Under the regulations in “Subpart-Fruits and Vegetables” (7 CFR 319.56 through 319.56-49, referred to below as the regulations), the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture prohibits or restricts the importation of fruits and vegetables into the United States from certain parts of the world to prevent plant pests from being introduced into and spread within the United States.

On May 16, 2008, we published in the Federal Register (73 FR 28377-28382, Docket No. APHIS-2008-0017) a proposal  1 to amend the regulations in § 319.56-28 to allow the importation of commercial shipments of tomatoes from the Souss-Massa-Draa  2 region of Morocco subject to a systems approach similar to that which is already in place in that section for tomatoes imported into the United States from other areas within Morocco. We proposed to require the tomatoes to be produced under conditions that include requirements for pest exclusion at the production site, fruit fly trapping inside and outside the production site, and pest-excluding packinghouse procedures. We further proposed that the tomatoes would be required to be accompanied by a phytosanitary certificate issued by the Moroccan national plant protection organization with an additional declaration stating that the tomatoes have been grown in registered pest-exclusionary structures in the Souss-Massa-Draa region and were pink at the time of packing.

We solicited comments concerning our proposal for 60 days ending July 15, 2008. We received four comments by that date. They were from a State department of agriculture, representatives of growers and importers, and the Moroccan Ministry of Agriculture. They are discussed below.

Two commenters opposed the importation of tomatoes from the Souss-Massa-Draa region of Morocco unless the tomatoes are treated for fruit flies with a Probit 9 treatment.

Probit 9 is a treatment standard that requires a pest mortality rate of greater than 99 percent. As described in the proposal, the systems approach uses methods other than treatment to mitigate the risk associated with fruit flies, and, therefore, application of a Probit 9 treatment is not required.

In order to address the risk associated with fruit flies, we proposed various mitigation measures, including ripeness requirements, a requirement that the tomatoes be produced in pest-exclusionary structures, fruit fly trapping, pest-exclusionary procedures at the production site and packinghouse, the removal of shade trees around the pest-exclusionary structures, and fruit fly bait spray applications.

One commenter, the Moroccan Ministry of Agriculture, stated that two of the proposed requirements would not be feasible to implement, specifically the requirement for removal of shade trees within 10 meters of the pest-exclusionary structures and the requirement to apply approved protein bait spray pesticide for Mediterranean fruit fly (Medfly, Ceratitis capitata ) on shade trees and host plants within 200 meters of the pest-exclusionary structures every 6 to 10 days, starting at least 30 days before harvest. The commenter stated that these requirements would be in conflict with environmental protection requirements in Morocco. In addition, the Moroccan Ministry of Agriculture stated that the pesticide spraying requirements were not feasible because the small size of farms within the Souss-Massa-Draa region means that they are concentrated very close together and the ministry expressed concern that the frequency and concentration of the spraying could negatively affect the natural environment and could lead to fruit flies developing resistance to the protein bait spray pesticides. As an alternative, the Moroccan Ministry of Agriculture stated that it already has an export program in place in Souss-Massa-Draa that focuses on fruit fly protection measures inside the production site such as the use of a greater number of traps per hectare than in areas of Morocco and Western Sahara from which tomatoes are currently approved to be exported under § 319.56-28(c). The program also uses anti-thrips nets; as the anti-thrips nets are 50 mesh and fruit flies are much larger than thrips, this mesh size is adequate to prevent access to the production site by fruit flies. The commenter stated that the program was adequate to mitigate the risks associated with fruit flies.

We have determined that some of the measures the commenter identified as unfeasible are not necessary to provide phytosanitary security, given the demonstrated efficacy of the existing tomato export program in Morocco and Western Sahara. No fruit flies have ever been intercepted in this program. Therefore, in this final rule, we are not including the proposed requirement in § 319.56-28(g)(6) for the removal of shade trees within 10 meters of the pest-exclusionary structures. In addition, we have changed the proposed buffer zone and spraying requirements to be consistent with the requirements currently in place for the El Jadida and Safi production areas in Morocco and in Western Sahara.

As provided in current paragraph (c) of § 319.56-28, in the El Jadida and Safi production areas in Morocco and in Western Sahara, traps must be placed outside the registered pest-exclusionary structure within a 2-kilometer radius at a density of 4 traps per square kilometer 2 months prior to the start of the shipping season and continuing through the end of the shipping season. The capture of a single Medfly within 200 meters of a registered pest-exclusionary structure necessitates the addition of 6 more traps to be placed within a radius of 200 meters surrounding the initial detection. Capture of 2 Medflies within 200 meters of a registered pest-exclusionary structure within a 1-month time period necessitates bait sprays in the area every 7 to 10 days for 60 days to ensure eradication within the 200-meter buffer zone.

We are adding the requirements for trapping outside the pest-exclusionary structures to proposed paragraph (g)(3) and the requirements for additional trapping when a Medfly is trapped outside the greenhouse to proposed paragraph (g)(5). Because Souss-Massa-Draa is not an area of low prevalence for fruit flies, unlike the currently approved tomato export provinces in Morocco and Western Sahara, some additional mitigations are necessary in order to mitigate the additional pest risk associated with tomatoes from Souss-Massa-Draa. Therefore, we are retaining the proposed requirement for eight fruit fly traps per hectare within the pest-exclusionary structures, with a minimum of four traps per structure, as opposed to the requirement for four traps per hectare in the currently approved provinces. We are also retaining the proposed prohibition of fruit fly host material within 50 meters of the pest-exclusionary structures, which is not included in the requirements for the currently approved provinces.

In addition, we are retaining the proposed requirements for trapping program monitoring and retention of trapping records for 1 year, and the requirement that sea containers must be kept closed if stored within 20 meters of Medfly host materials prior to loading. We are also amending the regulations in § 319.56-28(c)(4) to make the 1-year retention of trapping records requirement applicable for all approved growing areas within Morocco and Western Sahara in order to harmonize our regulations.

Two commenters expressed concern or had questions regarding Morocco's ability to enforce the proposed systems approach or APHIS' review of the program. One commenter asked what APHIS's confidence level is in the Moroccan Ministry of Agriculture's Division of Plant Protection, Inspection, and Enforcement (DPVCTRF) and asked what quality control measures are in place to monitor compliance with the provisions of the systems approach within Morocco. Specifically, the commenter asked how many site visits have been made or are planned and how much fruit is inspected at the port of arrival.

Another commenter stated that the systems approach is inadequate because it cannot be effectively reviewed or enforced by APHIS. According to the commenter, the systems approach is too reliant on reviews by DPVCTRF staff that may not have proper training. The commenter also expressed concern that there may not be enough DPVCTRF staff to perform required tasks and that decisions within Morocco will not be scrutinized by APHIS in a timely manner.

Based on the track record of our program for the importation of tomatoes from other areas of Morocco and Western Sahara into the United States, we are confident the DPVCTRF can effectively oversee the application of these measures in the Souss-Massa-Draa region. In addition, trapping records must be maintained for each site for 1 year and made available to APHIS for review upon request. To provide additional oversight, we are adding in § 319.56-28(g)(1) a requirement that tomatoes must be grown in approved production sites and provisions for APHIS to maintain oversight by participating in the approval and monitoring of production sites. In addition, we are adding the provisions that, 2 months before harvest and continuing until the end of the shipping season, DPVCTRF will visit and inspect the production sites and that APHIS may monitor the production sites at any time during this period. Approval and monitoring of production sites are standard requirements for our more recent import programs.

If, through trapping records, site visits, or port-of-arrival inspections, we find that any of the required mitigation measures are not being properly implemented, we will suspend shipments from the offending sites. Two site visits have already been conducted, with a third planned for the future in order to approve the pest-exclusionary structures. We will monitor the program on a regular basis and make additional site visits as needed. A standard port-of-arrival inspection rate of 2 percent will apply.

The proposed rule included a requirement that the tomatoes be pink at the time of packing. As stated in the current regulations, we consider pink tomatoes to be tomatoes where the surface area of the tomato is more than 30 percent but not more than 60 percent pink and/or red. One commenter asked who makes the decision regarding whether the tomatoes are at the correct stage of ripeness.

DPVCTRF is responsible for determining whether the tomatoes are at the correct stage of ripeness. However, port-of-arrival inspection will serve to check compliance with that provision of the regulations.

One commenter asked what safeguards are in place to mitigate high Medfly population fluctuations and ensure that the packinghouse is free of fruit flies. The commenter also asked if there can be fruit fly host plants in close proximity to the packinghouse.

As proposed, the tomatoes will have to be packed within 24 hours of harvest and must be safeguarded by an insect-proof mesh screen or plastic tarpaulin while in transit to the packinghouse and while awaiting packing. In addition, they must be packed in insect-proof cartons or containers, or covered by insect-proof mesh or plastic tarpaulin for transit to the airport or ship and export to the United States. We are adding a provision in a new paragraph (g)(8) in § 319.56-28 that during the time the packinghouse is in use for exporting fruit to the United States, the packinghouse may only accept fruit from registered approved production sites. (We are also moving the provisions proposed in paragraph (g)(8) to a new paragraph (g)(9).) This provision is standard for our import programs, including our import program for Chilean tomatoes, and will provide additional protection against infested host material entering the packinghouse and being transported to the United States. These measures are adequate to protect against the incursion of fruit flies into the packinghouse regardless of Medfly population fluctuations. In addition, as stated in the proposed rule, no fruit fly host material is permitted within 50 meters of the entry door of the packinghouse.

In addition to the changes discussed earlier, we are making several minor changes to the proposed requirements for the importation of tomatoes from Souss-Massa-Draa, Morocco, in § 319.56-28(g). We are replacing the word “greenhouses” with the phrase “pest-exclusionary structures” in the regulatory text we proposed and in the current regulations for the importation of tomatoes from the provinces of El Jadida and Safi in Morocco and the province of Dahkla in Western Sahara in § 319.56-28(c), as “pest-exclusionary structures” is a more inclusive term that allows us the flexibility to approve structures other than greenhouses that we have found to adequately mitigate risk. To be more consistent with the current regulations for the provinces of El Jadida and Safi in Morocco and the province of Dahkla in Western Sahara, and to reflect the current reality within Morocco, we are also making a change in proposed paragraph (g)(8), which we are redesignating (g)(9), of § 319.56-28 to state that the Moroccan Ministry of Agriculture, Fresh Product Export (EACCE) division and not DPVCTRF is responsible for export certification and issuance of phytosanitary certificates.

Since publication of the proposal, several Mediterranean countries, including Morocco, have experienced an outbreak of an additional quarantine pest of tomatoes, the tomato leaf miner ( Tuta absoluta) . We have issued a Federal Order (FO)  3 that imposes additional restrictions on the movement of tomatoes from countries where the pest is known to occur, including Morocco, in order to prevent the spread of the pest. Under the FO, the following criteria must be met before tomatoes from Morocco are eligible to enter the United States:

• The tomatoes must be grown in approved production sites registered with DPVCTRF;

• Tomato production sites must include a pest-exclusionary structure which must have double self closing doors and have all other openings and vents covered with 1.6 mm (or smaller) of screening;

• Registered production sites must conduct regular inspections for T . absoluta throughout the harvest season and find these areas free of evidence ( e.g. , eggs or larvae) of T . absoluta . If, within 30 days of harvest, 2 T . absoluta are captured inside the greenhouse or a single T . absoluta is found inside individual fruit or in a consignment of the fruit, shipments from the production site will be suspended until APHIS and

• DPVCTRF determine that an appropriate level of risk mitigation has been achieved; and DPVCTRF must maintain records of T . absoluta captures for 1 year following the date of the capture for APHIS review. DPVCTRF must maintain an APHIS-approved quality control program to monitor or audit the program. APHIS must be notified when a production site is removed or added to the program.

APHIS will conduct routine site visits to monitor the program and will issue a future rulemaking to revise the regulations in accordance with the requirements in the FO.

Finally, because the botanical name for tomatoes has been changed, we are replacing each occurrence of the old botanical name, Lycopersicon esculentum , in §§ 319.56-13 and 319.56-28 with the new botanical name, Solanum lycopersicum .

This final rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. We have prepared an economic analysis for this final rule. The analysis, which considers the number and types of entities that are likely to be affected by this action and the potential economic effects on those entities, provides the basis for the Administrator's determination that the rule will not have a significant economic impact on a substantial number of small entities. The economic analysis may be viewed on the Regulations.gov Web site (see footnote 1 for instructions for accessing Regulations.gov). Copies of the economic analysis are also available from the person listed under FOR FURTHER INFORMATION CONTACT .

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

This final rule allows tomatoes to be imported into the United States from the Souss-Massa-Draa region of Morocco. State and local laws and regulations regarding tomatoes imported under this rule will be preempted while the fruit is in foreign commerce. Fresh fruits are generally imported for immediate distribution and sale to the consuming public, and remain in foreign commerce until sold to the ultimate consumer. The question of when foreign commerce ceases in other cases must be addressed on a case-by-case basis. No retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq .), the information collection or recordkeeping requirements included in this rule have been approved by the Office of Management and Budget (OMB) under OMB control number 0579-0345.

The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 851-2908.

This final rule is issued under Marketing Agreement and Order No. 983, both as amended (7 CFR part 983), regulating the handling of pistachios grown in California, Arizona, and New Mexico. The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect.

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

This final rule makes changes to the administrative rules and regulations contained in the order. The changes will bring the current handling regulations into conformance with amendments to the order by including certain regulatory language previously contained in the order's provisions in the order's administrative rules and regulations, lifting the suspension of certain language, removing obsolete language, and revising references to renumbered order provisions. These changes were recommended by the committee and submitted to USDA on May 28, 2008.

A Secretary's decision, which describes the proposed amendments to the order, was published in the Federal Register on August 6, 2009 (74 FR 39230). A copy of the Secretary's decision may be viewed at: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480a02766 . An order amending the order implementing the amendments is also scheduled to be published in the Federal Register on the date this rule is published.

Amendments to the order's provisions will expand the production area subject to regulation under the order to include the States of Arizona and New Mexico in addition to California. Additional amendments to the order will modify existing provisions regarding aflatoxin and quality regulations, revise various administrative procedures under the order, authorize the committee to recommend research projects, and make other related changes. The amendments were approved by producers participating in a referendum conducted during the period August 10 through August 22, 2009; thus, conforming changes to the order's administrative rules and regulations are necessary.

Among other things, specific regulatory language contained in the order's aflatoxin and quality provisions is being removed. To avoid a lapse in regulation, the committee recommended that specific order provisions concerning aflatoxin tolerance levels and testing procedures be added to the order's administrative rules and regulations section at the same time the amendments are effectuated. This will provide a seamless transition and will assure that pistachios continue to be handled under the same regulations previously in place for California pistachios under the order. This rule implements those conforming changes. It is intended that finalization of this rule correspond with the issuance of the order amending the order upon publication in the Federal Register .

Section 983.38 of the order previously specified the maximum aflatoxin tolerance level for domestic shipments of pistachios for human consumption. This section also specified aflatoxin testing and certification procedures. Section 983.39 of the order, which was suspended on December 10, 2007 (72 FR 69141), specified minimum quality levels for domestic shipments of pistachios for human consumption. Testing and certification procedures to verify pistachio quality were also specified in this section. Section 983.46(c) of the order authorized the committee to recommend administrative rules and regulations implementing the provisions of §§ 983.38 and 983.39.

The order as amended includes amendments to §§ 983.38 and 983.39 that removes specific regulatory language from those provisions and replaces it with general authority to recommend and establish aflatoxin and quality regulations through the informal rulemaking process. Sections 983.38 and 983.39 are also being redesignated as §§ 983.50 and 983.51, respectively. Such changes require the addition of new regulatory sections to the order's administrative rules and regulations, render certain other sections obsolete, and require the revision of other sections to reflect changes to the order provisions, including references to renumbered sections.

As a result of the amendment of § 983.38, certain specific handling requirements concerning aflatoxin levels and testing procedures previously provided in that section are being moved to a new § 983.150—Aflatoxin Regulations, which is added to the order's rules and regulations. Section 983.150 specifies an aflatoxin tolerance level of 15 ppb, which is the aflatoxin tolerance previously provided under the order. Section 983.150 also specifies the same aflatoxin sampling, testing, and certification procedures previously contained in the order, with some modifications. For instance, the regulation requires that at least eight members of the committee recommend, and the Secretary approve, any alternative aflatoxin analysis methods. The regulation also requires accredited laboratories performing aflatoxin testing to certify that every lot of production area pistachios shipped domestically does not exceed the maximum aflatoxin tolerance level specified under the regulations. Additionally, handlers are required to maintain testing and shipping records for three years beyond the production year of their applicability. Finally, section references throughout the section are updated to reflect renumbered order provisions.

Section 983.138 of the order's administrative rules and regulations concerns the drawing of samples for aflatoxin testing in accordance with requirements in § 983.38. Because updated sampling procedures are contained in new § 983.150, this section would be obsolete under the amended order. Therefore, the committee recommended removing this section.

Due to amendment of § 983.39, the order will no longer contain specific regulations regarding minimal pistachio quality or testing. The committee will have general authority to consider and recommend minimal quality regulations and testing procedures. Certain references to the provisions of § 983.39 will also be obsolete. Therefore, the committee recommended that affected sections be revised to reflect proposed amendments to that section.

Section 983.141 outlines procedures for exempting handlers from minimum quality testing. This section has been suspended since December 10, 2007 (72 FR 69141), when the minimum quality provision of the order was also suspended. This section will be obsolete under the amended order. Therefore, the committee recommended lifting the suspension of § 983.141 and removing the section.

The order amendments include a change to § 983.40 that removes specific regulations regarding rework procedures for lots of pistachios failing aflatoxin and minimum quality testing. Those regulations are being replaced with general authority to recommend rework procedures for failed lots. Specific regulations describing rework provisions for lots failing aflatoxin testing are being moved to a new § 983.152—Failed lots/rework procedure. Conforming changes to the text of the current regulations are being made in § 983.152 to reference aflatoxin regulations in the amended order provisions, and references to renumbered sections are also being changed.

The order amendments include a change to § 983.41 that removes a quality testing exemption for handlers handling fewer than 1,000,000 pounds of pistachios annually and replaces it with general authority to recommend testing procedures for minimum quantities. Section 983.41 is also being redesignated as § 983.53. Section 983.47 previously provided for the collection of necessary reports from regulated handlers. As a result of the amendments, § 983.47 is being redesignated as § 983.64. Paragraph (d) of § 983.147 describes Form ACP-5—“Minimal Testing Form,” for use by handlers handling fewer than 1,000,000 pounds of pistachios annually. That paragraph has been suspended since December 10, 2007 (72 FR 69141), when the minimum quality provision of the order was also suspended. The committee recommended revising that paragraph to specify that handlers may use Form ACP-5 to request permission to handle minimum quantities of pistachios according to the provisions of redesignated § 983.53. To remain consistent with the redesignation of § 983.47 as § 983.64, this rule redesignates § 983.147 as § 983.164.

