering foreign IRBs would enable them to have access to educational materials and other information. However, one comment would limit such registration to foreign IRBs reviewing research conducted in the United States, and another comment noted that local privacy laws in foreign countries might affect a foreign IRB's ability to provide certain registration information.

In contrast, one comment said that we should respect oversight of ethical review committees by foreign authorities and that we should not impose “additional bureaucracy.” Similarly, another comment opposed registering foreign IRBs, stating that such registration could pose “significant difficulties” for clinical investigators and sponsors and that foreign laws and regulations might make it difficult for foreign IRBs to register.

(Response) We agree in part with the comments. We agree that foreign IRBs would benefit from educational and other materials that would be sent to registered IRBs. Therefore, we have revised § 56.106(a) to allow for voluntary registration by foreign IRBs and by any domestic IRB that is not otherwise required to register.

We decline to require registration by foreign IRBs that review research to be conducted in the United States. We do not believe a significant number of foreign IRBs review research that is to be conducted in the United States. Furthermore, requiring registration by foreign IRBs that review research conducted in the United States could lead to arguments over the validity of our regulatory authority when applied to actions occurring in a foreign country.

As for possible problems foreign IRBs might encounter in registering information due to foreign laws and regulations, the comments did not identify specific registration elements that would be a problem. Consequently, we lack sufficient information to determine whether we should modify certain IRB registration elements to accommodate foreign IRBs.

(Comment 3) One comment asked us to clarify whether the reference to section 520(g) of the act was limited to research done under an investigational device exemption (IDE) or encompassed all investigational devices in a clinical investigation.

(Response) The reference to section 520(g) of the act encompasses all investigational devices in a clinical investigation, regardless of whether FDA approval of an IDE is needed in accordance with 21 CFR part 812 for the clinical investigation.

(Comment 4) One comment asked us to clarify whether the rule applied to “non-local” or “commercial” IRBs.

(Response) The comment did not explain what it meant by the terms “non-local” or “commercial” IRB. For purposes of this response, we will assume that a “non-local” IRB is one that is physically located away from the clinical trial site(s) and that a “commercial” IRB is one that is paid to review research.

If the “non-local” or “commercial” IRB is located in the United States and:

• Reviews clinical investigations regulated by FDA under sections 505(i) or 520(g) of the act; or

• Reviews clinical investigations that are intended to support applications for research or marketing permits for FDA-regulated products, then the non-local or commercial IRB must register under § 56.106(a). If the non-local or commercial IRB does not perform any of the reviews described immediately above or is outside the United States, then it may register voluntarily.

Proposed § 56.106(b) would describe the information that IRBs would provide as part of the registration process. For example, proposed § 56.106(b)(1) would require the name and mailing address of the institution operating the IRB and the name, mailing address, phone number, facsimile number, and electronic mail address of the senior officer of that institution who is responsible for overseeing the IRB's activities. (A facsimile number also is known more commonly as a “fax number.”)

(Comment 5) Several comments addressed the registration information in proposed § 56.106(b) generally. Two comments said that the registration information that OHRP and FDA would require should either be the same or that information required by OHRP, but not by FDA, should be clearly delineated and marked as optional for IRBs that are subject to FDA regulation. Similarly, one comment said that questions relating to research funded by HHS, which were part of OHRP's proposed registration system, should be identified clearly so IRBs that do not review HHS-funded research are not obliged to answer those questions.

Another comment said the proposed registration information is appropriate.

One comment urged us to reexamine the registration information to assure that the information is necessary to support the rule's stated goals.

(Response) We coordinated our rule with OHRP and tailored our respective registration information elements to be as consistent as possible and to use the same internet-based registration system.

We agree that the IRB registration system should specify whether certain registration information is optional or not required for IRBs subject only to our jurisdiction. The preamble to the proposed rule stated that, “In those instances where the Internet registration site would seek more information than FDA would require under this proposal, the site would clarify that IRBs regulated solely by FDA may, but are not required to, provide the additional information” (69 FR 40556 at 40558). The Internet registration site will be structured so that required information will be identified or marked as such, and IRBs indicating that they are registering pursuant to FDA's regulation also will be directed to questions requesting information required only under FDA's regulation.

(Comment 6) Proposed § 56.106(b)(1) would require IRBs to provide the name and mailing address of the institution operating the IRB and the name, mailing address, phone number, facsimile number, and electronic mail address of the “senior officer of that institution who is responsible for overseeing activities performed by the IRB.” The preamble to the proposed rule explained that the senior officer “must not be an IRB member, IRB staff, or a sponsor or investigator participating in an investigation under review by that IRB” (see 69 FR 40556 at 40558).

Several comments addressed this provision. Two comments supported the proposed requirement, but two other comments stated that our interpretation of “senior officer” was too prohibitive or too restrictive. These comments said that if a senior officer is on the IRB, his or her membership should not invalidate registration or subject the IRB to enforcement action.

Another comment questioned what we meant when we referred to “IRB staff.” The comment said that some IRBs distinguish staff from IRB members to ensure the IRB's integrity and independence. The comment suggested that we list persons who cannot be a “senior officer” and that we delete “IRB staff” from that list.

(Response) We agree, in part, with the comments. We recognize that, in some cases, it may not be feasible to identify a “senior officer” who is not also an IRB member or IRB staff. However, our experience indicates that IRBs sometimes form subcommittees or other groups and that the institutions overseeing the IRBs may not be aware of these subcommittees or other groups. Thus, when we said that the “senior officer” should not be an IRB member or IRB staffer, our goal was to ensure that the institution overseeing the IRB's activities is truly aware of those activities. For these reasons, where feasible, we recommend that the senior officer not be an IRB member or an IRB staffer.

Additionally, as the preamble to the proposed rule stated, information regarding the institution will enable us to identify the institution and to determine whether problems that might exist for one IRB at that institution exist at other IRBs affiliated with that institution (see 69 FR 40556 at 40558).

Additionally, on our own initiative, we have revised § 56.106(b)(1) to require the street address for the institution if the street address is different from the institution's mailing address.

(Comment 7) One comment said we should ensure that any addresses and telephone numbers are current and are kept current. The comment suggested that we issue fines and penalties if IRBs fail to keep such information current.

(Response) Section 56.106(e) requires IRBs to revise their registration information within 90 days if a contact person or chairperson information changes; this would encompass changes in the contact person's or chairperson's telephone number.

As for the comment's suggestion of imposing fines and penalties, we do not have legal authority to impose fines for failure to maintain IRB registration information. As for other penalties, we discuss the consequences of failing to register in comment 24 of this document.

(Comment 8) Proposed § 56.106(b)(2) would require IRBs to provide the IRB's name, the names of each IRB chair person and each contact person (if one exists) for the IRB, and the IRB's mailing address, street address (if different from the mailing address), phone number, facsimile number, and electronic mail address.

One comment supported the proposal. However, another comment noted that the OHRP proposal would require IRBs to provide the name, gender, degree, scientific or nonscientific specialty, and affiliation of each IRB member and suggested that we revise our rule to require the same information as the OHRP rule.

(Response) We agree, in part, and disagree, in part, with the comment's suggestion that we require the same information as OHRP's rule. We decline to revise the rule as requested by the comment. Unlike OHRP, we have never required IRBs to give us the names, educational background, and qualifications of all IRB members. Our rule does not include this information because our regulatory emphasis has been on the IRB's overall composition. Consequently, our final rule does not require such information about individual IRB members.

We have, however, revised § 56.106(b)(2) to replace “chair person” with “chairperson.” This change reflects the common spelling for this noun and does not alter the application or interpretation of § 56.106(b)(2). Additionally, we have revised § 56.106(b)(2) to require the phone number and electronic mail address for the IRB chairperson; this will enable us to communicate with the IRB chairperson quickly if such a need arises.

On our own initiative, we have revised § 56.106(b)(2) to delete the parenthetical of “(if one exists)” after “the contact person's name” and to require and the name, mailing address, phone number, facsimile number, and electronic mail address of the contact person providing the registration information. This information will enable us to communicate with the contact person if any questions arise regarding the IRB or its registration information, and the information now required is similar to that required for the contact person under OHRP's rule. We also have reorganized the provision to make it easier to understand what information is required.

(Comment 9) Proposed § 56.106(b)(3) would require IRBs to provide the “number of active protocols (small, medium, or large) involving FDA-regulated products reviewed.” The proposal explained that a “small” number of protocols is 1 to 25 protocols; “medium” is 26 to 499 protocols, and “large” is 500 protocols or more.

Several comments interpreted this provision in different ways or sought clarification as to its meaning. In brief:

• One comment asked us to define “protocol” because it said questions would arise regarding multi-site studies involving a single protocol.

• Another comment would redefine the numerical ranges so that “small” would be 1 to 99 protocols, “medium” would be 100 to 499 protocols, “large” would be 500 to 1,999 protocols, and “very large,” a new category, would be 2,000 protocols or more. The comment explained that a “substantial number” of organizations oversee thousands of protocols and that these organizations operate differently compared to those that review 500 protocols.

• Another comment expressed concern about the protocol numbers, stating that it was unclear how useful or accurate the data would be due to complexities in IRB review and “protocol driven research activities,” the level of IRB review (such as full IRB review or expedited review), and frequent or daily changes in protocol review numbers.

Similarly, another comment stated that protocols are neither uniform nor uniformly complex, so that protocol activity is not a reasonable basis for determining IRB activity. A third comment said that we should consider the protocol ranges to be only approximations of IRB workloads and use the information carefully and cautiously in evaluating or characterizing IRBs.

• Another comment disputed the need for protocol review information, arguing that compliance with regulatory requirements is an issue regardless of the number of protocols reviewed by an IRB.

(Response) The preamble to the proposed rule explained that information regarding the number of protocols reviewed would enable us to determine how active an IRB is and to assign our inspection resources based on IRB activity levels (see 69 FR 40556 at 40558). Our intent was not to get an exact or precise figure, and the proposal's use of “small,” “medium,” and “large” protocol ranges reflected that intent.

Consequently, we decline to revise the rule to define “protocol” in the final rule. Webster's II—New Riverside University Dictionary defines “protocol,” in relevant part, as “the plan for a scientific experiment or treatment” (see Webster's II—New Riverside University Dictionary at page 947 (1988)). Thus, in the comment's scenario, if an IRB conducts one review for a multi-site study, that single review could be considered as one “protocol.” If an IRB conducts separate reviews for individual study sites, then it conceivably could have reviewed multiple “protocols” notwithstanding the fact that the study plan remains essentially the same for all sites.

However, on our own initiative, we have amended § 56.106(b)(3) to define what the term “active protocol” means. The final rule defines “active protocol” as “any protocol for which an IRB conducted an initial review or a continuing review at a convened meeting or under an expedited review procedure during the preceding 12 months.” We have made this change to be consistent with changes made by OHRP in its final rule.

With respect to the proposal's numerical ranges and their usefulness to us, we reiterate that our intent was to get a general—rather than a precise—sense of how active IRBs are and to assign our limited inspectional resources more efficiently and effectively. We recognize that there are different types of IRB review and that changes in an IRB's workload could make an IRB's protocol estimate outdated or obsolete at a later point in time. However, given the protocol ranges were created simply to give us an idea about an IRB's activity, we have revised the rule to eliminate the “small,” “medium,” and “large” ranges. Instead, the final rule requires an approximate number of active protocols reviewed, but we neither expect nor want IRBs to constantly change or update their protocol numbers whenever their protocol numbers fluctuate. If the approximate number of protocols changes after initial IRB registration, the IRB should report the new protocol number as part of the re-registration process which takes place every 3 years.

As for compliance activities, we believe the comment may have misinterpreted the preamble to the proposed rule. We did not state that we would base inspections solely on an IRB's self-reported level of “small,” “medium,” or “large” numbers of protocols reviewed. We simply said that the information would help us assign inspection resources based on IRB activity levels.

To put it another way, we have limited inspectional resources, and our field staffs that inspect IRBs are also responsible for many other types of inspections and activities. We must prioritize our routine IRB inspections in some manner to make the most efficient use of our resources. Such prioritization of IRB inspections is not tantamount to declaring, as the comment suggests, that IRBs reviewing “small” or “medium” numbers of protocols do not have to comply with FDA regulations or that we enforce our requirements differently depending on whether an IRB reviews a “small,” “medium,” or “large” number of protocols. Nevertheless, given that the final rule does not contain the “small,” “medium,” or “large” protocol ranges, the issue is largely moot.

(Comment 10) Proposed § 56.106(b)(4) would require IRBs to describe the types of FDA-regulated products, such as biological products, color additives, food additives, human drugs, or medical devices, involved in the protocols that they review.

Two comments addressed this provision. One comment stated that it had no objection to the requirement provided that the description could be simple or generic without numerical ranges associated with each product type. Another comment said the descriptions would be appropriate only if we used the information for purposes of sending useful and targeted information to IRBs. The comment also said that the description should be generic and without numerical ranges associated with product types.

(Response) We agree with the comments. Section 56.106(b)(4) merely seeks a generic description of the FDA-regulated products in the protocols reviewed by the IRB. So, for example, if the IRB reviews protocols for human drug studies, the description, to satisfy § 56.106(b)(4), could simply be “human drugs.” If the IRB reviews protocols for human drug and medical device studies, the description would be “human drugs” and “medical devices.” We also note that the electronic registration system will list the types of FDA-regulated products and allow individuals to check the appropriate boxes relating to those products and to check “other” and explain what the “other” FDA-regulated products are.

Furthermore, § 56.106(b)(4) does not require IRBs to assign numerical values to the FDA-regulated product types. As the comments noted, our intent is to use this information to send product-specific information to IRBs, and we can do so with a simple description of product types.

(Comment 11) Proposed § 56.106(b)(5) would require an indication whether the IRB is accredited and, if so, the date of the last accreditation and the name of the accrediting body or organization. The preamble to the proposed rule stated that we recognized that IRB accreditation is a developing concept and invited comment on “the perceived value of collecting information on the accreditation status of IRBs” (see 69 FR 40556 at 40558).

We received more than 10 comments on IRB accreditation issues, and the comments reflected a considerable difference of opinion regarding IRB accreditation and whether we should require information about such accreditation. In brief, the comments stated:

• IRB accreditation information may give FDA useful information in deciding which IRBs to inspect and may help us decide whether to focus educational activities on certain areas. One comment added that accreditation information would help us evaluate the value of IRB accreditation. In contrast, one comment said that IRB accreditation information will not give FDA new information that will be useful in assessing accreditation's value;

• FDA should refer to accreditation of human research protection programs rather than accreditation of IRBs;

• FDA should require information about the name of the accrediting organization under which the IRB functions or collect information about accreditation type or level. One comment explained that one body has two different accreditation categories;

• The additional reporting burden should not be passed on to the institution;

• FDA should delete the provision because accreditation information can be collected without the need for a regulation or is publicly available from accrediting organizations. One comment added that accreditation information, if it were part of the IRB registration requirement, might be unreliable because our rule would require re-registration every 3 years; and

• Accreditation does not accurately represent a measure of compliance with human subject protection requirements. Similarly, an IRB's lack of accreditation could be misconstrued as reflecting on the quality of the IRB's human subject protection program. In contrast, one comment strongly encouraged IRBs to become accredited, and another comment said that accreditation implies that a certain standard has been achieved.

(Response) The final rule omits accreditation information from the IRB registration requirements. We agree that, if necessary, we can obtain accreditation information from the accreditation organizations themselves and that the resulting information may be more reliable or accurate, given that the rule does not require certain registration information to be updated until re-registration. We also agree that, as a general matter, accreditation does not ensure or demonstrate that a particular action was done correctly; instead, accreditation may increase one's confidence that the accredited body is capable of performing a particular action correctly.

Furthermore, we continue to believe that accreditation, insofar as human subject protection is concerned, is still a developing concept. Consequently, we will continue to follow such accreditation activities, but will not require accreditation information as part of IRB registration.

Finally, because the final rule does not require accreditation information, the comment regarding reporting burdens is moot.

Proposed § 56.106(c) would have IRBs register once and to renew their registrations every 3 years. Initial IRB registration would occur within 30 days before the date when the IRB intends to review clinical investigations regulated by FDA. IRB registration would become effective upon HHS posting of the registration information on its Web site.

(Comment 12) One comment would have us consider IRBs to be registered as soon as they complete submitting the registration information regardless of whether the IRB submitted the information electronically or in writing. Another comment suggested that the electronic registration system acknowledge or document that the IRB has registered. Another comment stated that, if IRB registration is to identify IRBs for future inspections, there is no need for a 30-day “waiting” period.

A different comment said that the 30-day time period might interfere with IRB review, particularly expedited reviews and full IRB reviews that take less than 30 days. The comment suggested that we revise the rule so that IRBs may not issue a determination on FDA-regulated research until they have registered.

Another comment asked us to clarify when IRBs must register. The comment explained that the codified provision directed IRBs to submit an initial registration within 30 days before the date when the IRB intends to review clinical investigations regulated by FDA. The comment said that the word “within” could mean that an IRB could register “anytime between one and 30 days before reviewing a protocol,” but that the preamble to the proposed rule interpreted proposed § 56.106(c) as requiring registration at least 30 days before reviewing the protocol. The comment preferred giving IRBs the ability to register any time between 1 and 30 days before reviewing protocols in FDA-regulated research.

(Response) We agree, in part, with the comments. For IRBs that register electronically, the registration system will notify them that they are registered. This notification will be sent to the electronic mail address that the IRB provides as part of the registration process. The IRB's registration will be effective after review and acceptance by HHS. We have amended § 56.106(c) regarding the time at which IRB registration becomes effective to correspond to changes made by OHRP in its final rule which is published elsewhere in this issue of the Federal Register . OHRP revised a comparable provision in its rule to clarify when IRB registration would become effective.

For IRBs that submit their registration information in writing, our experience with written forms in other contexts suggests that some individuals will not complete the forms or omit required information. As a result, we may need to contact individuals to obtain the missing information. Therefore, it would be more practical for us to consider IRBs who submit their registration information in writing to be registered only after they have submitted all required registration information, we have entered that information into the electronic registration system, and the information is reviewed and accepted by HHS.

As for the comments concerning the 30-day timeframe and the suggestion that we amend the rule so that IRBs cannot issue decisions on FDA-regulated research until they have registered, we have decided to eliminate the 30-day timeframe from the final rule. We note that IRB registration, alone, does not address issues regarding an IRB's competence or expertise, nor does it require IRBs to meet a particular standard in order to conduct a review. However, because it is important to FDA to assemble an accurate IRB database, we have revised § 56.106(c) to state that: “Each IRB must submit an initial registration. The initial registration must occur before the IRB begins to review a clinical investigation described in paragraph (a) of this section. Each IRB must renew its registration every 3 years. IRB registration becomes effective after review and acceptance by HHS.”

(Comment 13) One comment would require IRBs to renew their registration every year instead of every 3 years. The comment said that 3 years would be too long a time period.

(Response) We decline to revise the rule as suggested by the comment. IRB registration does not confer any particular status on IRBs, nor does registration, alone, reflect upon an IRB's competence or capabilities. Moreover, given that the information we seek through IRB registration is quite basic (as in names and addresses) and that § 56.106(e) describes how and when IRBs are to revise their registration information, annual registration would not appear to confer any advantages or make registration information more accurate or reliable. Consequently, we decline to require IRBs to register annually.

Proposed § 56.106(e) would direct IRBs to register at a specific Internet address or, if an IRB lacked the ability to register electronically, to send its registration information to a specific mail address. We indicated that we would provide the Internet address and mail address in the final rule. We also invited comment on whether we should discontinue written IRB registration procedures after some time period has elapsed, because we did not know how widespread Internet access is among IRBs (see 69 FR 40556 at 40558).

(Comment 14) Several comments pertained to the registration site(s). One comment said we should maintain one common registration site with OHRP and that the registration system should automatically include currently registered IRBs. The comment said the registration system should also allow such IRBs to retain their assigned numbers. The comment acknowledged the intent to create a single registration site, but implied that the proposed rule's omission of a specific Internet address created concern. Another comment supported creation of a simple, electronic registration system.

(Response) We agree that a single Internet registration site should be used for electronic registrations and have always worked with OHRP towards that end. We were unable to provide a specific Internet address at the time of the proposed rule because the electronic registration system was still under development. The final rule now states that the Internet registration address is http://ohrp.cit.nih.gov/efile .

Additionally, as we stated in the preamble to the proposed rule, OHRP will continue to recognize previous IRB registrations (see 69 FR 40556 at 40558).

(Comment 15) One comment asked whether entities that have more than one IRB at the same location need to register more than once or whether they could register once and provide multiple pieces of information in connection with a single registration.

(Response) The electronic registration system will assign an organization number to each entity, and this will enable the entity to register several IRBs without having to enter the same data repeatedly for each IRB.

