The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions

[The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions]
[The Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]

[[Page 61133]]

DEPARTMENT OF AGRICULTURE (USDA)

Statement of Regulatory Priorities
The Department of Agriculture, consistent with its reputation as the
``people's Department,'' will pursue regulations that enhance and
protect the quality of American agriculture, assist and promote
America's farmers and ranchers, and benefit the lives of all Americans.
USDA will remain vigilant to ensure the safety of our Nation's food
supply and to address the potential threats posed by bioterrorism.
Farmers, ranchers, and other USDA customers will find
significant changes in all aspects of regulations that
govern their interaction with the Department and its
programs. Farm credit, a mainstay of the Nation's rural
economy, is being significantly streamlined by the merger
of cumbersome loan-making regulations with forms and
certifications simplified to facilitate the application
process. Existing forms and procedures are also being
reviewed for their applicability to electronic submission
and collection. The Department is undertaking a number of
actions in the regulation of commodities that will increase
efficiency, improve customer service, and reduce
intervention in markets.
USDA will develop new regulations and review existing ones
that address the potential threats posed by domestic
outbreaks of exotic animal diseases such as Foot-and-Mouth
Disease (FMD) and Bovine Spongiform Encephalopathy (BSE).
In the area of food safety, the Department will continue to
refine existing regulations to assist industry in
implementing a consistent, science-based process control
system while developing new regulations that address
emerging and exotic threats to the safety of the Nation's
meat, poultry, and egg products supply.
The Department is also improving the regulations that serve
rural communities. Regulations are being streamlined and
simplified so that they will be more customer friendly
while providing for more efficient and effective program
management.
Nutrition programs are being improved to strengthen dietary
quality by providing a wider variety of food packages to
children and low-income participants while also improving
the efficiency and integrity of program operations.
Reducing Paperwork Burden on Farmers
The Department has made substantial progress in implementing the goal
of the Paperwork Reduction Act of 1995 to reduce the burden of
information collection on the public. The Government Paperwork
Elimination Act (GPEA) is leading all agencies in the Department to
evaluate how they conduct business and migrate toward electronically
oriented methods. The Farm Service Agency, Natural Resources
Conservation Service, Rural Development, and Risk Management Agency are
also working to implement the Freedom to E-File Act. Freedom to E-File
directs the agencies, to the maximum extent practicable, to modify
forms into user-friendly formats with user instructions and permits
those forms to be downloaded and submitted via facsimile, mail, or
similar means. As a result, producers should have the capability to
electronically file forms and all other documentation if they so
desire. Underlying these efforts will be analyses to identify and
eliminate redundant data collections and streamline collection
instructions. The end result of implementing both of these pieces of
legislation will be better service to our customers so that they can
choose when and where to conduct business with USDA.
The Role of Regulations
The programs of the Department are diverse and far reaching, as are
the regulations that attend their delivery. Regulations codify how the
Department will conduct its business, including the specifics of access
to, and eligibility for, USDA programs. Regulations also specify the
behavior of State and local governments, private industry, businesses,
and individuals that is necessary to comply with their provisions. The
diversity in purpose and outreach of our programs contributes
significantly to the USDA being near the top of the list of departments
that produce the largest number of regulations annually. These
regulations range from nutrition standards for the school lunch
program, to natural resource and environmental measures governing
national forest usage and soil conservation, to regulations protecting
American agribusiness (the largest dollar value contributor to exports)
from the ravages of domestic or foreign plant or animal pestilence, and
they extend from farm to supermarket to ensure the safety, quality, and
availability of the Nation's food supply. Many regulations function in
a dynamic environment, which requires their periodic modification. The
factors determining various entitlement, eligibility, and
administrative criteria often change from year to year. Therefore, many
significant regulations must be revised annually to reflect changes in
economic and market benchmarks. Almost all legislation that affects
departmental programs has accompanying regulatory needs, often with a
significant impact. The Federal Agriculture Improvement and Reform Act
of 1996 (the 1996 Act), the Farm Bill of 1996, Public Law 104-127, had
considerable regulatory consequences. This key legislation affects most
agencies of USDA and resulted in the addition of new programs, the
deletion of others, and modification to still others. In addition, the
``Agricultural Risk Protection Act of 2000,'' Public Law 106-224,
provides further assurances that agricultural programs will continue to
achieve long-term improvements, particularly in reforms to the crop
insurance programs. This legislation also provides for improvements in
market loss and conservation assistance, crop and livestock disease
pest protection, marketing program enhancements, child nutrition
program measures, pollution control, and research and development for
biomass.
Major Regulatory Priorities
Five agencies are represented in this regulatory plan. They include
the Farm Service Agency, the Food and Nutrition Service, the Food
Safety and Inspection Service, the Animal and Plant Health Inspection
Service, and the Agricultural Marketing Service. This document
represents summary information on prospective significant regulations
as called for in Executive Order 12866. A brief comment on each of the
five agencies appears below, which summarizes the Agency mission and
its key regulatory priorities. The Agency summaries are followed by the
regulatory plan entries.
Farm Service Agency⁵⁶ Mission: The Farm Service Agency (FSA) administers contract
commodity, conservation, farm loan, commodity purchase and emergency
loan, and disaster programs as prescribed by various statutes. The
Agency's objective is to support farming certainty and flexibility,
ensure compliance with highly erodible land, farm conservation and
wetland protection requirements, and to assist owners and operators of
farms and ranches to conserve and enhance soil, water, and related
natural resources.

[[Page 61134]]

Priorities: FSA's priority for 2002 will be to continue to emphasize
service to our customers. As Administration initiatives and changes in
law require revisions to the Agency's regulations, the Agency's focus
will be to implement the changes in such a way as to provide benefits
for, while minimizing program complexity and regulatory burden for,
program participants. As regulations are revised for program changes,
opportunities will be taken to clarify, simplify, and reduce confusion
whenever possible. The FSA regulations that operate the contract
commodity programs, such as production flexibility contracts and
marketing assistance loans, were revised a few years ago to remove the
link between income support payments and farm prices and provide for
seven annual payments. More changes to the laws governing those
programs and the related regulations changes are anticipated in 2002.
However, the Agency's ability to promote new policy initiatives when
implementing these regulations is limited, due to the need to adhere to
legislative intent. Therefore, due to their economic magnitude, they
are noted here to acknowledge their significance in the overall USDA
regulatory plan but are not further listed in the body of the plan that
appears below.
A primary mission of FSA is to administer commodity payment and
commodity marketing assistance loan programs. Generally, these programs
are authorized by the 1996 Act with respect to the 1996 through 2002
crop years. Accordingly, FSA envisions no major changes in the last
year of the regulations used to administer these programs but
anticipates major initiatives once legislation is enacted which would
authorize such programs for the 2003 and subsequent crops.
FSA is committed to the Paperwork Reduction Act of 1995's goal of
reducing the information collection burden on the public. FSA is
streamlining its farm loan-making and servicing regulations and
reducing the information collection burden associated with the
programs. FSA plans to reduce the number of CFR parts containing its
farm loan program regulations by approximately 70 percent. In addition,
FSA hopes to achieve a significant reduction in the total number of CFR
pages by removing administrative provisions and internal policy and
eliminating duplicative material. Furthermore, FSA intends to improve
the clarity of the farm loan program regulations by following the
guidelines established in the Plain Language in Government Writing
Initiative.
As part of this project, all farm program regulations and internal
Agency directives will be completely rewritten. All application
processes and information collections will be reviewed, and unnecessary
or redundant requirements will be eliminated. All forms associated with
the programs were reviewed and assigned to one of the following
categories:
Prepared by the public;
Prepared by the Agency, reviewed by the public; or
Internal agency use only.
FSA will concentrate on streamlining forms assigned to the first
category to reduce public burden. In addition, a data base was
developed listing each field contained on the forms. This information
will be used to identify duplicate collections and ensure consistency
in terminology.
FSA has completed the streamlining of the Guaranteed Loan Program,
Indian Tribal Land Acquisition Loan Program, and portions of the direct
loan program. The balance of the direct loan program will be published
in three separate rulemaking packages. A final rule streamlining the
loan-making process for emergency loans should be published by the end
of the 2001 calendar year. A proposed rule streamlining the loan-making
process for farm ownership and operating loans and servicing of direct
loans will be published in the spring of 2002. A proposed rule
streamlining special loan programs, including boll weevil eradication,
drainage and irrigation, and grazing associations is planned for the
fall of 2002.
Finally, FSA is a full participant in the USDA Electronic Access
Initiative and is taking the lead on the implementation of the
Government Paperwork Elimination Act. All FSA information collections,
forms, and procedures are reviewed for their applicability to
electronic submission and collection.
Food and Nutrition Service⁵⁶ Mission: FNS increases food security and reduces hunger in
partnership with cooperating organizations by providing children and
low-income people access to food, a healthful diet, and nutrition
education in a manner that supports American agriculture and inspires
public confidence.
Priorities: In addition to responding to provisions of legislation
authorizing and modifying Federal nutrition assistance programs, FNS'
2002 regulatory plan supports the broad goals and objectives in the
Agency's strategic plan, which include:
Improved nutrition of children and low-income people. This
goal represents FNS' efforts to improve nutrition by
providing access to program benefits (Food Stamps, WIC food
vouchers, commodities, and State administrative funds),
nutrition education, and quality meals and other benefits.
It includes three major objectives: 1) improved food
security, which reflects nutrition assistance benefits
issued to program participants; 2) improved ability of FNS
program participants to make healthy food choices, which
represents our efforts to improve nutrition knowledge and
behavior through nutrition education and breastfeeding
promotion; and 3) improved nutritional quality of meals,
food packages, commodities, and other program benefits,
which represents our efforts to ensure that program
benefits meet the appropriate nutrition standards to
effectively improve nutrition for program participants.
In support of this goal, FNS plans to propose a rule mandated under
Public Law 106-387 to increase food stamp benefits for household with
high shelter costs and to make it easier for low-income working
families to receive food stamps and own a reliable vehicle. The Agency
also plans a proposed rule to amend regulations governing food packages
provided in WIC to improve their variety and consistency with the
Dietary Guidelines for Americans and to increase the nutritional
adequacy of food packages for those with special medical needs.
Improved Stewardship of Federal Funds. This goal represents
FNS' ongoing commitment to maximize the accuracy of
benefits issued, maximize the efficiency and effectiveness
of program operations, and minimize participant and vendor
fraud. It includes two major objectives: 1) improved
benefit accuracy and reduced fraud, which represents the
Agency's effort to reduce participant and Agency errors and
to control Food Stamp and WIC trafficking and participant,
vendor, and administrative Agency fraud, and 2) improved
efficiency of program administration, which represents our
efforts to streamline program

[[Page 61135]]

operations and improve program structures as necessary to
maximize their effectiveness.
In support of this goal, FNS plans to publish a final rule making
changes in Child and Adult Care Food Program (CACFP) rules designed to
improve management and financial integrity in this important program.
FNS also plans to publish a final rule, mandated under the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 and the
Balanced Budget Act of 1997, which is designed to provide State
agencies that administer the Food Stamp Program greater flexibility to
support personal responsibility and independence and encourage work.
Food Safety and Inspection Service⁵⁶ Mission: The Food Safety and Inspection Service (FSIS) is
responsible for ensuring that meat, poultry, and egg products in
commerce are safe and not adulterated or misbranded.
Priorities: Since the mid-1990's, FSIS has been reviewing its
regulations to eliminate duplication of and inconsistency with its own
and other agencies' regulations and to convert ``command-and-control''
regulations to performance standards. The review effort is directed, in
particular, at improving the consistency of the regulations with the
Agency's pathogen reduction and hazard analysis and critical control
point (PR/HACCP) regulations. HACCP is a science-based process control
system for producing safe food products. FSIS-inspected meat and
poultry establishments are required to develop and implement HACCP
plans incorporating the controls the establishments have determined are
necessary and appropriate to produce safe products. Under the HACCP
regulations, establishments assume the responsibility for producing
meat and poultry products that are safe, but they are able to tailor
their control systems to their particular needs and processes and to
take advantage of the latest technological innovations.
FSIS is continuing to revise its numerous command-and-control
regulations, which prescribe the exact means establishments must use to
ensure the safety of their products. Some of these regulations specify
precise time-and-temperature combinations for processing meat, poultry,
or egg products. Others require the prior approval by FSIS of equipment
and procedures, in effect assigning to the Agency the responsibility
for determining the means used by establishments to comply with the
regulations. As a general matter, such command-and-control regulations
are incompatible with HACCP because they deprive plants of the
flexibility to innovate, and they undercut the clear delineation of
responsibility for food safety.
In addition to undertaking regulatory amendments based on the results
of its review activities, FSIS has been developing regulations for
emergency use. Such regulations are an outcome of the Agency's
proactive, risk-based policy toward emerging and exotic threats to the
safety of the Nation's meat, poultry, and egg product supply.
Following are some of the Agency's recent and planned initiatives to
convert command-and-control regulations to performance standards, to
streamline and simplify the regulations, and to make the meat, poultry
products, and egg products inspection regulations more consistent with
the pathogen reduction and HACCP systems final rule:
FSIS has proposed a rule clarifying requirements for meat produced
using advanced recovery systems by replacing the compliance program
parameters in the current regulations with non-compliance criteria for
bone solids, bone marrow, and neural tissue. Establishments would have
to have process control procedures in place before labeling or using
the product derived by use of such systems.
FSIS has proposed a rule to establish food safety performance
standards for all processed ready-to-eat meat and poultry products and
partially heat-treated meat and poultry products that are not ready-to-
eat.
FSIS plans to propose generic Eshcerichia coli process control
criteria based on the sponge method of sampling, for cattle, wine, and
geese slaughtering establishments and for turkey slaughtering
establishments based on both the sponge and the whole-bird rinse
sampling methods. The Agency also plans to propose updated Salmonella
performance standards for all market classes of cattle and swine.
FSIS will propose removing from the poultry products inspection
regulations the requirement for ready-to-cook poultry products to be
chilled to 40 degrees or below within certain time periods according to
the weight of the dressed carcasses.
In addition, FSIS will be proposing to require federally inspected egg
product establishments to develop and implement HACCP systems and
sanitation standard operating procedures. The Agency will be proposing
pathogen reduction performance standards for pasteurized egg products.
Further, the Agency will be proposing to remove requirements for
approval by FSIS of egg-product plant drawings, specifications, and
equipment prior to use and to end the system for pre-marketing approval
of labels for egg products.
Besides the foregoing initiatives, FSIS has proposed requirements for
the nutrition labeling of ground or chopped meat and poultry products
and single-ingredient products. This proposed rule would require
nutrition labeling, on the label or at the point-of-purchase, for
themajor cuts of single-ingredient, rawproducts and will require
nutrition information on the label of ground or chopped products.
Finally, FSIS is planning to propose stand-by emergency procedures for
dealing with any occurrences of bovine spongiform encephalopathy (BSE),
known as mad-cow disease, to prevent any meat or meat products of
animals affected by BSE from entering commerce. To date, no cases of
BSE have been found in the United States herd. Any final rule that may
be developed after the proposal would become effective when and if a
native case of BSE is detected in the United States.
Animal and Plant Health Inspection Service⁵⁶ Mission: The major part of the mission of the Animal and Plant
Health Inspection Service (APHIS) is to protect U.S. animal and plant
resources from destructive pests and diseases. APHIS conducts programs
to prevent the introduction of exotic pests and diseases into the
United States and monitors and manages pests and diseases existing in
this country. These activities enhance agricultural productivity and
competitiveness and contribute to the national economy and the public
health.
Priorities: APHIS is reviewing its existing regulations and developing
new regulatory initiatives to ensure that a comprehensive framework is
in place to address the threats posed by exotic and endemic animal
diseases. Prompted in part by recent outbreaks of foot-and-mouth
disease elsewhere in the world, APHIS is developing a proposed rule to
amend its regulations for the cooperative control and eradication of
animal diseases to ensure their adequacy with regard to the valuation
of animals and materials, as well as the payment of indemnity, should
an

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outbreak of foot-and-mouth disease occur in the United States. APHIS
has also published, or is developing, proposed and final rules
pertaining to the group of neurological diseases known as transmissible
spongiform encephalopathies, which includes scrapie (a disease of sheep
and goats), bovine spongiform encephalopathy (BSE, which affects
cattle), and chronic wasting disease (a disease of deer and elk). APHIS
has recently established an expanded regulatory program incorporating
interstate movement restrictions and compensation for scrapie,
strengthened its restrictions on the importation of ruminant-derived
animal products that present a risk of introducing BSE, and is in the
early stages of developing a cooperative eradication program for
chronic wasting disease. In addition, APHIS, in coordination with the
Department's Food Safety and Inspection Service, has begun developing
an advance notice of proposed rulemaking to solicit public comment on
BSE-related issues, including mandatory testing of down/dead/dying
animals and requirements for the disposal of the carcasses of such
animals.
APHIS documents published in the Federal Register and related
information, including the names of organizations and individuals who
have commented on APHIS dockets, are available on the Internet at
http://www.aphis.usda.gov/ppd/rad/webrepor.html.
Agricultural Marketing Service⁵⁶ Mission: The Agricultural Marketing Service (AMS) facilitates
the marketing of agricultural products in domestic and international
markets, while ensuring fair trading practices and promoting a
competitive and efficient marketplace to the benefit of producers,
traders, and consumers of U.S. food and fiber products.
Priorities: (1) AMS is proposing to develop a Lamb Promotion,
Research, and Information Order (Order). The proposed Order, if
implemented, would establish an industry-funded program that would be
subject to a referendum within 3 years after assessments begin under
the Order. The proposed Order provides for an assessment of one-half
per pound of live lambs sold to be paid by producers, seedstock
producers, feeders, and exporters and remitted to a 12-member industry
board by the first handler or exporter. The program would generate an
estimated $3 million annually, all from the domestic lamb industry.
Importers of lamb would not be assessed.
(2) AMS plans to amend the National Organic Program (NOP) to add
practice standards for Organic Certification of Wild Captured Aquatic
Animals. The Organic Foods Production Act states that an organic
certification program be established for producers and handlers of
agricultural products that have been produced using organic methods.
The NOP has been reviewing organic certification of fish including wild
captured and aquaculture operations in response to a FY 2000
congressional mandate to develop regulations for the certification of
seafood. The NOP has engaged in public meetings and workshops and
conducted public comment proceedings on this subject. The NOP considers
it advantageous to proceed with a proposed rule for wild capture
operations prior to issuing a proposed rule for aquaculture systems
because of the significant impact that wild capture standards will have
on the production and use of fish meal confined systems.
(3) AMS published in the Federal Register on July 13, 2001, a proposed
rule implementing the Hass Avocado Promotion, Research, and Information
Order (Order) and a proposed rule containing referendum procedures for
the program. Under the proposed Order, producers and importers would
pay an assessment to the proposed Hass Avocado Board (Board). The Board
would use the assessment collected to conduct a promotion, research,
and information program to maintain, develop, and expand markets for
Hass avocados in the United States. The comment period ended August 27,
2001. On August 28, 2001, AMS published a notice extending the comment
period until September 12, 2001, due to several requests that were
received. AMS plans to publish a final rule before the end of this
calendar year.
AMS Program Rulemaking Pages. Most of AMS' rules as published in the
Federal Register are available on the Internet at: http://
www.ams.usda.gov/rulemaking. This site also includes commenting
instructions and addresses, links to news releases and background
material, and comments received so far on various rules.
_______________________________________________________________________

USDA--Agricultural Marketing Service (AMS)

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PROPOSED RULE STAGE

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1. ' ESTABLISHING A LAMB PROMOTION, RESEARCH, AND INFORMATION ORDER
(LS-01-12)
Priority:

Other Significant

Legal Authority:

7 USC 7401 through 7425

CFR Citation:

7 CFR 1280

Legal Deadline:

None

Abstract:

The Agricultural Marketing Service (AMS) is planning to issue a
proposed rule establishing an industry-funded promotion, research, and
information program for lamb and lamb products including pelts but
excluding wool and wool products. In response to an invitation
published in the Federal Register to submit proposals for a Lamb
Promotion, Research, and Information (Order), AMS received a proposal
from the lamb industry.

Statement of Need:

The United States sheep industry has identified this program as a key
to its future viability. Due to the negative impact on producer prices
caused by high levels of imports, the sheep industry has sought
Government assistance and is seeking to fund this self-help program to
improve industry profitability. A $100 million trade adjustment
assistance package has been provided based on a Presidential
Proclamation. The proposed Lamb Promotion, Research, and Information
Program would be a self-help program funded through assessments on
sales of live lambs. The assessments would be paid by producers,
feeders, and lamb slaughters.

Summary of Legal Basis:

Section 512(b) of the Commodity Promotion, Research, and Information
Act (Act) of 1996 indicates that the purpose of the Act is to authorize
the Secretary to establish programs of promotion, research, and
information for agricultural commodities to strengthen their position
in domestic and foreign markets. Section 514 of the Act provides that
to carry out the

[[Page 61137]]

purpose of the Act, the Secretary may issue orders applicable to
producers of an agricultural commodity and others in the marketing
chain.

Alternatives:

Not issue a proposed Order.

Anticipated Cost and Benefits:

The proposed program would generate approximately $3 million annually
for promotion, research, and information activities designed to benefit
the sheep and lamb industry. These funds would be generated from
assessments on sales of lamb paid by producers, feeders, and lamb
slaughters. The Department of Agriculture costs associated with the
implementation and oversight of the program would be reimbursed from
the assessments collected under the program. The activities funded
under the program would likely increase the demand for lamb and lamb
products and have a positive impact on producer profitability.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Federal

Agency Contact:
Ralph L. Tapp
Chief, Marketing Programs Branch, Livestock and Seed Division
Department of Agriculture
Agricultural Marketing Service
Room 2624
P.O. Box 96456, Room 2748-So. Bldg.
Washington, DC 20090-6456
Phone: 202 720-1115
RIN: 0581-AC06
_______________________________________________________________________

USDA--AMS

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FINAL RULE STAGE

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2. HASS AVOCADO PROMOTION, RESEARCH, AND INFORMATION ORDER (FV-01-705)
Priority:

Other Significant

Legal Authority:

7 USC 7801 to 7813

CFR Citation:

7 CFR 1219

Legal Deadline:

None

Abstract:

Under the Hass Avocado Promotion, Research, and Information Order, Hass
avocado producers and importers will pay an assessment of 2.5 cents per
pound on Hass avocados produced and imported into the U.S. The funds
will be used by the Hass Avocado Board to increase demand for Hass
avocados in the U.S.

Statement of Need:

The Agricultural Marketing Service (AMS) is proposing an industry-
funded research, promotion, industry information, and consumer
information program for Hass avocado. A proposed program--the Hass
Avocado Research, Promotion, and Consumer Information Order (Order)--
was submitted to AMS by the California Avocado Commission. In addition,
Mexican, Chilean, and New Zealand producers and associations submitted
partial proposals. Under the proposed order, producers and importers
would pay an initial assessment of 2.5 cents per pound of Hass domestic
and imported avocados to the Hass Avocado Board (Board). The Board
would be appointed by the Secretary of Agriculture to conduct research,
promotion, industry information, and consumer information needed for
the maintenance, expansion, and development of domestic markets for
Hass avocados. The purpose of the program is to increase consumption of
Hass avocados in the United States.

Summary of Legal Basis:

The proposed Order is issued under the Hass Avocado Research,
Promotion, and Consumer Information Act (Pub.L. 104-127), enacted on
October 23, 2000.

Alternatives:

Not issue a proposed Order.

Anticipated Cost and Benefits:

The proposed Order would authorize assessments on producers (to be
collected by first handlers) and on importers (collected by Customs) of
Hass avocados at an initial rate of 2.5 cents a pound. Exports of
domestic Hass avocados are exempt from assessment. At the initial rate
of assessment, about $10 million will be collected to administer the
program--about 65 percent from domestic production and 35 percent from
imports. All costs of program administration, including conducting the
program, AMS oversight, and collection of assessments by Customs will
be covered by the collected assessments.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 36869 07/13/01
NPRM Comment Period End 08/27/01
Final Action 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Margaret B. Irby
Assistant Branch Chief
Department of Agriculture
Agricultural Marketing Service
Stop 0244, Fruit & Vegetable Programs
14th & Independence Avenue SW
Washington, DC 20250-0244
Phone: 202 720-9915
Fax: 202 205-2800
Email: [email protected]
RIN: 0581-AB92
_______________________________________________________________________

USDA--Animal and Plant Health Inspection Service (APHIS)

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PROPOSED RULE STAGE

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3. ' FOOT-AND-MOUTH DISEASE; PAYMENT OF INDEMNITY
Priority:

Other Significant

Legal Authority:

21 USC 111; 21 USC 114 to 114a; 21 USC 134a to 134h

CFR Citation:

9 CFR 53

Legal Deadline:

None

Abstract:

APHIS is proposing to amend its regulations for the cooperative control

[[Page 61138]]

and eradication of livestock or poultry diseases. These changes would
provide APHIS with much needed flexibility in responding in an
effective manner in the event of an outbreak of foot-and-mouth disease
so that eligible claimants may be compensated while at the same time
protecting the U.S. livestock and poultry population from the further
spread of this highly contagious disease.

Statement of Need:

APHIS has recently reviewed these regulations to determine their
sufficiency should an occurrence of foot-and-mouth disease occur in the
United States. This review has been prompted, in part, by the series of
outbreaks of foot-and-mouth disease that have taken place in the United
Kingdom and elsewhere around the world. Based on this review, APHIS has
determined that changes to the regulations are needed with regard to
the valuation of animals and materials, as well as the payment of an
indemnity to those persons who suffer loss of property as a result of
foot-and-mouth disease.

Summary of Legal Basis:

The Secretary of Agriculture, either independently or in cooperation
with States or political subdivisions, farmers' associations and
similar organizations, and individuals, is authorized to control and
eradicate any communicable diseases of livestock or poultry and
contagious or infectious diseases of animals that, in the opinion of
the Secretary, constitute an emergency and threaten the livestock
industry of the country, including the payment of claims growing out of
destruction of animals (including poultry), and of materials affected
by or exposed to any such disease, in accordance with such regulations
as the Secretary may prescribe (21 U.S.C. 114a).

Alternatives:

The proposed rule would comprise several regulatory changes, each of
which is intended to facilitate the control and eradication of foot-
and-mouth disease, should an outbreak of this disease occur in the
United States. Reasonable alternatives to the proposed rule would be to
(1) not make any changes at all or (2) to provide alternative levels of
compensation.

Anticipated Cost and Benefits:

The proposed rule is expected to affect livestock operations and
Federal and State government agencies. The vast majority of livestock
operations are small entities. The potential costs and benefits would
depend upon the degree of compensation provided should a compensation
alternative be chosen.

Risks:

The changes contained in the proposed rule would be particularly
important in facilitating early and effective intervention should an
outbreak of foot-and-mouth disease occur in the United States. An
effective response in the early stages of such an outbreak greatly
reduces the risk of the disease's wider dissemination.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
NPRM Comment Period End 02/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Additional Information:

APHIS documents published in the Federal Register and related
information, including the names of organizations and individuals who
have commented on APHIS dockets, are available on the Internet at
http://www.aphis.usda.gov/ppd/rad/webrepor.html.

Agency Contact:
Dr. Mark Teachman
Senior Staff Veterinarian, Emergency Programs, VS
Department of Agriculture
Animal and Plant Health Inspection Service
Unit 41
4700 River Road
Riverdale, MD 20737-1231
Phone: 301 734-8073
RIN: 0579-AB34
_______________________________________________________________________

USDA--APHIS

4. ' CHRONIC WASTING DISEASE IN ELK; INTERSTATE MOVEMENT RESTRICTIONS
AND PAYMENT OF INDEMNITY
Priority:

Other Significant

Legal Authority:

21 USC 111 to 114a-1; 21 USC 120 to 121; 21 USC 125; 21 USC 134b

CFR Citation:

9 CFR 55; 9 CFR 81

Legal Deadline:

None

Abstract:

APHIS is proposing to establish minimum requirements for the interstate
movement of farmed elk and to provide indemnity for the depopulation of
farmed elk that have been infected with, or exposed to, chronic wasting
disease (CWD).

Statement of Need:

CWD has been confirmed in free-ranging deer and elk in a limited number
of counties in northeastern Colorado and southeastern Wyoming and has
also been diagnosed in farmed elk herds in South Dakota, Nebraska,
Oklahoma, Montana, and Colorado. The proposed rule is intended to
prevent the spread of, and perhaps eliminate altogether, CWD in farmed
elk herds in the United States. APHIS believes that establishing
restrictions on the interstate movement of infected and exposed farmed
elk, coupled with the payment of some level of indemnity for infected
and exposed animals, will encourage elk producers who are not yet
engaging in surveillance activities to begin doing so. To date, the
level of support from States and the farmed elk industry for such a
program has been high. Without a Federal program in place to depopulate
infected and exposed animals, the movement of infected elk into new
herds and States with no known infection will continue or may even
accelerate. APHIS needs to take action to document the prevalence of
the disease and to prevent its further spread.

Summary of Legal Basis:

[[Page 61139]]

accordance with such regulations as the Secretary may prescribe (21
U.S.C. 114a).

Alternatives:

APHIS has identified two alternatives to the proposed rule. The first--
to maintain the status quo--was rejected because it would not address
the animal disease risks associated with CWD. The second option would
have been to provide financial and technical assistance to the elk
industry for continuation and expansion of a variety of herd management
practices to reduce or eliminate CWD. Although this option may be less
costly than the option chosen by APHIS (i.e., the proposed rule), this
option was not selected because it would not advance CWD eradication as
quickly or effectively as the chosen option. However, APHIS will
continue to work with industry to develop voluntary herd management
practices to preserve and increase the reduction in CWD levels that the
proposed program is expected to achieve.

Anticipated Cost and Benefits:

The presence of CWD in elk causes significant economic and market
losses to U.S. producers. Recently Canada has begun to require, as a
condition for importing U.S. elk into Canada, that the animals be
accompanied by a certificate stating that the herd of origin is not
located in Colorado or Wyoming, and CWD has never been diagnosed in the
herd of origin. The Republic of Korea recently suspended the
importation of deer and elk and their products from the United States
and Canada. The domestic prices for elk are severely affected by fear
of CWD; it is extremely difficult for producers to sell elk that are
associated with any hint of exposure to CWD.

Risks:

Aggressive action in controlling this disease now will decrease the
chance of having to deal with a much larger, widespread, and costly
problem later, such as the situation with bovine spongiform
encephalopathy (``mad cow disease'') in Europe. Although there is
currently no evidence that CWD is linked to disease in humans, or in
domestic animals other than deer and elk, a theoretical risk of such a
link exists.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 01/00/02
NPRM Comment Period End 03/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Additional Information:

Agency Contact:
Dr. Lynn Creekmore
Staff Veterinarian/Wildlife Diseases Liaison, NAHPS, VS
Department of Agriculture
Animal and Plant Health Inspection Service
4101 Laporte Avenue
Fort Collins, CO 80521
Phone: 970 266-6128
RIN: 0579-AB35
_______________________________________________________________________

USDA--Food and Nutrition Service (FNS)

-----------

PROPOSED RULE STAGE

-----------

5. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND
CHILDREN (WIC): REVISIONS IN THE WIC FOOD PACKAGES
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

42 USC 1786

CFR Citation:

7 CFR 246

Legal Deadline:

None

Abstract:

This proposed rule will amend regulations governing the WIC food
packages to disallow low-iron WIC formulas in food packages for
infants; revise the maximum monthly allowances and minimum requirements
for certain WIC foods; revise the substitution rates for certain WIC
foods and allow additional foods as alternatives; make technical
adjustments in all of the food packages to accommodate newer packaging
and physical forms of the WIC foods; add vegetables as a food category
in Food Packages III-VII for women and children; require that State
agencies make available the full maximum foods allowed in each package;
revise the criteria for developing State agency proposals for
alternative food packages to accommodate participant food preferences
more effectively; revise the purpose, content, and requirements for
Food Package III; and address general provisions that apply to all the
food packages. These revisions will improve the likelihood that WIC
recipients achieve the food servings recommendations of the Dietary
Guidelines for Americans and nutritional recommendations, providing WIC
participants with a wider variety of foods, accommodating newer
packaging and physical forms of WIC foods, and providing WIC State
agencies with greater flexibility in prescribing food packages,
especially to accommodate participants with hardships or cultural/food
preferences. (99-006)

Statement of Need:

While WIC has been successful in many areas, obesity and inappropriate
dietary patterns have become equal, if not greater, problems for many
in WIC's target population. WIC food packages and nutrition education
are the chief means by which WIC affects the dietary quality and habits
of participants. Results of a recent WIC study found that the
supplemental food package is consistently ranked by pregnant and
postpartum women as the leading positive attribute of the program.
Therefore, revised food packages, which will foster greater consistency
with the Dietary Guidelines for Americans, are an appropriate response
to further increase the positive effects of the program among the WIC
eligible population.

The overarching objective of this rule is to improve disease prevention
and nutritional status by improving dietary quality and nutritional
adequacy of the WIC food packages by:

1. Improving the manner in which the nutrients lacking in the target
population's diet are provided by revising food packages to reflect
more closely the Dietary Guidelines for Americans as represented by the
diet recommendations of the Food Guide Pyramid; and

[[Page 61140]]

2. Increasing the nutritional adequacy of the WIC food packages for
medically needy participants.

Summary of Legal Basis:

The WIC Program was established to provide nutritious supplemental
foods, nutrition education, and referrals to related health and social
services to low-income pregnant, breastfeeding, and non-breastfeeding
postpartum women, infants, and children up to age 5. Section 17 of the
Child Nutrition Act of 1966 (as amended, 42 U.S.C. 1786) clearly
established the WIC Program as a supplemental nutrition program
designed to provide nutrients determined by nutritional research to be
lacking in the diets of the WIC target population. WIC law requires
that, to the extent possible, the fat, sugar, and salt content of WIC
foods be appropriate. The law gives substantial latitude to the
Department in designing WIC food offerings but obligates the Department
to prescribe foods that effectively and economically supply the target
nutrients.

Alternatives:

None.

Anticipated Cost and Benefits:

None.

Risks:

This rule is intended to improve the nutritional status and dietary
patterns of the WIC target population, as a response to the threat of
increasing risk factors for nutrition-related diseases--obesity,
diabetes, coronary heart disease, stroke, and cancer, to name a few--in
the WIC eligible population.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 05/00/02
NPRM Comment Period End 08/00/02
Final Action 02/00/03
Final Action Effective 06/00/03
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

State, Local, Tribal, Federal

Federalism:

This action may have federalism implications as defined in EO 13132.

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
Room 910
3101 Park Center Drive
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: [email protected]
RIN: 0584-AC90
_______________________________________________________________________

USDA--FNS

6. FOOD STAMP PROGRAM: VEHICLE AND MAXIMUM EXCESS SHELTER
EXPENSE DEDUCTION PROVISIONS OF PUBLIC LAW 106-387
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

PL 106-387

CFR Citation:

7 CFR 272.1; 7 CFR 273.8; 7 CFR 273.9

Legal Deadline:

None

Abstract:

This proposed rule will (1) implement a revision of the Food Stamp
Program's resource eligibility standards regarding vehicle ownership
and (2) set the maximum excess shelter expense deduction for fiscal
year 2001 and, for future years, index it to the Consumer Price Index.
(01-006)

Statement of Need:

This rule is necessary to implement revisions to the Food Stamp
Program's resource eligibility standards regarding vehicle ownership
and maximum excess shelter expense deduction.

Summary of Legal Basis:

All provisions of this proposed rule are mandated by Public Law 106-
387.

Alternatives:

The alternative would be not to revise current rules, which have been
superseded by changes brought about by Public Law 106-387.

Anticipated Cost and Benefits:

Low-income households will benefit by claiming larger income deductions
for shelter expenses, thereby obtaining higher food stamp benefits. The
new vehicle ownership provisions will make more low-income households
eligible for food stamps and make it easier for them to own a reliable
vehicle. States will benefit by having more flexibility and simpler
administrative options for determining the effect of vehicle ownership
upon food stamp eligibility.

Risks:

Not implementing this proposed rule would ignore the mandates contained
in Public Law 106-387.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 02/00/02
NPRM Comment Period End 04/00/02
Final Action 11/00/02
Final Action Effective 01/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Local

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
Room 910
3101 Park Center Drive
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: [email protected]
RIN: 0584-AD13
_______________________________________________________________________

USDA--FNS

-----------

FINAL RULE STAGE

-----------

7. CHILD AND ADULT CARE FOOD PROGRAM: IMPROVING MANAGEMENT AND PROGRAM
INTEGRITY
Priority:

Other Significant

Legal Authority:

42 USC 1766; PL 103-448; PL 104-193; PL 105-336

CFR Citation:

7 CFR 226

Legal Deadline:

None

[[Page 61141]]

Abstract:

This rule amends the Child and Adult Care Food Program (CACFP)
regulations. The changes in this rule result from the findings of State
and Federal program reviews and from audits and investigations
conducted by the Office of Inspector General. This rule will revise:
State agency criteria for approving and renewing institution
applications; program training and other operating requirements for
child care institutions and facilities; State- and institution-level
monitoring requirements; and criteria for terminating agreements with
institutions and day care homes. This rule also includes changes that
are required by the Healthy Meals for Healthy Americans Act of 1994
(Pub. L. 103-448), the Personal Responsibility and Work Opportunities
Reconciliation Act of 1996 (Pub. L. 104-193), the William F. Goodling
Child Nutrition Reauthorization Act of 1998 (Pub. L. 105-336), the
Agricultural Risk Protection Act of 2000 (Pub. L. 106-224), and the
Grain Standards and Warehouse Improvement Act of 2000 (Pub. L. 106-
472).

The changes are designed to improve program operations and monitoring
at the State and institution levels and, where possible, to streamline
and simplify program requirements for State agencies and institutions.
(95-024)

Statement of Need:

In recent years, State and Federal program reviews have found numerous
cases of mismanagement, abuse, and in some instances, fraud by child
care institutions and facilities in the CACFP. These reviews revealed
weaknesses in management controls over program operations and examples
of regulatory noncompliance by institutions, including failure to pay
facilities or failure to pay them in a timely manner; improper use of
program funds for non-program expenditures; and improper meal
reimbursements due to incorrect meal counts or to mis-categorized or
incomplete income eligibility statements. In addition, audits and
investigations conducted by the Office of Inspector General (OIG) have
raised serious concerns regarding the adequacy of financial and
administrative controls in CACFP. Based on its findings, OIG
recommended changes to CACFP review requirements and management
controls.

Summary of Legal Basis:

Some of the changes proposed in the rule are discretionary changes
being made in response to deficiencies found in program reviews and OIG
audits. Other changes codify statutory changes made by the Healthy
Meals for Healthy Americans Act of 1994 (Pub. L. 103-448), the Personal
Responsibility and Work Opportunities Reconciliation Act of 1996 (Pub.
L. 104-193), the William F. Goodling Child Nutrition Reauthorization
Act of 1998 (Pub. L. 105-336), the Agricultural Risk Protection Act of
2000 (Pub. L. 106-224), and the Grain Standards and Warehouse
Improvement Act of 2000 (Pub. L. 106-472).

Alternatives:

In developing the proposal, the Agency considered various alternatives
to minimize burden on State agencies and institutions while ensuring
effective program operation. Key areas in which alternatives were
considered include State agency reviews of institutions and sponsoring
organization oversight of day care homes.

Anticipated Cost and Benefits:

This rule contains changes designed to improve management and financial
integrity in the CACFP. When implemented, these changes would affect
all entities in CACFP, from USDA to participating children and
children's households. These changes will primarily affect the
procedures used by State agencies in reviewing applications submitted
by, and monitoring the performance of, institutions which are
participating or wish to participate in the CACFP. Those changes which
would affect institutions and facilities will not, in the aggregate,
have a significant economic impact.

Data on CACFP integrity is limited, despite numerous OIG reports on
individual institutions and facilities that have been deficient in
CACFP management. While program reviews and OIG reports clearly
illustrate that there are weaknesses in parts of the program
regulations and that there have been weaknesses in oversight, neither
program reviews, OIG reports, nor any other data sources illustrate the
prevalence and magnitude of CACFP fraud and abuse. This lack of
information precludes USDA from estimating the amount of money lost due
to fraud and abuse or the reduction in fraud and abuse the changes in
this rule will realize.

Risks:

Continuing to operate the CACFP under existing provisions of the
regulations that do not sufficiently protect against fraud and abuse in
CACFP puts the program at significant risk. This rule includes changes
designed to strengthen current program regulations to reduce the risk
associated with the program.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 55103 09/12/00
NPRM Comment Period End 12/11/00
Interim Final Rule 07/00/02
Interim Final Rule Effective 08/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Local

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
Room 910
3101 Park Center Drive
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: [email protected]
RIN: 0584-AC24
_______________________________________________________________________

USDA--FNS

8. FOOD STAMP PROGRAM: WORK PROVISIONS OF THE PERSONAL RESPONSIBILITY
AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996 AND THE FOOD STAMP
PROVISIONS OF THE BALANCED BUDGET ACT OF 1997
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

PL 104-193

CFR Citation:

7 CFR 273.7; 7 CFR 273.22

Legal Deadline:

None

[[Page 61142]]

Abstract:

This proposed rule will implement revisions to the Food Stamp Program's
work and employment and training requirements, as well as new
provisions for a work supplementation or support program and an
employment initiative program. (96-025)

Statement of Need:

This rule is necessary to implement revisions to the Food Stamp
Program's work requirements.

Summary of Legal Basis:

All provisions of this proposed rule are mandated by Public Law 104-193
and the Balanced Budget Act of 1997.

Alternatives:

The alternative is not to revise current rules. This is not practical.
The current rules have been superseded by changes brought about by
Public Law 104-193.

Anticipated Cost and Benefits:

None.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 64 FR 72196 12/23/99
NPRM Comment Period End 02/22/00
Final Action 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Local

Agency Contact:
Sharon Ackerman
Agency Regulatory Officer
Department of Agriculture
Food and Nutrition Service
Room 910
3101 Park Center Drive
Alexandria, VA 22302
Phone: 703 305-2246
Fax: 703 605-0220
Email: [email protected]
RIN: 0584-AC45
_______________________________________________________________________

USDA--Food Safety and Inspection Service (FSIS)

-----------

PRERULE STAGE

-----------

9. POULTRY INSPECTION: REVISION OF FINISHED PRODUCT STANDARDS WITH
RESPECT TO INGESTA
Priority:

Economically Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

21 USC 451 to 470 et seq

CFR Citation:

9 CFR 381

Legal Deadline:

None

Abstract:

FSIS is seeking to clarify its Poultry Inspection regulations regarding
visible ingesta on poultry carcasses and parts. A preliminary
regulatory impact analysis conducted by FSIS determined that costs to
achieve a zero tolerance for ingesta far outweighed benefits. This
action was precipitated by a civil suit filed against USDA.

Statement of Need:

FSIS is seeking to clarify the regulations respecting visible ingesta
on poultry carcasses and parts. In 1997, FSIS issued a final rule
removing the process tolerance level for fecal contamination on poultry
carcasses, in effect, adopting a zero process tolerance for poultry
fecal matter. During the comment period on the final rule, several
commenters supported a zero tolerance for ingesta. As a result, FSIS
solicited comments and information on ingesta to determine whether
there was a need for additional regulatory measures regarding ingesta.
No comments were received. Lacking any information to suggest the
current tolerance standards were inadequate, FSIS let stand the current
process tolerance for ingesta contamination. However, partly in view of
a civil suit, now dismissed, that alleged disparate regulation of the
meat and poultry industries by FSIS and challenged the existing process
tolerance for ingesta contamination of poultry carcasses, FSIS is
issuing an ANPRM to determine how it should proceed on this issue.

Summary of Legal Basis:

This action is authorized under the Poultry Products Inspection Act (21
U.S.C. 451-470).

Alternatives:

No action.

Anticipated Cost and Benefits:

FSIS is seeking information and data from the public about the costs of
establishing any of several alternative tolerance levels for ingesta
and the effects on operations of large and small poultry
establishments. In addition, we are soliciting comments on the
availability of new technology that would reduce the levels of
contamination of birds. FSIS is interested in having information on new
research that identifies microbial hazards and determines whether or
not their presence results in pathogen contamination of the poultry.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 07/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Washington, DC 20250
Phone: 202 720-5627
RIN: 0583-AC77
_______________________________________________________________________

USDA--FSIS

-----------

PROPOSED RULE STAGE

-----------

10. PERFORMANCE STANDARDS FOR BACON
Priority:

Other Significant

Legal Authority:

21 USC 601 et seq; 21 USC 451 et seq

CFR Citation:

9 CFR 424.22(b)

Legal Deadline:

None

[[Page 61143]]

Abstract:

FSIS is proposing to revise the regulatory provisions concerning the
production and testing of bacon (9 CFR 424.22(b)). FSIS is proposing to
remove provisions that require the Agency to test bacon for
nitrosamines and to remove provisions that prescribe the substances and
amounts of such substances that must be used to produce bacon. FSIS is
proposing to replace these provisions with performance standards that
establishments producing bacon must meet. To meet these proposed
performance standards, the process used would be required to limit the
presence of nitrosamines when the product is cooked. Under the hazard
analysis and critical control points (HACCP) system, establishments
would incorporate the proposed performance standards into their HACCP
plans.

Statement of Need:

FSIS is proposing to replace restrictive provisions concerning the
processing of bacon with a performance standard. The proposed
performance standard concerns limiting the presence of volatile
nitrosamines in bacon products. The Agency is also proposing to remove
provisions that require the Agency to sample and test bacon for the
presence of nitrosamines. These proposed changes are necessary to make
the bacon regulations consistent with those governing Hazard Analysis
and Critical Control Point (HACCP) systems.

Summary of Legal Basis:

Under the Federal Meat Inspection Act (21 U.S.C. 601-695) a meat or
meat food product is adulterated ``if it bears or contains any
poisonous or deleterious substance which may render it injurious to
health; but in case the substance is not an added substance, such
article shall not be considered adulterated under this clause if the
quantity of such substance in or on such article does not ordinarily
render it injurious to health'' (21 U.S.C. 601(m)(1)). Volatile
nitrosamines are deleterious because carcinogenic and, though not added
directly to bacon, they may be produced when the bacon is fried.
Processors can control the levels of nitrosamines that may be present
when the product is fried by controlling the levels of nitrite and
nitrosamine inhibitors that are used in the bacon curing process. In
1978, USDA stated that nitrosamines present at confirmable levels in
bacon after preparation for eating were deemed to be adulterative. FSIS
still maintains that bacon with confirmable levels of nitrosamines
after preparation for eating is adulterated. In this proposed rule,
processors would control the levels of nitrosamines by complying with a
performance standard.

Alternatives:

No action; performance standards for all types of bacon (not just
pumped bacon, as proposed); removal of the FSIS testing provisions
without converting prescriptive regulations to performance standard.

Anticipated Cost and Benefits:

Because FSIS is proposing to convert existing regulations to a
performance standard and is not proposing any new requirements for
establishments producing bacon, FSIS does not anticipate that this
proposed rule would result in any significant costs or benefits. Bacon-
processing establishments whose HACCP plans do not address nitrosamines
as hazards reasonably likely to occur may incur some costs. Also,
establishments that choose to test their products for nitrosamines may
incur some costs. Because this rule provides establishments the
flexibility to develop new procedures for producing bacon, this rule
may result in profits to processors who develop cheaper means of
producing product or who develop a product with wide consumer appeal.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 07/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

Agency Contact:
Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Washington, DC 20250
Phone: 202 720-5627
RIN: 0583-AC49
_______________________________________________________________________

USDA--FSIS

11. EGG AND EGG PRODUCTS INSPECTION REGULATIONS
Priority:

Economically Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

21 USC 1031 to 1056

CFR Citation:

9 CFR 590.570; 9 CFR 590.575; 9 CFR 590.146; 9 CFR 590.10; 9 CFR
590.411; 9 CFR 590.502; 9 CFR 590.504; 9 CFR 590.580; 9 CFR 591; ...

Legal Deadline:

None

Abstract:

The Food Safety and Inspection Service (FSIS) is proposing to require
shell egg packers and egg products plants to develop and implement
Hazard Analysis and Critical Control Points (HACCP) systems and
Sanitation Standard Operating Procedures (SOPs). FSIS also is proposing
pathogen reduction performance standards that would be applicable to
pasteurized shell eggs and egg products. Plants would be expected to
develop HACCP systems that ensure products meet the pathogen reduction
performance standards. Finally, FSIS is proposing to amend the Federal
egg and egg products inspection regulations by removing current
requirements for prior approval by FSIS of egg products plant drawings,
specifications, and equipment prior to their use in official plants.
The Agency also plans to eliminate the prior label approval system for
egg products.

The actions being proposed are part of FSIS's regulatory reform effort
to improve FSIS's egg and egg products food safety regulations, better
define the roles of Government and the regulated industry, encourage
innovations that will improve food safety, remove unnecessary
regulatory burdens on inspected egg products plants, and make the egg
and egg products regulations as consistent as possible with the
Agency's meat and poultry products regulations. FSIS is also taking
these actions in light of changing inspection priorities and recent
findings of salmonella in pasteurized egg products.

[[Page 61144]]

Statement of Need:

FSIS is proposing to require egg products plants to develop and
implement HACCP systems and Sanitation Standard Operating Procedures
(SSOPs). FSIS also is proposing a pathogen reduction performance
standard that would be applicable to pasteurized egg products. Plants
would be expected to develop HACCP systems that ensure egg products
meet the lethality required by the pathogen reduction performance
standard. In addition, FSIS is proposing to amend the Federal shell egg
and egg products inspection regulations by removing current
requirements for approval by FSIS of egg product plant drawings,
specifications, and equipment prior to their use in official (FSIS-
inspected) plants. Finally, the Agency plans to eliminate the pre-
marketing label approval system for egg products but to require safe-
handling labels on shell eggs and egg products.

The actions being proposed are part of FSIS's regulatory reform effort
to improve FSIS's shell egg and egg products food safety regulations,
better define the roles of Government and the regulated industry,
encourage innovations that will improve food safety, remove unnecessary
regulatory burdens on inspected egg products plants, and make the shell
egg and egg products regulations as consistent as possible with the
Agency's meat and poultry products regulations. FSIS also is taking
these actions in light of changing inspection priorities and recent
findings of Salmonella in pasteurized egg products.

This proposal is directly related to FSIS's PR/HACCP initiative.

Summary of Legal Basis:

This proposed rule is authorized under the Egg Products Inspection Act
(21 U.S.C. 1031-1056). It is not the result of any specific mandate by
the Congress or a Federal court.

Alternatives:

A team of FSIS economists and food technologists is conducting a cost-
benefit analysis to evaluate the potential economic impacts on the
public, the egg products industry, and FSIS of several alternatives.
These alternatives include: (1) taking no regulatory action; (2)
requiring all inspected egg products plants to develop, adopt, and
implement written Sanitation SOPs and HACCP plans; and (3) converting
to a lethality-based pathogen reduction performance standard many of
the current highly prescriptive egg products processing requirements.
The team will consider the effects of a uniform, across-the-board
standard for all egg products; a performance standard based on the
relative risk of different classes of egg products; and a performance
standard based on the relative risks to public health of different
production processes.

Anticipated Cost and Benefits:

FSIS is analyzing the potential costs of this proposed rulemaking to
industry, to FSIS and to other Federal agencies, to State and local
governments, to small entities, and to foreign countries. The expected
costs to industry will depend on a number of factors. These costs
include the required lethality, or level of pathogen reduction, and the
cost of HACCP plan and SSOP development, implementation, and associated
employee training. The pathogen reduction costs will depend on the
amount of reduction sought and in what classes of product, product
formulations, or processes.

Relative enforcement costs to FSIS and FDA may change because the two
agencies share responsibility for inspection and oversight of the egg
industry and a common farm-to-table approach for shell egg and egg
products food safety. Other Federal agencies and local governments are
not likely to be affected.

FSIS has cooperative agreements with six States and the Commonwealth of
Puerto Rico under which they provide inspection services to egg
processing plants under Federal jurisdiction. FSIS reimburses the
States for staffing costs and expenses for full-time State inspectors.
HACCP implementation may result in a reduction of staffing resource
requirements in the States and a corresponding reduction of the Federal
reimbursement. As a result, some States may decide to stop providing
inspection services and convert to Federal inspection of egg products
plants.

Egg and egg product inspection systems of foreign countries wishing to
export eggs and egg products to the U.S. must be equivalent to the U.S.
system. FSIS will consult with these countries, as needed, if and when
this proposal becomes effective.

This proposal is not likely to have a significant impact on small
entities. The entities that would be directly affected by this proposal
would be the approximately 75 federally inspected egg-processing
establishments, most of which are small businesses, according to Small
Business Administration criteria. If necessary, FSIS will develop
compliance guides to assist these small firms in implementing the
proposed requirements.

The impacts on the FSIS budget will be influenced by the alternatives
proposed and industry responses. Most likely, fewer FSIS inspection
personnel will be required over time as more uniform inspection
practices are employed among the meat, poultry, and egg products
industries.

Potential benefits associated with this rulemaking include:
Improvements in human health due to pathogen reduction; improved
utilization of FSIS inspection program resources; and cost savings
resulting from the flexibility of egg products plants in achieving a
lethality-based pathogen reduction performance standard. Once specific
alternatives are identified, economic analysis will identify the
quantitative and qualitative benefits associated with each.

Human health benefits from this rulemaking are likely to be small
because of the low level of (chiefly post-processing) contamination of
pasteurized egg products. In light of recent scientific studies that
raise questions about the efficacy of current regulations, however, it
is likely that measurable reductions will be achieved in the risk of
foodborne illness.

Risks:

FSIS believes that this regulatory action may result in a further
reduction in the risks associated with egg products. The development of
a lethality-based pathogen reduction performance standard for egg
products, replacing command-and-control regulations, will remove
unnecessary regulatory obstacles to, and provide incentives for,
innovation to improve the safety of egg products.

To assess the potential risk-reduction impacts of this rulemaking on
the public, an interagency panel of scientific and technical experts is
conducting a risk management analysis. The panel has been charged with
identifying the lethality requirement sufficient to ensure the safety
of egg products and the alternative methods for implementing the
requirement. The egg products processing and distribution module of the
Salmonella enteritidis Risk Assessment, made public June 12, 1998, will
be appropriately modified to evaluate the risk associated with the
regulatory alternatives.

[[Page 61145]]

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses, Governmental Jurisdictions

Government Levels Affected:

None

Agency Contact:
Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Washington, DC 20250
Phone: 202 720-5627
RIN: 0583-AC58
_______________________________________________________________________

USDA--FSIS

12. PATHOGEN REDUCTION; HAZARD ANALYSIS AND CRITICAL CONTROL POINTS
(HACCP) SYSTEMS; ADDITIONS TO GENERIC E. COLI CRITERIA
Priority:

Other Significant

Legal Authority:

21 USC 601 to 695; 21 USC 451 to 470

CFR Citation:

9 CFR 310; 9 CFR 381

Legal Deadline:

None

Abstract:

FSIS is proposing to add generic E. coli criteria to the regulations.
In addition, FSIS is proposing to revise the terms used to identify and
define certain classes of product listed in the Salmonella tables.

FSIS is proposing to delay making the proposed criteria and standards
applicable for 1 year for small establishments and for 2 years for very
small establishments.

Statement of Need:

FSIS is proposing to update its pathogen reduction (PR)/Hazard Analysis
and Critical Control Point (HACCP) System regulations by adding generic
Eschericha coli (E. coli) criteria for cattle, swine, and goose
carcasses based on the sponging method of sample collection and for
turkey carcasses based on the sponging and rinse methods of sample
collection. FSIS is also proposing new pathogen reduction performance
standards for Salmonella in cattle, swine, young turkey, and goose
carcasses by the sponging method and fresh pork sausage by direct
sampling. The new cattle performance standard would replace the
existing Salmonella performance standards for steers/heifers and cows/
bulls. The new swine standard would replace the existing standard for
hogs. These new standards apply to all market classes of cattle and
swine, respectively.

The National Academy of Sciences and the National Advisory Committee on
Microbiological Criteria for Foods are examining the Salmonella
performance standards and generic E. coli criteria. FSIS will take into
account their findings and concerns before issuing rules on this
matter.

In addition, FSIS is proposing to revise the terms used to identify
and define certain classes of product listed in the Salmonella tables
to more accurately reflect the products sampled in the baseline studies
that are the basis for the standards. The Agency also intends to
correct some errors in the E. coli and Salmonella tables and to change
the footnotes to the tables for greater clarity.