The order amendments include a change to § 983.70, which previously provided an exemption from certain handling regulations under the order for handlers of fewer than 1,000 pounds of pistachios and authorized the committee to recommend revised exemption levels. The amendment raises the exemption level to 5,000 pounds. The section is also being redesignated as § 983.92. As authorized under § 983.70, § 983.170 of the order's administrative rules and regulations previously provided an exemption for handlers of fewer than 5,000 pounds. As a result of the amendment to § 983.70, § 983.170 is redundant. Therefore, the committee recommended that § 983.170 be removed. Additionally, a reference to § 983.170 in § 983.143 is revised to reference the exemption level in redesignated § 983.92. Finally, amendments to § 983.43 redesignate that section as § 983.55. To remain consistent with that redesignation, this rule also redesignates § 983.143 as § 983.155.

Section 983.53 of the order authorizes the collection of assessments from handlers on receipts of pistachios. Such assessments are used to fund expenses of the committee. Section 983.253 specifies the current assessment rate established for California pistachios. As explained above, the order amendments include expanding the production area to include the States of Arizona and New Mexico, in addition to California. Therefore, the committee recommended that paragraph (b) of § 983.253 be revised to establish an assessment rate applicable to all production area pistachios. To conform to the definition of the committee's “production year” contained in the order, the language of paragraph (b) of § 983.253 is also being revised to specify that assessments are due to the committee by December 15 of the applicable production year.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

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

Small business firms, which include handlers regulated under the order, have been defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $7,000,000. Small agricultural producers have been defined as those with annual receipts of less than $750,000.

There are approximately 29 handlers and 875 producers of pistachios in California, Arizona, and New Mexico. The committee has estimated that approximately 50 per cent of California handlers would be considered small businesses, as defined by SBA. The industry has estimated that one of the Arizona handlers and all three New Mexico handlers would also be considered small businesses.

Data provided by the committee regarding the size of the 2007 crop, as well as data reported by the National Agricultural Statistics Service (NASS), suggests that the average California producer revenue for the 2007 crop was $733,200. It is estimated that 85 percent of California producers had receipts of less than $750,000 and would thus be considered small businesses according to the SBA definition. Although there is no official data available, the industry estimates that the majority of producers in Arizona and New Mexico would also be considered small businesses.

The order previously regulated only pistachios produced in California. As a result of amendments to the order, the production area is being expanded to include Arizona and New Mexico. Additional amendments to the order will remove specific aflatoxin and quality regulations and testing procedures from the order's provisions and replace them with general authority for the committee to recommend aflatoxin and quality regulations. This rule makes changes to the order's administrative rules and regulations by adding the specific aflatoxin regulations previously found in the order's provisions and clarifying that the regulations pertain to handlers throughout the expanded production area. Certain language in the administrative rules and regulations section that is currently suspended, or that is redundant or obsolete due to enactment of the amendments, is being removed or revised. References to order sections that have been redesignated are also revised to reference the renumbered sections. These changes were recommended by the committee to ensure a seamless transition in aflatoxin regulation when the amendments are approved and to conform to various changes to the order's provisions.

Specifically, this rule removes § 983.138—Samples for testing, § 983.141—Procedures for exempting handlers from minimum quality testing, and § 983.170—Handler exemption, from the order's administrative rules and regulations. Conforming changes are being made to the language and references in §§ 983.143, 983.147, 983.253 to reflect amendments to the order, such as the expansion of the production area to include Arizona and New Mexico and the redesignation of several order sections. Sections 983.143 and 983.147 are being redesignated as §§ 983.155 and 983.164, respectively. Finally, two new sections, § 983.150—Aflatoxin regulations, and § 983.152—Failed lots/rework procedure, are being added to incorporate specific regulations concerning aflatoxin tolerance levels and testing procedures that are removed from the order's provisions as a result of the amendments.

The impact of the amendments to the order on producers and handlers has been analyzed in the Secretary's Decision published in the Federal Register on August 6, 2009, at 74 FR 39230. It may be generally concluded from the final regulatory impact analysis that the order amendments will improve the operation and functioning of the marketing order program and that all producers and handlers will benefit regardless of size. The analysis examined the benefits and costs to producers and handlers as a result of the expansion of the production area to include Arizona and New Mexico and the regulation of handlers under the marketing order program, including aflatoxin certification requirements.

Many of the amendments in this rule simply change the location of the regulatory provisions concerning aflatoxin levels and testing from the order provisions to the regulations. Therefore, these changes should have no effect upon California pistachio handlers of any size since they are currently required to comply with those requirements. With regard to application of aflatoxin certification requirements on Arizona and New Mexico handlers, that impact is fully considered in the previously referenced final regulatory flexibility analysis. The minimum quality provisions of the order have been suspended since December 10, 2007 (72 FR 69141), so there will be no effect on handlers as a result of removing those provisions. The revision of certain language, redesignation of some sections, and references to redesignated sections of the order that will be made to conform to the amended order are administrative in nature and will have no effect on producers or handlers of any size.

The changes in this rule are necessary to conform to amendments to the order. With regard to alternatives, if the amendments had not been approved by producers voting in the referendum, these changes would not be made and the proposed rule would have been withdrawn.

This action will not impose any additional reporting or recordkeeping requirements on either small or large pistachio handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

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

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

These changes were recommended by the committee on March 6, 2008, and submitted to AMS on May 28, 2008. The committee's meeting was widely publicized throughout the pistachio industry and all interested persons were invited to attend and participate. All entities, both large and small, were able to express their views on the effects of the amendments contained herein.

A proposed rule concerning this action was published in the Federal Register on September 4, 2009 (74 FR 45772). Copies of the rule were provided to interested parties. The rule was also made available through the Internet by USDA and the Office of the Federal Register. A 10-day comment period ending on September 14, 2009, was provided to allow interested persons to respond to the proposal.

One comment was received during the comment period. The comment was submitted by the manager of the committee. The commenter requested that the implementation of the aflatoxin regulations be delayed for handlers in the States of Arizona and New Mexico (District 4). The commenter points out that these States will be added to the production area and subject to regulation as a result of amendments to the order. The commenter states that handlers in Arizona and New Mexico have not previously been subject to marketing order requirements and have not had access to the necessary inspection services and forms needed to comply with the marketing order requirements. In addition, the committee will need time to consider implementation of rules and regulations that could provide reimbursement to District 4 handlers for additional costs associated with aflatoxin testing and certification.

USDA agrees that it may take a period of time for the handlers in Arizona and New Mexico to be in a position to meet these marketing order requirements. California handlers have been operating under the requirements since 2005; however, the Arizona and New Mexico handlers will need some time to transition into the program.

USDA believes it is reasonable to implement the aflatoxin sampling, testing, and certification requirements for Arizona and New Mexico handlers in District 4. Therefore, a change is made in this final rule that will implement the aflatoxin regulations for Arizona and New Mexico handlers on or after October 30, 2009.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/AMSv1.0/ams.fetchTemplateData.do?template=TemplateN&page=MarketingOrdersSmallBusinessGuide . Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

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

It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C. 553) because, as stated in the final rule amending the current order, the new production year began on September 1, and these regulations, which implement the order as amended, should be in place as soon as possible. Further, the effective date of this final rule corresponds to the effective date of the amended order.

Prior documents in this proceeding: Notice of Hearing issued on July 15, 2008, and published in the July 18, 2008, issue of the Federal Register (73 FR 41298); a Recommended Decision issued on April 29 and published in the May 5, 2009, issue of the Federal Register (74 FR 20630); and a Secretary's Decision and Referendum Order issued on July 29, 2009, and published in the August 6, 2009, issue of the Federal Register (74 FR 39230).

This action is governed by the provisions of sections 556 and 557 of Title 5 of the United States Code and is therefore excluded from the requirements of Executive Order 12866.

This final rule was formulated on the record of a public hearing held on July 29 and 30, 2008, in Fresno, California. Notice of this hearing was issued on July 15, 2008, and published in the July 18, 2008, issue of the Federal Register (73 FR 41298). The hearing was held to consider proposed amendments to the order.

The hearing was held pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act”, and the applicable rules of practice and procedure governing the formulation of marketing agreements and orders (7 CFR part 900).

The Notice of Hearing contained several amendment proposals submitted by the Committee. Upon the basis of evidence introduced at the hearing and the record thereof, the Administrator of AMS on April 29, 2009, filed with the Hearing Clerk, U.S. Department of Agriculture, a Recommended Decision and Opportunity to File Written Exceptions thereto. This Recommended Decision was published in the May 5, 2009, issue of the Federal Register (74 FR 39230). No exceptions were filed.

A Secretary's Decision and Referendum Order was issued on July 29, 2009, and published in the August 6, 2009, issue of the Federal Register (74 FR 39230). This document directed that a referendum among pistachio growers be conducted during the period August 10 through August 22, 2009 to determine whether they favor the proposed amendments to the order. To become effective, the amendments had to be approved by at least two-thirds of the volume of pistachios represented by voters in the referendum. All of the proposed amendments were favored by at least 94 percent of those voting in the referendum and by at least 96 percent of the volume represented in the referendum.

The amendments included in this final order will:

1. Expand the production area to include the States of Arizona and New Mexico. The production area covered under the order was previously limited to the State of California. This amendment will revise existing § 983.26, Production area, and redesignate it as § 983.25. It will also result in corresponding changes being made to existing § 983.11, Districts; § 983.21, Part and subpart; and existing § 983.32, Establishment and membership. Existing sections 983.21 and 983.32 will also be redesignated as § 983.20 and § 983.41, respectively.

2. Authorize the Committee to reimburse handlers for travel and shipping costs related to aflatoxin inspection, under certain circumstances. This amendment will revise existing § 983.44, Inspection, certification and identification, and redesignate it as § 983.56.

3. Add a new § 983.46, Research, that will authorize the Committee to engage in research projects with the approval of USDA. This amendment will also require corresponding changes to existing § 983.34, Procedure, to establish voting requirements for Committee recommendations concerning research. It will also require corresponding changes to existing § 983.46, Modification or suspension of regulations, and § 983.54, Contributions. The existing § 983.34, § 983.46, and § 983.54 will also be redesignated as § 983.43, § 983.59, and § 983.72, respectively.

4. Provide broad authority for aflatoxin regulations by revising existing § 983.38, Aflatoxin levels, and redesignating it as § 983.50. This amendment also requires corresponding changes to existing § 983.40, and redesignating that section as § 983.52. It also requires corresponding changes to § 983.1, Accredited laboratory.

5. Provide broad authority for quality regulations by revising existing § 983.39, Minimum quality levels, and redesignating it as § 983.51. It also removes provisions from that section concerning specific quality regulations that are currently suspended. This amendment will also require corresponding changes by removing currently suspended language in § 983.6, Assessed weight; revising § 983.7, Certified pistachios; removing existing § 983.19, Minimum quality requirements and § 983.20, Minimum quality certificate; revising existing § 983.31, Shelled pistachios; revising existing § 983.41, Testing of minimal quantities, and removing currently suspended language in that section; revising existing § 983.42, Commingling; and revising existing § 983.45, Substandard pistachios. Sections 983.31, 983.41, 983.42, and 983.45 will be redesignated as sections 983.30, 983.53, 983.54, and 983.57, respectively.

6. Add a new § 983.58, Interhandler Transfers. This proposal will modify existing authority under the order by expanding the range of marketing order obligations that may be transferred between handlers when pistachios are transferred between handlers. This proposal will require a corresponding change to existing § 983.53, Assessments, and will redesignate § 983.53 as § 983.71.

7. As a result of the proposed amendments and corresponding changes to the order summarized above, numerous administrative changes to the order will also be required. Such changes include numerical redesignations to several sections of the order, changes to cross references of section numbers in regulatory text as a result of the numerical redesignations, and removal of obsolete provisions. The title of order will be revised to include the States of Arizona and New Mexico. In addition, a change will be made to amend existing § 983.70 and redesignate it as § 983.92.

In addition to these amendments to the order, AMS proposed to make any such additional changes as may be necessary to the order to conform to any amendment that may be adopted. To the extent necessary, conforming changes have been made to the amendments. These conforming changes have been identified in the above list of amendments.

An amended marketing agreement was subsequently provided to all pistachio handlers in the production area for their approval. The marketing agreement was approved by handlers representing more than 50 percent of the volume of pistachios handled by all handlers during the representative period of September 1, 2008 through August 31, 2009.

Pursuant to the requirements set forth in the Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA), AMS has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions so that small businesses will not be unduly or disproportionately burdened. Marketing orders and amendments thereto are unique in that they are normally brought about through group action of essentially small entities for their own benefit.

Small agricultural service firms, which include handlers regulated under the order, have been defined by the Small Business Administration (SBA) (13 CFR 121.201) as those having annual receipts of less than $7,000,000. Small agricultural producers have been defined as those with annual receipts of less than $750,000.

There are approximately 24 handlers and approximately 800 producers of pistachios in the State of California. It is estimated that approximately 50 percent of the processing handlers had annual receipts of less than $7,000,000, according to information presented at the hearing. In addition, based on the number of producers, the size of the 2007 crop, and the average producer price per pound data reported by the National Agricultural Statistics Service (NASS), the average producer revenue for the 2007 crop was $702,000. It is estimated that 85% of the producers in California produced less than $750,000 worth of pistachios and would thus be considered small businesses according to the SBA definition.

Based on information presented at the hearing, it is estimated that there are approximately 40 to 50 growers of pistachios in Arizona and approximately 30 growers in New Mexico. It is also estimated that there are 2 handlers in Arizona and 3 handlers in New Mexico. Although no official data is available, based on hearing testimony it is estimated that the majority of producers in Arizona and New Mexico are small businesses according to SBA's definition. It is also estimated that all of the handlers in New Mexico are small businesses and one of the handlers in Arizona is a small business.

California accounts for the vast majority of pistachio acreage and production in the U.S. According to data from the National Agricultural Statistics Service (NASS), California's total acreage in 2007 was reported at 176,400 acres. While no 2007 acreage data is available from NASS for Arizona and New Mexico, in 2006, Arizona acreage was reported at 2,500 acres while New Mexico acreage was reported at 1,350 acres in 2002. Two witnesses from New Mexico testified that they estimate acreage in New Mexico to be about 450 acres in 2007. Pistachios are also grown in small quantities in Texas, Utah, and Nevada. However, witnesses testified that pistachios produced in those States are considered to be the result of hobby farming and are not commercially significant in volume. California, Arizona, and New Mexico account for over 99.99 percent of domestic pistachio production and essentially all of the production used for commercial purposes, according to the record.

The order regulating the handling of pistachios grown in the State of California was established in 2004. The primary feature of the order is a quality provision that requires pistachios to be sampled and tested for aflatoxin prior to shipment to domestic markets. Such shipments of pistachios may not exceed a tolerance level for aflatoxin. Information collection and dissemination is also conducted under the order. The program is funded through assessments on handlers according to the quantity of pistachios handled. The order is administered by an industry committee of handlers and growers, and is designed to support both large and small pistachio handlers and growers. Committee meetings where regulatory recommendations and other decisions are made are open to the public. All members are able to participate in Committee deliberations, and each Committee member has an equal vote. Others in attendance at meetings are also allowed to express their views.

The Committee met on March 6, 2008, and requested that USDA conduct a public hearing to consider proposed amendments to the order. USDA reviewed the request and determined to proceed to a hearing. A hearing was conducted on July 29 and 30, 2008, in Fresno, California. The Committee's meeting and the hearing were both open to the public and all that attended were able to participate and express their views.

The amendments approved by producers in referendum will: Expand the production area to include the States of Arizona and New Mexico; authorize the Committee to reimburse handlers for certain inspection costs; authorize research activities under the order; provide broad authority for aflatoxin regulation under the order, provide broad authority for quality regulation under the order; provide authority for interhandler transfer of marketing order obligations; and make corresponding administrative changes to the order as a result of the aforementioned proposed changes.

The amendments are intended to improve the operation and functioning of the marketing order program. Record evidence indicates that they are intended to benefit all producers and handlers under the order, regardless of size. All grower and handler witnesses at the hearing supported the amendments and while acknowledging the additional cost implications, they stated that they expected the benefits to outweigh the costs.

A description of the amendments and their anticipated economic impact on small and large entities is discussed below.

The key economic issues to examine in considering the amendments to the marketing order are the benefits and costs to growers and handlers of the expansion of the production area and the consequences of that expansion. The most significant change in terms of its potentially significant and immediate impact is the fact that expanding the production area to include Arizona and New Mexico will result in pistachio handlers in those two States being regulated under the order which will require them to meet the same aflatoxin certification requirements that apply to California handlers.

Pistachio handlers under the order must have all pistachio lots destined for the domestic market tested and certified that they do not exceed a maximum aflatoxin tolerance. To comply with the standard, handlers arrange for a sample to be taken from each lot that is to be shipped domestically and to have that sample tested for aflatoxin. Lots that meet the standard receive written certifications that allow shipment to the domestic market. Lots that exceed the aflatoxin tolerance cannot be shipped domestically. Handlers may rework the lots to remove contaminated nuts and then can begin the certification process again. There are costs associated with each of these steps, which were previously borne only by California handlers and will be borne by handlers in the other two States as a result of the amendment.

Before considering cost-related details, it is important to examine the benefits associated with mandatory aflatoxin certification. Various grower and handler witnesses testified that they expected significant benefits to accrue from the mandatory requirements enforced through the marketing order, and increased consumer confidence in the quality of U.S. pistachios. Arizona and New Mexico handler witnesses indicated that they would willingly comply with all of the steps involved in meeting the aflatoxin standards. Grower witnesses from Arizona and New Mexico indicated awareness that at least part of the increased handler costs from aflatoxin certification would be passed onto them, but that they expected the net effect to be strongly positive. Grower witnesses from Arizona and New Mexico also stated they did not expect to have to undertake any significant changes in their pistachio production operations as a result of coming under the authority of the marketing order. Witnesses said that they believed that they would have overall improved returns and higher sales than would be the case without the marketing order regulation. They expected the benefits of the proposed amendments to far outweigh the costs.

A 2005 benefit cost analysis of federal marketing order mandatory aflatoxin requirements for California was submitted as evidence at the hearing. The analysis, prepared by agricultural economists at the University of California-Davis, was entitled “Economic Consequences of Mandated Grading and Food Safety Assurance: Ex Ante Analysis of the Federal Marketing Order for California Pistachios” (Richard S. Gray and others, University of California, Giannini Foundation Monograph 46, March 2005). In present-value terms, over a 20-year horizon, the benefits to producers in the study's baseline scenario were estimated to be $75.3 million. The study reported a “most likely scenario” benefit cost ratio of nearly 6:1, with a range from about 4:1 to 9:1 under alternative scenarios representing low and high aflatoxin event impacts, respectively, on the pistachio market.

One witness noted that, depending on compliance cost and aflatoxin event assumptions under alternative scenarios in the study, the expected benefit cost ratio from implementation of mandatory aflatoxin standards under the California marketing order ranged between 5:1 and 17:1. Several grower and handler witnesses suggested that these significant benefit cost ratios for the California marketing order will also likely apply if the order is expanded to include Arizona and New Mexico.

The following section examines the cost impacts of the mandatory aflatoxin requirements in an expanded marketing order.

Aflatoxin inspection and certification costs can be divided into the costs of: (1) Inspector travel time to pistachio handlers' premises; (2) time required for the inspector to draw samples from lots designated for domestic shipment; (3) cost of shipping samples to the testing laboratory; (4) aflatoxin analysis (testing cost); and (5) value of the destroyed pistachios used in the sampling and analysis.