(Comment 16) Two comments encouraged us to have the electronic registration system consider IRBs to be registered automatically once an IRB completes the electronic registration process or to send acknowledgements to the IRBs once they complete the electronic registration process.

(Response) As we stated in our response to comment 12 of this document, when an IRB completes the electronic registration process and HHS has reviewed and accepted the information, the electronic registration system will notify IRBs that they are registered.

(Comment 17) Several comments responded to our question whether we should discontinue written IRB registrations after some time period has elapsed. One comment supported conversion to electronic registration as soon as possible, but said it is important to allow small organizations the time to acquire the necessary technology. The comment agreed that not all institutions have electronic capabilities or Internet access.

Another comment supported giving IRBs the option to submit registration information in writing for a predetermined period of time, but did not suggest any time period. A different comment also supported the written registration option, but suggested that it be available only for 2 years.

Another comment opposed discontinuing written IRB registration. The comment said that there are adverse consequences to both the IRB and any sponsor or investigator that might use an unregistered IRB (which appeared to be a reference to a later discussion, in the preamble to the proposed rule, about “What Happens if an IRB Does Not Register?” (see 69 FR 40556 at 40559)), so we should continue to make written IRB registration possible.

(Response) While we continue to believe that most IRBs will use the electronic registration system, we do not know how many IRBs will use the written registration option, and the administrative record for this rulemaking does not give us sufficient basis to set a deadline at which we would end the written registration option. (We realize that one comment suggested a 2-year period, but, given that IRBs have 3 years to renew registrations, discontinuing written registrations after 2 years would not give IRBs the opportunity to renew their registrations in writing.) Consequently, until we become more experienced with IRB registrations, we will continue to offer written registration as an alternative to electronic registration, and the final rule states that IRBs that lack the ability to register electronically must send their registration information, in writing, to the Good Clinical Practice Program (HF-34), Office of Science and Health Coordination, Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857.

Proposed § 56.106(e) would have IRBs revise their registration information within specific timeframes if certain changes occurred. For example, if the IRB's contact or chair person information changes, proposed § 56.106(e) would require the IRB to change its registration information within 90 days of the change. If the IRB decided to disband or to discontinue reviewing FDA-regulated clinical investigations, it would report that change within 30 days. All other information changes would be reported when the IRB renews its registration.

(Comment 18) Two comments pointed out a discrepancy between the proposed rule and its preamble. The comments noted that the preamble to the proposed rule said that if an IRB reviews new types of FDA-regulated products, it would revise its registration information within 30 days (see 69 FR 40556 at 40559), yet proposed § 56.106(e) was silent regarding such changes. The comments suggested that we reconcile the codified text with the preamble.

(Response) The comments were correct. We inadvertently omitted changes in the IRB's review of FDA-regulated research from proposed § 56.106(e), and we have revised the rule so that IRBs must revise their registration information within 30 days if they review new types of FDA-regulated products. Additionally, on our own initiative, we have added a parenthetical phrase to clarify that a decision to review “new types of FDA-regulated products” should be interpreted as a decision to review a different category of FDA-regulated products, such as a decision to review studies pertaining to food additives when the IRB previously reviewed studies pertaining to drug products. We do not want IRBs to revise their registration information if they decide to review studies pertaining to subcategories within the same class of FDA-regulated products; for example, if an IRB previously reviewed studies pertaining to drugs intended to treat cardiac conditions and then decided to review studies pertaining to drugs intended to treat cancer, both types of studies would still pertain to drug products, so there would be no “new type” of FDA-regulated product within § 56.106(e).

(Comment 19) One comment addressed IRBs that have decided to disband. The comment said that the process of closing an IRB may take longer than 30 days, so requiring IRBs to revise their registration information within 30 days of a decision to disband would put an “undue burden” on IRBs and the institutions responsible for the IRBs.

(Response) We agree in part, and disagree in part with the comment. We agree that, in some cases, closing an IRB may take more than 30 days, but, in other cases, the process may take less time. In other words, IRBs vary in size, resources, organization, and complexity, and, as a result, different IRBs will take different amounts of time to perform the same or similar functions.

The comment also may have misinterpreted the proposed rule. Proposed § 56.106(e) stated that an IRB's decision to disband or to discontinue reviewing FDA-regulated clinical investigations is a change that must be reported within 30 days of that change; thus, the proposal would begin the time period when IRB decides to close, not when the IRB finally closes. Nevertheless, for consistency with OHRP's final rule (which appears elsewhere in this issue of the Federal Register ), we have revised § 56.106(e) to state that an IRB's decision to disband is a change that must be reported “within 30 days of permanent cessation of the IRB's review of research.” In the preamble to the OHRP final rule, OHRP states that “the date of permanent cessation of the IRB's review of * * * research would occur on or after the IRB's decision to disband, but not before the IRB's decision to disband was made.”

Furthermore, given the simplicity of the electronic registration system, we do not believe that IRBs or their institutions will find it “unduly” burdensome to report the IRB's decision to disband.

(Comment 20) One comment would shorten the time period for reporting changes in the IRB's contact or chair person information from 90 days to 60 days.

(Response) We decline to revise the rule as suggested by the comment. The comment did not identify any advantage in shortening the timeframe, and we do not believe that reducing the timeframe by 30 days will confer any significant benefit.

The preamble to the proposed rule referred to the OHRP proposal for information regarding public disclosure of IRB registration information, the Freedom of Information Act (FOIA), and the Privacy Act of 1974 (see 69 FR 40556 at 40557). It also stated that, insofar as FDA's registration system was concerned, the name of the institution operating the IRB and the IRB's name will be publicly accessible, and all other IRB registration information would be subject to public disclosure under FOIA and our public information regulations at part 20 (21 CFR part 20) (see id.).

(Comment 21) One comment said that, in addition to the institution's name and the IRB's name, we should make the following information publicly available:

• The name, address, and telephone number of the IRB contact; and

• For accredited IRBs, information relating to that accreditation.

Another comment asked us to clarify what information would be publicly available under FOIA.

(Response) All registration information required under this rule will be subject to FOIA and any other applicable statutes and regulations pertaining to public disclosure. Please note that certain information may be withheld from public disclosure or may require an individual's consent to public disclosure (see, e.g., § 20.63(e) (stating that a request for all records relating to a specific individual will be denied as a clearly unwarranted invasion of personal privacy unless accompanied by the written consent of the individual named)).

As for accreditation information, accreditation status is not required under the final rule, so that information will not be publicly available from us or from OHRP.

(Comment 22) One comment suggested that sponsors and investigators have access to the IRB registration database. The comment said that sponsors and investigators currently have access to Federal-wide assurances data and suggested that, if sponsors and investigators could not have access to the IRB registration database, we or OHRP should issue a report of IRB registrations or issue certificates to individual IRBs.

(Response) OHRP currently posts all registered IRBs on its Web site, including the name and location of the organization operating the IRB(s) and the name and location of each IRB.

We decline to issue reports on IRB registration or certificates to show that an IRB is registered. As we stated in our response to comment 12 of this document, IRB registration, alone, does not address issues regarding an IRB's competence or expertise, nor does it require IRBs to meet a particular standard in order to conduct a review.

(Comment 23) One comment said we should establish a link to the publicly available IRB registration information from the portion of our own Web site that pertains to “Good Clinical Practices in FDA-Regulated Clinical Trials,” located at http://www.fda.gov/oc/gcp/default.htm .

(Response) We agree with the comment and have modified our Web site accordingly.

The preamble to the proposed rule stated that sponsors and investigators who used unregistered IRBs might be using IRBs that “would not have had the benefit of receiving educational materials from FDA and would not have been identified on an FDA IRB registration list for future inspection” (see 69 FR 40556 at 40559). Thus, the preamble to the proposed rule added that, “to the extent that any existing FDA regulation requires a sponsor or investigator to comply with [part 56] or to use an IRB that complies with part 56, FDA will consider sponsors and investigators using an unregistered IRB to be in conflict with their regulatory obligations” (id.).

The preamble to the proposed rule also noted how we considered other options to require sponsors and investigators to use only registered IRBs, such as refusing to consider information from an application for a research permit for a clinical investigation that is reviewed or is to be reviewed by an unregistered IRB (id.). The preamble to the proposed rule also invited comment on what sanctions or administrative mechanisms, if any, should or might be used against sponsors and investigators who use unregistered IRBs and whether any additional changes to our regulations were necessary.

(Comment 24) We received many comments relating to sanctions, other regulatory changes, and ensuring that sponsors and investigators use only registered IRBs. The comments reflected a considerable difference of opinion. For example:

• One comment said we should impose and enforce “high fines” for failure to follow human subject protection regulations;

• Several comments said that the forms investigators currently use (Form FDA 1572) could be used to reinforce or otherwise highlight the need to use only registered IRBs, but the comments differed as to whether investigators should be subject to any sanctions if they use an unregistered IRB. For example, one comment said failure to use a registered IRB should be treated the same as any other breach of an investigator's responsibilities, but others said that IRBs, rather than sponsors or investigators, should be responsible for any failure to register. One comment also opposed placing an investigation on clinical hold because, the comment argued, clinical holds are appropriate when the rights and/or safety of human subjects are in jeopardy or other material, noncompliance concerns are evident; the comment said that failure to register does not mean improper oversight by the IRB or by the sponsor. Some comments argued that sponsors and investigators should not be obliged to monitor an IRB's registration status. In contrast, one comment would have us amend the investigational new drug (IND) application regulations to authorize us to place a study on clinical hold if the sponsor or investigator uses an unregistered IRB. The same comment suggested that we consider additional enforcement options, such as “refusing to consider information from an application for a research permit for a clinical investigation that is reviewed or is to be reviewed by an unregistered IRB.”

• Several comments, mostly from pharmaceutical firms or trade associations, opposed any changes outside the IRB regulations. The comments, in general, felt that the existing IND regulations were sufficient and clear regarding a sponsor's or investigator's obligation to use IRBs that comply with part 56. Some comments said we should not expend resources on revising the IND regulations but should promote awareness of the IRB registration requirements instead. Another comment, from an association of medical colleges, also opposed revisions to the IND regulations, stating that clinical holds would be unworkable because, if an unregistered IRB had reviewed a clinical study and the clinical study had proceeded, retroactive review of the study would be impermissible. The comment said we should refuse to consider information from an application for a research permit that is reviewed or is to be reviewed by an unregistered IRB.

• One comment suggested a “flexible” approach whereby we would start by sending a certified letter to an unregistered IRB regarding its failure to register and include registration instructions. If the IRB remained unregistered, the comment suggested that we inspect the IRB. The comment said that this approach would allow us to take appropriate action against unregistered IRBs without “unnecessarily penalizing” sponsors and investigators who have attempted to follow our regulations in good faith. Similarly, another comment advocated sending letters to IRBs or notices to sponsors rather than imposing sanctions.

• One comment agreed with us that an IRB's failure to register would not justify disqualification of the IRB under § 56.121 absent the extreme circumstances described in § 56.121(b)(1) (the IRB has refused or repeatedly failed to comply with regulatory requirements) or § 56.121(b)(2) (the noncompliance adversely affects the rights or welfare of the human subjects in a clinical investigation).

(Response) We agree in part and disagree in part with the comments. We agree that the existing IND regulations, as well as the IDE regulations, are sufficient and clear regarding a sponsor's or investigator's obligation to use IRBs that comply with part 56. We also agree that an IRB's failure to register, alone, should not lead to disqualification proceedings under § 56.121 absent extreme circumstances. We intend to educate IRBs, sponsors, and investigators about the IRB registration requirements and to encourage sponsors and investigators to use registered IRBs for the same reasons we stated in the preamble to the proposed rule.

Given the existing IND and IDE regulations and our intent to pursue educational efforts, we disagree with those comments that would have us impose fines or place clinical investigations on clinical hold if the sponsor or investigator used an unregistered IRB. We believe that it would be premature for us to consider the use of such sanctions before we and the regulated community have gained sufficient experience with the IRB registration program.

Several comments addressed issues that were either not part of the rulemaking or not material to the proposed codified text.

(Comment 25) One comment disagreed with the preamble to the proposed rule when we stated that our knowledge about the identities and numbers of IRBs reviewing FDA-regulated clinical research is obsolete or incomplete (see 69 FR 40556 at 40557). The comment said that we require sponsors to identify IRBs and that, for 20 years, OHRP has maintained a list of IRBs that have filed assurances (under 45 CFR part 46). The comment said that such past practices were apparently sufficient for purposes of conducting inspections.

(Response) We disagree with the comment. As we stated in the preamble to the proposed rule, existing FDA regulations have required some, but not all, clinical investigators and sponsors to provide IRB names and addresses to us, and those regulatory requirements differ slightly (see 69 FR 40556 at 40557). Consequently, because of differences within our own regulations, we do not have a comprehensive list of IRBs that review FDA-regulated research. Additionally, because our pre-existing regulations do not require sponsors and investigators to revise or update IRB information if and when the IRB changes its address, contact person, or chair person, or even, in some cases, to provide addresses, contact information, or chair person information to us, the IRB information we do have is not as detailed as the information we seek under this rule.

As for institutions that have filed assurances with OHRP under 45 CFR part 46, the IRBs associated with such institutions are not necessarily identical to those that review FDA-regulated research. OHRP's regulations apply to institutions that are engaged in human subjects research conducted or supported by HHS. In contrast, our IRB regulations apply to clinical investigations regulated by us, regardless of whether those investigations are conducted or supported by HHS. Thus, the fact that OHRP has operated an assurance system for decades does not necessarily mean that the OHRP list of institutions that have filed assurances can serve as a list of IRBs that review FDA-regulated research.

(Comment 26) One comment said that registration and re-registration fees should be set at $5,000 to cover costs. The comment said that taxpayers should not have to pay the fees or fund the costs of “profiteers,” and that pharmaceutical companies should not “get away” with low fees when “they can pay their executives $150,000,000 at retirement.”

(Response) We decline to revise the rule as suggested by the comment. We have no express authority to impose registration or re-registration fees on IRBs. Additionally, the rule is directed at IRBs themselves rather than pharmaceutical firms, so issues relating to pharmaceutical executives' salaries are not relevant to this rulemaking.

(Comment 27) One comment asked us to confirm that our IRB inspections will adhere to the guidelines described in the “Guidance for Institutional Review Boards and Clinical Investigators.”

(Response) This rulemaking does not affect how we conduct IRB inspections. We may, however, use IRB registration information to help us prioritize inspections. Additionally, our receipt of more accurate IRB addresses and contact information due to IRB registration should make it easier and more efficient to schedule IRB inspections.

The proposal would also make a non-substantive amendment to part 56. The proposal would revise the definition of “An Application for an Investigational Device Exemption,” at § 56.102(b)(12), to eliminate its reference to 21 CFR part 813. The preamble to the proposed rule explained that this change is necessary because we removed the regulations at part 813 (which had pertained to intraocular lenses) in 1997 (see 62 FR 4164, January 29, 1997).

We received no comments on this aspect of the proposal. Consequently, the final rule deletes a reference to part 813.

This rule is effective July 14, 2009. This protracted effective date is necessary to allow refinement of the electronic registration system so that it corresponds to this final rule and to OHRP's final rule.

In general, the act authorizes us to issue regulations pertaining to investigational uses of FDA-regulated products (see, e.g., sections 409(j) (21 U.S.C. 348(j)) (investigations involving food additives); 505(i) (investigations involving human drugs); 520(g) (investigations involving devices); and 721(f) (21 U.S.C. 379e(f)) of the act (investigations involving color additives)).

The act also requires the submission of a petition or application to FDA (see, e.g., sections 409(b) (food additive petitions); 505(b) (new drug applications); 505(j) (abbreviated new drug applications); 513(f) (premarket notification for devices); 515(c) (premarket approval applications for devices); 520(m) (humanitarian device exemption applications); and 721(b) of the act (color additive petitions)) before marketing begins.

To implement these provisions of the act, section 701(a) of the act gives us the authority to issue regulations for the efficient enforcement of the act. By requiring IRB registration, the final rule will aid in the efficient enforcement of the act's provisions regarding the investigational use of various FDA-regulated products (because then we would be able to conduct IRB inspections more efficiently) as well as those provisions regarding marketing applications (because marketing applications usually depend on clinical investigations involving human subjects, and IRBs are supposed to provide protections for the rights and welfare of such human subjects). Moreover, by requiring IRBs to register, the final rule will enable FDA to contact IRBs more quickly and efficiently on various issues, such as adverse reactions that may be attributed to a particular product, new regulatory requirements or policies, or problems associated with a particular protocol or clinical investigator. Consequently, we conclude that we have sufficient legal authority to issue the final rule.

We have examined the impacts of the final rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (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 final rule is not a significant regulatory action as defined by the Executive Order.

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the required registration information is minimal and the costs associated with registration are low, the agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $127 million, using the most current (2006) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

The final rule requires most IRBs to register with FDA. The information sought through the registration process is minimal, consisting largely of names and addresses for a contact person, the institution operating the IRB (if an institution exists), the head of the institution, the IRB, and the IRB chairperson. The registration would also indicate the approximate number of active protocols reviewed and the types of FDA-regulated products involved. We estimate that initial IRB registration may require 1 hour. The average loaded wage rate for administrators at public institutions is about $44 per hour. 1 This means that each IRB would spend $44 for an initial registration ($44 per hour x 1 hour per initial registration).

We estimate that re-registration would require less time, especially if the IRB verifies existing information. If re-registration requires 30 minutes, then the cost of re-registration to each IRB would be approximately $22 ($44 per hour x 0.5 hours per re-registration).

Revising an IRB's registration information would probably involve costs similar to re-registration costs. If the revision requires 30 minutes, then the cost of revising an IRB's registration information would be approximately $22 per IRB.

Given the minimal registration information that would be required and the low costs associated with registration, this final rule is not a significant regulatory action, and we certify that the final rule does not have a significant economic impact on a substantial number of small entities. Therefore, the rule is not a “significant regulatory action” under Executive Order 12866 and does not require a Regulatory Flexibility Act analysis.

Additionally, assuming that an estimated 5,000 IRBs would register, the final rule will result in a 1-year expenditure of $220,000 (5,000 IRBs x $44 registration wage costs per IRB). Because the total expenditure under the rule will not result in a 1-year expenditure of $100 million or more, we are not required to perform a cost-benefit analysis under the Unfunded Mandates Reform Act.

We have determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule contains information collection requirements that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520). The title, description, and respondent description of the information collection provisions are shown below with an estimate of the annual reporting and recordkeeping burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.

Title : Institutional Review Boards: Registration Requirements.

Description : The final rule requires IRBs to register with FDA.

Description of Respondents : Businesses and individuals.

The estimated burden associated with the information collection requirements of this rule is 8,750 hours.

We estimate the burden of this collection of information as follows:

Our estimates are based on the following considerations. According to a 1998 OIG report, there are 3,000 to 5,000 IRBs in the United States, and most are associated with hospitals and academic centers (see Department of Health and Human Services, Office of the Inspector General, Institutional Review Boards: A Time for Reform , page 3, June 8, 1998). While not all IRBs are involved in clinical investigations regulated by FDA, for purposes of the PRA, we will use 5,000 as the maximum number of IRBs subject to the final rule. Additionally, because the final rule requires basic information about an IRB (such as names and addresses) and because registration would, in most cases, be done electronically, we will assume that registration will take only 1 hour per IRB. Thus, the total burden hours would be 5,000 hours (5,000 IRBs x 1 hour per IRB).

Re-registration and revisions to existing registration information should require less time than initial registration. We will assume that re-registration and revisions will take only 30 minutes per IRB. We will also assume, based on OHRP's experience with its IRB registration program, that 50 percent of IRBs (2,500) will re-register and that all (5,000) will revise their registration information. Therefore, the total burden hours for re-registration will be 1,250 hours (2,500 IRBs x 0.5 hours per IRB), and the total burden hours for revisions will be 2,500 hours (5,000 IRBs x 0.5 hours per IRB).

Prior to the effective date of this final rule, FDA will publish a notice in the Federal Register announcing OMB's decision to approve, modify, or disapprove the information collection provisions in this final rule. In compliance with the PRA (44 U.S.C. 3507(d)), we have submitted the information collection requirements of this rule to OMB for review. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

We have analyzed this final rule in accordance with the principles set forth in Executive Order 13132. We have 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, we have concluded that the rule does not contain policies that have federalism implications as defined in the order and, consequently, a federalism summary impact statement isnot required.

The Department published an interim rule, Public Notice 4446 at 68 FR 49353, Aug. 18, 2003, with a request for comments. The comment period expired on October 17, 2003. No public comments were received during the comment period.

The rule amended the Department's regulations at 22 CFR 42.33 to establish an entirely electronic system utilizing a specifically designated Internet Web site, by which aliens can petition for the opportunity to participate in the Diversity Visa Program.