These changes would ensure that the pathogen reduction performance
standards and process control criteria applying to products and
establishments regulated by FSIS are appropriate and accurate. The
additional performance standards for Salmonella and criteria for E.
coli will help establishments to improve process controls for certain
classes of raw product. Improved process controls will help reduce
pathogens on certain raw products and may result in the reduction of
foodborne illness. The provision of E. coli criteria based on the
sponge method of sampling would provide affected establishments with
flexibility in complying with the rule.

In addition to the need to update and add flexibility to existing PR/
HACCP requirements, the rule is needed to help address the market
failure associated with the consumer's lack of information about
pathogens that may be present in certain classes of meat and poultry
products and to help meet the commitments made by FSIS in its PR/HACCP
and associated regulatory reform initiatives.

Summary of Legal Basis:

This action is authorized under the Federal Meat Inspection Act (21
U.S.C. 601-695) and the Poultry Products Inspection Act (21 U.S.C. 451-
470).

Alternatives:

No action.

Anticipated Cost and Benefits:

The costs of the proposal are estimated to be in the $18 million to $20
million range and are attributable to the need for some firms to modify
their processes to meet the new standards.

Benefits would accrue from reductions in pathogen levels, which in
turn, might lead to reductions in foodborne illness. There is, however,
a great deal of uncertainty associated with the human health benefits
estimates, including data reflecting a decline in foodborne illness
after implementation of the PR/HACCP regulations, because of the lack
of prevalence data for the period before and after implementation of
the regulations.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 07/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

Agency Contact:
Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Washington, DC 20250
Phone: 202 720-5627
RIN: 0583-AC63
_______________________________________________________________________

USDA--FSIS

13. ELIMINATION OF CHILLING TIME AND TEMPERATURE REQUIREMENTS
FOR READY-TO-COOK POULTRY (SECTION 610 REVIEW)
Priority:

Other Significant

Legal Authority:

21 USC 451 to 470

CFR Citation:

9 CFR 381.66

[[Page 61146]]

Legal Deadline:

None

Abstract:

FSIS is proposing to eliminate the time and temperature requirements
for chilling ready-to-cook poultry carcasses and giblets. The Agency is
taking this action because the requirements are inconsistent with the
Agency's Pathogen Reduction/Hazard Analysis and Critical Control Point
(HACCP) System regulations, with its final rule further restricting
retained water in raw meat and poultry, and with the Agency's
regulatory reform program. Moreover, because of these regulations, the
meat and poultry industries receive disparate regulatory treatment: No
regulations that apply to the chilling of poultry apply to the chilling
of meat. This proposal responds to longstanding petitions by industry
trade associations.

Statement of Need:

This proposed rule addresses Federal regulations that are inconsistent
with the PR/HACCP regulations because they restrict the ability of
poultry processors to choose appropriate and effective measures to
eliminate, reduce, or control biological hazards identified in their
hazard analyses. The regulations also complicate efforts by
establishments to comply with the terms of the January 9, 2001, final
rule further restricting the amount of water that may be retained in
raw meat or poultry products after post-evisceration processing; some
establishments may have to use chilling procedures that result in
higher levels of retained water in carcasses than may be necessary to
achieve the same food safety objective. For example, establishments
that operate automated chillers may have to subject poultry carcasses
to higher agitation rates or longer dwell times in the chillers. Also,
as discussed above, the time/temperature chilling regulations for
poultry result in disparate regulatory treatment of the meat and
poultry industries.

Summary of Legal Basis:

This regulatory action is authorized under the Poultry Products
Inspection Act (21 U.S.C. 451-470).

Alternatives:

FSIS evaluated five regulatory alternatives: (1) taking no regulatory
action; (2) replacing the command-and-control requirements with a
performance standard; (3) requiring meatpackers, as well as poultry
processors, to comply with such a performance standard; (4) requiring
all establishments that prepare raw meat or poultry products or handle,
transport, or receive the products in transportation to comply with a
performance standard; or (5) removing the command-and-control
requirements from the poultry products inspection regulations. The
Agency chose the fifth alternative.

Anticipated Cost and Benefits:

Poultry processors would gain the flexibility to choose the best
processing techniques and procedures for achieving production
efficiencies, meeting HACCP food safety objectives, and preventing
economic adulteration of raw product with retained water in amounts
greater than unavoidable for food-safety purposes. They would be able
to operate with a wider range of chilling temperatures consistently
with the requirements of the PR/HACCP regulations. The poultry products
industry could achieve energy efficiencies resulting in annual savings
of as much as $2.8 million.

The industry could also reduce carcass ``dwell times'' in immersion
chillers and thereby reduce the amount of water absorbed and retained
by the carcasses. The reduction in dwell time might enable some
establishments, particularly those currently operating at the
throughput capacity of their chillers, to increase production by
installing additional evisceration lines. Poultry establishments would
therefore be able to operate more efficiently to provide consumers with
product that is not adulterated.

FSIS also would gain some flexibility by being able to reallocate some
inspection resources from measuring the temperature of chilled birds to
such activities as HACCP system verification.

This proposed rule would directly impose no new costs on the regulated
industry. It would relieve burdens arising from the disparate impacts
of the current regulations on the meat and poultry industries.

Risks:

None

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 02/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Washington, DC 20250
Phone: 202 720-5627
RIN: 0583-AC87
_______________________________________________________________________

USDA--FSIS

14. ' EMERGENCY REGULATIONS TO PREVENT MEAT FOOD AND MEAT PRODUCTS THAT
MAY CONTAIN THE BSE AGENT FROM ENTERING COMMERCE
Priority:

Economically Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

21 USC 601 et seq

CFR Citation:

Not Yet Determined

Legal Deadline:

None

Abstract:

FSIS is proposing to amend the meat inspection regulations to add
emergency regulations to prevent meat and meat food products that may
contain the bovine spongiform encephalopathy (BSE) agent from entering
commerce. The emergency regulations would become effective when, and
if, BSE is diagnosed in native cattle in the United States. The
proposed regulations provide for periodic review by FSIS to determine
their effectiveness and to evaluate the need to modify or remove some
measures or impose additional measures.

Statement of Need:

FSIS is proposing to amend the meat inspection regulations to add
provisions to prevent meat and meat products that may contain the BSE
agent from entering commerce in the event that BSE is diagnosed in
native cattle in the U.S. Any final rule that is developed as a result
of this proposal will become effective when, and if, a native case of
BSE is detected in the U.S.

BSE is a chronic, degenerative, neorological disorder of cattle.
Worldwide, there have been more than

[[Page 61147]]

178,000 cases since the disease was first diagnosed in 1986 in Great
Britain. There have been no cases of BSE detected in the United States
despite 10 years of active surveillance for the disease. Recent
laboratory and epidemiological research indicate that there is a causal
association between BSE and variant Creutzfeldt-Jakob Disease (vCJD), a
slow degenerative disease that affects the central nervous system of
humans. Like BSE, vCJD has not been detected in the United States. Both
BSE and vCJD are always fatal.

Although BSE has not been detected in the U.S., USDA policy in regard
to BSE has been to be proactive and preventive. Therefore, FSIS is
proposing these regulations so that the Agency will have an immediate
regulatory response in the event that BSE is detected in the U.S. Once
finalized, the proposed measures will be incorporated in the meat
inspection regulations but would only become effective when, and if,
BSE is detected in native cattle.

Summary of Legal Basis:

Under the Federal Meat Inspection Act (21 U.S.C. 601-695), FSIS issues
regulations governing the production of meat and meat food products.
The regulations, along with FSIS inspection programs, are designed to
ensure that meat food products are safe, not adulterated, and properly
marked, labeled, and packaged.

Alternatives:

As an alternative to the proposed requirements, FSIS considered taking
no action. FSIS rejected this option because, as previously mentioned,
USDA policy in regard to BSE has been to be proactive and preventive.
Publishing a proposed rule will inform the public of the type of
regulatory response it can expect from FSIS when, and if, BSE is
detected in native cattle.

In addition to the proposed requirements, FSIS is considering taking
actions prior to the detection of BSE in the U.S. to minimize human
exposure to materials from cattle that could potentially contain the
BSE agent. The measures under consideration are targeted at the
materials of cattle that are most likely to contain the BSE agent, if
such animals have been infected with BSE, and those cattle that have
consumed feed prohibited by Food and Drug Administration's (FDA)
regulations (i.e., mammalian meat and bone meal in ruminant feed).

Anticipated Cost and Benefits:

None.

Risks:

Although vCJD is a rare condition, the symptoms are severe, and it is
always fatal. This proposed rule is intended to reduce the risk of
humans developing vCJD in the U.S. in the event BSE is detected in
native cattle. The measures proposed by FSIS are intended to minimize
human exposure to materials from cattle that could potentially contain
the BSE agent. In April 1998, USDA entered into a cooperative agreement
with Harvard University's School of Public Health to conduct a risk
analysis to assess the potential pathways for entry into U.S. cattle
and the U.S. food supply, to evaluate existing regulations and
policies, and to identify any additional measures that could be taken
to protect human and animal health. FSIS will use the findings of the
risk assessment to evaluate the level of risk reduction associated with
the proposed measures.

Unlike bacterial and viral pathogens that may be found in or on meat
food products, the BSE agent cannot be destroyed by conventional
methods, such as cooking or irradiation. Also, although it is rare,
vCJD, the human disease associated with exposure to the BSE agent, is
generally more severe than the human illnesses associated with exposure
to bacterial and viral pathogens. Thus, if BSE were detected in the
U.S., additional measures to reduce the risk of human exposure to the
BSE agent are necessary to protect public health.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 09/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Federalism:

Undetermined

Agency Contact:
Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Washington, DC 20250
Phone: 202 720-5627
RIN: 0583-AC88
_______________________________________________________________________

USDA--FSIS

-----------

FINAL RULE STAGE

-----------

15. MEAT PRODUCED BY ADVANCED MEAT/BONE SEPARATION MACHINERY AND
RECOVERY SYSTEMS
Priority:

Economically Significant

Legal Authority:

21 USC 601 to 695

CFR Citation:

9 CFR 301.2; 9 CFR 318.24 (Revision); 9 CFR 320.1(b)(10)

Legal Deadline:

None

Abstract:

In 1994, the Food Safety and Inspection Service amended its regulations
to recognize that product resulting from advanced meat/bone separation
machinery comes within the definition of meat when recovery systems are
operated to assure that the characteristics and composition of the
resulting product are consistent with those of meat. Subsequent
compliance problems and other concerns have made it apparent that the
regulations are inadequate to prevent misbranding and economic
adulteration. Therefore, FSIS is developing a rule to clarify the
regulations and supplement the rules for assuring compliance.

Statement of Need:

In 1998, FSIS proposed to clarify the meat inspection regulations
regarding mechanically separated meat contained in a final rule issued
in December 1994. The proposed rule would replace the present
compliance program parameters with non-compliance criteria for bone and
bone-related material. The proposed rule would require, as a
prerequisite to labeling or using product derived by mechanically
separating skeletal muscle tissue from cattle bones as meat, that

[[Page 61148]]

establishments implement and document procedures for ensuring that
their production process is in control. FSIS intends to issue a final
rule in the first quarter of 2002 that prohibits central nervous system
tissue in meat produced by advanced meat separation and recovery
systems.

Summary of Legal Basis:

This action is authorized under the Federal Meat Inspection Act (21
U.S.C. 601-695).

Alternatives:

No action.

Anticipated Cost and Benefits:

Although the 1998 proposed rule was determined to be not economically
significant, FSIS restudied the projected costs using data from various
FSIS data bases and other sources to develop an improved estimate of
the benefits and costs of implementing the final rule. To date, it
appears that the final rule will not be economically significant, but
data evaluation continues. The benefit of publishing a rule that
prohibits central nervous system tissue is that the meat industry would
be producing a product that is not misbranded or economically
adulterated.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 63 FR 17959 04/13/98
NPRM Comment Period End 06/12/98
Final Action 02/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

None

Agency Contact:
Daniel L. Engeljohn
Director, Regulations and Directives Development Staff
Department of Agriculture
Food Safety and Inspection Service
Washington, DC 20250
Phone: 202 720-5627
RIN: 0583-AC51
_______________________________________________________________________

USDA--FSIS

16. PERFORMANCE STANDARDS FOR ON-LINE ANTIMICROBIAL REPROCESSING OF
PRE-CHILL POULTRY CARCASSES
Priority:

Other Significant

Legal Authority:

21 USC 451 to 470

CFR Citation:

9 CFR 381; 9 CFR 424

Legal Deadline:

None

Abstract:

This rule is proposing to allow, on a voluntary basis, the on-line
reprocessing of pre-chill poultry carcasses that are accidentally
contaminated with digestive tract contents during slaughter. The
treated carcasses must meet pre-chill performance standards that are
substantially lower than the current performance standard and criteria.

Statement of Need:

On December 1, 2000, FSIS issued a proposed rule to permit on-line
antimicrobial reprocessing of pre-chill poultry carcasses on a
voluntary basis. It is estimated that approximately 90 poultry
slaughter establishments are now engaged in on-line processing.
Permitting pre-chill poultry to be reprocessed on-line rather than off-
line yields great benefits to industry and reduces microbial loads on
visibly contaminated and visibly clean birds.

Summary of Legal Basis:

This action is authorized by the Poultry Products Inspection Act (21
U.S.C. 456 et seq.) Exercise of the Secretary of Agriculture's
functions under this Act has been delegated to the Under Secretary for
Food Safety (7 CFR 2.18) and by the Under Secretary to the
Administrator of FSIS (7 CFR 2.53).

Alternatives:

Executive Order 12866 requires that FSIS identify and assess
alternative forms of regulation. FSIS considered two alternatives to
this proposed rule: (1) not proposing to allow for the on-line
reprocessing of contaminated carcasses and (2) proposing to require
plants to perform on-line reprocessing of pre-chill contaminated
carcasses and establishing specific numerical performance standards
that the reprocessed poultry must meet using a mandated antimicrobial
treatment or process. FSIS rejected both alternatives for the reasons
explained below.

Failing To Propose

FSIS is committed to reducing the levels of microbial pathogens in
poultry products. On-line reprocessing of poultry in commercial trials
using solutions of TSP/chlorine and acidified sodium chlorite has been
shown to be a highly effective method of reducing the microbial levels
of raw poultry to levels substantially below the performance standards
and criteria established by the pathogen reduction/HACCP final rule.

Mandating Procedures, Materials, and Methods

FSIS is proposing to give all establishments the option of adopting
on-line reprocessing of visibly contaminated birds. By not mandating
that all plants adopt on-line reprocessing, FSIS is recognizing that
there are other solutions to reducing bacterial loads that may be more
appropriate and cost-effective for small plants. There are many
possible solutions for pathogen reduction of raw poultry and poultry
products, and the industry continues to seek out new products and
equipment that will be effective.

Pathogen reduction is central to the FSIS food safety strategy.
However, eliminating as many prescriptive or command-and-control
regulations as possible also is an important part of the overall
strategy for updating and improving inspection in light of HACCP.
Therefore, there will be no mandate proposed for establishments to use
TSP or any other substance as the antimicrobial reprocessing aid.
Various substances have undergone trials to determine their potential
as antimicrobial processing agents. Such substances include acidified
sodium chlorite; organic acids such as lactic, acetic, and formic
acids; chlorine dioxides; and ozone. Plants will be free to use other
products that have demonstrated their efficacy in reducing levels of
microorganisms in in-plant commercial trials. This is consistent with
the Agency's strategy of encouraging the industry to take advantage of
new technology to reduce the risks associated with the consumption of
meat and poultry products.

Anticipated Cost and Benefits:

The economic impact of this rule is likely to be minimal because of the
voluntary nature of the practice this

[[Page 61149]]

proposal would authorize. An establishment will use on-line
reprocessing if it is consistent with the objectives of the firm,
conforms with plant configuration, provides increased efficiency in
achieving product standards, improves product characteristics, and
other factors. The poultry industry is highly competitive; an increase
in product price by a single producer is likely to result in a loss of
market share. A firm is not likely to purchase new equipment that will
increase overall production costs or reduce profits.

The cost for a poultry plant to adopt an acceptable on-line
reprocessing system will vary from plant to plant and will be
contingent on the location, physical structure, and age of the plant
and the adaptability of the equipment. Available information indicates
that the capital cost per line ranges from $10,000 to more than
$55,000, with an average cost of $35,600, which is close to the
manufacturer's estimate for a single line cost of $30,000.

Operating costs associated with on-line reprocessing systems also can
vary significantly as a result of plant size, number of lines,
processing capacity, plant configuration, and other factors. Rhodia
estimates that the TSP application cost will be about 0.2 cents per
pound for an average chicken slaughter plant. The application of other
antimicrobial substances may vary slightly in cost. Plant data suggest
that total annual operating costs, which include labor, water softener,
TSP, and water, are very close to the manufacturer's estimate.
Available information suggests annual operating costs of about $125,000
per line for an average plant. Costs associated with off-line
reprocessing would be expected to decline following installation of on-
line reprocessing equipment because of reduced labor and other
operating requirements. Available data suggest the decrease in
operating costs because of reduced off-line reprocessing is about
$70,000 per line, somewhat more than half of the increase in operating
costs associated with TSP on-line reprocessing. The available plant
information suggests that about two-thirds of the plants would not
experience any change in sewage treatment. The remaining third would be
required to perform additional treatment at the plant to meet discharge
limits. Two-thirds of the plants would show no change in water use,
while the remaining plants will have to increase use by 1 to 2 gallons
per bird, or about 10 percent.

For the average plant, the net present value of capital costs and the
net change in operating costs of TSP on-line reprocessing is about $1.2
million over a 10-year period using a discount rate of 7 percent. Based
on the assumptions that the average plant processes about 200,000 birds
per day, that an average bird has a dressed weight of 3.6 pounds, and
the plant operates an average of 255 days per year over the next 10
years, the increase in total production costs is slightly more than .2
cents per pound. The capital costs amortized over a 10-year period are
minimal on a per pound basis. The costs to the poultry processing
industry would accrue to plants engaged in slaughter, either
exclusively or in combination with processing. In 1996, there were 281
federally inspected plants of this description. Only one Federal-State
cooperative inspection plant is currently engaged in poultry slaughter.
If all such plants voluntarily install an on-line reprocessing system,
the total cost to the poultry industry would be about $345 million over
a 10-year period.

Risks:

The cost of a TSP on-line reprocessing system represents an
insignificant portion of the retail price per pound of poultry. If
there is any increase in the retail price of poultry, it will be modest
and offset by consumer confidence that the product presents lower
microbial risks.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 75187 12/01/00
NPRM Comment Period End 01/30/01
Final Action 03/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

DEPARTMENT OF COMMERCE (DOC)

[[Page 61150]]

Statement of Regulatory and Deregulatory Priorities
Enhancing long-term economic growth is a central focus of the
President's policies and priorities. The mission of the Department of
Commerce is to promote job creation, economic growth, technological
competitiveness, sustainable development, and improved living standards
for all Americans by working in partnership with businesses,
universities, communities, and workers to:
Build for the future and promote U.S. economic competitiveness
in the global marketplace by strengthening and safeguarding
the Nation's economic infrastructure;
Keep America competitive with cutting-edge science and
technology and an unrivaled information base; and
Provide effective management and stewardship of our Nation's
resources and assets to ensure sustainable economic
opportunities.
The DOC mission statement, containing our three strategic themes,
provides the vehicle for understanding the Department's aims, how they
interlock, and how they are to be implemented through our programs.
This statement was developed with the intent that it serves as both a
statement of departmental philosophy and as the guiding force behind
the Department's programs.
The importance that this mission statement and these strategic themes
have for the Nation is amplified by the vision they pursue for
America's communities, businesses, and families. Commerce is the
smallest Cabinet agency, yet our presence is felt, and our
contributions are found, in every State.
The DOC touches Americans, daily, in many ways--we make possible the
weather reports that all of us hear every morning; we facilitate the
technology that all of us use in the workplace and in the home each
day; we support the development, gathering, and transmitting of
information essential to competitive business; we make possible the
diversity of companies and goods found in America's (and the world's)
marketplace; and we support environmental and economic health for the
communities in which Americans live.
The DOC has a clear and powerful vision for itself, for its role in
the Federal Government, and for its roles supporting the American
people, now and in the future. We confront the intersection of trade
promotion, civilian technology, economic development, sustainable
development, and economic analysis, and we want to provide leadership
in these areas for the Nation.
We work to provide programs and services that serve our country's
businesses, communities, and families, as initiated and supported by
the President and the Congress. We are dedicated to making these
programs and services as effective as possible, while ensuring that
they are being delivered in the most cost-effective ways. We seek to
function in close concert with other agencies having complementary
responsibilities so that our collective impact can be most powerful. We
seek to meet the needs of our customers quickly and efficiently, with
programs, information, and services they require and deserve.
As a permanent part of the Federal Government, but serving an
Administration and Congress that can vary with election results, we
seek to serve the unchanging needs of the Nation, according to the
priorities of the President and the Congress. The President's
priorities for the Department range from issues concerning the economy
to the environment. For example, the President directs the Department
to promote and develop alternative sources of energy that conserve the
environment; promote electronic commerce activities; encourage open and
free trade; represent American business interests abroad; and assist
small businesses expand and create jobs. We are able to address these
priorities effectively by functioning in accordance with the
legislation that undergirds our programs and by working closely with
the President and the committees in Congress, which have programmatic
and financial oversight for our programs.
Among the President's priorities, the DOC works to advance alternative
energy sources as discussed in the President's national energy policy.
In his State of the Union address, the President acknowledged that many
citizens were struggling with the high cost of energy. In response to
the energy crisis, the President charged Vice President Cheney and
Cabinet secretaries to develop a national energy policy that encourages
production of energy while protecting our environment. In doing so, the
President emphasized the need to promote alternative energy to ensure
that ``future generations of Americans will have access to the energy
they need.''
The DOC is working to reform the hydropower licensing process so that
applicants will encounter less uncertainty. Hydropower ranks as the
fourth largest source of the Nation's energy; it accounted for 7
percent of the Nation's total energy needs in 2000. To promote the use
of this renewable source of power, the Department is streamlining the
licensing process to ensure more public participation, adopt more
effective fish and wildlife conditions, and provide interagency
resolution before conflicting mandatory license conditions are
implemented.
The DOC also promotes and expedites American exports, helps nurture
business contacts abroad, protects U.S. firms from unfair foreign
competition, and makes how-to-export information accessible to small
and mid-sized companies throughout the Nation, thereby ensuring that
U.S. market opportunities span the globe.
The DOC encourages development in every community, clearing the way
for private-sector growth by building and rebuilding economically
deprived and distressed communities. We promote minority
entrepreneurship to establish businesses that frequently anchor
neighborhoods and create new job opportunities. We work with the
private sector to enhance competitive assets.
As the Nation looks to revitalize its industries and communities, The
DOC works as a partner with private entities to build America with an
eye on the future. Through technology, research and development, and
innovation, we are making sure America continues to prosper in the
short-term, while also helping industries prepare for long-term
success.
The DOC's considerable information capacities help businesses
understand clearly where our national and world economies are going,
and take advantage of that knowledge by planning the road ahead. Armed
with the Department's economic and demographic statistics, businesses
can undertake the new ventures, investments, and expansions that make
our economy grow.
The DOC has instituted programs and policies that lead to cutting-
edge, competitive, and better paying jobs. We work every day to boost
exports, to deregulate business, to help smaller manufacturers battle
foreign competition, to advance the technologies critical to our future
prosperity, to invest in our

[[Page 61151]]

communities, and to fuse economic and environmental goals.
The DOC is American business' surest ally in job creation, serving as
a vital resource base, a tireless advocate, and its Cabinet-level
voice.
The Regulatory Plan directly tracks these policy and program
priorities, only a few of which involve regulation of the private
sector by the Department.
Responding to the Administration's Regulatory Philosophy and Principles
The vast majority of the Department's programs and activities do not
involve regulation. Of the Department's 12 primary operating units,
only two--the Bureau of Export Administration (BXA) and the National
Oceanic and Atmospheric Administration (NOAA)--plan significant
preregulatory or regulatory actions for this Regulatory Plan year.
However, none of these significant actions rise to the level of ``most
important'' of the Department's ``significant regulatory actions''
planned for the Regulatory Plan year.
Though not principally a regulatory agency, the DOC has long been a
leader in advocating and using market-oriented regulatory approaches in
lieu of traditional command-and-control regulations when such
approaches offer a better alternative. All regulations are designed and
implemented to maximize societal benefits while placing the smallest
possible burden on those being regulated.
The DOC is also refocusing on its regulatory mission by taking into
account, among other things, the President's regulatory principles. To
the extent permitted by law, all preregulatory and regulatory
activities and decisions adhere to the Administration's statement of
regulatory philosophy and principles, as set forth in section 1 of
Executive Order 12866. Moreover, we have made bold and dramatic
changes, never being satisfied with the status quo. We have emphasized,
initiated, and expanded programs that work in partnership with the
American people to secure the Nation's economic future. At the same
time we have downsized, cut regulations, closed offices, and eliminated
programs and jobs that are not part of our core mission. The bottom
line is that, after much thought and debate, we have made many hard
choices needed to make this Department ``state of the art.''
The Secretary has prohibited the issuance of any regulation that
discriminates on the basis of race, religion, gender, or any other
suspect category and requires that all regulations be written so as to
be understandable to those affected by them. The Secretary also
requires that the Department afford the public the maximum possible
opportunity to participate in departmental rulemakings, even where
public participation is not required by law.
National Oceanic and Atmospheric Administration
The National Oceanic and Atmospheric Administration (NOAA) establishes
and administers Federal policy for the conservation and management of
the Nation's oceanic, coastal, and atmospheric resources. It provides a
variety of essential environmental services vital to public safety and
to the Nation's economy, such as weather forecasts and storm warnings.
It is a source of objective information on the state of the
environment. NOAA plays the lead role in achieving the departmental
goal of promoting stewardship by providing assessments of the global
environment.
Recognizing that economic growth must go hand-in-hand with
environmental stewardship, the Department, through NOAA, conducts
programs designed to provide a better understanding of the connections
between environmental health, economics, and national security.
Commerce's emphasis on ``sustainable fisheries'' is saving fisheries
and confronting short-term economic dislocation, while boosting long-
term economic growth. The Department is where business and
environmental interests intersect, and the classic debate on the use of
natural resources is transformed into a ``win-win'' situation for the
environment and the economy.
Three of NOAA's major components, the National Marine Fisheries
Services (NMFS), the National Ocean Service (NOS), and the National
Environmental Satellite, Data, and Information Service (NESDIS),
exercise regulatory authority.
NMFS oversees the management and conservation of the Nation's marine
fisheries, protects marine mammals, and promotes economic development
of the U.S. fishing industry. NOS assists the coastal states in their
management of land and ocean resources in their coastal zones,
including estuarine research reserves; manages the Nation's national
marine sanctuaries; monitors marine pollution; and directs the national
program for deep-seabed minerals and ocean thermal energy. NESDIS
administers the civilian weather satellite program and licenses private
organizations to operate commercial land-remote sensing satellite
systems.
The Administration is committed to an environmental strategy that
promotes sustainable economic development and rejects the false choice
between environmental goals and economic growth. The intent is to have
the Government's economic decisions guided by a comprehensive
understanding of the environment. The Department, through NOAA, has a
unique role in promoting stewardship of the global environment through
effective management of the Nation's marine and coastal resources and
in monitoring and predicting changes in the Earth's environment, thus
linking trade, development, and technology with environmental issues.
NOAA has the primary Federal responsibility for providing sound
scientific observations, assessments, and forecasts of environmental
phenomena on which resource management and other societal decisions can
be made.
In the environmental stewardship area, NOAA's goals include:
rebuilding U.S. fisheries by refocusing policies and fishery management
planning on increased scientific information; increasing the
populations of depleted, threatened, or endangered species of marine
mammals by implementing recovery plans that provide for their recovery
while still allowing for economic and recreational opportunities;
promoting healthy coastal ecosystems by ensuring that economic
development is managed in ways that maintain biodiversity and long-term
productivity for sustained use; and modernizing navigation and
positioning services. In the environmental assessment and prediction
area, goals include: modernizing the National Weather Service;
implementing reliable seasonal and interannual climate forecasts to
guide economic planning; providing science-based policy advice on
options to deal with very long-term (decadal to centennial) changes in
the environment; and advancing and improving short-term warning and
forecast services for the entire environment.
Magnuson-Stevens Act Rulemakings
Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-
Stevens Act) rulemakings concern the conservation and management of
fishery resources in the U.S. 3-to-200-mile Exclusive Economic Zone
(EEZ). Among the several hundred

[[Page 61152]]

rulemakings that NOAA plans to issue in the Regulatory Plan year, a
number of the preregulatory and regulatory actions will be significant.
The exact number of such rulemakings is unknown, since they are usually
initiated by the actions of eight regional Fishery Management Councils
(FMCs) that are responsible for preparing fishery management plans
(FMPs) and FMP amendments, and for drafting implementing regulations
for each managed fishery. Once a rulemaking is triggered by an FMC, the
Magnuson-Stevens Act places stringent deadlines upon NMFS by which it
must exercise its rulemaking responsibilities. Most of these
rulemakings will be minor, involving only the opening or closing of a
fishery under an existing FMP. While no one Magnuson-Steven Act
rulemaking is among the Department's most important significant
regulatory actions, and, therefore, none is specifically described
below, the sum of these actions, and a few of the individual actions
themselves, are highly significant.
The Magnuson-Stevens Act, which is the primary legal authority for
Federal regulation to conserve and manage fishery resources,
establishes eight regional FMCs, responsible for preparing FMPs and FMP
amendments. NMFS issues regulations to implement FMPs and FMP
amendments. FMPs address a variety of fishery matters, including
depressed stocks, overfished stocks, gear conflicts, and foreign
fishing. One of the problems that FMPs may address is preventing
overcapitalization (preventing excess fishing capacity) of fisheries.
This may be resolved by limiting access to those dependent on the
fishery in the past and/or by allocating the resource through
individual transferable quotas, which can be sold on the open market to
other participants or those wishing access. Quotas set on sound
scientific information, whether as a total fishing limit for a species
in a fishery or as a share assigned to each vessel participant, enable
stressed stocks to rebuild. Other measures include staggering fishing
seasons or limiting gear types to avoid gear conflicts on the fishing
grounds, and establishing seasonal and area closures to protect fishery
stocks.
The FMCs provide a forum for public debate and, using the best
scientific information available, make the judgments needed to
determine optimum yield on a fishery-by-fishery basis. Optional
management measures are examined and selected in accordance with the
national standards set forth in the Magnuson-Stevens Act. This process,
including the selection of the preferred management measures,
constitutes the development, in simplified form, of an FMP. The FMP,
together with draft implementing regulations and supporting
documentation, is submitted to NMFS for review against the national
standards set forth in the Magnuson-Stevens Act, in other provisions of
the Act, and other applicable laws. The same process applies to
amending an existing approved FMP.
The Magnuson-Stevens Act contains ten national standards against which
fishery management measures are judged. NMFS has supplemented the
standards with guidelines interpreting each standard, and has updated
and added to those guidelines. One of the national standards requires
that management measures, where practicable, minimize costs and avoid
unnecessary duplication. Under the guidelines, NMFS will not approve
management measures submitted by an FMC unless the fishery is in need
of management. Together, the standards and the guidelines correspond to
many of the Administration's principles of regulation as set forth in
section 1(b) of Executive Order 12866. One of the national standards
establishes a qualitative equivalent to the Executive Order's ``net
benefits'' requirement--one of the focuses of the Administration's
statement of regulatory philosophy as stated in section 1(a) of the
Order.
Bureau of Export Administration
The Bureau of Export Administration (BXA) promotes U.S. national and
economic security and foreign policy interests by managing and
enforcing the Department's security-related trade and competitiveness
programs. BXA plays a key role in challenging issues involving national
security and nonproliferation, export growth, and high technology. The
Bureau's continuing major challenge is combating the proliferation of
weapons of mass destruction while furthering the growth of U.S.
exports, which are critical to maintaining our leadership in an
increasingly competitive global economy. BXA strives to be the leading
innovator in transforming U.S. strategic trade policy and programs to
adapt to the changing world.
Major Programs and Activities
The Export Administration Regulations (EAR) provide for export
controls on dual use goods and technology (primarily commercial goods
that have potential military applications) not only to fight
proliferation, but also to pursue other national security, short
supply, and foreign policy goals (such as combating terrorism).
Simplifying and updating these controls in light of the end of the Cold
War has been a major accomplishment of BXA.
BXA is also responsible for:
Enforcing the export control and antiboycott provisions of the
Export Administration Act (EAA), as well as other statutes
such as the Fastener Quality Act. The EAA is enforced
through a variety of administrative, civil, and criminal
sanctions.
Analyzing and protecting the defense industrial and technology
base, pursuant to the Defense Production Act and other
laws. As the Defense Department increases its reliance on
dual-use high technology goods as part of its cost-cutting
efforts, ensuring that we remain competitive in those
sectors and sub-sectors is critical to our national
security.
Helping Ukraine, Kazakstan, Belarus, Russia, and other newly
emerging countries develop effective export control
systems. The effectiveness of U.S. export controls can be
severely undercut if ``rogue states'' or terrorists gain
access to sensitive goods and technology from other
supplier countries.
Working with former defense plants in the Newly Independent
States to help make a successful transition to profitable
and peaceful civilian endeavors. This involves helping
remove unnecessary obstacles to trade and investment and
identifying opportunities for joint ventures with U.S.
companies.
Assisting U.S. defense enterprises to meet the challenge of
the reduction in defense spending by converting to civilian
production and by developing export markets. This work
assists in maintaining our defense industrial base as well
as preserving jobs for U.S. workers.
BILLING CODE 3510-BW-S

[[Page 61153]]

DEPARTMENT OF DEFENSE (DOD)

Statement of Regulatory Priorities
Background
The Department of Defense (DoD) is the largest Federal department
consisting of 3 military departments (Army, Navy, and Air Force), 9
unified combatant commands, 15 Defense agencies, and 7 DoD field
activities. It has over 1,370,000 military personnel and 670,000
civilians assigned as of May 31, 2001, and over 500 military
installations and properties in the continental United States, U. S.
territories, and foreign countries. The overall size, composition, and
dispersion of the Department of Defense, coupled with an innovative
regulatory program, presents a challenge to the management of the
Defense regulatory efforts under Executive Order 12866 ``Regulatory
Planning and Review'' of September 30, 1993.
Because of its diversified nature, DoD is impacted by the regulations
issued by regulatory agencies such as the Departments of Energy, Health
and Human Services, Housing and Urban Development, Labor,
Transportation, and the Environmental Protection Agency. In order to
develop the best possible regulations that embody the principles and
objectives embedded in Executive Order 12866, there must be
coordination of proposed regulations among the regulating agencies and
the affected Defense components. Coordinating the proposed regulations
in advance throughout an organization as large as DoD is
straightforward, yet a formidable undertaking.
DoD is not a regulatory agency but occasionally issues regulations
that have an impact on the public. These regulations, while small in
number compared to the regulating agencies, can be significant as
defined in Executive Order 12866. In addition, some of DoD's
regulations may impact the regulatory agencies. DoD, as an integral
part of its program, not only receives coordinating actions from the
regulating agencies, but coordinates with the agencies that are
impacted by its regulations as well.
The regulatory program within DoD fully incorporates the provisions of
the President's priorities and objectives under Executive Order 12866.
Promulgating and implementing the regulatory program throughout DoD
presents a unique challenge to the management of our regulatory
efforts.
Coordination
Interagency⁵⁶ DoD annually receives regulatory plans from those agencies that
impact the operation of the Department through the issuance of
regulations. A system for coordinating the review process is in place,
regulations are reviewed, and comments are forwarded to the Office of
Management and Budget. The system is working in the Department, and the
feedback from the Defense components is most encouraging, since they
are able to see and comment on regulations from the other agencies
before they are required to comply with them. The coordination process
in DoD continues to work as outlined in Executive Order 12866.
Internal⁵⁶ Through regulatory program points of contact in the Department,
we have established a system that provides information from the
Administrator of the Office of Information and Regulatory Affairs
(OIRA) to the personnel responsible for the development and
implementation of DoD regulations. Conversely, the system can provide
feedback from DoD regulatory personnel to the Administrator, OIRA. DoD
continues to refine its internal procedures, and this ongoing effort to
improve coordination and communication practices is well received and
supported within the Department.
Overall Priorities
The Department of Defense needs to function at a reasonable cost,
while ensuring that it does not impose ineffective and unnecessarily
burdensome regulations on the public. The rulemaking process should be
responsive, efficient, cost-effective, and both fair and perceived as
fair. This is being done in the Department while it must react to the
contradictory pressures of providing more services with fewer
resources. The Department of Defense, as a matter of overall priority
for its regulatory program, adheres to the general principles set forth
in Executive Order 12866 as amplified below.
Problem Identification⁵⁶ Congress typically passes legislation to authorize or require an
agency to issue regulations and often is quite specific about the
problem identified for correction. Therefore, DoD does not generally
initiate regulations as a part of its mission.
Conflicting Regulations⁵⁶ Since DoD plans to issue just two significant regulations this
year, the probability of developing conflicting regulations is low.
Conversely, DoD is impacted to a great degree by the regulating
agencies. From that perspective, DoD is in a position to advise the
regulatory agencies of conflicts that appear to exist using the
coordination processes that exist in the DoD and other Federal agency
regulatory programs. It is a priority in the Department to communicate
with other agencies and the affected public to identify and proactively
pursue regulatory problems that occur as a result of conflicting
regulations both within and outside the Department.
Alternatives⁵⁶ DoD will identify feasible alternatives that will obtain the
desired regulatory objectives. Where possible, the Department
encourages the use of incentives to include financial, quality of life,
and others to achieve the desired regulatory results.
Risk Assessment⁵⁶ Assessing and managing risk is a high priority in the DoD
regulatory program. The Department is committed to risk prioritization
and an ``anticipatory'' approach to regulatory planning, which focuses
attention on the identification of future risk. Predicting future
regulatory risk is exceedingly difficult due to rapid introduction of
new technologies, side effects of Government intervention, and changing
societal concerns. These difficulties can be mitigated to a manageable
degree through the incorporation of risk prioritization and
anticipatory regulatory planning into DoD's decisionmaking process,
which results in an improved regulatory process and increases the
customer's understanding of risk.
Cost-Effectiveness⁵⁶ One of the highest priority objectives of DoD is to obtain the
desired regulatory objective by the most cost-effective method
available. This may or may not be through the regulatory process. When
a regulation is required, DoD considers incentives for innovation to
achieve desired results, consistency in the application of the
regulation, predictability of the activity outcome (achieving the
expected results), and the costs for regulation development,
enforcement, and compliance. These will include costs to the public,
Government, and regulated entities, using the best available data or
parametric analysis methods, in the

[[Page 61154]]

cost-benefit analysis and the decisionmaking process.
Cost-Benefit⁵⁶ Conducting cost-benefit analyses on regulation alternatives is a
priority in the Department of Defense so as to ensure that the
potential benefits to society outweigh the costs. Evaluations of these
alternatives are done quantitatively or qualitatively or both,
depending on the nature of the problem being solved and the type of
information and data available on the subject. DoD is committed to
considering the most important alternative approaches to the problem
being solved and providing the reasoning for selecting the proposed
regulatory change over the other alternatives.
Information-Based Decisions⁵⁶ The Defense Department uses the latest technology to provide
access to the most current technical, scientific, and demographic
information in a timely manner through the world-wide communications
capabilities that are available on the Internet. Realizing that
increased public participation in the rulemaking process improves the
quality and acceptability of regulations, DoD is committed to exploring
the use of Information Technology (IT) in rule development and
implementation. IT provides the public with easier and more meaningful
access to the processing of regulations. Furthermore, the Department
endeavors to increase the use of automation in the Notice and Comment
rulemaking process in an effort to reduce time pressures in the
regulatory process.
Performance-Based Regulations⁵⁶ Where appropriate, DoD is incorporating performance-based
standards that allow the regulated parties to achieve the regulatory
objective in the most cost-effective manner.
Outreach Initiatives⁵⁶ DoD endeavors to obtain the views of appropriate State, local,
and tribal officials and the public in implementing measures to enhance
public awareness and participation both in developing and implementing
regulatory efforts. Historically, this has included such activities as
receiving comments from the public, holding hearings, and conducting
focus groups. This reaching out to organizations and individuals that
are affected by or involved in a particular regulatory action remains a
significant regulatory priority of the Department and, we feel, results
in much better regulations.
The Department is actively engaged in addressing the requirements of
the Government Paperwork Elimination Act (GPEA) in implementing
electronic government and in achieving IT accessibility for individuals
with disabilities. One of the Department's regulatory priorities,
specifically Defense Acquisition, will, as a goal, establish
acquisition policy on electronic and IT accessibility.
Coordination⁵⁶ DoD has enthusiastically embraced the coordination process
between and among other Federal agencies in the development of new and
revised regulations. Annually, DoD receives regulatory plans from key
regulatory agencies and has established a systematic approach to
providing the plans to the appropriate policy officials within the
Department. Feedback from the DoD components indicates that this
communication among the Federal agencies is a major step forward in
improving regulations and the regulatory process, as well as in
improving Government operations.
Minimize Burden⁵⁶ In the regulatory process, there are more complaints concerning
burden than anything else. In DoD, much of the burden is in the
acquisition area. Over the years, acquisition regulations have grown
and become burdensome principally because of legislative action. But,
in coordination with Congress, the Office of Federal Procurement
Policy, and the public, DoD is initiating significant reforms in
acquisition so as to effect major reductions in the regulatory burden
on personnel in Government and the private sector. DoD has implemented
a multi-year strategy for reducing the paperwork burden imposed on the
public. This plan shows that DoD has met and will exceed the goals set
forth in the Paperwork Reduction Act. It is the goal of the Department
of Defense to impose upon the public the smallest burden viable, as
infrequently as possible, and for no longer than absolutely necessary.
Plain Language⁵⁶ Ensuring that regulations are simple and easy to understand is a
high regulatory priority in the Department of Defense. All too often,
the regulations are complicated, difficult to understand, and subject
to misinterpretation, all of which can result in the costly process of
litigation. The objective in the development of regulations is to write
them in clear, concise language that is simple and easy to understand.
DoD recognizes that it has a responsibility for drafting clearly
written rules that are reader-oriented and easily understood. Rules
will be written for the customer using natural expressions and simple
words. Stilted jargon and complex construction will be avoided. Clearly
written rules will tell our customers what to do and how to do it. DoD
is committed to a more customer-oriented approach and uses plain
language rules thereby improving compliance and reducing litigation.
In summary, the rulemaking process in DoD should produce a rule that
addresses an identifiable problem, implements the law, incorporates the
President's policies defined in Executive Order 12866, is in the public
interest, is consistent with other rules and policies, is based on the
best information available, is rationally justified, is cost-effective,
can actually be implemented, is acceptable and enforceable, is easily
understood, and stays in effect only as long as is necessary. Moreover,
the proposed rule or the elimination of a rule should simply make
sense.
Specific Priorities
For this regulatory plan, there are three specific DoD priorities, all
of which reflect the established regulatory principles. One of these,
``Improve Health Care Delivery in the Defense Department,'' will have
two significant regulatory actions as defined by E.O. 12866. In those
areas where rulemaking or participation in the regulatory process is
required, DoD has studied and developed policy and regulations that
incorporate not only the provisions of the President's priorities and
objectives under the Executive order.
DoD has focused its regulatory resources on the most serious
environmental, health, and safety risks. Perhaps most significant is
that each of the three priorities described below promulgates
regulations to offset the resource impacts of Federal decisions on the
public or to improve the quality of public life, such as those
regulations concerning civil functions of the U.S. Army Corps of
Engineers, acquisition, and improving health care delivery in the
Department of Defense.
U.S. Army Corps of Engineers, Directorate of Civil Works⁵⁶Preserve Quality and Quantity of Wetlands
During Fiscal Year (FY) 2002, the U.S. Army Corps of Engineers is not

[[Page 61155]]

proposing any significant regulations as defined by Executive Order
12866. The Office of the Assistant Secretary of the Army (Civil Works)
and the Corps have completed one regulation.
On May 10, 1999, the Corps issued a Final Rule in the Federal Register
(64 FR 25120) modifying our definition of ``discharge of dredged
material'' in response to the Court of Appeals holding in National
Mining Association v. United States Army Corps of Engineers, 145 F.3rd
1339 (D.C. Cir. 1998) (``NMA'') and to ensure compliance with the
District Court's injunction. That rule made those changes that were
necessary to conform the Corps' regulations to the Court's decision.
The preamble to the Corps' May 10, 1999, rulemaking stated that they
would be undertaking additional notice and comment rulemaking to
further the Clean Water Act's objective to ``restore and maintain the
chemical, physical, and biological integrity of the Nation's waters.''
On April 17, 2001, the Corps published a Final Rule in the Federal
Register (66 FR 10367) amending the Clean Water Act section 404
regulations defining the term ``discharge of dredged material.'' This
action was coordinated with the Office of Management and Budget.
On April 20, 2001, the Corps also proposed revisions to the Clean
Water Act regulatory definitions of ``Fill Material'' and ``Discharge
of Fill Material'' (65 FR 21292). This proposal would revise the
definitions in order to clarify those pollutants that are regulated by
the Corps. The Corps intends to issue a Final Rule in late FY 2001 or
early FY 2002. Development of the rule is being facilitated by the
Office of Management and Budget.
Natural Disaster Procedures
The President's Federal Response Plan, developed through the efforts
of 27 departments and agencies, describes the basic methodology by
which the Federal Government will mobilize resources and conduct
activities to assist States in coping with the consequences of
significant disasters. Within the Plan, the Department of Defense has
designated the U.S. Army Corps of Engineers as the primary agency for
planning, preparedness, and response under the Emergency Support
Function 3, Public Works and Engineering. The purpose of this
Emergency Support Function is to provide lifesaving or life protecting
assistance to augment efforts of the affected State(s) and local
response efforts following a major or catastrophic disaster.
The Corps supports the Nation and other agencies during times of
crisis by providing ``All Hazards Response,'' while maintaining a high
level of preparedness. The Corps is proposing revisions to 33 CFR 203
(Natural Disaster Procedures: Preparedness, Response, and Recovery
Activities of the Corps of Engineers). This revision is necessary to
reflect current policy, add features required by the Water Resources
Development Act of 1996 (Public Law 104-303), and streamline procedures
regarding Corps authority.
Defense Acquisition⁵⁶ The Department continues its efforts to reengineer its
acquisition system to achieve its vision of an acquisition system that
is recognized as being the smartest, most efficient, most responsive
buyer of best value goods and services, which meet the warfighter's
needs from a globally competitive base. To achieve this vision, the
Department will focus in the acquisition regulations arena during this
next year on implementing and institutionalizing initiatives that may
include additional changes to existing and recently modified
regulations to ensure that we are achieving the outcomes we desire
(continuous process improvement).
The Department of Defense is committed to acquisition reform and
continues to make significant improvements in this area, consistent
with Executive Order 12866. DoD continuously reviews its supplement to
the Federal Acquisition Regulation (FAR) and continues to lead
Government efforts to simplify the following acquisition processes:
Rewrite of FAR part 45, Government Property. The primary
objectives of the rewrite are to: Reduce the amount of
Government property in the possession of contractors; rely
to a greater extent on the contractors' own processes and
procedures; eliminate Government reviews; hold the
contractor accountable and liable for property provided for
their use; rely on the Government's own internal records as
the official recordkeeping and reporting mechanism for
compliance with the Chief Financial Officers Act and
related legislation; and make greater use of property
management contracts for long-term storage or use
concurrently on multiple contracts.
Rewrite of FAR part 27, Patents, Data, and Copyrights. The
goals of the FAR part 27 rewrite are to clarify,
streamline, and update guidance and clauses on patents,
data, and copyrights.
Revise policy on profit. The goal of this initiative is to
make changes to DoD profit policy that would reduce and
eventually eliminate emphasis on facilities investment,
increase emphasis on performance risk, and encourage
contractor cost efficiency.
Establish policy on Electronic Commerce in Federal
Procurement. The goal of this initiative is to establish
policies and procedures to employ electronic commerce in
the conduct and administration of the procurement system.
Improve Health Care Delivery in the Defense Department⁵⁶ The Military Health System (MHS) supports the Department of
Defense and our Nation's security by providing health support for the
full range of military deployments and sustaining the health of members
of the Armed Forces, their families, and others to advance our national
security interests. Major goals of the Military Health System emphasize
readiness, wellness and fitness, managed care growth, and integration
of technologies to enable the best possible and most cost beneficial
clinical and management outcomes.
The principal health-related regulatory publications of the Department
involve CHAMPUS, the Civilian Health and Medical Program of the
Uniformed Services (32 CFR part 199). CHAMPUS regulations
comprehensively address such issues as eligibility, benefits,
authorized providers, claims payment, appeals procedures, and similar
topics. Amendments to the CHAMPUS regulations generally focus on
program changes arising from revisions to the statutory base or from
DoD initiatives to improve the program, such as TRICARE.
During FY 2001, the Department submitted two Interim Final Rules,
affecting the Military Health System, which are categorized as
economically significant, as defined by E.O. 12866. Both are
promulgated to comply with statutory requirements. One action,
``Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS)/TRICARE; Partial Implementation of Pharmacy Benefits Program;
Implementation of National Defense Authorization Act Medical Benefits
for Fiscal Year 2001,'' implements several sections of the Floyd D.
Spence National Defense Authorization Act. Specifically, the rule:
Allows coverage of physical examinations for beneficiaries ages 5

[[Page 61156]]

through 11 that are required in connection with school enrollment;
provides an additional 2-year period for survivors of deceased active-
duty members to remain eligible for TRICARE medical and dental benefits
at active-duty dependent rates; extends eligibility for medical and
dental benefits to Medal of Honor recipients and their immediate
dependents in the same manner as if the recipient were entitled to
retired pay; partially implements the Pharmacy Benefits Program
establishing revised copays and cost-shares for the prescription drug
benefit; and implements the TRICARE Senior Pharmacy Program by
establishing a new eligibility for prescription drug benefits for
Medicare-eligible retirees. Additionally the rule: Allows a waiver of
copayments, cost-shares, and deductibles for all Uniformed Services
TRICARE eligible active duty family members residing with their sponsor
within a TRICARE Prime Remote designated area; provides for the
elimination of TRICARE Prime copayments for active duty family members
enrolled in TRICARE Prime; provides for the reimbursement of reasonable
travel expenses for TRICARE Prime beneficiaries referred by a primary
care provider; and reduces the maximum amount which retirees, their
family members, and survivors would be liable.
The other significant action, ``TRICARE; Civilian Health and Medical
Program of the Uniformed Services (CHAMPUS); Eligibility and Payment
Procedures for CHAMPUS Beneficiaries Age 65 and Over,'' implements
section 712 of the National Defense Authorization Act for Fiscal Year
2001. Section 712 extends TRICARE eligibility to persons age 65 and
over who would otherwise have lost their TRICARE eligibility due to
attainment of entitlement to hospital insurance benefits under Part A
of Medicare. In order for these individuals to retain their TRICARE
eligibility, they must be enrolled in the supplementary medical
insurance program under part B of Medicare. In general, in the case of
medical or dental care provided to these individuals for which payment
may be made under both Medicare and TRICARE, Medicare is the primary
payer and TRICARE will normally pay the actual out-of-pocket costs
incurred by the person. This rule prescribes TRICARE payment procedures
and makes revisions to TRICARE rules to accommodate Medicare-eligible
CHAMPUS beneficiaries.
_______________________________________________________________________

DOD

-----------

FINAL RULE STAGE

-----------

17. CHAMPUS/TRICARE; PARTIAL IMPLEMENTATION OF PHARMACY
BENEFITS PROGRAM; IMPLEMENTATION OF NATIONAL DEFENSE AUTHORIZATION ACT
MEDICAL BENEFITS FOR FISCAL YEAR 2001
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

10 USC 55; 5 USC 301

CFR Citation:

32 CFR 199

Legal Deadline:

Final, Statutory, April 1, 2001, Implements Public Law 106-398.

Provisions of act effective October 30, 2000, or 180 days thereafter.

Abstract:

This rule implements several sections of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001. The rule allows
coverage of physical examinations for beneficiaries ages 5 through 11
that are required in connection with school enrollment; provides an
additional 2-year period for survivors of deceased active-duty members
to remain eligible for TRICARE medical and dental benefits at active-
duty dependent rates; extends eligibility for medical and dental
benefits to Medal of Honor recipients and their immediate dependents in
the same manner as if the recipient were entitled to retired pay;
partially implements the Pharmacy Benefits Program establishing revised
copays and cost-shares for the prescription drug benefit; implements
the TRICARE Senior Pharmacy Program by establishing a new eligibility
for prescription drug benefits for Medicare-eligible retirees; allows a
waiver of copayments, cost-shares, and deductibles for all Uniformed
Services TRICARE eligible active duty family members residing with
their TRICARE Prime Remote eligible Active Duty Service Member Sponsor
within a TRICARE Prime Remote designated area until implementation of
the TRICARE Prime Remote for Family Member Program or October 30, 2001,
whichever is later; provides for the elimination of TRICARE Prime
copayments for active-duty family members enrolled in TRICARE Prime;
provides for the reimbursement of reasonable travel expenses for
TRICARE Prime beneficiaries referred by a primary care provider to a
specialty care provider who provides services over 100 miles away; and
reduces the maximum amount which retirees, their family members, and
survivors would be liable from $7,500 to $3,000. The Department is
publishing this rule as an interim final rule in order to meet
statutorily required effective dates.

Statement of Need:

The rule implements requirements of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001. In addition, because of
the effect on the overall pharmacy program of the new statutorily
required TRICARE Senior Pharmacy Program and the change in TRICARE
Prime active duty dependent copayments, this rule also partially
implements the Pharmacy Benefits Program.

Summary of Legal Basis:

The rule implements provisions of the Floyd D. Spence National Defense
Authorization Act for Fiscal Year 2001 that were effective upon the
date of enactment or a date within 180 days thereafter. Specifically,
the rule implements the following sections of the Act:

Section 703, school required physicals, which was effective on the date
of enactment;

Section 704, 2-year extension of benefits for survivors, which was
effective on the date of enactment;

Section 706, benefits for Medal of Honor recipients, which was
effective on the date of enactment;

Section 711, TRICARE Senior Pharmacy Program, which was effective April
1, 2001;

Section 722, that portion of TRICARE Prime Remote for Family Members
that was effective on the date of enactment;

Section 752, elimination of copayments for active-duty dependents in
TRICARE Prime, which the statute requires be implemented within 180
days;

Section 758, reimbursement of certain travel expenses for TRICARE Prime
beneficiaries, which was effective on the date of enactment; and

Section 759, reduction of retiree catastrophic cap, which was effective
on the date of enactment.

[[Page 61157]]

Alternatives:

The rule implements statutorily required provisions to expand TRICARE
benefits. No other alternatives are applicable.

Anticipated Cost and Benefits:

For FY02, it is anticipated that costs for the programs covered by this
rule will be about $900 million. Provides for coverage of physical
examinations in connection with school enrollment; extends eligibility
for medical and dental benefits; partially implements the Pharmacy
Benefits Program; allows a waiver of copayments, cost-shares, and
deductibles for members within a TRICARE Prime Remote designated area;
provides for the elimination of TRICARE Prime copayments; provides for
the reimbursement of reasonable travel expenses; and reduces the
maximum amount which retirees, their family members, and survivors
would be liable from $7,500 to $3,000.

Risks:

The rule implements statutorily required provisions to expand TRICARE
benefits. No risk to the public is applicable.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Interim Final Ru66 FR 9651 02/09/01
Interim Final Ru66 FR 16400ion 03/26/01
Interim Final Ru66 FR 10367in Effective Date 04/01/01
Interim Final Ru66 FR 9651 Period End 04/10/01
Interim Final Rule Effective 04/10/01
Final Action 12/00/01
Final Action Effective 01/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal

Agency Contact:
Tariq Shahid
Department of Defense
Office of Assistant Secretary for Health Affairs
Phone: 303 676-3801
RIN: 0720-AA62
_______________________________________________________________________

DOD

18. TRICARE; CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE
UNIFORMED SERVICES (CHAMPUS); ELIGIBILITY AND PAYMENT PROCEDURES FOR
CHAMPUS BENEFICIARIES AGE 65 AND OVER
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

10 USC 55; 5 USC 301

CFR Citation:

32 CFR 199

Legal Deadline:

Final, Statutory, October 1, 2001, Implements section 712 of FY 2001
NDAA.