Tables 1-3 that follow present estimated costs for representative handlers in California, Arizona, and New Mexico. Each table is designed to summarize handler costs for the lots being tested, including each of the five cost elements listed above. For clarity of the cost comparisons, the lot size to be sampled is assumed to be 50,000 pounds in the representative scenarios for all three States. The 50,000-pound lot size is most appropriate for California's handler plants, which are generally larger than the handler plants in Arizona and New Mexico. The impact in terms of higher unit cost for smaller lot sizes is discussed below.

Table 1 is a representation of the aflatoxin certification cost situation in California. It serves as a benchmark with which to compare the costs in the other two States, Arizona and New Mexico. Witnesses from the pistachio industry in each of the three States submitted as evidence the data used in the three tables, and stated that the data was representative of the situation that exists or would be faced by handlers in those States.

Witnesses pointed out that inspector travel costs and sample shipment costs were the most variable costs across the States. Inspector travel costs consist of the mileage reimbursement that inspectors need to be paid by the handlers, plus the time spent traveling to the handler's location. In California, inspectors are regularly in the plants, and there is no additional travel time associated with aflatoxin sampling. Witnesses testified that New Mexico inspector travel costs could be as high as $485 per lot due to the large distances involved, but that the figure of $432.50 was the most representative. Data presented at the hearing indicated that Arizona inspector travel cost could be as high as $100 per lot, but that a lower figure of $32.70 was more likely due to the closer proximity of Arizona Plant Services inspectors, who may be certified to take the sample.

Two cost elements that are uniform across the three States are sampling time and testing cost. The estimated time that it takes an inspector to draw a 10 kg (22 pound) sample for aflatoxin testing of a 50,000 pound lot, based on 100 sub-samples, is 2 hours. At a standard hourly rate of $35 per hour, two hours of sampling time will cost the handler $70. The testing cost for a laboratory to determine the aflatoxin level from a sample is $90.

Witnesses indicated that the cost for the 22 pounds of pistachios used in the sample (handler sales revenue foregone) was $2.00 per pound ($44 total) in California and New Mexico and $2.75 in Arizona (about $61 total).

Given all of the assumptions that went into developing the cost summary in Table 1, the estimated cost per lot for a California handler for aflatoxin certification is $204, which is less than one half cent per pound (about four tenths of a cent). This represents 0.2 percent of the $2.00 pistachio value per pound at the handler level (estimate provided by industry witnesses) and 0.3 percent of the 2007 grower price per pound for California pistachios, estimated by NASS at $1.35 per pound. A California pistachio industry witness pointed out that the unit price would be even lower with larger lot sizes and that the average lot size for “failed lots” in a recent year under the marketing order (those that exceeded the maximum aflatoxin tolerance) was nearly 67,000 pounds.

Table 2 shows that a representative Arizona handler would pay twice as much as a California handler—$453 per lot, or nearly one cent per pound (about nine tenths of a cent). The data in Table 3 indicated that a New Mexico handler would pay even more for aflatoxin certification—$742 per 50,000 pound lot, or about 1.5 cents per pound. Thus the certification costs for the smaller plants in Arizona and New Mexico would be between two and four times higher, if lot sizes were the same.

Typical lot sizes may be smaller in Arizona and New Mexico; witnesses indicated that lot sizes could vary between 10,000 and 50,000 pounds. An Arizona handler witness presented evidence indicating that 40,000 pounds would be a more likely typical lot size, and that the sample size and related cost factors would be the same. With a smaller lot size, the Arizona handler cost per pound rises from nine tenths of a cent (50,000 pound lot) to 1.1 cents (40,000 pound lot). This cost per pound is nearly 3 times higher than the cost for a California handler with a 50,000 pound lot, but the percentage of the estimated handler sales price remains under one half of one percent (0.4%).

A New Mexico handler witness characterized their own operation as being quite a bit smaller than the main Arizona handler and most California handlers. If the typical lot size for a small New Mexico handler was 10,000 pounds, then the sample size would be smaller (13.2 pounds) and the inspector sampling time declines from two hours to one hour. The total cost would decline modestly, from $742 for a 50,000 pound lot to $689 for a 10,000 pound lot. However, since the costs are spread over fewer pounds, the unit cost for certification would rise to nearly seven cents per pound, about 3 percent of the handler sales price. If the small handler had a typical lot size of 30,000 pounds (the midpoint between 10,000 and 50,000 pounds) the certification cost would be about 2.5 cents per pound, just over one percent of the handler sale price.

However, the New Mexico handler witness indicated that they would try to organize their pistachio handling operation to keep the lot sizes for sampling and testing large enough to keep costs down. The 50,000 pound lot example shown in Table 3 therefore provides a reasonable representation of small handler certification costs. The higher costs are due largely to the less developed aflatoxin testing infrastructure than is available in California, and related issues such as greater distances for inspector travel.

Additional costs are incurred if a lot exceeds the maximum aflatoxin tolerance. Witnesses estimated that in all three States the cost for reworking a lot to remove the contaminated nuts would be 25 cents per pound. After reworking the lot a handler would incur another round of the sampling and testing costs highlighted in the tables.

Grower witnesses stated that the aflatoxin certification costs as presented by handler and other industry witnesses, and illustrated by the three tables, appeared to be reasonable representations of the cost of compliance with the aflatoxin requirements under the marketing order.

The significant cost differences highlighted above is the reason that pistachio industry witnesses from all three States supported a proposed amendment to authorize the Committee to reimburse handlers in more remote locations within the production area for the excess costs due to lack of access to inspection and certification services. Reimbursing handlers for the excess costs would eliminate any differential impact and would equalize the aflatoxin certification costs across the proposed expanded production area.

Although the precise details of reimbursement would be established through the informal rulemaking process upon recommendation of the Committee, the following example illustrates one way to estimate the amount of reimbursement that may occur. With a 50,000 pound lot size, Table 3 shows the cost per lot for a New Mexico handler is about $742. The New Mexico handler would be expected to pay only the portion of the costs that are the same across the three States ($70 for inspector sampling, plus $90 testing cost, plus $44 in revenue foregone from destroyed pistachios, for a total cost per lot of $204). The handler represented by Table 3 would receive a reimbursement per lot of $538 ($742 minus $204).

Using different cost assumptions, a pistachio industry witness provided an example with a somewhat higher estimate of the likely cost ($605 per lot) that the Committee would reimburse New Mexico handlers. The witness estimated that with ten sampling trips per year, and one lot sampled per trip, the New Mexico reimbursements would total $6,050. With an anticipated total of 100 lots tested in Arizona in the example presented by the witness, and with a reimbursement rate of $235 per lot, the total Arizona cost would be $23,500. The sum for the two States would be about $30,000.

Based on similar assumptions used in developing the tables, the total current cost of marketing order aflatoxin certification for California handlers (excluding the Committee assessment) was estimated by an industry witness to be $530,000. Based on this example, a $30,000 reimbursement would be issued by the Committee to the Arizona and New Mexico handlers. The reimbursement would represent about a 6 percent increase above the $530,000 currently paid by the California handlers. The witness also stated that when the reimbursement system is implemented, all handlers of like-size operations would have comparable inspection costs.

All California handler and grower witnesses expressed their support for such a reimbursement provision. In addition, all of the Arizona and New Mexico handler and grower witnesses also testified in favor of such a reimbursement.

Handler and grower witnesses indicated that the expected benefits from the operation of the expanded marketing order would substantially exceed costs.

The addition of production, post harvest, and nutrition research authority to the order would have no immediate cost impact on the industry. This amendment would allow the Committee to recommend research activities to USDA. If approved, the projects would be funded through handler assessments. It is likely that program assessments would increase in order to fund any projects recommended, which would increase costs to handlers. However, the order limits the total assessment that can be implemented under the order so that the entire assessment cannot exceed one half of one percent of the average price received by producers in the preceding crop year. To the extent that funds for research would only represent a portion of the assessment funds, the cost of any research that may be conducted would necessarily be less than one half of one percent of the average price received by producers. In addition, since assessments are collected from handlers based on the volume of pistachios handled, any cost associated with research projects would be proportionate to the size of the handlers.

Witnesses testified that the Committee would not undertake any research activities unless they expected the benefits to outweigh the costs. One witness testified that a presentation at a Symposium for Agricultural Research held on June 18 and 19, 2008, in Sacramento, California indicated that a benefit/cost ratio for agricultural research in California has been estimated at 30.7 to 1.

Handler and grower witnesses made positive comments in support of other order amendments, including the granting of broad authority for aflatoxin standards and for other quality regulations. Witnesses stated that there would be no immediate impact from the granting of these authorities, because there are no industry plans for changes in regulations. However, handler and grower witnesses stated that having such authority would be quite helpful to the future of the pistachio industry, and that if the authorities were exercised in the future, they expected that it would be done in a way that assured that benefits would outweigh costs. Since unanimity of the Committee would generally be required to make such changes, they expressed confidence that only regulations would be established that had very broad industry consensus. They expected additional improvements in product quality and improved returns to growers and handlers from the use of any such future regulations.

One other amendment, relating to interhandler transfers, merits discussion in the context of economic impact on handlers and growers, particularly small ones. When the marketing order was promulgated in 2004, authority was given for interhandler transfers of noncertified pistachios. Evidence presented at the hearing indicates that the amendment formalizes that authority and expands it to include other marketing order requirements, including the payment of assessments on hulled and dried pistachios, when that processing is done by the producer. Under the marketing order, the entity which hulls and dries pistachios is responsible for assessments and inspections. This provision was included because in California producers normally deliver pistachios to a handler (processor) for hulling and drying as well as the subsequent handling functions.

However, conditions in Arizona and New Mexico are different due to the limited processing capacity of some handlers, the lack of processing access of producers, and the small size of some producing operations. It is necessary in these conditions for some producers to process (hull and dry) their pistachios prior to delivery to a handler. The hulling and drying is part of the harvest process, and it is not the intent of these producers to perform any other handling functions. The proposal would therefore allow the transfer of responsibility for assessments, inspections and other marketing order requirements to the handler who places the pistachios into the stream of commerce.

According to evidence presented at the hearing, this amendment will allow a small number of producers who hull and dry their own production, but perform no additional handling functions (estimated at less than ten), to limit their responsibility to filing a form at the time of pistachio delivery. This amendment will more clearly delineate the responsibilities of handlers and the small number of affected producers. Both will continue their current practices in virtually all cases, and the amendment neither increases or decreases returns. This amendment has the effect of assisting small business operations by removing them from paperwork and other burdens.

Under the marketing order, handlers pay assessments to the Committee for costs associated with administering the program. Following is an evaluation of the impact these costs will have on handlers in Arizona and New Mexico.

The assessment rate authorized under the order is limited to one-half of one percent (.005) of the average grower price received in the preceding crop year. The current assessment rate under the order is $.0007 per pound, or .07 cents per pound. This compares to an estimated average grower price for the 2007 crop year of $1.35 per pound. The assessment rate for the 2007 crop year was .05 percent (5/100ths of one percent) of the grower price.

Although there are no NASS data available regarding New Mexico pistachio production, information presented by witnesses at the hearing indicates average annual production in New Mexico could be in the range of 300,000 to 350,000 pounds. At an assessment rate of $.0007, this would equate to a total annual assessment ranging from $210 to $245 for all New Mexico handlers combined. Production from Arizona was 7 million pounds in 2007, according to NASS data. At the $.0007 per pound assessment rate, this would equate to a total annual assessment of $4,900 for all Arizona handlers combined. Assessments under the order present a cost to handlers, but as can be seen from the foregoing example, the cost is minimal. In addition, the costs are applied to handlers in proportion to the quantity of pistachios handled, so there is no differential impact anticipated for small and large handlers.

Interested persons were invited to present evidence at the hearing on the probable regulatory and informational impact of the proposed amendments to the order on small entities. The record evidence indicates that the amendments are intended to benefit all producers and handlers under the order, regardless of size. Further, the record shows that the costs associated with implementing regulations would be outweighed by the benefits expected to accrue to the pistachio industry.

USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule. These amendments are designed to enhance the administration and functioning of the order to the benefit the pistachio industry.

Information collection requirements for Part 983 are currently approved by the Office of Management and Budget (OMB) under OMB No. 0581-0215, “Pistachios Grown in California.” The information requirements generated by the amendments result in an increase in burden, which has been submitted to OMB for approval under OMB No. 0581-NEW. We have requested that this collection be merged into OMB No. 0581-0215 when approved.

Producers and handlers of pistachios located in the States of Arizona and New Mexico will be required to complete forms relating to committee nominations, background questionnaires, referendum and nomination ballots, and handler reports. The estimated number of respondents is 85. This will result in a burden of 29 hours. Additionally, handlers will have to maintain related records and documentation for three full years following the end of the crop year.

As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

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

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

The amendments to Marketing Agreement and Order 983 proposed herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed no later than 20 days after the date of the entry of the ruling.

The findings and determinations set forth hereinafter are supplementary and in addition to the findings and determinations previously made in connection with the issuance of the agreement and order; and all of said previous findings and determinations are hereby ratified and affirmed, except insofar as such findings and determinations may be in conflict with the findings and determinations set forth herein.

(a) Findings and Determinations Upon the Basis of the Hearing Record.

Pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 601-674) and the applicable rules of practice and procedure effective thereunder (7 CFR part 900), a public hearing was held upon the proposed amendments to Marketing Order No. 983 (7 CFR part 983), regulating the handling of pistachios grown in California.

Upon the basis of the evidence introduced at such hearing and the record thereof, it is found that:

(1) The marketing agreement and order, as amended, and all of the terms and conditions thereof, will tend to effectuate the declared policy of the Act;

(2) The marketing agreement and order, as amended, regulate the handling of pistachios grown in the production area in the same manner as, and are applicable only to, persons in the respective classes of commercial and industrial activity specified in the marketing agreement and order upon which a hearing has been held;

(3) The marketing agreement and order, as amended, are limited in their application to the smallest regional production area which is practicable, consistent with carrying out the declared policy of the Act, and the issuance of several orders applicable to subdivisions of the production area would not effectively carry out the declared policy of the Act;

(4) The marketing agreement and order, as amended, prescribe, insofar as practicable, such different terms applicable to different parts of the production area as are necessary to give due recognition to the differences in the production and marketing of pistachios grown in the production area; and

(5) All handling of pistachios grown in the production area as defined in the marketing agreement and order, is in the current interstate or foreign commerce or directly burdens, obstructs, or affects such commerce.

(b) Additional Findings.

It is necessary and in the public interest to make these amendments effective not later than one day after publication in the Federal Register . A later effective date would unnecessarily delay implementation of the amendments. These amendments should be in place as soon as possible as the new production year began on September 1.

In view of the foregoing, it is hereby found and determined that good cause exists for making these amendments effective one day after publication in the Federal Register , and that it would be contrary to the public interest to delay the effective date for 30 days after publication in the Federal Register (Sec. 553(d), Administrative Procedure Act; 5 U.S.C. 551-559).

(c) Determinations. It is hereby determined that:

(1) The “Marketing Agreement Regulating the Handling of Pistachios Grown in California, Arizona, and New Mexico,” upon which the aforesaid public hearing was held, has been signed by handlers (excluding cooperative associations of producers who are not engaged in processing, distributing, or shipping pistachios covered by the order) who during the period September 1, 2008, through August 31, 2009, handled not less than 50 percent of the volume of such pistachios covered by the order; and

(2) The issuance of this amendatory order, amending the aforesaid order, is favored or approved by at least two-thirds of the producers who participated in a referendum on the question of approval and who, during the period of September 1, 2008, through July 31, 2009, (which has been determined to be a representative period), have been engaged within the production area in the production of such pistachios, such producers having also produced for market at least two-thirds of the volume of such commodity represented in the referendum.

It is therefore ordered, That on and after the effective date hereof, all handling of pistachios grown in California, Arizona, and New Mexico shall be in conformity to, and in compliance with the terms and conditions of the said order as hereby amended as follows:

The provisions of the proposed marketing agreement and order amending the order contained in the Secretary's Decision issued on July 29, 2009, and published in the Federal Register on August 6, 2009, (74 FR 39230) shall be and are the terms and provisions of this order amending the order and are set forth in full herein.

Executive Order 12866

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

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

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

This rule will not have any substantial direct effect on states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, consultation with states is not required.

The Agency certifies that this rule will not have a significant economic impact on a substantial number of small entities, as defined in the Regulatory Flexibility Act, 5 U.S.C. 605(b); therefore, no further analysis is required. The amendments reflect only statutory changes that Congress has mandated and over which the Agency has no discretion. They also involve minimal procedural matters on other agreements already negotiated.

This rule contains no new reporting or recordkeeping burdens under Office of Management and Budget (OMB) control number 0572-0032 that would require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

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

The Catalog of Federal Domestic Assistance (CFDA) number assigned to the Electric Loan and Loan Guarantee program is 10.850 Rural Electrification Loans and Loan Guarantees. The catalog is available on the Internet and the General Services Administration's (GSA) free CFDA website at http://www.cfda.gov. The CFDA website also contains a PDF file version of the Catalog that, when printed, has the same layout as the printed document that the Government Printing Office (GPO) provides. GPO prints and sells the CFDA to interested buyers. For information about purchasing the Catalog of Federal Domestic Assistance from GPO, call the Superintendent of Documents at 202-512-1800 or toll free at 866-512-1800, or access GPO's on-line bookstore at http://bookstore.gpo.gov.

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

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

The Rural Electrification Act of 1936 (7 U.S.C. 901-950bb (REACT)), as amended establishes the authority for RUS to provide loans and loan guarantees to eligible entities for the purpose of financing the construction and operation of generating plants, electric transmission and distribution lines or systems for the furnishing and improving of electric service to rural areas, including by assisting electric borrowers to implement demand side management, energy conservation programs, and on and off grid renewable energy systems.

The Food, Conservation, and Energy Act of 2008 (2008 Farm Bill) (Pub. L. 110-246) hereinafter called the “2008 Farm Bill,” amends Section 13 of the Rural Electrification Act of 1936 by revising the definition of rural area to include any area other than a city, town, or unincorporated area that has a population of greater than 20,000 inhabitants. The 2008 Farm Bill also includes in the revised rural definition those service areas of borrowers having an outstanding loan under Titles I through V of the REACT. The general and preloan policies and procedures common to Electric Program loans and loan guarantees are established in 7 CFR part 1710.

The amendments will have no financial impact on the public or the Agency. It is a necessary action to comply with the requirements of the 2008 Farm Bill. These amendments are not published for proposed rulemaking because they merely reflect changes in statutory authority enacted by the 2008 Farm Bill and make only minor technical corrections to the regulations, which do not involve matters of agency discretion. Notice and public comment, therefore, are impractical, unnecessary, and contrary to the public interest.

Regulatory History, 74 FR 54108 (October 21, 2009).

The Postal Service seeks to add a new product identified as Priority Mail Contract 19 to the Competitive Product List. For the reasons discussed below, the Commission approves the Request.

On October 13, 2009, the Postal Service filed a formal request pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add Priority Mail Contract 19 to the Competitive Product List. 1 The Postal Service asserts that the Priority Mail Contract 19 product is a competitive product “not of general applicability” within the meaning of 39 U.S.C. 3632(b)(3). This Request has been assigned Docket No. MC2010-1.