There are three main benefits to changing the mail-in process to an electronic format. First, it helps eliminate multiple applications, prohibited under INA Section 204(a)(1)(I). Secondly, it greatly reduces the cost of administering the system. Finally, it benefits the petitioners by immediately notifying them of the receipt of the petition, impossible under the mail-in system.

On November 17, 2008 (73 FR 68204), HUD published a final rule amending its regulations to further the purposes of the Real Estate Settlement Procedures Act (12 U.S.C. 2601-2617) by requiring more timely and effective disclosures related to mortgage settlement costs for federally related mortgage loans to consumers. The final rule followed publication of a March 14, 2008, proposed rule (73 FR 14030) and made changes in response to public comment and in further consideration of certain issues by HUD. Additional information regarding the regulatory amendments, and the changes made by HUD at the final rule stage, is provided in the preamble to the November 17, 2008, final rule.

The effective date of the November 17, 2008, final rule is January 16, 2009. However, the final rule provides for an appropriate transition period for certain requirements. Other provisions are to be implemented upon the effective date of the final rule.

Among those regulatory changes to be implemented upon the effective date of January 16, 2009, is the revised definition of the term “ Required use. ” This amendment has become the subject of recently initiated litigation. ( National Association of Home Builders, et al. v. Steve Preston, et al., Civ. Action No. 08-CV-1324, United States District Court for the Eastern District of Virginia, Alexandria Division.) For reasons related to the proper litigation of this case, HUD is issuing this final rule to delay the effective date of the revised definition of “ Required use ” for an additional 90 days until April 16, 2009.

In general, HUD publishes a rule for public comment before issuing a rule for effect, in accordance with its own regulations on rulemaking at 24 CFR part 10. Part 10, however, does provide in § 10.1 for exceptions from that general rule where HUD finds good cause to omit advance notice and public participation. The Department finds that good cause exists to publish this final rule for effect without first soliciting public comment as public comment is impracticable, given the litigation schedule established by the court.

Background

This document contains amendments to the Procedure and Administration Regulations (26 CFR part 301). Section 7508A of the Internal Revenue Code (Code) relates to the postponement of certain tax-related acts by reason of a federally declared disaster or terroristic or military action. Section 7508A was added by section 911(a) of the Taxpayer Relief Act of 1997, Public Law 105-34 (111 Stat. 788, 877-78 (1997)) (the 1997 Act), which was effective for any period for performing an act that had not expired before December 5, 1997.

A notice of proposed rulemaking (REG-142680-06) was published in the Federal Register (73 FR 40471-01) on July 15, 2008. No comments were received from the public in response to the notice of proposed rulemaking, and no public hearing was requested or held. In this Treasury decision, the proposed regulations are adopted as revised.

Section 301.7508A-1 of these final regulations is revised throughout to use the term “federally declared disaster” instead of the term “Presidentially declared disaster” when referring to any disaster determined by the President of the United States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121, et seq. (the “Stafford Act”). Prior versions of these regulations and the proposed regulations included the term “Presidentially declared disaster” as defined in former Code section 1033(h)(3). Sec. 706(a) of TEAMTRA, Div. C of Public Law 110-343 (122 Stat. 3765, 3920), amended Code section 1033(h)(3) by replacing the term “Presidentially declared disaster” with “federally declared disaster” and providing that the term shall have the meaning given such term by section 165(h)(3)(C). Section 165(h)(3)(C), added by section 706(a) of TEAMTRA, defines the term “federally declared disaster” to mean any disaster subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Stafford Act. This definition is substantially the same as the definition of “Presidentially declared disaster” under former section 1033(h)(C). Thus, these statutory changes in terminology do not materially impact the meaning of either the proposed or final regulations.

Section 301.7508A-1(d)(1) of the final regulations is revised to expand the definition of “affected taxpayer” to include any individual, business entity, or sole proprietorship not located in a covered disaster area, but whose records necessary to meet a deadline for an act specified in paragraph (c) of § 301.7508A-1 are located in the covered disaster area. Section 301.7508A-1(d)(1) of the final regulations further expands the definition of affected taxpayer to include any individual visiting the covered disaster area who was killed or injured as a result of the disaster. These changes reflect current IRS practice of broadly defining the term “affected taxpayer.”

Section 301.7508A-1(f) of the final regulations is revised to include a new Example 9. Example 9, which reflects current IRS practice, explains the impact of disaster relief on installment agreement payments that become due during the postponement period. Example 9 explains that the affected taxpayer's obligation to make installment agreement payments is suspended during the postponement period. Example 9 further explains that, because installment agreement payments pertain to pre-existing tax liabilities, interest and penalties continue to accrue during the postponement period.

It has been determined that these final regulations are not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. The regulations do not impose a collection of information requirement on small business entities, thus the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these final regulations is Mary Ellen Keys of the Office of the Associate Chief Counsel (Procedure and Administration).

In rule document Z8-31188 beginning on page 17 in the issue of Friday, January 2, 2009 make the following correction:

On page 17, in the second column, in the DATES heading, March 3, 2008 should read March 3, 2009.

Regulatory Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it was impracticable since the logistical details of the steam generators transit in the Captain of the Port Zone San Diego was not finalized nor presented to the Coast Guard in enough time to draft and publish an NPRM. As such, the event would occur before the rulemaking process was complete.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . The issuance of the final approval and permitting was so recent that the rule would be made effective less than 30 days after publication.

Steam Generators will be transiting to San Onofre Nuclear Power Plant. Due to the operational significance of the cargo the Captain of the Port is establishing a security zone to prevent vessels from transiting the area and to protect the generators and personnel from potential damage and injury.

The Coast Guard is establishing a temporary moving security zone that will be enforced from 11:59 p.m. on January 2, 2009, to 11:59 p.m on January 22, 2009. The limits of the security zone will include all waters of the Pacific Ocean extending from the surface to the sea floor, within 200 yards ahead, and 100 yards on each side and astern of the steam generators while underway and 100 yards on all sides when moored in the navigable waters of COTP zone San Diego.

Persons and vessels are prohibited from entering into or transiting through this security zone unless authorized by the Captain of the Port, or his designated representative. By prohibiting all vessel traffic from entering the waters surrounding these generators, the security of the cargo will be enhanced. U.S. Coast Guard personnel will enforce the security zone.

The Captain of the Port may, in his discretion grant waivers or exemptions to this rule, either on a case-by-case basis or categorically to a particular class of vessel that otherwise is subject to adequate control measures.

The Coast Guard will issue a Broadcast Notice to Mariners to further ensure the local boating traffic is aware of the security zone and its geographical boundaries. Vessels or persons violating this section will be subject to both criminal and civil penalties.

The security zone will be effective from 11:59 p.m. on January 2, 2009, to 11:59 p.m on January 22, 2009. A Broadcast Notice to Mariners will notify the public on the specific days of transit.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

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

We expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation is unnecessary. This determination is based on the size and location of the security zone. The affected area will be relatively small in size and will only briefly affect the transits of other vessels.

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

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

We anticipate that the security zone would not have a significant economic impact on a substantial number of small entities for the following reasons. This rule would only affect those small portions of the waterways immediately surrounding the military operations within the COTP Zone. Before the effective period, the Coast Guard will issue maritime advisories widely available to users of the waterways so owners and operators can make necessary preparations. Traffic may also be allowed to pass through the security zone with the permission of the Coast Guard patrol commander or COTP.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

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

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

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

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 5100.1 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded under the Instruction that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation.

An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated under ADDRESSES .

Entities potentially affected by this action include sources in all industry groups. The majority of sources potentially affected are expected to be in the following groups.

Entities potentially affected by the subject rule for this proposed action also include state, local, and tribal governments.

The information presented in this preamble is organized as follows:

The reader is referred to 67 FR 80187-88 (December 31, 2002) for an overview of the NSR program of the Clean Air Act (CAA) and to 71 FR 54237 (September 14, 2006) for background on this rulemaking.

When undergoing a physical or operational change, a source determines major NSR applicability through a two-step analysis that first considers whether the increased emissions from a particular proposed change alone are significant, followed by a calculation of the change's net emissions increase considering all contemporaneous increases and decreases at the source ( i.e. , source-wide netting calculation) to determine if a major modification has occurred. See, for example, 40 CFR 52.21(b)(2)(i). The term “aggregation” comes into play in the first step (Step 1), and describes the process of grouping together multiple, nominally-separate but related, physical changes or changes in the method of operation into one physical or operational change, or “project.” The emission increases of the nominally-separate changes are combined for purposes of determining whether a significant emissions increase has occurred from the project. See, for example, 40 CFR 52.21(b)(40). In addition, when undertaking multiple nominally-separate changes, the source must consider whether NSR applicability should be determined collectively or whether the emissions from each of these activities should separately undergo a Step 1 analysis. 1

Neither the CAA nor current EPA rules specifically address the basis upon which to aggregate nominally-separate changes for the purpose of making NSR applicability determinations. Instead, we  2 have developed our aggregation policy over time through statutory and regulatory interpretation and applicability determinations. Our aggregation policy aims to ensure the proper permitting of modifications that involve multiple physical and/or operational changes. Thus, multiple, nominally-separate activities that are sufficiently interrelated should be grouped together and considered a single project for the purpose of Step 1 in the NSR applicability test. When these sorts of activities are evaluated separately, they may circumvent the purpose of the NSR program, which is designed to address emissions from projects that have a significant net emissions increase.

On September 14, 2006 (71 FR 54235), we proposed to revise the NSR regulations in 40 CFR parts 51 and 52 to state that a source must aggregate emissions from nominally-separate changes that are dependent on one another to be technically or economically viable. More specifically, we proposed that if a source or reviewing authority determines that nominally-separate changes are dependent on each other for their technical or economic viability, the source and reviewing authority must consider these activities to be a single project and must aggregate all of the emissions increases to properly evaluate major NSR applicability. In our notice's preamble, we offered definitions for the terms “economic dependence” and “technical dependence,” and we discussed example scenarios to describe how the test should work. We took comment on all aspects of the proposed regulatory clarification for NSR Aggregation.

As we described in our 2006 proposal preamble, our aggregation policy has never been spelled out in detail in a single letter or memorandum. We have consistently interpreted the CAA to require the grouping of related activities when determining which emissions changes result from a physical or operational change at a facility. At issue is what constitutes a “project” for purposes of determining NSR applicability under the CAA. Proper characterization of this term is important for regulated entities to understand their permitting obligations.

Over the years, our aggregation policy has evolved in large part from specific, case-by-case after-the-fact inquiries related to the possible circumvention of NSR in existing permits. The letters and memoranda resulting from these inquiries have been, until now, the sole resource for permitting authorities and sources to rely upon in making aggregation decisions. However, the decision to aggregate or disaggregate activities is highly case-dependent, such that letters and memoranda that opine on whether to aggregate a particular set of activities at one facility are not necessarily transferrable to a decision to aggregate a similar set of activities but with a slightly different set of circumstances at another plant. Our 2006 proposal aimed to address concerns about applying our policy in such instances.

This Federal Register notice takes final action on the regulations concerning NSR aggregation. More specifically, we are finalizing an interpretation of the existing rule language with respect to our policy on aggregation. This interpretation is intended to describe how to approach aggregation under the existing NSR rules. However, elements of this interpretation were proposed for this first time in this action, and are being finalized as a definitive agency position for the first time in this notice. As such, this interpretation will only apply prospectively. As explained below, we are not adopting the amended regulatory text in 40 CFR parts 51 and 52 that we proposed. Through this notice we retain the current relevant regulatory text for “project” and provide our new interpretation of that text regarding when emissions at a source should be aggregated into a single project for purposes of determining major NSR applicability.

In this preamble, we enumerate several principles of our aggregation policy that apply to the existing rule text. We explain that activities should be aggregated for the purposes of the NSR applicability determination only in cases where there is a substantial relationship among the activities, either from a technical or an economic standpoint. The determination of this relationship is based on the relevant case-specific facts and circumstances; as such, sources and permitting authorities should be careful to not over apply the examples in this final notice to cases with slightly different sets of facts and circumstances. In addition to the discussion of the technical or economic relationship, this notice also reiterates the role of timing in making aggregation decisions and establishes for the first time a rebuttable timing-based presumption that permitting authorities may rely upon to support a determination for nonaggregation.

This notice serves as final agency action with respect to our September 2006 proposed criteria for NSR aggregation. This action should enable the aggregation policy to be applied consistently by both those considering the applicability of NSR to potential modifications and those conducting an after-the-fact inquiry regarding whether or not NSR was circumvented through the failure to aggregate dependent physical or operational changes at a source.

We received many comments on our September 2006 proposed rule for aggregation. Comments from all stakeholder groups raised a variety of concerns about our attempts to define terms used in the proposed rule and preamble. We sought comment on how to best define the terms “technical dependence” and “economic dependence.” Our intent in proposing to add these terms to our regulations was to frame them in a manner that could be universally applied and reduce the subjective nature of the aggregation test. We also requested comments on specific examples of dependence and independence, and asked for other suggestions for maximizing the clarity with which to articulate these criteria.

Many commenters, representing a variety of stakeholder groups, expressed that our definitions and examples were too prescriptive and would lead to increased confusion as compared to the existing policy being applied. They raised specific concerns that our hypothetical examples would restrict one's ability to handle cases that are similar but that have small nuances, and could lead to aggregating physical or operational changes that are truly independent or disaggregating changes that are truly dependent. Commenters also asserted that determining economic dependence would be highly site- and project-specific, so what may prove to be sufficiently related from an economic standpoint at one plant may not have the same level of interconnection at another plant. For example, one commenter stated “* * * it is virtually impossible to craft a meaningful, easy-to-apply test for economic dependence. EPA's proposed criteria for economic dependence may work in some situations * * * but it will not work in the more common situations, where the processes at a source are at least somewhat interrelated.”  3 Commenters also raised similar concerns with our efforts to define technical dependence, but to a lesser degree.

We agree with many of the commenters that the proposed definitions for economic and technical dependence/viability were overly prescriptive, and we also agree that the decision to aggregate activities is highly case-specific and requires consideration of factors that are difficult to fully characterize with a bright-line test. We recognize the challenges to precisely describe these terms, particularly when the definitions must apply to the myriad cases that permitting authorities encounter. We have concluded, upon considering the comments, that the terms “dependence” and “viability,” though used by EPA in past guidance memoranda, should not be adopted as regulatory “bright lines” regarding whether to aggregate activities under the NSR program. Although we are not adopting regulatory language, we do note that whether a physical or operational change is dependent on another for its viability is still a relevant factor in assessing whether the changes should be aggregated. Technical or economic dependence may be evidence of a substantial relationship between changes, though projects may also be substantially related where there is not a strict dependence of one on the other.

Activities at a source should be aggregated when they are substantially related. To be “substantially related,” there should be an apparent interconnection—either technically or economically—between the physical and/or operational changes, or a complementary relationship whereby a change at a plant may exist and operate independently, however its benefit is significantly reduced without the other activity. Two examples offered in our 2006 proposal at 71 FR 54246 present clear cases of a “substantial relationship” between two physical or operational changes: (1) The installation of burners on a utility boiler and a required modification to the air handling system in order to avoid severe impairment when operating the new burners; and (2) the installation of a process heater to make a new product and the installation of a holding tank necessary to hold the new product after its manufacture.

When there is no technical or economic relationship between activities or where the relationship is not substantial, their emissions need not be aggregated for NSR purposes. For example, in most cases, activities occurring in unrelated portions of a major stationary source ( e.g. , a plant that makes two separate products and has no equipment shared among the two processing lines) will not be substantially related. The test of a substantial relationship centers around the interrelationship and interdependence of the activities, such that substantially related activities are likely to be jointly planned ( i.e. , part of the same capital improvement project or engineering study), and occur close in time and at components that are functionally interconnected. We note that these factors are not necessarily determinative of a substantial relationship, but are merely indicators that may suggest that two or more activities are likely to be substantially related and, therefore, candidates for aggregation.

For example, at an automotive assembly facility, the mere fact that the various operations at the plant ultimately produce a car does not necessarily mean that a physical or operational change performed at the facility's boiler house is always “substantially related” to any change at the automotive coating operation. Some changes to an industrial boiler may not be substantially related to a particular change at a coating line, since a boiler often serves many other operations at an automotive plant. For instance, if higher pressure steam is needed to drive a steam pump elsewhere within the plant, the boiler island could be retrofitted with an additional heat exchanger to superheat the steam. Even though the boiler may provide power or may heat the make-up air for the coating line enclosures, an expansion at the coating line would not necessarily have a need for the new higher pressure steam output, would probably not be related to the steam pump, and would not necessarily operate more efficiently because of the higher pressure steam that is required by the steam pump. Absent any evidence demonstrating a substantial relationship between such a retrofit at the boiler and the change at the coating line, a permitting authority need not aggregate emissions from these physical changes. On the other hand, if an automotive facility installs a new, larger gas-fired cure oven to handle the increased throughput from the expanded surface coating operation, then we would expect that a substantial relationship between the oven and the coating line activities would exist and these activities' emissions should be aggregated.

Furthermore, simply because a physical or operational change occurs at the same process unit as a previous change does not automatically establish a substantial relationship. As a commenter noted, “[a]lmost all plant improvements are dependent on another piece of equipment as a technical matter. For instance, a chemical synthesis operation may install a new process dryer or a coater may install a new dryer or oven simply because of processes already present at a facility. The decision to install the new dryer or oven, however, is separate because of other factors that could include efficiency or fuel improvements, market factors or demand for a new product or the original group of products, or process refinements.”  4 We agree with this commenter that, despite the fact that the changes occur at the same process unit, the dryer installation could be separate from other modifications to the process unit if, as suggested by the comment, there was not a substantial technical or economic relationship among the changes. (As noted above, however, a case-specific inquiry is necessary to confirm this.)

Finally, while examining the technical and economic relationship among activities has always been central to aggregation decisions, we note that a portion of one of our past letters addressing a site-specific scenario may have been applied beyond the specific scenario it discussed. In a memorandum issued in 1993 related to a research facility owned by 3M Company in Maplewood, Minnesota  5 (hereafter “3M-Maplewood memo”), after describing different factors that could be considered in deciding whether the source may have circumvented NSR by not aggregating related research and development activities, we concluded the determination by stating that modifications at plants which are expected to modify regularly in response to consumer and projected production demands or research needs “cannot be presumed independent given the plant's overall basic purpose to support a variety of research and development activities.” This portion of the analysis could be taken to posit a presumption that all activities at a facility are related for NSR purposes if they contribute to the plant's basic business purpose. This suggestion that all changes consistent with the basic purpose of the source can and should be aggregated is inconsistent with the policy we are adopting in this notice that aggregation should be based on a substantial technical or economic relationship among the activities. Moreover, we are concerned that it could be interpreted to imply that almost any activity is related to any other activity at that source simply because they are both capital investments and support the company's goal to make a profit. This action explains that this is not our interpretation of the NSR rules, and that a source's “overall basic purpose” is not a sufficient basis for determining that activities should be aggregated.

Thus, we affirm that the decision to aggregate nominally-separate changes hinges on whether they have a substantial relationship, and we acknowledge the case-specific nature of this assessment, as well as the multiple considerations that contribute to the assessment. We understand that this policy stops short of providing the bright line criteria we sought to provide in our proposal, and we acknowledge there will continue to be gray areas that sources and permitting authorities will ultimately have to work through in deciding whether or not to aggregate a set of changes at a facility. Permitting authorities, as they have long done, will continue to exercise their best judgment in determining the technical and economic relationship of activities.

Another aspect of our past aggregation policy that has at times been unclear relates to how activities that are performed close in time to each other should be handled in making an NSR applicability assessment. At times, timing of construction has been used, usually in conjunction with one or more other factors, by some permitting authorities as a basis for aggregating or disaggregating activities for NSR applicability. While the relative timing of two or more activities cannot by itself be used to determine whether they have a technical or economic relationship, it is nevertheless an objective criterion that is simpler to apply than assessing the technical and/or economic interaction of the physical or operational changes. As such, it has some appeal, and may have even been used in some cases, as a surrogate for actually establishing a relationship that serves as a basis to aggregate activities.