Abstract:

This rule implements section 712 of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001. Section 712 extends
TRICARE eligibility to persons age 65 and over who would otherwise have
lost their TRICARE eligibility due to attainment of entitlement to
hospital insurance benefits under Part A of Medicare. In order for
these individuals to retain their TRICARE eligibility, they must be
enrolled in the supplementary medical insurance program under Part B of
Medicare. In general, in the case of medical or dental care provided to
these individuals for which payment may be made under both Medicare and
TRICARE, Medicare is the primary payer and TRICARE will normally pay
the actual out-of-pocket costs incurred by the person. This rule
prescribes TRICARE payment procedures and makes revisions to TRICARE
rules to accommodate Medicare-eligible CHAMPUS beneficiaries. The
Department is publishing this rule as an interim final rule in order to
meet the statutorily required effective date.

Statement of Need:

This rule is necessary to comply with the statutory requirement. It
implements procedures which help to ensure that military retirees do
not incur substantial out-of-pocket expenses for necessary health care.

Summary of Legal Basis:

This rule is required by section 712 of the Floyd D. Spence National
Defense Authorization Act for Fiscal Year 2001 (Pub. L. 106-398), as
codified at section 1086(d) of title 10, United States Code.

Alternatives:

The rule implements statutorily required provisions to expand TRICARE
benefits. No other alternatives are applicable.

Anticipated Cost and Benefits:

The provisions of this rule will affect an estimated 1.5 million
beneficiaries. In most cases, these beneficiaries will have no out-of-
pocket expenses for health care. For FY01 we expect to incur about $90
million in start-up costs, and we estimate FY02 health care and
administration costs will be about $3 billion.

Risks:

The provisions of this rule will ensure that beneficiaries have a
seamless coordination of benefits between two Federal entitlement
programs. This coordination will minimize the risk of any personal
liability or out-of-pocket costs on the part of the beneficiary when
the service or supply is payable under both plans.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Interim Final Ru66 FR 40601 08/03/01
Interim Final Rule Effective 10/01/01
Interim Final Rule Comment Period End 10/02/01
Final Action 12/00/01
Final Action Effective 01/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal

Agency Contact:
Stephen Isaacson
Department of Defense
Office of Assistant Secretary for Health Affairs
Phone: 303 676-3572
Email: [email protected]
RIN: 0720-AA66
BILLING CODE 5001-10-S

[[Page 61158]]

DEPARTMENT OF EDUCATION (ED)

Statement of Regulatory and Deregulatory Priorities
General
We support States, local communities, institutions of higher
education, and others to improve education nationwide. Our roles
include providing leadership and financial assistance for education to
agencies, institutions, and individuals in situations in which there is
a national interest; monitoring and enforcing Federal civil rights laws
in programs and activities that receive Federal financial assistance;
and supporting research, evaluation, and dissemination of findings to
improve the quality of education.
To connect our customers to a ``one-stop-shopping'' center for
information about our programs and initiatives, we instituted 1-800-
USA-LEARN (1-800-872-5327). We also set up 1-800-4FED-AID (1-800-433-
3243) for information on student aid; and we provide an on-line library
of information on education legislation, research, statistics, and
promising programs at the following Internet address:
http://www.ed.gov
More than 660,000 people take advantage of these resources every week.
We have forged effective partnerships with customers and others to
develop policies, regulations, guidance, technical assistance, and
approaches to compliance. We have a record of successful communication
and shared policy development with affected persons and groups,
including parents, students, educators, representatives of State and
local governments, neighborhood groups, schools, colleges, special
education and rehabilitation service providers, professional
associations, advocacy organizations, business, and labor.
In particular, we continue to seek greater and more useful customer
participation in our rulemaking activities through the use of
consensual rulemaking and new technology. If we determine that the
development of regulations is absolutely necessary, we seek customer
participation at all stages--in advance of formal rulemaking, during
rulemaking, and after rulemaking is completed in anticipation of
further improvements through statutory or regulatory changes. We have
expanded our outreach efforts through the use of satellite broadcasts,
electronic bulletin boards, and teleconferencing. For example, we
invite comments on all proposed regulations through the Internet.
We are streamlining information collections, reducing burden on
information providers involved in our programs, and making information
maintained by us easily available to the public. We are looking into
coordinating similar information collections across programs as one
possible approach to reduce overlapping or inconsistent paperwork
requirements. To the extent permitted by statute, we'll revise
regulations to eliminate barriers that inhibit coordination across
programs (such as by creating common definitions). This should help
reduce the frequency of reports and eliminate unnecessary data
requirements.
Recently, we have piloted two new Internet-based software
applications, e-Application and e-Reports. These enable applicants,
grantees, and grant teams to process applications and file performance
reports online. We have received positive feedback from participants in
the pilot programs. Our goal over time is to encourage applicants and
grantees to make electronic commerce, or the process of conducting
business over the Internet, their preferred method of doing business.
New Initiatives⁵⁶ The Secretary's initiatives include No Such Thing as a Vacation
from Reading, our campaign to encourage families to read together
during the summer to help school-aged children develop and strengthen
reading skills and prevent summer fall-off. The Secretary has designed
this initiative to counter the documented loss of reading skills that
can take place when children do not practice through the extended
vacation from school. No Such Thing as a Vacation from Reading is
supported by our Partnership for Family Involvement in Education, which
we initially formed to involve businesses, community organizations,
faith-based organizations, foundations, schools, and other groups in
building and supporting strong relationships between children and
adults.
Also, at the National Summit on the 21st Century Workforce, the
Secretary announced a partnership between our Department and the
Department of Labor to enhance the quality of basic skills training in
reading and math offered to young adults and adults through workforce
training programs.
One of the Secretary's first initiatives, the management improvement
initiative, has resulted in actions to address and close more than 300
audit and management recommendations. This initiative focuses on
strengthening financial management, addressing audit deficiencies,
modernizing student aid delivery and management, and reducing student
loan default costs to taxpayers. In addition to recovering $65 million
in student loan default costs through the use of a new data base, we
have recovered almost $350 million in Department funds previously
called into question by our Inspector General.
Principles for Regulating ⁵⁶ Our Principles for Regulating determine when and how we will
regulate. Through aggressive application of the following principles,
we have eliminated outdated or unnecessary regulations and identified
situations in which major programs could be implemented without any
regulations or with only limited regulations:
We will regulate only if regulating improves the quality and equality
of services to our customers, learners of all ages. We will regulate
only if absolutely necessary and then in the most flexible, most
equitable, and least burdensome way possible.
Whether to Regulate:
When essential to promote quality and equality of opportunity
in education.
When a demonstrated problem cannot be resolved without
regulation.
When necessary to provide legally binding interpretation to
resolve ambiguity.
Not if entities or situations to be regulated are so diverse
that a uniform approach does more harm than good.
How to regulate:
Regulate no more than necessary.
Minimize burden and promote multiple approaches to meeting
statutory requirements.
Encourage federally funded activities to be integrated with
State and local reform activities.
Ensure that benefits justify costs of regulation.
Establish performance objectives rather than specify
compliance behavior.
Encourage flexibility so institutional forces and incentives
achieve desired results.

[[Page 61159]]

Regulatory and Deregulatory Priorities for the Next Year
Making No Child Left Behind a Reality⁵⁶ Reauthorization of the Elementary and Secondary Education Act of
1965 will reflect President Bush's No Child Left Behind plan for
reforming our public schools. Our priorities include amending existing
regulations in 34 CFR chapter II (Office of Elementary and Secondary
Education) to make the No Child Left Behind plan a reality and to
implement various changes in statutes as they are enacted.
_______________________________________________________________________

-----------

PROPOSED RULE STAGE

-----------

19. REAUTHORIZATION OF THE ELEMENTARY AND SECONDARY EDUCATION ACT OF
1965 (SECTION 610 REVIEW)
Priority:

Other Significant

Legal Authority:

20 USC 6301 to 8962

CFR Citation:

34 CFR 299

Legal Deadline:

None

Abstract:

These regulations would implement changes made by the reauthorization
of the Elementary and Secondary Education Act of 1965. This action is a
notice that ED is reviewing the regulations in 34 CFR chapter II under
section 610 of the Regulatory Flexibility Act (5 U.S.C. 610). The
purpose of this review is to determine if these regulations should be
continued without change, or should be amended or rescinded, to
minimize any significant economic impact upon a substantial number of
small entities. We are requesting comment on the continued need for the
regulations; the complexity of the regulations; the extent to which
they overlap, duplicate, or conflict with other Federal, State, or
local government rules; and the degree to which technology, economic
conditions, or other relevant factors have changed since the
regulations were promulgated.

Statement of Need:

These regulations may be necessary to implement new legislation. The
Department is also completing its review of these regulations under
section 610(c) of the Regulatory Flexibility Act. In developing any
regulations, the Department will seek to reduce regulatory burden and
increase flexibility to the maximum extent possible.

Summary of Legal Basis:

Anticipated legislation.

Alternatives:

In addition to implementing new legislation, the purpose of reviewing
these regulations is to determine whether there are appropriate
alternatives.

Anticipated Cost and Benefits:

Existing regulatory provisions may be eliminated or improved as a
result of this review.

Risks:

These regulations would not address a risk to public health, safety, or
the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 05/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Government Levels Affected:

Undetermined

Agency Contact:
William A. Wooten
Office of the Assistant Secretary
Department of Education
Office of Elementary and Secondary Education
Room 3W308
400 Maryland Avenue SW
Washington, DC 20202-6123
Phone: 202 260-1922
RIN: 1810-AA91
BILLING CODE 4000-01-S

[[Page 61160]]

DEPARTMENT OF ENERGY (DOE)

Statement of Regulatory and Deregulatory Priorities
The Department makes vital contributions to the Nation's welfare
through its extraordinary scientific and technical capabilities in
energy research, environmental remediation, and national security. The
Department's mission is to:
Foster a secure and reliable energy system that is
environmentally and economically sustainable;
Provide responsible stewardship of the Nation's nuclear
weapons;
Clean up the Department's facilities;
Lead in the physical sciences and advance the biological,
environmental and computational sciences; and,
Provide premiere instruments of science for the Nation's
research enterprise.
The Department of Energy's regulatory plan reflects the Department's
continuing commitment to enhance safety, cut costs, reduce regulatory
burden, and increase responsiveness to the public. While not primarily
a major Federal regulatory agency, the Department's regulatory
activities are essential to achieving its critical mission and to
implementing major initiatives in the President's National Energy Plan.
Energy Efficiency Program for Consumer Products and Commercial
Equipment
The Department's rulemaking activities, related to energy efficiency
standards and determinations, have been categorized as high, medium, or
low priority. These priorities were established with significant input
from the public and are reflected in the rulemaking schedules set forth
in The Regulatory Plan and the Unified Agenda of Federal Regulatory and
Deregulatory Actions.
During the past year, the Department published final rules that
revised existing energy efficiency standards for clothes washers and
for residential water heaters. It is estimated that the revised
standards will reduce energy consumption by an amount equivalent to 1.7
billion barrels of oil over the next 27 years. Once fully implemented,
the revised standards also will reduce annual greenhouse gas emissions
by an amount equal to that produced by 7.8 million cars and conserve
enough water to meet the annual needs of 6.6 million households. The
Department also published a final rule that set efficiency standards
for certain types of commercial equipment that fall under the scope of
the American Society for Heating, Refrigerating, and Air Conditioning
Engineers (ASHRAE) Standard 90.1.
During the coming year, the Department expects to publish a final rule
that would establish new energy efficiency standards for residential
central air conditioners and heat pumps. The Department will also begin
action to revise the existing statutory standards for residential
furnaces, boilers and mobile home furnaces, for electric distribution
transformers, and for commercial central air conditioners and heat
pumps rated 65-240 kBtu's/hr. Additional information and timetables for
these high priority actions can be found below.
The Department also expects to publish in the coming months final
rules concerning test procedures for dishwashers, residential central
air conditioners and heat pumps, electric distribution transformers,
commercial warm air furnaces and air conditioning equipment, package
boilers, and commercial water heaters. Information and timetables
concerning these actions, other medium and low priority standards
rulemakings, and other test procedures can be found in the Department's
regulatory agenda, which appears elsewhere in this issue of the Federal
Register.
Nuclear Safety Regulations
The Department is committed to openness and public participation as it
addresses one of its greatest challenges--managing the environment,
health, and safety risks posed by its nuclear activities. A key element
in the management of these risks is to establish the Department's
expectations and requirements relative to nuclear safety and to hold
its contractors accountable for safety performance. The 1988 Price-
Anderson Amendments Act revisions to the Atomic Energy Act of 1954
(AEA) provide for the imposition of civil and criminal penalties for
violations of DOE nuclear safety requirements. As a result, new nuclear
safety requirements were initiated with the publication of four notices
of proposed rulemaking for review and comment in 1991. The Department's
nuclear safety procedural regulations (10 CFR part 820) were published
as a final rule in 1993. The Department's substantive nuclear safety
requirements (10 CFR parts 830 and 835) were finalized in 2001 and
1998, respectively. The remaining action, 10 CFR part 834, Radiation
Protection and the Environment, is scheduled for publication by the end
of fiscal year 2002.
_______________________________________________________________________

DOE--Energy Efficiency and Renewable Energy (EE)

-----------

PRERULE STAGE

-----------

20. ENERGY EFFICIENCY STANDARDS FOR RESIDENTIAL FURNACES, BOILERS, AND
MOBILE HOME FURNACES
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

42 USC 6295

CFR Citation:

10 CFR 430

Legal Deadline:

Final, Statutory, January 1, 1994.

Abstract:

The Energy Policy and Conservation Act, as amended, establishes initial
energy efficiency standard levels for most types of major residential
appliances and generally requires DOE to undergo two subsequent
rulemakings, at specified times, to determine whether the extant
standard for a covered product should be amended.

This is the initial review of the statutory standards for furnaces,
boilers and mobile home furnaces.

Statement of Need:

This rulemaking is required by statute. Experience has shown that the
choice of residential appliances and commercial equipment being
purchased by both builders and building owners is generally based on
the initial cost rather than on life-cycle costs. Thus, the law
requires minimum energy efficiency standards for appliances to
eliminate inefficient appliances and equipment from the market.

Summary of Legal Basis:

The Energy Policy and Conservation Act (EPCA), as amended, establishes
initial energy efficiency standard levels for most types of major
residential

[[Page 61161]]

appliances and certain commercial equipment. The EPCA generally
requires DOE to undergo rulemakings, at specified times, to determine
whether the standard for a covered product should be made more
stringent.

Alternatives:

The statute requires the Department to conduct rulemakings to review
standards and to revise standards to achieve the maximum improvement in
energy efficiency that the Secretary determines is technologically
feasible and economically justified. In making this determination, the
Department conducts a thorough analysis of the alternative standard
levels, including the existing standard, based on criteria specified by
statute. The process improvements that were recently announced (61 FR
36974, July 15, 1996) further enhance the analysis of alternatives in
the appliance standards development process. For example, under this
process, the Department will ask stakeholders and private sector
technical experts to review its analyses of the likely impacts, costs
and benefits of alternative standard levels. In addition, the
Department will solicit and consider information on nonregulatory
approaches for encouraging the purchase of energy efficient products.

Anticipated Cost and Benefits:

The specific costs and benefits for these rulemakings have not been
established because the final standard levels have not been determined.
Nevertheless, existing appliance standards are projected to save 23
quadrillion Btu's from 1993 to 2015, resulting in estimated consumer
savings of $1.7 billion per year in 2000 and estimated annual emission
reductions of 107 million tons of carbon dioxide and 280 thousand tons
of nitrogen oxides in that year. Under the existing standards, the
discounted energy savings for consumers are 2.5 times greater than the
up-front price premium paid for the appliance.

Risks:

Without appliance standards, energy use will continue to increase with
resulting damage to the environment caused by atmospheric emissions.
Enhancing appliance energy efficiency reduces atmospheric emissions
such as CO2 and NOx. Establishing standards that are too stringent
could result in excessive increases in the cost of the product,
possible reductions in product utility and may place an undue burden on
manufacturers that could result in loss of jobs or other adverse
economic impacts

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 58 FR 47326 09/08/93
Screening Workshop 07/17/01
Supplemental ANPRM 09/00/02
NPRM 09/00/03
Final Action 09/00/04
Regulatory Flexibility Analysis Required:

Government Levels Affected:

State, Local

Agency Contact:
Cyrus Nasseri, EE-41
Program Manager, Office of Building Research and Standards
Department of Energy
Energy Efficiency and Renewable Energy
1000 Independence Avenue SW.
Washington, DC 20585
Phone: 202 586-9138
Email: [email protected]
RIN: 1904-AA78
_______________________________________________________________________

DOE--EE

21. ENERGY EFFICIENCY STANDARDS FOR ELECTRIC DISTRIBUTION
TRANSFORMERS
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

42 USC 6317

CFR Citation:

10 CFR 430

Legal Deadline:

None

Abstract:

The Energy Policy and Conservation Act, as amended, (EPCA) establishes
initial energy efficiency standard levels for most types of major
residential appliances and certain types of commercial equipment. The
EPCA generally requires DOE to undergo two subsequent rulemakings, at
specified times, to determine whether the current standard for a
covered product should be amended.

This is the initial review of the statutory standards for electric
distribution transformers

Statement of Need:

This rulemaking is required by statute. Experience has shown that the
choice of residential appliances and commercial equipment being
purchased by both builders and building owners is generally based on
the initial cost rather than on life-cycle cost. Thus, the law requires
minimum energy efficiency standards for appliances to eliminate
inefficient appliances and equipment from the market.

Summary of Legal Basis:

EPCA establishes initial energy efficiency standard levels for most
types of major residential appliances and certain types of commercial
equipment and generally requires DOE to undergo rulemakings, at
specified times, to determine whether the standard for a covered
product should be made more stringent.

Alternatives:

The statute requires DOE to conduct rulemakings to review standards and
to revise standards to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. In making this determination, the
Department conducts a thorough analysis of alternative standard levels,
including the existing standard, based on criteria specified by
statute. The process improvements that were recently announced (61 FR
36974, July 15, 1996) further enhance the analysis of alternative
standards. For example, DOE will ask stakeholders and private sector
technical experts to review its analyses of the likely impacts, costs,
and benefits of alternative standard levels. In addition, the
Department will solicit and consider information on nonregulatory
approaches for encouraging the purchase of energy efficient products.

Anticipated Cost and Benefits:

The specific costs and benefits for these rulemakings have not been
established because the final standard levels have not been determined.
Nevertheless, existing appliance standards are projected to save 23
quadrillion Btu's of energy from 1993 to 2015, resulting in estimated
consumer savings of $1.7 billion per year in the year 2000 and
estimated annual emission reductions of 107 million tons of carbon
dioxide and 280 thousand tons of nitrogen oxides in the year 2000.
Under the existing standards, the discounted energy savings for
consumers are 2.5

[[Page 61162]]

times greater than the up-front price premium paid for the appliance.

Risks:

Without appliance efficiency standards, energy use will continue to
increase with resulting damage to the environment caused by atmospheric
emissions. Enhancing appliance energy efficiency reduces atmospheric
emissions of carbon dioxide and nitrogen oxides. Establishing standards
that are too stringent could result in excessive increases in the cost
of the product, possible reductions in product utility and may place an
undue burden on manufacturers that could result in a loss of jobs or
other adverse economic impacts.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Determination No62 FR 54809 10/22/97
ANPRM 09/00/02
NPRM 09/00/03
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

None

Agency Contact:
Antonio Bouza
Department of Energy
Energy Efficiency and Renewable Energy
1000 Independence Avenue SW.
Washington, DC 20676
Phone: 202 586-4563
Email: [email protected]
RIN: 1904-AB08
_______________________________________________________________________

DOE--EE

22. ENERGY EFFICIENCY STANDARDS FOR COMMERCIAL CENTRAL AIR
CONDITIONING UNITS AND HEAT PUMPS RATED 65-240 KBTU'S/HR
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

42 USC 6293

CFR Citation:

10 CFR 431

Legal Deadline:

None

Abstract:

This is the initial review of the statutory standards for these
products.

Statement of Need:

These rulemakings are required by statute. Experience has shown that
the choice of residential appliances and commercial equipment being
purchased by both builders and building owners is generally based on
the initial cost rather than on life-cycle cost. Thus, the law requires
minimum energy efficiency standards for appliances to eliminate
inefficient appliances and equipment from the market.

Summary of Legal Basis:

Alternatives:

Anticipated Cost and Benefits:

The specific costs and benefits for this rulemaking has not been
established because the final standard levels have not been determined.

Risks:

Without energy efficiency standards, energy use will continue to
increase with resulting damage to the environment caused by atmospheric
emissions. Enhancing energy efficiency reduces atmospheric emissions of
carbon dioxide and nitrogen oxides. Establishing standards that are too
stringent could result in excessive increases in the cost of the
product, possible reductions in product utility and may place an undue
burden on manufacturers that could result in a loss of jobs or other
adverse economic impacts.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Screening Workshop 09/12/01
ANPRM 09/00/02
NPRM 12/00/03
Final Action 12/00/04
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

None

Agency Contact:
Bryan Berringer, EE-41
Office of Building Research and Standards
Department of Energy
Energy Efficiency and Renewable Energy
1000 Independence Avenue SW.
Washington, DC 20585
Phone: 202 586-0371
Fax: 202 586-4617
Email: [email protected]
RIN: 1904-AB09
_______________________________________________________________________

DOE--EE

-----------

FINAL RULE STAGE

-----------

23. ENERGY EFFICIENCY STANDARDS FOR CENTRAL AIR CONDITIONERS AND HEAT
PUMPS
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

[[Page 61163]]

Legal Authority:

42 USC 6295

CFR Citation:

10 CFR 430.32

Legal Deadline:

Final, Statutory, January 1, 1994.

Abstract:

The Energy Policy and Conservation Act, as amended, establishes initial
energy-efficiency standard levels for most types of major residential
appliances and generally requires DOE to undergo two subsequent
rulemakings, at specified times, to determine whether the extant
standard for a covered product should be amended.

This is the initial review of the statutory standards for central air
conditioners and heat pumps.

Statement of Need:

This rulemaking is required by statute. Experience has shown that the
choice of residential appliances and commercial equipment being
purchased by both builders and building owners is generally based on
the initial cost rather than on life-cycle cost. Thus, the law requires
minimum energy efficiency standards for appliances to eliminate
inefficient appliances and equipment from the market.

Summary of Legal Basis:

The Energy Policy and Conservation Act (EPCA), as amended, establishes
initial energy efficiency standard levels for most types of major
residential appliances and certain types of commercial equipment and
generally requires DOE to undergo rulemakings, at specified times, to
determine whether the standard for a covered product should be made
more stringent.

Alternatives:

The statute requires DOE to conduct rulemakings to review standards and
to revise standards to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. In making this determination, the
Department conducts a thorough analysis of alternative standard levels,
including the existing standard, based on criteria specified by
statute. The process improvements that were announced (61 FR 36974,
July 15, 1996) further enhance the analysis of alternative standards.
For example, DOE will ask stakeholders and private sector technical
experts to review its analyses of the likely impacts, costs, and
benefits of alternative standard levels. In addition, the Department
will solicit and consider information on nonregulatory approaches for
encouraging the purchase of energy efficient products.

Anticipated Cost and Benefits:

The proposed energy efficiency standards for central air conditioners
would provide significant energy savings to the Nation. Over a 25-year
period more than 4 quadrillion Btu's of energy would be saved,
equivalent to all the energy consumed by nearly 12 million Americans in
a single year. These energy savings would also significantly reduce the
emissions of air pollutants and greenhouse gases associated with
electricity production by avoiding the emission of 60 million tons of
carbon and 150 thousand tons of nitrogen oxide. Also, the standards
would eliminate the need for the construction of at least 6 new 500-
megawatt power plants.

Risks:

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 58 FR 47326 09/08/93
Screening Workshop 06/30/98
Supplemental ANP64 FR 66305 11/24/99
NPRM 65 FR 59589 10/05/00
Final Rule 66 FR 7170 01/22/01
Supplemental NPR66 FR 38821sal to Withdraw Final Rule 07/25/01
Final Action 02/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

State, Local

Agency Contact:
Michael Raymond, EE-41
Program Manager, Office of Building Research and Standards
Department of Energy
Energy Efficiency and Renewable Energy
1000 Independence Avenue SW.
Washington, DC 20585
Phone: 202 586-9611
Email: [email protected]
RIN: 1904-AA77
_______________________________________________________________________

DOE--Departmental and Others (ENDEP)

-----------

FINAL RULE STAGE

-----------

24. RADIATION PROTECTION OF THE PUBLIC AND THE ENVIRONMENT
Priority:

Other Significant

Legal Authority:

42 USC 2201; 42 USC 7191

CFR Citation:

10 CFR 834

Legal Deadline:

None

Abstract:

This action would add a new 10 CFR 834 to DOE's regulations
establishing a body of rules setting forth the basic requirements for
ensuring radiation protection of the public and environment in
connection with DOE nuclear activities. These requirements stem from
the Department's ongoing effort to strengthen the protection of health,
safety, and the environment from the nuclear and chemical hazards posed
by these DOE activities. Major elements of the proposal included a dose
limitation system for protection of the public; requirements for liquid
discharges; reporting and monitoring requirements; and residual
radioactive material requirements.

Statement of Need:

The purpose of this rule is to ensure that the Department's obligation
to protect health and safety is fulfilled and to provide, if needed, a
basis for the imposition of civil and criminal penalties consistent
with the Price-Anderson Amendments Act of 1988. This action is
consistent with the Department's commitment to the issuance of nuclear
safety requirements using notice and comment rulemaking.

[[Page 61164]]

Summary of Legal Basis:

Under the Atomic Energy Act of 1954, as amended, the Department of
Energy has the authority to regulate activities at facilities under its
jurisdiction. The Department is committed to honoring its obligation to
ensure the health and safety of the public and workers affected by its
operations and the protection of the environs around its facilities.

Alternatives:

The Department could continue to impose nuclear safety requirements
through directives made applicable to DOE contractors through the terms
of their contracts.

Anticipated Cost and Benefits:

The incremental costs of the proposed rules should be minimal because
contractors are currently bound by comparable contractual obligations.
Full compliance by contractors with nuclear safety standards will
result in substantial societal benefits.

Risks:

This rulemaking should reduce the risk of nuclear safety problems by
clarifying safety requirements applicable to DOE contractors and
improving compliance.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 58 FR 16268 03/25/93
Second NPRM 60 FR 45381 08/31/95
Final Action 09/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

Federal

Agency Contact:
Andrew Wallo III
Director, Air, Water and Radiation Division
Department of Energy
Office of Environmental Guidance
1000 Independence Avenue SW.
Washington, DC 20585
Phone: 202 586-4996
RIN: 1901-AA38
BILLING CODE 6450-01-S

[[Page 61165]]

DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS)
When it comes to serving the American people, the status quo just isn't
good enough. That's why, when it comes to regulations, we need to move
aggressively to streamline, revise and, where necessary, to cut those
rules that keep us from fulfilling our most fundamental mission --
enhancing the health and quality of life for every American.

Tommy G. Thompson

Statement of Regulatory Priorities
The Department of Health and Human Services (HHS) is responsible for a
vast array of programs designed to protect and promote the health and
the social and economic well being of the American public. These
programs affect some of the Nation's most vulnerable populations,
including children, the elderly and persons with disabilities. In one
way or another, HHS programs and activities touch the lives of
virtually every person in our country, citizens and non-citizens alike.
HHS' programs and activities include: Medicare, Medicaid, the State
Children's Health Insurance Program (SCHIP), support for biomedical
research, substance abuse and mental health treatment, assuring food
safety, assuring safe and effective drugs and other medical products,
financial assistance to low income families, Head Start, services to
older Americans and direct health services delivery. These programs and
activities are essential to the well-being of millions of Americans
across our country--people of every age, in every location and in every
walk of life.
To improve the administration and conduct of these programs and
activities, Secretary Thompson has made it clear that the Department
must operate under a culture of responsiveness, where listening and
responding to those we serve--State, Local and Tribal governments, our
business partners and stakeholders--is our cornerstone. For example,
Secretary Thompson has launched a nationwide series of community
listening sessions to give voice to persons receiving benefits from the
Temporary Assistance for Needy Families (TANF) program. This will help
HHS better meet the needs of those on the downside of advantage as they
work to become productive members of our society, and to prepare for
major policy discussions about TANF reauthorization that will occur
this fiscal year.
In the same way, we will hold listening sessions to provide
individuals across the country with an opportunity to offer personal
input concerning their health needs, their problems with the existing
system and their ideas for how to make the delivery of health care
simpler, better and more efficient. From health care to child welfare
to food safety, the Secretary is committed to widening communication
between consumers, beneficiaries and Federal administrators.
Given the size and scope of the Department's responsibilities,
effective program regulations are critical. Yet too often, excessive
regulation can be more of a hindrance than a help. Programs become
caught in a web of mandates, rules and paperwork. And those the
programs were intended to serve fail to receive the help they need.
Regulations do not exist for their own sake. They exist to help
implement good policies. If they deter that implementation, they have
to change--or be eliminated altogether.
Earlier this year, Secretary Thompson announced an initiative to
reduce regulatory burdens. A major part of his initiative is to
encourage a more rapid response to those affected by HHS rules and to
listen to their concerns more closely. Consequently, the Department is
establishing the Secretary's Advisory Committee on Regulatory Reform to
provide recommendations regarding potential regulatory changes.
These changes will enable HHS programs to reduce burdens and costs
associated with Departmental regulations, while at the same time
maintaining or enhancing the effectiveness, efficiency, impact and
accessibility of HHS programs. Over the next year, the Advisory
Committee will hold public hearings, listen to public concerns and make
recommendations for beneficial changes in four broad areas: health care
delivery; health systems operations; biomedical and health research,
and the development of pharmaceuticals and other medical products.
While the Department will strive to reduce regulatory burdens on the
public, to fulfill its mission, it must also issue new regulations to
protect the public from health hazards, other threats and to improve
the lives of all Americans.
FY 2002 Themes
The Secretary has adopted four overarching regulatory themes for FY
2002:
Improving America's health and well-being;
Protecting America's consumers;
Improving the Department's ability to respond to emergencies
and disasters; and
Modernizing and simplifying the Department's programs.
The Department's regulatory priorities for this fiscal year will fall
under these themes. It should be noted, however, that the Secretary's
overall priorities go beyond these four regulatory categories, and
include for example: Medicare modernization; disease prevention; long-
term care improvement; children's health and development, and intra-
Departmental management reform.
Improving America's Health and Well Being⁵⁶ The 20th century brought remarkable and unprecedented
improvements in the health of the American people. We saw the infant
mortality rate plummet and life expectancy increase by 30 years. The
challenge for the 21st century is twofold. First, we must ensure that
significant health advances continue. Second, we must make certain that
quality of life applies throughout this extended life span for all
Americans.
Over the years, it has become clear that individual health is closely
linked to community health--the health of the communities and
environments in which individuals live, work, and play. Consequently,
the Secretary plans to work to improve not only the health of
individuals, but also the health of America's communities.
Regulations in the Plan that address this theme include:
A proposed rule to establish a Medicare prescription drug
discount card program;
A proposed rule establishing new conditions of coverage and
performance measures for organ procurement organizations;
A proposed rule that would improve services to long-term care
facility residents;
Medicare and Medicaid managed care rules that will enhance
these programs for beneficiaries, potential beneficiaries,
providers and States;
A final rule designed to make it easier for certain
prescription drugs to be purchased over-the-counter,
thereby providing increased access to a number of drugs.
Protecting America's Consumers⁵⁶ Consumer safety is a major concern for the public and the
Secretary. A

[[Page 61166]]

recent Institute of Medicine report highlighted the risks of medical
errors in the health delivery system. Similarly, ensuring a safer food
supply is paramount. Every year, tens of thousands of Americans become
sick and many die from food borne pathogens. The size of vulnerable
populations (e.g., the elderly and those with compromised immune
systems) is growing. The Secretary is especially interested in
identifying opportunities that exist to make patient care and the food
supply safer.
Regulations under this theme include:
A proposed rule controlling the manufacturing and packaging of
dietary supplements;
A final rule to require that amounts of trans fatty acids be
included in food labeling because such information has
significant potential to reduce the risk of coronary heart
disease;
Several proposed rules designed to reduce the frequency of
medical errors associated with prescription drug use; and
Several regulations addressing the importation and re-
importation of foods and drugs.
Improving the Ability of HHS to Respond to Emergencies and
Disasters⁵⁶ HHS is responsible for directing and coordinating the medical
and public health response to natural disasters, terrorism, major
accidents and other events that can result in mass casualties. Timely
and well-focused responses to such events are key to limiting mortality
and morbidity. The Department and its partners must be able to react
quickly, and tailor responses to the specific emergency without being
encumbered by unnecessary or counter productive activities.
Regulations in the Plan that are designed to help ensure that HHS has
appropriate authority and flexibility to address emergencies and
disasters include:
A final rule on new procedures for establishing the efficacy
of a new drug or biologic product designed to combat
chemical or biological terrorism, (e.g. new anti-viral
drugs to treat smallpox);
A proposed rule to permit use of an investigational medical
product during a potential chemical or biological terrorism
event;
A proposed rule issued by the Centers for Disease Control and
Prevention to update provisions dealing with the spread of
communicable disease; and
A set of proposed rules that will implement Administration
sponsored legislation dealing with bioterrorism. These
rules would address, among other things: biological agents
that could pose a threat to national security; detention
and recall of foods presenting a serious health threat;
tampering with food products; record keeping regarding the
distribution of foods, food-shipment importation procedures
and related matters.
Modernizing and Simplifying the Department's Programs⁵⁶ To ensure that beneficiaries and taxpayers continue to receive
the most effective and highest quality services, we need to streamline
program requirements and bring openness and responsiveness into the
regulatory process. Payment systems and regulatory requirements need to
be modernized to reflect the significant advances in today's changing
health care delivery system.
While the impressive improvements made in health information
technology have helped make the American health care system the best in
the world, new and updated requirements are needed so that the health
care system can capture the full benefit of these technological
advances. At the same time, patients are concerned about unwanted and
invasive access to their health records. Rules are needed to ensure
that all Americans have confidence that their medical records will
remain private.
Most of the regulations under this theme are associated with either
Medicare reimbursement issues, or implementation of provisions under
the Health Insurance Portability and Accountability Act of 1996
(HIPAA). Priority Medicare reimbursement rules include:
A new prospective payment scheme for long-term care hospitals;
A fee schedule for ambulance services; and
A variety of other prospective payment revisions and updates.
With regard to HIPAA, the law requires the Secretary to adopt a series
of regulations. While some of these have already been issued, others
are expected during FY 2002. These include regulations addressing:
Security of information held by providers;
National provider and employer ID's; and
Modifications to existing electronic transaction requirements.
Public Comments and Reactions⁵⁶ The Secretary welcomes comments not only on specific regulations
as they are published in the Federal Register, but also on the themes
he has established for 2002 and the regulatory priorities noted above.
The regulations we issue affect a wide array of health care consumers,
providers and others, and the Secretary wants to hear from those
affected by the rules most directly. Comments, as well as ideas and
specific suggestions for regulatory improvements and initiatives should
be sent to: The Honorable Tommy G. Thompson, Secretary of Health and
Human Services, Attention Ann Agnew, Executive Secretary to the
Department, Room 603, Hubert H. Humphrey Building, 200 Independence
Avenue SW., Washington, DC 20201.
Listing of Priority Regulations by Theme
1. Improving America's Health and Well Being
Program to Endorse Prescription Drug Discount Programs
Organ Procurement Organizations Condition for Coverage
Requirement for Paid Feeding Assistants in Long-Term Care
Facilities
Additional Criteria and Procedures for Classifying Over-the-
Counter Drugs as Generally Recognized as Safe and Effective
and Not Misbranded
Medicaid Managed Care
Modification to Medicare Managed Care Rules Based on
Provisions of BIPA and Technical Corrections
2. Protecting America's Consumers
Current Good Manufacturing Practice in Manufacturing, Packing
or Holding Dietary Ingredients and Dietary Supplements
Food Labeling: Trans Fatty Acids in Nutrition Labeling,
Nutrient Content Claims, and Health Claims;
Control of Salmonella Enteritidis in Shell Eggs During
Production and Retail
Marking Requirements for and Prohibitions on the Reimportation
of Imported Food Products That Have Been Refused Admission
into the United States
Foreign Establishment Registration and Listing
Labeling for Human Prescription Drugs, Revised Format

[[Page 61167]]

Safety Reporting Requirements for Human Drug and Biological
Products
CGMPs for Blood and Blood Components: Notification of
Consignees and Transfusion Recipients Receiving Blood and
Blood Components at Increased Risk of Transmitting HCV
(Lookback)
Bar Code Label Requirements for Human Drug Products
3. Improving the Department's Ability to Respond to Emergencies and
Disasters
Implementing the Bioterrorism Prevention Response Act of 2001
Control of Communicable Diseases
Efficacy Evidence Needed for Products to be Used Against Toxic
Substances When Human Studies are Unethical
Exception from General Requirements for Informed Consent;
Request for Comments and Information
4. Modernizing and Simplifying the Department's Programs, Rules and
Systems
HIPAA Administrative Simplification Regulations
Modifications to the Standards for Privacy of Individually
Identifiable Health Information
Health Insurance Reform: Standards for Electronic Claims
Attachments
Health Insurance Reform: Modifications to Standards for
Electronic Transactions
Revisions to Transaction and Code Set Standards for Electronic
Transactions
Health Insurance Reform: Standard Unique Health Care Provider
Identifier
National Standard Employer Identifier
Security Standards
National Standard for Identifiers of Health Plans
Payment Modernization Rules
Prospective Payment System for Long Term Care Hospitals for FY
2003
Fee Schedule for the Payment of Ambulance Services and
Revisions to the Physician's Certification Requirements for
Coverage of Non-emergency Ambulance Services
Home Health Prospective Payment System Refinements
Home Health Prospective Payment System Rate Update for FY 2003
Hospital Inpatient Prospective Payment System for FY 2003
Hospital Outpatient Prospective Payment System for CY 2003
Revisions to Payment Policies Under the Physician Fee Schedule
for CY 2003
Hospital Inpatient Rehabilitation Prospective Payment System
FY 2003
Tribal Self-Governance Amendments
Prospective Payment System and Consolidated Billing for
Skilled Nursing Facilities-Update
Modification of the Medicaid Upper Payment Limit for Inpatient
Hospital Services and Outpatient Hospital Services
_______________________________________________________________________

HHS--Office of the Secretary (OS)

-----------

PROPOSED RULE STAGE

-----------

25. MODIFICATIONS TO STANDARDS FOR PRIVACY OF INDIVIDUALLY
IDENTIFIABLE HEALTH INFORMATION
Priority:

Other Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect State, local or tribal goverments.

Legal Authority:

42 USC 1320d-2; 42 USC 1320d-3; PL 104-191, sec 262; PL 104-191, sec
264

CFR Citation:

45 CFR 160; 45 CFR 164

Legal Deadline:

None

Abstract:

The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
required the Department of Health and Human Services (the Department)
to issue standards for health plans, health care clearinghouses, and
certain health care providers to protect the privacy of individually
identifiable health information. The Department published these
standards, entitled ``Standards for Privacy of Individually
Identifiable Health Information,'' (the Privacy Rule) as a final rule
on December 28, 2000. The final rule was effective on April 14, 2001.
The proposed rule would amend the Privacy Rule to, among other things,
support the delivery of the highest quality of health care to patients
and address concerns regarding the workability of the rule for entities
subject to its requirements.

Statement of Need:

The Department received many inquires from Congress, industry, and
private citizens about how the rule will operate, and concerns over the
complexity and workability of the rule. On July 6, 2001, in response to
these and other comments, the Department issued guidance to address
some of the misunderstandings regarding the rule, and to provide
clarifications on various provisions. The Department has preliminarily
determined that some modifications to the Privacy Rule would be
appropriate. Entities covered by the Privacy Rule have until April 14,
2003 to come into compliance (and until April 14, 2004 for small health
plans). Timely action is needed so that covered entites can implement
these modifications to meet these deadlines with minimal cost and
disruption.

Summary of Legal Basis:

Section 262 of the Health Insurance Portability and Accountability Act
of 1996, adding Section 1174 to the Social Security Act (42 U.S.C.
1320d-3), generally provides that the Department, in reference to the
privacy and other standards, ``shall review the standards ... and shall
adopt modifications to the standards (including additions to the
standards), as determined appropriate .... Any addition or modification
to a standard shall be completed in a manner which minimizes the
disruption and cost of compliance.''

Alternatives:

Modifications to the Privacy Rule requires rulemaking. Therefore, there
are no alternatives to regulatory action.

Anticipated Cost and Benefits:

The anticipated cost and benefits are not known at this time because
decisions have not been made regarding specific changes in the Privacy
Rule. The options being considered to address workability are expected
to reduce cost and to remove barriers to access to or the quality of
health care.

Risks:

Not applicable.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM Determined To Be
Regulatory Flexibility Analysis Required:

Yes

[[Page 61168]]

Small Entities Affected:

Businesses

Government Levels Affected:

Federal, State, Local, Tribal

Federalism:

This action may have federalism implications as defined in EO 13132.

Agency Contact:
Susan McAndrew
Senior Health Information, Policy Specialist
Department of Health and Human Services
Office of the Secretary
Office for Civil Rights
200 Independence Avenue SW.
Washington, DC 20201
Phone: 202 205-8725
RIN: 0991-AB14
_______________________________________________________________________

HHS--OS

26. IMPLEMENTING THE BIOTERRORISM PREVENTION AND RESPONSE ACT
OF 2001
Priority:

Other Significant

Legal Authority:

Not Yet Determined

CFR Citation:

None

Legal Deadline:

None

Abstract:

A variety of regulations will be required once the Bioterrorism
Prevention and Response Act has been signed into law. These regulations
would among other things address: biological agents that have the
potential to pose a national security threat; detention and recall of
foods presenting a serious health threat; tampering with food products;
recordkeeping regarding the distribution of foods, food-shipment
importation procedures and related matters. For example, laboratories
possessing certain biological agents would have to adhere to strict
safety and security provisions.

Statement of Need:

The Secretary has testified before Congress that, while the Nation is
currently prepared to respond to a biological attack, we must
accelerate current efforts to build the strongest, most coordinated
capacity possible for responses to acts of terrorism involving
biological agents. He stressed that a strong and flexible public health
infrastructure is the best defense against any disease outbreak.

Summary of Legal Basis:

Congressional enactment of the Bioterrorism Prevention and Response Act
of 2001 is required.

Alternatives:

Not applicable.

Anticipated Cost and Benefits:

Not applicable.

Risks:

Regulations implementing legislation to protect the health of citizens
against biological terrorism would advance the development,
organization and enhancement of public health prevention systems and
tools. The magnitude of the risks addressed by such systems and tools
is at least as great as the other risk reduction efforts within HHS's
jurisdiction.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 01/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Tribal, Federal

Agency Contact:
Alex Azar
General Counsel
Department of Health and Human Services
Office of the Secretary
Phone: 202 690-7741
RIN: 0991-AB15
_______________________________________________________________________

HHS--Centers for Disease Control and Prevention (CDC)

-----------

PROPOSED RULE STAGE

-----------

27. CONTROL OF COMMUNICABLE DISEASES
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

42 USC 216; 42 USC 243; 42 USC 264; 42 USC 271

CFR Citation:

42 CFR 70; 42 CFR 71

Legal Deadline:

None

Abstract:

This proposal updates existing regulations related to prevention of the
introduction, transmission, or spread of communicable diseases from
foreign countries to the U.S. and from State to State. The regulation
addresses the: process by which persons infected with, or who have been
exposed to, modern communicable diseases should be quarantined;
surveillance of quarantined persons; and requirements for carriers
(e.g., airlines, etc.) to maintain passenger manifests for a determined
period of time.

Statement of Need:

The quarantine of persons believed to be infected with communicable
diseases is a long-term prevention measure that has been used
effectively to contain the spread of disease. As diseases evolve due to
the natural occurrences or bioterrorist events, it is important to
assure procedures reflect new threats and uniform ways to contain them.

The existing regulations are outdated and do not address communicable
diseases that currently pose a substantial public health threat.

Summary of Legal Basis:

USC 42 section 264 authorizes the Surgeon General, with the approval of
the Secretary, to make and enforce regulations as are necessary to
prevent the introduction, transmission, or spread of communicable
diseases from foreign countries into the States or possessions, or from
one State or possession into any other State or possession.

Alternatives:

In the absence of this regulation, uniform application of procedures
for the quarantine of individuals exposed to or infected with a
communicable disease would be unavailable.

Anticipated Cost and Benefits:

It is anticipated that there will be a cost to carriers to maintain
passenger manifests for an extended period of time. However, these
costs are undetermined.

Risks:

This rule would allow for improvements to existing quarantine

[[Page 61169]]

procedures and clarify due process procedures.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

State

Federalism:

Undetermined

Agency Contact:
John Moore
Department of Health and Human Services
Centers for Disease Control and Prevention
1600 Clifton Road NE
Atlanta, GA 30333
Phone: 404 639-7070
RIN: 0920-AA03
_______________________________________________________________________

HHS--Food and Drug Administration (FDA)

-----------

PROPOSED RULE STAGE

-----------

28. SAFETY REPORTING REQUIREMENTS FOR HUMAN DRUG AND BIOLOGICAL
PRODUCTS
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

42 USC 216; 42 USC 241; 42 USC 242a; 42 USC 262; 42 USC 263; 42 USC
263a-n; 42 USC 264; 42 USC 300aa; 21 USC 321; 21 USC 331; 21 USC 351 to
353; 21 USC 355; 21 USC 360; 21 USC 360b-j; 21 USC 361a; 21 USC 371; 21
USC 374; 21 USC 375; 21 USC 379e; 21 USC 381

CFR Citation:

21 CFR 310; 21 CFR 312; 21 CFR 314; 21 CFR 600; 21 CFR 320; 21 CFR 601;
21 CFR 606

Legal Deadline:

None

Abstract:

This regulation is one component of the Secretary's initiative to
reduce medical errors. The proposed rule would amend the expedited and
periodic safety reporting regulations for human drugs and biological
products to revise certain definitions and reporting formats as
recommended by the International Conference on Harmonisation and to
define new terms; to possibly add to or revise current reporting
requirements; to consider revising certain reporting time frames; and
to suggest other revisions to these regulations to enhance the quality
of safety reports received by FDA.

Statement of Need:

FDA currently has safety reporting requirements in section 21 CFR
312.32 for sponsors of investigational drugs for human use. FDA also
has safety reporting requirements in sections 21 CFR 310.305, 314.80,
314.98 and 600.80 for applicants, manufacturers, packers and
distributors of approved human drug and biological products. FDA has
undertaken a major effort to clarify and revise these regulations to
improve the management of risks associated with the use of these
products. For this purpose, the agency is proposing to implement
certain definitions and reporting formats and standards recommended by
the International Conference on Harmonisation of Technical Requirements
for Registration of Pharmaceuticals for Human Use (ICH) to provide more
effective and efficient safety reporting to regulatory authorities
worldwide. Currently, the United States, European Union, and Japan
require submission of safety information for marketed drug and
biological products using different reporting formats and different
reporting intervals.

Summary of Legal Basis:

The agency has broad authority under sections 505 and 701 of the
Federal Food, Drug, and Cosmetic Act (the Act) (21 U.S.C. 355 and 371)
and section 351 of the Public Health Service Act (42 U.S.C. 262) to
monitor the safety of drug and biological products for human use.

Alternatives:

The alternatives to the proposal include not amending our existing
safety reporting requirements. This alternative would be inconsistent
with FDA's efforts to harmonize its safety reporting requirements with
international initiatives and with its mission to protect public
health.

Anticipated Cost and Benefits:

Manufacturers of human drug and biological products currently have
limited incentives to invest capital and resources in standardized
global safety reporting systems because individual firms acting alone
cannot attain the economic gains of harmonization. This proposed rule
would harmonize FDA's safety reporting requirements with certain
international initiatives, thereby providing the incentive for
manufacturers to modify their safety reporting systems. Initial
investments made by manufacturers to comply with the rule are likely to
ultimately result in substantial savings to them over time.

The impact on industry includes costs associated with revised safety
reporting and recordkeeping requirements. The benefits of the proposed
rule are public health benefits and savings to the affected industries.
The expected public health benefits would result from the improved
timeliness and quality of the safety reports and analyses; making it
possible for health care practitioners and consumers to expedite
corrective actions and to make more informed decisions about
treatments. Savings to the affected industry would accrue from more
efficient allocation of resources resulting from international
harmonization of the safety reporting requirements.

Risks:

None

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 02/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

Undetermined

Agency Contact:
Audrey Thomas
Regulatory Policy Analyst, Office of Regulatory Policy
Department of Health and Human Services
Food and Drug Administration
Suite 3037 (HFD-7)
Center for Drug Evaluation and Research
1451 Rockville Pike
Rockville, MD 20852
Phone: 301 594-2041
Fax: 301 827-5562
RIN: 0910-AA97

[[Page 61170]]

_______________________________________________________________________

HHS--FDA

29. CURRENT GOOD MANUFACTURING PRACTICE IN MANUFACTURING, PACKING, OR
HOLDING DIETARY INGREDIENTS AND DIETARY SUPPLEMENTS
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

21 USC 321; 21 USC 342; 21 USC 343; 21 USC 348; 21 USC 371; 21 USC 374;
21 USC 381; 21 USC 393; 42 USC 264

CFR Citation:

21 CFR 111

Legal Deadline:

None

Abstract:

The Food and Drug Administration (FDA) announced in an advance notice
of proposed rulemaking (ANPRM) of February 6, 1997 (62 FR 5700), its
plans to consider developing regulations establishing current good
manufacturing practices (CGMP) for dietary supplements and dietary
ingredients. The ANPRM was published in order for FDA to solicit
comments on whether it should initiate action to establish CGMP
regulations and if so, what constitutes CGMP for these products. FDA
announced that this effort was in response to the section of the
Federal Food, Drug, and Cosmetic Act (the Act) that provides authority
to the Secretary of Health and Human Services to promulgate CGMP
regulations and to a submission from the dietary supplement industry
asking that FDA consider an industry-proposed CGMP framework as a basis
for CGMP regulations. The ANPRM also responds to concerns that such
regulations are necessary to ensure that consumers are provided with
dietary supplement products which have not been adulterated as a result
of manufacturing, packing, or holding; which have the identity and
provide the quantity of dietary ingredients declared in labeling; and
which meet the quality specifications that the supplements are
represented to meet.

Statement of Need:

FDA intends to publish a proposed rule to establish current good
manufacturing practices (CGMP) for dietary supplements and dietary
ingredients for several reasons. First, FDA is concerned that some
firms may not be taking appropriate steps during the manufacture of
dietary supplements and dietary ingredients to ensure that products are
not adulterated as a result of manufacturing, packing, or holding.
There have been cases of misidentified ingredients harming consumers
using dietary supplements. FDA is also aware of products that contain
potentially harmful contaminants because of apparently inadequate
manufacturing controls and quality control procedures. The agency
believes that a system of CGMP is the most effective and efficient way
to ensure that these products will not be adulterated during
manufacturing, packing, or holding.

Summary of Legal Basis:

If CGMP regulations were adopted by FDA, failure to manufacture, pack,
or hold dietary supplements or dietary ingredients under CGMP
regulations would render the dietary supplement or dietary ingredients
adulterated under section 402(g) of the Act.

Alternatives:

The two principal alternatives to comprehensive CGMP are end-product
testing and Hazard Analysis Critical Control Points (HACCP). In the
ANPRM, FDA asked for public comment on approaches to ensure that
dietary supplements and dietary ingredients are not adulterated during
the manufacturing process. The agency asked whether HACCP may be a more
effective approach than a comprehensive CGMP, and whether different
approaches may be better able to address the needs of the broad
spectrum of firms that conduct one or more distinct operations, such as
the manufacture of finished products, or solely the distribution and
sale of finished products at the wholesale or retail level. FDA will
consider the information it received in response to the ANPRM and from
other sources, such as public meetings and small business outreach
meetings, in its consideration of whether CGMP or other approaches are
most appropriate.

Anticipated Cost and Benefits:

A comprehensive CGMP (or other system of ensuring that dietary
supplements and dietary ingredients are not adulterated during
manufacturing, packing, or holding) would permit more effective and
efficient oversight by Federal, State, and local governments. It would
place primary responsibility for ensuring that these products are not
adulterated during manufacturing, packing, or holding on the
manufacturer, packer or holder by requiring that they implement a
system to control their processes. FDA anticipates that costs to
industry generated by implementing a comprehensive manufacturing
process, whether CGMP or other plan, would be offset in four ways: (1)
by reducing the amount of supplement-associated illnesses or adverse
events; (2) by increasing public confidence in dietary supplements
marketed in the United States; (3) by enabling U.S. supplements
companies to compete more effectively in the world market; and (4) by
decreasing the number of future product recalls.

Risks:

Any potential for consumers to be provided adulterated (e.g.,
contaminated with industrial chemicals, pesticides, microbial
pathogens, or dangerous misidentified ingredients or toxic components
of ingredients) products must be considered a very serious risk because
of the possibility that such contamination could be widespread,
affecting whole segments of the population, causing some severe long-
term effects and even loss of life. Dietary supplements are used by a
large segment of the American public. Moreover they are often used by
segments of the population that are particularly vulnerable to
adulterated products, such as the elderly, young children, pregnant and
nursing women, and persons who may have serious illnesses or are taking
medications that may adversely interact with dietary supplements. FDA
has adopted or proposed manufacturing controls for a number of foods
and commodities that present potential health hazards to consumers if
not processed properly, including seafood, juice products, and fruits
and vegetables and it is appropriate that FDA consider whether
manufacturing controls are necessary to assure consumers that dietary
supplements are not adulterated during the manufacturing, packing, or
holding process.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 62 FR 5700 02/06/97
ANPRM Comment Period End 06/06/97
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Yes

[[Page 61171]]

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Federalism:

Undetermined

Agency Contact:
Karen Strauss
Consumer Safety Officer
Department of Health and Human Services
Food and Drug Administration
(HFS-820)
200 C Street SW.
Washington, DC 20204
Phone: 202 205-4168
Fax: 202 205-5295
Email: [email protected]
RIN: 0910-AB88
_______________________________________________________________________

HHS--FDA

30. CONTROL OF SALMONELLA ENTERITIDIS IN SHELL EGGS DURING PRODUCTION
AND RETAIL
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

21 USC 321; 21 USC 342; 21 USC 371; 21 USC 381; 21 USC 393; 42 USC 264;
42 USC 243; 42 USC 264; 42 USC 271; ...

CFR Citation:

21 CFR 16; 21 CFR 116; 21 CFR 118

Legal Deadline:

None

Abstract:

The President's Council on Food Safety was established in August 1998
to improve the safety of the food supply through science-based
regulations and well-coordinated inspection, enforcement, research, and
education programs. The Council has identified egg safety as one
component of the public health issue of food safety that warrants
immediate Federal, interagency action.

In July 1999, the Food and Drug Administration (FDA) and the Food
Safety Inspection Service (FSIS) committed to developing an action plan
to address the presence of salmonella enteritidis (SE) in shell eggs
and egg products using a farm-to-table approach. FDA and FSIS held a
public meeting on August 26, 1999, to obtain stakeholder input on the
draft goals, as well as to further develop the objectives and action
items for the action plan. The Egg Safety Action Plan was announced on
December 11, 1999. The goal of the Action Plan is to reduce egg-related
SE illnesses by 50 percent by 2005 and eliminate egg-related SE
illnesses by 2010.

The Egg Safety Action Plan consists of eight objectives covering all
stages of the farm-to-table continuum as well as support functions. On
March 30, 2000 (Columbus, OH), April 6, 2000 (Sacramento, CA), and July
31, 2000 (Washington, DC), joint public meetings were held by FDA and
FSIS to solicit and discuss information related to the implementation
of the objectives in the Egg Safety Action Plan.

In accordance with discussions at the public meetings, FDA intends to
publish a proposed rule to require that shell eggs be produced under an
SE risk reduction plan that is designed to prevent transovarian SE from
contaminating eggs at the farm during production.