The Postal Service contemporaneously filed a contract related to the proposed new product pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. The contract has been assigned Docket No. CP2010-1.

In support of its Request, the Postal Service filed the following materials: (1) A redacted version of the Governors' Decision, originally filed in Docket No. MC2009-25, authorizing the Priority Mail Contract Group;  2 (2) a redacted version of the contract;  3 (3) a requested change in the Mail Classification Schedule product list;  4 (4) a Statement of Supporting Justification as required by 39 CFR 3020.32;  5 (5) a certification of compliance with 39 U.S.C. 3633(a);  6 and (6) an application for non-public treatment of the materials filed under seal. 7 The redacted version of the contract provides that the contract is terminable on 30 days' notice by either party, but could continue for 3 years from the effective date subject to annual price adjustments. Request, Attachment B.

In the Statement of Supporting Justification, Mary Prince Anderson, Acting Manager, Sales and Communications, Expedited Shipping, asserts that the service to be provided under the contract will cover its attributable costs, make a positive contribution to coverage of institutional costs, and will increase contribution toward the requisite 5.5 percent of the Postal Service's total institutional costs. Request, Attachment D, at 1. W. Ashley Lyons, Manager, Regulatory Reporting and Cost Analysis, Finance Department, certifies that the contract complies with 39 U.S.C. 3633(a). Id., Attachment E.

The Postal Service filed much of the supporting materials, including the supporting data and the unredacted contract, under seal. The Postal Service maintains that the contract and related financial information, including the customer's name and the accompanying analyses that provide prices, certain terms and conditions, and financial projections, should remain confidential. Id., Attachment F at 2-3.

In Order No. 313, the Commission gave notice of the two dockets, appointed a public representative, and provided the public with an opportunity to comment. 8

Comments were filed by the Public Representative. 9 No comments were submitted by other interested parties. The Public Representative states that the Postal Service's filing comports with title 39 and the relevant Commission rules. Public Representative Comments at 1, 3. He further states that the agreement employs pricing terms favorable to the customer, the Postal Service, and thereby, the public. Id. at 3-4. The Public Representative also believes that the Postal Service has provided appropriate justification for maintaining confidentiality in this case. Id. at 3.

The Commission has reviewed the Request, the contract, the financial analysis provided under seal that accompanies it, and the comments filed by the Public Representative.

Statutory requirements. The Commission's statutory responsibilities in this instance entail assigning Priority Mail Contract 19 to either the Market Dominant Product List or to the Competitive Product List. 39 U.S.C. 3642. As part of this responsibility, the Commission also reviews the proposal for compliance with the Postal Accountability and Enhancement Act (PAEA) requirements. This includes, for proposed competitive products, a review of the provisions applicable to rates for competitive products. 39 U.S.C. 3633.

Product list assignment. In determining whether to assign Priority Mail Contract 19 as a product to the Market Dominant Product List or the Competitive Product List, the Commission must consider whether

The Commission is further required to consider the availability and nature of enterprises in the private sector engaged in the delivery of the product, the views of those who use the product, and the likely impact on small business concerns. 39 U.S.C. 3642(b)(3).

The Postal Service asserts that its bargaining position is constrained by the existence of other shippers who can provide similar services, thus precluding it from taking unilateral action to increase prices without the risk of losing volume to private companies. Request, Attachment D, para. (d). The Postal Service also contends that it may not decrease quality or output without risking the loss of business to competitors that offer similar expedited delivery services. Id. It further states that the contract partner supports the addition of the contract to the Competitive Product List to effectuate the negotiated contractual terms. Id., para. (g). Finally, the Postal Service states that the market for expedited delivery services is highly competitive and requires a substantial infrastructure to support a national network. It indicates that large carriers serve this market. Accordingly, the Postal Service states that it is unaware of any small business concerns that could offer comparable service for this customer. Id., para. (h).

No commenter opposes the proposed classification of Priority Mail Contract 19 as competitive. Having considered the statutory requirements and the support offered by the Postal Service, the Commission finds that Priority Mail Contract 19 is appropriately classified as a competitive product and should be added to the Competitive Product List.

Cost considerations. The Postal Service presents a financial analysis showing that Priority Mail Contract 19 results in cost savings while ensuring that the contract covers its attributable costs, does not result in subsidization of competitive products by market dominant products, and increases contribution from competitive products.

Based on the data submitted, the Commission finds that Priority Mail Contract 19 should cover its attributable costs (39 U.S.C. 3633(a)(2)), should not lead to the subsidization of competitive products by market dominant products (39 U.S.C. 3633(a)(1)), and should have a positive effect on competitive products' contribution to institutional costs (39 U.S.C. 3633(a)(3)). Thus, an initial review of proposed Priority Mail Contract 19 indicates that it comports with the provisions applicable to rates for competitive products.

Application for non-public treatment. The Commission has repeatedly held that applications for non-public treatment for an indefinite time period are premature finding that if the need for non-public treatment remains well into the future due to ongoing business relationships, the Postal Service may submit a motion to the Commission to extend the duration at the appropriate time. 10 Nonetheless, the Postal Service continues to request indefinite non-public treatment of materials. 11 The Commission finds its prior rulings on this topic to be clear and sufficiently precedential to avoid the necessity of continually ruling on this issue in every case. Accordingly, if the Postal Service continues its requests for indefinite non-public treatment of materials in the future, the Commission's silence on that matter (or any similar request to deviate from the default rules) shall not be deemed to be a ruling on the merits.

Other considerations. The Postal Service shall notify the Commission if termination occurs prior to the scheduled termination date. Following the scheduled termination date of the agreement, the Commission will remove the product from the Competitive Product List.

In conclusion, the Commission approves Priority Mail Contract 19 as a new product. The revision to the Competitive Product List is shown below the signature of this order and is effective upon issuance of this order.

It is ordered:

1. Priority Mail Contract 19 (MC2010-1 and CP2010-1) is added to the Competitive Product List as a new product under Negotiated Service Agreements, Domestic.

2. The Postal Service shall notify the Commission if termination occurs prior to the scheduled termination date.

3. The Secretary shall arrange for the publication of this order in the Federal Register.

The preamble to this final rule is organized as follows:

HHS/CDC is promulgating this rule under the authority of 42 U.S.C. 252 and 8 U.S.C. 1182 and 1222.

Under section 212(a)(1) of the INA (8 U.S.C. 1182(a)(1)), any alien who is determined to have a communicable disease of public health significance is inadmissible to the United States. As a result of this statute, aliens outside the United States who have a communicable disease of public health significance are ineligible to receive a visa for admission into the United States, absent the grant of a waiver on the ground of inadmissibility. The grounds of inadmissibility also apply to most aliens who reside in the United States and are seeking adjustment of their status to that of a lawful permanent resident.

The Secretary of Health and Human Services (HHS) is authorized to promulgate regulations establishing the requirements for the medical examination of aliens by sections 212(a)(1) and 232 of the Immigration and Nationality Act (INA), and section 325 of the Public Health Service Act (42 U.S.C. 252). The regulations, administered by HHS/CDC, are promulgated at 42 CFR part 34.

HHS/CDC issues Technical Instructions, that provide the technical consultation and guidance to panel physicians and civil surgeons who conduct the medical examinations of aliens. Panel physicians, designated by the U.S. Department of State (DoS) consular officers, perform medical examinations on those refugees and/or persons living outside the United States who are seeking to immigrate to the United States. Civil surgeons, designated by the U.S. Citizenship and Immigration Services within the U.S. Department of Homeland Security (DHS), perform medical examinations for aliens who are already present in the United States and are seeking adjustment of status. The CDC Technical Instructions for Medical Examination of Aliens, including the most current updates, that panel physicians and civil surgeons must follow in accordance with these regulations, are available to the public on the CDC Web site, located at the following Internet address: http://www.cdc.gov/ncidod/dq/technica.htm .

Beginning in 1952, the language of the INA mandated that aliens “who are afflicted with any dangerous contagious disease” are ineligible to receive a visa and therefore are excluded from admission into the United States. In April 1986, prior to the recent developments in medicine and epidemiologic principles concerning HIV infection, HHS published a proposal in the Federal Register to include acquired immunodeficiency syndrome (AIDS) as a dangerous contagious disease. See 51 FR 15354 (April 23, 1986). In June 1987, HHS published a final rule adopting this proposal. See 52 FR 21532 (June 8, 1987). Also during this time, HHS separately published a proposed rule to substitute HIV infection for AIDS on the list of dangerous contagious diseases. See 52 FR 21607 (June 8, 1987). While this proposed rule was pending public comment, Congress added HIV infection to the list of dangerous contagious diseases. Pub. L. 100-71, section 518, 101 Stat. 475 (July 11, 1987). In response to the congressional mandate, HHS issued final regulations to that effect in August of that year. See 52 FR 32540 (August 28, 1987). Accordingly and immediately, aliens infected with HIV became ineligible to receive visas and were excluded from admission into the United States. See INA section 212(a)(6), 8 U.S.C. 1182(a)(6)(1988).

In 1990, Congress amended the INA by revising the classes of excludable aliens to provide that an alien who is determined (in accordance with regulation prescribed by the Secretary of Health and Human Services) to have a communicable disease of public health significance is excludable from the United States. Immigration Act of 1990, Public Law 101-649, section 601, 104 Stat. 4978 January 23, 1990; INA section 212(a)(1)(A)(i), 8 U.S.C. 1182(a)(1)(A)(i) (effective June 1, 1991). HHS/CDC subsequently published a proposed rule that would have removed from the list all diseases, including HIV infection, except for infectious tuberculosis. See 56 FR 2484 (January 23, 1991). Based on public comments received on this proposal, and after reconsideration of the issues, HHS published an interim final rule retaining all diseases on the list, including HIV infection, and committed its initial proposal for further study. See 56 FR 25000 (May 31, 1991). Congress subsequently amended INA section 212(a)(1) to specify that “infection with the etiologic agent for acquired immune deficiency syndrome” is a communicable disease of public health significance, thereby making explicit in the INA that aliens with HIV are ineligible for admission into the United States. National Institutes of Health Revitalization Act of 1993, Public Law 103-43, section 2007, 107 Stat. 122 (June 10, 1993).

In summer 2008, Congress amended the INA by striking “which shall include infection with the etiologic agent for acquired immune deficiency syndrome,” thereby leaving to the Secretary of HHS the discretion for determining whether HIV infection should remain in the definition of communicable disease of public health significance provided for in 42 CFR 34.2(b). [Tom Lantos and Henry Hyde United States Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008, Pub. L. 110-293, section 305, 122 Stat. 2963 (July 30, 2008)].

In a separate action on October 6, 2008, HHS/CDC published an Interim Final Rule (IFR) announcing a revised definition of communicable disease of public health significance and revised scope of the medical examination in 42 CFR part 34. This IFR addressed concerns regarding emerging and reemerging diseases in immigrant and refugee populations who are bound for the United States. See 73 FR 58047 and 73 FR 62210. With the revision to 42 CFR Part 34, the definition of communicable disease of public health significance was modified to include two disease categories: (1) Quarantinable diseases designated by Presidential Executive Order; and (2) a communicable disease that may pose a public health emergency of international concern in accordance with the International Health Regulations of 2005, provided the disease meets specified criteria. Specific illnesses remaining as a communicable disease of public health significance were active tuberculosis, infectious syphilis, gonorrhea, infectious leprosy, chancroid, lymphogranuloma venereum, granuloma inguinale, and HIV infection.

In response to the 2008 amendment to the INA, on July 2, 2009, HHS/CDC published a Notice of Proposed Rule Making (NPRM), which proposed two regulatory changes: (1) The removal of HIV infection from the definition of communicable disease of public health significance; and (2) removal of references to serologic testing for HIV from the scope of examinations.

The provisions in 42 CFR part 34 apply to the medical examination of (1) aliens outside the United States who are applying for a visa at an embassy or consulate of the United States; (2) aliens arriving in the United States; and (3) aliens required by the U.S. Department of Homeland Security (DHS) to have a medical examination in connection with determination of their admissibility into the United States; and (4) aliens who apply for adjustment of their immigration status to that of lawful permanent resident.

While 42 CFR part 34 can apply to individuals who wish to come to the United States on a temporary basis, such as leisure or business travelers, a medical examination is not routinely required as a condition for issuance of non-immigrant visas or entry into the United States.

Aliens who are already in the United States may apply to adjust to permanent resident status pursuant to statutorily-eligible adjustment categories. See INA §  245; 8 U.S.C. 1255. Refugees and aslyees may also apply to adjust to permanent resident status from inside the United States. See INA §  209; 8 U.S.C. 1159.

An alien seeking permanent residence, whether through an immigrant visa or asylee status, or through an adjustment of status must undergo a medical examination to determine whether the alien is inadmissible on medical grounds. Aliens seeking admission as refugees also undergo medical examinations overseas. Overseas examinations are conducted by panel physicians designated by the Department of State. Applicants for adjustment of status to lawful permanent resident are required to have a medical examination conducted by a civil surgeon designated by U.S. Citizenship and Immigration Services within DHS.

In 2004, the Joint United Nations Programme on HIV/AIDS (UNAIDS) and the International Organization for Migration (IOM) issued the “UNAIDS/IOM Statement on HIV/AIDS-related travel restrictions” that provides guidance to governments in regard to addressing the public health, economic, and human rights concerns involved in HIV-related travel restrictions. This document concludes that HIV-related travel restrictions have no public health justification.

On July 2, 2009, HHS/CDC published a notice of proposed rulemaking (NPRM) to remove HIV infection from the definition of communicable disease of public health significance, as defined in 42 CFR 34.2(b) and from the scope of examinations in 42 CFR 34.3. See 74 FR 31798.

Until this final rule, human immunodeficiency virus (HIV) infection was among those diseases listed in the definition of communicable disease of public health significance, as defined in 42 CFR part 34.2(b). As described in the “Legislative and Regulatory History” section above, Congress amended the INA by striking “which shall include infection with the etiologic agent for acquired immune deficiency syndrome,” thereby leaving to the Secretary of HHS the discretion for determining whether HIV infection should remain in the definition of communicable disease of public health significance provided for in 42 CFR 34.2(b). In consideration of scientific evidence, including epidemiologic principles and current medical knowledge regarding the mode of HIV transmission, HHS/CDC proposed to remove HIV infection from the definition of communicable disease of public health significance.

HHS/CDC also proposed to remove all references to serologic testing for HIV infection in 42 CFR 34.3, which is entitled “Scope of examinations.” This section applies to those aliens who are required to undergo a medical examination for U.S. immigration purposes. The scope of examinations outlines those matters that relate to the inadmissible health-related conditions. This section provides specific screening and testing requirements for those diseases that meet the definition of communicable disease of public health significance and directly relates to the diseases listed in Section 34.2(b) of 42 CFR part 34. It does not provide specific testing requirements for other health-related conditions that are not included in the current definition of communicable disease of public health significance.

Therefore, HHS/CDC proposed to remove the specific testing requirements for HIV infection in 42 CFR 34.3.

Through this final rule, HHS/CDC is now removing HIV infection from the definition of communicable disease of public health significance and from the scope of examinations. HHS/CDC received over 20,000 public comments on the NPRM, with the vast majority of commenters in support of the proposed changes, as written. HHS/CDC's evaluation of the comments did not lead to changes between the NPRM and this final rule. While HIV infection is a serious health condition, scientific evidence shows that it does not represent a communicable disease that is a significant risk for introduction, transmission, and spread to the United States population through casual contact. An arriving alien with HIV infection—or one adjusting status to that of a legal permanent resident—does not pose a public health risk to the general population through casual contact.

Beginning on the effective date of this final rule, HIV infection will no longer be an inadmissible condition, and HIV testing will no longer be required, for those aliens who are required to undergo a medical examination for U.S. immigration purposes.

The specific illnesses that are now listed in the definition of communicable disease of public health significance are: Active tuberculosis, infectious syphilis, gonorrhea, infectious leprosy, chancroid, lymphogranuloma venereum, and granuloma inguinale. The definition of communicable disease of public health significance also consists of (1) quarantinable diseases designated by Presidential Executive Order (E.O. 13295 as amended), and (2) communicable diseases that could pose a public health emergency of international concern, in accordance with the revised International Health Regulations of 2005, provided the disease meets specified criteria.

As a result of this final rule, HHS/CDC has also revised the Technical Instructions provided to panel physicians and civil surgeons to reflect the removal of the HIV testing requirement. The revised Technical Instructions will be immediately available to the public on the HHS/CDC Division of Global Migration and Quarantine Web site, located at the following Internet address: http://www.cdc.gov/ncidod/dq/technica.htm.

HHS/CDC will continue to work with DoS and DHS to ensure that panel physicians and civil surgeons are aware of the revision to the Technical Instructions. DHS and DoS will determine the process for those applicants with HIV infection who have current applications pending.

The public comment period for the NPRM lasted for forty-five (45) days and ended on August 17, 2009. HHS/CDC received approximately 20,100 comments; of these, approximately 18,500 were largely similar “form” letters in favor of the proposed rule and also several “form” letters against the proposed rule. Comments were submitted by individuals; advocacy organizations; international and national public health agencies; immigration organizations; State and local health departments; medical associations; international, national and local AIDS organizations; corporate entities; various human rights; and other organizations from across the globe. Some comments were the collaborative effort of multiple groups. The comments will be permanently located in the docket for this final rule and maintained by HHS/CDC.

The sections below summarize and discuss the comments in detail: Comments on removing HIV infection from the definition of communicable disease of public health significance; comments on removing HIV testing from the scope of examinations; comments on the Economic Impact Analysis (EIA); and comments on technical correction. Data on the numbers of comments received in support of and opposed to the rule are provided below for informational purposes. However, these data are not the determinative factor in guiding public policy or in making these policy changes.

Most commenters supported CDC's public health assessment that HIV infection should be removed from the definition of communicable disease of public health significance as defined in 42 CFR 34.2(b) (approximately 19,500 comments were received in support of CDC's preliminary determination).

Many commenters stated that the practice of excluding HIV-infected visitors and immigrants from the United States has no medical or public health rationale. Most of these individuals and organizations supported the language of the NPRM stating that the scientific evidence shows that HIV infection is not a risk to the general population through casual contact. Other comments submitted by individuals supporting equal rights and HIV advocacy groups urged HHS/CDC to adopt the NPRM verbatim as a final rule that removes HIV infection from the definition of communicable disease of public health significance as defined in 42 CFR 34.2(b). In response, HHS/CDC has adopted the revisions to 42 CFR 34.2(b), as proposed. HHS/CDC has taken this action because based on scientific evidence, HIV infection is not a threat to the general population through casual contact and is no longer considered a significant public health risk given advances in public health practices and interventions for prevention and control.

A number of commenters supported the proposed rule for humanitarian reasons, stating that the former regulation (a) stigmatizes and discriminates against HIV-infected people, which include battered women and children; the lesbian, gay, bisexual and transgender (LGBT) community; or other vulnerable or already stigmatized populations; (b) separates loved ones; (c) denies U.S. businesses and research institutions access to talented workers; (d) bars students and tourists from accessing opportunities and supporting our economy; and/or (e) violates human rights by denying or interfering with the rights to life, freedom of movement, privacy, liberty and work. While HHS/CDC acknowledges these assertions, its mission is to protect public health and base decisions upon solid scientific and medical grounds. Therefore, there is no public health benefit for retaining this government-imposed barrier.