We are explaining in this notice that timing, in and of itself, is not determinative in a decision to aggregate activities. We do not believe that timing alone should be a basis for aggregation because it is inconsistent with our policy discussed earlier in this notice that the appropriate basis for aggregation should be a substantial technical and economic relationship. Aggregation based on timing alone could, in some cases, clearly result in aggregation of activities that have no technical or economic relationship whatsoever. There should be no presumption that activities automatically should be aggregated as a result of their proximity in time. Activities that happen to occur simultaneously at different units or large integrated manufacturing facilities do not necessarily have a substantial relationship. Even if they occur over a short period of time, multiple activities should be treated as a single project for NSR purposes only when a substantial technical or economic relationship exists among the changes.[FTNT][P][SU]7[/SU] At the same time, the construction of some projects that are substantially related may occur at entirely different times, simply because of funding or other reasons which dictates the projects be phased.[/FTNT][FTNT][P][SU]8[/SU] Bridgett K. Ellis, Tennessee Valley Authority, EPA-HQ-OAR-2003-0064-0088.1.[/FTNT]

Within certain industries, it may be common practice for certain types of activities to be done separately (though not necessarily at separate times). A company's decision to do a series of activities at the same time— e.g. , during a conventional scheduled outage, “turnaround” or “annual shutdown”—should not be viewed as evidence of their technical or economic relatedness. In fact, absent an evaluation of the technical or economic relationship among the activities, the only presumption that should be gleaned from the practice of utilities, refineries, and other types of industry to do many activities during normally scheduled outages is that it is efficient and cost-effective to undertake multiple activities at the same time. Some of these activities will, in fact, be unrelated, but are done simultaneously simply because it is easier to make these changes at a time when the source is not operating. These activities should not be automatically aggregated.

We recognize that there has been some confusion over the aforementioned 3M-Maplewood memo and how it portrays the use of timing in making aggregation decisions. While the 3M-Maplewood memo suggested that activities that are timed within one year or eighteen months of each other may be related, and it advises authorities to scrutinize closely-timed minor source permit applications, it did not suggest that such a scenario should be the sole basis for a decision to aggregate. It simply reaffirmed our view that multiple changes over a short period of time “should be studied” for treatment as one project. Hence, it is consistent with this notice.

A state commenter observed “[i]n certain circumstances timing may be a relevant consideration, together with technical and economic factors, but timing is not a conclusive factor as to whether a series of changes should be aggregated. The staging of a project into multiple smaller construction activities within a short time period may signal that further inquiry into a facility's construction activities is appropriate and under the right circumstances, timing may provide evidence, along with other factors, that a facility has or is attempting to circumvent NSR.”  6 We agree with this commenter that knowing the timing between activities is useful solely from a standpoint of directing resources to further scrutinize activities that are timed closer together because these changes are generally more apt to be substantially related as opposed to activities that are separated by larger time frames. In fact, activities that are substantially related are often so heavily aligned or interconnected that constructing only one of the activities at a time is technically unsound or illogical. 7 Therefore, even though activities that occur simultaneously are not to be presumed “substantially related,” it makes sense to look closer at these activities since close timing may be one—but should not be the only—indicator of whether a technical or economic relationship exists and is substantial.

In our proposal, we also solicited comment on whether we should change our aggregation approach and include a time-based presumption against aggregation. We specifically solicited comments on whether we should create a presumption in the final rule that changes separated by a certain number of years, e.g. , three, four, or five years, are independent and not aggregated for NSR purposes. We also solicited comments on whether we should create a rebuttable or irrebuttable presumption.

Some commenters thought that creating a timing presumption for nonaggregation would be beneficial, if properly bounded, since it would streamline the decision making process and add regulatory certainty. Others felt that it was unwarranted and would lead to incorrect results, particularly if it was made to be irrebuttable. Some commenters stated that if we set a timing upper bound for nonaggregation, we should also establish a timing lower bound for automatic aggregation.

In making aggregation decisions, we acknowledge that the determining factor— i.e. , whether the activities are “substantially related”—is not always a straightforward analysis. On the other hand, the passage of time provides a fairly objective indicator of nonrelatedness between physical or operational changes. Specifically, the greater the time period between activities, the less likely that a deliberate decision was made by the source to split an otherwise “significant” activity into two or more smaller, non-major activities. If there is a large timeframe between the construction and operation of the activities, it is reasonable to conclude that they should be treated individually and that the CAA did not expect activities separated by large periods of time to constitute a single event when evaluating NSR applicability and control levels.

We believe that if a previous physical or operational change has operated for a period of three or more years, permitting authorities may presume that a newly constructed change is not substantially related to the earlier change. When activities are undertaken three or more years apart, there is less of a basis that they have a substantial technical or economic relationship because the activities are typically part of entirely different planning and capital funding cycles. The fact that the earlier activities were constructed and operated independently for such a long a period of time tends to support a determination that the latter activities are technically and economically unrelated and independent from the other earlier constructed activities. Even if activities are related, once three years have passed, it is difficult to argue that they are substantially related and constitute a single project. We note that the selection of a 3-year timeframe is long enough to ensure a reasonable likelihood that the presumption of independence will be valid, but is short enough to maintain a useful separation between relevant construction cycles, consistent with industry practice. For example, in the case of electric utilities, a commenter explained that companies plan and schedule major turbine outages every four to five years. 8

Nevertheless, we understand that there may be exceptions to the more typical set of circumstances. Therefore, for our 3-year presumptive timeframe that we are adopting, we are making it rebuttable, such that an alternative decision can be made if conditions warrant and if the changes are, in fact, substantially related. In order to rebut the presumption of nonaggregation, there should be evidence that demonstrates a substantial relationship between the activities. For example, evidence that a company intends to undertake a phased capital improvement project, consisting of enhancements to major plant components scheduled for 2009 and 2013 that have a substantial economic relationship would likely be sufficient to rebut the presumption of nonaggregation.

Although some commenters requested that our presumption for nonaggregation be irrebuttable, we have concerns that making it irrebuttable does not fully recognize the fact that sources often implement significant modifications in a series of phased construction projects over a period of years. Setting an irrebuttable presumption would therefore hamper permitting authorities of the ability to monitor compliance with the rules in these instances. A rebuttable presumption, on the other hand, enables the permitting agencies to retain the authority to ensure that facility owners and operators do not engage in a pattern of development including phasing, staging, and delaying or engaging in incremental construction at a facility which, except for such pattern of development, would otherwise require a permit.

While having a timeframe-based presumption for nonaggregation may appear at odds with the previous section of this notice, in which we reject the use of timing alone in making aggregation decisions, the two positions are consistent because they both stem from the same principle that aggregation is based on a technical or economic relationship. Our primary concern with the use of timing in making aggregation decisions has been the interpretation of the 3M-Maplewood memo that aggregates activities occurring within 12 to 18 months of each other without also determining whether a substantial relationship exists between the activities. Thus, we disagree with the commenters who asserted that an upper bound timeframe for nonaggregation should be coupled with a lower bound presumption for aggregation. Establishing an upper bound for timing, particularly one which can be refuted, serves to define a reasonable threshold for what is considered not to be a substantial relationship. Furthermore, by making the presumption rebuttable, we are assuring that the decision is not based on timing alone but must also consider the technical and economic relationship that could overturn the presumption.

While we are establishing this 3-year rebuttable presumption for nonaggregation, we are setting forth our view that activities separated by less than three years have no presumption. If activities within this time period are presumed aggregated, there could be numerous physical or operational changes across a plant that are aggregated without any substantial relationship among them. We believe that, even without a presumption, permitting authorities will continue to be able to aggregate activities when it determines that there is a substantial technical or economic relationship among them. We believe that establishing this presumption will help to streamline and provide some added certainty to the permit decision-making process. This 3-year rebuttable presumption will apply prospectively from the effective date of this notice. At that time, we will begin using this 3-year presumptive timeframe when reviewing activities that postdate the effective date of this notice for aggregation. Furthermore, permitting authorities may also adopt this presumptive timeframe as guidance for their sources.

In applying this presumption, the time period separating physical or operational changes should be calculated based on time of approval ( i.e. , minor NSR permit issuance). If a permit has not been, or will not be, issued for the physical or operational changes, the time period should be based on when construction commences on the changes.

In our 2006 proposal, we proposed to amend our rule definition for “project” to provide that “[p]rojects occurring at the same stationary source that are dependent on each other to be economically or technically viable are considered a single project.” As discussed earlier in this notice, we have concluded that the terms “economically viable” and “technically viable,” and what is meant to be economically or technically dependent, are difficult to define clearly and should not be adopted as regulatory bright lines. We are, therefore, not promulgating the proposed rule for aggregation, 9 nor are we adopting the descriptions of technical and economic viability and dependence that were set forth in the 2006 proposal preamble. We believe the statements made in this notice better explain the NSR Aggregation policy and enable permitting authorities and sources to better implement the current rule text without revision.

We have determined that the aggregation policy set forth in this notice will not significantly affect air quality and not interfere with achievement of the purposes of the NSR program. Although this notice aims to add certainty to some aspects of the process for making aggregation decisions, it is very unlikely to change the aggregation outcomes in the vast majority of instances.

For example, while this policy clearly specifies that the basis for aggregation is a substantial technical or economic relationship, our experience is that most prior aggregation and nonaggregation decisions already relied on technical or economic relationships to a large degree even if it was not clearly specified that this should be the basis, and we expect that they would have continued to do so even absent this action. Moreover, even allowing for the possibility that a future aggregation or nonaggregation decision could, absent this notice, theoretically have been expressed as relying upon factors other than the technical or economic interrelationship of activities ( e.g. , on timing alone, or the plant's overall basic purpose), it is not a given that such an aggregation decision would have been any different if the reviewing authority had instead examined the technical or economic relationship.

Even under the new 3-year rebuttable presumption for nonaggregation, we do not expect a significant difference in outcome compared to how physical or operational changes would have been aggregated without the presumption. We expect that there would be few cases under the prior aggregation policy where activities divided by three years or more would have been aggregated for purposes of NSR unless there was a strong technical or economic linkage between them. This outcome would be identical under this policy, which allows for the 3-year presumption to be rebutted in such cases. Thus, while the presumption can assist permitting authorities by streamlining the process for aggregation decisions, it is not likely to lead to appreciably different outcomes.

Therefore, we conclude that there would be negligible environmental impact associated with this final action on aggregation.

In our September 14, 2006 proposal, we proposed a regulatory change to enable emissions decreases from a project to be included in the calculation of whether a significant emissions increase will result from the project. We refer to this NSR concept as “project netting.”  10

We are not taking action on the proposal rule for project netting at this time. We are still considering whether and how to proceed with the project netting proposal. Until we decide on how to proceed with the 2006 proposal for project netting, there is no change in how the Agency views project netting. Therefore, nothing in the September 2006 proposed amendments on project netting should be taken as establishing any change in the Agency's interpretation of its current rules, nor should any of the statements in the 2006 preamble characterizing our current rules be cited as demonstrating the Agency's interpretation of our current rules.

This action is not a “significant regulatory action” under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO.

This action does not impose any new information collection burden. We are not promulgating any new paperwork requirements ( e.g. , monitoring, reporting, recordkeeping) as part of this proposed action. However, OMB has previously approved the information collection requirements contained in the existing regulations (40 CFR parts 51 and 52) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and has assigned OMB control number 2060-0003. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

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

For purposes of assessing the impacts of this action on small entities, a “small entity” is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of this final action on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on small entities.” See 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

A Regulatory Flexibility Act Screening Analysis (RFASA) developed as part of a 1994 draft Regulatory Impact Analysis (RIA) and incorporated into the September 1995 ICR renewal analysis, showed that the changes to the NSR program due to the 1990 CAA Amendments would not have an adverse impact on small entities. This analysis encompassed the entire universe of applicable major sources that were likely to also be small businesses (approximately 50 “small business” major sources). Because the administrative burden of the NSR program is the primary source of the NSR program's regulatory costs, the analysis estimated a negligible “cost to sales” (regulatory cost divided by the business category mean revenue) ratio for this source group. Currently, and as reported in the current ICR, there is no economic basis for a different conclusion.

We have therefore concluded that this notice will not increase, and will possibly decrease, the regulatory burden for all affected small entities.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. This final action is not expected to increase the burden imposed upon reviewing authorities. In addition, we believe this notice may actually reduce the regulatory burden associated with the major NSR program by streamlining the NSR applicability decisionmaking process for permitting authorities and regulated entities. Therefore, this action is not subject to the requirements of sections 202 and 205 of the UMRA.

This action is also not subject to the requirements of section 203 of the UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. As discussed above, this final rule does not impose any new requirements on small governments.

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

This final action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. In addition, we believe this final action will actually reduce the regulatory burden associated with the major NSR program by streamlining the NSR applicability decisionmaking process for permitting authorities and regulated entities. Thus, Executive Order 13132 does not apply to this action.

In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and state and local governments, EPA specifically solicited comments on the proposed rule from state and local officials.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). No tribal government currently has an approved tribal implementation plan (TIP) under the CAA to implement the NSR program; therefore the Federal government is currently the NSR reviewing authority in Indian country. Thus, tribal governments should not experience added burden from this final action, nor should their laws be affected with respect to implementation of this action. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866.

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

This action does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards.

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

EPA has determined that this final action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. This action, in conjunction with other existing programs, would not relax the control measures on sources regulated by the final action and therefore would not cause emissions increases from these sources.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective February 17, 2009.

Under CAA section 307(b), judicial review of this final action is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit on or before March 16, 2009. Under CAA section 307(d)(7)(B), only those objections to the final rule that were raised with specificity during the period of public comment may be raised during judicial review. Moreover, under CAA section 307(b)(2), the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brough by EPA to enforce these requirements.

The statutory authority for this action is provided by sections 307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42 U.S.C. 7401, 7411, 7414, 7416, and 7601). This notice is also subject to section 307(d) of the CAA (42 U.S.C. 7407(d)).

Throughout this document, whenever “we”, “us”, or “our” is used, we mean the EPA.

We are approving a revision to the Arkansas SIP, submitted to meet the Emissions Inventory and Emissions Statement requirements of the CAA for the Crittenden County 8-hour ozone non-attainment area. 1 The revision was adopted by the State of Arkansas on June 22, 2007, became effective July 15, 2007, and was submitted to EPA on November 19, 2007. We are approving the Emissions Inventory for Crittenden County because it satisfies the Emissions Inventory requirements for 8-hour ozone nonattainment areas classified as marginal or above. We are approving the revisions to the Arkansas Regulations requiring Emissions certification as meeting Emissions Statement requirements of the CAA. We are approving the revision pursuant to section 110 of the CAA.

EPA is publishing this rule without prior proposal because we view this as a noncontroversial amendment and anticipate no relevant adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the SIP revision if relevant adverse comments are received. This rule will be effective on March 16, 2009 without further notice unless we receive relevant adverse comment by February 17, 2009. If we receive relevant adverse comments, we will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. We will address all public comments in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so now. Please note that if we receive adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of an adverse comment.

Section 110 of the CAA requires states to develop air pollution regulations and control strategies to ensure that air quality meets the national ambient air quality standards (NAAQS) established by EPA. NAAQS are established under section 109 of the CAA and currently address six criteria pollutants: Carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide.

A SIP is a set of air pollution regulations, control strategies, other means or techniques, and technical analyses developed by the state, to ensure that the state meets the NAAQS. It is required by section 110 and other provisions of the CAA. A SIP protects air quality primarily by addressing air pollution at its point of origin. A SIP can be extensive, containing state regulations or other enforceable documents, and supporting information such as emissions inventories, monitoring networks, and modeling demonstrations. Each state must submit regulations and control strategies to EPA for approval and incorporation into the federally-enforceable SIP.

Inhaling even low levels of ozone, a key component of urban smog, can trigger a variety of health problems including chest pains, coughing, nausea, throat irritation, and congestion. It can also worsen bronchitis and asthma, and reduce lung capacity. Volatile organic compounds (VOC) and oxides of nitrogen (NO X ) are known as “ozone precursors”, as VOCs react with NO X , oxygen, and sunlight to form ozone.

EPA promulgated, on July 18, 1997, a revised 8-hour ozone standard of 0.08 parts per million (ppm), which is more protective than the previous 1-hour ozone standard (62 FR 38855). 2 On April 30, 2004 EPA published designations for the 1997 standard 8-hour ozone standard (69 FR 23858). Crittenden County, Arkansas and Memphis, Tennessee were designated as an ozone nonattainment area; and the area was classified as a moderate nonattainment area under subpart 2 with an attainment date of no later than June 15, 2010. On July 15, 2004, pursuant to section 181(a)(4) of the CAA, the States of Tennessee and Arkansas submitted a petition to EPA Regions 4 and 6, requesting a downward reclassification of the area “moderate” to “marginal” for the 8-hour ozone standard. The petition was approved by EPA on September 22, 2004 (69 FR 56697). As a result of the downward classification, the new attainment date for the area was set at no later than June 15, 2007 (73 FR 15087). The 1997 ozone standard was not attained by this date, so the area was reclassified back to “moderate” on March 28, 2008, with a new attainment date of no later than June 15, 2010 (73 FR 16547).

Sections 172(c)(3) and 182(a)(1) of the Clean Air Act (CAA) and EPA's 8-hour ozone regulation (40 CFR 51.915) require submission of an emissions inventory for each 8-hour ozone non-attainment area. An emissions inventory is an estimation of actual emissions of air pollutants in an area. The emissions inventory for an ozone nonattainment area contains nitrogen oxide (NO X ), volatile organic compound (VOC), and carbon monoxide (CO) emissions as these pollutants are precursors to ozone formation. In this case, the emissions inventory is for the year 2002.

CAA section 182(a)(3)(B) calls for the SIP to require that owners or operators of each stationary source of NO X and VOC in an ozone non-attainment area submit an annual emissions statement. The emissions statement must show the actual emissions of NO X or VOC and contain a certification that the information contained in the statement is accurate to the best knowledge of the individual certifying the statement.

On December 22, 2006, the U.S. Court of Appeals for the District of Columbia Circuit vacated EPA's Phase 1 Rule in South Coast Air Quality Management Dist . v. EPA , 472 F.3d 882 (DC Cir. 2006). On June 8, 2007, in response to several petitions for rehearing, the court modified the scope of vacatur of the Phase 1 Rule. See 489 F.3d 1245 (DC Cir. 2007), cert. denied , 128 S.Ct. 1065 (2008). The court vacated those portions of the Phase 1 Rule that provide for regulation of the 1997 8-hour ozone NAAQS in some nonattainment areas under Subpart 1 in lieu of Subpart 2 and that allowed areas to revise their SIPs to no longer require certain programs as they applied for purposes of the 1-hour NAAQS; new source review, section 185 penalties, and contingency plans for failure to meet RFP and attainment milestones. The decision does not affect the requirements for areas classified under subpart 2, such as the Crittenden area, to submit a base year emission inventory for the 1997 8-hour ozone NAAQS. Litigation on the Phase 2 Rule is pending before the D.C. Circuit Court of Appeals.

On November 19, 2007, ADEQ submitted both the 2002 base year emission inventory for the Crittenden County 8-hour ozone non-attainment area and the certification statement requirement that was added to the Arkansas Pollution Control and Ecology Commission's Regulation Number 19 (Regulations of the Arkansas Plan of Implementation for Air Pollution Control). These regulations require each emission inventory is to be accompanied by a certifying statement attesting that the information contained in the inventory is true and accurate to the best knowledge of the certifying official.

EPA has reviewed the revision for consistency with the requirements of EPA regulations. A summary of EPA's analysis is provided below. For a full discussion of our evaluation, please see our TSD.

CAA sections 172(c)(3) and 182(a)(1) require an inventory of actual emissions from all sources of relevant pollutants in the nonattainment area. EPA strongly recommended using 2002 as the base year emissions inventory. Arkansas has developed a 2002 base year inventory for the Crittenden County nonattainment area. The 2002 base year emissions inventory includes all point, area, non-road mobile, and on-road mobile source emissions in all of Crittenden County. EPA has determined that the inventory was developed in accordance with EPA guidelines, and that the revised 2002 base year emission inventory is approvable. For more information, see the TSD for this section. Table 1 lists the emissions inventory for the Crittenden County area. For more detail on how emissions inventories were estimated, see the Technical Support Document.

CAA section 182(a)(3)(B) calls for the SIP to require that owners or operators of each stationary source of NO X and VOC in an ozone non-attainment area submit an annual emissions statement. The emissions statement must show the actual emissions of NO X or VOC and contain a certification that the information contained in the statement is accurate to the best knowledge of the individual certifying the statement.

Arkansas revised Regulation 19, Chapter 7 (Sampling, Monitoring, and Reporting Requirements), to require emissions statements. Regulation 19.705(D) states, “Each emission inventory is to be accompanied by a certifying statement, signed by the owner(s) or operator(s) and attesting that the information contained in the inventory is true and accurate to the best knowledge of the certifying official. The certification shall include the full name, title, signature, date of signature, and telephone number of the certifying official.” This revision is a statewide rule, applying to all counties in Arkansas, not just Crittenden County.

By requiring the owner or operator of each stationary source to submit annual emissions statements of emissions of NO X and VOCs, the revision to Regulation 19.705 meets the requirements of CAA section 182(a)(3)(B).