Because egg safety is a farm-to-table effort, FDA intends to include in
its proposal certain provisions of the 1999 Food Code that are relevant
to how eggs are handled, prepared, and served at certain retail
establishments. In addition, the agency plans to propose specific
requirements for certain retail establishments that serve populations
most at-risk of egg-related illness (i.e., the elderly, children, and
the immunocompromised).

Statement of Need:

FDA is proposing regulations as part of the farm-to-table safety system
for eggs outlined by the President's Council on Food Safety in its Egg
Safety Action Plan to require that shell egg producers implement SE
risk reduction plans at the farm and that retail establishments
institute certain egg-relevant provisions of the 1999 Food Code. FDA
intends to propose these regulations because of the continued reports
of outbreaks of foodborne illness and death caused by SE that are
associated with the consumption of shell eggs. The agency believes
these regulations can have significant effect in reducing the risk of
illness from SE-contaminated eggs and will contribute significantly to
the interim public health goal of the Egg Safety Action Plan of a 50
percent reduction in egg-related SE illness by 2005.

Summary of Legal Basis:

FDA's legal basis for the proposed rule derives in part from sections
402(a)(4), and 701(a) of the Federal Food, Drug and Cosmetic Act (the
Act)((21 U.S.C. 342(a)(4) and 371(a)). Under section 402(a)(4) of the
Act, a food is adulterated if it is prepared, packed, or held in
insanitary conditions whereby it may have been contaminated with filth
or may have been rendered injurious to health. Under section 701(a) of
the Act, FDA is authorized to issue regulations for the efficient
enforcement of the Act. FDA also intends to rely on section 361 of the
Public Health Service Act (42 U.S.C. 264), which gives FDA authority to
promulgate regulations to control the spread of communicable disease.

Scientific reports in published literature and data gathered from
existing voluntary egg quality assurance programs indicates that
measures designed to prevent SE from entering a poultry house (e.g.,
rodent/pest control, use of chicks from SE-monitored breeders, and
biosecurity programs) can be very effective in reducing SE-
contamination of eggs and related foodborne illness.

Moreover, the use of shell eggs or egg products that have been treated
to destroy SE or thorough cooking of untreated eggs in retail
establishments will significantly contribute to the reduction of egg-
related SE illnesses.

Alternatives:

There are several alternatives that the agency intends to consider in
the proposed rule. The principal alternatives include: (1) no new
regulatory action; (2) alternative testing requirements; (3)
alternative on-farm mitigation measures; (4) alternative retail
requirements; and (5) HACCP. FDA will consider the information that it
receives in response to the public meetings in its consideration of the
various alternatives.

Anticipated Cost and Benefits:

The benefits from a regulation designed to reduce the risk of SE
contamination on the farm and at retail derive from better farming
practices and safer handling and cooking of eggs at the retail level.
While numerical estimates of benefits currently are not yet available,
FDA believes that the benefits of the proposed rule will be
significant. FDA plans to estimate benefits using data from the United

[[Page 61172]]

States Department of Agriculture (USDA) Risk Assessment for SE in Eggs,
the Layers `99 study of on-farm SE controls, and from other available
information on the effectiveness of SE controls.

The costs of the proposed rule are undetermined at this time.

Risks:

Any potential for contamination of eggs with SE and its subsequent
survival or growth must be considered a very serious risk because of
the possibility that such contamination, survival and growth could
cause widespread foodborne illness, including some severe long-term
effects and even loss of life. FDA made a decision to publish a
proposed rule to require that shell egg producers have on-farm SE risk
reduction plans and that retail establishments institute certain egg-
relevant provisions of the 1999 Food Code based on a considerable body
of evidence, literature and expertise in this area. In addition, this
decision was also based on the USDA risk assessment on SE in shell eggs
and egg products and the identified public health benefits associated
with controlling SE in eggs at the farm and retail levels.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Federalism:

Undetermined

Agency Contact:
Rebecca Buckner
Consumer Safety Officer
Department of Health and Human Services
Food and Drug Administration
HFS-306
Center for Food Safety and Applied Nutrition
200 C Street SW.
Washington, DC 20204
Phone: 202 205-4081
Fax: 202 205-4422
Email: [email protected]

Nancy Bufano
Consumer Safety Officer
Department of Health and Human Services
Food and Drug Administration
HFS-306
Center for Food Safety and Applied Nutrition
200 C Street SW.
Washington, DC 20204
Phone: 202 401-2022
Fax: 202 205-4422
Email: [email protected]
RIN: 0910-AC14
_______________________________________________________________________

HHS--FDA

31. EXCEPTION FROM GENERAL REQUIREMENTS FOR INFORMED CONSENT;
REQUEST FOR COMMENTS AND INFORMATION
Priority:

Other Significant

Legal Authority:

21 USC 321; 21 USC 346; 21 USC 346a; 21 USC 348; 21 USC 352; 21 USC
353; 21 USC 355; 21 USC 360; 21 USC 360bbb; 21 USC 360c; 21 USC 360d;
21 USC 360e; 21 USC 360f; 21 USC 360h; 21 USC 360i; 21 USC 360j; 21 USC
371; 21 USC 379e; 21 USC 381; 42 USC 241; 42 USC 262; 42 USC 263b-263n

CFR Citation:

21 CFR 50.23(e)

Legal Deadline:

None

Abstract:

FDA is proposing to add a new exception from the general requirement
for informed consent to address situations associated with preparedness
and response to chemical and biological terrorism, when investigational
products regulated by FDA need to be used.

Statement of Need:

The agency is proposing this action because it is concerned that during
a potential chemical or biological terrorism event, delaying the use of
investigational products may threaten the lives of subjects. In many
instances, there may also be others who have been exposed to or be at
risk of exposure to a dangerous chemical or biological agent.

Summary of Legal Basis:

FDA believes the statutory authority provided in the Federal Food,
Drug, and Cosmetic Act (the Act) would permit a limited exception to
obtaining informed consent for chemical or biological terrorism events.
The Act specifically states when an exception from informed consent is
permissible. The statutory provision governing informed consent for
investigational devices 520(g)(3)(D) of the Act, provides that informed
consent is required unless the clinical investigator determines in
writing that: (1) there exists a life-threatening situation involving
the human subject of such testing which necessitates the use of such
device; (2) it is not feasible to obtain informed consent from the
subject; and (3) there is not sufficient time to obtain such consent
from his representative. Further, a licensed physician uninvolved in
the testing must agree with this three-part determination in advance of
using the product unless immediate use of the device is required to
save the life of the human subject of such testing and there is not
sufficient time to obtain such concurrence. The statute states that the
exceptions to requiring informed consent are subject to such conditions
as the Secretary may prescribe. This proposed rule is not required by
statute or court order.

Alternatives:

The only other option open to the agency is to do nothing. FDA believes
that this option is not acceptable because it could result in improper
treatment or no treatment for persons with serious illnesses because
the health professionals could not use these investigational products
in absence of informed consent.

Anticipated Cost and Benefits:

The minimal burdens imposed by this rule are offset by the fact that,
in the absence of this rule, the sponsor would be required to obtain
informed consent, which is just as burdensome, if not more so. The rule
would permit use of investigational products without

[[Page 61173]]

which patients' lives might be threatened. Because of uncertainty about
the nature or extent of any chemical or biological terrorism event, FDA
cannot estimate the extent of the benefits of this rule.

Risks:

The primary risk addressed by this rule is the risk that patients may
go untreated or may be improperly treated because health professionals
could not use an investigational product in the absence of informed
consent. FDA cannot determine the extent of this risk without knowing
the nature or extent of any chemical or biological terrorism event.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
Claudia M. Gaffey
Medical Officer
Department of Health and Human Services
Food and Drug Administration
Room 314/HFZ-314
Center for Devices and Radiological Health
2098 Gaither Road
Rockville, MD 20850
Phone: 301 594-2096
Fax: 301 594-5941
Email: [email protected]
RIN: 0910-AC25
_______________________________________________________________________

HHS--FDA

32. BAR CODE LABEL REQUIREMENTS FOR HUMAN DRUG PRODUCTS
Priority:

Other Significant. Major under 5 USC 801.

Legal Authority:

21 USC 321; 21 USC 331; 21 USC 351 to 353; 21 USC 355; 21 USC 358; 21
USC 360; 21 USC 360b; 21 USC 360gg to 360ss; 21 USC 371; 21 USC 374; 21
USC 379e; 42 USC 216; 42 USC 241; 42 USC 262; 42 USC 264

CFR Citation:

21 CFR 201.25; 21 CFR 601.67

Legal Deadline:

None

Abstract:

This regulation is one component of the Secretary's initiative to
reduce medical errors. The proposal would require human drug products
and biological products to have a bar code. The bar code would contain
certain information about the product and, when used in conjunction
with bar code scanners and computer equipment, will help reduce the
number of medication errors.

Statement of Need:

In 1999, the Institute of Medicine (IOM) report titled, To Err Is
Human: Building a Safer Health System, cited studies and articles
estimating that between 44,000 and 98,000 Americans may die each year
due to medical mistakes made by health care professionals, with most
deaths attributable to medication errors. The report also indicated
that, between 1983 and 1993, the medication error rate leading to a
patient's death may have increased by over 2.5 times. While later
medical articles have questioned the IOM's estimates, other studies
have indicated that, regardless of the medication error rate, many
medication errors are or were preventable.

Medication errors are a significant economic cost to the United States.
An article published in 1995 estimated the direct cost of preventable
drug-related mortality and morbidity to be $76.6 billion, with drug-
related hospital admissions accounting for much of the cost. The
authors suggested that indirect costs, such as those relating to lost
productivity, might be two to three times greater than the direct
costs, making the total cost of all preventable, drug-related mortality
and morbidity range from $138 to $182 billion. Another article,
published in 2001, used updated cost estimates derived from current
medical and pharmaceutical literature to revise the $76.6 billion
estimate to exceed $177.4 billion; hospital admissions accounted for
$121.5 billion in costs, and long-term care admissions accounted for
another $32.8 billion.

Various organizations and health professional associations have
advocated the use of bar codes as a method for reducing medication
errors. For example, if a health professional could use a bar code
scanner to compare the bar code on a human drug product to a specific
patient's drug regimen, the health professional would be able to verify
that the patient is receiving the right drug, at the right dose, and at
the right time. Most organizations and associations have recommended
that the bar code contain the drug's National Drug Code number (a
unique numerical code identifying the manufacturer, product, and
package size or type), lot number, and expiration date.

Thus, FDA is proposing to require human drug products and biological
products to be bar coded. The bar code would contain certain
information about the product, such as its National Drug Code number.
The agency is considering whether to require other information, such as
the drug's expiration date and lot number, to make it easier to
identify expired drugs and recalled drugs that may not be safe and
effective for use. The bar code, when used in conjunction with bar code
scanners and computer equipment, will enable health professionals to
decrease the medication error rate.

Summary of Legal Basis:

Section 502 of the Federal Food, Drug, and Cosmetic Act (the Act)
considers a drug to be misbranded unless it bears a label containing
(in part) the name of the manufacturer and the drug's name (see
sections 502(b) and 502(e)(1)(A) of the Act).

Section 501(a)(1) of the Act considers a drug to be adulterated if,
among other things, the methods used in, or the facilities and controls
used for, its manufacture, processing, packing, or holding do not
conform to or are not operated or administered in conformity with
current good manufacturing practice to assure that the drug meets the
requirements of the Act as to safety and ``has the identity and
strength, and meets the quality and purity characteristics, which it
purports or is represented to possess....''

Section 701(a) of the Act, in turn, authorizes FDA to issue regulations
for the efficient enforcement of the Act.

A bar code requirement for human drug products and biological products
would be consistent with, and aid in the efficient enforcement of,
sections 501 and 502 of the Act. For example, if the bar code merely
contained the drug's National Drug Code number, the bar code would
identify the manufacturer and the drug, and this would be consistent
with sections 502(b) and 502(e)(1)(A) of the Act. If the bar code
contained other information, such as lot

[[Page 61174]]

number and expiration date (pieces of information required under FDA's
good manufacturing practice regulations (see 21 CFR 211.130 and
211.137), this would be consistent with section 501(a)(1) of the Act.

Therefore, using its general rulemaking authority at section 701(a) of
the Act, the agency finds that it has sufficient authority to propose
requiring human drug products to have a bar code.

Alternatives:

FDA considered a voluntary bar coding program, but this would be akin
to a ``no action'' alternative as many products are not bar coded or
not coded in a manner that would help health professionals. A voluntary
bar coding system might also lead to the adoption of incompatible bar
coding formats on human drug products and biological products, thereby
deterring hospitals and health care professionals from buying bar code
scanners and computer equipment.

FDA also considered decreasing the amount of information it would
require on the bar code. This would decrease bar coding costs to drug
manufacturers and labelers, but also decrease the usefulness of the bar
code and its ability to reduce medication errors.

Anticipated Cost and Benefits:

FDA is continuing to examine the potential costs and benefits
associated with bar coding. The anticipated costs may vary greatly
depending on the amount of information required in a bar code and the
products to be bar coded. FDA's preliminary estimate is that the rule
would cost between $500 million and $1.4 billion over a 10-year period;
the wide range in the cost estimate reflects the agency's uncertainty
as to the costs associated with various pieces of information that
might go into a bar code, whether all or some human drug products and
biological products are bar coded, and possible changes in labeling
operations.

The rule's principal benefit would be a reduction in the number of
medication errors, including reduced mortality and morbidity. As stated
earlier, medication error costs have been estimated in the billions of
dollars, and the agency is trying to determine the extent to which
medication errors would be reduced.

Risks:

There is a possible risk that some manufacturers and repackagers, if
required to bar code individual unit dose packages, would eliminate
such types of packaging and only supply their products in bulk
containers. Individual unit dose packages are convenient for hospitals,
health professionals, and patients, but are expensive to produce, and
bar coding may increase production costs. Consequently, a manufacturer
or repackager who wanted to reduce its expenses might decide to reduce
the number of packages, particularly individual unit dose packages,
that would be subject to a bar coding requirement.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 04/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Philip L. Chao
Senior Policy Analyst
Department of Health and Human Services
Food and Drug Administration
Room 15-61 (HF-23)
Office of Policy, Planning and Legislation
5600 Fishers Lane
Rockville, MD 20857
Phone: 301 827-0587
Fax: 301 827-4774
Email: [email protected]
RIN: 0910-AC26
_______________________________________________________________________

HHS--FDA

-----------

FINAL RULE STAGE

-----------

33. LABELING FOR HUMAN PRESCRIPTION DRUGS; REVISED FORMAT
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

21 USC 321; 21 USC 360gg to 360ss; 21 USC 371; 21 USC 374; 21 USC 379e;
21 USC 331; 21 USC 351 to 353; 21 USC 355; 21 USC 358; 21 USC 360; 21
USC 360b; 42 USC 216; 42 USC 241; 42 USC 262; 42 USC 264

CFR Citation:

21 CFR 201

Legal Deadline:

None

Abstract:

This regulation is one component of the Secretary's initiative to
reduce medical errors. The regulation would amend the regulations
governing the format and content of professional labeling for human
prescription drug and biologic products, 21 CFR 201.56 and 201.57. The
regulation would require that professional labeling include a section
containing highlights of prescribing information, and a section
containing an index to prescribing information; reorder currently
required information and make minor changes to its content, and
establish minimum graphical requirements for professional labeling. The
regulation would also eliminate certain unnecessary statements that are
currently required to appear on prescription drug labels and move
certain information to professional labeling.

Statement of Need:

The current format and content requirements in sections 201.56 and
201.57 were established to help ensure that labeling includes adequate
information to enable health care practitioners to prescribe drugs
safely and effectively. However, various developments in recent years,
such as technological advances in drug product development, have
contributed to an increase in the amount, detail, and complexity of
labeling information. This has made it harder for practitioners to find
specific information and to discern the most critical information in
product labeling.

FDA took numerous steps to evaluate the usefulness of prescription drug
labeling for its principal audience and to determine whether, and how,
its format and content can be improved. The agency conducted focus
groups and a national survey of office-based physicians to ascertain
how prescription drug labeling is used by health care practitioners,
what labeling information is most important to practitioners, and how
professional labeling should be revised to improve its usefulness to
prescribing practitioners.

Based on the concerns cited by practitioners in the focus groups and
physician survey, FDA developed and tested two prototypes of revised
labeling formats designed to facilitate

[[Page 61175]]

access to important labeling information. Based on this testing, FDA
developed a third revised prototype that it made available to the
public for comment. Ten written comments were received on the
prototype. FDA also presented the revised prototype at an informal
public meeting held on October 30, 1995. At the public meeting, the
agency also presented the background research and provided a forum for
oral feedback from invited panelists and members of the audience. The
panelists generally supported the prototype.

The proposed rule discribed format and content requirements for
prescription drug labeling that incorporate information and ideas
gathered during this process. The agency has received several comments
on the proposal and the comment period was extended until June 22,
2001.

Summary of Legal Basis:

The agency has broad authority under sections 201, 301, 501, 502, 503,
505, and 701 of the Federal Food, Drug, and Cosmetic Act (the Act)(21
U.S.C. 321, 331, 351, 352, 353, 355 and 371) and section 351 of the
Public Health Service Act (42 U.S.C. 262) to regulate the content and
format of prescription drug labeling to help ensure that products are
safe and effective for their intended uses. A major part of FDA's
efforts regarding the safe and effective use of drug products involves
FDA's review, approval, and monitoring of drug labeling. Under section
502(f)(1) of the Act, a drug is misbranded unless its labeling bears
``adequate directions for use'' or it is exempted from this requirement
by regulation. Under section 201.100 (21 CFR 201.100), a prescription
drug is exempted from the requirement in section 502(f)(1) only if,
among other things, it contains the information required, in the format
specified, by sections 201.56 and 201.57.

Under section 502(a) of the Act, a drug product is misbranded if its
labeling is false or misleading in any particular. Under section 505(d)
and 505(e) of the Act, FDA must refuse to approve an application and
may withdraw the approval of an application if the labeling for the
drug is false or misleading in any particular. Section 201(n) of the
Act provides that in determining whether the labeling of a drug is
misleading, there shall be taken into account not only representations
or suggestions made in the labeling, but also the extent to which the
labeling fails to reveal facts that are material in light of such
representations or material with respect to the consequences which may
result from use of the drug product under the conditions of use
prescribed in the labeling or under customary usual conditions of use.

These statutory provisions, combined with section 701(a) of the Act and
section 351 of the Public Health Service Act, clearly authorize FDA to
promulgate a final regulation designed to help ensure that
practitioners prescribing drugs (including biological products) will
receive information essential to their safe and effective use in a
format that makes the information easier to access, read, and use.

Alternatives:

The alternatives to the final rule include not amending the content and
format requirements in sections 201.56 and 201.57 at all, or amending
them to a lesser extent. The agency has determined that although drug
product labeling, as currently designed, is useful to physicians, many
find it difficult to locate specific information in labeling, and some
of the most frequently consulted and most important information is
obscured by other information. In addition, the agency's research
showed that physicians strongly support the concept of including a
highlights section of the most important prescribing information, an
index and numbering system that permits specific information to be
easily located, and other requirements, such as the requirement for a
minimum type size. Thus, the agency believes that the requirements in
the final rule will greatly facilitate health care practitioners'
access and use of prescription drug and biological labeling
information.

Anticipated Cost and Benefits:

The expected benefits from the final rule include reduced time needed
for health care professionals to read or review labeling for desired
information, increased effectiveness of treatment, and a decrease in
adverse events resulting from avoidable drug-related errors. For
example, the proposed revised format is expected to significantly
reduce the time spent on reading labeling by highlighting often used
information at the beginning of labeling and facilitating access to
detailed information.

The potential costs associated with the final rule include the cost of
redesigning labeling for previously approved products to which the
proposed rule would apply and submitting the new labeling to FDA for
approval. In addition, one-time and ongoing incremental costs would be
associated with printing the longer labeling that would result from
additional required sections. These costs would be minimized by
applying the amended requirements only to newer products and by
staggering the implementation date for previously approved products.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 81082 12/22/00
Final Action 09/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Federalism:

Undetermined

Agency Contact:
Lee D. Korb
Regulatory Counsel, Office of Regulatory Policy
Department of Health and Human Services
Food and Drug Administration
Suite 3037 (HFD-7)
Center for Drug Evaluation and Research
1451 Rockville Pike
Rockville, MD 20852
Phone: 301 594-2041
Fax: 301 827-5562

Nancy M. Ostrove
Division of Drug Marketing, Advertising, and Communications
Department of Health and Human Services
Food and Drug Administration
(HFD-42)
Center for Drug Evaluation and Research
5600 Fishers Lane
Rockville, MD 20857
Phone: 301 827-2828
RIN: 0910-AA94
_______________________________________________________________________

HHS--FDA

34. FOREIGN ESTABLISHMENT REGISTRATION AND LISTING
Priority:

Other Significant

[[Page 61176]]

Legal Authority:

21 USC 321; 21 USC 331; 21 USC 351; 21 USC 352; 21 USC 355; 21 USC 360;
21 USC 360b; 21 USC 360c; 21 USC 360i; 21 USC 360j; 21 USC 371; 21 USC
374; 21 USC 381; 21 USC 393; 42 USC 262; 42 USC 264; 42 USC 271

CFR Citation:

21 CFR 207.3; 21 CFR 207.7; 21 CFR 207.10; 21 CFR 207.20; 21 CFR
207.21; 21 CFR 207.25; 21 CFR 207.37; 21 CFR 207.40; 21 CFR 607.3; 21
CFR 607.7; 21 CFR 607.20; 21 CFR 607.22; 21 CFR 607.25; 21 CFR 607.26;
21 CFR 607.31; 21 CFR 607.35; 21 CFR 607.37; 21 CFR 607.40; 21 CFR
607.65; 21 CFR 807.3; 21 CFR 807.20; 21 CFR 807.25; 21 CFR 807.40

Legal Deadline:

None

Abstract:

The final rule requires persons who manufacture, prepare, propagate,
compound, or process a drug or device that is imported or offered for
import into the United States to register the name and place of
business of the establishment and to identify a United States agent for
the establishment.

Statement of Need:

Section 417 of the Food and Drug Modernization Act (PL 105-115)
requires any establishment in any foreign country that is engaged in
the manufacture, preparation propagation, compounding, or processing of
a drug or device that is imported or offered for import into the United
States to register the name and place of business of the establishment
and to identify a United States agent.

The final rule implements the statutory requirement by amending the
establishment registration and listing regulations for human drugs and
biological products (21 CFR part 207), blood and blood products (21 CFR
part 607), and devices (21 CFR part 807). The final rule also discusses
the duties of the United States agent. The United States agent's
duties, under the final rule, include facilitating communications with
the foreign establishment and responding to inquiries about the foreign
establishment's products that are imported or offered for import into
the United States. The final rule will strengthen FDA's procedures for
ensuring that products imported or offered for import into the United
States are safe and effective.

Summary of Legal Basis:

The principal legal basis can be summarized as follows. Section 510 of
the Federal Food, Drug, and Cosmetic Act (the Act) requires
establishment registration and listing. Section 417 of the Food and
Drug Modernization Act amended section 510 by requiring foreign
establishments to register, to list their products, and to identify a
United States agent.

Section 701(a) of the Act gives FDA authority to promulgate regulations
for the efficient enforcement of the Act. Thus, the final rule
represents FDA's effort to enforce section 510 of the Act, as amended
by section 417 of the Food and Drug Modernization Act.

Alternatives:

FDA considered requiring less establishment registration information,
but the information required by the rule is quite minimal, consisting
largely of the establishment's address, names of owners or responsible
officials, and additional identifying information (such as the type of
establishment). An alternative that would have required less
information would not give FDA sufficient information to identify a
foreign establishment's location, type, or responsible persons, and
this would complicate efforts to locate or contact the foreign
establishment.

FDA also rejected requiring less frequent registration by foreign
establishments because this would increase the likelihood that the
information would become incorrect or obsolete and would hinder
regulatory actions involving foreign establishments.

FDA also considered comments seeking an exemption from the United
States agent requirement or to allow the United States agent to be in a
foreign country. However, the statute requires foreign establishments
to have a United States agent, and the most logical interpretation of
the statute is that the United States agent must be in the United
States rather than in a foreign country. FDA did state that the United
States agent may be an entity or a person.

Anticipated Cost and Benefits:

FDA examined the potential costs and benefits associated with foreign
establishment registration. Given its experience with establishment
registration for domestic firms, FDA estimates the total registration
costs for foreign establishments to be $809,820. Recordkeeping costs
are estimated at $810,000.

The rule's principal benefit would be the creation of an accurate,
comprehensive list of foreign establishments. This list will make it
easier for FDA to identify foreign establishments, schedule
inspections, and contact foreign establishments when needed. The United
States agent is another benefit as the United States agent will help
FDA in communications with the foreign establishment, respond to
questions regarding the foreign establishment's products that are
imported or offered for import into the United States, and help
schedule inspections of the foreign establishment.

Risks:

Before the enactment of the Food and Drug Modernization Act, Federal
law required domestic establishments to register with FDA and to list
their products. Foreign manufacturers could register their
establishments voluntarily, but were required to list their products.
The different treatment between domestic and foreign establishments
created some confusion among foreign establishments. Some foreign
establishments erroneously believed that listing was voluntary; others
neither registered their establishments nor listed their products.

Establishment registration enables FDA to identify manufacturers and
other FDA-regulated entities for inspection, communication, and other
administrative or regulatory action. For example, if a foreign product
presented a health or safety concern, FDA would contact the foreign
manufacturer, but if the foreign establishment was not registered, the
agency might find it difficult to contact the foreign manufacturer
promptly or to contact the manufacturer at all.

Requiring foreign establishments to register will facilitate FDA's
regulatory and enforcement actions and treat domestic and foreign
establishments alike. Moreover, the regulation implements section 417
of the Food and Drug Modernization Act.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 64 FR 26330 05/14/99
NPRM Comment Period Reopen 08/09/99
NPRM Comment Period End 10/08/99
Final Action 11/00/01
Regulatory Flexibility Analysis Required:

[[Page 61177]]

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
Philip L. Chao
Senior Policy Analyst
Department of Health and Human Services
Food and Drug Administration
Room 15-61 (HF-23)
Office of Policy, Planning and Legislation
5600 Fishers Lane
Rockville, MD 20857
Phone: 301 827-0587
Fax: 301 827-4774
Email: [email protected]
RIN: 0910-AB21
_______________________________________________________________________

HHS--FDA

35. FOOD LABELING: TRANS FATTY ACIDS IN NUTRITION LABELING, NUTRIENT
CONTENT CLAIMS, AND HEALTH CLAIMS
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

21 USC 321; 21 USC 331; 21 USC 342; 21 USC 343; 21 USC 348; 21 USC 371;
...

CFR Citation:

21 CFR 101

Legal Deadline:

None

Abstract:

Section 403(q) of the Federal Food, Drug, and Cosmetic Act, which was
added by the Nutrition Labeling and Education Act of 1990 (NLEA),
requires that the label or labeling of food products bear nutrition
information. Among other things, section 403(q) of the Act authorizes
the Food and Drug Administration (FDA) to add or delete nutrients that
are to be declared on the labels or labeling of food products by
regulation if it finds such action necessary to assist consumers in
maintaining healthy dietary practices. FDA issued final regulations
implementing NLEA in 1993. FDA subsequently received a citizen petition
requesting that FDA amend its regulations on food labeling to require
that the amount of trans fatty acids be listed in the nutrition label
and be limited wherever saturated fat limits are placed on nutrient
content claims, health claims, or disqualifying levels and disclosure
levels. In response to this petition and based on new evidence, FDA
proposed the actions requested in the petition on November 17, 1999 (64
FR 62746). In addition, FDA proposed to define the claim ``trans fat
free.''

Statement of Need:

FDA intends to publish a final rule amending its nutrition labeling
regulations to incorporate requirements for trans fatty acids in
labeling, nutrient content and health claims for several reasons.
First, this final rule responds, in part, to a citizen petition on
trans fatty acids in food labeling from the Center for Science in the
Public Interest. Also, recent research shows that dietary trans fatty
acids raise low density lipoprotein cholesterol (LDL-C), the major diet
related risk factor for coronary heart disease (CHD). Finally, the
information on trans fatty acids in nutrition labeling is needed to
assist consumers in maintaining healthy dietary practices.

Summary of Legal Basis:

The NLEA (Pub. L. 101-535) amended the Federal Food, Drug, and Cosmetic
Act (the Act) to provide, among other things, that certain nutrients
and food components be included in nutrition labeling. Sections
403(q)(2)(A) and (q)(2)(B) of the Act provide the agency with authority
to, by regulation, add or delete nutrients included in the food label
or labeling if the agency finds that such action will assist consumers
in maintaining healthy dietary practices.

Alternatives:

FDA proposed, in the November 1999 proposal, that when trans fatty
acids are present in a food, the declaration of saturated fat must bear
a symbol that refers to a footnote at the bottom of the nutrition label
that states the number of grams of trans fatty acids present in a
serving of the product, i.e., ``Includes ------ g trans fat.'' In
addition to the proposed option, the agency considered a variety of
other options for the declaration of trans fatty acids in the Nutrition
Facts panel. The other options were: (1) include trans fatty acids with
saturated fat and call the total value ``saturated fat;'' (2) include
trans fatty acids with saturated fat and call the total value
``saturated fat,'' and add an asterisk after the term ``saturated fat''
when the food contains trans fatty acids that refers to a footnote
stating ``Contains -------- g trans fat;'' (3) include trans fatty
acids with saturated fat and call the total value ``saturated + trans
fat;'' and (4) list trans fatty acids separately under saturated fat.

Anticipated Cost and Benefits:

FDA has estimated the benefits of the proposed rule in the range of $25
to $50 billion compared with costs in the range of $400 to $900 million
(discounted at 7 percent for 20 years). The value of the benefits were
estimated based on CHD morbidity and mortality prevented. The costs
were estimated based on a formula that included costs for testing,
decisionmaking, information panel reprinting, relabeling of the
principal display panels and product reformulation.

Risks:

The American Heart Association estimates that CHD causes 1.1 million
heart attack cases annually, with 33 percent of them fatal. FDA used
these estimates as the baseline to estimate the number of cases and
fatalities prevented by this rule. The agency estimated the rule would
annually prevent 6,300 to 17,100 cases of CHD and 2,100 to 5,600
deaths, using three different methods to estimate these benefits. Thus,
the labeling changes resulting from this rule are expected to reduce
the risk of CHD, preventing, at a minimum, 6,300 cases of CHD and 2,100
deaths annually.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 64 FR 62746 11/17/99
NPRM Comment Per65 FR 75887d 12/05/00
NPRM Comment Period End 01/19/01
Final Rule 09/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

[[Page 61178]]

Agency Contact:
Susan Thompson
Chemist
Department of Health and Human Services
Food and Drug Administration
(HFS-832)
Center for Food Safety and Applied Nutrition
200 C Street SW.
Washington, DC 20204
Phone: 202 205-5587
Fax: 202 205-5532
Email: [email protected]
RIN: 0910-AB66
_______________________________________________________________________

HHS--FDA

36. CGMPS FOR BLOOD AND BLOOD COMPONENTS: NOTIFICATION OF CONSIGNEES
AND TRANSFUSION RECIPIENTS RECEIVING BLOOD AND BLOOD COMPONENTS AT
INCREASED RISK OF TRANSMITTING HCV (LOOKBACK)
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

21 USC 321; 42 USC 216; 42 USC 262; 42 USC 263; 42 USC 263a; 42 USC
264; 42 USC 300aa-25; 21 USC 331; 21 USC 351 to 353; 21 USC 355; 21 USC
360; 21 USC 371; 21 USC 374

CFR Citation:

21 CFR 606; 21 CFR 610

Legal Deadline:

None

Abstract:

This rulemaking is one of a number of actions being taken to amend the
biologics regulations to remove, revise, or update the regulations
applicable to blood, blood components, and blood derivatives. These
actions are based on a comprehensive review of the regulations
performed by FDA, and are also based on reports by the U.S. House of
Representatives Committee on Government Reform and Oversight,
Subcommittee on House Resources and Intergovernmental Relations, the
General Accounting Office, and the Institute of Medicine, as well as
public comments. In this rulemaking, FDA will amend the biologics
regulations to require that blood establishments prepare and follow
written procedures for appropriate action when it is determined that
blood and blood components pose an increased risk for transmitting
hepatitis C virus (HCV) infection because they have been collected from
a donor who, at a later date, tested repeatedly reactive for evidence
of HCV.

Statement of Need:

In the Federal Register of June 22, 1999 (64 FR 33309), FDA announced
the availability of guidance, which updated previous guidance,
providing recommendations for donor screening and further testing for
antibodies to HCV, notification of consignees, transfusion recipient
tracing and notification, and counseling by physicians regarding
transfusion with blood components at increased risk for transmitting
HCV (often called ``lookback''). While available evidence indicates
that blood establishments are following these recommendations, FDA
believes that regulations should be codified, consistent with the
previous recommendations, to assure there is clear enforcement
authority in case deficiencies in an establishment's lookback program
are found and to provide clear instructions for continuing lookback
activities.

Summary of Legal Basis:

The Public Health Service Act (21 U.S.C. 216 et seq.) and the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321 et seq.) authorize FDA to
regulate biological products and to ensure that the products are safe,
pure, potent, and effective. The Public Health Service Act also
contains the authority under which FDA can promulgate regulations to
prevent the spread of communicable diseases. These regulations would
assure that appropriate action is taken when blood components have been
transfused which may potentially be capable of transmitting HCV, that
persons who have been transfused with such blood components are
notified so that they receive proper counseling and treatment, and to
help prevent the further transmission of HCV.

Alternatives:

FDA has considered permitting the continued voluntary compliance with
the recommendations that have already issued. However, lookback will
remain appropriate for the foreseeable future, and FDA believes that
the procedures should be clearly established in the regulations.

Anticipated Cost and Benefits:

FDA is in the process of analyzing the costs related to the rulemaking.
Monetary burdens will be associated to the tracing of previous
donations of donors, identifying the recipients of these previous blood
donations, and notifying these recipients, as appropriate. FDA believes
these costs will be more than compensated by the public health
benefits, including benefits related to the notification of past
transfusion recipients who may be unaware that they may be infected
with HCV.

Risks:

FDA believes there are minimum risks posed by requiring that
appropriate lookback procedures for HCV be prepared and followed.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 69377 11/16/00
NPRM Comment Period End 02/14/01
Final Action 09/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

Additional Information:

See RIN 0910-AB26.

Agency Contact:
Steven F. Falter
Director, Regulations and Policy Staff
Department of Health and Human Services
Food and Drug Administration
Suite 200N (HFM-17)
Center for Biologics Evaluation and Research
1401 Rockville Pike
Rockville, MD 20852-1448
Phone: 301 827-6210
Fax: 301 594-1944
Email: [email protected]
RIN: 0910-AB76
_______________________________________________________________________

HHS--FDA

37. MARKING REQUIREMENTS FOR AND PROHIBITIONS ON THE REIMPORTATION OF
IMPORTED FOOD PRODUCTS THAT HAVE BEEN REFUSED ADMISSION INTO THE UNITED
STATES
Priority:

Other Significant

Legal Authority:

15 USC 145; 15 USC 1454; 15 USC 1455; 21 USC 321; 21 USC 343; 21 USC

[[Page 61179]]

352; 21 USC 355; 21 USC 360b; 21 USC 362; 21 USC 371; 21 USC 374; 21
USC 381; 21 USC 382; 21 USC 393; 42 USC 216; 42 USC 241; 42 USC 243; 42
USC 262; 42 USC 264

CFR Citation:

21 CFR 1.98

Legal Deadline:

None

Abstract:

The rule would require food products that have been refused entry into
the United States for safety reasons to be marked, ``United States
Refused Entry.'' The proposed rule is intended to protect the public
health against contaminated or unsafe imported food products and to
facilitate FDA's examination of imported products.

Statement of Need:

In 1998, the General Accounting Office issued a report titled, ``Food
Safety: Federal Efforts to Ensure the Safety of Imported Foods Are
Inconsistent and Unreliable.'' The report stated that some food
importers evade import controls and are able to introduce contaminated,
adulterated, or unsafe food into the United States even after FDA
refused to admit the food and the Customs Service ordered the food to
be reexported or destroyed.

Additionally, in 1998, the Senate Permanent Subcommittee on
Investigations conducted hearings on the safety of food imports. The
subcommittee heard testimony about reimporting refused foods through
another port (a practice known as ``port shopping).'' On July 3, 1999,
the President issued a memorandum to the Secretary of Health and Human
Services and the Secretary of the Treasury directing them, in part, to
take all actions available to ``prohibit the reimportation of food that
has been previously refused admission and has not been brought into
compliance with United States laws and regulations'' by requiring the
marking of shipping containers and/or papers of imported food that is
refused admission for safety reasons.

Consequently, FDA and the Department of the Treasury jointly prescribed
a rule to require that imported food that has been refused admission
for safety reasons be marked as ``UNITED STATES REFUSED ENTRY.'' The
mark will make it easier to detect previously refused food and reduce,
if not eliminate, ``port shopping.''

Summary of Legal Basis:

Section 801(a) of the Federal Food, Drug, and Cosmetic Act (the Act)
authorizes FDA to refuse to admit imported food if the food has been
manufactured, processed, or packed under insanitary conditions, is
forbidden or restricted in sale in the country in which is was
produced, or is adulterated or misbranded. Sections 402 and 403 of the
Act describe when a food is adulterated or misbranded respectively.
Section 701(a) of the Act authorizes FDA to issue regulations for the
efficient enforcement of the Act, while section 701(b) of the Act
authorizes FDA and the Department of the Treasury to jointly prescribe
regulations for the efficient enforcement of section 801 of the Act.

The final rule is within FDA's authority at sections 402, 403, 701, and
801 of the Act. In general, unsafe food is often adulterated under
section 402 of the Act, and may also be misbranded under section 403 of
the Act if the food purports to meet a particular definition, standard
of identity, or standard of quality. Marking refused foods will make it
easier for FDA to refuse to admit previously-refused, adulterated or
misbranded food imports into the United States.

Additionally, section 301 of the Public Health Service Act (PHS Act)
authorizes FDA to ``render assistance'' to appropriate health
authorities in the conduct of or to promote coordination of research,
investigations, experiments, demonstrations, and studies relating to
the causes, diagnosis, treatment, control, and prevention of disease.
Section 361 of the PHS Act authorizes FDA to issue regulations to
prevent the introduction, transmission, or spread of communicable
diseases into the United States. Marking refused food products will
help foreign health officials determine whether to take regulatory
action against a particular product. It would also alert foreign
officials to previously refused food and help prevent the introduction,
transmission, or spread of communicable diseases into the United States
by making it more difficult for unsafe food to reenter the United
States.

Alternatives:

FDA considered exempting small businesses from the rule, but, because
most importers and consignees would qualify as small businesses, this
would negate the rule's purpose.

The agency also considered ordering the destruction of all refused food
imports, but this would not be feasible because it would divert federal
resources to supervising or otherwise ensuring that the refused food
imports are stored until they can be destroyed and that they are
destroyed.

A ``no action'' alternative was rejected because it would allow illegal
practices, such as port shopping, to continue, resulting in unsafe food
entering the United States.

FDA also rejected marking some, but not all, imported food refused
entry for safety reasons. While this alternative would be less costly,
it would also be less efficient because some refused food imports would
be able to reenter the United States and because a previously-refused,
but unmarked, food would be difficult to detect compared to a
previously-refused and marked food. This alternative would also result
in arguments as to the criteria to be applied and whether a particular
food should be marked.

Anticipated Cost and Benefits:

FDA examined the potential costs and benefits associated with marking
refused food imports. Importers and consignees would bear the costs
associated with marking refused food imports. If these importers and
consignees use labeling (an inexpensive and time efficient method) as
their marking method, the annual cost to importers and consignees would
be $398,663 with an additional $39,600 in costs for labeling equipment.
FDA would incur an estimated $308,131 in hourly wage costs associated
with refusals to admit an imported food and for supervising the marking
process.

The rule's principal benefit would be a reduction in the number of
illnesses and injuries caused by unsafe imported food. The agency is
unable to quantify the amount of illegal importation of previously
refused foods, so it cannot accurately predict the value of reduced
illnesses and injury.

Risks:

There is a possible risk that previously refused, unpackaged food (such
as loose grain in a railroad car) would be able to enter the United
States because the food itself cannot be marked, although the final
rule would require the importer or consignee to affix the mark on
papers accompanying the product.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 6502 01/22/01

[[Page 61180]]

NPRM Comment Period End 04/09/01
Final Rule 04/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Philip L. Chao
Senior Policy Analyst
Department of Health and Human Services
Food and Drug Administration
Room 15-61 (HF-23)
Office of Policy, Planning and Legislation
5600 Fishers Lane
Rockville, MD 20857
Phone: 301 827-0587
Fax: 301 827-4774
Email: [email protected]
RIN: 0910-AB95
_______________________________________________________________________

HHS--FDA

38. EFFICACY EVIDENCE NEEDED FOR PRODUCTS TO BE USED AGAINST TOXIC
SUBSTANCES WHEN HUMAN STUDIES ARE UNETHICAL
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

15 USC 1451 to 1561; 21 USC 331; 21 USC 351 to 353; 21 USC 355; 21 USC
360; 21 USC 360c to 360f; 21 USC 360h to 360j; 21 USC 371; 21 USC 374;
21 USC 379e; 21 USC 381; 42 USC 216; 42 USC 241; 42 USC 262; 42 USC
263b; 21 USC 321; PL 105-115, sec 122, 111 stat 2322 (21 USC 355 note)

CFR Citation:

21 CFR 314; 21 CFR 601

Legal Deadline:

None

Abstract:

The agency plans to publish a final rule that would amend its new drug
and biological product regulations to identify the information needed
to provide substantial evidence of the efficacy of new drug and
biological products used to reduce or prevent the toxicity of chemical,
biological, radiological, or nuclear substances when adequate and well-
controlled efficacy studies in humans ethically cannot be conducted.
Efficacy studies in humans cannot be conducted ethically if: 1) the
studies would involve administering a potentially lethal or permanently
disabling toxic substance or organism to healthy human volunteers
without a proven treatment; and 2) field trials (assessment of use of
the product after accidental or hostile exposure to the substance) are
not feasible. FDA is taking this action because it recognizes the
importance of improving medical responses to the use of lethal or
permanently disabling chemical, biological, radiological, and nuclear
substances in order to protect individuals exposed to these substances.

Statement of Need:

A distinct possibility exists that American military personnel and
civilians may be exposed to lethal or permanently disabling chemical,
biological, or radiological substances in the course of conventional or
unconventional warfare, as a result of terrorist actions, or as a
consequence of an industrial accident. Significant difficulties are
presented in conducting efficacy studies on drug and biological
products intended to reduce or prevent the toxicity of these substances
in humans. The incidence of exposure is so low that field efficacy
studies cannot be conducted and the toxicity of the substances prevents
them from being ethically given to healthy volunteers. The only
practical and ethical means of evaluating the efficacy of drugs and
biological products in these situations is to rely on data from animal
studies that are an adequate model for the action of both the toxin and
the drug or biological product in humans.

Summary of Legal Basis:

FDA approves new drugs under the authority of the Federal, Food, Drug,
and Cosmetic Act (the Act) and biological products under section 351 of
the Public Health Service Act. Section 505(d) (21 USC 355(d)) of the
Act authorizes the Secretary of Health and Human Services to issue an
order refusing to approve a new drug application if the Secretary finds
that ``there is a lack of substantial evidence that the drug will have
the effect it purports or is represented to have under the conditions
of use prescribed, recommended, or suggested in the proposed labeling
thereof ....'' The term substantial evidence is defined in section
505(d) of the Act as``... evidence consisting of adequate and well-
controlled investigations, including clinical investigations, by
experts qualified by scientific training and experience to evaluate the
effectiveness of the drug involved, on the basis of which it could
fairly and responsibly be concluded by such experts that the drug will
have the effect it purports or is represented to have under the
conditions of use prescribed, recommended, or suggested in the labeling
or proposed labeling thereof.''

In interpreting the term ``substantial evidence,'' FDA has viewed the
phrase ``adequate and well-controlled investigations, including
clinical investigations'' as meaning that efficacy determinations must
include studies of efficacy in humans. The agency's regulations did not
contemplate situations in which efficacy studies cannot ethically be
conducted in humans, and FDA believes that it would be inconsistent
with the statute's public health objectives to conclude that FDA cannot
use some other basis for considering the efficacy of such products. The
legislative history does not address this issue. Concluding that such
products cannot ever be approved because human efficacy trials cannot
be conducted is contrary to the public interest and inconsistent with
the Act's purpose of public health protection.

FDA has therefore concluded that, where definitive human efficacy
studies cannot ethically be conducted because they would necessarily
expose healthy subjects to a potentially lethal or permanently
disabling substance, the statutory standard permits efficacy to be
based on adequate and well-controlled investigations that are not
conducted in humans. This conclusion is consistent with the recognition
by Congress of the importance of ethical behavior in the study of
unapproved products. For FDA to approve products where definitive
efficacy studies cannot be conducted in humans there must be sufficient
data available to meet the statutory standard. The data must be such
that experts are able to fairly and responsibly conclude ``that the
drug will have the effect it purports or is represented to have ...''
in humans. Where data from adequate and well-controlled animal studies
meet this standard, FDA may approve the product.

Alternatives:

FDA did not identify any valid alternatives to using efficacy data from
animal studies to approve drug and biological products used to treat or

[[Page 61181]]

prevent the toxicity of chemical, biological, or radiological
substances where the normal incidence of exposure is so low that normal
clinical trials would be impractical and the deliberate exposure of
volunteers to the substances would be unethical. The rule would not
apply if product approval can be based on standards described elsewhere
in FDA's regulations (for example, accelerated approval based on human
surrogate markers or clinical endpoints other than survival or
irreversible morbidity).

Anticipated Cost and Benefits:

The potential public health benefits of having new drugs and biological
products approved under this rule are difficult to measure. The cost of
approving new drugs and biological products under this rule should not
exceed the cost of approving similar drugs based on clinical efficacy
data.

Risks:

Risks from the use of drugs and biological products approved under this
rule should be minimal. The safety of these products will be studied in
human volunteers comparable to the people who would be exposed to the
product.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 64 FR 53960 10/05/99
Final Action 04/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

Agency Contact:
Wayne H. Mitchell
Regulatory Counsel, Office of Regulatory Policy
Department of Health and Human Services
Food and Drug Administration
Suite 3037 (HFD-7)
Center for Drug Evaluation and Research
1451 Rockville Pike
Rockville, MD 20852
Phone: 301 594-2041
Fax: 301 827-5562
Email: [email protected]
RIN: 0910-AC05
_______________________________________________________________________

HHS--FDA

39. ADDITIONAL CRITERIA AND PROCEDURES FOR CLASSIFYING OVER-
THE-COUNTER DRUGS AS GENERALLY RECOGNIZED AS SAFE AND EFFECTIVE AND NOT
MISBRANDED
Priority:

Economically Significant

Legal Authority:

21 USC 321; 21 USC 351 to 353; 21 USC 355; 21 USC 360; 21 USC 371

CFR Citation:

21 CFR 330

Legal Deadline:

None

Abstract:

The OTC drug review establishes conditions under which OTC drugs are
generally recognized as safe and effective and not misbranded. After a
final monograph (i.e., final rule) is issued, only OTC drugs meeting
the conditions of the monograph, or having an approved new drug
application, may be legally marketed. This final rule establishes
additional criteria and procedures by which other OTC conditions may
become eligible for consideration in the OTC drug monograph system. The
additional criteria and procedures describe how OTC drugs marketed in
the United States after the OTC drug review began in 1972 and OTC drugs
without any U.S. marketing experience may become eligible and, if found
eligible, how the drug would be evaluated for general recognition of
safety and effectiveness.

Statement of Need:

This final rule establishes additional criteria and procedures by which
over-the-counter (OTC) conditions (e.g., ingredients, combinations of
ingredients, uses) may become eligible for inclusion in the OTC drug
monograph system. This rule benefits manufacturers and consumers
because it provides for increased access to certain OTC drugs under
certain conditions.

Summary of Legal Basis:

The legal basis is the Federal Food, Drug, and Cosmetic Act, 21 U.S.C.
sections 321, 351, 352, 353, 355, 360 and 371. No aspect of the action
is required by statute or court order.

Alternatives:

Without this final rule, the only alternative to marketing approval for
drugs subject to the rule would be an NDA.

Anticipated Cost and Benefits:

The major benefit of this rule will be increased over the counter
access to drugs, and potential cost savings to consumers. Considering
potential one-time cost savings associated with prescription drug user
fees and reduced reporting requirements of marketing under an OTC drug
monograph vs. an NDA, the agency calculates a one-time cost savings to
industry of around $300,000 per submission. Future yearly cost savings
could total around $21,000 per product and $142,000 per establishment
if the submitted product were the establishment's only product. If FDA
receives 25 to 50 submissions a year, industry would save between $7.3
and $14.5 million in one-time costs alone.

Risks:

There are minimal risks associated with this final rule. The
flexibility to market drug products under FDA's OTC drug monogreaph
system provides an overall net benefit to the companies seeking to use
this approach, as well as to the American public. One important benefit
to sponsoring companies is the saving of NDA user fees (see Anticipated
Costs and Benefits above). The American public benefits by having OTC
drugs without any U.S. marketing experience but sufficient foreign
marketing experience become available in the U.S.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 61 FR 51625 10/03/96
ANPRM Comment Period End 01/02/97
NPRM 64 FR 71062 12/20/99
NPRM Comment Period End 03/22/00
Final Action 04/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Government Levels Affected:

None

[[Page 61182]]

Agency Contact:
Gerald M. Rachanow
Regulatory Counsel, Division of Over-the-Counter Drug Products
Department of Health and Human Services
Food and Drug Administration
HFD-560
Center for Drug Evaluation and Research
5600 Fishers Lane
Rockville, MD 20857
Phone: 301 827-2241
Fax: 301 827-2315
Email: [email protected]
RIN: 0910-AC22
_______________________________________________________________________

HHS--Indian Health Service (IHS)

-----------

PROPOSED RULE STAGE

-----------

40. TRIBAL SELF-GOVERNANCE AMENDMENTS
Priority:

Other Significant

Legal Authority:

PL 106-260, sec 517(a)(2); 25 USC 450, Tribal Self-Governance
Amendments

CFR Citation:

None

Legal Deadline:

NPRM, Statutory, August 18, 2001, Expiration of authority to promulgate
final rule: May 18, 2002.

Abstract:

Title V of the Tribal Self-Governance Amendments of 2000 (Pub. L. 106-
260) made permanent the demonstration program which allowed tribes full
control over the operation and redesign of various activities
historically managed by IHS. The proposal includes provisions that
govern how IHS and Tribes will carry out their responsibilities under
the Act.

Statement of Need:

Given the success of the Self-Governance demonstration program that had
been in operation since 1992, Congress elected to make the program
permanent. Under the Act, Tribal compacts initiated under the
demonstration program will continue with up to 50 additional compact
awards each year. Currently, almost 44 percent of IHS funds are
allocated for tribally controlled programs.

Summary of Legal Basis:

Section 517(a) of the Act requires the Secretary to initiate procedures
to negotiate and promulgate the regulations.

Alternatives:

Negotiated rulemaking is prescribed by the Act and is consistent with
Federal policy on coordination and consultation with tribal
governments. Given the number of Indian and Alaska Native Tribes and
extent of the provisions covered by the Act, absence of this regulation
would have a substantial negative impact on the implementation of title
V. The proposed rule represents a consensus of Tribal and Federal
representatives on most of the provisions. Failure to implement the
rule would result in wide variation in interpretation of the provisions
and potential for increased litigation. Further, failure to implement
the rule would be received poorly by Tribal leaders who have worked in
good faith to reach consensus on the provisions.

Anticipated Cost and Benefits:

Not appicable.

Risks:

Not applicable.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Final Rule 05/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal, Tribal

Agency Contact:
Paula K. Williams
Director of Tribal Self-Governance
Department of Health and Human Services
Indian Health Service
Suite 240
Thompson Building
801 Thompson Avenue
Rockville, MD 20852
Phone: 301 443-7821
RIN: 0917-AA05
_______________________________________________________________________

HHS--Centers for Medicare & Medicaid Services (CMS)

-----------

PROPOSED RULE STAGE

-----------

41. NATIONAL STANDARD FOR IDENTIFIERS OF HEALTH PLANS (CMS-4145-P)
Priority:

Other Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect State, local or tribal goverments.

Legal Authority:

42 USC 1320d-2(b)(1) of the Social Security Act

CFR Citation:

45 CFR 160.103; 45 CFR 162

Legal Deadline:

Final, Statutory, February 21, 1998.

Abstract:

This rule would implement a standard identifier to identify health
plans that process and pay certain electronic health care transactions.
It would implement one of the requirements for administrative
simplification in section 262 of the Health Insurance Portability and
Accountability Act of 1996.

Statement of Need:

This rule would implement the national health plan identifier; one of
the requirements for administrative simplification in section 262 of
the Health Insurance Portability and Accountability Act of 1996.

Summary of Legal Basis:

Health Insurance Portability and Accountability Act of 1996 (Pub. L.
104-191, August 21, 1996, sec. 1173).

Alternatives:

Three alternatives were considered:

Option 1: Federal and State Medicaid Agencies Cost : $38.1M

Option 2: Private Organizations Cost : $38.1M

Option 3: Registry Cost : $34.9M

Duration: Every option is required to complete the enumeration process
within two years of the promulgation and effective date of the Final
Rule for all health plans, except that small health plans have three
years to comply.

[[Page 61183]]

Option 1: Two or more coordinating entities will share responsibility
for enumerating health plans. The entities would consist of Federal and
State Medicaid programs.

Option 2: Same as option one, except that coordinating entities would
consist of private organizations.

Option 3: CMS, acting through a contractor, would be the single entity
enumerating all health plans and maintaining the registry.

Decision: The Secretary has selected option three, not only because its
costs are lower, but also because it would result in less burden on
organization in coordinating enumeration, less confusion for health
plans, better quality control of data control, and better management of
the enumeration process.

Anticipated Cost and Benefits:

A benefit/cost analysis was conducted with three contribution rates of
PlanID toward overall HIPPA cost savings. Given a 1 percent
contribution rate, the PlanID project shows a net present value of over
$12.8 M and a benefit/cost ratio of 1.45. For 5 and 15 percent rates,
the net present values are $179.2M and $595.3M, respectively, and the
benefit cost ratios are 7.23 and 21.69, respectively. These values
indicate that the implementation of the PlanID project will result in a
considerable positive return on investment.

Risks:

There are three categories of risk:

Technical and Operational--physical/logical system

Schedule--delays/slippage

Cost/Budget--cost overruns, funding shortfalls, unexpected funding
needs

An assessment and mitigation of risks was conducted as part of the
information technology documentation. The subsequent risk analysis
determined the project to be a low risk endeavor.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM Determined To Be
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

State

Federalism:

This action may have federalism implications as defined in EO 13132.

Agency Contact:
Helen Dietrick
Department of Health and Human Services
Centers for Medicare & Medicaid Services
S1-07-17
7500 Security Boulevard
Baltimore, MD 21244-1850
Phone: 410 786-7448
RIN: 0938-AH87
_______________________________________________________________________

HHS--CMS

42. HEALTH INSURANCE REFORM: STANDARDS FOR ELECTRONIC CLAIMS
ATTACHMENTS (CMS-0050-P)
Priority:

Other Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect State, local or tribal goverments.

Legal Authority:

42 USC 1320d-2(a)(2)(B)

CFR Citation:

45 CFR 162

Legal Deadline:

Final, Statutory, August 21, 1998.

Abstract:

This rule proposes an electronic standard transmissions for claims
attachments. The standard is required by HIPAA. It would be used to
transmit clinical data, beyond those data contained in the claims
standard, to help establish medical necessity or coverage.

Statement of Need:

The Administrative Simplification subtitle of the Health Insurance
Portability and Accountability Act (HIPAA) of 1996 requires the
Secretary of Health and Human Services to adopt standards for
electronically requesting and supplying additional information to
support submitted claims data. This rule stipulates the requirements
necessary to comply with the law.

Summary of Legal Basis:

The Administrative Simplification provisions of HIPAA require the
Secretary to establish standards that additionally support information
attached to claims.

Alternatives:

In the absence of this regulation, claims attachments in electronic
form would be left with the private industry to develop. This action
may create an inconsistent standard use of electronic claims
attachments within the health care industry.