Several organizations and individuals noted that preventing HIV-infected travelers and/or immigrants from entering the United States is also counter to the nation's longstanding leadership in fighting the HIV/AIDS epidemic internationally. These commenters noted that no international conference on HIV/AIDS has been held in the United States since 1990 because of the former regulations. In response, HHS/CDC notes that with this final rule, the United States will no longer be included among the other countries that maintain entry restrictions for HIV-infected individuals.

Many commenters suggested that the former regulations undermine public health efforts, including the fight against HIV/AIDS, by keeping HIV-infected researchers, advocates and experts from entering the country and by preventing HIV-infected immigrants from taking their medications in an effort to conceal their status from U.S. immigration authorities. Some commenters indicated that effective treatment of HIV infection requires a continuous antiviral regimen, and that interrupting antiviral medication can result in difficulty treating the virus as well as higher viral loads, which is also the most important factor in transmissibility. In response, HHS/CDC acknowledges these humanitarian and medical considerations. This final rule, based on solid scientific and public health practices, removes HIV as a condition barring entry into the United States.

A number of commenters did not support CDC's assessment that HIV infection should be removed from the definition of communicable disease of public health significance as defined in 42 CFR 34.2(b) (almost 600 comments). Many commenters who opposed the removal of HIV infection from the definition of communicable disease of public health significance cite financial concerns. They suggested that neither State health departments, Federal government, nor individuals should have to bear a significant financial burden to pay costs associated with treating HIV conditions in immigrants. In addition, many submissions pointed to the state of the economy and the recent debate over the strength of the health care system as a reason not to admit HIV-infected persons. Some commenters indicated that proof of ability to pay for health care should be required for HIV-infected immigrants, noting that HIV is a chronic, life-long infection, which is costly to monitor and even more costly to effectively treat.

CDC acknowledges these concerns, including those related to the potential financial burden that may result from this regulatory change. However, these reasons are not part of the scientific criteria used in determining whether HIV infection should be included as a defined communicable disease of public health significance and as a basis for admission to the United States. An individual infected with HIV will not pose a significant risk to the general U.S. population since HIV infection already exists as an endemic disease. Data have shown that decrease in transmission rates of HIV is directly correlated with national prevention efforts. CDC has and will continue to work on a number of fronts to reduce the impact of HIV across the nation by enhancing access to available prevention programs. These program activities include expanding HIV testing to increase knowledge of HIV status, improving surveillance to identify the leading edge of the epidemic, and exploring innovative and promising new prevention approaches. Communities and public health partners are working to tailor prevention efforts to meet local needs, mobilize communities, and expand the reach of HIV prevention.

Some commenters noted that changing the regulation at this current time is ill advised, and several of the commenters opposed to the proposed rule requested that the waiver remain a requirement for entry into the United States. HHS/CDC acknowledges these comments, but notes that the Part 34 regulations do not address the criteria for a waiver of inadmissibility under Section 212 of the INA.

A few commenters asked why the U.S. government would put even one person at risk of contracting HIV from an immigrant. In response, as stated previously, scientific evidence confirms that HIV infection is not transmitted in casual settings. An arriving alien with HIV infection—or one adjusting status to that of a legal permanent resident—does not pose a public health risk to the general population through casual contact.

A few of these commenters, who did not support the removal of HIV infection as a condition of inadmissibility, expressed concerns that HIV infection should remain a communicable disease of public health significance or be accepted as a disease of “public health significance,” and cited morbidity and mortality rates of HIV infection domestically and internationally. HHS/CDC acknowledges that HIV infection is a serious illness and a major public health concern both domestically and internationally. However, HHS/CDC notes that the purpose of the NPRM was to determine whether HIV infection should remain as a disease that bans entry to the United States for immigration purposes . HHS/CDC, through this final rule, notes that HIV infection will no longer be included in the definition of communicable disease of public health significance, because scientific evidence suggests that it is not transmitted through casual contact.

Other reasons cited by commenters opposing the rule change include various comments such as: (a) HIV-infected persons should be allowed in for tourism but not for permanent relocation; (b) allowing HIV-infected immigrants into the country would allow new strains of HIV to circulate in the United States; (c) reporting requirements for HIV infection seem to indicate that HIV is a disease of public health significance; and (d) removing HIV infection from the disease list is inconsistent with leaving other sexually transmitted infections on the disease list. In response, HHS/CDC acknowledges these comments, however as previously stated, the basis for this regulatory change is based on solid scientific knowledge and current public health practices. Additionally, HHS/CDC is reviewing the other sexually transmitted diseases on the disease list to determine whether additional revisions to Part 34 are warranted.

In summary, HHS/CDC appreciates all the comments received on the proposed change. After considering these comments, CDC has determined that HIV infection is not a communicable disease that is a significant risk for introduction and spread through casual contact to the general U.S. population, where HIV infection already exists as an endemic disease. Thus, HHS/CDC finalized the proposal to remove HIV infection from the definition of communicable disease of public health significance .

On the topic of removing HIV infection from the scope of examinations, some commenters stated that mandatory testing for HIV infection should no longer be required if they meet all other conditions of admissibility. These commenters also noted that maintaining testing while removing HIV infection from the definition of communicable disease of public health significance is legally and procedurally problematic. HHS/CDC maintains that it is appropriate to remove HIV testing from the immigration process, since HIV infection has been removed as a communicable disease of public health significance. As previously stated, HHS/CDC also notes that the regulations found at 42 CFR part 34 regulations do not specify testing for any illness that is not included in the definition of communicable disease of public health significance.

Other commenters stated that immigrants and refugees are not tested for other expensive chronic diseases ( i.e., diabetes, heart disease, obesity) and so, maintaining testing for HIV is discriminatory and would fuel the stigmatization of HIV-infected individuals. In response, HHS/CDC notes that testing for those chronic diseases are not within the scope of Part 34 regulations since they neither fall under the diseases listed in the INA for the purpose of a medical examination for U.S. immigration nor are they defined as a communicable disease of public health significance . HHS/CDC notes that this regulatory change will result in reducing stigma of HIV-infected persons.

Another group of commenters maintained that any mention of serologic testing for HIV should be removed from the regulation. These comments stated that (1) the entry ban for HIV infection amounted to mandatory testing of all immigrants for HIV, which should not be included in routine medical screening of aliens seeking admission into the United States; (2) that people living with HIV should be allowed to enter the United States or adjust to permanent resident status if they meet all other conditions of admissibility; and (3) that when tested, many immigrants do not receive adequate counseling and in some cases have their privacy violated. For these reasons, these groups felt that testing for HIV should be separate from the immigration process.

In response, HHS/CDC acknowledges these humanitarian concerns but notes that HIV testing was required as a part of the 42 CFR part 34 rule when HIV infection was an inadmissible condition based on the definition of communicable disease of public health significance . With this final rule, HIV infection will no longer be contained in this definition and HIV testing will not be required as part of the medical examination.

Some comments in support of the proposed change to remove HIV infection from the Part 34 regulations also stressed the importance of HIV testing for immigrants and refugees for their own benefit and that of their potential sexual partners (approximately 30 comments). Specifically, several commenters said that testing for HIV enables immigrants to receive counseling and education related to HIV/AIDS, including information on treatment mechanisms and support systems, as well as prevention. These individuals and groups submit that health care outcomes are improved when testing is administered and access to treatment is determined or planned prior to arrival. Improved outcomes mentioned due to HIV testing prior to arrival included longer duration until AIDS diagnosis, reduced onward HIV transmission, reduced risk of active tuberculosis infection, and increased quality of life. In response, HHS/CDC acknowledges that diagnosis and linkage to high quality medical care in the context of the required immigration medical examination could positively impact the health of persons with HIV infection. HHS/CDC currently recommends and funds routine HIV screening in medical settings for all U.S. residents, including immigrants in contact with the health system.

Some individuals noted that in September 2006, HHS/CDC recommended that all persons age 13-64 undergo testing at least once for HIV. They suggested that keeping the HIV testing requirement for would-be immigrants would be consistent with HHS/CDC existing policy, would help to meet the HHS/CDC recommendation of voluntary testing, and would ensure that would-be permanent residents were aware of their HIV status.

HHS/CDC appreciates these comments and emphasizes the importance of adolescents and adults knowing their individual HIV status. However, removing the requirement for HIV testing at the time of the medical examination for immigration purposes will not prevent individuals from knowing their status upon and after arrival in the U.S. CDC has and will continue to work on a number of fronts to reduce the impact of HIV across the nation by enhancing access to available prevention programs. These program activities include expanding HIV testing to increase knowledge of HIV status, improving surveillance to identify the leading edge of the epidemic, and exploring innovative and promising new prevention approaches. Communities and public health partners are working to tailor prevention efforts to meet local needs, mobilize communities, and expand the reach of HIV prevention. Further, Part 34 regulations do not specify testing for any disease that is not included in the definition of communicable disease of public health significance . For example, other recommended screening procedures such as cholesterol tests, Pap smears, mammograms, or other diagnostic tests for the presence of asymptomatic chronic health conditions such as hepatitis B, are not conducted as part of the required medical examination. CDC recognizes that the medical exam provides a unique opportunity to both inform immigrants of their health status and, if warranted, link them with care. If, as a part of the medical examination for immigration, the panel physician detects a condition that might warrant additional follow-up or testing, CDC will continue to encourage the panel physician to inform the applicant about the condition and to seek appropriate medical care and counseling services. This would include anyone with symptoms suggestive of hepatitis, AIDS, or other chronic infectious diseases that are not inadmissible conditions.

Commenters also asked HHS/CDC to clarify how local public health departments and voluntary agencies will be funded and equipped to provide testing and counseling services to immigrants potentially infected with HIV if HIV testing is no longer included in the required medical examination for U.S. immigration. In response, HHS/CDC will continue to work closely with its state and local partners in protecting the public's health. HHS/CDC currently provides funding to State and local health departments and community-based organizations for outreach and HIV counseling and testing programs. Immigrants would be eligible for services under these programs.

Some commenters suggested alternatives such as listing HIV infection as a Class B health condition or another designation to justify testing for immigrant applicants. In response, HHS/CDC reiterates that Part 34 regulations do not specify testing unless the illness is defined as a communicable disease of public health significance .

In summary, CDC appreciates all the comments received on the proposed change. After considering these comments, CDC has determined that HIV testing will no longer be included in the scope of examinations since HIV has been removed from the definition of communicable disease of public health significance. Therefore, as stated above, it is no longer necessary or appropriate to maintain HIV in the scope of examinations.

HHS/CDC received a number of comments from individuals and organizations on the NPRM regarding the cost estimates of admitting HIV-infected visitors and immigrants into the United States (approximately 100). Many of the commenters complimented the quality of the economic impact analysis and the level of transparency provided regarding the methods and assumptions.

A majority of the individuals and organizations that provided comments on the economic impact analysis supported the removal of HIV infection from the list of communicable diseases as defined in 42 CFR 34.2(b), but suggested that the estimates provided in the NPRM overestimate the cost of the proposed rule to the United States taxpayer. Specifically, these individuals and organizations expressed concerns that the NPRM estimates did not differentiate costs between public and private payers; they noted that some HIV-infected immigrants would secure private insurance, some would pay out-of-pocket, and some would go without care or treatment. These commenters also noted that there is no data available to support the assumptions that HIV-infected immigrants will seek public benefits. They stated that all immigrants entering the United States must document that they will not be a public charge and immigrants do not have access to entitlement benefits for five years.

Many of these commenters also noted that economic benefits of removing the HIV ban were not included in the cost analysis. Specifically, they noted that health care expenditures are a large portion of the United States economy. Health care expenditures for treatment of HIV infection contribute to the United States economy and the creation of jobs. Similarly, some of these individuals and organizations suggested that many HIV-infected immigrants will provide revenue for the United States through taxes, visa fees, and contributions to Social Security and that government-incurred expenses currently used to enforce bans would be reduced. Some commenters also noted that many immigrants would bring unique sets of skills and abilities, that can contribute greatly to the United States workforce and noted that these benefits were not captured in the analysis.

For these reasons, these individuals and organizations suggested that the cost estimates presented in the NPRM inflated the public costs of allowing HIV-infected immigrants into the United States. In other words, these commenters suggested that the cost estimates in the NPRM overestimate public sector expenditures resulting from this proposed rule. HHS/CDC acknowledges these comments on the health care expenditure estimates and recognizes that the estimates in the analysis do not consider all factors and that there are some limitations to the analysis.

Many of these individuals and organizations suggested that the cost estimates were high, but they also noted that the assumptions upon which the cost estimates were based were reasonable for this economic analysis.

In response to these comments, HHS/CDC notes that the analysis was not restricted to impacts to the U.S. Government. The HHS/CDC analysis is an analysis of the health care sector expenditures taken from a societal perspective. That is, all health care costs are included, regardless of who pays. However, HHS/CDC also acknowledges that the analysis is focused on the impact to the health care sector.

HHS/CDC acknowledges that the health care expenditures estimated in the economic analysis may be small relative to the total heath care sector in the U.S. Nonetheless, Office of Management and Budget (OMB) Circular A-4 on “Regulatory Analysis” (available at: http://www.whitehouse.gov/OMB/circulars/a004/a-4.pdf ) directs agencies to assess all relevant impacts whether they be benefits, costs or distributional (regardless of payer).

HHS/CDC also acknowledges that allowing immigrants to enter and settle in the United States benefits the economy resulting from a number of additional economic activities. However, we are unable to quantify those potential benefits directly related to this rule.

Many organizations and individuals also noted that immigrants infected with HIV may consume fewer health care resources than immigrants with other chronic medical conditions. As such, these commenters suggested that including the cost model in the NPRM reflected inconsistencies in United States immigration policy. Specifically, they noted that the costs of treating HIV are raised as a concern in the proposed rule, but the costs of treating immigrants with other chronic conditions are not considered when determining immigrant status. In summary, they note that if the costs of treating immigrants with other significant health concerns are not considered in determining immigration policy, then HIV status should not be a factor in setting immigration policy.

HHS/CDC appreciates these comments and acknowledges the points made by these individuals and organizations. However, HHS/CDC conducted this cost analysis in adherence to the Office of Management and Budget (OMB) Circular A-4 requirements (available at: http://www.whitehouse.gov/OMB/circulars/a004/a-4.pdf ).

Many of the individuals and organizations in opposition to the proposed rule often cited concerns that the potential costs of the proposed rule would result in an unacceptable, increased burden to the United States tax payers and to the United States health care system.

HHS/CDC notes that the purpose of the rulemaking was to determine whether HIV infection should remain as a communicable disease of public health significance. Through this Final Rule, HHS/CDC notes that HIV infection will no longer be a communicable disease of public health significance, because scientific evidence suggests that it is not transmitted through casual contact. Furthermore, we found no evidence to support the assertion that the rule would impose an unacceptable, increased burden on tax payers or the U.S. health care system.

One commenter noted that a significant number of visa applicants are the immediate relatives of U.S. citizens, for whom there is no numerical restriction. HHS/CDC acknowledges this point, but also notes that most immediate relatives of U.S. citizens are eligible for waivers under existing regulations. Much will depend on the assumed age structure of family-related immigration ( i.e., immigrants who are granted landed immigrant status on the basis of uniting families) and how many would have received a waiver absent this regulatory change. However, HHS/CDC has no reliable data measuring existing demand ( i.e., from family members who are HIV-infected and who will wish to immigrate here due to the change in regulations).

Two reviewers noted CDC may have overstated the costs of the proposed rule through calculation or transcription errors in the NPRM. HHS/CDC thanks these reviewers for their careful review of the analysis. HHS/CDC acknowledges that there was a transcription error and made the necessary edits in the analysis for the final rule.

In addition to the general comments on the Economic Impact Analysis (EIA), HHS/CDC also received a detailed technical review of the EIA from commenters. The comments received on this review concluded that the HHS/CDC cost assumptions were reasonable, but possibly overstated. These reviewers also indicated that a 5-year time horizon for analysis was reasonable.

This technical review noted that many of the economic benefits of removing the HIV ban were not included in the cost analysis. These reviewers further noted that the costs identified by HHS/CDC are health care expenditures that may benefit rather than harm the economy and suggest using a multiplier to estimate these economic benefits. One reviewer also suggested that HHS/CDC wrongly assumes that there will be no added economic benefit from new HIV-infected immigrants. The reviewer also contented that these immigrants would contribute to the economy and so the added health care expenditures CDC outlined would in some part be offset.

Several reviewers also noted that the costs estimated by the HHS/CDC model were small in proportion to the overall health care sector.

HHS/CDC acknowledges that data on the average annual health care costs of HIV treatment for immigrants are limited and may be lower than the estimates used in our analysis. We have added language which indicates that the average annual medical costs for HIV treatment in the Ryan White and Medicaid Programs range from $15,738 to $17,790 per person. HHS/CDC also acknowledges that we did not include a quantitative estimate of the economic benefits of removing HIV as an inadmissible condition. We further acknowledge that the health care expenditures have a direct impact on the health of individuals. However, because no data exist to quantify these potential indirect effects on the economy, we have not estimated these effects, either through direct measurement or with the use of a multiplier.

HHS/CDC acknowledges that the health care expenditures estimated in the economic analysis may be small relative to the total heath care sector in the U.S. Nonetheless, OMB's Circular A-4 directs agencies to assess all relevant impacts whether they be benefits, costs, or distributional (regardless of payer).

One of the reviewers suggested that it would be helpful if HHS/CDC explicitly stated that the costs to be borne by the federal government are a fraction of the figure described as “costs” in the NPRM. The reviewer also felt that it would be helpful if HHS/CDC would highlight that the CBO analysis states that the government has already identified a mechanism for offsetting the costs through visa fees.

The reviewer also suggested that the assumption that the prevalence of HIV infection among those immigrating to the U.S. will be the same as the prevalence in the general population of a particular region is questionable. However, although the reviewer notes the lack of reliable data may make this assumption reasonable, the reviewer believes that the assumption is a likely overestimation.

This reviewer also suggested that the assumption that there are a fixed number of immigrants is a flawed assumption because 40-47% of all immigrants are not subject to numerical caps. Therefore, immediate relatives would not replace an immigrant who is HIV negative. The reviewer finally states that the assessment of the economic impact of lifting the ban should also take into account the economic benefits.

HHS/CDC thanks the reviewer for the thoughtful and thorough examination of the proposed rule and the economic model. The reviewer is correct in the statement that all of the costs are not those to the government. Consistent with OMB's Circular A-4, the HHS/CDC analysis is an analysis of the health care sector costs taken from a societal perspective; that is, all health care costs are included, regardless of payer.

HHS/CDC acknowledges the uncertainty in the estimate of HIV prevalence among immigrants who change their status to legal permanent residents, and the argument can be made that the estimate of prevalence should be higher or lower. Thus HHS/CDC chose to use a range. Further, HHS/CDC acknowledges that the range is “wide.” However, HHS/CDC believes that the range provides an important understanding of the limitations of the available data.