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. );

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• 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);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

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 action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 16, 2009. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

Throughout this document, whenever “we” “us” or “our” is used, we mean the EPA.

EPA is approving a revision to the Texas SIP. The revision is a 1997 8-hour ozone NAAQS maintenance plan for El Paso County. The State of Texas, through the Texas Commission on Environmental Quality (TCEQ), submitted the 1997 8-hour ozone NAAQS maintenance plan for El Paso County to EPA on January 20, 2006. EPA is approving the maintenance plan SIP revision for El Paso County as meeting the requirements of CAA Section 110(a)(1) and EPA's regulations under 40 CFR 51.905(c) and (d) and being consistent with EPA guidance. The maintenance plan is designed to help keep the El Paso area in attainment for the 8-hour ozone NAAQS through the year 2014.

Under the 1990 CAA Amendments, El Paso County continued to be designated nonattainment for the 1-hour ozone NAAQS by operation of law and was classified as a serious nonattainment area ( see 56 FR 56694). El Paso County has unique considerations for ozone attainment planning due to airshed contributions from Ciudad Juarez, Mexico. Under Section 179B of the Act, the EPA approved the 1-hour ozone standard attainment demonstration SIP for El Paso County on June 10, 2004 ( see 69 FR 32450). TCEQ established to the EPA's satisfaction that implementation of the plan would achieve timely attainment of the 1-hour ozone NAAQS but for emissions emanating from Ciudad Juarez.

EPA also found the El Paso area would attain by November 15, 1996, earlier than the attainment deadline of November 15, 1999. Due to this finding, and the State's enforceable commitment to perform basin-wide modeling whenever the necessary Juarez information became available, the requirement for a post-1996 plan with an additional 9 percent of reductions from November 1996 through November 1999 was deferred. This approval of the section 179B attainment demonstration SIP and deferral of the post-1996 plan was contingent; valid only as long as the area's modeling data continued to show that the El Paso 1-hour ozone area would be in attainment of the 1-hour NAAQS, but for emissions from outside the United States.

TCEQ submitted all the other requirements for a 1-hour ozone nonattainment area classified as serious and EPA approved them as follows:

On April 30, 2004, EPA designated and classified areas for the 1997 8-hour ozone NAAQS (69 FR 23858), and published the final Phase 1 rule for implementation of the 1997 ozone NAAQS (69 FR 23951). El Paso County was designated as unclassifiable/attainment for the 1997 ozone standard, effective June 15, 2004 ( see 69 FR 23858). Consequently, this attainment area is required to submit a 10-year maintenance plan under section 110(a)(1) of the CAA and the Phase 1 rule. On May 20, 2005, EPA issued guidance providing information regarding how a state might fulfill the maintenance plan obligation established by the Act and the Phase 1 rule (Memorandum from Lydia N. Wegman to Air Division Directors, Maintenance Plan Guidance Document for Certain 8-hour Ozone Areas Under Section 110(a)(1) of Clean Air Act, May 20, 2005 ). On January 20, 2006, Texas submitted a 1997 8-hour ozone standard maintenance plan for El Paso County to EPA. This SIP revision satisfies the section 110(a)(1) CAA requirements for a plan that provides for implementation, maintenance, and enforcement of the 1997 8-hour ozone NAAQS in the El Paso County unclassifiable/attainment area.

On December 22, 2006, the United States Court of Appeals for the District of Columbia Circuit issued an opinion that vacated EPA's Phase 1 Implementation Rule for the 1997 8-Hour Ozone Standard. ( South Coast Air Quality Management District . v. EPA , 472 F.3d 882 (DCCir. 2006). Petitions for rehearing were filed with the Court, and on June 8, 2007, the Court modified the scope of the vacatur of the Phase 1 rule. See 489 F.3d 1245 (DC Cir. 2007), cert. denied , 128 S.Ct. 1065 (2008). The Court vacated those portions of the Rule that provide for regulation of the 1997 8-hour ozone NAAQS nonattainment areas under Subpart 1 in lieu of Subpart 2 and that allowed areas to revise their SIPs to no longer require certain programs as they applied for purposes of the 1-hour NAAQS; new source review, section 185 penalties, and contingency plans for failure to meet RFP and attainment milestones. Consequently, the Court's modified ruling does not alter any requirements under the Phase 1 implementation rule for the 1997 8-hour ozone NAAQS for maintenance plans.

The Phase 1 Rule also provided that for an area like El Paso, any outstanding obligations to provide SIP revisions concerning attainment demonstration and Rate of Progress (ROP) Plan for the 1-hour ozone NAAQS would no longer be required as long as the area continues to maintain the 8-hour standard. If the 8-hour standard is violated prior to the area having an approved 8-hour maintenance plan under section 110(a)(1), the area would be required to submit a SIP revision to address the deferred post-1996 ROP plan. The area is not violating either the 1-hour or 8-hour standard, and upon the effective date of our approval of the 8-hour ozone maintenance plan, there no longer will be a potential outstanding requirement to submit a 1-hour ozone post-1996 ROP Plan for the El Paso 1-hour ozone nonattainment area. 1

On January 20, 2006, the State of Texas submitted a SIP revision containing a maintenance plan for the 1997 ozone NAAQS for El Paso County. The January revision provides a 1997 ozone NAAQS maintenance plan, as required by section 110(a)(1) of the CAA and the provisions of EPA's Phase 1 Implementation Rule ( see 40 CFR 51.905(a)(4)). The purpose of the plan is to ensure continued attainment and maintenance of the 1997 ozone NAAQS in El Paso County.

In this action, EPA is approving the State's maintenance plan for the 1997 ozone NAAQS for the area of El Paso County because EPA finds that the TCEQ submittal meets the requirements of section 110(a)(1) of the CAA, EPA's rule, and is consistent with EPA's guidance. As required, the plan provides for continued attainment and maintenance of the 1997 ozone NAAQS in the area for 10 years from the effective date of the area's designation as unclassifiable/attainment for the 1997 ozone NAAQS, and includes components illustrating how the area will continue in attainment of the 1997 ozone NAAQS and contingency measures. Each of the section 110(a)(1) plan components is discussed below.

(a) Attainment Inventory—The TCEQ developed comprehensive inventories of VOC and NO X emissions from area, stationary, and mobile sources using 2002 as the base year to demonstrate maintenance of the 1997 ozone NAAQS for El Paso County. The year 2002 is an appropriate year for the TCEQ to base attainment level emissions because States may select any one of the three years on which the 8-hour attainment designation for the 1997 ozone NAAQS was based (2001, 2002, and 2003). The State's submittal contains the detailed inventory data and summaries by source category. The 2002 base year inventory is a good choice. Using the 2002 inventory as a base year reflects one of the years used for calculating the air quality design values on which the 8-hour ozone designation decisions were based. It also is one of the years in the 2002-2004 period used to establish baseline visibility levels for the regional haze program.

A practical reason for selecting 2002 as the base year emission inventory is that Section 110(a)(2)(B) of the CAA and the Consolidated Emissions Reporting Rule (67 FR 39602, June 10, 2002) require States to submit emissions inventories for all criteria pollutants and their precursors every three years, on a schedule that includes the emissions year 2002. The due date for the 2002 emissions inventory is established in the rule as June 2004. In accordance with these requirements, the State of Texas compiles a statewide EI for point sources on an annual basis. For stationary point sources, for El Paso County, the TCEQ provided estimates for each commercial or industrial operation that emits 50 tons or more per year of VOC or NO X in Appendix B of the maintenance plan. This data is quality assured and entered into the State of Texas Air Reporting System (STARS). Projections for 2008 and 2014 were developed using the August 2005 Texas Industrial Production Index (TIPI) derived growth factors, supplemented with Economic Growth Analysis System version 4.0 (EGAS 4.0). Stationary non-point source data was grown by using EGAS 4.0, and On-road mobile emissions of VOC and NO X were estimated using EPA's MOBILE6.2 motor vehicle emissions factor computer model. Non-road mobile projections were developed with EPA's NONROAD model, with the exception of aircraft, airport ground support equipment, and locomotives. For these categories, the 2002 Periodic Emissions Inventory was grown to 2008 and 2014 using EGAS 4.0 growth factors, and the Federal Aviation Administration's Dispersion Modeling System (EDMS) model was used to develop aircraft emissions projections. EPA finds that the TCEQ prepared the 2002 base year emissions inventories and projected data to the years 2008 and 2014, for the area consistent with EPA's long-established guidance memoranda.

The following table provides VOC and NO X emissions data for the 2002 base attainment year inventory, as well as projected VOC and NO X emission inventory data for the years 2008 and 2014. Please see the Technical Support Document (TSD) for additional emissions inventory data including projections by source category.

As shown in the Table above, total VOC and total NO X emissions for El Paso County are expected to decrease over the 10-year period of the maintenance plan. Please see the TSD for more information on EPA's analysis and review of the State's methodologies, modeling data and performance, etc. for developing the base and attainment year inventories. The State has demonstrated that the future year 1997 8-hour ozone emissions will be less than the 2002 base attainment year's emissions. The attainment inventories submitted by the TCEQ for this area are consistent with the criteria as discussed in the EPA Maintenance Plan Guidance memo dated May 20, 2005 and in other guidance documents (please see the docket for additional information). EPA finds that the future emissions levels in 2008 and 2014 are expected to be less than emissions levels in 2002.

(b) Maintenance Demonstration—The primary purpose of a maintenance plan is to demonstrate how an area will continue to remain in compliance with the 1997 ozone standard for the 10 year period following the effective date of designation as unclassifiable/attainment. The end projection year is 10 years from the effective date of the attainment designation for the 1997 ozone NAAQS, which for El Paso County was June 15, 2004. Therefore, the plan must demonstrate attainment through 2014. As discussed in section (a) Attainment Inventory above, Texas has identified the level of ozone-forming emissions in El Paso County that was consistent with attainment of the NAAQS for ozone in 2002. Texas has projected VOC and NO X emissions for the years 2008 and 2014 in El Paso County and EPA finds that the future emissions levels in those years are expected to be below the emissions levels in 2002. Please see the TSD for more information on EPA's review and evaluation of the State's methodologies, modeling, inputs, etc., for developing the 2008 and 2014 projected emissions inventories.

This demonstration shows compliance and maintenance of the 1997 8-hour ozone standard by assuring that current and future emissions of VOC and NO X remain at or below attainment or baseline EI of 2002. The year 2002 was chosen as the baseline year because it is one of the most recent three years ( i.e. , 2002, 2003, and 2004) for which the El Paso area has clean air quality data for the 8-hour ozone standard. It includes future inventory projected years for 2008 and 2014. The plan identifies an “out year,” at least 10 years after the effective date of classification. EPA finds that the future emissions levels in 2008 and 2014 are expected not to exceed the emissions levels in 2002.

(c) Monitoring Network—The State of Texas has committed in its maintenance plan to continue operation of an appropriate ozone monitoring network and to work with EPA in compliance with 40 CFR part 58 with regard to the continued adequacy of such a network, if additional monitoring is needed, and when monitoring can be discontinued.

In El Paso County, there are six monitoring sites, each of which has monitored attainment with the 1997 ozone standard from 2002 through 2007. The 1997 ozone NAAQS is 0.08 parts per million based on the three-year average of the fourth-highest daily maximum 8-hour average ozone concentration measured at each monitor within an area. The 1997 ozone standard is considered to be attained at 84 parts per billion (ppb). The three most recent 8-hour ozone design values for El Paso County are 76 ppb for 2005, 78 ppb for 2006, and 79 ppb for 2007.

(d) Contingency Plan—The section 110(a)(1) maintenance plan includes contingency provisions to correct promptly any violation of the 1997 ozone NAAQS that occurs. The contingency indicator is based upon monitoring data. The triggering mechanism for activation of contingency measures is a monitoring violation of the 1997 8-hour ozone standard. In the maintenance plan, if contingency measures are triggered, TCEQ is committing to implement the measures as expeditiously as practicable but no longer than 24 months following the trigger. Because the area can be influenced by transport from outside the area ( e.g. , emissions from Mexico), the State will notify the EPA if the violation was caused by actions outside TCEQ's jurisdiction.

The following contingency measures are identified for implementation:

• Vent gas control.

• Control of emissions from degassing or cleaning of stationary, marine, and transport vehicles.

• Control of emissions from petroleum dry cleaning systems.

• Other measures deemed appropriate at the time because of advances in control technologies.

These contingency measures and schedules for implementation satisfy EPA's long-standing guidance on the requirements of section 110(a)(1) of Continued Attainment. Based on the above, we find that the contingency measures provided in the State's El Paso 8-hour Ozone maintenance plan are sufficient and meet the requirements of section 110(a)(1) of the CAA.

(e) Verification of Continued Attainment—Texas commits to track the progress of the maintenance plan by continuing to periodically update the EI. It will compare the updated EIs against the projected 2008 and 2014 EIs. In addition, Texas commits to verify the 8-hour ozone status through appropriate ambient air quality monitoring, and to quality assure air quality monitoring data according to federal requirements.

As discussed previously in Section II, although the monitoring data shows that the area is meeting both the 1-hour and 8-hour ozone standards, the State did not submit a request for redesignation of the area to attainment for the 1-hour ozone standard before EPA revoked this standard. Because the area was never redesignated to attainment for the 1-hour standard, the area must continue to meet the applicable 1-hour ozone serious area measures. These mandatory measures include the serious nonattainment area NSR permitting program.

40 CFR 51.905(a)(3) 8-Hour NAAQS Attainment/1-Hour NAAQS Nonattainment of EPA's Phase 1 implementation rule, however, provides that the State may request that the Nonattainment New Source Review program no longer apply in an area such as El Paso. If the State submits to EPA a request to remove the NNSR program from the El Paso Ozone SIP and replace it with the State's prevention of significant deterioration (PSD) SIP, a section 110(l) demonstration would need to be included with the request.

If Texas chooses to submit such a request, the request must include all necessary supporting elements, e.g. , a section 110(l) demonstration, any necessary regulatory revisions. Please note that the Texas PSD SIP requirements would apply in the El Paso ozone area only upon the effective date of an EPA action approving the removal from the El Paso ozone SIP of the NNSR SIP program.

Pursuant to section 110 of the Act, EPA is approving the 1997 8-hour ozone maintenance plan for El Paso County. We have evaluated the State's submittal and have determined that it meets the applicable requirements of the Clean Air Act and EPA regulations, and is consistent with EPA policy.

EPA is publishing this rule without prior proposal because we view this as a non-controversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the SIP revision if relevant adverse comments are received. This rule will be effective on March 16, 2009 without further notice unless we receive adverse comment by February 17, 2009. If we receive adverse comments, we will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. We will address all public comments in a subsequent final rule based on the proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so now. Please note that if we receive adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of an adverse comment.

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

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant. Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Because this rule merely approves a state rule implementing a Federal standard, EPA lacks the discretionary authority to modify today's regulatory decision on the basis of environmental justice considerations.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 16, 2009. 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).)

For questions related to a specific state please contact the appropriate regional office:

In CAA section 169A, Congress declared as a national goal the prevention of any future, and the remedying of any existing, impairment of visibility in mandatory class I Federal areas (Class I areas)  1 which impairment results from manmade air pollution. EPA's visibility regulations, codified at 40 CFR 51.300-51.309, require states to develop regional haze SIPs with measures necessary to make reasonable progress towards remedying visibility impairment in Class I areas. The required SIP elements include: (1) For states with one or more Class I areas, the setting of reasonable progress goals for each Class I area; (2) calculations of baseline and natural visibility conditions for each Class I area located in a state; (3) the development of long term strategies addressing visibility impairment; (4) a monitoring strategy that is representative of all Class I areas within a state and reporting requirements; (5) the BART requirements; and (6) a description of how the state addressed any comments provided by Federal Land Managers. 40 CFR 51.308. EPA's visibility regulations also provide certain states with the option to submit regional haze SIPs based on the recommendations of the Grand Canyon Visibility Transport Commission. Such SIPs are required to include certain emission reduction strategies, including a program to reduce emissions of sulfur dioxide from stationary sources. 40 CFR 51.309.

Some states have submitted regional haze SIPs as required under the CAA and EPA's implementing regulations, but at present a number of states have not yet submitted final SIPs to EPA to satisfy these requirements of the CAA. The EPA is by this action making a finding of failure to submit for those states.

Sections 169A and 169B of the CAA set forth the goals of the regional haze program and mandate that states develop SIPs to ensure that reasonable progress is made towards meeting those goals, including the requirements for BART. The regional haze rule issued in 1999 specifies the requirements and deadlines for state and local SIPs designed to meet the visibility protection provisions of the CAA. See 64 FR 35714. EPA revised certain requirements of the regional haze rule on July 6, 2005 (70 FR 39104) including the deadline for submitting regional haze SIPs, pursuant to the Consolidated Appropriations Act for Fiscal Year 2004, Public Law 108-199, January 23, 2004 (codified at 42 U.S.C. 7407(d)(7), CAA section 107(d)(7)). This statutory deadline for SIP submittals was December 17, 2007.

Under the CAA section 110(c), EPA is required to promulgate a Federal Implementation Plan (FIP) within two years of the effective date of a finding that a state has failed to submit a SIP. The FIP requirement is void if a state submits a regional haze SIP, and EPA approves that SIP within the two year period.

In this action, EPA is finding that 37 states, the District of Columbia, and the U.S. Virgin Islands have failed to make all or part of the required SIP submissions to address regional haze. This finding starts the two year clock for the promulgation by EPA of a FIP. EPA is not required to promulgate a FIP if the state makes the required SIP submittal and EPA takes final action to approve the submittal within two years of EPA's finding.

At approximately the same time as the signing of this notice, EPA Regional Administrators are sending letters informing each state identified below that they have failed to make the required regional haze SIP submissions. These letters, and any accompanying enclosures, have been included in the docket to this action. This action will be effective on January 15, 2009. The states listed in the tables below failed to submit all or part of the required SIP elements per section 169A of the CAA and associated implementing regulations at 40 CFR 51.308 and 40 CFR 51.309.

Arizona, New Mexico, and Wyoming have opted to develop SIPs based on the recommendations of the Grand Canyon Visibility Transport Commission under 40 CFR 51.309. All three States have failed to submit the plan elements required by 40 CFR 51.309(g), the reasonable progress requirements for areas other than the 16 Class I areas covered by the Grand Canyon Visibility Transport Commission Report. Arizona and New Mexico have also failed to submit the plan element required by 40 CFR 51.309(d)(4), the alternate stationary source program for control of sulfur dioxide (SO 2 ).

Colorado has failed to submit plan elements required by 40 CFR 51.308(d), specifically, reasonable progress goals and long-term strategy elements addressing reasonable progress. Colorado has also failed to submit a plan meeting the BART requirements of 40 CFR 51.308(e), specifically, BART determinations and requirements, for two sources located in the state, Colorado Springs Utilities' Martin Drake Power Plant in Colorado Springs, Colorado and Cemex, Inc. Lyons Portland Cement Plant in Lyons, Colorado.

Michigan has also failed to submit plan elements required by 40 CFR 51.308(d), specifically, reasonable progress goals and long-term strategy elements addressing reasonable progress. In addition, Michigan has failed to submit a plan meeting the BART requirements of 40 CFR 51.308(e). Specifically, for the following six sources located in the state, Michigan has failed to submit a plan with BART determinations and requirements: LaFarge Midwest, Inc. in Alpena, Michigan; St. Mary's Cement in Charlevoix, Michigan; Smurfit/Stone Container Corporation in Ontonagon, Michigan; Escanaba Paper Company in Escanaba, Michigan; and Cleveland Cliffs Corporation Tilden Mining Company and the Empire Iron Mining, both in Marquette, Michigan.

Alaska, California, Connecticut, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Texas, Vermont, U.S. Virgin Islands, Virginia, Washington, and Wisconsin.

Arizona—40 CFR 51.309(g) and 40 CFR 51.309(d)(4).

Colorado—40 CFR 51.308(d) and 40 CFR 51.308(e) for two sources.

Michigan—40 CFR 51.308(d) and 40 CFR 51.308(e) for six sources.

New Mexico—40 CFR 51.309(g) and 40 CFR 51.309(d)(4).

Wyoming—40 CFR 51.309(g).

This is a final EPA action, but is not subject to notice-and-comment requirements of the Administrative Procedure Act (APA), 5 U.S.C. 553(b). EPA believes that because of the limited time provided to make findings of failure to submit regarding SIP submissions, Congress did not intend such findings to be subject to notice-and-comment rulemaking. However, to the extent such findings are subject to notice-and-comment rulemaking, EPA invokes the good cause exception pursuant to the APA, 5 U.S.C. 553(b)(3)(B). Notice and comment are unnecessary because no EPA judgment is involved in making a finding of failure to submit a SIP or required elements of SIP submissions pursuant to the CAA. Furthermore, providing notice and comment would be impracticable because of the limited time provided under the statute for making such determinations. Finally, notice and comment would be contrary to the public interest because it would divert agency resources from the critical substantive review of SIPs that have already been submitted. See 58 FR 51270, 51272, n.17 (Oct. 1, 1993); 59 FR 39832, 39853 (Aug. 4, 1994).