Anticipated Cost and Benefits:

Risks:

Failure to publish this rule would mean that no standard for electronic
claims attachments would be established for use within the health care
system. Lack of a standard electronic claims attachments would decrease
the amount of savings in health care costs.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM Determined To Be
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

State, Local, Federal, Tribal

Federalism:

This action may have federalism implications as defined in EO 13132.

Procurement:

This is a procurement-related action for which there is a statutory
requirement. There is a paperwork burden associated with this action.

Agency Contact:
James Krall
Health Insurance Specialist
Department of Health and Human Services
Centers for Medicare & Medicaid Services
7500 Securtiy Boulevard
Baltimore, MD 21244
Phone: 410 786-6999
RIN: 0938-AK62

[[Page 61184]]

_______________________________________________________________________

HHS--CMS

43. HEALTH INSURANCE REFORM: MODIFICATIONS TO STANDARDS FOR ELECTRONIC
TRANSACTIONS (CMS-0003-P)
Priority:

Other Significant

Unfunded Mandates:

Undetermined

Legal Authority:

Social Security Act, sec 1871

CFR Citation:

45 CFR 162

Legal Deadline:

None

Abstract:

This proposed rule would adopt modifications to certain standards for
retail pharmacies adopted in our regulations entitled ``Health
Insurance Reform: Standards for Electronic Transactions'' published in
the Federal Register on August 17, 2000 (65 FR 50312), which
implemented some of the requirements of the Administrative
Simplification subtitle of the Health Insurance Portability and
Accountability Act of 1996. This rule proposes to adopt the National
Council for Prescription Drug Programs Batch Standard Batch
Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000
for the following standards for retail pharmacy transactions: health
care claims or equivalent encounter information; eligibility for a
health plan; referral certification and authorization; and coordination
of benefits. Additionally, we propose to modify the standard for the
health care claim payment and remittance advice transaction as the
standard for the retail pharmacy sector by adopting, in place of the
current standard, the ASC X12N 835, Health Care Claim Payment/Advice,
as the standard for the retail pharmacy transaction.

This rule also proposes to repeal the adoption of National Drug Codes
as the standard medical data code set for reporting drugs and biologics
in all standard transactions, except those for retail pharmacy
transactions, for which standards have been adopted.

Statement of Need:

The Administrative Simplification subtitle of the Health Insurance
Portability and Accountability Act (HIPAA) of 1996 requires the
Secretary of Health and Human Services to adopt standards for
electronic transactions. This rule modifies previous adopted standards
to standards that are currently in use throughout the health care
industry.

Summary of Legal Basis:

The Administrative Simplification provisions of HIPAA require the
Secretary to establish standards of electronic transactions for health
plans, health care clearing houses, and certain health care providers.

Alternatives:

Failure to publish this rule would cause non-compliance with standards
that are already in widespread use throughout the health care industry.

Anticipated Cost and Benefits:

The estimated costs and benefits of this rule would not change the
impact of the Standard for Electronic Transaction final rule published
on August 17, 2000 (65 FR 50312).

Risks:

This rule would permit compliance with standards currently used within
the health care industry.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

Undetermined

Agency Contact:
Marilyn Abramovitz
Health Insurance Specialist
Department of Health and Human Services
Centers for Medicare & Medicaid Services
N2-14-26
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-5939
RIN: 0938-AK64
_______________________________________________________________________

HHS--CMS

44. PROSPECTIVE PAYMENT SYSTEM FOR LONG-TERM CARE HOSPITALS FOR FY 2003
(CMS-1177-P)
Priority:

Other Significant

Unfunded Mandates:

Undetermined

Legal Authority:

BBRA, sec 123; BIPA, sec 307; PL 105-33, sec 4422; PL 106-113, sec 123;
PL 106-544, sec 307(b)

CFR Citation:

42 CFR 412

Legal Deadline:

NPRM, Statutory, December 31, 2001, Final rule 4/30/02.

Abstract:

This rule would implement a prospective payment system for long-term
care hospitals.

Statement of Need:

The Medicare inpatient hospital acute-care PPS was established by the
Social Security Amendments of 1983 (Pub. L. 98-21). This prospective
payment system (PPS) generally applies to all hospitals participating
in the Medicare program with certain exclusions, exemptions, and
adjustments specifically set out under the law. Long-term care
hospitals (LTCHs), established under section 101 of Tax Equity and
Fiscal Responsibility Act (TEFRA) of 1982, which amended section
1886(b) of the Social Security Act, was one of four classes of
specialty hospitals (the others being children's, psychiatric,
rehabilitation, and psychiatric and rehabilitation units in acute-care
hospitals) that were excluded from the inpatient acute-care PPS. These
classes of hospitals and cancer hospitals, which were added to the
category of, excluded hospitals beginning in fiscal year 1990, under
section 6004 of the Omnibus Budget Reconciliation Act (OBRA) of 1989,
continued to be paid for under TEFRA. The exemption of these facilities
from the PPS was intended to be a temporary measure, pending the
development of more appropriate systems to pay these providers under a
PPS.

Section 123 of Public Law 106-113, the Balanced Budget Refinement Act
of 1999 (BBRA), requires the establishment and implementation of a
prospective payment system (PPS) for long-term care hospitals (LTCHs)
by October 1, 2002. Section 307(b) of Public Law 106-554, the Benefits
Improvement and Protection Act of 2000 (BIPA), authorized the Secretary
to examine and evaluate a number of adjustment factors for inclusion in
the LTCH PPS. Congressional intent regarding a timely implementation of
the LTCH PPS is reflected in the statutory establishment of a default
model under which LTCHs will receive

[[Page 61185]]

Medicare payments for services furnished on or after October 1, 2002.

Summary of Legal Basis:

Section 123 of Public Law 106-113, the BBRA, requires that the
Secretary develops and implements the PPS for LTCHs by October 1, 2002.
Section 307(b) of Public Law 106-554 confers broad authority on the
Secretary to determine whether and which payment adjustments should be
included in the system.

Alternatives:

None.

Anticipated Cost and Benefits:

Section 123(a) of the BBRA requires that the PPS for LTCH maintain
budget neutrality. Payment will be estimated using the excluded
hospitals' market basket update. The ability to pay for long-term care
prospectively at LTCHs will have a direct, positive impact on the
Medicare system by controlling the increase in costs for services that
these hospitals provide. Although some hospitals will benefit more than
others during the first year of the PPS due to variations in individual
case mix indices, we anticipate that the system to ``self-correct''
within two years, because the more accurate coding and data-reporting
required by a PPS will affect payment rates. Operating under a PPS will
also have a beneficial impact on the efficient management and planning
capability of individual LTCHs.

Risks:

Failure to develop and implement the PPS for LTCHs by October 1, 2002
would place us in violation of the BBRA and BIPA. Moreover, failure to
meet the deadlines imposed by the notice and comment rulemaking process
(citation) would make it impossible to comply with statutory
requirements for implementation.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM Determined To Be
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Local, Federal

Federalism:

Undetermined

Agency Contact:
Judith H. Richter
Department of Health and Human Services
Centers for Medicare & Medicaid Services
C4-07-07
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-2590
RIN: 0938-AK69
_______________________________________________________________________

HHS--CMS

45. MODIFICATIONS TO MEDICARE MANAGED CARE RULES BASED ON PROVISIONS OF
BIPA AND TECHNICAL CORRECTIONS (CMS-1180-P)
Priority:

Economically Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

BIPA, sec 601 to 608; BIPA, sec 611 to 621; BIPA, sec 623; BIPA, sec
634

CFR Citation:

Not Yet Determined

Legal Deadline:

None

Abstract:

This regulation would implement certain Medicare payment provisions of
the Medicare, Medicaid and SCHIP Benefits Improvement and Protection
Act (BIPA) of 2000. The policy changes include premium reductions for
M+C enrollees, uniform coverage for M+C plans in multiple locations,
eliminating health disparities, M+C program compatibility with employer
or union group plans, ESRD enrollees, and increased civil money
penalties for M+C organizations that terminate contracts mid-year.
Moreover, this regulation describes CMS' authority to waive or modify
requirements that hinder the design of, the offering of, or the
enrollment in such M+C plans offered to employers or labor unions.

Statement of Need:

This rule would implement changes to the Social Security Act (the Act)
enacted in sections 606, 612, 615, 616, 617, 620, 621, and 623 of the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA), relating to the Medicare+Choice (M+C) program. These
changes include permitting premium reductions as additional benefits,
restricting implementation of significant new regulatory requirements
midyear, allowing a uniform local coverage policy for M+C plans
covering multiple localities, and allowing us to waive or modify
certain requirements that hinder the offering of M+C plans to employers
or labor unions.

Summary of Legal Basis:

Sections 606, 612, 615, 616, 617, 620, 621, and 623 of BIPA.

Alternatives:

None.

Anticipated Cost and Benefits:

These changes to the M+C regulations, implementing the provisions of
BIPA pertaining to the M+C program would result in more flexibility for
the M+C plans, enabling them to better serve their Medicare enrollees,
including ESRD enrollees. The changes would also assist the M+C
organizations in the marketplace by allowing them to waive or modify
certain regulatory requirements that hinder the offering of M+C plans
to employers or labor unions.

Risks:

If not published timely, the regulations will not implement changes
mandated by the Congress. With the exception of one, all of the
provisions of BIPA have already taken effect consistent with the
effective dates established by the BIPA.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Federal

Agency Contact:
Alfred G. D'Alberto
Office of Managed Care
Department of Health and Human Services
Centers for Medicare & Medicaid Services
S3-02-01
7500 Security Boulevard
Baltimore, MD 21244-1850
Phone: 410 786-1100
RIN: 0938-AK71

[[Page 61186]]

_______________________________________________________________________

HHS--CMS

46. REVISIONS TO TRANSACTION AND CODE SET STANDARDS FOR ELECTRONIC
TRANSACTIONS (CMS-0005-P)
Priority:

Other Significant

Legal Authority:

Social Security Act, sec 1171 to 1179; PL 104-191

CFR Citation:

45 CFR 162

Legal Deadline:

None

Abstract:

This rule would adopt modifications to the standards for electronic
health care transactions adopted by the Secretary in regulations
published August 2000. These modifications enable covered entities to
comply with the standards and area result of the Designated Standard
Maintenance Organization (DSMO) process.

Statement of Need:

The Administrative Simplification subtitle of the Health Insurance
Portability and Accountability Act (HIPAA) of 1996 requires the
Secretary of Health and Human Services to adopt standards for
electronic transactions. This rule modifies previous adopted standards
as a result of the Designated Standard Maintenance Organization (DSMO)
process.

Summary of Legal Basis:

Alternatives:

In the absence of this regulation, standard for electronic transactions
would be left with the private industry to develop. This action may
create an inconsistent standard use of electronic claims attachments
within the health care industry.

Anticipated Cost and Benefits:

The estimated costs and benefits of this rule would not change the
impact of the Standard for Electronic Transaction Final Rule published
on August 17, 2000 (65 FR 50312).

Risks:

Modifying standards established in the Standard for Electronic
Transaction Final Rule (65 FR 50312), as a result of the Designated
Standard Maintenance Organization (DSMO) process, will allow the health
care industry to be in compliance with regulations under HIPAA. This
proposed rule would enable providers, health plans, and clearinghouses
to utilize a consistent set of electronic standards that are in
compliance throughout the entire health care community.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses, Governmental Jurisdictions, Organizations

Government Levels Affected:

State, Local, Tribal, Federal

Agency Contact:
Stanley B. Nachimson
Senior Technical Advisor
Department of Health and Human Services
Centers for Medicare & Medicaid Services
N2-16-03
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-6153
RIN: 0938-AK76
_______________________________________________________________________

HHS--CMS

47. ORGAN PROCUREMENT ORGANIZATION CONDITION FOR COVERAGE (CMS-3064-
IFC)
Priority:

Other Significant

Legal Authority:

42 USC 1320b-8(b)(1)(A)(i); 42 USC 273(b)(2)

CFR Citation:

42 CFR 486.301

Legal Deadline:

Final, Statutory, January 1, 2002, Requires promulgation of new
conditions.

Abstract:

This rule would establish conditions for coverage for organ procurement
organizations (OPOs) to be certified by the Secretary to receive
payment from Medicare and Medicaid for organ procurement costs and to
be designated by the Secretary for a specific geographic service area.

Statement of Need:

This rule contains new conditions for coverage for organizations OPOs,
including new performance standards. This rule would also increase the
rectification cycle for OPOs from two years to four years.

Summary of Legal Basis:

Section 1138(b) of the Social Security Act (the Act) provides the
statutory qualifications and requirements that an OPO must meet in
order to receive payment for organ procurement costs associated with
procuring organs for hospitals under the Medicare and Medicaid
programs. This section gives the Secretary broad authority to establish
performance-related standards for OPOs. Under this authority, the
Secretary established conditions for coverage for OPOs at 42 CFR
486.301, et seq. Section 1138(b) of the Act specifies that an OPO must
be certified or rectified by the Secretary as meeting the standards to
be a qualified OPO as described in section 371(b) of the Public Health
Service (PHS) Act. The PHS Act requirements were established by the
National Organ Transplant Act of 1984 and include provisions for OPO
board membership, staffing, agreements with hospitals, and membership
in the OPTN. The Organ Procurement Organization Certification Act of
2000 (section 701 of Pub. L. 106-505, 42 U.S.C. section 273(b)(1)(D))
amended section 371(b) of the PHS Act to require CMS to increase the
certification cycle for OPOs from two years to four years and
promulgate new performance standards for OPOs.

Alternatives:

CMS is considering various alternatives in the development of
performance measures and additional conditions for coverage and will
solicit public comments in order to identify additional alternatives.

Anticipated Cost and Benefits:

Undetermined.

Risks:

Undetermined.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

[[Page 61187]]

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Jacqueline Morgan
Health Insurance Specialist
Department of Health and Human Services
Centers for Medicare & Medicaid Services
S3-02-01
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-4282
RIN: 0938-AK81
_______________________________________________________________________

HHS--CMS

48. HOME HEALTH PROSPECTIVE PAYMENT SYSTEM REFINEMENTS (CMS-
1161-P)
Priority:

Other Significant. Major under 5 USC 801.

Legal Authority:

PL 105-33, sec 4603(a); PL 105-277, sec 5101(c); PL 105-277, sec
5101(d); PL 106-113, sec 305 to 306; PL 106-554, sec 502; PL 106-554,
sec 508; 42 USC 1395ff

CFR Citation:

Not Yet Determined

Legal Deadline:

None

Abstract:

This rule proposes refinements to the case-mix policies governing the
home health prospective payment system (PPS) for FY 2004.

Statement of Need:

This rule proposes refinements to the PPS case-mix for FY 2004. Future
refinements may include, but are not limited to, accuracy, modification
of existing adjustments to the PPS to improve distributional integrity
of the system, and changes to improve case-mix.

Summary of Legal Basis:

Section 1895 of the Social Security Act allows the Secretary to
establish a prospective payment system for payment of all costs of
Medicare home health services. Section 1895(b)(3)(B) allows the
Secretary to adjust the standards prospective payment amount (or
amounts) for subsequent fiscal years so as to eliminate the effect of
coding or classification changes that do not reflect real changes in
case mix.

Alternatives:

In this regulation, we will explore the possibility of PPS refinements
based on an analysis of the appropriateness and accuracy of payments
for different case mixes and the overall distributional effects of PPS.

Anticipated Cost and Benefits:

At this point, it is too early to determine any specific costs and
benefits of this regulatory action. We believe the overall effect of
such refinements will be a more equitable distribution of payments to
home health agencies.

Risks:

The home health industry will benefit from refinements that will result
in more precise and equitable payments based on ongoing analysis of the
PPS environment and refinements to the case mix methodology.
Beneficiaries will similarly benefit from payment methodology
improvements which more accurately distribute Medicare payments based
on relative patient needs. We believe any risk will be minimized by
assuring that proposed refinements are based on objective analysis of
ongoing data reflecting HHA behavior and beneficiary impacts under the
current system.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 06/00/02
Final Action 05/00/03
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Susan Levy
Health Insurance Specialist
Department of Health and Human Services
Centers for Medicare & Medicaid Services
C5-08-27
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-9364
RIN: 0938-AK93
_______________________________________________________________________

HHS--CMS

49. MEDICAID MANAGED CARE (CMS-2104-F)
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

Undetermined

Legal Authority:

Sec 4701 to 4710, Balanced Budget Act of 1997; sec 1932, Social
Security Act

CFR Citation:

42 CFR 400; 42 CFR 430; 42 CFR 431; 42 CFR 434; 42 CFR 435; 42 CFR 438;
42 CFR 440; 42 CFR 447

Legal Deadline:

None

Abstract:

This rule will revise recently published provisions for the Medicaid
Managed Care program. It would also address quality of care and
services under Medicaid managed care arrangements. In addition, this
rule would affect enrollee rights and responsibilities, as well as
contracts between State agencies and managed care organizations.

Statement of Need:

This regulation is necessary in order to implement the Medicaid managed
care provisions of the Balanced Budget Act of 1997 (BBA). The Secretary
has committed to releasing this final regulation as soon as possible so
that States can begin to make necessary changes to their systems and
operations.

Summary of Legal Basis:

Section 4701 through 4710 of the Balanced Budget Act of 1997; Section
1932 of the Social Security Act.

Alternatives:

To not publish a final regulation, which will leave States with no
guidance for implementing the BBA's managed care provisions.

Anticipated Cost and Benefits:

This regulation is economically significant. However, the regulation
includes new managed care rate setting provisions that will be of great
benefit to States and health plans. We have heard repeatedly from
States and health plans that they are in support of the rate setting
provisions as they will help offset the cost of other provisions within
the regulation.

[[Page 61188]]

Risks:

If we do not publish a final regulation by August 16, 2002, the final
rule with comment period that was published on January 19, 2001 will
take effect.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 43613 08/20/01
NPRM Comment Period End 10/19/01
Final Action 02/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

State, Federal

Agency Contact:
Bruce Johnson
Center for Medicaid and State Operations
Department of Health and Human Services
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD
Phone: 410 786-0615

Deirdre Duzor
Health Insurance Specialist
Department of Health and Human Services
Centers for Medicare & Medicaid Services
S3-13-15
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-4626
RIN: 0938-AK96
_______________________________________________________________________

HHS--CMS

50. MEDICAID UPPER PAYMENT LIMIT FOR NON-STATE GOVERNMENT-
OWNED OR OPERATED HOSPITALS (CMS-2134-P)
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

Sec 1902(a)(30), Social Security Act

CFR Citation:

42 CFR 447.321

Legal Deadline:

None

Abstract:

This rule concerns the Medicaid upper payment limit (UPL) for inpatient
hospital services and outpatient hospital services furnished by non-
State government-owned or operated hospitals.

Statement of Need:

This rule addresses the Medicaid upper payment limit for inpatient and
outpatient hospitals furnished by non-State government-owned or
operated facilities.

Summary of Legal Basis:

Section 1902(a)(30)(A) of the Social Security Act requires the State
plan provide such methods and procedures relating to the utilization
of, and the payment for, care and services available under the plan as
may be necessary to safeguard against unnecessary utilization of such
care and services and to assure that payments are consistent with
efficiency, economy, and quality of care and are sufficient to enlist
the plan at least to the extent that such care and services are
available to the general population in the geographic area.

Alternatives:

None.

Anticipated Cost and Benefits:

Undetermined.

Risks:

Undetermined.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State

Agency Contact:
Larry Reed
Chief, Medicaid Noninstitutional Payment Policy Branch
Department of Health and Human Services
Centers for Medicare & Medicaid Services
S2-01-16
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-3325
RIN: 0938-AL05
_______________________________________________________________________

HHS--CMS

51. HOME HEALTH PROSPECTIVE PAYMENT SYSTEM RATE UPDATE FOR FY
2003 (CMS-1198-NC)
Priority:

Other Significant

Legal Authority:

Balanced Budget Act, PL 105-33, sec 460.3(a); OCESAA, PL 105-277, sec
5101(c); OCESAA, PL 105-277, sec 5101(d); Balanced Budged Act
Refinement Act of 1999, PL 100-113, sec 305; Balanced Budget Act
Refinement Act of 1999, PL 100-113, sec 306; Medicare, Medicaid & SCHIP
Benefits Improve.& Protection Act of 2000, PL 106-544; ...

CFR Citation:

Not Yet Determined

Legal Deadline:

Other, Statutory, October 1, 2002, Publish by 07/01/2002.

Abstract:

This notice with comment period updates rates for the home health
prospective payment system for FY 2003.

Statement of Need:

This annual rate update is required by section 1895(b)(3)(B) of the
Social Security Act.

Summary of Legal Basis:

Section 1895 of the Social Security Act allows the Secretary to
establish a prospective payment system for payment of all costs of
Medicare home health services. Section 1895(b)(3)(B) provides for the
Secretary's adjustment of the standard prospective payment amount (or
amounts) for subsequent fiscal years.

Alternatives:

There are no alternatives to a home health prospective payment system
rate update for FY 2003 without new legislation.

Anticipated Cost and Benefits:

At this time, the data are not available to determine the specific rate
updates for FY 2003.

Risks:

We risk being out of compliance with the statutory requirement that the
home health prospective payment system rates be updated annually for
inflation.

[[Page 61189]]

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Notice 07/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Susan Levy
Health Insurance Specialist
Department of Health and Human Services
Centers for Medicare & Medicaid Services
C5-08-27
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-9364
RIN: 0938-AL16
_______________________________________________________________________

HHS--CMS

52. REQUIREMENTS FOR PAID FEEDING ASSISTANTS IN LONG-TERM
CARE FACILITIES (CMS-2131-P)
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

Sec 1819(a) to (f) of the Social Security Act; sec 1919(a) to (g) of
the Social Security Act; PL 100-203

CFR Citation:

42 CFR 483.73; 42 CFR 483.75(c)

Legal Deadline:

None

Abstract:

This rule would permit long-term care facilities to use paid feeding
assistants to supplement the services of certified nurse aids. If
facilities choose this option, feeding assistants must complete a
specified training program. This proposed rule would benefit residents
by ensuring that more of them will receive the help with eating and
drinking that they need.

Statement of Need:

The Secretary wants to revise the policy in order to permit long term
care facilities to employ paid feeding assistants.

Summary of Legal Basis:

Sections 1819(a) through (f) and 1919(a) through (g) of the Social
Security Act, PL 100-203.

Alternatives:

None.

Anticipated Cost and Benefits:

This rule may help nursing homes to supplement staffing in order to
help more residents who have eating and drinking difficulties.

Risks:

This rule may cause confusion in State survey agencies, which have the
responsibility for surveying long-term care facilities. It may also
cause concerns for nursing home resident advocates.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses

Government Levels Affected:

State, Federal

Agency Contact:
Nola Petrovich
Department of Health and Human Services
Centers for Medicare & Medicaid Services
S2-14-26
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-4671
RIN: 0938-AL18
_______________________________________________________________________

HHS--CMS

53. HOSPITAL OUTPATIENT PROSPECTIVE PAYMENT SYSTEM FOR
CALENDAR YEAR 2003 (CMS-1206-P)
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

42 USC 1395 L; BBA'97; BBRA' 99; BIPA' 00

CFR Citation:

Not Yet Determined

Legal Deadline:

None

Abstract:

These rules would revise the Medicare hospital outpatient department
prospective payment system for the January 2, 2003 update.

Statement of Need:

Annual updates to the hospital outpatient prospective payment systems
rates are required by section 1833 of the Social Security Act (the
Act), as amended by the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (BBRA), and the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (BIPA), relating to
Medicare payments for hospital outpatient department patient
prospective payment systems.

Summary of Legal Basis:

Section 1833(t) of the Act sets forth a system of payment for hospital
outpatient department services furnished to Medicare beneficiaries
based on prospectively set rates.

Alternatives:

None.

Anticipated Cost and Benefits:

Undetermined.

Risks:

Failure to update the hospital outpatient department prospective
payment systems would place us in violation of the Act. Moreover,
failure to meet the publication deadline imposed by the Act would also
constitute a violation.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 05/00/02
Final Action 10/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Federal

[[Page 61190]]

Agency Contact:
Nancy Edwards
Center for Medicare Mangement
Department of Health and Human Services
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850
Phone: 410 786-0378
Email: [email protected]
RIN: 0938-AL19
_______________________________________________________________________

HHS--CMS

54. PROSPECTIVE PAYMENT SYSTEM AND CONSOLIDATED BILLING FOR
SKILLED NURSING FACILITIES-UPDATE FOR FY 2003 (CMS-1202-P)
Priority:

Other Significant. Major under 5 USC 801.

Legal Authority:

Sec 1888(e) of the Social Security Act

CFR Citation:

42 CFR 410; 42 CFR 411; 42 CFR 413; 42 CFR 424; 42 CFR 489

Legal Deadline:

NPRM, Statutory, March 29, 2002.

Final, Statutory, July 31, 2002.

Abstract:

This rule sets forth updates to the payment rates under the prospective
payment system (PPS) for skilled nursing facilities (SNFs) for fiscal
year (FY) 2003.

Statement of Need:

The Medicare SNF PPS was established by section 4432 of the Balances
Budged Act of 1997 (BBA). The PPS applies to all costs (routine,
ancillary, and capital) of covered SNF services furnished to
beneficiaries under part A of the Medicare program, effective for cost
reporting periods beginning on or after July 1, 1998. Annual updates to
the PPS rates are required by section 1888(e) of the Social Security
Act (the Act), as amended by the Medicare, Medicaid, and SCHIP Balanced
Budged Refinement Act of 1999 (BBRA), and the Medicare, Medicaid, and
SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), relating
to Medicare payments and consolidated billing for SNFs.

Summary of Legal Basis:

Section 1888(e)(4)(H) requires that annual updates to the SNF PPS rates
be published in the Federal Register before August 1 of each year, to
be effective on the first day of the fiscal year.

Alternatives:

None.

Anticipated Cost and Benefits:

Section 1888(e) of the Act established the SNF PPS for the payment of
Medicare SNF services for cost reporting periods beginning on or after
July 1, 1998. This section also specifies that the base year cost date
to be used in computing the Resource Utilization Group III (RUG-III)
payment rates must be from FY 1995. The Act also requires that a number
of elements be incorporated into the SNF PPS, such as case-mix
classification methodology, the Minimum Data Set (MDS) assessment
schedule, a market basket index, a wage index, and the urban and rural
distinction used in the development or adjustment of the Federal rates.
Payment for SNF care prospectively has a direct, positive impact on the
Medicare program by controlling the increase in costs for services
provided by SNFs. Operating under a PPS also has a beneficial impact on
the efficient management and planning capability of individual SNFs.

Risks:

Failure to update the SNF PPS by October 1, 2002 would place us in
violation of the Act. Moreover, failure to meet the publication
deadline imposed by the Act would also constitute a violation.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
NPRM Comment Period End 05/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses, Organizations

Government Levels Affected:

None

Agency Contact:
William Ullman
Department of Health and Human Services
Centers for Medicare & Medicaid Services
C4-13-15
7500 Security Boulevard
Baltimore, MD 21244-1850
Phone: 401 786-5667
RIN: 0938-AL20
_______________________________________________________________________

HHS--CMS

55. REVISIONS TO PAYMENT POLICIES UNDER THE PHYSICIAN FEE
SCHEDULE FOR CALENDAR YEAR 2003 (CMS-1204-P)
Priority:

Other Significant. Major under 5 USC 801.

Legal Authority:

42 USC 1395W-4

CFR Citation:

Not Yet Determined

Legal Deadline:

None

Abstract:

This rule would make several changes affecting Medicare part B payment.

Statement of Need:

Since January 1, 1992, Medicare has paid for physicians' services under
section 1848 of the Social Security Act (the Act), ``Payment for
Physicians' Services.'' This section provides for three major elements:
1) a fee schedule for the payment of physicians' services; 2) a
sustainable growth rate for the rates of increase in Medicare
expenditures for physicians' services; and 3) limits on the amounts
that nonparticipating physicians can charge beneficiaries. The Act
requires that payments under the fee schedule be based on national
uniform relative value units (RVUs) based on the resources used in
furnishing a service. Section 1848(c) of the Act requires that national
RVUs be established for physician work, practice expense, and
malpractice expense.

Summary of Legal Basis:

Section 6102 of the Omnibus Reconciliation Act of 1989 (Pub. L. 101-
239) amended the Act by adding section 1848, ``Payment for Physicians'
Services'' that requires Medicare to pay for physicians' services under
a fee schedule. Section 4644 of the Balanced Budget Act of 1997 (Pub.
L. 105-33)

[[Page 61191]]

amended section 1848(b)(1) of the Act by requiring that we publish fee
schedules that establish payment amount of all physicians' services
before November 1 of the preceding year, each year.

Alternatives:

None.

Anticipated Cost and Benefits:

The statute requires that annual adjustments to physician fee schedule
RVUs not cause annual payments to differ by more than $20 million from
what they would have been had the adjustments not been made. If this
threshold is exceeded, we would make adjustments to the conversion
factor (the dollar amount that converts relative values into a payment
amount for a physician's service) to preserve budget neutrality.

Because changes to RVUs must be budget neutral, if we increase a
service's RVUs, we must reduce the overall multiplier (or the actual
RVUs) that converts the RVUs to a dollar amount. Therefore, certain
physician specialty groups may experience an increase in payment and
some may experience a decrease in payment.

Risks:

Failure to establish payment amounts for physicians' services would
place us in violation of section 1848 of the Act.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 05/00/02
Final Action 10/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Federal

Agency Contact:
Diane Milstead
Department of Health and Human Services
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-3355
RIN: 0938-AL21
_______________________________________________________________________

HHS--CMS

56. HOSPITAL INPATIENT REHABILITATION PROSPECTIVE PAYMENT
SYSTEM FOR FY 2003 (CMS-1205-P)
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

PL 105-33, sec 4421; 42 USC 1395ww(j), sec 1886(j) of the Social
Security Act

CFR Citation:

Not Yet Determined

Legal Deadline:

None

Abstract:

We will revise the Medicare inpatient rehabilitation hospital PPS to
implement statuary requirements and incorporate changes that arise from
our experience with the system. We will also review the amounts and
factors used to determine rates for Medicare rehabilitation hospitals
and rehabilitation units of a hospital.

The provision specified in the prospective payment system inpatient
rehabilitation for hospitals 2002 final regulation will become
effective for cost reporting periods on or after January 2002.

Statement of Need:

The Balanced Budget Act (BBA) significantly changed the way we will pay
for Medicare covered services furnished to a Medicare inpatient in a
rehabilitation facility. The BBA requires payments to be based on the
inpatient operating and capital costs of rehabilitation facilities and
adjusted for: 1) case mix using patient classification groups; 2) area
wages; 3) inflation; 4) outlier and special payments; and 5) other
factors necessary to reflect variations in costs of treatment. Total
payments made under the system to rehabilitation facilities during
fiscal year 2002 are required to equal 100 percent of the estimated
payments that would have been made under the current TEFRA payment
system. Outlier payments in a fiscal year may not exceed five percent
of the total projected payments for the fiscal year.

The BBA gives us considerable discretion in designing the prospective
payment system. Payment rates must be based on the discharge. The case
mix classification groups may be based on those factors as the
Secretary deems appropriate such as impairment, age, related prior
hospitalization, co-morbidities, and functional capability of the
patient.

Summary of Legal Basis:

Section 1886(j) to the Social Security Act, as added by section 4421 of
the BBA, and as amended by section 125 of BBRA and section 305 of BIPA,
to provide prospective payment for inpatient rehabilitation facilities
(freestanding and units).

Alternatives:

None.

Anticipated Cost and Benefits:

Based on the results of implementation of other Medicare prospective
payment systems, CMS believes that the implementation of the
prospective payment system, as the method to pay for the services
furnished to Medicare beneficiaries who are inpatients in
rehabilitation facilities, will yield significant savings to the
Medicare program. We estimate that the inpatient rehabilitation
facilities prospective payment system costs for FY 2003 will be $10
million. The FY 2003 estimated costs of $10 million are associated with
the portion of inpatient rehabilitation facilities cost reporting
periods between October 1, 2002, and September 30, 2003 using the FY
2002 rates. However, we have not completed our analysis, so we can not
be specific about the expected full costs and benefits of the FY 2003
rates.

Risks:

Altering the method that we pay rehabilitation facilities for the
services they furnish to Medicare inpatients has the potential to
affect a beneficiary's access to care and the quality of care furnished
to a beneficiary. Therefore, we will be implementing methods to monitor
the effect of the prospective payment system on these two associated
patient care concerns.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 05/00/02
Final Action 10/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses, Organizations

Government Levels Affected:

None

[[Page 61192]]

Agency Contact:
Laurence Wilson
Center for Medicare Management
Department of Health and Human Services
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850
Phone: 410 786-4603
RIN: 0938-AL22
_______________________________________________________________________

HHS--CMS

57. HOSPITAL INPATIENT PROSPECTIVE PAYMENT SYSTEM FOR FY 2003
(CMS-1203-P)
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

Undetermined

Legal Authority:

Sec 1886(d) of the Social Security Act

CFR Citation:

Not Yet Determined

Legal Deadline:

NPRM, Statutory, April 1, 2002.

Final, Statutory, August 2, 2002.

Abstract:

We would revise the Medicare hospital inpatient prospective payment
system for operating costs to implement changes arising from our
continuing experience with the system. In addition, in the Addendum, we
describe changes to the amounts and factors used to determine the rates
for Medicare hospital inpatient services for operating costs and
capital-related costs. These changes apply to discharges occurring on
or after October 2, 2002.

Statement of Need:

Annual updates to the hospital inpatient prospective payment system
rates are required by section 1886 of the Social Security Act (the
Act), as amended by the Medicare, Medicaid, and SCHIP Balanced Budged
Refinement Act of 1999 (BBRA), and the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000 (BIPA), relating to
Medicare payments for hospital inpatient prospective payment systems.

We are proposing to revise the Medicare hospital inpatient prospective
payment systems for operating and capital costs to: describe proposed
changes to the amounts and factors used to determine the rates for
Medicare hospital inpatient services for operating costs and capital-
related costs. These changes would be applicable to discharges
occurring on or after October 1, 2002. We also are setting forth
proposed rate-of-increase limits as well as proposed policy changes for
hospitals and hospital units excluded from the prospective payment
systems.

Summary of Legal Basis:

Section 1886(d) of the Social Security Act sets forth a system of
payment for the operating costs of the acute care hospital inpatient
system under Medicare part A based on prospectively set rates. Section
1866(g) of the Act requires the Secretary to pay for the capital-
related costs of hospital inpatient stays under a prospective payment
system.

Section 1886(e)(5)(B) requires that annual updates to the hospital
inpatient prospective payment systems rates be published in the Federal
Register before August 1 of each year, to be effective on the first day
of the fiscal year (FY).

Alternatives:

None.

Anticipated Cost and Benefits:

The cost and benefits of this regulation will depend upon the market
basket projection by the Office of the Actuary. Under current law, the
update for FY 2003 will be market basket minus .55 percentage points. A
one percent change in payments under the inpatient prospective payment
system represents an approximately $760 million change.

Risks:

Inadequately paying for the services hospitals furnish to Medicare
beneficiaries has the potential to affect a beneficiary's access to
care and the quality of care furnished to a beneficiary. Therefore, we
will carefully assess the impacts of all of the changes we implement
through this regulation to mitigate these risks.

Failure to update the hospital inpatient prospective payment systems by
October 1, 2003 would place us in violation of the Act. Moreover,
failure to meet the publication deadline imposed by the Act would also
constitute a violation.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Final Action 07/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

Federalism:

Undetermined

Agency Contact:
Stephen Phillips
Center for Health Plans and Providers
Department of Health and Human Services
Centers for Medicare & Medicaid Services
C4-05-27
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-4548
RIN: 0938-AL23
_______________________________________________________________________

HHS--CMS

58. INITIATIVE TO ENDORSE PRESCRIPTION DRUG DISCOUNT PROGRAMS
(CMS-4027-P)
Priority:

Economically Significant

Legal Authority:

42 USC 1395b-3; 42 USC 1302; 42 USC 1302b-10

CFR Citation:

None

Legal Deadline:

None

Abstract:

The proposed rule would set forth a Department of Health and Human
Services' initiative for a Medicare endorsement to entities currently
offering prescription drug discounts to the general public to offer
prescription drug discount cards to Medicare beneficiaries. The
proposed rule would set forth the criteria the Department proposes to
establish for participation in the initiative, including qualifications
for entities for endorsement, and the proposed method by which entities
could apply for Medicare endorsement. The proposed rule would request
public comment on all aspects of the prescription drug discount card
initiative.

Statement of Need:

Currently, Medicare beneficiaries have limited opportunities to obtain

[[Page 61193]]

discounts on prescription drugs, and lack information on how to pursue
such opportunities that exist. The proposed rule would propose a
program, among other things: (1) to educate Medicare beneficiaries
about private market methods available for securing discounts on the
purchase of prescription drugs; (2) to provide a mechanism for Medicare
beneficiaries to gain access to the effective tools widely used in the
private sector to receive lower priced, quality pharmaceuticals; (3) to
endorse qualified private sector prescription drug discount card
programs; and (4) to provide Medicare beneficiaries an opportunity to
enroll in a prescription drug discount card program.

Because of the limited opportunities Medicare beneficiaries have to
obtain discounts on prescription drugs, on July 12, 2001, President
George W. Bush and Secretary Tommy Thompson announced an initiative to
provide Medicare beneficiaries with a way to obtain a Medicare-endorsed
prescription drug discount card and to educate them about such discount
card programs. On September 11, 2001, a District Court judge
preliminarily enjoined the Secretary from implementing that Medicare-
Endorsed Prescription Drug Discount Card initiative, published in the
Federal Register on July 18, 2001. The judge's order was based in part
on a preliminary finding that the Secretary should have issued the
initiative through notice and comment rulemaking. This proposed rule
would open to public comment the discount card initiative as a whole,
as well as the qualifications necessary for the Medicare endorsement.

Summary of Legal Basis:

There are a number of legal authorities that support the Secretary's
endorsement of available prescription drug discount programs, including
42 U.S.C. 1395b-3; 42 U.S.C. 1302 (authority to make and publish such
rules and regulations as are necessary to the efficient administration
of the functions charged under the Social Security Act); and 42 U.S.C.
1320b-10.

Alternatives:

Rather than offering Medicare endorsement to entities that meet defined
qualifications, the Secretary could perform a study of prescription
drug discount cards currently available in the market and provide
recommendations to Medicare beneficiaries regarding which prescription
drug discount cards provide the highest-quality services.

The Secretary could also serve as a clearinghouse for currently
available prescription drug discount card sponsors to provide
information on their products. Such information could include
information on enrollment fees, the names or types of drugs for which
discounts are offered, the discounts available on such drugs, and the
scope of discount cards' networks of pharmacies.

Anticipated Cost and Benefits:

The benefits of this proposed initiative will be: (1) the education of
Medicare beneficiaries about private market methods available for
securing discounts on the purchase of prescription drugs, and (2) the
provision of a mechanism for Medicare beneficiaries to gain access to
the effective tools widely used by prescription benefit managers and by
discount card programs to get lower drug prices and higher quality
pharmaceutical care. The Department anticipates that, as a result of
this proposed initiative, Medicare recipients could obtain prescription
drugs they currently may be unable to afford and may, thus, remain
healthier. The Department anticipates that this, in turn, may
ultimately lead to cost-savings for Medicare.

The Department will incur some program costs associated with developing
educational materials on discount programs and providing such
information to Medicare beneficiaries, evaluating applicants, and
assisting the start-up of a consortium of prescription drug programs to
run the program. Applicants and entities offering endorsed prescription
drug discount cards will incur certain costs, but such costs are
voluntary since participation in the program is voluntary.

Risks:

Undetermined.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Paula Stannard
Department of Health and Human Services
Centers for Medicare & Medicaid Services
Room 707F
200 Independence Avenue SW.
Washington, DC 20201
Phone: 202 690-7741

Teresa Decaro
Department of Health and Human Services
Centers for Medicare & Medicaid Services
C5-17-14
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-6604
Email: [email protected]
RIN: 0938-AL28
_______________________________________________________________________

HHS--CMS

-----------

FINAL RULE STAGE

-----------

59. HEALTH INSURANCE REFORM: STANDARD UNIQUE HEALTH CARE PROVIDER
IDENTIFIER (CMS-0045-F)
Priority:

Other Significant. Major under 5 USC 801.

Legal Authority:

42 USC 1320D-2(b)(1)

CFR Citation:

42 CFR 160; 42 CFR 162

Legal Deadline:

Final, Statutory, February 21, 1998.

Abstract:

This rule addresses the health care industry's need for a standardized
provider identifier. It implements one of the requirements for
administrative simplification in section 262 of the Health Insurance
Portability and Accountability Act of 1996. A standard provider
identifier will save the health insurance industry significant costs
incurred in maintaining multiple identifier systems.

Statement of Need:

The Health Insurance Portability and Accountability Act of 1996 (HIPAA)
(Pub. L. 104-191) creates a new part C, entitled ``Administrative
Simplification,'' to title XI of the Social Security Act. One of the
standards for health identifiers that is mandated by part C is a
standard unique health care provider identifier, to be used in the

[[Page 61194]]

health care system. This regulation announces the adoption of the
National Provider Identifier (NPI) as the standard unique health care
provider identifier. It also provides information on how health care
providers will be assigned NPIs and defines the requirements of health
plans, health care providers, and health care clearinghouses with
respect to obtaining and using this standard. Implementation of the NPI
and the other Administrative Simplification standards will increase the
efficiency of the processing of standard transactions within the health
care system.

Summary of Legal Basis:

Currently, health plans assign identification numbers to their member
health care providers. Different health plans assign different numbers
to the same health care providers. The identifiers are frequently not
standard within a health plan or across health plans. This results in
health care providers having different identification numbers for
different health programs, often having multiple billing numbers issued
within a single health program. This complicates the health care
providers' claims submissions and other transactions and increases the
costs incurred by health care providers in conducting those
transactions.

The Administrative Simplification provisions of HIPAA were designed to
improve the efficiency and effectiveness of the health care system by
encouraging the development of a health information system through the
establishment of the standard unique health care provider identifier
and other standards and requirements to facilitate the electronic
transmission of certain health information.

Alternatives:

This regulation announces the NPI as the standard unique health care
provider identifier. The NPI is a 10-position all numeric identifier,
with a check-digit in the tenth position. There is no intelligence in
the number. This design and our assignment strategy will allow more
than 200 million NPIs to be issued. The NPI meets the principles
established by the Department of Health and Human Services (HHS) for
designation as a national standard. This final regulation defines
``health care provider'' in terms of the entities that will receive
NPIs.

Health care providers will be enumerated by a federally directed
registry (the enumeration contractor). The enumeration contractor will
use the National Provider System (NPS) to uniquely identify a health
care provider and issue it an NPI. The NPS will be developed by CMS.
Health care providers must supply updates to their NPS data to the
enumeration contractor within 30 days of the effective dates of the
changes.

The NPS will establish the National Provider File (NPF), which will
contain information collected from health care providers in order to
assign them NPIs. The NPS will assign a single, unique NPI to a health
care provider. Upon the dissolution of an organization health care
provider or the death of a individual health care provider, the NPS
will deactivate the NPI that had been issued to that health care
provider and will not assign a deactivated NPI to any other health care
provider.

Anticipated Cost and Benefits:

Our analysis of the costs and savings of the HIPAA Administrative
Simplification standards is an aggregate impact of all the standards.
Assessing the impact of each standard independently would inflate the
costs and would yield inaccurate results. While each individual
standard is beneficial, the standards as a whole have a synergistic
effect on savings. A difficulty in this analysis was the fact that we
have no historical experience in assessing the costs and benefits of
such a sweeping change. The costs of implementing the standards
specified in HIPAA are primarily one-time or short-term costs related
to conversion. These costs will be incurred during the first three
years of implementation. Benefits will accrue almost immediately, but
will not exceed costs for health care providers until after the third
year of implementation. After the third year, the benefits will
continue to accrue into the fourth year and beyond. The impact analysis
for the costs and benefits associated with all the Administrative
Simplification standards indicates that the combined net savings for
health plans and health care providers would amount to $1.5 billion
dollars after five years.

Risks:

This rule will formally establish the standard for the unique health
care provider identifier and will communicate the requirements for
health plans, health care providers, and health care clearinghouses in
implementing this standard.

Failure to publish this rule would jeopardize the benefits of
administrative simplification. Payers would continue to maintain their
own system of enumerating providers, and providers would need to
maintain systems to store the different identifiers. Additional costs
would thus be incurred.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 63 FR 25320 05/07/98
NPRM Comment Period End 07/06/98
Final Action Determined To Be
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Federal, State, Local, Tribal

Federalism:

This action may have federalism implications as defined in EO 13132.

Additional Information:

None

Agency Contact:
Patricia Peyton
Office of Information Services
Department of Health and Human Services
Centers for Medicare & Medicaid Services
N3-20-05
7500 Security Boulevard
Baltimore, MD 21224-1850
Phone: 410 786-1812
RIN: 0938-AH99
_______________________________________________________________________

HHS--CMS

60. SECURITY STANDARDS (CMS-0049-F)
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

PL 104-191; 42 USC 1320d-2(d)

CFR Citation:

45 CFR 162

Legal Deadline:

Final, Statutory, February 21, 1998.

Abstract:

This rule implements some of the requirements of the Administrative
Simplification subtitle of the Health Insurance Portability and
Accountability Act of 1996. It establishes standards for the security
of health information used by health

[[Page 61195]]

plans, health care clearinghouses, and certain health care providers.
These entities would use the security standards to develop and maintain
the security of all electronic health information.

Statement of Need:

The Health Insurance Portability and Accountability Act of 1996
requires the Secretary of Health and Human Services to adopt security
standards that require reasonable and appropriate administrative,
technical and physical safeguards to: 1) ensure the integrity and
confidentiality of health information; 2) protect against any
reasonably anticipated threats or hazards to the security or integrity
of the information; and 3) protect against unauthorized uses or
disclosures of the information. This rule stipulates the requirements
necessary to comply with the law.

Summary of Legal Basis:

The Administrative Simplification provisions of HIPAA require the
Secretary to establish standards for the security of health information
use by health plans, health care clearing houses, and certain health
care providers.

Alternatives:

In the absence of Federal regulations, the security of health care
information in electronic form would be left to the private sector to
develop. It is believed that this course of action would result in an
extremely uneven level of protection (ranging from none to excessive)
for electronic health information pertaining to individuals and make it
difficult, if not impossible, to provide for privacy of this
information.

Anticipated Cost and Benefits:

As the effect of any one of the HIPAA standards is affected by the
implementation of other standards, it is misleading to discuss the
impact of one standard by itself. Therefore, an Impact Analysis on the
total effect of all the standards was published in the proposed rule
concerning the national provider identifier (HCFA-0045-P) which was
published on May 7, 1998 (63 FR 25320). Security protection for health
care information is not a ``stand alone'' type requirement. Appropriate
security protections will be a business enabler, encouraging the growth
and use of electronic data interchange. The synergistic effect of the
employment of the recommended security practices, procedures and
technologies will enhance all aspects of HIPAA's Administrative
Simplification requirements.

Risks:

The storage, handling and transmission of health information has long
been a paper process. However, the transition from paper to electronic
media has begun and is increasing at a rapid pace. This transition has
brought on a significantly increased risk to the security and
confidentiality of health information, particularly for information
pertaining to individuals. This rule formally establishes a baseline
set of requirements for security that must be adopted by health care
providers, health plans and health care clearinghouses. Compliance with
these requirements will greatly decrease risk to the security,
integrity and confidentiality of health information.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 63 FR 43242 08/12/98
NPRM Comment Period End 10/13/98
Final Action Determined To Be
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

State, Local, Tribal, Federal

Federalism:

Undetermined

Agency Contact:
Barbara Clark
Office of Information Services
Department of Health and Human Services
Centers for Medicare & Medicaid Services
N2-14-10
7500 Security Boulevard
Baltimore, MD 21244-1850
Phone: 410 786-3017
RIN: 0938-AI57
_______________________________________________________________________

HHS--CMS

61. NATIONAL STANDARD EMPLOYER IDENTIFIER (CMS-0047-F)
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

PL 104-191; 42 USC 1320d to 1320-d-8

CFR Citation:

45 CFR 162

Legal Deadline:

Final, Statutory, February 21, 1998.

Abstract:

This rule institutes the employer identification number (EIN) as the
standard for identifying employers for purposes of administrative
simplification, as required by the Health Insurance Portability and
Accountability Act of 1996. Use of one standard in the health care
industry will reduce the cost of identifying employers in electronic
health care transactions.

Statement of Need:

The Health Insurance Portability and Accountability Act of 1996 (Pub.
L. 104-191) includes Subtitle F-Administrative Simplification, whose
purpose is to improve the Medicare and Medicaid programs under the
Social Security Act, and the efficiency and effectiveness of the health
care system, by the establishment of standards and requirements for the
electronic transmission of certain health information. This regulation
establishes the standard for a unique employer identifier, as required
by the Administrative Simplification provisions of Public Law 104-191.

Summary of Legal Basis:

The Administrative Simplification provisions of HIPAA require the
Secretary of HHS to adopt a standard unique health identifier for each
employer for use in the health care system and to specify the purposes
for which a unique health identifier may be used.

Alternatives:

HHS examined several existing identifiers that might be adopted for the
standard. In keeping with the requirements of HIPAA, because no
standard setting organization had developed, adopted, or modified a
standard for an employer identifier, HHS consulted with the National
Uniform Billing Committee, the National Uniform Claim Committee, the
Workgroup for Electronic Data Interchange and the American Dental
Association in selecting this standard. HHS also relied on the
recommendations of the National Committee on Vital and Health
Statistics.

[[Page 61196]]

Anticipated Cost and Benefits:

As the effect of any one standard is affected by the implementation of
other standards, it can be misleading to discuss the impact of one
standard by itself. Therefore HHS did an impact analysis showing total
costs and savings of all the HIPAA standards in the proposed rule
concerning the national provider identifier (HCFA-0045-P), which can be
found at 63 FR 25320. HHS determined that the requirements concerning
the employer identifier would have a one time impact on those
providers, clearinghouses, and health plans that have to convert to use
the EIN, and on those employers that would have to disclose the EIN to
covered entities.

Risks:

Failure to publish this rule would mean that no standard employer
identifier would be established for use in the health care system. Lack
of a standard employer identifier would decrease the savings in health
care costs to be realized from administrative simplification.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 63 FR 32784 06/16/98
NPRM Comment Period End 08/17/98
Final Action Determined To Be
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

State

Federalism:

This action may have federalism implications as defined in EO 13132.

Agency Contact:
Mary Emerson
Office of Information Services
Department of Health and Human Services
Centers for Medicare & Medicaid Services
N2-12-22
7500 Security Boulevard
Baltimore, MD 21244
Phone: 410 786-7065
Email: [email protected]
RIN: 0938-AI59
_______________________________________________________________________

HHS--CMS

62. FEE SCHEDULE FOR PAYMENT OF AMBULANCE SERVICES AND REVISIONS TO THE
PHYSICIAN'S CERTIFICATION REQUIREMENTS FOR COVERAGE OF NONEMERGENCY
AMBULANCE SERVICES (CMS-1002-FC)
Priority:

Other Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

PL 105-33, sec 4531(b)

CFR Citation:

42 CFR 410; 42 CFR 414

Legal Deadline:

Final, Statutory, January 1, 2000.

Abstract:

The Balanced Budget Act (BBA) of 1997 requires that the Secretary
establish a fee schedule for ambulance services through negotiated
rulemaking. The fee schedule was to be effective beginning with
services furnished on or after January 1, 2000. However, other
statutory obligations and the scope of systems changes required to
implement the ambulance fee schedule were so numerous as to make it
impossible for us to accomplish this concurrent with the critical work
that we and our contractors had to perform to assure that our
respective systems were compliant with the year 2000 requirements.

In the September 12, 2000 proposed rule, we indicated our intention to
implement the fee schedule beginning January 1, 2001. However, although
the proposed rule was largely based on an agreement reached as part of
a negotiated rulemaking process with representatives of the ambulance
industry and other interests, we received over 340 public comments. We
did not have sufficient time to carefully consider all comments and
publish a final rule in time to implement the fee schedule by January
1, 2001. This final rule establishes an implementation date of January
1, 2002. Our objective is to have the ambulance fee schedule become
effective as soon as feasibly possible after the statutory date, in
this case, April 1, 2002.

In addition to setting the payment rates, the Secretary is to ensure
that the aggregate amount of payment made for ambulance services in
2001 may not exceed the amount of payment that would have been made
absent the fee schedule. This is a cap on payment, not a budget
neutrality adjustment. Negotiations were conducted by a committee
chartered under the Federal Advisory Committee Act (FACA) (5 U.S.C.
App. 2). We used the services of an impartial conveyer to help identify
interests that would be significantly affected by the proposed rule
(including residents of rural areas) and the names of persons who were
willing and qualified to represent those interests. The Negotiated
Rulemaking Committee on the Medicare Ambulance Services Fee Schedule
consisted of national representatives of interests that were likely to
be significantly affected by the fee schedule. To the extent that this
proposed rule accurately reflected the Committee Statement as signed on
February 14, 2000, each member to the Committee agreed not to comment
on those issues on which consensus was reached.

In our proposed rule (65 FR 55078), we discussed the negotiated
rulemaking procedure used to formulate our policy for the ambulance fee
schedule. We also proposed additions to part 414, based on
recommendations of the Committee. We discussed operational and regional
variations, cost of living differences, services furnished in rural
areas and mileage. The structure of the fee schedule, the ambulance
inflation factor and phase-in methodology were also covered.

In addition, we proposed changes not based on the negotiated
rulemaking, on matters including coverage of ambulance services,
physician certification requirements, payment during the first year,
and billing method. We discussed local or State ordinances, mandatory
assignment, and miscellaneous payment policies, including multiple
patients, pronouncement of death, multiple arrivals, and BLS services
furnished in an ALS vehicle.

We presented our methodology for determining the conversion factor (CF)
and for implementing the fee schedule. We discussed expenditure control
for ambulance services, adjustments to account for inflation and the
medical conditions list.

Statement of Need:

The establishment of this fee schedule is required by section 4531 of
the BBA. In going through the negotiated rulemaking process, a fairer
payment system will be implemented that is

[[Page 61197]]

consistent with the services furnished and that takes into account the
variations caused by regional and operational differences among
ambulance companies.

Summary of Legal Basis:

Section 4531 of the BBA requires the establishment of this fee
schedule.

Alternatives:

Because section 4531 of the BBA requires the establishment of this fee
schedule, no alternatives to this regulation exist.

Anticipated Cost and Benefits:

Benefits include establishing a fee schedule that will be commensurate
with the services furnished, and will take into account the regional
and operational variations in providing ambulances. The current
reasonable charge/reasonable cost systems do not result in a fair
geographic variation in payment allowances, since some areas receive
two to three times the payment of other areas for the same services.