The reviewer further commented that the model fails to account for the economic benefits that those immediate family member immigrants would bring to the U.S. economy. HHS/CDC notes that the purpose of the HHS/CDC model was to account for the direct impact to the changes in policy to the health care sector and not to account for ancillary economic benefits. HHS/CDC also notes that although it thoroughly and carefully examined the direct effects of the proposed rule change, there are limitations to the analysis. Finally, HHS/CDC points out that there is a limit on the number of immigrants allowed into the U.S. each year. Family-related immigration is usually outside those limits. Again, HHS/CDC acknowledges that it has no reliable data measuring the existing demand among families to reunite with their loved ones. In addition, HHS/CDC notes that this point is probably only valid for an initial period following the change in regulations, where there would be a catch-up phase.

Two comments were received that provided the following technical correction: “In section II, Background, part I (p. 31798), last sentence, the proposed rule should state that the grounds of inadmissibility for specific health related grounds also pertain to most aliens in the United States who are applying for adjustment of their status to that of lawful permanent resident. There are few exceptions, e.g., applicants under INA 249, 8 U.S.C. 1259 (registry) or under INA 245, 8 U.S.C. 1255 (m) (U nonimmigrant status/U visa holders) are exempt from the health-related grounds of inadmissibility at INA 212(a)(1)(A), (8 U.S.C. 1182 (a)(1)(A))”. CDC has accepted this technical change and amended the preamble text to reflect this.

Therefore, HHS/CDC amends 42 CFR 34 as follows: HIV infection is removed from the definition of a communicable disease of public health significance as defined in 42 CFR 34.2(b), and references to HIV are removed from the scope of examinations in 42 CFR 34.3. As a result, beginning on the effective date of this rule, HIV infection will no longer be an inadmissible condition, and HIV testing will no longer be required for those aliens who are required to undergo a medical examination for U.S. immigration purposes.

HHS/CDC has considered the rationale for all the public comments on the proposed rule. The vast majority of comments support the NPRM as written, with less than 3% of all commenters opposed to the changes in the NPRM.

HHS/CDC believes that the positive benefits of this regulatory change outweigh the costs. After considering public comments, as well as the most recent scientific and public health data available, HHS/CDC has decided to promulgate the final regulation as proposed in the NPRM.

HHS/CDC will revise the Technical Instructions provided to panel physicians and civil surgeons, as needed, regarding the removal of required HIV testing, and this information will also be immediately available to the public on the HHS/CDC Division of Global Migration and Quarantine Web site, located at the following Internet address: http://www.cdc.gov/ncidod/dq/technica.htm. HHS/CDC will also work with DoS and DHS to ensure that panel physicians and civil surgeons respectively are aware of the revision to the Technical Instructions regarding the removal of required HIV testing.

HHS/CDC has examined the impacts of the proposed rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act (Pub. L. 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this final rule is an economically significant action under the Executive Order.

In the analysis that follows, we assess the potential impacts of removing HIV infection from the list of specific communicable disease of public health significance and removing the HIV testing requirement in the medical examination for aliens who are applying for adjustment of their status to that of a lawful permanent resident.

Prior to the enactment of the United States Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008, HHS/CDC was required by statute to list HIV infection as a “communicable disease of public health significance.” Now that the statute provides discretion, HHS/CDC is taking this action to reflect current scientific knowledge and public health best practices, and to reduce stigmatization of people who are HIV-infected. This final rule is not intended to correct any market failure, but to remove a government-imposed barrier that does not provide a significant public health benefit.

HHS/CDC examined three regulatory approaches.

1. The first approach is to maintain HIV infection on the list of communicable disease of public health significance, i.e., to keep the disease as an inadmissible condition for entry into the U.S. This means that visa applicants seeking permanent residency would continue to undergo testing for HIV infection as part of the application process. Those applicants testing positive for HIV, if eligible, would still be required to apply for and obtain a waiver from DHS prior to coming to the U.S. There are several disadvantages to this approach. As stated previously, while HIV infection is a serious health condition, it does not represent a communicable disease that is a significant risk for introduction, transmission, and spread to the U.S. population through casual contact. Currently, there are already roughly 1 million persons in the United Stated living with HIV [1]. Thus, maintaining HIV infection on the list of inadmissible conditions for entry into the U.S. would not result in significant public health benefits. Further, this approach is not in line with current international public health practice. This approach contributes toward the stigmatization of HIV-infected persons. HHS/CDC did not select this approach.

2. The second approach is to remove HIV infection from the list of communicable disease of public health significance, i.e. remove it as a ground of inadmissibility into the U.S., but continue mandatory HIV testing for all immigrant applicants similar to an approach followed by some countries. Under this approach, all those aliens who test positive for HIV infection could be informed of their HIV status, counseled regarding their condition, the need for appropriate treatment, and the steps that should be taken to minimize the risk of onward transmission.

There are potential public health benefits to a mandatory testing approach. The medical examination offers a unique opportunity to both inform immigrants of their HIV status and link them with care. Through screening, HIV-infected aliens who are potentially unaware of their HIV status would become aware of their status and could be linked with prevention, care and treatment options in the United States. Early diagnosis and treatment of HIV-infected persons can increase life expectancy and may improve the quality of life. Additionally, knowing one's HIV status decreases the likelihood of onward transmission [2, 3]. These public health benefits are the basis for the HHS/CDC's “Revised Recommendations for HIV Testing of Adults, Adolescents, and Pregnant Women in Health-Care Settings,” which states that the characteristics of HIV infection are consistent with all generally accepted criteria that justify voluntary screening [4]. However, mandatory HIV testing is limited to certain infrequent cases such as blood and organ donors.

There are also disadvantages to continued mandatory testing if HIV infection is removed from the definition of communicable disease of public health significance. Mandatory testing for other serious health-related conditions that are not inadmissible health conditions, ( e.g., infectious diseases, such as hepatitis, malaria, and West Nile virus and chronic conditions such as diabetes and heart conditions), are not required as part of this medical examination. Thus, continued mandatory HIV testing would differentiate HIV infection from other serious health-related conditions. Second, although the purpose of the medical examination is to identify health conditions considered inadmissible on public health grounds, the results of examinations conducted by panel physicians in the immigrant's home country might not be kept confidential because of requirements in the country of origin making it necessary to report HIV results to local authorities. These results may be counter to HHS/CDC objectives of reflecting current scientific knowledge and public health best practices, and reducing stigmatization of people who are HIV-infected. Therefore, as discussed below in the third approach, HIV testing, consistent with CDC's recommendations for general screening, would be available.

3. The third approach is to remove HIV infection from the definition of communicable disease of public health significance and as a requirement in the medical examination. This means that mandatory testing for HIV infection would no longer be required and DHS would allow HIV-infected persons to enter into the U.S. (or to adjust to permanent resident status) if they meet all other conditions of admissibility. This is the regulatory approach that HHS/CDC selected. Along with this approach, all immigrants, refugees and status adjusters would still have the opportunity to receive information about HIV testing and to be tested in the United States as recommended by the CDC guidelines [4]. The discussion of the potential impacts of the rule that follow relate to this approach.

The baseline for this analysis assumes no change in the current regulation. In other words, all applicants for admission into the U.S. as legal permanent residents and those already within the U.S. seeking adjustment to permanent resident status are currently tested for HIV infection during the immigration medical examination. Those who are HIV-infected and are not granted a waiver by the Department of Homeland Security are refused lawful permanent resident status in the United States.

Currently, refugees who are HIV-infected must be granted a waiver by the Department of Homeland Security before entering the U.S. Subsequently, refugees infected with HIV who are present in the U.S. and apply for adjustment to permanent resident status must be re-examined and granted another waiver from DHS at that time ( i.e., the grant of waivers permits these individuals to obtain refugee status, and later, permanent resident status despite being HIV-infected, which would otherwise render them inadmissible). We have not explicitly included groups other than lawful permanent residents ( e.g. refugees) in our analysis, however, because: (i) These persons, compared to the other immigrants, enter the U.S. under extraordinary circumstances; (ii) the numbers are relatively small; and, (iii) the proposed change in regulations is not likely to have a significant impact on the annual number of HIV-infected refugees admitted to the U.S. and who later become permanent residents because such persons generally receive a waiver of inadmissibility for HIV infection under current procedures. Thus, the numbers of admitted HIV-infected refugees who are subsequently granted permanent resident status are likely to stay the same, regardless of regulations in place. That is, the HIV-infected refugees-turned-permanent residents are part of the baseline scenario.

Furthermore, though this policy would increase the total number of people who may be eligible to be admitted, we assume that the total number of immigrants who are annually admitted into the United States is fixed over time. Thus, the incremental input to the rule is a calculation of the additional costs due to HIV-infected immigrants above the costs of non-HIV-infected immigrants. In general, given that the total number of immigrants is not likely to change and the share of HIV-infected immigrants is likely to be relatively small, the rule will not likely have an appreciable impact on the economy in terms of wages, productivity, or prices of goods and services.

The affected population is defined as the number of new HIV-infected lawful permanent residents entering the United States each year and those individuals already in the United States seeking to adjust their immigration status to that of a lawful permanent resident. The proposed changes in 42 CFR part 34: Medical Examination of Aliens affects all foreign nationals entering the U.S. who are infected with HIV. Although HIV testing is not routinely required for entrance into the U.S. except for those aliens who are seeking to become lawful permanent residents, visitors who are infected with HIV are currently required to request waivers to obtain entrance. With this final rule, the waiver process will no longer be necessary. Data on the number of waivers granted annually based on HIV status are not available. For example, in Fiscal Year 2007, the Department of State reported that its consular officers found 746 applicants for immigration ineligible for admission to the U.S. under the communicable disease grounds of INA 212(a)(1)(A)(i). The number of applicants who tested positive for HIV infection is unknown. This analysis is limited to aliens seeking to become lawful permanent residents who are required to have a medical examination to determine admissibility. Because applicants such as visitors and refugees have historically had the option of obtaining a waiver to enter and remain in the U.S., these groups are not included in this analysis.

Based on the estimated distribution of HIV/AIDS cases in each of the regions in the world and weighted by the number of immigrants entering the United States from each region, we estimate that approximately 4.06 (range of 1.02 to 6.09) immigrants per 1,000 immigrants that would be likely to enter the U.S. under the proposed rule would be infected with HIV (see Table 1 for the summary of regional estimates and weights and Technical Appendix II, Table 1: Summary of Model, HIVEcon, Inputs and Assumptions for Primary, Lower and Upper Bound Analyses [5]).

The numbers of HIV/AIDS persons in each region of the world were taken from the 2007 AIDS Epidemic Update: Global Overview issued by the Joint United Nations Programme on HIV/AIDS (UNAIDS)[8]. HHS/CDC used regional data and rates that were determined using the regional population data from 2006 published by the Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat [7]. After examining the immigration data, by region, from the Yearbook of Immigration Statistics: 2007 Immigrants [6], we assigned regional weights according to the number of aliens coming to the United States from each region.

The 2007 Immigration Statistics [6, 9] indicate that 1,052,415 persons became permanent residents in 2007. Multiplying this number by our prevalence estimate of 4.06 (range of 1.02 to 6.09) HIV-infected immigrants per 1000 immigrants yields an estimated 4,275 (range of 1,073 to 6,409) HIV-infected immigrants who would enter into the United States each year.

However, we note that there are significant uncertainties in this estimate since no specific data exist on the HIV prevalence of persons seeking to immigrate to the United States. We do not have a basis to judge how these immigrants who qualify for permanent residence differ from the general regional population in terms of HIV prevalence; thus, for the purposes of this analysis we assumed that it would be equivalent to the regional HIV prevalence rates. We used regional HIV prevalence rates rather than HIV rates for specific countries to allow for year to year variations in the number of aliens entering the U.S. from specific countries.

There are several possible reasons as to why the proportion of HIV-infected immigrants could be less or more than the prevalence of HIV-infected persons in the region of origin. For example, the cost of adequate medical care in the U.S. may make HIV-infected individuals reluctant to immigrate to this country. With the increase in the availability of appropriate HIV treatments in many parts of the world, adequate treatment is often cheaper outside of the U.S. Conversely, in regions or specific countries where appropriate treatment is less readily available, the portion of HIV-infected immigrants from those regions could be higher than the prevalence of HIV-infected persons in that region.

We used a range of 1.02 to 6.09 HIV-infected persons per 1,000 immigrants based on 25% and 150% of the mean weighted average—4.06 per 1,000 immigrants of the number of estimated HIV-infected persons in each region but weighted by the number of lawful permanent residents who entered the U.S. in 2007. This range yields a lower bound estimate of 1,073 and an upper bound estimate of 6,409 HIV-infected persons entering the United States annually (see Technical Appendix II [5]).

In this final rule, HHS/CDC is removing HIV infection from the definition of communicable disease of public health significance contained in 42 CFR 34.2(b) and scope of examination, 42 CFR 34.3 because HIV infection does not represent a communicable disease that is a significant threat to the general U.S. population. The rationale for maintaining HIV infection as an inadmissible condition is no longer valid based on current medical knowledge and public health practice, scientific knowledge, and experience which has informed us on the characteristics of the virus, the modes of transmission of HIV, and the effective interventions to prevent further spread of the virus. To the extent the final rule will result in an increased number of HIV-infected immigrants to the U.S. each year, there will be quantifiable impacts. We have made our best attempt to capture the likely effects of the rule, but there are significant uncertainties in this estimation effort.

The benefits from this action are difficult to quantify. Based on the estimate above, this rule would allow perhaps roughly 4,275 (range of 1,073 to 6,409) persons to enter the United States annually who are otherwise admissible but are denied admission solely based on their HIV status. The rule will bring family members together who had been barred from entry, thus strengthening families. Also, HIV-infected immigrants with skills in high demand would be permitted to enter the U.S. to seek employment and contribute as productive members of U.S. society. Depending on the region of the world from which a person emigrates, admittance to the U.S. may afford greater opportunity, better health care, and education and training programs than those available in the immigrant's home country. These HIV-infected individuals, compared to those who do not receive appropriate multi-drug anti-retroviral therapy for HIV treatment, could survive an additional 13 years, with an average life expectancy of approximately 29 years (to age 49 years) [10]. This increased life expectancy allows the opportunity for longer and improved productivity.

Further, this final rule removing HIV infection from the definition of communicable disease of public health significance and from the scope of examinations will remove stigmatization of HIV-infected people who have long been denied entry into the U.S. based only on a treatable and preventable medical condition. This proposed rule will bring the U.S. in line with current science and international standards of public health.

Though this rule is assumed to not have an impact on the total number of immigrants annually admitted as legal permanent residents, we note that immigration, in general, produces net economic gains for the United States.[11].

As previously noted, we have made our best attempt to capture the likely effects of the rule, but there are significant uncertainties in this estimation effort. HHS/CDC notes that this analysis is an analysis of the health care sector costs taken from a societal perspective; that is, all health care costs are included, regardless of payer. The costs to be borne by the Federal government are only a part of the total costs described below.

As previously discussed, the incremental impacts of the rule should be a comparison between the arrival of an HIV-infected immigrant and the arrival of an HIV-negative immigrant. Presumably, HIV-related health care expenditures will be different, but there are a variety of health expenditures that the HIV-infected immigrant may not incur that other immigrants may incur (e.g., certain types of cancer, diabetes, heart disease). It is not clear that, over the course of a lifetime, on net an HIV-infected immigrant would consume more health care resources than other immigrants. Furthermore, HIV treatment yields benefits that off-set the expenditures, including increased life expectancy and productivity.

However, given that health care expenditures associated with treatment of HIV infection can be substantial and may result in some fiscal impacts (as discussed below), we developed a model (HIVEcon) to estimate these potential effects of the rule. A complete description of the model including assumptions, results and limitations is available for examination [5]. The spreadsheet model itself is also available for download so that the reader can determine the relative impact of altering almost any input value, individually or several simultaneously [12].

The model, HIVEcon, examines the treatment costs as estimated by Schackman et al [13] associated with newly identified persons infected with HIV regardless of payer, following the 2004 standards of care. The annual treatment cost is estimated to be $25,200 in 2004 dollars, with a range of $19,466 to $30,954. However, significant advances in the treatment of HIV have been made since 2004 [14], and are likely to continue to be made. Thus, the expenditure estimates could be underestimated since as treatment options increase, the benefits such as quality of life and lifespan will increase as will costs. However, these expenditures may be overestimated since it is not clear to what extent immigrants will seek and receive even the 2004 standard of care. Expenditures may also be overestimates if only including direct medical costs, as is done for the Ryan White Block Grant and Medicaid Programs, where average annual costs range from $15,738 to $17,790 per person.

The absolute lower bound estimate is $19 million in the first year (decreasing the prevalence rate to 1.02 HIV+ immigrants per 1,000 immigrants and the average annual medical expenditures to $19,466). The maximum upper bound estimate is $173 million (increasing the prevalence rate to 6.09 HIV-infected immigrants among 1,000 immigrants, and the average annual medical expenses to $30,954 per immigrant). In the HIVEcon model, in Year Two following the change in regulation, as the cumulative number of HIV-infected immigrants almost doubles, so will these annual health expenditures. Likewise in the third year, the expenditures will be equivalent to three years' worth of immigrants (excluding those who have passed away) and so on until the HIV-infected immigrants reach their life expectancy (e.g., in the model, an HIV-infected person at age 30 has an average life expectancy of 24.7 years).

The Congressional Budget Office (CBO) estimated the cost to the federal government of Section 305 of PL 110-293 prior to the law's enactment. The analysis included increases in direct spending related to provision of health care and other benefits paid for by the federal government. Specifically, those benefits include Medicaid, Supplemental Security Income, Food Stamps, and nutritional programs. In total, CBO estimated that providing these benefits to HIV-infected immigrants and their citizen children will increase spending by less than $500,000 in 2010 and $83 million over the 2010-2018 period, primarily for Medicaid.

The CBO analysis was done for the purpose of estimating the impact of PL 110-293 on the federal budget. The analysis for this final rule was done to comply with Executive Order 12866, which directs agencies to assess all costs of available regulatory alternatives, including, but not limited to, those costs incurred by the federal government. The economic analysis for this regulation differs from the CBO analysis for PL 110-293 in four major areas: (1) The CBO analysis assumed that the HIV prevalence rate would be equal to half of the weighted-average HIV prevalence rate for the immigrants' country of origin, whereas this analysis assumed that the HIV prevalence rate would be equal to the weighted-average rate of the immigrants' region of origin; (2) the number of immigrants was increased by 5% each year in the CBO analysis while this analysis did not include growth in the annual number; (3) the CBO analysis only examined health care costs paid for by Medicaid whereas this analysis included all health care costs including those paid for by the Ryan White Program; and (4) the CBO analysis included costs of federal disability and nutrition benefits, whereas this analysis did not include those costs.

By the year 2013, the number of HIV-infected immigrants entering the U.S. projected by the CBO analysis is roughly equivalent to that projected by this analysis (analytical differences in prevalence and growth rates cancel out). By 2018, the number of HIV-infected immigrants projected by the CBO analysis exceeds projections in this analysis. The health care costs in this analysis exceed that of CBO's analysis because the former included all federal and nonfederal costs including those costs paid for through the federally-funded Ryan White Program. This analysis did not include non-health care costs.