This action will be effective on January 15, 2009. Under the APA, 5 U.S.C. 553(d)(3), agency rulemaking may take effect before 30 days after the date of publication in the Federal Register if the agency has good cause to specify an earlier effective date. This action concerns SIP submissions that are already overdue; and EPA previously cautioned the affected states that the SIP submissions were overdue and that EPA was considering taking this action. In addition, this action simply starts a “clock” for EPA to promulgate a SIP within two years. There are no mandatory sanctions enacted against the states by this action, although the Agency may employ discretionary sanctions, and the clock may be “turned off” through the submission of complete SIPs by the states followed by approval of the SIPs by EPA. These reasons support an effective date prior to 30 days after the date of publication.

This action is not a “significant regulatory action” under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO. However, the EPA submitted this action to the Office of Management and Budget (OMB) for review on December 11, 2008, and any changes made in response to OMB's recommendations have been documented in the docket for this action. The OMB released it on January 6, 2009.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320(b). This rule relates to the requirement in the CAA for states to submit SIPs under section Part D of title I of the CAA.

This final rule is not subject to the Regulatory Flexibility Act (RFA), which generally requires an agency to prepare a regulatory flexibility analysis for any rule that will have a significant economic impact on a substantial number of small entities. The RFA applies only to rules subject to notice and comment rulemaking requirements under the Administrative Procedure Act (APA) or any other statute. This rule is not subject to notice and comment requirements under the APA or any other statute because, although the rule is subject to the APA, the Agency has invoked the “good cause” exemption under 5 U.S.C. 553(b), and therefore it is not subject to the notice and comment requirement.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1998 (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments or the private sector. This action imposed no enforceable duty on any state, local, or tribal governments or the private sector. The action imposes no enforceable duty on any State, local or tribal governments or the private sector. Therefore, this action is not subject to the requirements of sections 202 and 205 of the UMRA.

This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. This action does not impose any new obligations or enforceable duties on any small governments.

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

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. The CAA establishes the scheme whereby states take the lead in developing plans to meet the National Ambient Air Quality Standards and the Federal government acts as a backstop where states fail to take the required actions. This rule will not modify the relationship of the states and EPA for purposes of developing programs to implement the regional haze program. Thus, Executive Order 13132 does not apply to this rule.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). This rule responds to the requirement in the CAA for states to submit SIPs to satisfy the requirements of the 1999 Regional Haze Regulations; Final Rule. The CAA requires each state to develop a SIP describing how the state will minimize the impacts of emissions emanating from within the state and contributing to visibility impairment in Class I areas. Tribes have elected not to submit Regional Haze SIPs and EPA will ensure air quality protection in Indian country consistent with the provisions of 40 CFR 49.11(a). Therefore, Executive Order 13175 does not apply to this action.

EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. This action is not subject to EO 13045 because this action is a procedural step toward reducing visibility impairment, which may also reduce pollution that may be harmful to children.

This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer Advancement Act of 1995 (NTTAA), Public Law No. 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards (VCS) in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impracticable. VCS are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by VCS bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable VCS.

This action does not involve technical standards. Therefore, EPA did not consider the use of any VCS.

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

EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not directly affect the level of protection provided to human health or the environment. This notice finds that certain states have not met the requirement to submit one or more SIPs and begins a clock requiring them to do so to meet this statutory obligation. If the state fails to submit the required SIPs or if they submit SIPs that EPA cannot approve, then EPA will be required to develop the plans in lieu of the states.

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 rule report, a copy of this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A Major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective January 15, 2009.

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 District of Columbia Circuit within 60 days from the date this final action is published in the Federal Register . 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 must be filed, and shall not postpone the effectiveness of such rule or action.

Thus, any petitions for review of this action making findings of failure to submit regional haze SIPs identified in section II above, must be filed in the Court of Appeals for the District of Columbia Circuit within 60 days from the date final action is published in the Federal Register .

A. Background

This final rule amends part 102-42 of the Federal Management Regulation (FMR) (41 CFR part 102-42) to bring this policy into alignment with 5 U.S.C. 7342 by placing the responsibility and guidelines for obtaining appraisals for foreign gifts and decorations onto the agencies (as required by 5 U.S.C. 7342(g)(2)(b)). Removing the policies from this part that specify the format and content of an appraisal will give agencies greater flexibility in obtaining appraisals. The flexibility is not intended to preclude the reporting of gifts, nor does it eliminate the need for a commercial appraisal when a retail value appraisal is not an option. This applies to all gifts, even when the recipient wishes to retain and/or purchase the item. This flexibility may include agency use of reliable retail Web sites (e.g., Department store Web sites, Commercial merchandise catalogs) to obtain the retail value in the United States of the items(s). This excludes the use of any auction or discount sale offerings that appear on the Internet or written publications (e.g., EBAY, Craig's List, or other non-commercial sites). Also, GSA now requires the employing agency to obtain an appraisal of a gift or decoration that the agency has retained for official use and no longer needs before accepting the agency's report of the item as excess personal property. Additionally, appraisals are required for gifts that are personalized (e.g., Books signed by the author, or gifts personally labeled).

This final rule also updates the address in section 102-42.95.

This final rule is excepted from the definition of “regulation” or “rule” under Section 3(d)(3) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993 and, therefore, was not subject to review under Section 6(b) of that executive order.

This final rule is not required to be published in the Federal Register for comment. Therefore, the Regulatory Flexibility Act does not apply.

The Paperwork Reduction Act does not apply because the changes to the FMR do not impose information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

This final rule is exempt from Congressional review under 5 U.S.C. 801 since it relates solely to agency management and personnel.

Passengers are required by 49 U.S.C. 40118, commonly referred to as the “Fly America Act,” to use United States flag air carrier service for all air travel funded by the United States Government. One exception to this requirement is transportation provided under a bilateral or multilateral air transportation agreement to which the United States Government and the government of a foreign country are parties, and which the Department of Transportation has determined meets the requirements of the Fly America Act.

The United States Government has entered into several air transportation agreements which allow federally-funded passengers to use foreign air carriers under certain circumstances. For example, on April 30, 2007, the United States-European Union “Open Skies” Air Transport Agreement (US-EU Open Skies Agreement) was signed, providing EU member airlines the right to transport passengers and cargo on scheduled and charter flights funded by the United States Government under certain conditions. On March 4, 2008, GSA published a proposed rule in the Federal Register (73 FR 11576) with a request for comments concerning a proposal that would incorporate the US-EU Open Skies Agreement language pertaining to United States Government funded travelers into the FTR. Only one comment was received from the Association of Private Voluntary Organization Financial Managers (APVOFM). APVOFM strongly supported the proposed rule.

However, since the issuance of the proposed rule, the United States has also signed air transport agreements with Australia and Switzerland that include text relating to United States Government procured transportation. The provisions in both the Australia and Switzerland agreements became effective on October 1, 2008.

Accordingly, rather than amend the FTR to include language from these agreements, and thereafter amending the FTR each time future agreements are signed, GSA is issuing this final rule to provide for an Internet based source ( http://www.gsa.gov/openskies ) of information relating to air transportation agreements that impact United States Government funded transportation. This approach will allow GSA to quickly provide and update relevant information to Federal agencies as new agreements are signed or current agreements are amended without invoking the regulatory process. In the future, if GSA determines that further guidance is necessary, GSA will issue FTR Bulletins as appropriate.

This final rule is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This final rule is not a major rule under 5 U.S.C. 804.

This final rule is not required to be published in the Federal Register for notice and comment therefore, the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , does not apply.

The Paperwork Reduction Act does not apply because the changes to the FTR do not impose recordkeeping or information collection requirements, or the collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq.

This final rule is also exempt from congressional review prescribed under 5 U.S.C. 801 since it relates to agency management and personnel.

Pursuant to 5 U.S.C. 5707(b), the Administrator of General Services has the responsibility to establish POV mileage reimbursement rates that Federal employees are entitled to when they use a POA, motorcycle or airplane for official business. To set the rates, GSA is required to periodically investigate the cost to Government employees of operating a POV while on official travel, and consult with the Secretaries of Defense and Transportation, and representatives of Government employee organizations. GSA conducted investigative reports on the mileage rates for motorcycles and airplanes. The Internal Revenue Service (IRS) conducted an investigative report on the mileage rates for a POA to compute the deductible cost of operating passenger vehicles for business purposes. GSA analyzed the data in the IRS report and adopted the findings. After consultation with the above-referenced Federal agencies and Government employee organizations, the Administrator of General Services has determined that the per mile operating costs for the official use of a POA (including trucks) is $0.55, $0.52 for motorcycles, and $1.24 for airplanes. As provided in 5 U.S.C. 5704(a)(1), the POA mileage reimbursement rate cannot exceed the single standard mileage rate established by the IRS. The IRS announced a new single standard mileage rate for automobiles of $0.55 per mile effective January 1, 2009. The results of the investigative reports have been reported to Congress.

This is not a significant regulatory action, and therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This final rule is not a major rule under 5 U.S.C. 804.

This final rule is not required to be published in the Federal Register for notice and comment, and therefore, the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , does not apply.

The Paperwork Reduction Act does not apply because the changes to the FTR do not impose recordkeeping or information collection requirements, or the collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq.

This final rule is also exempt from congressional review prescribed under 5 U.S.C. 801 since it relates solely to agency management and personnel.

I. Background

HHS, through OHRP, regulates research involving human subjects conducted or supported by HHS in regulations codified at 45 CFR part 46. The HHS protection of human subjects regulations address the appropriate role of IRBs in the human subject research enterprise. IRBs are boards, committees, or groups formally designated by an institution to conduct initial and continuing review of research involving human subjects. An IRB's primary purpose during such reviews is to ensure the protection of the rights and welfare of human research subjects.

OHRP has been operating a system of IRB registration since December 2000, which was initiated in response to a 1998 HHS Office of Inspector General (OIG) recommendation that all IRBs register with the Federal government on a regular basis as part of an effort to develop a more streamlined, coordinated, and probing means of assessing IRB performance and to enhance the Federal government's ability to identify and respond to emerging problems. After reviewing OIG's recommendation, OHRP concluded that IRB registration would serve several important goals. IRB registration would enable OHRP to: (1) Identify more precisely those IRBs reviewing research conducted or supported by HHS under an assurance of compliance approved for federalwide use by OHRP (i.e., a Federalwide Assurance [FWA]); (2) keep an accurate, up-to-date list of IRBs; (3) send educational information and other information to IRBs, increasing the efficiency of OHRP educational and outreach efforts; and (4) identify IRBs that are subject to HHS regulations for monitoring and oversight purposes.

The OHRP IRB registration system was designed to collect information required under the HHS human subjects protection regulations at 45 CFR 46.103. That regulatory provision requires institutions that are engaged in human subjects research conducted or supported by HHS to file with OHRP an assurance of compliance with the HHS human subjects protection regulations. Under 45 CFR 46.103(a), other Federal Department or Agency heads shall accept an assurance on file with HHS that is approved for federalwide use by OHRP and that is appropriate for the research in question. The only type of assurance currently accepted by OHRP is an FWA. Among other things, assurances of compliance must include information on the institution's designated IRB(s), and a list of IRB members identified by name, earned degrees, representative capacity, experience, and any employment or other relationship with the institution (45 CFR 46.103(b)(2),(3)). The IRB registration system was designed to collect additional information, to be provided voluntarily by institutions or IRBs, regarding the accreditation status of the institution or IRB organization, total numbers of active research protocols reviewed by the IRB (including protocols supported by other Federal departments or agencies) and the nature of those protocols, and IRB staffing.

On July 6, 2004, OHRP published in the Federal Register a Notice of Proposed Rulemaking (NPRM) seeking public comment on changes to the current IRB registration system administered by OHRP (69 FR 40584). OHRP proposed to amend the HHS human subjects protection regulations at 45 CFR part 46 by adding subpart F, entitled “Registration of Institutional Review Boards.” In the new subpart F, OHRP proposed to require that any IRB designated under an assurance of compliance approved for federalwide use by OHRP that reviews human subjects research conducted or supported by HHS submit most of the information, including the information that previously was provided on a voluntary basis, listed on the IRB registration form that is currently used by OHRP. By requiring IRBs to provide such information, OHRP IRB registration requirements would become substantially consistent with requirements for IRB registration that were simultaneously proposed by FDA (69 FR 40556). OHRP and FDA proposed to use a single registration system, accessible on the OHRP Web site, in which all IRBs that review research conducted or supported by HHS or clinical investigations regulated by FDA can be registered.

The proposed subpart F specifically addressed who must register an IRB, what information an IRB must provide when registering, when an IRB must register, where an IRB can register, and how an IRB can revise its registration information.

In preparing the final rule, HHS has changed the designation of proposed subpart F to subpart E and changed the numbering of the provisions from §§ 46.601-605 to §§ 46.501-505.

During the public comment period that ended October 4, 2004, the Department received 13 public comments on the proposed rule from interested parties. In general, the comments were supportive of IRB registration, although some commenters disagreed with specific aspects of the proposed rule. The comments are summarized as follows:

Proposed § 46.602 described the information to be submitted as part of the registration process. Specific comments were received on the following proposed data elements required for registration.

OHRP proposed to collect an IRB roster that includes the names, earned degrees, gender, area of specialty and affiliation of each voting member (including the IRB chairperson) and alternate IRB members.

One commenter stated that the value or utility of collecting information about the IRB roster is not clear and that the collection may be quite burdensome. OHRP notes that the collection of IRB roster information by HHS for each IRB that is designated on an OHRP-approved FWA already is required by 45 CFR 46.103(b)(3), and thus has decided to delete this requirement from the final rule as unnecessarily duplicative. However, the IRB registration form will continue to include IRB roster information as part of the IRB registration process since this information is required by 45 CFR 46.103(b)(3).

OHRP proposed to require submission of the approximate number of total active protocols undergoing initial and continuing review and the approximate number of active protocols supported by HHS. The proposal would have required identification of the range of the number of protocols reviewed in the preceding calendar year. A “small” number of protocols would be 1 to 25 protocols, “medium” 26 to 499 protocols, and “large” 500 or more protocols. OHRP explained that this information will enable it to determine how active an IRB is and to assign its quality improvement, educational, and compliance oversight resources based on an IRB's activity level.

One commenter asserted that this collection poses an unnecessary reporting burden by going beyond the information needed to meet the registration requirements, and strongly recommended that OHRP limit its data collection to elements that support regulatory requirements. This commenter argued that the proposed data collection will not provide OHRP with information that assists in the constructive assessment of an institution's IRB activity, and, as a consequence, has limited value. The commenter noted that, for example, 24 cancer studies will most likely generate a significantly greater volume of work for an IRB than 500 social or statistical data analyses—many of the latter of which will be reviewed under expedited review procedures.

Two other commenters expressed concern about this information collection. One stated that, given the variety of protocols that are being performed at any large research university and the different oversight workloads that varying protocols require, such a crude measure might lead to erroneous interpretation of the registration data. This commenter asserted that, at a minimum, such data should be accompanied by a disclaimer to avoid misunderstanding, but that OHRP may want to reconsider the necessity and validity of such information. The second commenter said that it is unclear how useful or accurate such data would be in light of the following factors: The varying complexity of IRB review and protocol-driven research activity (e.g., social and behavioral, biomedical, phase 1, 2, or 3 studies, gene therapy); the level of IRB review (i.e., review at a convened meeting or expedited review process) required for different types of research protocols (e.g., chart reviews, interventions, survey research, continuation review, etc.); and the frequent and daily changes in the number of protocols reviewed by an IRB. The commenter recommended that this information collection be an optional question.

Another commenter questioned whether research volume per se is an accurate measure of the workload of an IRB. Acknowledging and appreciating that OHRP did not propose that institutions be required to supply specific numbers of active protocols undergoing initial and continuing review each year, this commenter had no objection to the proposal of numerical ranges that can be selected by registrants to describe their activity. However, the commenter urged that the information be interpreted carefully and cautiously in light of the importance of OHRP's proposed uses of the information collected.

Another commenter supported this information collection but encouraged OHRP to consider redefining the ranges as small 1-99, medium 100-499, large 500-1,999, and very large 2,000 or more. The commenter noted that there are a substantial number of organizations that oversee thousands of protocols and thus operate quite differently from those that oversee 500 protocols; further, there appears to be a small number of organizations with fewer than 25 protocols, and organizations with very few protocols often rely upon an IRB operated by another organization rather than form their own IRB.

After careful consideration of all comments, OHRP will retain this information requirement in the final rule for the reasons stated in the NPRM: This information will provide insight into an IRB's activity level and allow OHRP to more effectively assign its quality improvement, educational, and compliance oversight resources. However, given that the proposed protocol ranges were artificial, we have revised the rule to eliminate the “small,” “medium”, and “large” ranges. Instead, the final rule requires submission of an approximate number of all active protocols and the approximate number of active protocols conducted or supported by HHS. For the purpose of the final rule, an “active protocol” is any protocol or study for which an IRB conducted an initial review or a continuing review at a convened meeting or under an expedited review procedure during the preceding twelve months. OHRP will utilize this data cautiously and does not intend to use this data to make presumptive or sweeping determinations regarding an institution's human subject protection program.

OHRP proposed to require submission of the approximate number of full-time equivalent positions (FTEs) devoted to the IRB's administrative activities. HHS regulations for the protection of human subjects at 45 CFR 46.103(b)(2) require that assurances of compliance applicable to HHS-conducted or -supported research include the designation of one or more IRBs for which, among other things, provisions are made for meeting space and sufficient staff to support the IRB's review and recordkeeping duties. In OHRP's experience, the number of FTEs compared to the volume of research is one useful parameter for assessing whether an IRB has sufficient staff, as required by HHS regulations for the protection of human subjects at 45 CFR 46.103(b)(2).

Two commenters objected to this proposed information requirement. One recommended that these data not be included in the registry, stating that there is no standard measure for IRB staffing and no formula for allocation of personnel to administer an IRB; the nature of the protocols reviewed—biomedical or social and behavioral sciences—has a direct impact on staffing decisions; and information on the number of full-time IRB staff positions is of limited value in assessing the institution's commitment to human subject protection. The commenter asserted that this collection poses an unnecessary reporting burden by going beyond the information needed to meet the registration requirements, and strongly recommended that OHRP limit its data collection to elements that support regulatory requirements. The commenter also stated that the request for information about the number of staff devoted to the IRB does not strengthen the value of the protocol data; and that as with the approximation of active protocols, the types of protocols reviewed and managed by the IRB staff—biomedical or social and behavioral sciences—have a direct effect on the allocation of resources. The second commenter urged that this information be interpreted carefully and cautiously in OHRP's determinations of whether or not an institution has made provisions for meeting space and sufficient staff to support the IRB's review and record keeping duties.

OHRP finds that collecting information on the number of FTEs allocated to IRB administrative activities poses little if any burden on institutions and would be helpful in OHRP's assessment of whether an IRB has sufficient staff, and therefore, OHRP has retained this requirement in the final rule. OHRP will utilize this data cautiously and intends neither to use this information as the only parameter for measuring regulatory compliance with 45 CFR 46.103(b)(2), nor to use this data to make presumptive or sweeping determinations regarding an institution's human subject protection program. OHRP has no intention of using this data to develop a formula for assessing the adequacy of IRB resources.

OHRP proposed to require submission of information regarding whether the institution or organization registering an IRB currently is accredited by a human subjects protection program accrediting organization, and if so, the date of its last accreditation and the name of the accrediting organization. OHRP stated that because accreditation is a developing concept, information on accreditation will help OHRP to evaluate the extent and value of IRB accreditation, and specifically solicited public comment related to the perceived value of collecting information on the accreditation status of IRBs.

Four commenters endorsed the collection of accreditation status information. Of these, two urged OHRP to use the accreditation of the institution, organization, or human research protection program as the unit of measure rather than IRB accreditation.

Four commenters objected to the proposed collection of accreditation status information. Two of these commenters indicated that the accreditation process is relatively new and noted that the names of accredited institutions and organizations are publicly accessible at sites that will present more up-to-date information than would be available in the HHS IRB registration database. One of the objecting commenters stated that the information may not be accurate, and another noted that accreditation has shown no proven benefit and no one set of accreditation standards has been developed or accepted.

In response to these comments, OHRP has decided to eliminate the requirement for reporting accreditation status from the final rule. Because similar information is publicly accessible, OHRP has determined that collection of this information through the IRB registration process is unnecessary.