Risks:

Failing to implement the Medicare ambulance fee schedule would
perpetuate an inequitable payment system that sometimes overpays and
other times underpays for this critical aspect of medical care. The
current system also has unintentional incentives to provide inefficient
ambulance services in some areas, and inadequate ambulance services in
areas of low population.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 55078 09/12/00
Final Action 04/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

Undetermined

Federalism:

Undetermined

Agency Contact:
Glenn McGuirk
Department of Health and Human Services
Centers for Medicare & Medicaid Services
S3-05-27
Office of Clinical Standards and Quality
7500 Security Boulevard
Baltimore, MD 21244-1850
Phone: 410 786-5723
RIN: 0938-AK30
BILLING CODE 4150-24-S

[[Page 61198]]

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)

Statement of Regulatory Priorities
The Department of Housing and Urban Development is the Federal agency
responsible for national policy and programs that address Americans'
housing needs, work to improve and develop the Nation's communities,
and enforce fair housing laws. HUD's mission is to help to provide a
decent, safe and sanitary home and suitable living environment for
every American. HUD also plays a major role in supporting homeownership
by underwriting homeownership for lower- and moderate-income families
through its mortgage insurance programs.
HUD's regulatory plan for fiscal year 2002 reflects the leadership of
Secretary Mel Martinez, who has called upon HUD to focus on activities
that support its core mission. By concentrating on its basic
responsibilities of helping to provide and maintain affordable housing
and homeownership opportunities and promote economic growth in our
Nation's communities, HUD minimizes the number of initiatives and
programs that are not central to its mission, that consume critical
resources, and consequently undermine HUD's ability to administer
programs that are key to the success of achieving its mission.
Consistent with the Secretary's direction, the regulations highlighted
in this regulatory plan and in the semiannual agenda of regulations,
published elsewhere in today's Federal Register, are directed to
implementing policies, procedures and programs that support HUD's core
mission.
Priority: Expand Homeownership Opportunities
Homeownership plays a vital role in creating strong communities by
giving families a stake in their neighborhoods and helping them to
build wealth. Although a period of sustained economic growth has helped
to raise the overall homeownership rate to a record level, the
homeownership rates for minorities and low-income families lag far
behind those of other families. For example, while more than two-thirds
of Americans own their own homes, fewer than half of African-American
and Hispanic families are homeowners.
While many of HUD's core programs, including the HOME Investment
Partnerships Program, Federal Housing Administration mortgage insurance
and the Community Development Block Grant program, help low-income
families achieve the goal of homeownership, Secretary Martinez is
moving forward with regulatory initiatives to create homeownership
opportunities for low-income residents of public and assisted housing.
Regulatory Action: Implement the Section 8 Downpayment Initiative and
Improve the Section 8 Homeownership Program
This initiative expands the use of Section 8 vouchers for
homeownership. Section 301 of the American Homeownership and Economic
Opportunity Act of 2000 authorizes the public housing agency to
provide, in lieu of paying a monthly homeownership assistance payment,
a single downpayment assistance grant to be used toward the purchase of
a home. The final rule to be published in fiscal year 2002 follows
publication of a June 2001 proposed rule, and will take into
consideration public comment received on the proposed rule.
Regulatory Action: Implement the Public Housing Homeownership Program
This program, authorized by the Quality Housing and Work
Responsibility Act of 1998, allows a public housing agency to make
public housing dwelling units, public housing developments, and other
housing developments available for purchase by low-income families as
their principal residence. The final rule to be published in fiscal
year 2002 follows publication of a September 1999 proposed rule, and
will take into consideration public comment received on the proposed
rule.
Priority: Maintaining Homeownership--Prohibiting Predatory Lending
Practices
Over the last several years, our Nation has made enormous progress in
expanding access to capital for previously underserved borrowers.
Despite this progress, however, too many families are suffering today
because of a growing incidence of predatory lending practices in this
segment of the mortgage lending market. Predatory lending involves
engaging in deception or fraud, manipulating the borrower through
aggressive sales tactics, or taking unfair advantage of a borrower's
lack of understanding about loan terms. These practices are often
combined with loan terms that are abusive or make the borrower more
vulnerable to abusive practices. Predatory lending threatens
homeownership by placing on borrowers loans that are so expensive or
have such high rates that borrowers are unable to repay and risk
default. This significantly undercuts the Department's efforts to
revitalize communities and expand homeownership for millions of
Americans.
To address predatory lending, the Department is pursuing several
regulatory initiatives.
Regulatory Action: Prohibition of Property Flipping in HUD's Single
Family Mortgage Insurance Programs
This rule will prohibit ``property flipping,'' a practice whereby
recently acquired properties are immediately resold at an artificially
inflated value, often abetted by collusion with the appraiser. The rule
is designed to protect FHA borrowers from becoming unwitting victims of
property flipping. The final rule to be published in fiscal year 2002
follows publication of a September 2001 proposed rule and ngle Family
Loan Feestakes into consideration public comment received on the
proposed rule.
Regulatory Action: Limitation on FHA Single Family Loan Fees
This proposed rule would cap the total amount of expenses and fees
that can be charged on a mortgage insured by FHA. The cap would vary
depending on the original principal amount of the mortgage. The cap
would not include legitimate fees paid to service providers (such as
settlement attorneys, property inspectors, appraisers), reasonable and
customary discount points, and prepaid expenses (including escrows for
taxes and insurance).
Regulatory Action: Appraiser Qualifications for Placement on FHA Single
Family Appraiser Roster
This rule is designed to strengthen the integrity of FHA appraisals by
requiring that appraisers have the minimum professional credentials
required by the Appraiser Qualifications Board of the Appraisal
Foundation. This rule helps ensure that homebuyers seeking FHA-insured
mortgages receive accurate and complete appraisal of the homes they
seek to purchase.
Priority: Providing and Maintaining Affordable Rental Housing
While seeking to expand homeownership opportunities, HUD recognizes
that homeownership may not be practical for all families. To assist
these families obtain safe, decent and affordable housing, HUD's
regulatory plan will strengthen its current rental assistance programs
rather than proposing any new ones. HUD will

[[Page 61199]]

focus in particular on improving housing agencies utilization of
assistance.
Regulatory Action: Fully Implement the Capital Fund Program
The Capital Fund Program rule will fully implement the primary
``bricks and mortar'' program assisting public housing. The Capital
Fund Program addresses the capital and management improvement needs of
public housing agencies through the use of assistance made available
under the Capital Fund Formula. The Capital Fund Formula was
established by a final rule published on March 16, 2000. This Capital
Fund Program rule continues and expands the streamlining of procedures
and requirements initiated under the Comprehensive Grant and CIAP
(Comprehensive Improvement Assistance Program) programs, and will
remove and replace those program regulations as well as the existing
development program requirements. The new Capital Fund Program Rule
will govern not only the modernization of public housing, but the
development of replacement housing and public housing management
improvements as well as more flexible use of funds allowed by the
Quality Housing and Work Responsibility Act of 1998.
Regulatory Action: Implement the Final Requirements for the Operating
Fund Formula
This final rule will complete the rulemaking that establishes the new
Operating Fund Formula, which began with a proposed rule developed
through the negotiated rulemaking process. The Operating Fund Formula
rule governs the payment of operating subsidies to public housing
agencies. The interim rule, published on March 29, 2001, followed
publication of a June 20, 2000 proposed rule, and took into
consideration the public comments received on the proposed rule. The
policies and procedures described in the interim rule will govern the
determination of funding distributions to public housing agencies under
the Operating Fund until a final rule, reflecting the results of a
congressionally requested public housing cost study is developed and
published.
Regulatory Action: Implement the Project-Based Voucher Program
This proposed rule will begin the rulemaking process to implement the
new Project-Based Voucher Program. The Project-Based Voucher Program
will extensively revise the existing project-based voucher program and
further the Department's efforts to provide affordable housing to very
low-income families. The rule will also implement congressional intent
to make project-basing of voucher assistance more flexible.
Regulatory Action: Improve the Public Housing Assessment System
This proposed rule will propose changes to the Public Housing
Assessment System (PHAS) and the regulations implementing that system.
The PHAS, established in 1998, assesses the management performance of
public housing agencies and resident management corporations in four
critical areas of public housing operations: the physical condition of
public housing; the financial condition of the public housing agency or
resident management corporation; the management operations of the
public housing agency or resident management corporation; and the
satisfaction of the residents with the housing and services. The
Department has begun meeting with public housing agencies, residents,
representatives of these groups and other interested parties, to
solicit input on how the PHAS can be improved and expects to put PHAS
into effect on an interim basis shortly. The proposed rule to be issued
will incorporate the input from these important stakeholders.
Improvements made to the PHAS will in turn promote maintaining
affordable rental housing.
Priority: Building Assets and Skills Among Low-Income Families
Central to HUD's mission of promoting strong communities are
activities to help low-income working families acquire skills that will
increase their earnings and to help families on welfare make progress
towards self-sufficiency. HUD also seeks to help low-income families
accumulate assets so that they can achieve homeownership, pursue
educational opportunities, start a new business, and attain other
important goals.
Regulatory Action: Revisions to Resident Participation Regulation
This rule will help promote building assets and skills among public
housing residents. Among other changes, the proposed rule would
establish policies, procedures, and requirements for participating in
the Resident Opportunities and Self-Sufficiency Program. Overall, the
rule will promote effective resident participation in public housing
and assist in creating and maintaining a positive living environment.
Priority: Supporting Community and Economic Development
Regulatory Action: Making Brownfields Activities a CDBG-Eligible
Activity
This rule will improve the ability of entitlement communities and
States' grant recipients to use Community Development Block Grant
(CDBG) funds for brownfields activities. By making eligible under the
CDBG Program the cleanup and development of environmentally
contaminated properties, the Department will move toward achieving one
of the objectives under the CDBG Program, which is eliminating slums or
blighting conditions.
The Priority Regulations That Comprise HUD's FY 2002 Regulatory Plan
A more detailed description of the priority regulations that comprise
HUD's FY 2002 Regulatory Plan follows.
_______________________________________________________________________

HUD--Office of Housing (OH)

-----------

PROPOSED RULE STAGE

-----------

63. PROHIBITION OF PROPERTY FLIPPING IN HUD'S SINGLE FAMILY MORTGAGE
INSURANCE PROGRAMS (FR-4615)
Priority:

Other Significant

Legal Authority:

12 USC 1709; 12 USC 1710; 12 USC 1715b; 12 USC 1715u; 42 USC 3535(d)

CFR Citation:

24 CFR 203

Legal Deadline:

None

Abstract:

This rule addresses property ``flipping,'' the practice whereby a
property recently acquired is resold for a considerable profit with an
artificially inflated value, often abetted by a lender's collusion with
the appraiser. Specifically, the proposed rule would establish certain
new requirements regarding the eligibility of properties for FHA
mortgage insurance. The regulatory amendments made by this rule will
protect FHA borrowers from becoming unwitting victims of property
flipping. Further, the proposed changes comply with congressional
mandates to maintain the FHA Insurance Fund in a sound actuarial
manner.

[[Page 61200]]

Statement of Need:

Predatory lending -- whether undertaken by creditors, brokers or even
home improvement contractors -- involves engaging in deception or
fraud, manipulating the borrower through aggressive sales tactics, or
taking unfair advantage of a borrower's lack of understanding about
loan terms. These practices are combined with loan terms that, alone or
in combination, are abusive or make the borrower more vulnerable to
abusive practices. A major example of predatory lending is property
``flipping,'' the practice whereby a recently acquired property is
resold for a considerable profit with an artificially inflated value,
often abetted by a lender's collusion with the appraiser. Most property
flipping occurs within a matter of days after acquisition, and usually
with only minor cosmetic improvements, if any.

Summary of Legal Basis:

The National Housing Act and HUD's authority under the Department of
Housing and Urban Development Act authorize HUD to provide a home
financing system through the insurance of mortgages that would maintain
and expand homeownership opportunities, particularly to first-time
homebuyers and low-income families.

Alternatives:

Nonregulatory initiatives to date have not proven to be sufficiently
successful in curbing predatory lending practices.

Anticipated Cost and Benefits:

This rulemaking will help to reduce excessive fees and costs of home
mortgages. The anticipated benefit is that the rule will help to reduce
foreclosure arising from high-cost mortgages.

Risks:

This rule poses no threat to public safety, health, or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 46502 09/05/01
NPRM Comment Period End 11/05/01
Final Action 05/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses, Organizations

Government Levels Affected:

None

Agency Contact:
Vance Morris
Director, Office of Single Family Program Development
Department of Housing and Urban Development
Office of Housing
Phone: 202 708-2121
RIN: 2502-AH57
_______________________________________________________________________

HUD--OH

64. APPRAISER QUALIFICATIONS FOR PLACEMENT ON FHA SINGLE FAMILY
APPRAISER ROSTER (FR-4620)
Priority:

Other Significant

Legal Authority:

12 USC 1701 to 1715z-18; 42 USC 3535(d)

CFR Citation:

24 CFR 200

Legal Deadline:

None

Abstract:

This rule makes several regulatory changes designed to strengthen the
licensing and certification requirements for placement on the Federal
Housing Administration (FHA) Appraiser Roster. First, the rule requires
that appraisers on the Appraiser Roster must have professional
credentials that are based on the minimum licensing/certification
standards issued by the Appraiser Qualifications Board of the Appraisal
Foundation. The rule also clarifies that an appraiser may be removed
from the Appraiser Roster if the appraiser loses his or her license or
certification in any State due to disciplinary action, even if the
appraiser continues to be licensed or certified in another State.
Finally, the rule provides that an appraiser who is licensed or
certified in a single State and whose license or certification has
expired, or has been revoked, suspended or surrendered as a result of a
State disciplinary action, will be automatically suspended from the
Appraiser Roster until HUD receives evidence demonstrating renewal or
that the State-imposed sanction has been lifted.

Statement of Need:

HUD's Appraiser Roster lists those appraisers who are eligible to
perform FHA single family appraisals. HUD maintains the Appraiser
Roster to provide a means by which HUD can monitor the quality of
appraisals performed on single family homes financed through the FHA
single family programs and to ensure that appraisers performing FHA
appraisals meet high competency standards. The Appraiser Roster is an
important part of the FHA Single Family Mortgage Insurance program
because accurate appraisals are vital to the success of the program and
HUD's ability to protect the FHA Insurance Fund. The changes made by
this final rule are necessary to ensure that homebuyers seeking FHA-
insured mortgages receive accurate and complete appraisals of the homes
they seek to purchase.

Summary of Legal Basis:

Alternatives:

HUD has established codified placement and removal procedures for the
FHA Appraiser Roster. The changes made by this final rule would modify
these requirements and, therefore, must also be promulgated through
regulation. Furthermore, nonregulatory alternatives (such as
promulgation through mortgagee letter) would not be binding upon
appraisers.

Anticipated Cost and Benefits:

This rulemaking will strengthen the FHA Appraiser Roster licensing and
certification requirements. The anticipated benefit is that the rule
will enhance the accuracy and integrity of FHA appraisals, thereby
reducing opportunities for fraud and predatory lending abuses conducted
with the collusion of unscrupulous appraisers, such as property
flipping.

Risks:

This rule poses no risk to public health, safety or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 01/00/02
Final Action 03/00/02

[[Page 61201]]

Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Vance Morris
Director, Office of Single Family Program Development
Department of Housing and Urban Development
Office of Housing
Phone: 202 708-2121
RIN: 2502-AH59
_______________________________________________________________________

HUD--OH

65. LIMIT ON FHA SINGLE FAMILY LOAN FEES (FR-4700)
Priority:

Other Significant

Legal Authority:

12 USC 1709; 12 USC 1710; 12 USC 1715b; 12 USC 1715u; 12 USC 1715z to
1720; 42 USC 3535(d); ...

CFR Citation:

24 CFR 203; 24 CFR 206

Legal Deadline:

None

Abstract:

This proposed rule would implement one of several new HUD initiatives
to combat predatory lending in the Federal Housing Administration (FHA)
single family mortgage insurance programs. The proposed rule would cap
the total amount of charges and fees that may be charged on FHA-insured
single family mortgages. This maximum amount would vary depending on
the original principal amount of the mortgage. If the original
principal amount of the mortgage is $20,000 or less, the total
allowable charges and fees may not exceed 6 percent of the original
principal amount or $1,000, whichever is the greater. If the original
principal amount of the mortgage is greater than $20,000, the total
allowable charges and fees may not exceed 5 percent of the original
principal amount. The cap would not include legitimate fees paid to
service providers (such as settlement attorneys, property inspectors,
appraisers, credit reporting agencies and title insurers), reasonable
and customary discount points, and prepaid expenses (including escrows
for taxes and insurance).

Statement of Need:

Predatory lending -- whether undertaken by creditors, brokers or even
home improvement contractors -- involves engaging in deception or
fraud, manipulating the borrower through aggressive sales tactics, or
taking unfair advantage of a borrower's lack of understanding about
loan terms. These practices are combined with loan terms that, alone or
in combination, are abusive or make the borrower more vulnerable to
abusive practices. While no one set of abusive lending practices or
terms characterizes a predatory mortgage loan, a loan can be predatory
when lenders or brokers charge borrowers excessive, often hidden fees
or make loans without regard to a borrower's ability to repay.

Summary of Legal Basis:

Alternatives:

Nonregulatory initiatives to date have not proven to be sufficiently
successful in curbing predatory lending practices.

Anticipated Cost and Benefits:

This rulemaking will help to reduce excessive fees and costs of home
mortgages. The anticipated benefit is that the rule will help to reduce
foreclosure arising from high-cost mortgages.

Risks:

This rule poses no risk to public health, safety or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 02/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Vance Morris
Director, Office of Single Family Program Development
Department of Housing and Urban Development
Office of Housing
Phone: 202 708-2121
RIN: 2502-AH70
_______________________________________________________________________

HUD--Office of Community Planning and Development (CPD)

-----------

PROPOSED RULE STAGE

-----------

66. CDBG BROWNFIELDS/SLUM/BLIGHT (FR-4699)
Priority:

Other Significant

Legal Authority:

42 USC 3535(d); 42 USC 5301 et seq

CFR Citation:

24 CFR 570

Legal Deadline:

None

Abstract:

This rule will improve the ability of entitlement communities and
States' grant recipients to use Community Development Block Grant
(CDBG) funds for brownfields activities. The rule will clarify the
eligibility of activities involving the cleanup and development of
environmentally contaminated properties under section 105(a) of the
Housing and Community Development Act of 1974, as amended. The rule
also will increase CDBG recipients' flexibility to undertake activities
meeting the national objective of preventing or eliminating slums or
blighting conditions. The criteria for meeting the slum/blight national
objective will be revised to specifically recognize economic
obsolescence of buildings and the presence of environmental
contaminants as blighting influences on an area or property. This rule
will further clarify the list of activities that may be undertaken to
address the slum/blight national objective criteria on a spot basis.
Finally, this rule makes corresponding changes in the eligibility
regulations governing the Section 108 Loan Guarantee component of the
CDBG program.

[[Page 61202]]

Statement of Need:

Current CDBG regulations concerning the slum/blight national objective
only recognize the presence of physically deteriorated buildings or
public improvements as blighting influences on an area or property.
Professional practice and thinking in the community development field
is evolving toward a more encompassing view of the factors that
influence urban decay. Failure to update and streamline CDBG program
rules would hinder grantees' efforts to redevelop underutilized
properties and improve physical conditions in neighborhoods. In the FY
1999 HUD Appropriations Act (Public Law 105-276), Congress included
language clarifying the eligibility of activities to clean up and
develop environmentally contaminated properties; this rule will revise
the eligible activities discussion in the CDBG regulations to reflect
this statutory language. In addition, the rule will respond to a HUD
OIG audit recommendation by adding clarifying language regarding
activities that may be undertaken to address the slum/blight national
objective on a spot basis.

Summary of Legal Basis:

Under 42 U.S.C. 3535(d), the Department may make such rules and
regulations as may be necessary to carry out its functions, powers, and
duties. The Department's regulations governing the Community
Development Block Grant program are found at 24 CFR part 570, and are
promulgated pursuant to the statutory authority to administer the
program vested by the Housing and Community Development Act of 1974, as
amended (42 U.S.C. 5301 et seq.).

Alternatives:

The Department has considered a number of options regarding the
regulatory approach to take in issuing this rule; the Department has
commissioned a number of independent studies on the use of CDBG funds
to remediate and develop brownfields, and has consulted with
practitioners in the community development and brownfields professional
fields. In 1994, the Department sought comment from the public on how
to proceed with such a rule. The Department plans to pursue a rule that
provides as much flexibility as possible to grantees in determining
what types of remediation/development activities may be undertaken. The
Department has also considered the ``no rule'' option; however,
grantees and other interested parties continue to voice support for
issuance of such a rule.

Anticipated Cost and Benefits:

Costs: None. The rule simply adds flexibility to grantees in their
choice of activities with which to assist with CDBG funding; no
additional cost or burden is imposed on grantees that choose to take
advantage of this flexibility.

Benefits: Grantees will gain the flexibility to use CDBG funds to
assist in redeveloping a larger universe of properties whose conditions
negatively influence the condition of the surrounding area.

Risks:

This rule poses no threat to public safety, health or the environment.
Any cleanup of contaminated sites will be governed by existing Federal
and State standards for environmental remediation.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Local

Agency Contact:
Steve Johnson
Director, State and Small Cities Division
Department of Housing and Urban Development
Office of Community Planning and Development
Phone: 202 708-1322
RIN: 2506-AC12
_______________________________________________________________________

HUD--Office of Public and Indian Housing (PIH)

-----------

PROPOSED RULE STAGE

-----------

67. PUBLIC HOUSING CAPITAL FUND PROGRAM (FR-4507)
Priority:

Other Significant

Legal Authority:

42 USC 1437g; 42 USC 3535(d)

CFR Citation:

24 CFR 905

Legal Deadline:

None

Abstract:

This rule will implement the new Capital Fund Program for the capital
and management improvement needs of public housing agencies. The rule
will complement the rule for the Public Housing Capital Fund Program
formula allocation funding system published on March 16, 2000 (65 FR
14422). This rule will implement the regulatory framework for the
Capital Fund Program that will govern the use of the assistance made
available through the Capital Fund formula. The new rule at part 905
will replace and remove several other rules that currently govern a
PHA's use of HUD assistance including part 941 - Public Housing
Development and part 968 - Public Housing Modernization. This rule will
continue and expand the streamlining of procedures and requirements
initiated under the Comprehensive Grant and Comprehensive Improvement
programs at part 968.

Statement of Need:

Assistance under the Capital Fund Program is the primary, regular
source of funding made available by HUD to a PHA for its capital
activities, including modernization and development of public housing.
This final rule will implement the requirements for the use of
assistance made available under the Capital Fund program. The
regulations will provide the appropriate notice of the legal framework
for the program, and clear and uniform guidance for program operation.

Summary of Legal Basis:

Sections 518, 519, and 539 of the Quality Housing and Work
Responsibility Act of 1998 (Pub. L. 105-276, referred to as the Public
Housing Act) amended sections 9 and 5, and added section 35(g) of the
U.S. Housing Act of 1937 (42 U.S.C. 1437g).

Alternatives:

The QHWRA required a formula system to be established through
negotiated rulemaking to govern funding of PHAs' public housing capital
needs. Guidance for administration of these funds necessitates a
permanent legal framework rather than informal and sporadic HUD
notices.

[[Page 61203]]

Anticipated Cost and Benefits:

The costs of the program as administered with one fund from which a PHA
will fund all of its capital needs is the same as under existing
provisions. The benefits of having one funding mechanism for all such
needs, and the provision of additional flexibility to PHAs to manage
their physical assets provides increased benefits to the PHAs.
Likewise, uniform program administration of these funds will provide
increased benefits to the PHAs.

Risks:

This rule poses no threat to public safety, health, or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
William Flood
Director, Office of Capital Improvements
Department of Housing and Urban Development
Office of Public and Indian Housing
Phone: 202 708-1640
RIN: 2577-AC16
_______________________________________________________________________

HUD--PIH

68. PROJECT-BASED VOUCHER PROGRAM (FR-4636)
Priority:

Other Significant

Legal Authority:

42 USC 1437f; 42 USC 3535(d)

CFR Citation:

24 CFR 983

Legal Deadline:

None

Abstract:

The rule will implement the new Section 8 project-based voucher
program. It is based on comprehensive legislation that Congress passed
along with HUD's FY 2001 appropriation. Among the many changes made by
the law, the rule will cover requirements on: competition, consistency
of the PHA plan and deconcentration efforts, definition of supportive
services, and HQS inspections.

Statement of Need:

This rule proposes an extensive revision of the Section 8 project-based
assistance program to eliminate the differences between the current
project-based assistance regulations and the new law (Pub.L. 106-377)
which implements the new Section 8 project-based assistance voucher
program. Additionally, this rule will implement Congress' intent to
make Section 8 project-basing of voucher assistance more flexible and
further the Department's efforts to provide affordable housing for
very-low-income families.

Summary of Legal Basis:

Section 232 of the FY 2001 Departments of Veterans Affairs and Housing
and Urban Development and Independent Agencies Appropriations Act
(Pub.L. 106-377) substantially revised the provisions of the U.S.
Housing Act of 1937 that govern the authority of a public housing
agency to designate a portion of its available tenant-based voucher
funds for project-based assistance.

Alternatives:

None.

Anticipated Cost and Benefits:

This rule will have the benefit of increasing the number of affordable
housing units for very low-income families. Increasing the flexibility
of the project-based requirements will make the project-based voucher
program more flexible and more workable. Because the revised regulation
would be a refinement or improvement of existing procedures, and should
result in no additional, or a decrease in, monitoring or reporting
burdens, additional costs to PHAs and to HUD are negligible.

Risks:

The rule poses no risk to public health, safety or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Local

Agency Contact:
Gerald J. Benoit
Director, Real Estate and Housing Performance Division
Department of Housing and Urban Development
Office of Public and Indian Housing
Phone: 202 708-0477
RIN: 2577-AC25
_______________________________________________________________________

HUD--PIH

69. RESIDENT PARTICIPATION IN PUBLIC AND SECTION 8 HOUSING (FR-4657)
Priority:

Other Significant

Legal Authority:

42 USC 1437c-1; 42 USC 1437r; 42 USC 1437t; 42 USC 1437z-6; 42 USC
3535(d); 42 USC 1437d; 42 USC 1437g; 42 USC 1437l;; 12 USC 1715z-1b(a)

CFR Citation:

24 CFR 964

Legal Deadline:

None

Abstract:

This rule would update existing provisions of 24 CFR 964 and
incorporate new provisions of the Quality Housing and Work
Responsibility Act of 1998 related to resident/tenant participation. In
particular, the rule would establish policies, procedures, and
requirements for participating in the Resident Opportunities and Self-
Sufficiency (ROSS) Program. Additionally, the proposed rule contains
expanded definitions and other general information sections as part of
HUD's long-standing efforts to support resident organizations and
resident self-sufficiency.

Statement of Need:

Various sections of QHWRA provide statutory authority for permanent
programs. These regulations will provide appropriate notice of the
legal framework for these programs, and clear and uniform instructions
and procedures for implementation.

Summary of Legal Basis:

Various sections of QHWRA provide statutory authority for permanent
programs. These regulations will provide appropriate notice of the
legal

[[Page 61204]]

framework for these programs, and clear and uniform instructions and
procedures for implementation.

Alternatives:

The programs authorized under QHWRA need a long-term legal framework.
Therefore regulations are required as an alternative to short-term
program notices or notices of funding availability (NOFAs).

Anticipated Cost and Benefits:

The establishment of regulations will bring certainty to the resident
related programs authorized by QHWRA, to confirm their permanency. The
regulations when issued will provide the legal basis for these resident
related programs. The certainty to be provided through issuance of
regulations should reduce costs by providing longer-term participation
and planning on the part of program participants.

Risks:

The rule poses no threat to public safety, health, or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Organizations

Government Levels Affected:

None

Agency Contact:
Jeraldene White
Senior Program Manager
Department of Housing and Urban Development
Office of Public and Indian Housing
Phone: 202 708-4214
RIN: 2577-AC26
_______________________________________________________________________

HUD--PIH

70. AMENDED PUBLIC HOUSING ASSESSMENT SYSTEM (PHAS) RULE (FR-
4707)
Priority:

Other Significant

Legal Authority:

42 USC 1437d(j); 42 USC 3535(d)

CFR Citation:

24 CFR 902

Legal Deadline:

None

Abstract:

Through this rule, the Department will be revising the regulations that
govern the Public Housing Assessment System (PHAS). This rule will
incorporate the input of public housing stakeholders groups in the
public housing assessment process.

Statement of Need:

Per the directive of the Secretary of HUD, the Department has agreed to
consider changes to the current PHAS rule based on consultation with
public housing stakeholders including industry representatives,
resident groups and other interested Federal and congressionally
chartered agencies. As most PHAS Indicators have been in an advisory
status since its inception, the Department believes that the entire
PHAS system needs to be reevaluated and modified.

Summary of Legal Basis:

The Secretary of HUD is directed under section 6(j) of the United
States Housing Act of 1937 (42 U.S.C. 1437 et seq.) to develop and
publish in the Federal Register indicators to assess the management
performance of public housing agencies and resident management
corporations. Such indicators shall enable the Secretary to evaluate
the performance of public housing agencies and resident management
corporations in all major areas of management operations.

Alternatives:

An interim rule is an alternative currently under consideration.
However, the intent of the interim rule is to provide the Department
with a fully implemented assessment system while the amended PHAS rule
is being rewritten. Other alternatives that have been considered, such
as utilizing the Management Indicator (MASS) only, fails to meet the
Department's strategic goal of ensuring that public housing agencies
provide decent, safe and sanitary housing.

Anticipated Cost and Benefits:

This rule will have the benefit of promoting the success of PHAS by
ensuring the buy-in of public housing stakeholder groups in the public
housing assessment process. The new rule will soon be in the
development phase; therefore, accurate cost estimates cannot be
provided at this time.

Risks:

This rule poses no risk to public health, safety or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
Wanda Funk
Real Estate Assessment Center
Department of Housing and Urban Development
Office of Housing
Phone: 202 708-4932

Judy Wojciechowski
Director, PHAS Operations, Office of Troubled Agency Recovery
Department of Housing and Urban Development
Office of Public and Indian Housing
Phone: 202 708-4932
RIN: 2577-AC32
_______________________________________________________________________

HUD--PIH

-----------

FINAL RULE STAGE

-----------

71. OPERATING FUND ALLOCATION FORMULA (FR-4425)
Priority:

Other Significant

Legal Authority:

42 USC 1437g; 42 USC 3535(d)

CFR Citation:

24 CFR 990

Legal Deadline:

None

Abstract:

This final rule will follow publication of a March 29, 2001 interim
rule that governs the determination of funding distribution to public
housing agencies under the Operating Fund and will reflect the results
of a Congressionally mandated cost study. The Conference Report to
HUD's FY 2000 Appropriations Act (Pub.L. 106-74, approved October 20,
1999) directs HUD to contract with the Harvard University Graduate
School of Design to conduct a study of the cost incurred

[[Page 61205]]

in operating well-fund public housing and provides the results to the
negotiated rulemaking committee and the appropriate congressional
committees). As portions of the study are completed, HUD is meeting
with representatives of the negotiated rulemaking committee that helped
HUD develop the Operating Fund proposed rule, as well as other
interested parties. These meetings have also been open to the public.
HUD will develop the final rule based on the results of the cost study,
the comments on the interim rule and further input from the members of
the Operating Fund proposed rule negotiating committee and other
interested members of the public.

Statement of Need:

Section 519 of the Quality Housing and Work Responsibility Act requires
HUD to develop this rule to govern funding of PHAs' operating and
management needs.

Summary of Legal Basis:

Section 519 of the Quality Housing and Work Responsibility Act amending
section 9 of the U.S. Housing Act of 1937, codified at 42 USC 1437g.

Alternatives:

The Quality Housing and Work Responsibility Act of 1998 requires that
this new formula system be developed through negotiated rulemaking.

Anticipated Cost and Benefits:

The costs of the program as administered with one fund from which a PHA
will fund all of its operating and management needs will be the same as
under existing provisions. The benefits of having this new formula
system developed through negotiated rulemaking is that it allows those
entities and individuals directly affected -- public housing agencies
and their residents -- to have a say in how the formula will operate,
and consequently to help foster constructive, creative and acceptable
solutions to difficult problems.

Risks:

This rule poses no threat to public safety, health, or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Notice 64 FR 5570 02/03/99
Notice Comment Period End 03/05/99
NPRM 65 FR 42488 07/10/00
NPRM Comment Period End 08/09/00
Interim Final Ru66 FR 17276 03/29/01
Interim Final Rule Effective 04/30/01
Interim Final Rule Comment Period End 05/29/01
Final Action 08/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
Stephen Sprague
Funding and Financial Management Division, Office of Public and
Assisted Housing Delivery
Department of Housing and Urban Development
Office of Public and Indian Housing
Phone: 202 708-1872
RIN: 2577-AB88
_______________________________________________________________________

HUD--PIH

72. PUBLIC HOUSING HOMEOWNERSHIP PROGRAMS (FR-4504)
Priority:

Other Significant

Legal Authority:

42 USC 1437z-4; 42 USC 3535(d)

CFR Citation:

24 CFR 906

Legal Deadline:

None

Abstract:

This rule will set forth the requirements and procedures governing a
new statutory homeownership program to be administered by public
housing agencies. Under this rule, a PHA makes public housing dwelling
units available for purchase by low-income families as their principal
residences.

Statement of Need:

This rulemaking is needed to implement the public housing homeownership
program authorized by section 32 of the U.S. Housing Act of 1937.

Summary of Legal Basis:

Section 536 of the Quality Housing and Work Responsibility Act of 1998
(QHWRA) amended title I of the U.S. Housing Act of 1937 (42 U.S.C. 1437
et seq.) by adding a new section 32, which authorized a new public
housing homeownership program to replace the program formerly
authorized under section 5(h) of the 1937 Act.

Alternatives:

There are no alternatives to rulemaking in order to implement the
program.

Anticipated Cost and Benefits:

The rule provides the parameters for the use of public housing
properties to create homeownership opportunities for low-income
residents of public housing and other low-income families should a
public housing agency choose to do so. The rule's major effect is on
individuals; any incidental effect on other entities would be limited
to their cooperative efforts in promoting homeownership among public
housing residents and other low-income families.

Risks:

This rule poses no threat to the to public health, safety or the
environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 64 FR 49932 09/14/99
NPRM Comment Period End 11/15/99
Final Action 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
David Sowell
Director, Office of Public Housing Partnerships
Department of Housing and Urban Development
Office of Public and Indian Housing
Phone: 202 401-8812
RIN: 2577-AC15

[[Page 61206]]

_______________________________________________________________________

HUD--PIH

73. SECTION 8 DOWNPAYMENT INITIATIVE (FR-4670)
Priority:

Other Significant

Legal Authority:

42 USC 1437f; 42 USC 3535(d)

CFR Citation:

24 CFR 982

Legal Deadline:

None

Abstract:

Section 301 of the American Homeownership and Economic Assistance Act
of 2000 authorizes an alternative form of assistance under the Section
8 homeownership option by providing for assistance in the form of a
single downpayment assistance grant. Under section 301, a public
housing agency (PHA) may, in lieu of paying a monthly homeownership
assistance payment on behalf of a family, provide homeownership
assistance for the family in the form of a single grant to be used
toward the downpayment required in connection with the purchase of the
home.

Statement of Need:

This rulemaking is needed to implement section 301 and complete the
Section 8 Homeownership Program regulation at 24 CFR part 982, which
currently only provides for monthly homeownership assistance payments.

Summary of Legal Basis:

Under 42 U.S.C. 3535(d), the Department may make such rules and
regulations as may be necessary to carry out its functions, powers, and
duties. Section 301 of the American Homeownership and Economic
Assistance Act of 2000 (Public Law 106-569, 114 Stat. 2944, 2952,
approved December 27, 2000) amends the ``homeownership option'' under
section 8(y) of the United States Housing Act of 1937 (42 U.S.C.
1437f(y)) to permit downpayment assistance and provides specific
authority for this rule.

Alternatives:

This additional statutory authority expands the use of Section 8
assistance for homeownership and compliments an existing rule which
must be amended to address the new form of assistance made available.

Anticipated Cost and Benefits:

This rule adds a new eligible use of Housing Choice Vouchers as
authorized by statute. A PHA may choose whether or not to make
assistance available for this new use, and local conditions on the
relative benefits of eligible uses will influence its determination to
make such assistance available, thereby maximizing the benefit.

Risks:

This rule poses no threat to public safety, health or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 32198 06/13/01
NPRM Comment Period End 08/13/01
Final Action 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Local

[[Page 61207]]

DEPARTMENT OF THE INTERIOR (DOI)

Statement of Regulatory Priorities
The Department of the Interior (DOI) is the principal Federal steward
of our Nation's public lands and resources, including many of our
cultural treasures. We serve as trustee to Native Americans and Alaska
natives and also are responsible for relations with the island
territories under United States jurisdiction. We manage more than 450
million acres of Federal lands, including 384 park units, 537 wildlife
refuges, and 24,000 miles of trails, and approximately 1.7 billion
acres in submerged waters in offshore waters. The Department recovers
endangered species, manages water projects, fights wildland fires,
leases coal, oil and gas to meet the Nation's energy needs, educates
children in Indian schools and provides recreational opportunities for
almost 300 million visitors annually in our national parks.
In carrying out these responsibilities, the Department:
Manages natural resources on public lands, including energy
and mineral resources, water and grazing lands;
Provides recreation opportunities;
Protects the environment and preserves our Nation's natural
and cultural resources;
Meets our trust responsibilities to Indian tribes and our
commitments to the people of the U.S. territories; and
Provides science relating to land and resource management.
The Department is committed to achieving its stewardship objectives in
partnership with States, communities, and others through consultation,
cooperation, and communication.
We will review and update the Department's regulations and policies to
ensure that they are effective, efficient, and promote accountability.
Special emphasis will be given to regulations and policies that:
Adopt performance-based approaches focusing on achieving
results in the most cost-effective and timely manner;
Incorporate the best available science, including peer review
wherever appropriate;
Promote partnerships with States and other groups and
individuals;
Provide incentives for private landowners to achieve
conservation goals; and
Minimize regulatory and procedural burdens, promoting fairness
and accountability by agency regulators while maintaining
performance goals.
Major Regulatory Areas
Among the Department's bureaus and offices, the Office of Surface
Mining Reclamation and Enforcement (OSM) has the highest concentration
of regulatory responsibilities. OSM, in partnership with the States and
Indian tribes, has the responsibility for setting and enforcing
environmental standards during coal mining and reclamation operations.
Other DOI bureaus rely on regulations to implement legislatively
mandated programs by focusing on the management of natural resources
and public or trust lands. Some of these regulatory activities include:
Management of migratory birds and preservation of certain
marine mammals and endangered species;
Management of dedicated lands, such as national parks,
wildlife refuges, and American Indian trust lands;
Management of public lands open to multiple use;
Leasing and oversight of development of Federal energy,
minerals, and renewable resources;
Management of revenues from American Indian and Federal
minerals;
Fulfillment of trust and other responsibilities pertaining to
American Indian tribes;
Natural resource damage assessments; and
Management of financial and nonfinancial assistance programs.
Regulatory Policy
How DOI Regulatory Procedures Relate to the Administration's Regulatory
Policies ⁵⁶ Within the requirements and guidance in Executive Orders 12866,
12630, and 13132, DOI's regulatory program seeks to:
Fulfill all legal requirements as specified by statutes or
court orders;
Perform essential functions that cannot be handled by non-
Federal entities;
Minimize regulatory costs to society while maximizing societal
benefits; and
Operate programs openly, efficiently, and in cooperation with
Federal and non-Federal entities.
DOI bureaus have taken the initiative in working with other Federal
agencies, non-Federal government agencies, and public entities to make
our regulations easier to comply with and understand. Because
regulatory improvement is a continuing process that requires the
participation of all affected parties, we strive continually to include
all affected entities in the decisionmaking process and to issue rules
more efficiently. To better manage and review the regulatory process,
we have revised our internal rulemaking guidance. Results have
included:
Increased bureau awareness of and responsiveness to the needs
of small businesses and better compliance with the Small
Business Regulatory Enforcement Fairness Act (SBREFA);
A departmentwide effort to evaluate the economic effects of
rules and regulations that are planned; and
Issuance of new guidance in the Departmental Manual to ensure
the use of plain language in Government writing.
We are committed to improving the regulatory process through the use
of plain language. Simplifying regulations has resulted in a major
rewrite of the regulations for onshore oil and gas leasing and
operations in an easily understandable form that: (a) Puts previously
published rules into one location in a logical sequence; (b) eliminates
duplication by consolidating existing regulations and onshore orders
and national notices to lessees; (c) incorporates industry standards by
reference; and (d) implements performance standards in some of the
operating regulations. Our regulatory process ensures that bureaus
share ideas on how to reduce regulatory burden while meeting the
requirements of the laws they enforce and improving their stewardship
of the environment and resources under their purview.
Encouraging Responsible Management of the Nation's Resources⁵⁶ The Department's mission includes protecting and providing
access to our Nation's natural and cultural heritage and honoring our
trust responsibilities to tribes. We are committed to this mission and
to applying laws and regulations fairly and effectively. The
Department's priorities include protecting public health and safety,
restoring and maintaining public lands, solving land and resource-
management problems on public lands, and ensuring accountability and
compliance with Federal laws and regulations.

[[Page 61208]]

An example of this is the ``no surprises'' policy of the U.S. Fish and
Wildlife Service (FWS). This policy gives property owners an incentive
to implement voluntary conservation measures for a proposed or
candidate endangered or threatened species, or a species likely to
become a candidate or proposed in the near future. These property
owners will receive assurances from FWS that additional conservation
measures will not be required and additional land, water, or resource
use restrictions will not be imposed should the species become listed
in the future. This policy results in more involvement by landowners in
species protection, fewer fines, no ``surprises'' (in the form of
unexpected fines) for conforming landowners, better overall protection
of species, and better compliance with the Endangered Species Act.
Minimizing Regulatory Burdens⁵⁶ We are using the regulatory process to ease the burdens on
various entities throughout the country while improving results. For
instance, the Endangered Species Act (ESA) allows for the delisting of
threatened and endangered species if they no longer need the protection
of the ESA. We have identified approximately 40 species for which
delisting or downlisting (reclassification from endangered to
threatened) may be appropriate.
We use performance standards in a variety of regulations to improve
compliance and achievement of regulatory goals. These allow the
affected entity to choose the most economical method to accomplish a
goal provided it meets the requirements of the regulations. An example
of this is Minerals Management Service's (MMS) training rule, which
will allow companies with operations in the Outer Continental Shelf
(OCS) to select their own training courses or programs for employees.
The new rule will allow lessees and contractors to properly train the
employees by any method they choose as long as the employees are
competent. We anticipate that this will result in new and innovative
training techniques and allow companies added flexibility in tailoring
their training to employees' specific duties.
Encouraging Public Participation and Involvement in the Regulatory
Procedure Process⁵⁶ Encouraging increased public participation in the regulatory
process to improve results by ensuring that regulatory policies take
into account the knowledge and ideas of our customers, regulated
community, and other interested participants. The Department is
reaching out to communities to seek public input on a variety of
regulatory issues. For example, every year FWS establishes migratory
bird hunting seasons in partnership with ``flyway councils,'' which are
made up of State fish and wildlife agencies. As the process evolves
each year, FWS holds a series of public meetings to give other
interested parties, including hunters and other groups, opportunities
to participate in establishing the upcoming season's regulations.
Similarly, the Bureau of Land Management (BLM) uses Resource Advisory
Councils (RACs) made up of affected parties to help prepare land
management plans regulations that it issues under the Rangeland Reform
Act.
We encourage public consultation during the regulatory process. For
example:
OSM is continuing its outreach to interested groups to improve
the substance and quality of rules and, to the greatest
extent possible, achieve consensus on regulatory issues;
The Bureau of Indian Affairs is developing its roads program
rule using the negotiated rulemaking process. Because of
the importance of the roads program to the individual
tribes and because of the varying needs of the tribal
governments, the negotiated rulemaking process will result
in a rule that better serves the diverse needs of the
Native American community.
The Future of DOI
Interior plans to develop a single Departmentwide strategic plan
during FY 2002 in response to congressional, OMB, and other appraisals
indicating that Interior's ten separate strategic planning documents
are too long and lack the appropriate agency-level focus. Interior also
intends to use the single Strategic Plan as the basis for preparing a
single Departmentwide Annual Performance Plan beginning with the plan
for FY 2004. The Interior bureaus will continue to prepare internal
plans to support their budget initiatives and to meet management
excellence and accountability needs. However, in the future we plan to
submit only Departmentwide strategic and annual plans to the Congress.
Finally, the process of developing a single strategic plan also will
provide the Secretary with an opportunity to:
Set an agenda for Interior that reflects the Administration's
and the Secretary's priorities,
Consult with key interested constituents on the future
direction of the Department, and
Make Interior programs more ``results-oriented'' and
accountable to citizens.
Bureaus and Offices Within DOI
The following brief descriptions summarize the regulatory functions of
DOI's major regulatory bureaus and offices.
Office of the Secretary, Natural Resource Damage Assessment and
Restoration Program⁵⁶ The regulatory functions of the Natural Resource Damage
Assessment and Restoration Program (Restoration Program) stem from
requirements under section 301(c) of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (CERCLA).
Section 301(c) requires the development of natural resource damage
assessment rules and the biennial review and revision, as appropriate,
of these rules. Rules have been promulgated for the optional use of
natural resource trustees to assess compensation for damages to natural
resources caused by hazardous substances. The Restoration Program is
overseeing the study and possible promulgation of additional rules
pursuant to section 301(c)(2) and the review and possible revision of
the existing rule in compliance with section 301(c)(3).
In undertaking DOI's responsibilities under section 301(c), the
Restoration Program is striving to meet three regulatory objectives:
(a) make the regulation user friendly through the use of plain language
so that the assessment and restoration process can be followed by all
interested parties; (b) move towards a restoration bases approach for
determining compensation rather than monetizing economic damages, and
(c) follow a process that is based on facilitating negotiated
settlements rather than litigation over natural resource damages.
Bureau of Indian Affairs ⁵⁶ The Bureau of Indian Affairs (BIA) is responsible for managing
trust responsibilities to the Indian tribes and encouraging tribal
governments to assume responsibility for BIA programs.
The Bureau's rulemaking and policy development processes are designed
to foster public and tribal awareness of the standards and procedures
that directly affect them. The processes also encourage the public and
the tribes to participate in developing these

[[Page 61209]]

standards and procedures. The goals of BIA regulatory policies are to:
(a) ensure consistent policies within BIA that result in uniform
interactions with the tribal governments; (b) facilitate tribal
involvement in managing, planning, and evaluating BIA programs and
services; and (c) ensure continued protection of tribal treaties and
statutory rights.
Bureau of Land Management⁵⁶ The Bureau of Land Management manages about 264 million acres of
land surface and about 570 million acres of Federal mineral estate.
These lands consist of extensive grasslands, forests, mountains, arctic
tundra, and deserts. Resources on the lands include energy and
minerals, timber, forage, wild horse and burro populations, habitat for
fish and wildlife, wilderness areas, and archeological and cultural
sites. BLM manages these lands and resources for multiple purposes and
the sustained yield of renewable resources. Primary statutes under
which the Agency must operate include: The Federal Land Policy and
Management Act of 1976; the General Mining Law of 1872; the Mineral
Leasing Act of 1920, as amended; the Recreation and Public Purposes
Act; the Taylor Grazing Act; and the Wild, Free-Roaming Horses and
Burros Act.
The regulatory program mirrors statutory responsibilities and Agency
objectives. Agency objectives include:
Providing for a wide variety of public uses while maintaining
the long-term health and diversity of the land and while
preserving significant natural, cultural, and historical
resource values;
Understanding the arid, semi-arid, arctic, and other
ecosystems we manage and committing to using the best
scientific and technical information to make resource
management decisions;
Understanding the needs of the public that use BLM-managed
lands and providing them with quality service;
Committing to recovering a fair return for using publicly
owned resources and avoiding the creation of long-term
liabilities for American taxpayers; and
Resolving problems and implementing decisions in cooperation
with other agencies, States, tribal governments, and the
public.
The regulatory program contains its own objectives. These include
preparing regulations that:
Are the product of coordination and consultation with all
affected members of the public;
Are understandable to the general public, especially those to
whom they are directly applicable; and
Are reviewed periodically to determine whether or not BLM
still needs them, whether or not they need to be updated to
reflect statutory and policy changes, and whether they are
achieving desired results.
Minerals Management Service⁵⁶ The Minerals Management Service (MMS) has two major
responsibilities: (1) timely and accurate collection, distribution,
accounting for, and auditing of revenues owed by holders of Federal
onshore, offshore, and tribal land mineral leases in a manner that
meets or exceeds Federal financial integrity requirements and recipient
expectations; and (2) management of the resources of the Outer
Continental Shelf in a manner that provides for safety, protection of
the environment, and conservation of natural resources. These
responsibilities are carried out under the provisions of the Federal
Oil and Gas Royalty Management Act, the Minerals Leasing Act, the Outer
Continental Shelf Lands Act, the Indian Mineral Leasing Act, and other
related statutes.
Our regulatory philosophy is to develop clear, enforceable rules that
support the missions of each program. For the Offshore Minerals
Management program, as authorized by the Deep Water Royalty Relief Act
(DWRRA) (P.L. 104-58), we plan to issue a final regulation to revise
current regulations at 30 CFR 203. The revised rule would provide
detailed instructions on how deep water leases issued before the DWRRA
may apply and qualify for royalty-suspension on a case-by-case basis.
We plan to revise and extend these instructions to certain additional
categories of OCS leases, especially those issued after 2000. We will
also continue to review rules and issue amendments in response to new
technology and new industry practices.
We also plan to continue our review of existing regulations and to
issue rules to refine the Minerals Revenue Management (MRM) regulations
in chapter II of 30 CFR. MRM is in the process of issuing regulations
to: (1) revise its oil valuation regulations for Indian leases; and (2)
codify provisions in the Federal Oil and Gas Royalty Simplification and
Fairness Act of 1996; and (3) implement new financial and compliance
procedures resulting from a major reengineering initiative.
Office of Surface Mining Reclamation and Enforcement ⁵⁶ The Office of Surface Mining Reclamation and Enforcement (OSM)
was created by the Surface Mining Control and Reclamation Act of 1977
(SMCRA) to ``strike a balance between protection of the environment and
agricultural productivity and the Nation's need for coal as an
essential source of energy.''
The principal regulatory provisions contained in title V of SMCRA set
minimum requirements for obtaining a permit for surface coal mining
operations, set standards for those operations, require land
reclamation once mining ends, and require rules and enforcement
procedures to ensure that the standards are met. Under SMCRA, OSM is
the primary enforcer of SMCRA's provisions until the States achieve
``primacy''; that is, until they demonstrate that their regulatory
programs meet all the specifications in SMCRA and have regulations
consistent with those issued by OSM.
When a primacy State takes over the permitting, inspection, and
enforcement activities of the Federal Government, OSM then changes its
role from regulating mining activities directly to overseeing and
evaluating State programs. Today, 24 of the 27 key coal-producing
States have primacy. In return for assuming primacy, States are
entitled to regulatory grants and to grants for reclaiming abandoned
mine lands. In addition, under cooperative agreements, some primacy
States have agreed to regulate mining on Federal lands within their
borders. Thus, OSM regulates mining directly only in nonprimacy States,
on Federal lands in States where no cooperative agreements are in
effect, and on Indian lands.
SMCRA charges OSM with the responsibility of publishing rules as
necessary to carry out the purposes of the Act. The fundamental
mechanism for ensuring that the purposes of SMCRA are achieved is the
basic policy and guidance established through OSM's permanent
regulatory program and related rulemakings. This regulatory framework
is developed, reviewed, and applied according to policy directives and
legal requirements.
Litigation by the coal industry and environmental groups is
responsible for some of the rules now being considered by OSM. Others
are the result of efforts by OSM to address areas of concern that have
arisen during the course of

[[Page 61210]]

implementing OSM's regulatory program, and one is the result of
legislation.
OSM has sought to develop an economical, safe, and environmentally
sound program for the surface mining of coal by providing a stable,
consistent regulatory, results-focused framework. At the same time,
however, OSM has recognized the need (a) to respond to local
conditions, (b) to provide flexibility to react to technological
change, (c) to be sensitive to geographic diversity, and (d) to
eliminate burdensome recordkeeping and reporting requirements that over
time have proved unnecessary to ensure an effective regulatory program.
Major regulatory objectives regarding the mining of surface coal
include:
Continuing outreach activities with interested groups during
the rulemaking process to increase the quality of the
rulemaking process, improve the substance of the rules,
and, to the greatest extent possible, reflect consensus on
regulatory issues;
Minimizing the recordkeeping and regulatory compliance burden
during rulemaking; and
Publishing final rules to implement the Energy Policy Act of
1992, Public Law 102-486 and section 510(c) of SMCRA.
U.S. Fish and Wildlife Service
The mission of the U.S. Fish and Wildlife Service is working with
others to conserve, protect, and enhance fish, wildlife, and plants and
their habitats for the continuing benefit of the American people. Four
principal mission goals include:
The sustainability of fish and wildlife populations. We
conserve, protect, restore, and enhance fish, wildlife, and
plant populations entrusted to our care. We carry out this
mission goal through migratory bird conservation at home
and abroad; native fisheries restoration; recovery and
protection of threatened and endangered species; prevention
and control of invasive species; and work with our
international partners.
Habitat conservation -- a network of lands and waters.
Cooperating with others, we strive to conserve an
ecologically diverse network of lands and waters -- of
various ownerships -- providing habitats for fish,
wildlife, and plant resources. This mission goal emphasizes
two kinds of strategic actions: (1) the development of
formal agreements and plans with our partners who provide
habitat for multiple species, and (2) the actual
conservation work necessary to protect, restore, and
enhance those habitats vital to fish and wildlife
populations. Our habitat conservation strategy uses an
ecosystem approach to focus on the interaction and balance
of people, lands, and waters, and fish and wildlife.
Public use and enjoyment. We provide opportunities to the
public to enjoy, understand, and participate in the use and
conservation of fish and wildlife resources. The Service
directs activities on national wildlife refuges and
national fish hatcheries that increase opportunities for
public involvement with fish and wildlife resources. Such
opportunities include hunting, fishing, wildlife
observation and photography, and environmental education
and interpretation, as well as affording the public hands-
on experiences through volunteer conservation activities on
Service lands.
Partnerships in natural resources. We support and strengthen
partnerships with tribal, State, and local governments and
others in their efforts to conserve and enjoy fish,
wildlife, and plants and habitats. We administer Federal
grants to States and territories for restoration of fish
and wildlife resources and have a continuing commitment to
work with tribal governments. We also promote partnerships
with other Federal agencies where common goals can be
developed.
The Service carries out these mission goals through several types of
regulations and programs. The Service works continually with foreign
and State governments, affected industries and individuals, and other
interested parties to minimize any burdens associated with Service-
related activities. We attempt to ensure a balance between any possible
public burdens and adequate protection for the natural resource.
We implement and enforce regulations that govern public access, use
and recreation on more than 500 national wildlife refuges and in
national fish hatcheries. We authorize those uses that are compatible
with the purpose for which each area was established, are consistent
with State and local laws where practical, and afford the public
appropriate economic, recreational, and conservation opportunities.
We administer regulations to manage migratory bird resources.
Annually, the Service issues a regulation on migratory bird hunting
seasons and bag limits that is developed in partnership with the
States, tribal governments, and the Canadian Wildlife Service. These
regulations are necessary to permit migratory bird hunting that would
otherwise be prohibited by various international treaties.
The Service enforces regulations to fulfill our statutory obligation
to identify and conserve species faced with extinction. The Endangered
Species Act (ESA) dictates that the basis for determining endangered
species is limited to biological considerations. Regulations enhance
the conservation of listed species and certain marine mammals.
Regulations also help other Federal agencies comply with the ESA, which
prohibits them from conducting activities that would jeopardize the
existence of endangered species or adversely modify critical habitat of
listed species. In designating critical habitat, the Service considers
biological information and economic and other impacts of the
designation. Areas may be excluded if the benefits of exclusion
outweigh the benefits of inclusion, provided that such exclusion will
not result in the extinction of the species.
Some Service regulations permit activities otherwise prohibited by
law. These regulations allow possession, sale or trade, scientific
research, and educational activities involving fish and wildlife and
their parts or products. In general, these regulations supplement State
regulations and cover activities that involve interstate or foreign
commerce. In carrying out our assistance programs, we administer
regulations to help interested parties obtain Federal assistance and
also to help assistance recipients comply with applicable laws and
Federal requirements.
National Park Service⁵⁶ The National Park Service is dedicated to conserving the natural
and cultural resources and values of the National Park System for the
enjoyment, education, and inspiration of this and future generations.
The Service is also responsible for managing a great variety of
national and international programs designed to help extend the
benefits of natural and cultural resource conservation and outdoor
recreation throughout this country and the world.
There are 384 units in the National Park System, including national
parks and monuments; scenic parkways, preserves, trails, riverways,
seashores, lakeshores, and recreation areas; and historic sites
associated with important

[[Page 61211]]

movements, events, and personalities of the American past.
The National Park Service develops and implements park management
plans and staffs the areas under its administration. It relates the
natural values and historical significance of these areas to the public
through talks, tours, films, exhibits, and other interpretive media. It
operates campgrounds and other visitor facilities and provides, usually
through concessions, lodging, food, and transportation services in many
areas. The National Park Service also administers the following
programs: The State portion of the Land and Water Conservation Fund,
Nationwide Outdoor Recreation coordination and information and State
comprehensive outdoor recreation planning, planning and technical
assistance for the National Wild and Scenic Rivers System, and the
National Trails System, natural area programs, the National Register of
Historic Places, national historic landmarks, historic preservation,
technical preservation services, Historic American Buildings survey,
Historic American Engineering Record, and interagency archeological
services.
The National Park Service maintains regulations that help manage
public use, access, and recreation in units of the National Park
System. The Service provides visitor and resource protection to ensure
public safety and prevent degradation of resources. The regulatory
program develops and reviews regulations, maintaining consistency with
State and local laws, to allow these uses only if they are compatible
with the purpose for which each area was established.
Bureau of Reclamation ⁵⁶ The Bureau of Reclamation's mission is to manage, develop, and
protect water and related resources in an environmentally and
economically sound manner in the interest of the American public. To
accomplish this mission, Reclamation applies management, engineering,
and scientific skills that result in effective and environmentally
sensitive solutions.
Reclamation projects provide for some or all of the following
concurrent purposes: Irrigation water service, municipal and industrial
water supply, hydroelectric power generation, water quality
improvement, groundwater management, fish and wildlife enhancement,
outdoor recreation, flood control, navigation, river regulation and
control, system optimization, and related uses.
Reclamation's regulatory program is designed to ensure that its
mission is carried out expeditiously, efficiently, and with an emphasis
on cooperative problem-solving.
_______________________________________________________________________

DOI--Minerals Management Service (MMS)

-----------

FINAL RULE STAGE

-----------

74. VALUATION OF OIL FROM INDIAN LEASES
Priority:

Other Significant

Legal Authority:

25 USC 2101 et seq; 25 USC 396 et seq; 25 USC 396a et seq; 30 USC 1001
et seq; 30 USC 1701 et seq; 30 USC 181 et seq; 30 USC 351 et seq

CFR Citation:

30 CFR 206

Legal Deadline:

None

Abstract:

This rule would modify the regulations that establish royalty value for
oil produced from Indian leases and create a new form for collecting
value and value differential data. These changes would decrease
reliance on oil posted prices and make Indian oil royalty valuation
more consistent with the terms of Indian leases.