As previously discussed, even if HIV-related health restrictions are removed as a barrier to admission for immigrants, all immigrants still must meet other admission requirements. In the United States, under the Federal Personal Responsibility Work and Opportunity Reconciliation Act (PRWORA) of 1996, most immigrants are not eligible to receive means-tested public benefits for five years after their entry into the U.S. [15, 16]. Federal means-tested public benefits include Supplemental Security Income (SSI), cash Temporary Assistance for Needy Families (TANF), Medicaid, and food stamps [15, 17]. State and local means-tested benefits are determined at the state or local level and vary by jurisdiction. We have no data to assume that HIV-infected immigrants will seek, five years after being admitted to the U.S., such benefits at rates different from non HIV-infected immigrants.

In addition, PRWORA placed other limitations on aliens' access to public benefits, making them more difficult for aliens to obtain. For example, the income and resources of the sponsor of a family-based immigrant or permanent resident are deemed to be available to that alien if he/she should apply for certain means-tested public benefits. See 8 U.S.C. 1631, 1632. Since a sponsor must first prove to DHS that he/she is able to provide support to the sponsored alien at an annual income that is at least 125% above the federal poverty level before the alien's immigration application will be approved, it is unlikely that the alien will be able to show that his/her available resources fall beneath the low income eligibility thresholds required for many means-tested public benefits. See INA section 213A(a)(1)(A).

However, some immigrants may be eligible for certain assistance through the Ryan White HIV/AIDS Program—a federally-funded program that provides HIV-related health services. Funds are awarded to agencies located around the country, which in turn deliver care to eligible individuals. Since the program is administered through different grantees using different eligibility criteria, it is difficult to assess the extent the HIV-infected immigrants will be eligible for assistance through this program. However, given that the estimated number of new HIV-infected immigrants entering the United States as a result of this rule is relatively small compared to the total number of persons currently assisted by the funding (roughly half a million), the overall impact on the program is likely small.

Though difficult to quantify with precision, there will likely be some additional cases of HIV infection due to onward transmission from HIV-infected immigrants to others in the United States who are not currently infected. The costs associated with onward transmission include:

• Shortened lifespan and reduction in quality of life even with treatment,

• The health care costs associated with treating HIV infection,

• The costs of social services when individuals are unable to fully support themselves because of their illness, and

• Decreased productivity when individuals become too sick to work.

Because health care costs are substantial and other costs listed above are difficult to quantify, the analysis in the HIVEcon model is limited to health care costs associated with treatment of HIV infection.

In the model, the number of estimated HIV-infected cases due to onward transmission (in Year t) is calculated as: [(Number of HIV-infected immigrants entering in Year t + Number of HIV-infected immigrants surviving from previous years that survive to Year t + additional persons previously infected by onward transmission from HIV-infected immigrants that survive to Year t) x onward transmission rate].

A 1.51% onward transmission rate was used in the HIVEcon model to represent the annual estimated number of new infections caused by HIV-infected immigrants to the U.S., or caused by U.S. person infected by HIV-infected immigrants (i.e., annually every 100 HIV-infected persons infect an additional 1.51 persons). The most recent estimate of average onward transmission, when limited to sexual transmission, in the United States is 3.02 per 100 HIV positive immigrants [18]. In 2006, the overall rate for onward transmission of HIV in the U.S. from all causes, was 5 new infections per 100 HIV-infected persons [19]. Results from published research indicate that immigrants to the United States, regardless of their race or ethnicity, often have an initial better health profile than native-born Americans across diverse health behaviors and outcomes; however, this health advantage declines as length of residence in the United States and degree of acculturation increase [20-26]. Specifically, studies of HIV risk behavior among immigrant populations, upon arrival in the U.S., indicate that these behaviors are influenced by a number of factors including the demographic characteristics of the migrants (especially sex, social class, relationship status and education); the purpose of immigration; the type and location of their receiving community and the existing supports; discrepancy between pre-immigration expectations and post-immigration experiences; and transnational movement between the U.S. and their home countries [27-31]. These multiple factors result in heterogeneity in HIV risk between migrant communities, with some being at lower, and others higher risk, than their U.S. counterparts. There is no evidence to suggest immigration to the U.S. significantly affects HIV incidence in this country in one direction or the other. Thus, it is not unreasonable to assume that onward transmission rates amongst HIV-infected immigrants will be lower than among HIV-infected persons born in the U.S.

For this analysis, we assumed that the onward transmission rate for immigrants, and those that they infect, would be fifty percent of the average U.S. rate for sexual transmission (i.e., rate of onward transmission from HIV-infected immigrants is assumed, in the baseline case, to be 1.51 per 100). Because data supporting this assumption are limited, this assumption was tested in sensitivity analysis. We used 0% transmission as our lower bound estimate and a transmission rate of 4.53 per 100 HIV-infected immigrants, and those that they infect, as our upper bound estimate. The upper bound transmission rate is a fifty percent increase in the average annual onward transmission rate of 3.02%.

Assuming 4,275 HIV-infected immigrants enter in the first year, there will be 65 new HIV infections due to onward transmission, assuming an onward transmission rate of 1.51 per 100 HIV, with a range of 0 to 261 (assuming onward transmission of 0 and 4.53 per 100 HIV-infected immigrants, respectively). These estimates imply treatment costs, for those infected via onward transmission only, in the first year of $1.6 million in the primary estimate and a range of $0 to $8.1 million [5].

For the purposes of calculating new HIV infections associated with HIV-infected immigrants in the U.S., HIVEcon adds persons infected by HIV- infected immigrants to the cohort of projected HIV-infected immigrants. This modeling technique represents the chain of onward transmission after initial transmission from an HIV-infected immigrant. Thus, in the next year, though the cumulative number of HIV-infected immigrants essentially doubles, the number of new HIV cases (as well as the associated treatment costs) will be slightly more than double the previous year.

This modeling approach assumes that those people infected by HIV-infected immigrants would never have become infected with HIV were it not for the arrival in the U.S. of HIV-infected immigrants. This could be unrealistic since U.S. persons who are infected by HIV-infected immigrants may engage in behaviors that lead them to activities that expose them to HIV infections, regardless of the source of infection. An alternative interpretation may be that at least some of the additional infections are occurring earlier than they otherwise would have. Thus, these shifts in the timing of infection will increase the total number of new cases in any one year, but the true incremental impact may be the implications of becoming infected earlier.

Furthermore, the model treats the onward transmission rate as fixed over time. However, data show that onward transmission has declined over time[19]. If we assume that transmission rates will continue to decrease in the future, it is possible that the model may overestimate the number of HIV-infected individuals due to onward transmission as we project impacts into the future.

We have made our best attempt to capture the likely effects of the rule, but there are significant uncertainties in this estimation effort. For example, the HIVEcon model projects potential impacts out to 50 years after the rules go into effect. However, many of the key inputs to the model may be significantly different even ten years from now given the rapid pace of change in HIV treatment, HIV prevalence in other countries, as well as potential changes in the overall immigration policy. It may not be inconceivable that there would be an HIV vaccine in the next decade or two. Given these and other uncertainties, Table 2 provides a summary of the potential effects of the rule five years after implementation.

The primary benefit of this rule is that each year an additional 4,275 (range of 1,073 to 6,409) immigrants who otherwise qualify for entry but are denied based solely on HIV status will now be able to enter the country. Although we are unable to quantify all of the benefits of this change in policy, we believe it will help reduce stigmatization of HIV-infected people; bring family members together who had been barred from entry (thus strengthening families); and allow HIV-infected immigrants with skills in high demand to enter the U.S. to seek employment and contribute as productive members of U.S. society, and if they are able to obtain better health care in the United States, to improve health outcomes and productivity. There are also ethical, humanitarian, distributional, and international benefits that are important but difficult to quantify. [We note the words of Executive Order 12866: “Costs and benefits shall be understood to include both quantifiable measures (to the fullest extent that these can be usefully estimated) and qualitative measures of costs and benefits that are difficult to quantify, but nevertheless essential to consider.”] We observe as well that in the context of the U.S. HIV/AIDS prevalence, currently estimated at roughly 1 million persons [1] the 3,956 to 23,622 HIV-infected immigrants in five years represents 0.4% to 2.4% of the national total of persons living with HIV/AIDS.

The main cost of this rule is the potential for onward transmission to U.S. residents who are not infected with HIV. As we noted in the previous discussion, however, our modeling approach assumes that those people infected by HIV-infected immigrants would never have become infected with HIV were it not for the arrival in the U.S. of HIV-infected immigrants. This assumption will in some cases be unrealistic, because U.S. persons who are infected by HIV-infected immigrants may engage in behaviors that expose them to HIV infections, regardless of the source of infection. It is possible, of course, that at least some of the additional infections are occurring earlier than they otherwise would have. To the extent that this is so, the shifts in the timing of infection will increase the total number of new cases in any one year, but the true incremental impact may be the implications of becoming infected earlier.

Furthermore, the model treats the onward transmission rate as fixed over time. However, data show that onward transmission has declined over time [19]. Even given these caveats, in the context of the new U.S. incidence of HIV, currently estimated at roughly 56,000 [32], the number of new onward transmission cases due to the rule change, 65 (ranging from 0 to 261) in year one represent 0.1% (ranging from 0 to 0.5%) of the total new annual cases of HIV in the U.S. (as described in Section 5. Onward Transmission). The monetized costs including the treatment cost of the onward transmission cases, are relatively modest. We add, however, that these monetized costs are incomplete, because they do not include the health costs in terms of reduction in quality of life and longevity even with treatment.

On the other hand, health care expenditures for immigrants, although a quantifiable and relevant impact of the rule, are not really “costs” of the rulemaking. Unlike in the case of onward transmission, these immigrants already have the disease and will now be purchasing healthcare in the U.S. that they would have purchased in their home country (similar to spending on other services such as housing or education). However, since the spending pattern may be systematically different for HIV immigrants, we quantify and report these effects as a “transfer” from the perspective of this rulemaking—payments from immigrants and/or their 3rd party payers to U.S. providers of care. We estimate the annual transfer payments to be $86 million to $513 million. The share of these payments by Federal payers is likely to be small given the restrictions on Federal benefits to new immigrants.

Given these potential impacts, we conclude that the benefits of the rule justify its costs, and that while we do not believe HIV is a “communicable disease of public health significance” for the purposes of admissibility determinations, the rule may be economically significant.

HHS/CDC has considered the final rule's effects on small entities, as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq., Pub. L. 96-354) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121). The RFA establishes, as a principle of regulation, that agencies should tailor regulatory and informational requirements to the size of the entities, consistent with the objectives of a particular regulation and applicable statutes.

The objective of this analysis was to compare the benefits and the costs of a change in legislation that currently prohibits HIV-infected immigrants from entering the United States. HHS/CDC carefully considered several other alternatives, but they were either not logistically feasible or they were not compatible with current U.S. regulations. This analysis appears in the ‘alternatives’ section.

HHS/CDC certifies the rule will not have a significant impact on a substantial number of small entities as defined in the statute.

HHS/CDC evaluated the rule requirements for compliance with the Unfunded Mandates Reform Act (UMRA) of 1995. This rule does not contain Federal mandates under the regulatory provisions of Title II of the UMRA for State, local, or Tribal Governments, nor for the private sector. The rule's provisions will not affect small Governments.

Executive Order 13045 requires HHS/CDC to determine whether the rule is economically significant. The Executive Order further requires HHS to determine whether the rule would create an environmental health or safety risk disproportionately affecting children. HHS/CDC has determined that this rule does not create an environmental health or safety risk.

The Paperwork Reduction Act applies to the data collection requirements found in 42 CFR part 34. Currently, aliens determined to have a communicable disease of public health significance may request a waiver from DHS to enter the United States under sections 212(d)(3)(a) and 212(g) of the INA (8 U.S.C. 1182(d)(3)(a) and 1182(g)). HHS/CDC has approval from the Office of Management and Budget (OMB) under OMB Control No. 0920-0006: Statements in Support of Application for Waiver of Inadmissibility under the Immigration and Nationality Act (expiration date December 31, 2011) to collect data pertaining to the waiver; CDC Form 4.422-1b. HHS/CDC will discontinue the use of this form, for a reduction of 67 burden hours for this approved data collection.

HHS has determined that provisions to amend 42 CFR part 34.2(b) will not have a significant impact on the human environment.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, September 9, 2000), requires agencies to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” The Executive Order defines the phrase “policies that have tribal implications” to include regulations and other policy statements or actions that have “substantial direct effects 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.”

HHS/CDC has determined that provisions to amend 42 CFR Part 34 will not have tribal implications.

Under Executive Order 12630, if the contemplated rule would require a Federal taking of private property, then a takings analysis is required. Since the rule does not require a Federal taking of private property, the provisions in the Executive Order are not applicable.

Under Executive Order 13132, if the rule would limit or preempt State authorities, then a Federalism analysis is required. The agency must consult with State and local officials to determine whether the rule would have a substantial direct effect on State or local Governments, as well as whether it would either preempt State law or impose a substantial direct cost of compliance on them.

HHS/CDC has determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

Executive Order 13211 requires HHS/CDC to produce a statement of energy effects if the rule is significant or economically significant and likely to have a significant adverse effect on the supply, distribution, or use of energy. HHS/CDC has determined that this rule does not have that effect and that a statement of energy is not required.

This act, 15 U.S.C. 272, requires the adoption of technical standards developed or adopted by voluntary consensus standards bodies in rules promulgated by HHS. No voluntary consensus standards are applicable and feasible with regard to this rule.

Title 5 U.S.C.A. 601 (note) requires agencies to assess the impact of a regulatory action to determine whether such an action would affect family well-being. HHS/CDC has assessed the impact of this regulation and has determined that it would not negatively affect family well-being.

HHS/CDC has reviewed this rule under Executive Order 12988, on Civil Justice Reform and determines that this rule meets the standard in the Executive Order.

Under 63 FR 31883 (June 10, 1998), Executive Departments and Agencies are required to use plain language in all proposed and final rules. HHS/CDC did not receive any comments seeking clarity on language used in the NPRM. HHS/CDC has attempted to use plain language in promulgating this Final Rule.

The New England Fishery Management Council (Council) voted at its April 8, 2009, Council meeting to request that the NMFS Northeast Regional Administrator modify the GOM/GB Herring Midwater Trawl Gear LOA to require midwater trawl vessels fishing in CA I to have 100-percent observer coverage; be prohibited from slipping codends; and be required to pump all fish aboard the vessel, to allow sampling by the observer.

A proposed rule was published on September 4, 2009 (74 FR 45798), and that proposed rule includes detailed information on the background of this action. Comments on the proposed rule were initially accepted through September 21, 2009. A notice published on September 24, 2009 (74 FR 48707), reopened the comment period through September 27, 2009. Comments received are summarized and responded to below.

Based on public comment received, NMFS is modifying the proposed measures to clarify, as well as to make measures more consistent with, the Council's April 8, 2009, motion. The Council motion used the term “slipped codend” to refer to the practice of opening the codend of the net and releasing the catch before all of the fish are brought on board the vessel. The proposed rule used this term, with that meaning. It has come to NMFS's attention that the term “slipped” in this context may suggest to some that the release is made with the intent of hiding the catch from the observer. Therefore, to reflect the fact that catch may be released for a wide range of reasons, and to make the rule clearer, the term “released” has been substituted for the term “slipped” throughout this final rule.

After careful consideration of public comment, many of the proposed rule measures have been modified in this final rule to more closely reflect the Council's request and to reduce negative economic impact on the commercial herring industry, while still achieving the intended goal of collecting better information on bycatch in the midwater trawl fishery. This final rule modifies the proposed measures to:

• Allow flexibility to fish outside of CA I (rather than end a trip), should a vessel release a codend due to safety or mechanical reasons.

• Limit the prohibition on codend releases to tows made in CA I.

• Include an exemption that allows the release of small amounts of fish that may remain in the net after pumping is complete.

• Remove the minimum 50-percent spiny dogfish threshold provision from the dogfish dumping exception.

• Require vessels that release a codend due to catches of spiny dogfish to leave CA I, consistent with the requirement to leave CA I if a codend is released due to safety or mechanical reasons.

• Broaden the mechanical failure exception to include all significant mechanical failures that prohibit pumping the catch.

Modifications to the proposed rule measures to allow vessels to continue fishing outside of CA I if they release their codend due to safety or mechanical reasons, and that restrict the prohibition on releasing non-exempt codends to only tows that fish inside CA I, have been made to more closely align this action with the Council's request. Many of the measures being modified were initially proposed in such a way as to ensure consistency of measures throughout a given fishing trip, and to assist in their enforceability. However, because tracking of potential violations is possible due to the vessel monitoring systems required onboard these vessels, NMFS concurs with many of the commenters that additional flexibility can be allowed. An explicit allowance for the release of fish that remain in the net after completion of pumping operations is made in the final rule to acknowledge that this is an unavoidable situation. Existing regulations require a vessel to assist the observer to view the codend prior to the release, allowing these fish to be documented. NMFS also acknowledges that differences in pumping capacity between vessels would likely make a firm minimum spiny dogfish threshold (as a proportion of the catch) problematic. The NMFS NE Fishery Observer Program (NEFOP), additionally, has expressed concern that this proposed minimum percentage could place the observer in an enforcement role. Based on these concerns, the final rule removes the minimum spiny dogfish threshold from the exception. To provide consistency across the exemptions for releasing catch, and to provide a disincentive to potential abuse, vessels that release a tow in CA I because of spiny dogfish will be required to exit CA I, but can continue to fish outside of CA I on the same trip. Finally, the final rule's regulatory text pertaining to the mechanical failure exception is broadened to include all significant mechanical failures that prevent pumping the catch, to expand the exception to reasons other than failure of the pump itself.

This final rule requires vessels using midwater trawl gear in the directed herring fishery to indicate their intention to fish in CA I when scheduling an observer through the NEFOP. This notification allows NMFS to ensure an observer is deployed on all vessels that intend to fish in CA I with midwater trawl gear for all or any part of their trip. To ensure 100-percent observer coverage, midwater trawl vessels are not permitted to fish in CA I without an observer.

Midwater trawl vessels in the directed herring fishery that have been assigned a NMFS-approved at-sea observer and that are fishing in CA I are prohibited, unless specific conditions are met (see below), from releasing fish from the codend of the net, transferring fish to another vessel that is not carrying a NMFS-approved observer, or otherwise discarding fish at sea, unless the fish have first been brought aboard the vessel and made available for sampling and inspection by the observer.

NMFS recognizes that there are certain conditions under which fish must be released from the codend without being sampled. Therefore, fish that have not been pumped aboard the vessel may be released if the vessel operator finds that: Pumping the catch could compromise the safety of the vessel; mechanical failure precludes bringing some or all of a catch aboard the vessel; or spiny dogfish have clogged the pump and consequently prevent pumping of the rest of the catch. If a net is released for any of these three reasons, the vessel operator must complete and sign a CA I Midwater Trawl Released Codend Affidavit detailing where, when, and why the net was released as well as a good-faith estimate of both the total weight of fish caught on that tow and the weight of fish released (if the tow had been partially pumped). The completed affidavit form must be submitted to NMFS within 48 hr of the completion of the trip.