One commenter noted that the data required for registration fails to include a parameter that would monitor whether IRB members have experience that would contribute to an adequate review of research studies involving children. The commenter requested that proposed § 46.602(e) be modified to require an indication of whether each IRB member has child health care and research expertise, and that proposed § 46.602(f) be expanded to include an estimate of the number of protocols an IRB reviewed that involved children. OHRP finds that the collection of such information is not necessary to further its goals of ensuring consistency with the requirements of 45 CFR 46.103(b)(3) that pertain to IRB composition.

One commenter suggested that the information collected from IRBs include a sense of the scope of vulnerable populations included in the research protocols, such as children, pregnant women, the elderly, and prisoners. OHRP finds that the collection of such information is not necessary to further the stated goals of the IRB registration system.

Proposed § 46.604 directed IRBs to register at an HHS Internet site or, if the institution or IRB organization lacks the ability to register electronically, to send registration information to OHRP's mailing address.

One commenter expressed pleasure that IRB registration may be performed online, greatly easing the compliance burden associated with such a requirement. OHRP agrees that online registration simplifies the IRB registration process and expects that nearly all institutions or IRB organizations have the capability to register electronically. The final rule has been modified to now require that each IRB must be registered electronically unless an institution or organization lacks the ability to register its IRB(s) electronically. If an institution or organization lacks the ability to register an IRB electronically, it must send its IRB registration information in writing to OHRP.

Proposed § 46.605 required that changes in the IRB contact, chairperson, or roster information be updated in the registry within 90 days. Whenever the electronic system is used to update or revise such information, the system instructs that all data on the IRB registration form be verified.

Proposed § 46.605 also considered an assured institution's or IRB organization's decision to disband a registered IRB, or to stop reviewing research conducted or supported by HHS, to be a change that must be reported to HHS within 30 days.

One commenter expressed concern about the requirement for reporting the closure of an IRB within 30 days, noting that the closure process may take longer than 30 days and that imposition of this requirement would put an undue burden on IRBs and the supporting institutions. In response to this comment, OHRP has added clarifying language to the final rule (now § 46.505) to indicate that an institution's or organization's decision to disband a registered IRB designated under an FWA must be reported to OHRP within 30 days of permanent cessation of the IRB's review of HHS-conducted or supported research.

OHRP notes that § 46.505 of the final rule has been modified from the proposed § 46.605 to delete the requirement that IRB roster changes must be submitted within 90 days, because 45 CFR 46.103(b)(3) already requires that changes in IRB roster information be reported to OHRP.

Nine commenters specifically commented in support of the concept of IRB registration.

One commenter requested that FDA and OHRP maintain one common registration site that will automatically include currently registered IRBs and allow them to retain their currently assigned numbers. OHRP notes that such a common registration site has been created.

One commenter urged that the information required from registered IRBs be the same for both FDA and OHRP. OHRP finds that, because of the differing statutory and regulatory authorities of FDA and OHRP to collect IRB registration information, the information required from registered IRBs is not the same for both agencies. However, OHRP notes that § 46.502 of the final rule has been modified from the proposed § 46.602 to harmonize further OHRP's final rule with FDA's. These changes include the following:

• Section 46.502(a) (which was § 46.602(a) in the NPRM) was modified to remove the requirement to submit the earned degree and the title of the senior or head official of the institution or organization operating the IRB who is responsible for overseeing the activities performed by the IRB. This section also was modified to require submission of the street address (if different from the mailing address) for the institution or organization operating the IRB.

• Section 46.502(b) (which was § 46.602(b) in the NPRM) was modified to remove the requirement to submit the title of the contact person providing the registration information. This section also was modified to require submission of the mailing address of this contact person.

• Section 46.502(c) (which was § 46.602(c) in the NPRM) was modified to require submission of the IRB's phone number, facsimile number, mailing address, street address (if different from the mailing address), and electronic mail address.

• Section 46.502(d) (which was § 46.602(d) in the NPRM) was modified to remove the requirement to submit the gender, earned degree, title, mailing address, and facsimile number of the IRB chairperson.

As stated in the preamble to the proposed rule, the Internet registration site will request more information from IRBs reviewing research conducted or supported by HHS than from IRBs reviewing clinical investigations regulated by FDA that are not conducted or supported by HHS. In those instances where the registration site would seek more information than FDA would require, the Internet site would clarify that IRBs regulated solely by FDA are not required to provide the additional information. Likewise, in those instances where the registration site would seek additional information from IRBs regulated by FDA but not regulated by HHS, the Internet site would clarify that IRBs regulated by HHS are not required to provide such information.

One commenter suggested that the rule make clear what of the information submitted is available through a Freedom of Information Act (FOIA) request. OHRP notes that although the IRB registration system information is subject to FOIA, disclosure determinations will be made in accordance with applicable exemptions.

One commenter questioned whether, if an IRB was originally registered with the U.S. Department of Education (ED) and reviews both ED and HHS research projects, the proposed registration update will meet the ED requirements. ED has informed OHRP that ED will rely upon the HHS IRB registration system and indicated that ED would ensure that the IRB will be registered with OHRP.

One commenter asserted that if HHS requires IRBs to register but does not require industry and investigators to use a registered IRB, then only the IRBs are at risk of being penalized for a failure to register. The commenter suggested that HHS should impose a financial penalty on the investigators and sponsors who do not use a registered IRB. OHRP declines to impose monetary penalties on investigators and sponsors who do not use a registered IRB for review of research. OHRP does not have the legal authority to impose fines for failure to maintain IRB registration information. Furthermore, OHRP notes that an IRB cannot be designated under an assurance of compliance approved for federalwide use by OHRP if it fails to register. OHRP believes that the registration requirement is both simple and straightforward, so it does not expect that institutions or organizations operating IRBs designated under FWAs will refuse or fail to register or revise their registration information.

One commenter asked whether IRBs will receive confirmation that the IRB is registered. Confirmation of registration will be provided to the registering entity under the IRB registration system.

One commenter expressed concern that the proposed rule change will hinder small- to medium-sized organizations which wish to conduct HHS-supported research because such smaller organizations may lack resources to support standing IRBs. OHRP finds that this regulatory change does not mandate that every research organization that receives HHS support must have its own IRB. OHRP anticipates that an institution without an IRB that wishes to conduct HHS-supported human subjects research may designate under its FWA an independent IRB or another institution's IRB for review of research, and that this IRB will be registered in accordance with the regulatory requirements.

After considering the comments on the proposed rule, OHRP is adopting the rule largely as it was proposed. The following key changes have been made in the final rule:

1. The designation of proposed subpart F has changed to subpart E and the numbering of the provisions has changed from §§ 46.601-605 to 46.501-505.

2. The proposed requirement to collect an IRB roster that includes the name, gender, degree, scientific or nonscientific specialty, and affiliation of each voting and alternate IRB member, including the chairperson (which was § 46.602(e) in the NPRM) has been deleted from the final rule. However, the IRB registration form will continue to include IRB roster information as part of the IRB registration process since this information is required by 45 CFR 46.103(b)(3).

3. Section 46.502(a) of the final rule (which was § 46.602(a) in the NPRM) was modified to remove the requirement to submit the earned degree and title of the senior or head official of the organization or institution operating the IRB who is responsible for overseeing activities performed by the IRB. This section also was modified to require submission of the street address (if different from the mailing address) for the institution or organization operating the IRB.

4. Section 46.502(b) of the final rule (which was § 46.602(b) in the NPRM) was modified to remove the requirement to submit the title of the contact person providing the registration information. This section also was modified to require submission of the mailing address of this contact person.

5. Section 46.502(c) of the final rule (which was § 46.602(c) in the NPRM) was modified to require submission of the IRB's phone number, facsimile number, mailing address, street address (if different from the mailing address), and electronic mail address.

6. Section 46.502(d) of the final rule (which was § 46.602(d) in the NPRM) was modified to remove the requirement to submit the gender, earned degree, title, mailing address and facsimile number of the IRB chairperson.

7. Section 46.502(e) of the final rule (which was § 46.602(f) in the NPRM) was modified to require submission of the approximate number of all active protocols and active protocols conducted or supported by HHS, rather than the number ranges (small, medium, or large) for total active protocols and active protocols supported by HHS, as proposed in the NPRM.

8. The proposed requirement to submit information regarding whether the institution or IRB organization registering an IRB is accredited (which was in § 46.602(h) of the NPRM) has been deleted from the final rule.

9. Section 46.503 of the final rule (which was § 46.603 in the NPRM) was modified to clarify that IRB registration becomes effective when reviewed and accepted by OHRP, rather than when HHS posts registration information on its website.

10. Section 46.504 of the final rule (which was § 46.604 in the NPRM) was modified to require electronic submission of registration information unless an institution or organization lacks the ability to do so.

11. Section 46.505 of the final rule (which was § 46.605 in the NPRM) was modified to remove the requirement that information regarding IRB roster changes must be submitted within 90 days because 45 CFR 46.103(b)(3) already requires that changes in IRB roster information be reported to OHRP.

Other minor changes have been made in the final rule for purposes of clarity and accuracy.

An IRB cannot be designated under an FWA if it fails to register. If an FWA submitted to OHRP for approval designates an IRB that has not been registered, OHRP will not approve the FWA with the designation of that IRB.

If an IRB designated under an FWA fails to appropriately update its registration information in accordance with § 46.505 of the final rule, OHRP could restrict or revoke its approval of the FWA. For example, if an IRB fails to appropriately update its registration information in accordance with § 46.505 of the final rule, OHRP could take appropriate action under the institution's FWA and OHRP's compliance oversight policies and procedures. OHRP believes that the registration requirement in the final rule is both simple and straightforward, so it does not expect that institutions or organizations operating IRBs designated under FWAs will refuse or fail to register or update their registration information.

OHRP has posted and will continue to post on its Web site the following information collected under the IRB registration process:

1. The name, location, and OHRP-assigned number (called an IORG number) of each institution or organization that has registered an IRB. The IORG number is a unique number assigned by OHRP to an institution or organization the first time that it registers an IRB. This number is to be provided to OHRP whenever an institution or organization subsequently updates or renews the existing registration of any of its IRBs or registers a new IRB. Provision of the IORG number allows OHRP to efficiently track and organize all IRB registration information submitted by the same institution or organization.

2. The name, location, registration expiration date, and OHRP-assigned registration number of each registered IRB. The first time an IRB is registered, OHRP assigns it a separate unique IRB registration number. This number is to be provided to OHRP whenever an institution or organization subsequently updates or renews an IRB registration. Provision of the IRB registration number allows OHRP to efficiently track and organize all IRB registration information submitted by an institution or organization for the same IRB. Furthermore, an institution submitting an FWA includes the IRB registration number for each IRB designated under its FWA, thereby eliminating the need for multiple submissions of the same registration information to OHRP.

Although all other information collected by the IRB registration is subject to FOIA, disclosure determinations will be made in accordance with applicable exemptions.

Beyond such access to the information, OHRP will maintain the confidentiality of the information submitted with the IRB registration to the extent allowed by law.

All of the IRB registration information that is submitted to OHRP will be transferred to a separate server which will not be publicly accessible. In this manner, a high level of security can be maintained for the IRB registration database.

OHRP will provide browse-only access to the database containing all information collected in the IRB registration database, via a password protected mechanism, to all Federal departments and agencies that have adopted the Federal Policy for the Protection of Human Subjects, known as the “Common Rule,” which HHS has codified as 45 CFR part 46, subpart A.

This rule is effective July 14, 2009. This protracted effective date is necessary to (a) allow refinement of the electronic registration system so that it corresponds to this final rule and to FDA's final rule, and (b) obtain OMB review and approval for the information collection requirements of this rule.

Initial registration with all required information must be submitted within 60 days of the effective date of the rule, by September 14, 2009. For any IRB currently registered with OHRP, the institution or organization operating the IRB must submit all information required under this rule by the three-year expiration date previously assigned by OHRP or within 90 days of any changes regarding the contact person who provided the IRB registration information or the IRB chairperson.

Section 491 of the Public Health Service Act authorizes the Secretary, by regulation, to require each entity which applies for a grant, contract, or cooperative agreement under the Act for any project or program which involves the conduct of biomedical or behavioral research involving human subjects to submit assurances satisfactory to the Secretary that it has established an IRB to review research conducted at or supported by the entity in order to protect the rights of the human subjects (42 U.S.C. 289(a)). Section 491 of the Public Health Service Act also authorizes the Secretary to establish a program under which requests for clarification and guidance with respect to ethical issues raised in connection with biomedical or behavioral research involving human subjects are responded to promptly and appropriately (42 U.S.C. 289(b)). These authorities are delegated to OHRP (67 FR 10216-18, March 6, 2002).

By requiring IRB registration, the rule will aid in the efficient implementation of the Public Health Service Act's provisions regarding assurances and providing guidance and education to IRBs involved in human subjects research conducted or supported by HHS. Moreover, collection of the information required under the rule will enable OHRP to contact IRBs more quickly and efficiently on various issues, such as new regulatory requirements or policies or other matters related to the conduct of human subjects research. OHRP concludes that it has sufficient legal authority to issue this rule.

OHRP has examined the impact of the rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612) (as amended by subtitle D of the Small Business Regulatory Fairness Act of 1996 (Pub. L. 104-121)), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). OHRP believes that this final rule is not a significant regulatory action as defined by the Executive Order.

Under the Regulatory Flexibility Act, if a rule has a significant impact on a substantial number of small entities, an agency must analyze regulatory options that would minimize any significant impact of the rule on small entities. Because the required registration information is minimal and the costs associated with registration is low, OHRP certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that an agency prepare a written statement of anticipated costs and benefits before proposing 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 in any one year (adjusted annually for inflation). The current threshold after adjustment for inflation is $127 million, using the most current (2006) Implicit Price Deflator for the Gross Domestic Product. OHRP does not expect this final rule to result in any one-year expenditure that would meet or exceed this amount.

The rule requires IRBs designated under an assurance of compliance approved for Federalwide use by OHRP to register with HHS. The information sought through the registration process is minimal, consisting largely of the following: The name, mailing address, and street address (if different from the mailing address) for the institution or organization operating the IRB; the names, addresses, phone numbers, facsimile numbers, and electronic mail addresses of (i) the senior officer or head official of the institution or organization operating the IRB who is responsible for overseeing the activities performed by the IRB, and (ii) the contact person providing the registration information; the name, phone number, and electronic mail address of the IRB chairperson; and, the approximate numbers of all active research protocols, active protocols conducted or supported by HHS, and full-time equivalent positions devoted to the IRB's administrative activities.

OHRP estimates that initial IRB registration may require 1 hour to complete. If the average wage rate is $40 per hour, this means that each IRB will spend $40 for an initial registration ($40 per hour × 1 hour per initial registration).

OHRP estimates that the renewal or update of an IRB registration will require less time, especially if the IRB is only verifying existing information. If renewing or updating an IRB registration requires 30 minutes, then the cost of renewing or updating would be approximately $20 ($40 per hour × 0.5 hour per registration renewal or update).

Additionally, assuming that the maximum number of IRBs that will be subject to registration annually would be 6,000, OHRP estimates that 2,000 IRBs will complete one new registration and one update each year and the other 4,000 IRBs will complete two updates or renewals each year. The total annual burden costs for 6,000 IRBs are projected to be $280,000 (2,000 new IRB registrations × 1 hour × $40/hr = $80,000; 1 renewal/update of these 2,000 IRBs × 0.5 hr × $20/0.5 hr = $40,000; 4,000 IRBs will complete 2 updates/renewals each year, 4,000 IRBs × 0.5 hr × $20/0.5 hr × 2 = 160,000).

Given the minimal registration information that would be required and the low costs associated with registration, this rule is not a significant regulatory action, and OHRP certifies that the rule will not have a significant economic impact on a substantial number of small entities. The rule is not a significant regulatory action under Executive Order 12866 and does not require a Regulatory Flexibility Act analysis.

Because the total expenditure under the rule will not result in a one-year expenditure of $100 million or more, OHRP is not required to perform a cost-benefit analysis under the Unfunded Mandates Reform Act.

OHRP has determined that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule contains information collection requirements that are subject to review by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), OHRP will obtain OMB review and approval for the information collection requirements of this rule.

OHRP has analyzed this rule in accordance with the principles set forth in Executive Order 13132. OHRP 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, we have concluded that the rule does not contain policies that have federalism implications as defined in the order and, consequently, a federalism summary impact statement is not required.

This document announces that, on December 29, 2008, OMB approved, for a period of six months, the information collection requirement(s) contained in Section 73.626(f) of the rules. The Commission publishes this notice to announce the effective date of this rule. If you have any comments on the burden estimates listed below, or how the Commission can improve the collections and reduce any burdens caused thereby, please contact Cathy Williams, Federal Communications Commission, Room 1-C823, 445 12th Street, SW., Washington, DC 20554. Please include OMB Control Numbers 3060-0027 and 3060-0029, in your correspondence. The Commission will also accept your comments via the Internet if you send them to PRA@fcc.gov.

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

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the Commission is notifying the public that it received OMB approval on December 29, 2008, for the information collection requirement(s) contained in the Commission's rules at 47 CFR 73.626(f).

Under 5 CFR 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.

No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a valid OMB Control Number.

The OMB Control Numbers are 3060-0027 and 3060-0029 and the total annual reporting burdens for respondents for these information collections are as follows:

OMB Control Numbers: 3060-0027.

OMB Approval Date: December 29, 2008.

Expiration Date: June 30, 2009.

Title: Application for Construction Permit for Commercial Broadcast Station, FCC Form 301.

Form Number: FCC Form 301.

Type of Review: Revision to a currently approved collection.

Respondents: Business or other for profit entities; Not for profit institutions.

Number of Respondents/Responses: 4,378 respondents; 7,814 responses.

Estimated Hours per Response: 1-5 hours per response.

Frequency of Response: On occasion reporting requirement; Third party disclosure requirement.

Total Annual Burden: 14,808 hours.

Total Annual Cost: $52,580,197.

Obligation to Respond: Required to obtain or retain benefits. The statutory authority for this information collection is contained in Sections 154(i), 303 and 308 of the Communications Act of 1934, as amended.

Nature and Extent of Confidentiality: There is no need for confidentiality with this collection of information.

Privacy Act Assessment: No impact(s).

Needs and Uses: On November 3, 2008, the Commission adopted a Report and Order, In the Matter of Digital Television Distributed Transmission System Technologies; MB Docket No. 05-312, FCC 08-256 (released Nov. 7, 2008). In this Report and Order, the Commission adopts rules for the use of distributed transmission system (“DTS”) technologies in the digital television (“DTV”) service. See 47 CFR 73.626. DTS technology allows stations to employ multiple synchronized transmitters spread around a station's service area, rather than the current single-transmitter approach. Each transmitter would broadcast the station's DTV signal on the same channel, similar to analog TV booster stations but more efficiently. Due to the synchronization of the transmitted signals, DTV receivers should be able to treat the multiple signals as reflections or “ghosts” and use “adaptive equalizer” circuitry to cancel or combine them to produce a single signal.

Congress has mandated that after February 17, 2009, full-power television broadcast stations must transmit only in digital signals, and may no longer transmit analog signals. Emergency OMB approval is necessary for this collection to allow full-power DTV stations to use DTS technologies to meet their statutory responsibilities and begin operations on their final, post-transition (digital) channels by their construction deadlines. DTS will provide DTV broadcasters with an important tool for providing optimum signal coverage for their viewers. For some broadcasters that are changing channels or transmitting locations for their digital service, DTS may offer the best option for continuing to provide over-the-air service to current analog viewers, as well as for reaching viewers that have historically been unable to receive a good signal due to terrain or other interference.

FCC Form 301 is being revised to accommodate the filing of DTS applications.

OMB Control Numbers: 3060-0029.

OMB Approval Date: December 29, 2008.

Expiration Date: June 30, 2009.

Title: Application for TV Broadcast Station License, Form FCC 302-TV; Application for DTV Broadcast Station License, FCC Form 302-DTV; Application for Construction Permit for Reserved Channel Noncommercial Educational Broadcast Station, FCC Form 340; Application for Authority to Construct or Make Changes in an FM Translator or FM Booster Station, FCC Form 349.

Form Number: FCC Forms 302-TV, 302-DTV, 340 and 349.

Type of Review: Revision of a currently approved collection.

Respondents: Business or other for profit entities; Not for profit institutions.

Number of Respondents/Responses: 4,425 respondents; 6,425 responses.

Estimated Hours per Response: 1-4 hours per response.

Frequency of Response: Recordkeeping requirement; On occasion reporting requirement; Third party disclosure requirement.

Total Annual Burden: 14,450 hours.

Annual Burden Cost: $21,869,625.

Obligation to Respond: Required to obtain or retain benefits. The statutory authority for this information collection is contained in Sections 154(i), 303 and 308 of the Communications Act of 1934, as amended.