Statement of Need:

Current oil valuation regulations rely primarily on posted prices and
prices under arm's-length sales to value oil that is not sold at arm's-
length. Over time, posted prices have become increasingly suspect as a
fair measure of market value. This rulemaking would modify valuation
regulations to place substantial reliance on the higher of crude oil
spot prices major portion prices, or gross proceeds, and eliminate any
direct reliance on posted prices. This rulemaking would also add more
certainty to valuation of oil produced from Indian leases.

Summary of Legal Basis:

The primary legal basis for this rulemaking is the Federal Oil and Gas
Royalty Management Act of 1982, as amended, which defines the Secretary
of the Interior's (1) authority to implement and maintain a royalty
management system for oil and gas leases on Indian lands, and (2) trust
responsibility to administer Indian oil and gas resources.

Alternatives:

We considered a range of valuation alternatives such as making minor
adjustments to the current gross proceeds valuation method, using
futures prices, using index-based prices with fixed adjustments for
production from specific geographic zones, relying on some type of
field pricing other than posted prices, and taking oil in-kind. We
chose the higher of the average of the high daily applicable spot
prices for the month major portion prices in the field or area, or
gross proceeds received by the lessee or its affiliate. We chose spot
prices as one of the three value measures because (1) they represent
actual trading activity in the market, (2) they mirror New York
Mercantile Exchange futures prices, and (3) they permit use of an index
price in proximity to the actual production whose value is being
measured.

Anticipated Cost and Benefits:

We estimate compliance with this rulemaking would cost the oil and gas
industry approximately $46,000 annually. Additional costs to industry
and MMS would be up-front computer programming and other administrative
costs associated with processing the new form. The benefits of this
rulemaking would be an estimated $3.6 million increase in annual
royalties collected on oil produced from Indian leases. Additional
benefits would include simplification and increased certainty of oil
pricing, reduced audit efforts, and reduced valuation determinations
and associated litigation.

Risks:

The risk of not modifying current oil valuation regulations is that
Indian recipients may not receive royalties based on the highest price
paid or offered for the major portion of oil produced--a common
requirement in most Indian leases. These modifications ensure that the
Department fulfills its trust responsibilities for administering Indian
oil and gas leases under governing mineral leasing laws, treaties, and
lease terms.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 60 FR 65610 12/20/95
ANPRM Comment Period End 03/19/96
NPRM 63 FR 7089 02/12/98

[[Page 61212]]

NPRM Comment Per63 FR 17349d 04/09/98
NPRM Comment Period End 05/13/98
Supplementary NP65 FR 403 01/05/00
NPRM Comment Per65 FR 10436d 02/28/00
Final Action 01/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses, Governmental Jurisdictions

Government Levels Affected:

Tribal

Agency Contact:
Carol Shelby
Regulatory Specialist
Department of the Interior
Minerals Management Service
MS 320B2
P.O. Box 25165
Denver, CO 80225-0165
Phone: 303 231-3151
Fax: 303 231-3385
Email: [email protected]
RIN: 1010-AC24
_______________________________________________________________________

DOI--MMS

75. DEEP WATER ROYALTY RELIEF FOR OUTER CONTINENTAL SHELF OIL AND GAS
LEASES ISSUED AFTER 2000
Priority:

Other Significant

Legal Authority:

30 USC 1001 et seq; 30 USC 1701 et seq; 30 USC 181 et seq; 30 USC 351
et seq; 31 USC 9701; 43 USC 1301 et seq; 43 USC 1331 et seq; 43 USC
1801 et seq

CFR Citation:

30 CFR 203

Legal Deadline:

None

Abstract:

The rule explains who is eligible for relief, how they apply for
relief, and the criteria they must meet to receive relief. The proposed
rule makes a new class of leases, those sold after 2000 in the central
and western Gulf of Mexico (GOM), eligible to apply for royalty
suspensions to supplement any that may have been included in their
original lease terms. Also, it updates certain requirements and
authorizes royalty relief in special situations.

Statement of Need:

Because of the variation of geologic and economic circumstance standard
leasing terms do not encourage development of all potential reserves in
the deep water GOM. The Deep Water Royalty Relief Act (DWRRA)(Pub. L.
104-58) authorized the Minerals Management Service (MMS) to promote
development of marginal reserves. The existing regulations at 30 CFR
203 give detailed instructions on how deep water leases issued before
the DWRRA may apply and qualify for royalty suspension on a case-by-
case basis. This proposed rule revises and extends these instructions
to certain additional categories of OCS leases, especially those issued
after 2000. Revisions to the existing instructions reflect experience
with cases over the last 5 years. Also the proposed rule identifies
circumstances when MMS may consider special royalty relief outside our
established end-of-life and DWRR programs.

Summary of Legal Basis:

The OCS Lands Act is the basis for our regulations on suspending or
lowering royalties on producing OCS leases. The DWRRA is the basis for
regulations to reduce or eliminate royalty on non-producing leases in
the GOM west of 87 degrees, 30 minutes West longitude. It gives the
Secretary of the Interior this authority to (1) promote development or
increased production on producing and non-producing leases or (2)
encourage production of marginal resources on producing and non-
producing leases.

Alternatives:

The specificity with which the current regulations were written was
driven by the DWRRA to facilitate planning by potential applicants.
Those regulations do not leave room for anything but a rulemaking fix.
Otherwise, those new leases that legitimately need development
assistance would be relegated to seeking relief under ad hoc special
relief rules. Alternatively an extension of the DWRRA terms to fill a
perceived gap may give future deep water lessees royalty-suspension
terms that are not sufficiently responsive to current market
conditions. Moreover, it is fairer to both applicants and taxpayers to
establish clear and coherent rules by which individual leases can
obtain the amount of royalty relief actually needed to induce
development.

Anticipated Cost and Benefits:

This rule extends the benefit of discretionary royalty relief to
certain OCS leases after November 2000 that qualify as marginally
uneconomic. Lessees who choose to seek this discretionary royalty
relief pay user fees that range from $12,000 to $49,000 per
application, in addition to their internal costs of assembling the
necessary data. Benefits from this rule come from production that
otherwise would not occur or be deferred indefinitely. To date, one
field qualifying for relief has gone into production and added 15
million barrels of oil equivalent to reserves in the GOM. Another on
the verge of starting development would add 400 billion cubic feet of
natural gas to reserves that otherwise would not be produced in the
GOM.

Risks:

The risk of not modifying the discretionary royalty relief rule is that
some marginal resources will be bypassed. Alternatively, royalty
receipts could fall because overly generous relief will be given to
many leases to avoid the loss in production by a few.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 69259 11/16/00
Comment Period E65 FR 78431 12/15/00
Final Action Determined To Be
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Federal

Agency Contact:
Marshall B. Rose
Department of the Interior
Minerals Management Service
381 Elden Street
Herndon,
Phone: 703 787-1536
Fax: 703 787-1141
Email: [email protected]
RIN: 1010-AC71

[[Page 61213]]

_______________________________________________________________________

DOI--Bureau of Land Management (BLM)

-----------

FINAL RULE STAGE

-----------

76. OIL AND GAS LEASING AND OPERATIONS
Priority:

Other Significant

Legal Authority:

30 USC 181 et seq

CFR Citation:

43 CFR 3100 to 3180

Legal Deadline:

None

Abstract:

This rule will revise BLM's current Federal oil and gas leasing and
operations regulations, except those concerning drainage (section
3100.2-2), combined hydrocarbon leasing (part 3140) and oil and gas
leasing in the National Petroleum Reserve--Alaska (part 3130). The rule
will: (1) Cite industry standards and incorporate them by reference
rather than repeat those standards in the rule; (2) incorporate the
requirements of the Onshore Oil and Gas Orders and national notices to
lessees into the regulations to eliminate overlap with current
regulations; (3) use performance standards in certain places instead of
prescriptive requirements to allow more flexibility for operators and
to protect the environment and Federal royalty interests; (4) increase
certain bonding requirements and (5) eliminate redundancies, clarify
procedures and regulatory requirements and streamline procedures.

Statement of Need:

This rulemaking complies with the requirements of the Government
Performance and Results Act, the recommendations of the National
Performance Review, and other initiatives. It will be presented in a
user-friendly format, presented by process rather than by subject
matter.

Summary of Legal Basis:

The Mineral Leasing Act gives BLM the authority to issue and administer
the terms of oil and gas leases on Federal lands, to conduct
inspections of drilling operations and to promulgate and enforce
regulations pertaining to oil and gas leasing and operations. BLM is
the only Federal agency with authority to issue leases for publicly
owned oil and gas resources.

Alternatives:

The only alternative to the proposed regulations would be to continue
to operate under the existing regulations. These regulations are not
performance-based and are at times ambiguous and hard to understand.
Further, the important information found in Onshore Operating Orders is
published separately from the regulations and at irregular intervals.

Anticipated Cost and Benefits:

BLM anticipates the following benefits: (1) More clearly written rules
will be better understood by both oil and gas lessees and operators and
members of the general public; (2) performance standards, rather than
prescriptive requirements, will allow lessees and operators and BLM
greater flexibility to deal with unique geological or engineering
circumstances within the standards set by the rule; and (3)
streamlining and clarifying procedures will result in better customer
service and decreased time and money for both BLM and the user public.

Risks:

The public may misunderstand one or more performance standards. BLM
will publish user guides that explain in detail the standards and will
provide examples of how operators might meet specific standards.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 63 FR 66840 12/03/98
NPRM Comment Per64 FR 29256 07/19/99
Final Action Determined To Be
Regulatory Flexibility Analysis Required:

Government Levels Affected:

Local

Agency Contact:
Ian Senio
Regulatory Analyst
Department of the Interior
Bureau of Land Management
MS 401
Regulatory Management Team (WO-630)
1849 C Street N.W.
Washington, DC 20240
Phone: 202 452-5049
Email: [email protected]
RIN: 1004-AC94
BILLING CODE 4310-RK-S

[[Page 61214]]

DEPARTMENT OF JUSTICE (DOJ)

Statement of Regulatory Priorities
The Department of Justice is not a major regulatory agency, and it
carries out its vital investigative, prosecutorial, and other law
enforcement activities principally through means other than the
regulatory process. Even so, the Department does have significant
responsibilities for implementing the Americans with Disabilities Act
(ADA), as well as the immigration laws, including the Immigration
Reform and Control Act of 1986 and the Immigration Act of 1990. In
addition, the Department is currently engaged in a comprehensive effort
to focus its resources on the prevention of future terrorist acts and
the prosecution of terrorists responsible for past attacks. The
Department's key regulatory goals and initiatives are set forth in
detail below.
The Department has worked actively to implement the general regulatory
principles of Executive Order 12866. Relatively few of the Department's
rules are significant regulatory actions requiring review by the Office
of Management and Budget (OMB) under the Executive order. Accordingly,
the orientation of the OMB review process to focus on significant rules
has required the Department to increase its own review efforts to
ensure that all of its regulations are consistent with the
Administration's regulatory principles.
Pursuant to section 4(c) of Executive Order 12866, the Department of
Justice provides the following statement of regulatory priorities,
focusing in particular on four regulatory initiatives in the areas of
civil rights and immigration.
In addition to the specific initiatives set forth below, several other
components of the Department carry out important responsibilities
through the regulatory process. Although their regulatory efforts are
not singled out for specific attention in this regulatory plan, those
components carry out key roles in implementing the Department's law
enforcement priorities. The Drug Enforcement Administration (DEA) is
responsible for controlling abuse of narcotics and dangerous drugs,
while ensuring adequate supplies for legitimate medical purposes, by
regulating the aggregate supply of those drugs. DEA accomplishes its
objectives through coordination with State, local, and other Federal
officials in drug enforcement activities, development and maintenance
of drug intelligence systems, regulation of legitimate controlled
substances, and enforcement coordination and intelligence-gathering
activities with foreign government agencies. DEA continues to develop
and enhance regulatory controls relating to the diversion control
requirements and to the requirements of the Comprehensive
Methamphetamine Control Act of 1996, which regulates certain drug
products that are being diverted for the production of methamphetamine.
In addition, DEA has initiated a project to propose regulations to
provide an electronic alternative to the present paper-based system of
distributing and dispensing Schedule II, III, IV, and V controlled
substances. These rulemakings will permit DEA registrants to transmit
controlled substances orders and prescriptions electronically using
digital signature technology. These rulemakings will permit many DEA
registrants to conduct business electronically, while maintaining
appropriate security within the closed system of distribution of
controlled substances mandated by the Controlled Substances Act of
1970.
On March 20, 1997, the Federal Bureau of Investigation promulgated
final cost recovery regulations under the Communications Assistance for
Law Enforcement Act of 1994 (CALEA). Congress enacted CALEA to address
the recent and continuing advances in telecommunications technology,
which have impaired and, in some instances, precluded law enforcement
agencies from fully conducting various types of court-authorized
electronic surveillance. The Attorney General is authorized to
reimburse carriers for all of the reasonable costs directly associated
with the modifications they perform on equipment, facilities, and
services deployed on or before January 1, 1995. These regulations
provide the cost accounting standards for the reimbursements.
In response to public comments during the cost recovery rulemaking,
the FBI published on April 20, 1998, a proposed rule defining the terms
``significant upgrade'' and ``major modification.'' The FBI plans to
publish a supplemental notice of proposed rulemaking, which will define
the terms ``replaced'' and ``significantly upgraded or otherwise
undergone major modification.''
On March 12, 1998, the FBI, on behalf of law enforcement, published a
Final Notice of Capacity (following two previously published notices on
the same subject) informing telecommunications carriers offering local
exchange services and certain commercial mobile radio services
(specifically cellular service and broadband PCS) of the estimated
actual and maximum number of simultaneous interceptions that law
enforcement might conduct on or after specified dates.
On December 18, 1998, the FBI published a Notice of Inquiry (NOI)
soliciting information and suggestions from interested parties for
developing reasonable capacity methodologies for characterizing the
capacity requirements for telecommunications services other than those
covered by the March 12, 1998, Final Notice of Capacity. The FBI issued
a Further Notice of Inquiry (FNOI) on June 30, 2000. Information
gathered in response to the FNOI will be used in the publication of an
Initial Notice of Capacity for developing reasonable capacity
methodologies for the paging, mobile satellite, specialized mobile
radio, and enhanced specialized radio services.
Several proposed changes in the National Instant Criminal Background
Check System regulations are being considered by the Department. The
changes include: (1) requiring the FBI to destroy information about
approved firearm transfers before the beginning of the next business
day following the approval; (2) allowing the FBI to retain for up to 90
days by individual gun dealer information about dates of NICS checks
and the NICS transaction numbers on approved firearm transfers for the
purpose of sharing such information with the ATF for use in inspections
of gun dealers; (3) creating a new definition of ``unresolved''
transaction, i.e., transactions in which the NICS is unable to resolve
within 3 business days whether a record identified by a NICS check
demonstrates that a prospective gun purchaser is disqualified, and
allowing the FBI to retain for up to 90 days information about
unresolved transactions so that steps can be taken to retrieve a
firearm from a prohibited person if information demonstrating that a
person is prohibited is received within the 90-day time period; (4)
requiring state Points of Contact (POCs) that conduct NICS checks for
the system to provide to the FBI information about whether the POC
determined that the gun transfer may proceed, is denied, or that the
check is unresolved; and (5) allow a lawful firearm purchaser to
consent to the FBI retaining personal information in a voluntary
appeals file to avoid confusion or delay in future purchases.

[[Page 61215]]

Civil Rights
The Department and its Civil Rights Division are deeply committed to
the rigorous enforcement of this Nation's civil rights laws. In keeping
with that commitment, the Division will review and update its
regulations implementing the Americans with Disabilities Act of 1990
(ADA), as well as issue a rule pertaining to the Department's authority
to review police departments for a pattern or practice of unlawful
conduct under the Violent Crime Control and Law Enforcement Act of
1994.
The Department is planning to make revisions in its regulations
implementing titles II and III of the ADA to amend the ADA Standards
for Accessible Design (28 CFR part 36, appendix A) to be consistent
with the revised ADA accessibility guidelines proposed by the U.S.
Architectural and Transportation Barriers Compliance Board (Access
Board) in November 1999. Title II of the ADA prohibits discrimination
on the basis of disability by public entities, and title III prohibits
such discrimination by places of public accommodation and requires
accessible design and construction of places of public accommodation
and commercial facilities. In implementing these provisions, the
Department of Justice is required by statute to publish regulations
that include design standards that are consistent with the guidelines
developed by the Access Board.
The Access Board has been engaged in a multi-year effort to revise and
amend its accessibility guidelines. The goals of this project have
been: 1) to address issues such as unique State and local facilities
(e.g., prisons, courthouses), recreation, play areas, and building
elements specifically designed for children's use that were not
addressed in the initial guidelines; 2) to promote greater consistency
between the Federal accessibility requirements and the model codes; and
3) to provide greater consistency between the ADA guidelines and the
guidelines that implement the Architectural Barriers Act. The Access
Board has proposed and/or adopted guidelines that address all of these
issues. Therefore, to comply with the ADA requirement that the ADA
standards remain consistent with the Access Board's guidelines, the
Department will propose to adopt the changes previously proposed by the
Access Board.
The Department also plans to review its regulations implementing title
II and title III (28 CFR parts 35 and 36) to ensure that the
requirements applicable to new construction and alterations under title
II are consistent with those applicable under title III, to review and
update the regulations to reflect the current state of law, and to
ensure the Department's compliance with applicable provisions of the
Small Business Regulatory Enforcement Fairness Act (SBREFA).
Pursuant to the Violent Crime Control and Law Enforcement Act of 1994,
42 U.S.C. section 14141 (``section 14141''), the Attorney General is
authorized to file lawsuits seeking court orders to reform police
departments engaging in a pattern or practice of conduct that deprives
persons of rights, privileges, or immunities secured by the
Constitution or laws of the United States. To date, the Department of
Justice has conducted reviews of police departments pursuant to section
14141 using informal procedures. The Department plans to issue a rule
to formalize the procedures by which the Department reviews police
departments for a pattern or practice of unlawful conduct.
Immigration
The Immigration and Naturalization Service (INS) will advance the
President's objectives with regulatory initiatives that minimize
regulatory burdens on the public and increase the efficiency of Agency
operations. INS administers regulations governing the admission of
legal immigrants and temporary visitors, apprehension and deportation
of illegal aliens, alien employment authorization and verification, and
asylum and naturalization.
During the next 12 months, under new direction by Commissioner James
W. Ziglar, INS will implement rulemaking for:
Implementing the new Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act, which
amends provisions of the Immigration and Nationality Act
concerning the detention and removal of aliens who engage
in terrorist activities.
Strengthening INS law enforcement authority by extending the
time period for which aliens who are arrested for
immigration violations can be held in detention facilities.
Restructuring of the INS to modernize existing systems, to
streamline procedures to provide for more efficiency in
service delivery, and to provide better customer service to
the public.
Eliminating the immigration benefit application backlog and
obtaining a 6-month processing standard for all
applications.
Building and maintaining an immigration services system that
provides immigration information and benefits in a timely,
accurate, consistent, courteous, and professional manner.
Reviewing policies related to detention of children and asylum
seekers to ensure that INS only detains individuals who
absolutely require detention and determining alternatives
to detention where alternatives would be more appropriate.
The Victims of Trafficking and Violence Protection Act of 2000
and the LIFE Act.
Streamlining the immigration process faced by foreign health
care workers especially to relieve the significant nursing
shortage in many rural parts of the United States and
examining whether current INS regulations prevent much
needed physicians from settling in medically under-served
areas.
INS has recently issued regulations to carry out recent legislation
such as the Legal Immigration Family Equity Act of 2000 (LIFE Act). To
implement the Victims of Trafficking and Violence Protection Act of
2000, INS will issue an interim final rulemaking to implement the new
``T'' nonimmigrant visa for victims of severe forms of trafficking.
This final rule also provides both immigrant and nonimmigrant visa
categories, the new grounds of inadmissibility and corresponding waiver
requirements, and is one of two key regulatory priorities of the INS.
The INS will soon publish a proposed rule to implement the provisions
of the American Competitiveness and Workforce Improvement Act of 1998
(ACWIA) and the American Competitiveness in the Twenty-first Century
Act of 2000 (AC21) to reflect changes made to the H-1B nonimmigrant
classification. These changes include an increase in the number of
visas available annually, an increase in the fee for certain petitions,
a new portability provision allowing H-1B non-immigrants to commence
employment with a new H-1B employer prior to approval of a subsequent
petition by the Service, and improvements which will help the Service
deter fraud in the H-1B nonimmigrant classification.

[[Page 61216]]

In addition, over the past year, INS has promulgated critical interim
final rulemakings to implement the LIFE Act, which are included in the
fall 2001 Unified Agenda of Federal Regulatory and Deregulatory
Actions. For instance, INS prepared rulemaking for LIFE Act benefits
that provide:
For adjustment of status under section 245(i) of the
Immigration and Nationality Act that allows certain persons
who have an immigrant visa available but entered without
inspection or otherwise violated their status (and thus are
ineligible to apply for adjustment of status in the U.S.)
to apply if they pay a $1,000 penalty (Interim rule, 66 FR
16383, March 26, 2001).
A new status, temporary ``V'' non-immigrant classification,
pending rule publication, which will be available to the
spouses and minor children of lawful permanent residents
waiting more than 3 years for an immigrant visa based upon
an immigrant petition filed on or before the enactment date
of the LIFE Act. Persons granted ``V'' status would receive
employment authorization and are protected from removal.
The expansion of a new temporary ``K'' visa non-immigrant
classification available to include spouses of U.S.
citizens (and their children) living abroad. Previously the
K visa was only available to fiances of U.S. citizens who
were coming to the United States to get married within 90
days of arrival. (Interim rule, 66 FR 42587, August 14,
2001).
Adjustment of status for class membership in one of three
``late amnesty'' lawsuits (CSS v. Meese, LULAC v. INS, and
Zambrano v. INS). They are eligible to apply for adjustment
of status during a 12-month period that began on July 1,
2001. The family unity provision allows spouses and
unmarried children of the class action claimants will be
protected from certain categories of removal and will be
eligible for work authorization if they entered the United
States before December 1, 1988, and resided in the United
States on that date. (Interim rule, 66 FR 29661, June 1,
2001).
Technical amendments to section 202 of the Nicaragua
Adjustment and Central American Relief Act (NACARA) and
section 902 of the Haitian Refugee Immigration Fairness Act
of 1998 (HRFIA). Previously, certain aliens were barred
from seeking adjustment of status under these provisions if
they illegally reentered the United States after an order
of removal or a grant of voluntary departure. The technical
amendments found in section of 1505 of the LIFE Amendments
exempt otherwise eligible aliens from this bar to
adjustment and provided aliens already denied NACARA or
HRIFA benefits for this reason with the ability to file
motions to reopen. (Interim rule, 66 FR 29449, May 31,
2001).
The Bush Administration and Commissioner Ziglar will be steering the
INS to ensure that obligations under immigrations laws will be met with
good judgment, compassion and common sense.
_______________________________________________________________________

DOJ--Civil Rights Division (CRT)

-----------

PROPOSED RULE STAGE

-----------

77. NONDISCRIMINATION ON THE BASIS OF DISABILITY IN PUBLIC
ACCOMMODATIONS AND COMMERCIAL FACILITIES (SECTION 610 REVIEW)
Priority:

Economically Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

5 USC 301; 28 USC 509; 28 USC 510; 42 USC 12186(b)

CFR Citation:

28 CFR 36

Legal Deadline:

None

Abstract:

In 1991, the Department of Justice published regulations to implement
title III of the Americans with Disabilities Act of 1990 (ADA). Those
regulations include the ADA Standards for Accessible Design, which
establish requirements for the design and construction of accessible
facilities that are consistent with the ADA Accessibility Guidelines
(ADAAG) published by the U.S. Architectural and Transportation Barriers
Compliance Board (Access Board). In the time since the regulations
became effective, the Department of Justice and the Access Board have
each gathered a great deal of information regarding the implementation
of the Standards. The Access Board is currently in the process of
revising ADAAG, and it published a Notice of Proposed Rulemaking (NPRM)
on November 16, 1999. In order to maintain consistency between ADAAG
and the ADA Standards, the Department is reviewing its title III
regulation and expects to propose, in one or more stages, to adopt the
revisions proposed by the Access Board and to make related revisions to
the Department's title III regulation. In addition to maintaining
consistency between ADAAG and the Standards, the purpose of this review
and these revisions will be to more closely coordinate with voluntary
standards, to clarify areas which, through inquiries and comments to
the Department's technical assistance phone lines, have been shown to
cause confusion, to reflect evolving technologies in areas affected by
the Standards, and to comply with section 610 of the Regulatory
Flexibility Act, which requires agencies once every 10 years to review
rules that have a significant economic impact upon a substantial number
of small entities.

The adoption of revised ADAAG will also serve to address changes to the
ADA Standards previously proposed in RIN 1190-AA26 and RIN 1190-AA38,
which have been withdrawn. These changes will include technical
specifications for facilities designed for use by children and
accessibility standards for State and local government facilities that
have previously been published by the Architectural and Transportation
Barriers Compliance Board.

The timetable set forth below refers to the notice of proposed
rulemaking that the Department will issue as the first stage of the
above-described title III rulemaking. This notice of proposed
rulemaking will be issued under both title II and title III. For
purposes of the title III regulation, this notice will propose to adopt
revised ADAAG as the ADA Standards for Accessible Design and will
initiate the review of the regulation in accordance with the
requirements of section 610 of the Regulatory Flexibility Act, as
amended by the Small Business Regulatory Enforcement Fairness Act of
1996 (SBREFA).

Statement of Need:

Section 504 of the ADA requires the Access Board to issue supplemental
minimum guidelines and requirements for accessible design of buildings
and facilities subject to the ADA, including title III. Section 306(c)
of the ADA requires the Attorney General to promulgate regulations
implementing

[[Page 61217]]

title III that are consistent with the Access Board's ADA guidelines.
Because this rule will adopt standards that are consistent with the
minimum guidelines issued by the Access Board, this rule is required by
statute. Similarly, the Department's review of its title III regulation
is being undertaken to comply with the requirements of the Regulatory
Flexibility Act, as amended by the Small Business Regulatory
Enforcement Fairness Act of 1996.

Summary of Legal Basis:

The summary of the legal basis of authority for this regulation is set
forth above under Legal Authority and Statement of Need.

Alternatives:

The Department is required by the ADA to issue this regulation.
Pursuant to SBREFA, the Department's title III regulation will consider
whether alternatives to the currently published requirements are
appropriate.

Anticipated Cost and Benefits:

The Access Board has analyzed the effect of applying its proposed
amendments to ADAAG to entities covered by titles II and III of the ADA
and has determined that they constitute a significant regulatory action
for purposes of Executive Order 12866. The Access Board's determination
will apply as well to the revised ADA standards published by the
Department. The Department's proposed procedural amendments will not
have a significant impact on small entities.

The Access Board has prepared a regulatory assessment, which includes a
cost impact analysis for certain accessibility elements and a
discussion of the regulatory alternatives considered. A summary of the
Board's regulatory assessment is published at 64 FR 62282 (November 16,
1999). That assessment will also apply to the Department's proposed
rule.

Risks:

Without the proposed changes to the Department's title III regulation,
the ADA Standards will fail to be consistent with the ADAAG.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
NPRM Comment Period End 02/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses, Organizations

Government Levels Affected:

None

Additional Information:

RIN 1190-AA44, which will effect changes to 28 CFR 36 (the Department's
regulation implementing title III of the ADA), is related to another
rulemaking of the Civil Rights Division, RIN 1190-AA46, which will
effect changes to 28 CFR 35 (the Department's regulation implementing
title II of the ADA). By adopting revised ADAAG, this rulemaking will,
among other things, address changes to the ADA Standards previously
proposed in RIN 1190-AA26, which has been withdrawn and merged into RIN
1190-AA44 and RIN 1190-AA46. These changes include technical
specifications for facilities designed for use by children that had
been previously published by the Architectural and Transportation
Barriers Compliance Board.

Agency Contact:
John L. Wodatch
Chief, Disability Rights Section
Department of Justice
Civil Rights Division
P.O. Box 66738
Washington, DC 20035-6738
Phone: 800 514-0301
TDD Phone: 800 514-0383
Fax: 202 307-1198
RIN: 1190-AA44
_______________________________________________________________________

DOJ--CRT

78. NONDISCRIMINATION ON THE BASIS OF DISABILITY IN STATE AND LOCAL
GOVERNMENT SERVICES (SECTION 610 REVIEW)
Priority:

Economically Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

5 USC 301; 28 USC 509 to 510; 42 USC 12134; PL 101-336

CFR Citation:

28 CFR 35

Legal Deadline:

None

Abstract:

On July 26, 1991, the Department published its final rule implementing
title II of the Americans with Disabilities Act (ADA). On November 16,
1999, the U.S. Architectural and Transportation Barriers Compliance
Board (Access Board) issued its first comprehensive review of the ADA
Accessibility Guidelines, which form the basis of the Department's ADA
Standards for Accessible Design. The ADA (section 204(c)) requires the
Department's standards to be consistent with the Access Board's
guidelines. Therefore, the Department will publish a Notice of Proposed
Rulemaking (NPRM) proposing to adopt the revisions proposed by the
Access Board. The Department will also, in one or more stages, review
its title II regulation for purposes of section 610 of the Regulatory
Flexibility Act and make related changes to its title II regulation.

In addition to the statutory requirement for the rule, the social and
economic realities faced by Americans with disabilities dictate the
need for the rule. Individuals with disabilities cannot participate in
the social and economic activities of the Nation without being able to
access the programs and services of State and local governments.
Further, amending the Department's ADA regulations will improve the
format and usability of the ADA Standards for Accessible Design;
harmonize the differences between the ADA Standards and national
consensus standards and model codes; update the ADA Standards to
reflect technological developments that meet the needs of persons with
disabilities; and coordinate future ADA Standards revisions with
national standards and model code organizations. As a result, the
overarching goal of improving access for persons with disabilities so
that they can benefit from the goods, services, and activities provided
to the public by covered entities will be met.

The timetable set forth below refers to the notice of proposed
rulemaking that the Department will issue as the first stage of the
above-described title II rulemaking. This notice of proposed rulemaking
will be issued under both title II and title III. For purposes of the
title II regulation, this notice will propose to eliminate the Uniform
Federal Accessibility Standards (UFAS) as an alternative to the ADA
Standards for Accessible Design and to adopt revised ADAAG as the ADA
Standards.

Statement of Need:

[[Page 61218]]

requires the Attorney General to promulgate regulations implementing
title II that are consistent with the Access Board's ADA guidelines.
Because this rule will adopt standards that are consistent with the
minimum guidelines issued by the Access Board, this rule is required by
statute. Similarly, the Department's review of its title II regulation
is being undertaken to comply with the requirements of the Regulatory
Flexibility Act, as amended by the Small Business Regulatory
Enforcement Fairness Act (SBREFA).

Summary of Legal Basis:

The summary of the legal basis of authority for this regulation is set
forth above under Legal Authority and Statement of Need.

Alternatives:

The Department is required by the ADA to issue this regulation as
described in the Statement of Need above. Pursuant to SBREFA, the
Department's title II regulation will consider whether alternatives to
the currently published requirements are appropriate.

Anticipated Cost and Benefits:

The Administration is deeply committed to ensuring that the goals of
the ADA are met. Promulgating this amendment to the Department's ADA
regulations will ensure that entities subject to the ADA will have one
comprehensive regulation to follow. Currently, entities subject to
title II of the ADA (State and local governments) have a choice between
following the Department's ADA Standards for title III, which were
adopted for places of public accommodation and commercial facilities
and which do not contain standards for common State and local
government buildings (such as courthouses and prisons), or the Uniform
Federal Accessibility Standards (UFAS). By developing one comprehensive
standard, the Department will eliminate the confusion that arises when
governments try to mesh two different standards. As a result, the
overarching goal of improving access to the built environment to
persons with disabilities will be better served.

The Access Board has analyzed the effect of applying its proposed
amendments to ADAAG to entities covered by titles II and III of the ADA
and has determined that they constitute a significant regulatory action
for purposes of Executive Order 12866. The Access Board's determination
will apply as well to the revised ADA Standards published by the
Department. The Department's proposed procedural amendments will not
have a significant impact on small entities.

The Access Board has made every effort to lessen the impact of its
proposed guidelines on State and local governments but recognizes that
the guidelines will have some federalism effects. These affects are
discussed in the Access Board's regulatory assessment, which also
applies to the Department's proposed rule.

Risks:

Without this amendment to the Department's ADA regulations, regulated
entities will be subject to confusion and delay as they attempt to sort
out the requirements of conflicting design standards. This amendment
should eliminate the costs and risks associated with that process.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM (RIN 1190-A59 FR 31808 06/20/94
NPRM (RIN 1190-AA26) Comment Period End 08/19/94
RIN 1190-AA26 Me65 FR 22968190-AA46 02/15/00
Supplemental NPRM 12/00/01
Supplemental NPRM Comment Period End 02/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Governmental Jurisdictions

Government Levels Affected:

State, Local

Federalism:

This action may have federalism implications as defined in EO 13132.

Additional Information:

RIN 1190-AA46, which will effect changes to 28 CFR 35 (the Department's
regulation implementing title II of the ADA), is related to another
rulemaking of the Civil Rights Division, RIN 1190-AA44, which will
effect changes to 28 CFR 36 (the Department's regulation implementing
title III of the ADA). By adopting revised ADAAG, this rulemaking will,
among other things, address changes to the ADA Standards previously
proposed in RINs 1190-AA26 and 1190-AA38, which have been withdrawn and
merged into this rulemaking. These changes include technical
specifications for facilities designed for use by children and
accessibility standards for State and local government facilities that
had been previously published by the Architectural and Transportation
Barriers Compliance Board.

Agency Contact:
John L. Wodatch
Chief, Disability Rights Section
Department of Justice
Civil Rights Division
P.O. Box 66738
Washington, DC 20035-6738
Phone: 800 514-0301
TDD Phone: 800 514-0383
Fax: 202 307-1198
RIN: 1190-AA46
_______________________________________________________________________

DOJ--Immigration and Naturalization Service (INS)

-----------

PROPOSED RULE STAGE

-----------

79. AMERICAN COMPETITIVENESS IN THE TWENTY-FIRST CENTURY ACT OF 2000
AND OTHER RELATED BILLS
Priority:

Other Significant

Legal Authority:

8 USC 1101; 8 USC 1103; 8 USC 1182; 8 USC 1186a; 8 USC 1187; 8 USC
1221; 8 USC 1281; 8 USC 1282

CFR Citation:

8 CFR 103; 8 CFR 202; 8 CFR 212; 8 CFR 274a

Legal Deadline:

None

Abstract:

The American Competitiveness in the 21st Century Act, Public Law 106-
313, was enacted on October 17, 2000, along with two bills, the Visa
Waiver Permanent Program Act, Public Law 106-311, and a bill to
increase the fee for certain H-1B petitions. Together, these bills make
significant changes to

[[Page 61219]]

the H-1B classification. Public Law 106-313 increases the numerical H-
1B cap to 195,000 for FYs 2000-2002 and the percentage of the fees that
INS receives to 4 percent. It exempts certain aliens from the numerical
cap, provides for the ``portability'' of employment authorization, in
certain circumstances, 1-year extensions of stay for certain aliens who
have permanent residence applications pending. It also authorizes the
creation of an Immigration Services and Infrastructure Improvements
Account for appropriation of funds to eliminate the immigration benefit
application processing backlog. This regulation clarifies several
interpretive questions raised by the bills and ensures INS practice is
consistent with these laws.

Statement of Need:

This regulation is necessary to implement the AC21 and VWPPA. Failure
to fully implement will result in adverse consequences for the public.
For example, the scope of the ``portability'' benefit is unclear. This
lack of clarity combined with the self executing nature of the
portability benefit means that aliens who incorrectly interpret the
provisions may incur adverse immigration consequences. A clear
regulatory interpretation will prevent this situation.

Summary of Legal Basis:

See Statement of Need. This action is not required by the statute or by
a court order but as explained in the statement of need.

Alternatives:

None.

Anticipated Cost and Benefits:

The INS anticipates a moderate cost associated with the staff time and
resources necessary to conduct training and disseminate new guidelines
and standard operating procedures to the field. There is little or no
additional workload for adjudications officers involved with this
regulation.

Risks:

This regulatory action is critical for complete and clear
implementation of the provisions of this legislation. The regulation
will clarify the confusion that exists in the immigration community as
to the scope and applicability of many of these provisions and will
thus prevent the public from taking actions which may unintentionally
trigger adverse immigration consequences. Delay in this rulemaking or
failure to promulgate will perpetuate confusion among the public and
lead to members of the public unwittingly incurring adverse immigration
consequences.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
NPRM Comment Period End 02/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
John W. Brown
Adjudications Officer, Adjudications Division
Department of Justice
Immigration and Naturalization Service
Room 3214
425 I Street NW
Washington, DC 20536
Phone: 202 616-7435

Deborah Misir
Attorney, Office of General Counsel
Department of Justice
Immigration and Naturalization Service
425 I Street NW
Washington, DC 20536
Phone: 202 307-6596
RIN: 1115-AG11
_______________________________________________________________________

DOJ--INS

-----------

FINAL RULE STAGE

-----------

80. NEW CLASSIFICATION FOR VICTIMS OF SEVERE FORMS OF TRAFFICKING IN
PERSONS ELIGIBLE FOR THE T NONIMMIGRANT STATUS
Priority:

Other Significant

Legal Authority:

5 USC 552; 5 USC 552a; 8 USC 1101; 8 USC 1102; 8 USC 1103; 8 USC 1104;
8 USC 1182; 8 USC 1184; 8 USC 1187; 8 USC 1201; 8 USC 1224; 8 USC 1225;
8 USC 1226; 8 USC 1227; 8 USC 1252; 8 USC 1252a; 22 USC 7101; 22 USC
7105; ...

CFR Citation:

8 CFR 204; 8 CFR 212; 8 CFR 214; 8 CFR 299

Legal Deadline:

None

Abstract:

This rule sets forth application requirements for a new nonimmigrant
visa classification. The T classification was created by 107(e) of the
Victims of Trafficking and Violence Protection Act of 2000 (VTVPA),
Public Law 106-386. The T visa was designed for eligible victims of
severe forms of trafficking in persons who aid the Government with
their case against the traffickers and who can establish that they
would suffer extreme hardship involving unusual and severe harm if they
were removed from the United States after having completed their
assistance to law enforcement. The rule establishes application
procedures and responsibilities for the Immigration and Naturalization
Service (Service) and provides guidance to the public on how to meet
certain requirements to obtain T nonimmigrant status.

There is a statutory cap for victims of severe form of trafficking
(principals), which is set at 5,000 T visas per annum. The law also
provides that certain family members can derive a T status through the
principal's application. It is estimated that there may be four
derivative visas issued for each principal.

Statement of Need:

This rule is necessary to establish how an eligible alien can obtain
temporary immigration benefits as a victim of a severe form of
trafficking in persons while providing a means of assistance for law
enforcement officials at the Federal level to investigate and prosecute
trafficking in persons.

Summary of Legal Basis:

Public Law 106-386, The Victims of Trafficking and Violence Protection
Act of 2000.

Alternatives:

None

Anticipated Cost and Benefits:

No money has been authorized or appropriated for the anticipated
administrative or operational costs for this program. While there is no
precise formula for determining anticipated costs, there will be
additional costs for adjudicating benefits and investigating claims,
particularly those deemed fraudulent. There will be training costs for
INS staff. The T visa regulation builds on protections and assistance
for victims of severe forms of trafficking

[[Page 61220]]

in persons outlined in section 107(c) of the VTVPA and implemented in
amendments to 28 CFR part 1100 in the recent rulemaking 66 FR 38514
(July 24, 2001) (See RIN 1115-AG20). Part 1100 outlined procedures for
Federal officials to identify and protect victims of severe forms of
trafficking in persons; provided for access to information and
translation services for victims; and outlined legal mechanisms to
grant ``continued presence'' to victims of severe forms of trafficking
in persons to allow them to remain in the U.S. during the pendency of
law enforcement investigations and prosecutions. The T visa
classification allows victims of severe forms of trafficking in persons
to remain in the U.S. past the time of their assistance to law
enforcement, if they can demonstrate that they will face extreme
hardship involving unusual and severe harm if they were removed from
the United States.

There may be thousands of applications that will not be approved for a
variety of reasons, including failure to meet the basic T nonimmigrant
requirements. All applications will be reviewed and some will require
extensive investigation both here and abroad to determine if they are
bona fide.

The anticipated benefit of these expenditures includes the assistance
to trafficked victims and their families and the prosecution of
traffickers in persons and the elimination of the abuses caused by
their trafficking activities.

Benefits which may be attributed to the implementation of this rule are
expected to be:

--an increase in the number of cases brought forward for investigation
and/or prosecution;

--heightened awareness by the law enforcement community of trafficking
in persons;

--enhanced ability to develop and work cases in trafficking in persons
cross-organizationally and multi-jurisdictionally which may begin to
influence changes in trafficking patterns.

Risks:

This rule is not an initiative of the INS but rather promulgated as a
result of congressional action to develop a new nonimmigrant category.
Risks associated with the implementation of the congressionally
mandated new nonimmigrant classification include:

--increased workload on adjudicators and investigators which may impact
overall efficiency and productivity;

--increases in fraudulent applications/claims of such victimization in
order to obtain T nonimmigrant status; and

--changes in human trafficking patterns to elude law enforcement.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Interim Final Rule 12/00/01
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Federal

Additional Information:

INS No. 2132-01

There is a related rulemaking INS No. 2170-01, the new U non-immigrant
status. [RIN 1115-AG39]

Agency Contact:
Anne M. Veysey
Director, Program Strategy and Development Branch
Department of Justice
Immigration and Naturalization Service
Investigations Division
425 I Street NW
Washington, DC 20536
Phone: 202 514-3479
RIN: 1115-AG19
BILLING CODE 4410-BP-S

[[Page 61221]]

DEPARTMENT OF LABOR (DOL)

2001 Regulatory Plan
Executive Summary: Goals and Priorities
In its Strategic Plan for 1999-2004, the Department of Labor (DOL) set
three overall goals: first, to enhance opportunities for America's
workforce; second, to promote the economic security of workers and
their families; and third, to foster quality workplaces that are safe,
healthy, and fair.
To help achieve these goals, Secretary of Labor Elaine L. Chao has set
a new course for the Department. DOL will emphasize prevention and
compliance assistance, relying on the use of common-sense standards of
safety and fairness to protect workers before they are harmed
physically or economically. Education and encouragement of employers
will help workers far more than enforcement alone, since no enforcement
process can possibly identify every violation of the law, and fines and
penalties can never fully redress losses of life, health, and economic
well-being. As part of this effort, DOL will seek new strategies for
advising employers and workers of their rights and responsibilities. In
addition, the Department will work towards humanizing and rationalizing
the immigrant worker programs. We must deal promptly and efficiently
with immigrant worker applications and ensure the integrity of
guestworker programs if we are to provide safe, predictable and
appropriate working conditions for immigrant workers.
DOL also recognizes that the emerging 21st century economy presents
challenges to workers at all skill levels and in all walks of life.
Those who have been laid off from jobs because their companies could
not adapt to technological changes or foreign competition, or who did
not get a full education, or who made a wrong turn at some point in
their lives, cannot be left behind. Some of these workers, especially
young workers, need training in basic skills and help in becoming
acclimated to working life. Other workers may need assistance in
learning new skills or in obtaining advanced schooling. We must also
take advantage of advances in technology to open the doors of the
workplaces to the disabled.
At the same time, high-technology industries are creating job
opportunities unheard of even a decade ago, and DOL must help employers
and workers bridge the gap between the requirements of those jobs and
the skills of the workers who would fill them. Workers who can keep
their skills up to date throughout their careers have more productive
and more rewarding economic futures.
The tools the Department will use to reach its goals revolve around
five Secretarial priorities:
Ensure the safety of every workplace;
Guarantee an honest day's pay for an honest day's work;
Stop discrimination;
Protect workers from coercion and intimidation;
Safeguard the pension and health benefits of every American
worker.
The Secretary of Labor's Plan for Accomplishing These Objectives
The balance between labor and management that underlies the country's
labor laws is a crucial source of stability in our economy, and the
need for labor and management to work together has become increasingly
evident in recent years. For these reasons, any change in the
regulations that implement the country's labor and employment laws must
be carefully considered, and the views of all parties affected must be
taken into account.
In general, DOL will try to help employees and employers meet their
needs in a cooperative fashion, with a minimum of rulemaking. However,
to reflect changes in technology and business practices, and to clarify
existing rules in light of new laws and legal interpretations, DOL will
need to promulgate new regulations periodically.
In doing so, DOL will craft proposals that are responsive to workers'
needs. Those needs span an entire range of work environments, from
traditional settings that have well-defined conditions and locations of
work, to newly emerging settings that are more flexibly structured in
terms of schedules and workplaces.
Similarly, the skills needed by today's workforce are more varied than
at any time in our country's history, and they continue to change at a
rapid rate. Changes in the financial marketplace, as well as in
compensation and benefit arrangements, present both challenges and
opportunities for today's workers.
The following proposals represent what DOL believes to be a balanced
plan for protecting workers in their current jobs and preparing them
for future employment. DOL considers these proposals to be proactive,
common-sense approaches to the issues most clearly needing regulatory
attention.
DOL will continue to use plain language to explain the need for the
rules proposed, to describe the methods for obtaining compliance, and
to outline the effects of noncompliance. DOL will also explore new ways
to help its various constituencies comply with existing rules and with
new rules once they are adopted.
The Department's Regulatory Priorities
DOL has identified 17 high-priority items for regulatory action. Eight
of them address health and safety issues, which are central to DOL's
mission and which represent a major focus of the Secretary. Two
agencies, the Mine Safety and Health Administration (MSHA) and the
Occupational Safety and Health Administration (OSHA), are responsible
for these initiatives.
MSHA administers the Federal Mine Safety and Health Act of 1977 (Mine
Act). The agency demonstrates its commitment to ensuring safer and
healthier workplaces for our nation's miners in a number of ways, but
government intervention alone cannot eliminate occupational deaths,
injuries and illnesses in mining. The commitment of miners and mine
operators is also needed. MSHA will continue to concentrate on
improving existing health and safety standards and addressing emerging
health hazards in mining.
While levels of respirable coal dust have been significantly reduced
over the years, some miners continue to develop coal workers'
pneumoconiosis. MSHA intends to issue final rules that will provide a
means to verify operators' coal dust control plans, allow MSHA to
assume responsibility for the operator coal dust sampling program, and
prevent overexposure to respirable coal dust during every working shift
(RIN 1219-AB14, RIN 1219-AB18). MSHA also proposes to lower the
permissible exposure limit (PEL) for asbestos in surface and
underground metal and non-metal mines (RIN 1219-AB24). This rule, which
reflects current scientific data, is intended to reduce miners' risk of
developing asbestos-related occupational diseases.
The Occupational Safety and Health Administration administers a wide
range of measures throughout the public and private sectors. OSHA is
committed to establishing clear and sensible priorities, reducing
occupational deaths, injuries, and illnesses, and simplifying its
recordkeeping requirements.

[[Page 61222]]

Two of OSHA's initiatives address health standards. The first,
``Standards Improvement,'' will streamline a number of such standards
by removing language that is outdated, duplicative, unnecessary or
inconsistent (RIN 1218-AB81). These changes will reduce the amount of
time and effort needed to understand and comply with these standards.
The second proposes improvements in respiratory protection against
airborne contaminants, which include a variety of particulates, gases,
vapors and biological agents, for employees who routinely wear
respirators on the job (RIN 1218-AA05).
A third proposal concerns fires in shipyards, which claim the lives of
several workers each year (RIN 1218-AB51). Using the negotiated
rulemaking process, OSHA proposes to update requirements set in 1971
for fire extinguishers, sprinkler systems, detection systems, alarm
systems and fire brigades to reduce fire-related injuries and
fatalities.
Finally, OSHA proposes two changes in response to concerns raised by
stakeholders. One of these relates to highway signs, signals and
barricades (RIN 1218-AB88). OSHA will revise this rule to bring it into
conformity with rules set forth by the Department of Transportation and
to reflect new technology and offer more flexibility for compliance.
The other addresses emergency exit routes used by employees (RIN 1218-
AB82). Updating the standard and using clearer language should lead to
better compliance and fewer disputes about violations.
Another of the Secretary's priorities, protection of pension and health
benefits, is exemplified in three initiatives by the Pension and
Welfare Benefits Administration (PWBA), which administers the Employee
Retirement Income Security Act (ERISA). This law establishes reporting,
disclosure, fiduciary and other standards that apply to an estimated
700,000 private sector employee pension benefit plans (covering
approximately 92 million participants); an estimated 2.5 million group
health benefit plans (covering 131 million participants and
dependents); and 3.4 million other welfare benefits plans (covering
approximately 190 million participants).
PWBA's initiatives focus on encouraging voluntary compliance with the
laws and regulations that apply to employee benefit plans. The first
provides for adoption of a Voluntary Fiduciary Correction Program,
which will promote compliance with ERISA's fiduciary responsibility
requirements (RIN 1210-AA76). The second addresses revisions to PWBA's
Delinquent Filer Voluntary Compliance program, which will facilitate
compliance with ERISA's annual reporting requirements (RIN 1210-AA86).
The third advocates development of model COBRA notices, which will
promote compliance with the provisions of ERISA and the Internal
Revenue Code that govern continuation of health benefits coverage (RIN
1210-AA60).
The Secretary's emphasis on meeting the needs of the 21st century
workforce is reflected in a regulatory initiative developed by the
Employment and Training Administration (ETA). This rule will improve
the quality of employment services provided to low-income senior
citizens under the Older Americans Act (RIN 1205-AB28). These
individuals often need assistance in developing skills and obtaining
work experience so that they can obtain unsubsidized work. This rule
will also improve the performance accountability system for providers
of such services and enhance the ability of the States to coordinate
services.
The Department is working on certain rules in the immigration area that
will enhance the security of the employment-related immigration system.
One such rule is an ETA rule that will allow employers to submit H-1B
labor condition applications via the Internet (RIN 1205-AB29). Another
is a related Employment Standards Administration (ESA) rule that
implements amendments to the H-1B program contained in the American
Competitiveness and Workforce Improvement Act of 1998 (RIN 1215-AB09).
The Department is evaluating comments received on an interim final rule
published in December 2000.
Finally, ESA has set forth three regulatory initiatives. The Office of
Labor-Management Standards (OLMS) has proposed a rule that will
implement the requirements of Executive Order 13201 (RIN 1215-AB33).
This Order requires Federal contractors to notify their employees that
they are not required to join a union, and to inform employees of their
rights with respect to use of union dues and fees.
The Secretary's priority of ensuring that appropriate wages are paid at
legal levels is the subject of two proposals set forth by ESA's Wage
and Hour Division. Among the statutes enforced by the Wage and Hour
Division is the Fair Labor Standards Act (FLSA), which sets
requirements for payment of minimum wages and overtime pay to more than
100 million employees. It also defines conditions for the employment of
minors.
The Wage and Hour Division's first initiative updates the child labor
rules issued under the FLSA to address changes in the nature of the
workplace and situations in which minors may operate certain kinds of
machinery (RIN 1215-AA09). While young workers need employment
experiences that will help them gain the skills needed to find and hold
good jobs later in life, they also need to focus on obtaining high-
quality educations. It is our responsibility to ensure that they work
in jobs that are not hazardous, and that younger workers (14 and 15
years old) work hours that will not interfere with their education, and
under conditions that will not interfere with their health and well
being.
The Wage and Hour Division's second initiative revises and clarifies
the criteria that define the minimum wage and overtime exemptions for
``executive'', ``administrative'', ``professional'', and ``outside
sales'' employees under the FLSA (RIN 1215-AA14). Changes to these
rules will help employers meet their obligations voluntarily and
enhance workers' understanding of their rights and benefits.
_______________________________________________________________________

DOL--Employment Standards Administration (ESA)

-----------

PROPOSED RULE STAGE

-----------

81. DEFINING AND DELIMITING THE TERM ``ANY EMPLOYEE EMPLOYED IN A BONA
FIDE EXECUTIVE, ADMINISTRATIVE, OR PROFESSIONAL CAPACITY'' (ESA/W-H)
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect State, local or tribal goverments and the
private sector.

Legal Authority:

29 USC 213(a)(1)

CFR Citation:

29 CFR 541

Legal Deadline:

None

[[Page 61223]]

Abstract:

These regulations set forth the criteria for exemption from the Fair
Labor Standards Act's minimum wage and overtime requirements for
``executive,'' ``administrative,'' ``professional'' and ``outside sales
employees.'' To be exempt, employees must meet certain tests relating
to duties and responsibilities and be paid on a salary basis at
specified levels. A final rule increasing the salary test levels was
published on January 13, 1981 (46 FR 3010), to become effective on
February 13, 1981, but was indefinitely stayed on February 12, 1981 (46
FR 11972). On March 27, 1981, a proposal to suspend the final rule
indefinitely was published (46 FR 18998), with comments due by April
28, 1981. As a result of numerous comments and petitions from industry
groups on the duties and responsibilities tests, and as a result of
case law developments, the Department concluded that a more
comprehensive review of these regulations was needed. An ANPRM
reopening the comment period and broadening the scope of review to
include all aspects of the regulations was published on November 19,
1985, with the comment period subsequently extended to March 22, 1986.

The Department has revised these regulations since the ANPRM to address
specific issues. In 1991, as the result of an amendment to the Fair
Labor Standards Act (FLSA), the regulations were revised to permit
certain computer systems analysts, computer programmers, software
engineers, and other similarly skilled professional employees to
qualify for the exemption, including those paid on an hourly basis if
their rates of pay exceed 6 1/2 times the applicable minimum wage.
Also, in 1992 the Department issued a final rule which modified the
exemption's requirement for payment on a ``salary basis'' for otherwise
exempt public sector employees.

Statement of Need:

These regulations contain the criteria used to determine if an employee
is exempt from the FLSA as an ``executive,'' ``administrative,''
``professional,'' or ``outside sales'' employee. The existing salary
test levels used in determining which employees qualify as exempt were
adopted in 1975 on an interim basis. These salary level tests are
outdated and offer little practical guidance in applying the exemption.
In addition, numerous comments and petitions have been received from
industry groups regarding the duties and responsibilities tests in the
regulations, requesting a review of these regulations.