Following the release of a net for one of the three exemptions specified above, the vessel is required to exit CA I. The vessel may continue to fish, but may not fish in CA I for the remainder of the trip.

A total of 535 comments were received on the proposed rule, from 10 representatives of commercial fishing groups, 1 community organization, 1 recreational fishing group, 2 coalitions of herring interest groups, 1 environmental organization (Conservation Law Foundation (CLF)), 1 state-elected official (MA State Representative Sarah K. Peake), 1 state resource management agency (the State of Maine Department of Marine Resources), 516 individuals, and the U.S. Small Business Administration (SBA) Office of Advocacy. A significant majority of comments (523 out of 535) supported the proposed measures, and many expressed concern that any change could compromise the bycatch information collected. Most of the supporting comments urged quick implementation of these measures to ensure regulations are in place before midwater trawl vessels fish in CA I (generally the month of October). One comment from a U.S. Congressman (Representative William Delahunt, MA) supporting the action as proposed was received after the close of the comment period. Seven commenters expressed concerns outside the scope of this action, including the bycatch of river herring and general opposition to trawling of any kind.

Comment 1 : One representative of the commercial herring industry (Kelly Drye and Warren LLP) stated that, by requiring an observer for an entire midwater trawl trip, i.e., both inside and outside the boundaries of CA I, and requiring vessels to terminate a trip early if fish are released, the proposed measures exceed the Council's requested action, as well as NMFS' authority as specified in the regulations, and represent a significant regulatory action that would preempt the regulatory authority of the Council in its drafting of Amendment 5 to the FMP.

Response : The regulations implementing Framework Adjustment 18 (FW 18) to the NE Multispecies FMP (63 FR 7727, February 17, 1998), at § 648.81(a)(2)(iii), give the Regional Administrator conditional authority to “place restrictions and conditions in the letter of authorization for any or all individual fishing operations or, after consulting with the Council, suspend or prohibit any or all midwater trawl activities in the closed areas.” The presentation of recent observer data at the April 8, 2009, Council meeting, and the Council's subsequent request for increased observer measures, constitute a consultation with the Council. Therefore, the authority to suspend access to CA I to midwater trawl vessels that are not carrying an observer, as specified in the proposed rule and implemented through this final rule, is consistent with the cited authority. Moreover, the Council indicated a general belief that additional information on bycatch in CA I would be beneficial for future revisions to the Atlantic Herring FMP. There is additional, independent authority specified in section 402(a) of the Magnuson-Stevens Act to promulgate regulations to improve the information collection program in the Atlantic herring fishery. This action does not preempt the Council's efforts in developing Amendment 5 to the FMP, but rather contributes to them. NMFS' proposal to apply a discard prohibition to the entire midwater trawl trip was intended to collect the most information possible about bycatch in this fishery, and to provide a clear set of rules that would apply consistently throughout the trip. However, based on public comment, and to more closely reflect the Council's requested action, this final rule is modified such that tows made entirely outside of CA I would not be subject to the more restrictive CA I regulations implemented through this action. This action also eliminates the proposed restriction that vessels must end their trip if they release a net when fishing in CA I, i.e., vessels may fish out the remainder of their trip outside of CA I. Further details about these two modifications to the proposed rule measures can be found in the responses to Comments 4 and 10.

Comment 2 : Three representatives of the commercial herring industry (Kelly Drye and Warren LLP, Lunds' Fisheries, Inc., and Northern Pelagic Group LLC (NORPEL)) stated that the proposed measures should be implemented through modifications to the current LOA and not codified in the regulations, a violation of which could entail significant civil liability.

Response : All requirements of the LOA, both before and after this final rule, are codified in the regulations. NMFS codifies these requirements to ensure their enforceability. Additionally, as explained in the response to Comment 1, the measures are codified pursuant to NMFS' authority in section 402(a) of the Magnuson-Stevens Act.

Comment 3 : Seven representatives of the herring industry (Kelly Drye and Warren LLP, Lund's Fisheries, NORPEL, Western Sea Fishing, Cape Seafoods, Small Pelagic Group, and Shafmaster Fishing) commented that access to CA I should not be denied to a midwater trawl vessel if an observer is not available. Sixty-three commenters specifically supported the prohibition on fishing in CA I without an observer, as specified in the proposed rule.

Response : The NEFOP has committed sufficient funding to provide observers for all CA I herring midwater trawl trips for the 2009 and 2010 fishing years. NMFS intends to continue to provide observer coverage for this program in subsequent years; however, under the Federal budgetary process, such funding cannot be assured at this time. NMFS expects that monitoring provisions currently under development in Amendment 5 to the FMP are likely to supersede these measures. Therefore, it is anticipated, although not guaranteed, that 100-percent observer coverage of herring midwater trawl trips in CA I will be provided without limiting CA I access for any vessels for the foreseeable future. In Amendment 5, the Council could consider other ways to address the potential problems that would arise if observers are not available when requested.

Comment 4 : Seven representatives of the commercial herring industry commented that the Council's request to prohibit released codends and to require all fish to be pumped aboard the vessel was specific to vessels fishing inside CA I, and to require these provisions for tows fished entirely outside of CA I would exceed the scope of the Council's request.

In contrast, three commercial fishing organizations (Cape Cod Commercial Fishermen's Association (CCCHFA), GB Cod Hook Gear Sector, and GB Cod Fixed Gear Sector), one environmental group (CLF), MA State Representative Sarah K. Peake, and eight individuals expressed support for the proposed measure to require vessels to comply with the prohibition on releasing nets and the requirement for all fish to be pumped aboard the vessel for the entire trip, regardless of whether the vessel also fished outside of CA I on that trip. These latter commenters believe that this provision would maximize the amount of bycatch information collected on midwater trawl trips and could insulate the observer from having to determine which tows could be released without an exemption.

Response : Since implementation of FW 18 in 1998, herring midwater trawl vessels have been able to operate freely within the management areas of the Atlantic Herring FMP without additional consideration for the boundaries of the NE multispecies closed areas. NMFS acknowledges that the Council's request for 100-percent observer coverage was specific to midwater trawl vessels fishing in CA I. However, the measures of the proposed rule were designed to allow herring midwater trawl vessels to continue to operate freely throughout the herring management areas by establishing a consistent set of regulations so that vessel operators and observers would not need to be constantly aware of where the vessel was, relative to CA I, in order to know what rules applied. Based on public comment, and to more closely reflect the Council's requested action, this final rule has been modified such that tows made entirely outside of CA I are subject to the same regulations as any other midwater trawl vessel that did not declare into CA I. NMFS is modifying these provisions also, in part, due to the fact that vessels issued an All Areas and/or an Areas 2 and 3 Limited Access Herring Permit are currently required to use a NMFS-approved Vessel Monitoring System (VMS), and VMS provides NOAA's Office of Law Enforcement with the ability to better enforce these provisions. Thus, VMS allows for effective enforcement of these measures without any involvement of the observer.

Comment 5 : One coalition of herring interest groups (Herring Alliance) and 52 individuals supported applying the proposed measures to midwater trawl vessels fishing in all the NE multispecies closed areas.

Response : The Council's request was specific to CA I. An analysis of the observed bycatch of NE multispecies in the midwater trawl fishery from 2004 through 2008 indicates that CA I was the only closed area where the FW 18 threshold of 1-percent bycatch of regulated species had been reached on the trip level. Furthermore, CA I had more observed bycatch of NE multispecies by number of tows and by pounds of fish than any other closed area. Expanding this action to all of the NE multispecies closed areas could result in greater negative impact on the midwater trawl fishery, while providing limited additional benefits to NFMS in the form of information on bycatch. Therefore, this proposal was not considered.

Comment 6 : Six representatives of the commercial herring industry, and the SBA Office of Advocacy, commented that some fish inevitably remain in a net at the conclusion of pumping, either because they are too large for the pump grate or because they are floating and cannot be pumped. The commenters argued that, under a strict interpretation of the proposed regulations, release of these fish could constitute a civil violation, with significant fines, through no direct fault of the vessel operator.

Response : NMFS acknowledges that a small amount of fish may be unpumpable and remain in a net at the end of pumping operations and should not, therefore, constitute grounds for a violation. Observer protocols include documenting fish that remain in the net before they are released, and existing regulations require vessel operators to assist the observer in this process. Therefore, any loss of bycatch information should be minimal. NMFS has modified this final rule to clarify that the prohibition on releasing fish does not extend to fish that cannot be pumped and that remain in the net at the end of pumping operations.

Comment 7 : One herring industry representative (Kelly Drye and Warren LLP) commented that the exception for mechanical failure should be expanded, since the fish pump is not the only mechanical system whose failure could prohibit the pumping of some or all of a tow.

Response : NMFS acknowledges that the fish pump is not the only gear problem that could prohibit pumping the catch, and has modified this final rule accordingly. A review of observer data between 2005 and 2007 indicates that less than 18 percent of the tows that were partially or fully released were released for generic “gear problems.” Therefore, expanding this exemption to include additional mechanical failures that prohibit pumping the catch would not undermine the intention of this action to maximize the collection of data on bycatch in CA I.

Comment 8 : Two herring industry representatives requested that short duration tows, or “test tows,” generally lasting less than 1 hr, and used to check the abundance and condition of target species, should also be exempted from the requirements to pump all fish onboard.

Response : The proposed rule for this action explained that the intention of this action is to increase the understanding of the potential bycatch of this fishery in CA I and, as such, it is necessary to collect bycatch information on all tows made by midwater trawl vessels in CA I. Therefore, an exemption for test tows would be inconsistent with the intent of this action.

Comment 9 : Seven representatives of the herring industry commented that the proposed exemption for spiny dogfish (i.e., spiny dogfish constitute at least 50 percent, by weight, of the observed portion of the catch) is unworkable as proposed, and asserted that spiny dogfish cannot be pumped, no matter what percentage of the overall catch they comprise.

Response : Observer data clearly show that some spiny dogfish can be successfully pumped from the net. However, NMFS acknowledges that the variation in pumps being used by different vessels and the way that spiny dogfish are arranged at the pump intake could have a dramatic effect on whether a given concentration of spiny dogfish would clog the pump and prevent the pumping of the remainder of the catch. The use of a specific percentage threshold of spiny dogfish could also put undue pressure on the observer. Therefore, the spiny dogfish exemption has been modified to remove the 50-percent threshold and, if spiny dogfish clog the pump intake, the vessel operator is required to take reasonable measures to remove all of the fish that can be pumped from the net prior to releasing the codend.

Comment 10 : The seven representatives of the herring industry, the State of Maine Department of Marine Resources, and the SBA Office of Advocacy raised concerns that the requirement to end a trip if a net is released for safety or mechanical reasons could place an undue financial burden on vessels because of the high cost of outfitting a trip. As an alternative consequence for releasing a net, six members of the commercial herring industry suggested that vessels should be required to leave CA I, but allowed to continue fishing.

Alternatively, 3 commercial fishing organizations (CCCHFA, GB Cod Hook Gear Sector, and GB Cod Fixed Gear Sector), 2 coalitions of herring interest groups (Herring Alliance, and CHOIR Coalition), 1 community organization (Penobscot East Resource Center), 1 environmental organization (CLF), MA State Representative Sarah K. Peake, U.S. Congressman William Delahunt, and 383 individuals expressed their support for the proposed requirement to end a trip if a net is released for safety or mechanical reasons.

Response : The frequency of released nets in the midwater trawl fishery is relatively low. Based on observer data from 2005-2007, only 8.7 percent of tows were fully or partially released, and only 3 percent were released for apparent safety or mechanical reasons. Combined with the relatively few trips into CA I, and the low number of tows made on each trip (three tows per trip, on average), it is expected that roughly one trip per year might be subject to this provision. However, NMFS acknowledges that the proposed requirement to end the trip after releasing a net might have negative economic ramifications for that vessel, without significantly contributing to the understanding of bycatch in this fishery, which is the purpose of this action. Therefore, NMFS has adopted in this final rule the herring industry's suggested alternative that allows vessels to continue fishing outside of CA I on the same trip. Midwater trawl herring vessels fish in CA I when they have a reasonable expectation of finding a high concentration of herring there. NMFS believes that the loss of access to this productive fishing ground for the remainder of the trip is a sufficient disincentive for vessels to prevent abuse of these exemptions.

Comment 11 : One coalition of herring interest groups (Herring Alliance), 1 community organization (Penobscot East Resource Center), and 339 individuals requested that the consequence of releasing fish unobserved should be consistent across all three exemptions (vessel safety, mechanical failure, and spiny dogfish) including any requirement to end the trip and return to port.

Response : Unlike the exemptions for releasing fish unobserved for vessel safety and mechanical failure, the exemption for spiny dogfish, as proposed, contained a relatively high threshold of 50-percent dogfish as a disincentive to vessels that might use this exemption to avoid observer sampling of the catch. As described under the response to Comment 9, the 50-percent trigger was determined to be unworkable and has been removed from this final rule. The loss of access to the CA I fishing ground is a reasonable disincentive for abuse of all three exemptions and provides a consistent response to a released net. Therefore, this final rule incorporates the requirement to leave CA I for the remainder of the trip as a result of releasing the catch before it can be sampled by the observer, regardless of which exemption prompted the release. As detailed in the response to Comment 10, vessels would be able to continue to fish outside of CA I for the remainder of the trip.

Comment 12 : The SBA Office of Advocacy and one representative of the commercial herring industry (Kelly Drye and Warren LLP) questioned NMFS' determination that the action would not impact a substantial number of small entities. The commenters stated that the information provided in the proposed rule in support of the certification was vague and insufficient.

Response : NMFS acknowledges that additional information in the proposed rule would have made this determination clearer to the public. All 46 vessels issued an All Areas and/or an Areas 2 and 3 Limited Access Herring Permit in fishing year 2009 are considered “small entities” and are already subject to a requirement to call the observer program prior to each trip. This action adds a question to that call-in requirement prompting a vessel operator to indicate whether or not the vessel intends to fish in CA I on that trip. The increased observer coverage and catch releasing requirements apply only to vessels that indicate they intend to fish in CA I. Over the last 4 yrs, on average, there have been fewer than 15 midwater trawl trips annually that fished in CA I. The number of potentially impacted vessels is further reduced because some vessels take multiple trips into CA I. Therefore, this action applies to fewer than 30 percent of the vessels issued an All Areas and/or an Areas 2 and 3 Limited Access Herring Permit. From 2004 through 2008, of a total of 2,875 midwater trawl trips, only 59 reported fishing in CA I. Therefore, this action is expected to impact approximately 2 percent of all midwater trawl trips, and thus would not impact a substantial number of small entities.

Comment 13 : The SBA Office of Advocacy and one representative of the commercial herring industry (Kelly Drye and Warren LLP) raised a concern that small businesses could experience a significant adverse economic impact due to this action because lack of an observer would prohibit access to CA I, resulting in potentially lower catch rates outside of CA I.

Response : NMFS has allocated sufficient funds and observer sea days to provide an observer for all trips into CA I during the 2009 and 2010 fishing years, and will consider requesting that such funding be continued. It is expected that catch monitoring provisions currently being developed by the Council as part of Amendment 5 to the FMP will likely supersede the provisions in this action in the relatively near future. Even if Amendment 5's progress is delayed, NMFS intends to maintain sufficient observer funding to cover all herring midwater trawl trips into CA I. However, the availability of future funding cannot be guaranteed. If, in the future, funding is insufficient to support 100 percent observer coverage for vessels fishing in CA I, then NMFS has the ability to reassess this requirement at that time.

Additionally, NMFS notes that the density of herring and the resulting catch rate inside CA I fluctuate seasonally as schools of fish migrate across Georges Bank. Although some herring midwater trawl vessels fish seasonally in CA I, the majority of vessels in the directed herring fishery currently do not fish in this area and seemingly do not suffer significant adverse economic impact as a result of that choice. Given the transient nature of herring, NMFS cannot state with any certainty how the catch rate of herring inside versus outside CA I will differ in any given year. Therefore, NMFS cannot make a prediction of how a vessel with an All Areas and/or an Area 2 and 3 Limited Access Herring Permit may be economically impacted by fishing outside of CA I should there be insufficient observer sea days in the future.

NMFS has made several changes to the proposed rule as a result of public comment and to make measures more consistent with the Council's April 8, 2009, motion. These changes are listed below in the order that they appear in the regulations.

In § 648.14, paragraph (r)(2)(vii) has been revised to reflect that the prohibition on releasing fish from the codend is limited to tows that occur inside CA I.

In § 648.80, paragraph (d)(7)(ii) has been revised to reflect that the prohibition on releasing fish from the codend is limited to tows that occur inside CA I.

In § 648.80, paragraph (d)(7)(ii)(B) has been revised to remove specific reference to the fish pump.

In § 648.80, paragraph (d)(7)(ii)(C) has been revised to remove the 50-percent spiny dogfish threshold and to add vessel operator requirements.

In § 648.80, paragraph (d)(7)(ii)(D) has been added to clarify that fish that cannot be pumped from the net and, thus, remain in the net at the end of pumping operations, may be released.

In § 648.80, paragraph (d)(7)(iii)(A) has been revised to reflect that vessels that release a net for safety or mechanical concerns, or due to spiny dogfish in the catch, must exit CA I, but may continue fishing outside of CA I for the remainder of the trip.

In § 648.80, paragraph (d)(7)(iii)(B) has been revised to provide additional details of the CA I Midwater Trawl Released Codend Affidavit which will become effective at a later date, pending OMB approval.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this final rule is consistent with the Atlantic Herring and NE Multispecies FMPs, other provisions of the Magnuson-Stevens Act, and other applicable laws.

There is good cause under 5 U.S.C. § 553(d)(3) to waive the 30-day delay in effective date because of the annual seasonal nature of fishing in CA I. The industry has expected this rule, since the Council made its initial request on April 8, 2009. This final rule was delayed due to reopening the comment period for 6 days at the request of the public. Because commercial herring midwater trawl vessels pursue herring in CA I predominantly during the fall, as herring migrate across Georges Bank, a 30-day delay in effective date would increase observer coverage too late to observe the annual pulse of effort in CA I. This would delay the collection of bycatch information for up to a year. The Council has expressed an interested in using data collected under this program in the current development of Amendment 5 to the FMP.

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

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the SBA during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. Two comments were received on the factual basis for the certification and are addressed under the Comments and Responses section of this preamble. As a result, a regulatory flexibility analysis was not required and none was prepared.

This final rule contains two collection-of-information requirements subject to the Paperwork Reduction Act (PRA). The modification to the observer program notification to include a vessel's intention to fish in CA I has been added to the information collection for the Herring Vessel Observer Program Notification, which has been approved by OMB under control number 0648-0202. The new collection-of-information requirement pertaining to the CA I Midwater Trawl Released Codend Affidavit has not yet been approved, but OMB approval is expected in the near future. NMFS will publish notification in the Federal Register when this requirement is cleared by OMB and is, therefore, effective. Public reporting burden for the CA I Midwater Trawl Released Codend Affidavit is estimated to average 5 min per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Send comments regarding these burden estimates or any other aspect of this data collection, including suggestions for reducing the burden, to NMFS at the ADDRESSES above, and e-mail to David_Rostker@omb.eop.gov , or fax to (202) 395-7285.

Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

Fisheries, Fishing, Reporting and recordkeeping requirements.