Nature and Extent of Confidentiality: There is no need for confidentiality with this collection of information.

Privacy Act Assessment: No impact(s).

Needs and Uses: On November 3, 2008, the Commission adopted a Report and Order in the Matter of Digital Television Distributed Transmission System Technologies; MB Docket No. 05-312, FCC 08-256 (released Nov. 7, 2008). In this Report and Order, the Commission adopts rules for the use of distributed transmission system (“DTS”) technologies in the digital television (“DTV”) service. See 47 CFR 73.626. DTS technology allows stations to employ multiple synchronized transmitters spread around a station's service area, rather than the current single-transmitter approach. Each transmitter would broadcast the station's DTV signal on the same channel, similar to analog TV booster stations but more efficiently. Due to the synchronization of the transmitted signals, DTV receivers should be able to treat the multiple signals as reflections or “ghosts” and use “adaptive equalizer” circuitry to cancel or combine them to produce a single signal.

Congress has mandated that after February 17, 2009, full-power television broadcast stations must transmit only in digital signals, and may no longer transmit analog signals. Emergency OMB approval is necessary for this collection to allow full-power DTV stations to use DTS technologies to meet their statutory responsibilities and begin operations on their final, post-transition (digital) channels by their construction deadlines. DTS will provide DTV broadcasters with an important tool for providing optimum signal coverage for their viewers. For some broadcasters that are changing channels or transmitting locations for their digital service, DTS may offer the best option for continuing to provide over-the-air service to current analog viewers, as well as for reaching viewers that have historically been unable to receive a good signal due to terrain or other interference.

FCC Form 340 is being revised to accommodate the filing of DTS applications.

A. Background

Subpart 18.2 of the Federal Acquisition Regulation (FAR) provides for certain flexibilities in the execution of contracts for supplies and services that are determined by the head of the agency to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack. In accordance with the delegation of authority provision at FAR 1.108(b), this final rule adds a new section at DFARS 218.270 to authorize heads of DoD contracting activities to make the determination addressed in FAR Subpart 18.2. The rule will facilitate the use of streamlined acquisition procedures in emergency situations.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment under 41 U.S.C. 418b is not required. However, DoD will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2008-D026.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

DFARS 203.170(a) prohibits DoD senior leaders from performing multiple roles in major source selections. To reinforce this policy, this final rule adds a requirement for DoD departments and agencies to certify every two years that no senior leader has performed multiple roles in the acquisition of a major weapon system or major service.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment under 41 U.S.C. 418b is not required. However, DoD will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2008-D037.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

This interim rule implements Section 847 of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181). Section 847 requires that a DoD official, who has participated personally and substantially in a DoD acquisition exceeding $10 million or who has held a key acquisition position, must obtain a written opinion from a DoD ethics counselor regarding the activities that the official may undertake on behalf of a DoD contractor within two years after leaving DoD service. In addition, Section 847 prohibits a DoD contractor from providing compensation to such a DoD official without first determining that the official has received or appropriately requested a post-employment ethics opinion.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the requirement to verify that a prospective employee has received or requested the appropriate DoD ethics opinion should involve minimal effort on the part of a contractor. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2008-D007.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 847 of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181). Section 847 requires that DoD officials that have participated personally and substantially in a DoD acquisition exceeding $10 million, or that have held certain key acquisition positions, must obtain a written opinion from the appropriate DoD ethics counselor before accepting compensation from a DoD contractor within two years after leaving DoD service. In addition, Section 847 prohibits a DoD contractor from providing compensation to such a DoD official without first determining that the official has received or appropriately requested a post-employment ethics opinion. Comments received in response to this interim rule will be considered in the formation of the final rule.

10 U.S.C. 2409 and 41 U.S.C. 251 et seq. prohibit Government contractors from discharging, demoting, or otherwise discriminating against employees as a reprisal for disclosing to Government officials information relating to a substantial violation of law related to a contract. 10 U.S.C. 2409 and 41 U.S.C. 251 et seq. are implemented in Subpart 3.9 of the Federal Acquisition Regulation. Section 846 of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181) and Section 842 of the National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417) amended 10 U.S.C. 2409 to establish protections for DoD contractor employees that differ from those specified in 41 U.S.C. 251 et seq. and the Federal Acquisition Regulation. Therefore, this interim rule adds a new DFARS subpart to address DoD requirements related to whistleblower protections. The differences between the FAR and the new DFARS policy include: Expansion of the types of information to which the protections apply; expansion of the categories of Government officials to whom information may be disclosed without reprisal; establishment of time periods within which the Inspector General and the agency head must take action with regard to a complaint filed by a contractor employee; establishment of a de novo right of action in federal district court for contractor employees who have exhausted their administrative remedies under 10 U.S.C. 2409; and addition of a contract clause requiring contractors to inform employees in writing of their whistleblower rights and protections.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Although the rule contains a new requirement for contractors to inform employees in writing of their whistleblower rights and protections, compliance with this requirement is not expected to have a significant cost or administrative impact on contractors. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2008-D012.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 846 of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181) and Section 842 of the National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417). These laws address whistleblower protections for DoD contractor employees and require DoD to ensure that DoD contractors inform their employees in writing of whistleblower rights and protections. Comments received in response to this interim rule will be considered in the formation of the final rule.

A. Background

Under the U.S.-International Atomic Energy Agency Additional Protocol (U.S.-IAEA AP), the United States is required to declare a wide range of public and private nuclear-related activities to the IAEA and potentially provide access to IAEA inspectors for verification purposes. The Department of Commerce issued a final rule at 73 FR 65120 on October 31, 2008, to implement the U.S.-IAEA AP.

The U.S.-IAEA AP permits the United States unilaterally to declare exclusions from inspection requirements for activities with direct national security significance. This DFARS rule contains a contract clause requiring a contractor to notify the applicable DoD program manager if the contractor is required to report any of its activities under the U.S.-IAEA AP. Upon such a notification, DoD will determine if access may be granted to IAEA inspectors, or if a national security exclusion should be applied.

DoD published a proposed rule at 73 FR 48185 on August 18, 2008. DoD received no comments on the proposed rule. DoD has adopted the proposed rule as a final rule with minor changes to clarify the text and to update references to a related DoD publication.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the rule applies only to those DoD contractors involved in certain nuclear-related activities. The rule provides for exceptions to inspection requirements that might otherwise apply to such contractors, if DoD determines that an exception is necessary in the interest of national security.

This final rule contains a new information collection requirement. The Office of Management and Budget has approved the information collection under Control Number 0704-0454.

10 U.S.C. 2327(d) requires DoD to develop and maintain a list of all firms, and subsidiaries of firms, that are owned or controlled by the government of a terrorist country and that, therefore, are subject to a prohibition on DoD contract awards.

To facilitate maintenance of the list required by 10 U.S.C. 2327(d), this final rule amends DFARS 209.104-1 and 209.104-70 to address DoD procedures for forwarding, to the appropriate office, any information indicating that a firm or a subsidiary of a firm may be owned or controlled by the government of a terrorist country.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment under 41 U.S.C. 418b is not required. However, DoD will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2008-D025.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

The List of Parties Excluded from Federal Procurement and Nonprocurement Programs, maintained by the General Services Administration, identifies contractor facilities where no part of a Federal contract or subcontract may be performed due to a violation of the Clean Air Act (42 U.S.C. 7606) or the Clean Water Act (33 U.S.C. 1368). In accordance with Executive Order 11738, the head of a Federal agency may grant an exemption permitting award to a contractor using an otherwise ineligible facility, if the head of the agency determines that the exemption is in the paramount interest of the United States. This final rule amends the procedures specified in the DFARS for processing such an exemption, to more closely align with the requirements of Executive Order 11738.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment under 41 U.S.C. 418b is not required. However, DoD will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2007-D022.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

This final rule adds text at DFARS 209.105-1 to address use of PPIRS (available at http://www.ppirs.gov ) in meeting requirements for determining contractor responsibility. The rule emphasizes that use of PPIRS information regarding contract termination for cause or default is just one consideration in making a determination of contractor responsibility.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment under 41 U.S.C. 418b is not required. However, DoD will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2008-D022.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

This interim rule amends the DoD pilot program addressed in DFARS Subpart 212.70, Pilot Program for Transition to Follow-On Contracting After Use of Other Transaction Authority. The pilot program implements Section 845(e) of the National Defense Authorization Act for Fiscal Year 1994 (10 U.S.C. 2371 note), and provides that certain items that do not otherwise meet the definition of “commercial item” may be treated as commercial items in the award of contracts and subcontracts that follow an other transaction agreement. Section 824 of the National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417) amended the authority for the pilot program to establish a new program expiration date of September 30, 2010, and to add items developed under research projects in accordance with 10 U.S.C. 2371 to the types of items to which the program applies.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Although the rule is expected to ease the transition of nontraditional defense contractors from the use of other transaction agreements to standard contracts, the economic impact is not expected to be substantial. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2008-D030.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 824 of the National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417). Section 824 amended the DoD pilot program that permits the use of streamlined procedures in the award of contracts and subcontracts that follow other transaction agreements, to include items developed under research projects within the scope of the program. The pilot program is intended to ease the transition of nontraditional defense contractors from the use of other transaction agreements to standard contracts. Comments received in response to this interim rule will be considered in the formation of the final rule.

An interim rule amending the Federal Acquisition Regulation (FAR) was published at 73 FR 54008 on September 17, 2008, to implement Section 843 of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181). Section 843 prohibits the award of a task or delivery order contract in an amount exceeding $100 million to a single source unless the head of the agency determines that: the task or delivery orders expected under the contract are so integrally related that only a single source can reasonably perform the work; the contract provides only for firm-fixed-price task or delivery orders; only one source is qualified and capable of performing the work at a reasonable price to the Government; or it is necessary in the public interest to award the contract to a single source due to exceptional circumstances. With regard to the delegation of authority provision at FAR 1.108(b), this DFARS rule specifies that the head of the agency may not delegate the authority to make a single source public interest determination below the level of the senior procurement executive. The rule also requires that a copy of any determination authorizing the award of a single source task or delivery order contract be submitted to the Deputy Director, Defense Procurement (Contract Policy and International Contracting).

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment under 41 U.S.C. 418b is not required. However, DoD will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2008-D017.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

Section 108 of the Military Construction and Veterans Affairs Appropriations Act, 2009 (Pub. L. 110-329, Division E) prohibits the use of funds appropriated in Title I of that Act for the procurement of steel for any military construction project or activity for which American steel producers, fabricators, or manufacturers have been denied the opportunity to compete. This interim rule adds DFARS policy and a contract clause to implement the statutory prohibition.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 603. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows:

This interim rule implements Section 108 of the Military Construction and Veterans Affairs Appropriations Act, 2009. The objective of the rule is to ensure that American steel producers, fabricators, and manufacturers are given the opportunity to compete for contracts and subcontracts for the acquisition of steel for use in military construction projects and activities. Existing Buy American Act and Balance of Payments Program requirements, implemented in FAR Subpart 25.2 and DFARS Subpart 225.75 respectively, already provide for DoD acquisition of domestic construction materials, including steel. However, this DFARS rule will prohibit use of the exceptions to Buy American Act/Balance of Program requirements otherwise permitted by FAR/DFARS, with regard to the acquisition of steel, unless American steel producers, fabricators, and manufacturers are first provided the opportunity to compete. The rule is expected to benefit American steel producers, fabricators, and manufacturers by ensuring they are provided an opportunity to compete for contracts and subcontracts for the acquisition of steel for use in military construction projects and activities.

DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2008-D038.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

A determination has been made under the authority of the Secretary of Defense that urgent and compelling reasons exist to publish an interim rule prior to affording the public an opportunity to comment. This interim rule implements Section 108 of the Military Construction and Veterans Affairs Appropriations Act, 2009 (Pub. L. 110-329, Division E). Section 108 establishes a prohibition on the expenditure of funds for the procurement of steel for any military construction project or activity, unless American steel producers, fabricators, and manufacturers have been provided an opportunity to compete. Comments received in response to this interim rule will be considered in the formation of the final rule.

This final rule amends the clause at DFARS 252.225-7040, Contractor Personnel Authorized To Accompany U.S. Armed Forces Deployed Outside the United States, to address requirements for DoD contractors to institute effective programs to prevent law of war violations by contractor personnel. The rule requires that deploying contractor personnel receive appropriate law of war training, and that contractor personnel report any violations of the law of war to the appropriate authorities. The DFARS rule is consistent with the policy in DoD Directive 2311.01E, DoD Law of War Program, dated May 9, 2006.

DoD published a proposed rule at 73 FR 1853 on January 10, 2008. Four sources submitted comments on the proposed rule. A discussion of the comments is provided below.

1. Comment: The limitation on the use of Web-based basic law of war training is overly restrictive (i.e., must be approved by the contracting officer). The training should be available at any time for completion via a Web-based source to prevent delays in meeting training requirements.

DoD Response: Deployed contractor personnel must process through a deployment center, in accordance with paragraph (f) of the clause at DFARS 252.225-7040. DoD has provided training materials to all the pre-deployment training centers as the primary method of meeting basic training requirements. Web-based training is intended to substitute for live pre-deployment training only when determined to be appropriate by the contracting officer.

2. Comment: To ensure the availability of advanced training when needed, advanced training should be handled as an in-processing matter and should be provided at an in-theater/in-country central processing center for newly arriving contractor personnel.

DoD Response: Advanced training could be provided at in-processing, as long as the Judge Advocates or other Government counsel are involved. The DFARS rule has been amended to provide additional flexibility in meeting advanced law of war training requirements. However, government counsel must review advanced training content in all cases to ensure that it is commensurate with the duties and responsibilities of the personnel to be trained.

3. Comment: DoD should develop standard training content to ensure consistency and accuracy.

DoD Response: DoD has developed standard basic training for dissemination, as described in the response to comment 1 above. However, for advanced training, different missions require different emphasis, making complete standardization infeasible.

4. Comment: This rule will have cost impacts associated with implementation, especially if the contractor loses time while waiting for advanced law of war training. Contractors should not be held accountable for compliance with law of war training requirements until such time as DoD has its training materials deployed.

DoD Response: DoD has already deployed the basic training module to the military training centers, and online training is also available for use when deemed appropriate by the contracting officer. The DFARS rule has been amended to permit flexibility in meeting advanced law of war training requirements, provided the training content is coordinated with government counsel.

5. Comment: The Rules for the Use of Force (RUF) and the Uniform Code of Military Justice (UCMJ) should be addressed as part of law of war training.

DoD Response: RUF training is already required by the clause at DFARS 252.225-7040. The basic and advanced training on the law of war will complement this training by addressing law of war issues pertaining to the use of force. RUF training should be provided by the contractor in accordance with the cognizant Commander's RUF guidance. UCMJ criminal liability for law of war violations is included in the training program. However, the UCMJ applies to contractor employees, along with the Military Extraterritorial Jurisdiction Act, in a broader context than law of war violations. The contractor is responsible for ensuring that its employees are properly trained on all aspects of their criminal and civil liability.

6. Comment: The word “prevent” should be changed to the phrase “minimize the possibility of,” in the context of requiring contractors to implement a program to prevent law of war violations.

DoD Response: The word “prevent” is consistent with both DoD Directive 2311.01E and treaty obligations under international law.

7. Comment: What metrics will be used to determine if a contractor has an effective training program to prevent law of war violations?

DoD Response: The goal is to prevent law of war violations. Contractors should adopt training, control measures, and reporting procedures to that end. Basic training is Government resourced. Advanced training will be provided as specified in the contract.

8. Comment: The rule will impose a mandatory requirement on contractor personnel to report violations directly to Commanders, bypassing other complaint channels. Such reporting by individuals should be optional.

DoD Response: Contractor reporting of law of war violations is required by DoD Directive 2311.01E. The clause at DFARS 252.225-7040 has been amended to permit contractor personnel to report violations to authorities other than the Combatant Commander.

9. Comment: The requirement for contractor personnel to report law of war violations will amount to unenforceable “good faith” reporting. Contractors instead should be required to submit a daily or weekly log of activity on any violations as a way to enforce reporting.

DoD Response: DoD does not agree with the recommended change. Creating a daily or weekly log would cause an unnecessary recordkeeping requirement for contractors.

10. Comment: Requiring reporting by individuals requires contractor personnel to make legal judgments about the conduct of other contractor personnel and about the credibility of information that they may not be equipped to make.

DoD Response: DoD does not agree that this requirement calls for contractor personnel to make legal judgments. The basic law of war training is designed to educate contractor personnel on the law of war and on how to recognize suspected law of war violations. The legal analysis and credibility determinations will be made by the Commander, with the advice of Counsel, when deciding to report the incident to higher headquarters. For purposes of the DFARS clause, contractor personnel must report all suspected law of war violations, not only those violations that may have been committed by contractor personnel.

11. Comment: DoD should stablish an Office of Primary Responsibility to assist contractors with law of war issues.

DoD Response: DoD does not believe that establishing an Office of Primary Responsibility is necessary. Contractors should follow normal procedures by requesting any needed clarification from the contracting officer, who in turn can request assistance from a Judge Advocate or other Government counsel.

12. Comment: Paragraph (d) of the clause at 252.225-7040 should include a cross-reference to paragraph (a) of the clause, which defines the law of war.

DoD Response: The cross-reference is unnecessary. Paragraph (a) of the clause makes it clear that the definitions in that paragraph apply wherever the defined terms are used throughout the clause.

13. Comment: “Third country national laws” should be removed from 252.225-7040(d)(1)(i).

DoD Response: This change is outside the scope of this rule, which is focused on implementing law of war training in accordance with DoD Directive 2311.01E.

14. Comment: The Geneva and Hague Conventions should be specifically addressed in 252.225-7040(d)(1)(ii), as they are integral to the law of war.

DoD Response: This level of specificity should be and is addressed in basic law of war training and is not necessary for inclusion in the DFARS clause.

15. Comment: The rule should include a requirement for all contractors to be notified of the Geneva/Hague status and designation noted on the letters of agreement.

DoD Response: This requirement should be handled as part of in-processing procedures and is not necessary for inclusion in the DFARS.

16. Comment: At 252.225-7040(e)(1)(vii)(A), the phrase “all deploying personnel” should be replaced with “all contractors accompanying armed forces.”

DoD Response: For consistency with DoD Directive 2311.01E and the rest of the clause, the phrase has been changed to “Contractor personnel authorized to accompany U.S. Armed Forces deployed outside the United States.”

17. Comment: At 252.225-7040(h)(3), the phrase “installation to which they are assigned” should be changed to “installation where they reside,” because contractors are not assigned to installations.

DoD Response: The phrase “installation to which they are assigned” has been excluded from the final rule.

18. Comment: “Applicable United States, host country and third country national laws” should be added to 252.225-7040(h)(3)(i).

DoD Response: This recommended change is outside the scope of this rule, which is focused on implementing law of war training in accordance with DoD Directive 2311.01E.

19. Comment: At 252.225-7040(h)(3)(ii), the phrase “military operations other than war” should be changed to “declared contingency operations” to reflect latest terminology.

DoD Response: The phrase has been revised to read “during any other military operations.”

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. , because the requirement to institute an effective program to prevent law of war violations need not be a costly endeavor, and it can be tailored to the size of the company. Basic law of war training will be provided by the Government. Advanced law of war training requirements will be specified in the solicitation and contract to permit contractors to receive appropriate reimbursement of any training costs.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

DoD published an interim rule at 73 FR 53156 on September 15, 2008, to implement Section 343 of the National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181). Section 343 extended, through September 30, 2012, the period during which contractor performance of security-guard functions at military installations or facilities is authorized to fulfill additional requirements resulting from the terrorist attacks on the United States on September 11, 2001, provided the total number of personnel employed to perform such functions does not exceed specified limits.

DoD received no comments on the interim rule. Therefore, DoD has adopted the interim rule as a final rule without change.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. Although the rule may provide opportunities for small business concerns to receive contracts for the performance of security-guard functions at military installations or facilities, the economic impact is not expected to be substantial.

The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

The provision at DFARS 252.209-7001, Disclosure of Ownership or Control by the Government of a Terrorist Country, implements 10 U.S.C. 2327, which prohibits DoD from entering into a contract with a firm that is owned or controlled by the government of a country that has been determined by the Secretary of State to repeatedly provide support for acts of international terrorism. This final rule removes North Korea from the terrorist countries listed in the provision at DFARS 252.209-7001, since the Secretary of State has removed North Korea from the list of designated state sponsors of terrorism.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.

This rule will not have a significant cost or administrative impact on contractors or offerors, or a significant effect beyond the internal operating procedures of DoD. Therefore, publication for public comment under 41 U.S.C. 418b is not required. However, DoD will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should cite DFARS Case 2008-D036.