These regulations have been revised to deal with specific issues. In
1991, as the result of an amendment to the FLSA, the regulations were
revised to permit certain computer systems analysts, computer
programmers, software engineers, and other similarly skilled
professional employees to qualify for the exemption, including those
paid on an hourly basis if their rates of pay exceed 6 1/2 times the
applicable minimum wage. Also in 1991, the Department undertook
separate rulemaking on another aspect of the regulations, the
definition of ``salary basis'' for public-sector employees. Because of
the limited nature of these revisions, the regulations are still in
need of updating and clarification.

Summary of Legal Basis:

These regulations are issued under the statutory exemption from minimum
wage and overtime pay provided by section 13(a)(1) of the Fair Labor
Standards Act, 29 USC 213(a)(1), which requires the Secretary of Labor
to issue regulations that define and delimit the terms ``any employee
employed in a bona fide, executive, administrative, or professional
capacity..., or in the capacity of outside salesman...,'' for purposes
of applying the exemption to employees who meet the specified criteria.

Alternatives:

The Department will involve affected interest groups in developing
regulatory alternatives. Following completion of these outreach and
consultation activities, full regulatory alternatives will be
developed.

Although legislative proposals have been introduced in Congress to
address certain aspects of these regulations, the Department continues
to believe revisions to the regulations are the appropriate response to
the concerns raised. Alternatives likely to be considered range from
particular changes to address ``salary basis'' and salary level issues
to a comprehensive overhaul of the regulations that also addresses the
duties and responsibilities tests.

Anticipated Cost and Benefits:

Some 32 million employees are estimated to be within the scope of these
regulations. Legal developments in court cases are changing the guiding
interpretations under this exemption and creating law without
considering a comprehensive analytical approach to current compensation
concepts and workplace practices. Clear, comprehensive, and up-to-date
regulations would provide for central, uniform control over the
application of these regulations and ameliorate many concerns. In the
public sector, State and local government employers contend that the
rules are based on production workplace environments from the 1940s and
1950s that do not readily adapt to contemporary government functions.
The Federal Government also has concerns regarding the manner in which
the courts and arbitration decisions are applying the exemption to the
Federal workforce. Resolution of confusion over how the regulations are
to be applied in the public sector will ensure that employees are
protected, that employers are able to comply with their
responsibilities under the law, and that the regulations are
enforceable. Preliminary estimates of the specific costs and benefits
of this regulatory action will be developed once the various regulatory
alternatives are identified.

Risks:

This action does not affect public health, safety, or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Indefinite Stay 46 FR 11972le 02/12/81
Proposal To Susp46 FR 18998definitely 03/27/81
ANPRM 50 FR 47696 11/19/85
Extension of ANP51 FR 2525 Period From 01/21/86 to 03/22/86 01/17/86
ANPRM Comment Period End 03/22/86
NPRM 09/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses, Governmental Jurisdictions, Organizations

Government Levels Affected:

State, Local, Federal

Federalism:

Undetermined

[[Page 61224]]

Agency Contact:
Annabelle T. Lockhart
Acting Administrator, Wage and Hour Division
Department of Labor
Employment Standards Administration
200 Constitution Avenue, NW
FP Building, Room S3502
Washington, DC 20210
Phone: 202 693-0051
Fax: 202 693-1432
RIN: 1215-AA14
_______________________________________________________________________

DOL--ESA

82. OBLIGATION OF FEDERAL CONTRACTORS AND SUBCONTRACTORS, NOTICE OF
EMPLOYEE RIGHTS CONCERNING PAYMENT OF UNION DUES OR FEES
Priority:

Other Significant

Legal Authority:

EO 13201

CFR Citation:

29 CFR 470

Legal Deadline:

None

Abstract:

This regulation will implement E.O. 13201 which requires Government
contractors and subcontractors to post notices informing their
employees that (1) under Federal law they cannot be required to join a
union or maintain membership in a union to retain their jobs, and (2)
employees who choose not to be union members may object to the use of
their compulsory union dues and fees for activities other than
collective bargaining, contract administration, and grievance
adjustment, and may be entitled to a refund and an appropriate
reduction in their future payments. The proposed regulation, in
accordance with E.O. 13201, will also require that, where applicable,
each Government contracting agency include certain provisions of the
Order in its Government contracts, and that Government contractors and
subcontractors include these provisions in their nonexempt subcontracts
and purchase orders.

Statement of Need:

The regulation is necessary in order to implement Executive Order
13201.

Summary of Legal Basis:

The legal basis for this regulation is section 1(b) of Executive Order
13201. The legal basis for the Executive Order is the Constitution and
laws of the United States, including the Federal Property and
Administrative Services Act, 40 U.S.C. 471 et seq.

Alternatives:

There is no feasible alternative to issuing regulations. Regulations
are needed in order to implement Executive Order 13201 by (1)
clarifying the obligations of Federal contractors and subcontractors,
(2) providing exemptions as authorized by the Executive order, and (3)
establishing enforcement mechanisms as authorized by the Executive
order. Alternatives to the specific provisions of the proposed rule
suggested in comments by the public will be considered in developing
the final rule.

Anticipated Cost and Benefits:

The only costs that Federal contractors will incur are for (1) posting
the notice and (2) applying for waivers from the posting requirement.
These will be minimal since (1) under the proposed regulation, the
Department will supply the posters, and (2) the Department's experience
under similar posting requirements is that few contractors request
waivers. The benefits of the Executive order and the implementing
regulation are the promotion of economy and efficiency in Government
procurement by having workers who are informed of their rights
regarding union membership and the use of union dues and fees.

Risks:

This action does not affect public health, safety, or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Interim Procedur66 FR 19988 04/18/01
NPRM 66 FR 50010 10/01/01
NPRM Comment Period End 11/30/01
Final Rule 02/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

Federal

Agency Contact:
Don Todd
Deputy Assistant Secretary
Department of Labor
Employment Standards Administration
200 Constitution Avenue NW.
FP Building, Room S2321
Washington, DC 20210
Phone: 202 693-0200
Fax: 202 693-1340
RIN: 1215-AB33
_______________________________________________________________________

DOL--ESA

-----------

FINAL RULE STAGE

-----------

83. CHILD LABOR REGULATIONS, ORDERS, AND STATEMENTS OF INTERPRETATION
(ESA/W-H)
Priority:

Other Significant

Legal Authority:

29 USC 203(e)

CFR Citation:

29 CFR 570

Legal Deadline:

None

Abstract:

Section 3(l) of the Fair Labor Standards Act requires the Secretary of
Labor to issue regulations with respect to minors between 14 and 16
years of age ensuring that the periods and conditions of their
employment do not interfere with their schooling, health, or well-
being. The Secretary is also directed to designate occupations that are
particularly hazardous for minors 16 and 17 years of age. Child Labor
Regulation No. 3 sets forth the permissible industries and occupations
in which 14- and 15-year-olds may be employed, and specifies the number
of hours in a day and in a week, and time periods within a day, that
such minors may be employed. The Department has invited public comment
in considering whether changes in technology in the workplace and job
content over the years require new hazardous occupation orders, and
whether changes are needed in some of the applicable hazardous
occupation orders. Comment has also been solicited on whether revisions
should be considered in the permissible hours and time-of-day standards
for 14- and 15-year-olds. Comment has been sought on appropriate
changes required to implement school-to-work transition

[[Page 61225]]

programs. Additionally, Congress enacted Public Law 104-174 (August 6,
1996), which amended FLSA section 13(c) and requires changes in the
regulations under Hazardous Occupation Order No. 12 regarding power-
driven paper balers and compactors, to allow 16- and 17-year-olds to
load, but not operate or unload, machines meeting applicable American
National Standards Institute (ANSI) safety standards and certain other
conditions. Congress also passed the Drive for Teen Employment Act,
Public Law 105-334 (October 31, 1998), which prohibits minors under age
17 from driving automobiles and trucks on public roads on the job and
sets criteria for 17-year-olds to drive such vehicles on public roads
on the job.

Statement of Need:

Because of changes in the workplace and the introduction of new
processes and technologies, the Department is undertaking a
comprehensive review of the regulatory criteria applicable to child
labor. Other factors necessitating a review of the child labor
regulations are changes in places where young workers find employment
opportunities, the existence of differing Federal and State standards,
and the divergent views on how best to correlate school and work
experiences.

Under the Fair Labor Standards Act, the Secretary of Labor is directed
to provide by regulation or by order for the employment of youth
between 14 and 16 years of age under periods and conditions which will
not interfere with their schooling, health and well-being. The
Secretary is also directed to designate occupations that are
particularly hazardous for youth between the ages of 16 and 18 years or
detrimental to their health or well-being. The Secretary has done so by
specifying, in regulations, the permissible industries and occupations
in which 14- and 15-year-olds may be employed, and the number of hours
per day and week and the time periods within a day in which they may be
employed. In addition, these regulations designate the occupations
declared particularly hazardous for minors between 16 and 18 years of
age or detrimental to their health or well-being.

Public comment has been invited in considering whether changes in
technology in the workplace and job content over the years require new
hazardous occupation orders or necessitate revision to some of the
existing hazardous orders. Comment has also been invited on whether
revisions should be considered in the permissible hours and time-of-day
standards for the employment of 14- and 15-year-olds, and whether
revisions should be considered to facilitate school-to-work transition
programs. When issuing the regulatory proposals (after review of public
comments on the advance notice of proposed rulemaking), the
Department's focus was on assuring healthy, safe and fair workplaces
for young workers, and at the same time promoting job opportunities for
young people and making regulatory standards less burdensome to the
regulated community.

Summary of Legal Basis:

These regulations are issued under sections 3(1), 11, 12, and 13 of the
Fair Labor Standards Act, 29 USC sections 203(1), 211, 212, and 213
which require the Secretary of Labor to issue regulations prescribing
permissible time periods and conditions of employment for minors
between 14 and 16 years old so as not to interfere with their
schooling, health, or well-being, and to designate occupations that are
particularly hazardous or detrimental to the health or well-being of
minors under 18 years old.

Alternatives:

Regulatory alternatives developed based on recent legislation and the
public comments responding to the advance notice of proposed rulemaking
included specific proposed additions or modifications to the paper
baler, teen driving, explosive materials, and roofing hazardous
occupation orders, and proposed changes to the permissible cooking
activities that 14- and 15-year-olds may perform in retail
establishments.

Anticipated Cost and Benefits:

Preliminary estimates of the anticipated costs and benefits of this
regulatory action indicated that the rule was not economically
significant. Benefits will include safer working environments and the
avoidance of injuries with respect to young workers.

Risks:

The child labor regulations, by ensuring that permissible job
opportunities for working youth are safe and healthy and not
detrimental to their education as required by the statute, produce
positive benefits by reducing health and productivity costs employers
may otherwise incur from higher accident and injury rates to young and
inexperienced workers. Given the limited nature of the changes in the
proposed rule, a detailed assessment of the magnitude of risk was not
prepared.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Final Action HOs56 FR 5862612 11/20/91
Final Action Effective 12/20/91
ANPRM 59 FR 25167 05/13/94
ANPRM Comment Pe59 FR 40318 08/11/94
NPRM 64 FR 67130 11/30/99
NPRM Comment Period End 01/31/00
Final Action 06/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

Agency Contact:
Annabelle T. Lockhart
Acting Administrator, Wage and Hour Division
Department of Labor
Employment Standards Administration
200 Constitution Avenue, NW
FP Building, Room S3502
Washington, DC 20210
Phone: 202 693-0051
Fax: 202 693-1432
RIN: 1215-AA09
_______________________________________________________________________

DOL--ESA

84. LABOR CONDITION APPLICATIONS AND REQUIREMENTS FOR EMPLOYERS USING
NONIMMIGRANTS ON H-1B VISAS IN SPECIALTY OCCUPATIONS AND AS FASHION
MODELS
Priority:

Other Significant

Legal Authority:

8 USC 1101(a)(15)(H)(i)(b); 8 USC 1182(n); 8 USC 1184; 29 USC 49 et
seq; PL 102-232; PL 105-277

CFR Citation:

20 CFR 655, subparts H and I

Legal Deadline:

None

Abstract:

The H-1B visa program of the Immigration and Nationality Act allows
employers to temporarily employ nonimmigrants admitted into the United
States under the H-1B visa category in specialty occupations and

[[Page 61226]]

as fashion models, under specified labor conditions. An employer must
file a labor condition application with the Department of Labor before
the Immigration and Naturalization Service may approve a petition to
employ a foreign worker on an H-1B visa. The Department's Employment
and Training Administration administers the labor condition application
process; the Wage and Hour Division of the Department's Employment
Standards Administration handles complaints and investigations
regarding labor condition applications. The Department published a
proposed rule on January 5, 1999, in response to statutory changes in
the H-1B program made by the American Competitiveness and Workforce
Improvement Act of 1998 (Title IV, Pub. L. 105-277; Oct. 21, 1998).
Those changes placed additional obligations on ``H-1B-dependent''
employers (generally, those with work forces comprised of more than 15
percent H-1B workers) and on willful violators. These employers must
recruit for U.S. workers, hire U.S. workers who are at least as
qualified as H-1B workers, and not displace U.S. workers by hiring H-1B
workers or placing them at another employer's job site. The 1998
amendments also imposed additional obligations on all H-1B employers,
such as offering benefits to H-1B workers on the same basis and
according to the same criteria as offered to U.S. workers, and payment
to H-1B workers during periods they are not working for an employment-
related reason. The 1999 proposed rule also requested further public
comment on earlier proposed provisions published in October 1995, and
on particular interpretations of the statute and of the existing
regulations which the Department proposed to incorporate into the
regulations. Since publishing the proposed rule, Congress enacted
further amendments to the H-1B provisions under the American
Competitiveness in the Twenty-First Century Act of 2000 (Pub. L. 106-
313; Oct. 17, 2000), the Immigration and Nationality Act - Amendments
(Pub. L. 106-311; Oct. 17, 2000), and section 401 of the Visa Waiver
Permanent Program Act (Pub. L. 106-396; Oct. 30, 2000). On December 20,
2000, the Department published an Interim Final Rule to implement the
recent amendments and clarify the existing rules, and requested further
public comment on those provisions.

Statement of Need:

Statutory amendments to the Immigration and Nationality Act relating to
the H-1B visa program were enacted in 1998 and again in 2000. Under the
H-1B visa program, employers may temporarily employ nonimmigrants
admitted into the U.S. under H-1B visas in specialty occupations and as
fashion models, provided certain conditions are met. Section 412(d) of
the American Competitiveness and Workforce Improvement Act of 1998
(Title IV of the Omnibus Consolidated and Emergency Supplemental
Appropriations Act, 1999, Public Law 105-277), provides that some of
the amendments made by the 1998 legislation (those relating to ``H-1B-
dependent'' employers and willful violators) do not take effect until
the Department of Labor issues implementing regulations, which are the
subject of this rulemaking.

Summary of Legal Basis:

This rule is issued pursuant to provisions of the Immigration and
Nationality Act, as amended, and the American Competitiveness and
Workforce Improvement Act of 1998, 8 U.S.C. 1101(a)(15)(H)(i)(b),
1182(n), and 1184; sec. 303(a)(8), Pub. L. 102-232 (8 U.S.C. 1182
note); and secs. 412(d) and (e), Pub. L. 105-277. The objectives of the
rule are to enable employers to understand and comply with applicable
requirements of the amended H-1B visa program, and to advise employees
and applicants for employment of the protections afforded by the
amendments to U.S. and H-1B workers.

Alternatives:

Various regulatory alternatives were considered during the notice-and-
comment period for implementing the statutory provisions, as discussed
in the preamble to the December 2000 interim final rule. Alternatives
considered included, among others, various approaches to the manner and
timing for determining H-1B dependency status (and the meaning of
``full-time equivalent employees'' (FTEs) in the employer's work
force), documentation of the dependency determination and designation
of such status on the Labor Condition Application, and implementing the
requirements for no ``displacement'' and recruitment of U.S. workers,
payment of required wages and benefits to H-1B and U.S. workers, and
determining short-term placement options.

Anticipated Cost and Benefits:

The Department concluded that the anticipated costs and benefits of
this rule were not economically significant. This conclusion was based
on the analysis that the direct, incremental costs that employers would
incur because of the rule that were above customary business expenses
associated with recruiting qualified job applicants and retaining
qualified employees in specialized jobs would not exceed $100 million
per year or otherwise trigger ``economic significance'' under Executive
Order 12866. However, because of the importance of the rule to the
public, it was treated as a significant regulatory action and was,
therefore, reviewed by the Office of Management and Budget under
Executive Order 12866.

Risks:

This action does not directly affect public health, safety, or the
environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 60 FR 55339 10/31/95
NPRM Comment Period End 11/30/95
NPRM 64 FR 628 01/05/99
NPRM Comment Period End 02/04/99
Interim Final Ru65 FR 80110 12/20/00
Interim Final Rule Effective 01/19/01
Interim Final Ru66 FR 10865Period End 04/23/01
Final Action 09/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

Federal

[[Page 61227]]

_______________________________________________________________________

DOL--Employment and Training Administration (ETA)

-----------

PROPOSED RULE STAGE

-----------

85. LABOR CERTIFICATION PROCESS FOR THE PERMANENT EMPLOYMENT OF ALIENS
IN THE UNITED STATES
Priority:

Other Significant

Legal Authority:

8 USC 1182(a)(5)(A), 1189(p)(1); 29 USC 49 et seq

CFR Citation:

20 CFR 656

Legal Deadline:

None

Abstract:

The Employment and Training Administration (ETA) is in the process of
reengineering the permanent labor certification process. ETA's goals
are to make fundamental changes and refinements that will: streamline
the process, save resources, improve the effectiveness of the program
and better serve the Department of Labor's (DOL) customer.

Statement of Need:

The labor certification process has been described as being
complicated, costly and time consuming. Due to the increases in the
volume of applications received and a lack of adequate resources, it
can take up to 2 years or more to complete processing an application.
The process also requires substantial State and Federal resources to
administer and is reportedly costly and burdensome to employers as
well. Cuts in Federal funding for both the permanent labor
certification program and the U.S. Employment Service have made it
difficult for State and Federal administrators to keep up with the
process. ETA, therefore, is taking steps to improve effectiveness of
the various regulatory requirements and the application processing
procedures, with a view to achieving savings in resources both for the
government and employers, without diminishing protections now afforded
U.S. workers by the current regulatory and administrative requirements.

Summary of Legal Basis:

Promulgation of these regulations is authorized by section 212(a)(5)(A)
of the Immigration and Nationality Act.

Alternatives:

Regulatory alternatives are now being developed by the Department. The
public will be afforded an opportunity to comment on the Department's
plans for streamlining the permanent labor certification process in a
notice of proposed rulemaking which will be published in the Federal
Register.

Anticipated Cost and Benefits:

Preliminary estimates of the anticipated costs and benefits have not
been determined at this time. Preliminary estimates will be developed
after a decision is made as to what regulatory amendments are necessary
and after the implementing forms and automated systems to support a
streamlined permanent labor certification process have been developed.

Risks:

Possible alternative: This action does not affect public health,
safety, or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 02/00/02
Final Rule 08/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

State, Federal

Agency Contact:
Dale Ziegler
Chief, Division of Foreign Labor Certification
Department of Labor
Employment and Training Administration
200 Constitution Avenue NW.
Room C4318
FP Building
Washington, DC 20210
Phone: 202 693-2942
Fax: 202 693-2760
Email: [email protected]
RIN: 1205-AA66
_______________________________________________________________________

DOL--ETA

86. SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Legal Authority:

42 USC 3056(b)(2)

CFR Citation:

20 CFR 641

Legal Deadline:

None

Abstract:

The Employment and Training Administration will implement new
regulations to govern the Senior Community Service Employment Program
(SCSEP) under title V of the Older Americans Act Amendments of 2000.
SCSEP is the only Federally sponsored job creation program targeted to
low-income older Americans. The program subsidizes part-time community
service jobs for low-income persons age 55 years and older who have
poor employment prospects. Approximately 100,000 program enrollees
annually work in a wide variety of community service jobs, including
nurse's aides, teacher aides, librarians, clerical workers and day care
assistants. The Department of Labor allocates funds to operate the
program to State agencies on aging and to national organizations.

Proposed regulations will:

--improve integration of SCSEP with the broader workforce investment
system;

--establish an enhanced performance accountability system to hold each
grantee accountable for attaining quality levels of performance with
respect to core measures, such as customer satisfaction and placement
in unsubsidized employment;

--improve the ability of States to coordinate services, by providing
for the broad participation of stakeholders in the development of an
annual plan to ensure an equitable distribution of projects within the
State;

--strengthen administrative procedures by incorporating fiscal
accountability provisions similar to the Workforce Investment Act,
including definitions of administrative and programmatic costs and the
application of uniform cost principles; and

--revise the distribution of funding.

Statement of Need:

As the baby boom generation ages, the demand for employment and
training services and income support for low-income older persons will
increase. Low-income seniors generally must continue working and many
may not be able to find employment without work experience and
additional training. The basic goals of the SCSEP are to provide
community service employment for older workers with few skills and
little work experience, and

[[Page 61228]]

to move many of those seniors into unsubsidized employment. The
Employment and Training Administration will issue regulations and other
guidance, provide technical assistance, and establish performance
standards that will drive State and national grantees' efforts towards
the program's goals.

Summary of Legal Basis:

Promulgation of these regulations is authorized by section 502(b)(2) of
Pub. L. 106-501 of the Older Americans Act Amendments of 2000.

Alternatives:

The public provided comments on changes to the statute due to the Older
Americans Act Amendments of 2000 during Town Hall meetings held
throughout the country in spring 2001. The public also will be afforded
an opportunity to comment on the Department's plans for implementing
the Amendments in a notice of proposed rulemaking that will be
published in the Federal Register.

Anticipated Cost and Benefits:

Preliminary estimates of the anticipated costs of this regulatory
action have not been determined at this time and will be determined at
a later date.

Risks:

This action does not affect public health, safety, or the environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 01/00/02
Final Action 04/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State, Local, Tribal, Federal

Federalism:

Undetermined

Agency Contact:
Erich W. Larisch
Chief, Divison of Older Worker Programs
Department of Labor
Employment and Training Administration
200 Constitution Avenue, NW
FP Building, Room N4645
Washington, DC 20210
Phone: 202 693-3742
Fax: 202 693-3817
Email: [email protected]
RIN: 1205-AB28
_______________________________________________________________________

DOL--Pension and Welfare Benefits Administration (PWBA)

-----------

PROPOSED RULE STAGE

-----------

87. RULEMAKING RELATING TO NOTICE REQUIREMENTS FOR CONTINUATION OF
HEALTH CARE COVERAGE
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

29 USC 1135; 29 USC 1136

CFR Citation:

29 CFR 2520

Legal Deadline:

None

Abstract:

This rulemaking will provide guidance concerning the notification
requirements pertaining to continuation coverage under the Employee
Retirement Income Security Act of 1974 (ERISA). Section 606 of ERISA
requires that group health plans provide employees notification of the
continuation coverage provisions of the plan and imposes notification
obligations upon plan administrators, employers, employees, and
qualified beneficiaries relating to certain qualifying events.

Statement of Need:

Part 6 of title I of ERISA requires that group health plans provide
employees with notice of the continuation of health care coverage
provisions of the plan; it imposes notification requirements upon
employers, employees, plan administrators, and qualified beneficiaries
in connection with certain qualifying events. The public needs guidance
from the Department with regard to how they can fulfill their
respective obligations under these statutory provisions.

Summary of Legal Basis:

Section 606 ERISA specifies the respective notification requirements
for employers, employees, plan administrators, and qualified
beneficiaries in connection with group health plan provisions relating
to continuation of health care coverage. Section 606(a) of ERISA
specifically refers to regulations to be issued by the Secretary of
Labor clarifying these requirements. Section 505 of ERISA authorizes
the Secretary to issue regulations clarifying the provisions of title I
of ERISA.

Alternatives:

Regulatory alternatives will be developed once determinations have been
made with regard to the scope and nature of the regulatory guidance
which is needed by the public.

Anticipated Cost and Benefits:

Preliminary estimates of the anticipated costs and benefits will be
developed once decisions are reached regarding the alternatives to be
considered.

Risks:

Failure to provide guidance to the public concerning their notification
obligations under section 606 of ERISA may complicate compliance by the
public with the law and may reduce the availability of continued health
care coverage in certain commonly encountered situations.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 62 FR 49894 09/23/97
ANPRM Comment Period End 11/24/97
NPRM 09/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses, Organizations

Government Levels Affected:

None

Agency Contact:
Susan G. Lahne
Senior Pension Law Specialist
Department of Labor
Pension and Welfare Benefits Administration
Room N5669
200 Constitution Avenue NW
FP Building
Washington, DC 20210
Phone: 202 693-8500
RIN: 1210-AA60

[[Page 61229]]

_______________________________________________________________________

DOL--PWBA

-----------

FINAL RULE STAGE

-----------

88. VOLUNTARY FIDUCIARY CORRECTION PROGRAM (VFC PROGRAM)
Priority:

Other Significant

Legal Authority:

29 USC 1132; 29 USC 1134

CFR Citation:

29 CFR 2560

Legal Deadline:

None

Abstract:

Section 409 of ERISA provides that an employee benefit plan fiduciary
who breaches any of the responsibilities, obligations, or duties
imposed upon him or her by part 4 of title I of ERISA shall be
personally liable to make good to such plan any losses to the plan
resulting from each such breach, and to restore to such plan any
profits that such fiduciary may have made through use of assets of the
plan. The Department has the authority under section 504 of ERISA to
conduct investigations to deter and correct violations of title I of
ERISA and under section 502(a)(2) and 502(a)(5) to bring civil actions
to enforce the provisions thereof. Section 502(l) of ERISA requires the
assessment of a civil penalty in an amount equal to 20 percent of the
applicable recovery amount with respect to any breach of fiduciary
responsibility under (or other violation of) part 4 by a fiduciary.

To encourage and facilitate voluntary correction of certain breaches of
fiduciary responsibility, PWBA is adopting a Voluntary Fiduciary
Correction Program (VFC Program). Under the VFC Program, plan officials
will be relieved of the possibility of investigation and civil action
by the Department and imposition of civil penalties, to the extent that
plan officials satisfy the conditions for correcting breaches described
in the program.

Statement of Need:

The VFC Program is a key element in PWBA's effort to encourage and
facilitate fiduciary voluntary correction of certain breaches of
fiduciary responsibility. Under the Program, plan officials will be
relieved of the possibility of investigation and civil action by the
Department and imposition of civil penalties, to the extent that they
satisfy the conditions for correcting breaches described in the
Program.

Summary of Legal Basis:

Section 409 of ERISA provides that an employee benefit plan fiduciary
who breaches any of the responsibilities, obligations, or duties
imposed upon him or her by part 4 of title I of ERISA shall be
personally liable to make good to such plan any losses to the plan
resulting from each such breach, and to restore to such plan any
profits that such fiduciary may have made through use of the assets of
the plan. The Department has the authority under section 504 of ERISA
to conduct investigations to deter and correct violations of title I of
ERISA and under sections 502(a)(2) and 502(a)(5) of ERISA to bring
civil actions to enforce the provisions thereof. Section 502(1) of
ERISA requires the assessment of a civil penalty in the amount equal to
20 percent of the applicable recovery amount with respect to any breach
of fiduciary responsibility under (or other violation of) part 4 by a
fiduciary.

Alternatives:

The VFC Program is essentially a deregulatory initiative, and
participation in the Program is entirely voluntary. PWBA has determined
that this approach is more flexible, efficient and protective of plans
than regulatory alternatives which do not serve to encourage voluntary
correction of fiduciary breaches.

Anticipated Cost and Benefits:

Participation in the VFC Program is entirely voluntary and, as such, it
is assumed that plan officials will elect to participate only when the
potential benefits to them are expected to exceed the costs of
participation. Benefits may include the reduction of exposure to the
risk of investigation and subsequent litigation, the potential cost of
which cannot be specifically quantified, and the savings of penalties
under section 502(1) of ERISA which would otherwise be payable on
amounts required to be restored to plans by fiduciaries pursuant to a
settlement agreement with the Department or court order.

Risks:

Failure to adopt the VFC Program would deprive plan officials of
significant opportunities to voluntarily correct fiduciary breaches and
to avoid costly litigation and civil penalties. Because the VFC Program
encourages and facilitates compliance with the law, failure to
implement the VFC Program may serve as a disincentive to the proper
management of employee benefit plans.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Enforcement Poli65 FR 14164 03/15/00
Comment Period End 05/15/00
Final Action 12/00/01
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

Agency Contact:
Elizabeth A. Goodman
Pension Law Specialist, Office of Regulations and Interpretations
Department of Labor
Pension and Welfare Benefits Administration
Room N5669
200 Constitution Avenue NW
FP Building
Washington, DC 20210
Phone: 202 693-8500
RIN: 1210-AA76
_______________________________________________________________________

DOL--PWBA

89. DELINQUENT FILER VOLUNTARY COMPLIANCE PROGRAM (DFVC
PROGRAM)
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

29 USC 1132

CFR Citation:

Not Yet Determined

Legal Deadline:

None

Abstract:

Under ERISA section 502(c)(2) the Secretary of Labor is authorized to
assess civil penalties of up to $1100 per day against plan
administrators who fail or refuse to file complete and timely Form 5500
Series Annual Returns/Reports. The Secretary may waive all or part of
the civil penalty upon showing by the plan

[[Page 61230]]

administrator of reasonable cause for failure to file a timely annual
report. The Department determined that the possible assessment of these
civil penalties may deter certain delinquent filers from voluntarily
complying with the annual reporting requirements under title I of ERISA
and adopted, on April 27, 1995, the Delinquent Filer Voluntary
Compliance (DFVC) Program which was published as a Federal Register
rule-related notice (60 FR 20874). The DFVC Program permits delinquent
plan administrators, who are otherwise subject to the assessment of
higher civil penalties under ERISA section 502(c)(2), to pay reduced
civil penalties for voluntarily complying with their annual reporting
obligations under title I of ERISA.

PWBA is adopting modifications to the DFVC Program to further encourage
and facilitate voluntary compliance by plan administrators who are
delinquent in filing annual reports under title I of ERISA. The
modifications will also simplify the procedures governing participation
in the DFVC Program and conform the program's provisions to the ERISA
Filing Acceptance System (EFAST).

Statement of Need:

Title I of ERISA authorizes the Secretary of Labor to assess civil
penalties of up to $1100 per day against plan administrators who fail
or refuse to file complete and timely Form 5500 Annual Returns/Reports
for employee benefit plans. ERISA also authorizes the Secretary to
waive all or part of the civil penalty upon a showing of reasonable
cause for failure to file a timely report. The DFVC Program, adopted in
1995, permits delinquent plan administrators, who are otherwise subject
to the assessment of higher civil penalties to pay reduced civil
penalties for voluntarily complying with their annual reporting
obligations under Title I of ERISA. The modifications to the DFVC
Program provided by this rulemaking will further encourage and
facilitate voluntary compliance by plan administrators, simplify the
procedures governing participation in the Program, and conform the
Program to the ERISA Filing Acceptance System (EFAST).

Summary of Legal Basis:

Section 502(c)(2) authorizes the Secretary of Labor to assess the civil
penalties described above upon plan administrators who are delinquent
in fulfilling their annual reporting requirements with respect to
employee benefit plans. A notice adopting the DFVC Program was
published by the Department in the Federal Register on April 27, 1995,
at 60 FR 20874. This notice will modify that Program.

Alternatives:

The DFVC Program is essentially a deregulatory initiative, and
participation in the program is entirely voluntary. PWBA has determined
that this approach is more flexible, efficient and protective of plans
than regulatory alternatives which do not serve to encourage voluntary
compliance with the statutory annual reporting requirements for
employee benefit plans.

Anticipated Cost and Benefits:

Adoption of the DFVC Program modifications incorporated in this
initiative will not impose increased costs upon participants, but will
instead simplify the procedures for participation in the Program and
facilitate compliance. Since participation in the Program is entirely
voluntary, plan administrators would not be likely to participate if
the costs in doing so were to exceed the benefits.

Risks:

Failure to adopt the modifications to the DFVC Program represented by
this rulemaking would complicate compliance with ERISA's reporting
requirements by plan administrators and may serve to discourage timely
and complete reporting with regard to the operation of employee benefit
plans.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Modified Enforcement Policy 12/00/01
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

Agency Contact:
Eric A. Raps
Pension Law Specialist
Department of Labor
Pension and Welfare Benefits Administration
Room N5669
200 Constitution Avenue NW
FP Building
Washington, DC 20210
Phone: 202 693-8500
RIN: 1210-AA86
_______________________________________________________________________

DOL--Mine Safety and Health Administration (MSHA)

-----------

PRERULE STAGE

-----------

90. ASBESTOS EXPOSURE LIMIT
Priority:

Other Significant

Legal Authority:

30 USC 811; 30 USC 813

CFR Citation:

30 CFR 56; 30 CFR 57; 30 CFR 71

Legal Deadline:

None

Abstract:

MSHA's permissible exposure limit (PEL) for asbestos applies to surface
(30 CFR part 56) and underground (30 CFR part 57) metal and nonmetal
mines and to surface coal mines and surface areas of underground coal
mines (30 CFR part 71) and is over 20 years old. Current scientific
data indicate that this existing PEL is not adequate to protect miners'
health. MSHA is considering rulemaking to lower the PEL in order to
reduce the risk of miners developing asbestos-induced occupational
disease. A recent report by the Office of the Inspector General (OIG)
recommended that MSHA lower its existing permissible exposure limit for
asbestos to a more protective level, and address take-home
contamination from asbestos. It also recommended that MSHA use
Transmission Electron Microscopy to analyze fiber samples that may
contain asbestos.

Statement of Need:

Current scientific data indicate that the existing asbestos PEL is not
protective of miners' health. MSHA's asbestos regulations date to 1967
and are based on the Bureau of Mines (MSHA's predecessor) standard of 5
mppcf (million particles per cubic foot of air). In 1969, the Bureau
proposed a 2 mppcf and 12 fibers/ml standard. This standard was
promulgated in 1969. In 1970, the Bureau proposed to lower the standard
to 5 fibers/ml, which was promulgated in 1974. MSHA issued its current
standard of 2 fibers/ml at the end of 1978 for metal and nonmetal
mining [43 FR 54064]. Since enactment of the Mine Act, MSHA has
conducted regular inspections at both surface and underground
operations at metal and nonmetal mines. During these inspections, MSHA
routinely takes

[[Page 61231]]

samples, which are analyzed for compliance with its standard.

Other Federal agencies have addressed this issue by lowering their PEL
for asbestos. For example, the Occupational Safety and Health
Administration, working in conjunction with the Environmental
Protection Agency, enacted a revised asbestos standard in 1994 that
lowered the permissible exposure limit and the excursion limit to an
eight (8) hour time-weighted average limit of 0.1 fiber per cubic
centimeter of air and to 1.0 fiber per cubic centimeter of air (1 f/cc)
as averaged over a sampling period of thirty (30) minutes. These
lowered limits reflected increased asbestos-related disease risk to
asbestos-exposed workers.

Alternatives:

The Agency has increased sampling efforts in an attempt to determine
current miners' exposure levels to asbestos, including taking samples
at all existing vermiculite, taconite, talc, and other mines to
determine whether asbestos is present and at what levels. Since the
spring of 2000, MSHA has taken almost 900 samples at more than 40
operations employing more than 4,000 miners. During those sampling
events, the MSHA staff also discussed with the miners and mine
operators the potential hazards of asbestos and the types of preventive
measures that could be implemented to reduce exposures. The course of
action MSHA takes in addressing asbestos hazards to miners will, in
part, be based on these sampling results.

Anticipated Cost and Benefits:

MSHA will develop a preliminary economic analysis to accompany any
proposed rule that may be developed.

Risks:

There is concern that miners could be exposed to the hazards of
asbestos during mine operations where the ore body contains asbestos.
There is also potential for exposure at facilities in which installed
asbestos-containing material is present. Overexposure to asbestos
causes mesothelioma and other forms of cancers, such as cancers of the
digestive system, as well as asbestosis.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 09/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses

Government Levels Affected:

None

Additional Information:

The Office of the Inspector General's ``Evaluation of MSHA's Handling
of Inspections at the W.R. Grace & Company Mine in Libby, Montana,''
was issued in March 2001.

Agency Contact:
David L. Meyer
Director, Office of Standards
Department of Labor
Mine Safety and Health Administration
Room 631
4015 Wilson Boulevard
Arlington, VA 22203
Phone: 703 235-1910
Fax: 703 235-5551
Email: [email protected]
RIN: 1219-AB24
_______________________________________________________________________

DOL--MSHA

-----------

FINAL RULE STAGE

-----------

91. VERIFICATION OF UNDERGROUND COAL MINE OPERATORS' DUST CONTROL PLANS
AND COMPLIANCE SAMPLING FOR RESPIRABLE DUST
Priority:

Other Significant

Legal Authority:

30 USC 811

CFR Citation:

30 CFR 70; 30 CFR 75; 30 CFR 90

Legal Deadline:

None

Abstract:

Our current regulations require that all underground coal mine
operators develop and follow a mine ventilation plan for each
mechanized mining unit that we approve. However, we do not have a
requirement that provides for verification of each plan's effectiveness
under typical mining conditions. Consequently, plans may be implemented
by mine operators that could be inadequate to control respirable dust.
The proposed rule provides for MSHA to verify the effectiveness of mine
ventilation plans to control respirable dust under typical mining
conditions. For longwall mine operators, we proposed to permit the
limited use of either approved loose-fitting powered air purifying
respirators (PAPRs) or verifiable administrative controls as a
supplemental means of compliance if we have determined that further
reduction in respirable dust levels cannot be achieved using all
feasible engineering controls. Furthermore, MSHA proposed to assume
responsibility for all compliance sampling for respirable dust in
underground coal mines as required under 30 CFR parts 70 and 90.

Statement of Need:

Respirable coal mine dust levels in this country are significantly
lower than they were two decades ago. Despite this progress, there
continues to be concern about the respirable coal mine dust sampling
program and its effectiveness in maintaining exposure levels in mines
at or below the applicable standard. Our regulations require that all
underground coal mine operators develop and follow a mine ventilation
plan approved by us. The dust control portion of the mine ventilation
plan is the key element of an operator's strategy to control respirable
dust in the work environment. Although such plans are required to be
designed to control respirable dust, there is no current requirement
that provides for verification of each proposed plan's effectiveness
under typical mining conditions. Consequently, plans may be implemented
that may be inadequate to control respirable dust.

Therefore, we proposed to revoke existing operator respirable dust
sampling and to implement new regulations that would require each
underground coal mine operator to have a verified ventilation plan.
MSHA would verify the effectiveness of the mine ventilation plan for
each mechanized mining unit in controlling respirable dust under
typical mining conditions.

Summary of Legal Basis:

Promulgation of these regulations is authorized by section 101 of the
Federal Mine Safety and Health Act of 1977.

Alternatives:

In developing the proposed rule, we considered alternatives related to
typical production levels, the use of appropriate dust control
strategies, use of supplemental controls for mining entities other than
longwalls, and the level of protection of loose-fitting

[[Page 61232]]

powered air purifying respirators (PAPRS) in underground coal mines.

Anticipated Cost and Benefits:

Benefits sought are reduced dust levels over a miner's working lifetime
by the elimination of over-exposures to respirable coal dust on each
and every production shift. Additional benefits include reduced health
care costs and disability and black lung benefit payments. There would
be a cost savings for mine operators when MSHA completely takes over
compliance and abatement sampling for respirable dust. We developed
cost estimates and made them available for public review.

Risks:

Respirable coal mine dust is one of the most serious occupational
hazards in the mining industry. Occupational exposure to excessive
levels of respirable coal mine dust can cause black lung and silicosis,
which are potentially disabling and can cause death. We are pursuing
both regulatory and non-regulatory actions to eliminate these diseases
through the control of coal mine respirable dust levels in mines and
the reduction of miners' exposure.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 42122 07/07/00
Notice of Hearin65 FR 42186f Record 07/07/00
Extension of Com65 FR 49215; Close of Record 09/08/00
Final Action 09/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

Additional Information:

This rulemaking is related to RIN 1219-AB18 (Determination of

Concentration of Respirable Coal Mine Dust).

Agency Contact:
David L. Meyer
Director, Office of Standards
Department of Labor
Mine Safety and Health Administration
Room 631
4015 Wilson Boulevard
Arlington, VA 22203
Phone: 703 235-1910
Fax: 703 235-5551
Email: [email protected]
RIN: 1219-AB14
_______________________________________________________________________

DOL--MSHA

92. DETERMINATION OF CONCENTRATION OF RESPIRABLE COAL MINE DUST
Priority:

Other Significant

Legal Authority:

30 USC 811

CFR Citation:

30 CFR 72

Legal Deadline:

None

Abstract:

The National Institute for Occupational Safety and Health and the Mine
Safety and Health Administration jointly proposed that a single, full-
shift measurement (``single, full-shift sample'') will accurately
represent the atmospheric condition to which a miner is exposed. The
proposed rule addresses the U.S. Court of Appeals' concerns raised in
National Mining Association v. Secretary of Labor, 153 F3d 1264 (11th
Cir. 1998).

Statement of Need:

Respirable coal mine dust levels in this country are significantly
lower than they were over two decades ago. Despite this progress, there
continues to be concern about our current sampling programs' ability to
accurately measure and maintain respirable coal mine dust exposure at
or below the applicable standard on each shift. For as long as miners
have taken coal from the ground, many have suffered respiratory
problems due to their occupational exposures to respirable coal mine
dust. These respiratory problems affect the current workforce and range
from mild impairment of respiratory function to more severe diseases,
such as silicosis and pulmonary massive fibrosis. For some miners, the
impairment of their respiratory systems is so severe, they die
prematurely. Since there is a clear relationship between a miner's
cumulative exposure to respirable coal mine dust and the severity of
the resulting respiratory conditions, it is imperative that each
miner's exposure not exceed the applicable standard on each and every
shift.

Summary of Legal Basis:

Promulgation of this regulation is authorized by section 101 of the
Federal Mine Safety and Health Act of 1977.

Alternatives:

The requirements of this rule (``single full-shift sample rule'') will
work in tandem with those of the proposed rule (RIN 1219-AB14) in which
MSHA would verify the effectiveness of ventilation plans as well as
conduct all compliance sampling in underground coal mines.

Anticipated Cost and Benefits:

Risks:

Respirable coal mine dust is one of the most serious occupational
hazards in the mining industry. Occupational exposure to excessive
levels of respirable coal mine dust can cause workers' pneumoconiosis
and silicosis, which are potentially disabling and can cause death. We
are pursuing both regulatory and nonregulatory actions to eliminate
these diseases through the control of coal mine respirable dust levels
in mines and reduction of miners' exposure.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 42068 07/07/00
Notice of Hearin65 FR 42185f Record 07/07/00
Extension of Com65 FR 49215; Close of Record 09/08/00
Final Action 09/00/02
Regulatory Flexibility Analysis Required:

Yes

[[Page 61233]]

Small Entities Affected:

Businesses

Government Levels Affected:

None

Additional Information:

This rulemaking is related to RIN 1219-AB14 (Verification of
Underground Coal Mine Operators' Dust Control Plans and Compliance
Sampling for Respirable Dust).

Agency Contact:
David L. Meyer
Director, Office of Standards
Department of Labor
Mine Safety and Health Administration
Room 631
4015 Wilson Boulevard
Arlington, VA 22203
Phone: 703 235-1910
Fax: 703 235-5551
Email: [email protected]
RIN: 1219-AB18
_______________________________________________________________________

DOL--Occupational Safety and Health Administration (OSHA)

-----------

PROPOSED RULE STAGE

-----------

93. ASSIGNED PROTECTION FACTORS: AMENDMENTS TO THE FINAL RULE ON
RESPIRATORY PROTECTION
Priority:

Economically Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

29 USC 655(b); 29 USC 657

CFR Citation:

29 CFR 1910.134

Legal Deadline:

None

Abstract:

In January 1998, OSHA published the final Respiratory Protection
standard (29 CFR 1910.134), except for reserved provisions on assigned
protection factors (APFs) and maximum use concentrations (MUCs). APFs
are numbers that describe the effectiveness of the various classes of
respirators in reducing employee exposure to airborne contaminants
(including particulates, gases, vapors, biological agents, etc.).
Employers, employees, and safety and health professionals use APFs to
determine the type of respirator to protect the health of employees in
various hazardous environments. Maximum use concentrations establish
the maximum airborne concentration of a contaminant in which a
respirator with a given APF may be used.

Currently, OSHA relies on the APFs developed by NIOSH in the 1980s
unless OSHA has assigned a different APF in a substance-specific health
standard. However, many employers follow the more recent APFs published
in the industry consensus standard, ANSI Z88.2-1992. For some classes
of respirators, the NIOSH and ANSI APFs vary greatly.

When OSHA published the final Respiratory Protection standard in 1998,
it reserved for later rulemaking those provisions of the standard
dealing with APFs and MUCs. This rulemaking action will complete the
1998 standard, reduce compliance confusion among employers, and provide
employees with consistent and appropriate respiratory protection.

Statement of Need:

About 5 million employees wear respirators as part of their regular job
duties. Due to inconsistencies between the APFs found in the current
industry consensus standard (ANSI Z88.2-1992) and in the NIOSH
Respirator Decision Logic, employers, employees, and safety and health
professionals are often uncertain about what respirator to select to
provide protection against hazardous air contaminants. Several industry
and professional groups have asked OSHA to proceed with this rulemaking
to resolve these inconsistencies and provide reliable protection of
employees' health in cases where respirators must be worn.

Summary of Legal Basis:

The legal basis for this proposed rule is the determination that
assigned protection factors and maximum use concentrations are
necessary to complete the final Respiratory Protection standard and
provide the full protection of that standard.

Alternatives:

OSHA has considered allowing the current situation to continue, in
which OSHA generally enforces NIOSH APFs but many employers follow the
more recent consensus standard APFs. However, allowing the continuation
of this situation results in inconsistent enforcement, lack of guidance
for employers, and the potential for inadequate employee protection.

Anticipated Cost and Benefits:

The scope of the proposed APF table is still under development, and
estimates of the costs and benefits have not yet been developed.

Risks:

The preamble to the final Respiratory Protection rule (63 FR 1270, Jan.
8, 1998) discusses the significance of the risks potentially associated
with the use of respiratory protection. No independent finding of
significant risk will be made for the APF rulemaking, since it only
addresses a single provision of the larger rule.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 47 FR 20803 05/14/82
ANPRM Comment Period End 09/13/82
NPRM 59 FR 58884 11/15/94
Final Rule 63 FR 1152 01/08/98
Final Rule Effective 04/08/98
NPRM on APFs 09/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

State, Local, Tribal, Federal

Agency Contact:
Marthe B. Kent
Acting Director, Directorate of Health Standards Programs
Department of Labor
Occupational Safety and Health Administration
Room N3718
200 Constitution Avenue NW
FP Building
Washington, DC 20210
Phone: 202 693-1950
Fax: 202 693-1678
RIN: 1218-AA05
_______________________________________________________________________

DOL--OSHA

94. FIRE PROTECTION IN SHIPYARD EMPLOYMENT (PART 1915, SUBPART P)
(SHIPYARDS: FIRE SAFETY)
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

29 USC 655

[[Page 61234]]

CFR Citation:

29 CFR 1915, subpart P

Legal Deadline:

None

Abstract:

This proposal is being developed through the negotiated rulemaking
process. The rule will update and revise an important but outdated part
of OSHA's shipyard rules. The original rule was adopted by OSHA in 1971
and has remained unchanged since then. The negotiated rulemaking
committee was convened on October 15, 1996; members of the committee
include: OSHA, state government, Federal agency, small and large
shipyard employers, and maritime and firefighter union representatives.

Statement of Need:

Fires in the shipyard environment claim the lives of several workers
every year and thus account for a substantial number of deaths and more
than 50 serious burns occurring in this 75,000-employee workforce.
Updating OSHA's outdated shipyard requirements for fire extinguishers,
sprinkler systems, detection systems, alarm systems, and fire brigades
will facilitate compliance by employers and employees and reduce these
fire-related injuries and fatalities.

Summary of Legal Basis:

The legal basis for this proposed rule is a preliminary determination
that an unacceptable risk of fire-related injuries and fatalities
exists in the shipyard industry.

Alternatives:

OSHA has considered but rejected the alternative of allowing the
existing rule to remain in place, because the Agency believes that
doing so would contribute to the unacceptable number of fire-related
accidents occurring in shipyards every year.

Anticipated Cost and Benefits:

Detailed cost and benefits estimates have not yet been made for the
rule, because it is still in draft form.

Risks:

A detailed risk analysis has not yet been completed for this rule.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 09/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Agency Contact:
Marthe B. Kent
Director, Directorate of Safety Standards Programs
Department of Labor
Occupational Safety and Health Administration
Room N3605
200 Constitution Avenue NW
FP Building
Washington, DC 20210
Phone: 202 693-2222
Fax: 202 693-1663
RIN: 1218-AB51
_______________________________________________________________________

DOL--OSHA

95. STANDARDS IMPROVEMENT (MISCELLANEOUS CHANGES) FOR GENERAL INDUSTRY,
MARINE TERMINALS, AND CONSTRUCTION STANDARDS (PHASE II)
Priority:

Other Significant

Legal Authority:

29 USC 655(b)

CFR Citation:

29 CFR 1910.142; 29 CFR 1910.178; 29 CFR 1910.219; 29 CFR 1910.261; 29
CFR 1910.265; 29 CFR 1910.410; 29 CFR 1910.1001 to 1910.1052; 29 CFR
1926.60; 29 CFR 1926.62; 29 CFR 1926.1101; 29 CFR 1926.1127; 29 CFR
1926.1129; 29 CFR 1917.92; 29 CFR 1910, subpart Z

Legal Deadline:

None

Abstract:

The Occupational Safety and Health Administration's (OSHA's) process of
removing or revising provisions in its health standards are out of
date, duplicative, unnecessary, or inconsistent. The Agency is
proposing these changes to reduce the burden imposed on the regulated
community by these requirements. In this document, substantive changes
are proposed for standards that will revise or eliminate duplicative,
inconsistent, or unnecessary regulatory requirements without
diminishing employee protections. Phase I of this Standards Improvement
process was completed in June 1998 (63 FR 33450). OSHA plans to
initiate Phase III of this project at a future date to address problems
in various safety standards.

Statement of Need:

Some of OSHA's standards are out of date, duplicative, unnecessary, or
inconsistent. The Agency needs to periodically review its standards and
make needed corrections. This effort results in standards that are
easier for employers and employees to follow and comply with, and thus
enhances compliance and worker protection.

Summary of Legal Basis:

The legal basis for the proposed rule is a preliminary finding that the
OSHA standards need to be updated to bring them up to date, reduce
inconsistency, and remove unneeded provisions.

Alternatives:

OSHA has considered updating each standard as problems are discovered,
but has determined that it is better to make such changes to groups of
standards so it is easier for the public to comment on like standards.
OSHA has also considered the inclusion of safety standards that need to
be updated. However, the Agency has decided to pursue a separate
rulemaking for safety issues because the standards to be updated are of
interest to different stakeholders.

Anticipated Cost and Benefits:

This revision of OSHA's standards is a deregulatory action. It will
reduce employers' compliance obligations.

Risks:

The project does not address specific risks, but is intended to improve
OSHA's standards by bringing them up do date and deleting unneeded
provisions. The anticipated changes will have no negative effects on
worker safety and health.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 09/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

[[Page 61235]]

Agency Contact:
Marthe B. Kent
Acting Director, Directorate of Health Standards Programs
Department of Labor
Occupational Safety and Health Administration
Room N3718
200 Constitution Avenue NW
FP Building
Washington, DC 20210
Phone: 202 693-1950
Fax: 202 693-1678
RIN: 1218-AB81
_______________________________________________________________________

DOL--OSHA

-----------

FINAL RULE STAGE

-----------

96. UPDATE AND REVISION OF THE EXIT ROUTES STANDARD
Priority:

Other Significant

Legal Authority:

29 USC 655(b); 5 USC 353

CFR Citation:

29 CFR 1910.35; 29 CFR 1910.36; 29 CFR 1910.37; 29 CFR 1910.38

Legal Deadline:

None

Abstract:

Many Occupational Safety and Health Administration (OSHA) standards
were adopted under section 6(a) of the Occupational Safety and Health
Act (OSH Act; 29 U.S.C. 655(a)). This section of the OSH Act authorized
the Agency, in its first 2 years of existence, to adopt national
consensus standards without prior notice and comment. The versions of
the consensus standards OSHA adopted are now typically well over 30
years old and have been superseded by newer ones. In addition, many of
these old standards were written in technical jargon and were hard for
many employers and employees to understand.

To address these problems, OSHA is undertaking a consensus standards
initiative to revise OSHA's exit routes (also known as means of egress)
standard. The revisions will rewrite the standard in simple, easy-to-
understand language that will be easier for employers and employees to
follow.

Statement of Need:

The standard being revised in this initiative is one of OSHA's oldest
and most difficult to understand. The Agency has identified the exit
routes standard as a standard in need of revision because it is out of
date and unnecessarily complex, and stakeholders have recommended that
the standard be updated quickly. OSHA also believes that revising the
standard will lead to better voluntary compliance and fewer disputes
about violations. With OSHA's limited resources, any effort that can
substantially increase opportunities for compliance without sacrificing
employee safety and health protection will have long-term benefits.

Summary of Legal Basis:

The legal basis for the final rule will be a finding that, by making
these OSHA standards easier to understand and comply with, the Agency
will increase compliance and reduce work-related injuries and deaths.

Alternatives:

The alternative considered - leaving the outdated standard on the books
- has been rejected because doing so would not encourage compliance or
enhance safety.

Anticipated Cost and Benefits:

The final standard for exit routes will have no economic impacts
because this revision will not increase employers' obligations or
reduce employee protections.

Risks:

Employees can be injured or killed if they are not able to exit an area
safely when a fire or other emergency occurs.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 61 FR 47712 09/10/96
Public Hearing 62 FR 9402 04/29/97
Final Rule 06/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

Agency Contact:
Marthe B. Kent
Director, Directorate of Safety Standards Programs
Department of Labor
Occupational Safety and Health Administration
Room N3605
200 Constitution Avenue NW
FP Building
Washington, DC 20210
Phone: 202 693-2222
Fax: 202 693-1663
RIN: 1218-AB82
_______________________________________________________________________

DOL--OSHA

97. SIGNS, SIGNALS, AND BARRICADES
Priority:

Other Significant

Unfunded Mandates:

Undetermined

Legal Authority:

29 USC 651(b); 29 USC 655(b); 40 USC 333

CFR Citation:

29 CFR 1926

Legal Deadline:

None

Abstract:

Subpart G of 29 CFR part 1926 addresses the types of signs, signals and
barricades that must be used in situations such as work areas on
highways. OSHA's rule incorporates a 1971 ANSI standard, known as the
MUTCD (Manual on Uniform Traffic Control Devices). Since the early
1970's, the U.S. Department of Transportation has drafted updates to
the MUTCD. DOT requires all States to comply with its updates.

Several years ago, industry stakeholders asked OSHA to update its
standard to reflect new technology and provide more flexibility for
compliance.

OSHA has decided to use a Direct Final Rule to update its standard
since it anticipates widespread support for and few objections to the
change. The Agency's Advisory Committee on Construction Safety and
Health endorsed using a Direct Final Rule to make this change in its
Winter 2000 meeting.

With the current emphasis on rebuilding the Nation's highways and
improving safety in work zone areas, OSHA's update is particularly
appropriate.

[[Page 61236]]

Statement of Need:

The safe and efficient flow of traffic through construction work zones
is a major concern to transportation officials, the highway industry
and the traveling public. Today the majority of highway funds are being
used on system preservation-type projects (resurfacing, restoration,
rehabilitation, and reconstruction) on the existing highway system;
highway construction of this type is at an all time high and will
continue for several years to come.

The fatality rate for highway construction workers is twice the rate
for other types of construction trades (DOT FHWA Office of Program
Quality Coordination, Sept. 1998).

Summary of Legal Basis:

The legal basis for this direct final rule is a finding by the
Secretary of Labor that the number of highway work zone injuries and
fatalities is high and that the outdated OSHA standard may be
contributing to this result.

Alternatives:

The Directorate of Construction has formed a task group to formulate a
plan for reducing the number of highway work zone fatalities. In order
for this group to accomplish its mission the standards must reflect new
technology and best practices. Other alternatives, such as compliance
assistance and partnership programs, will not achieve these goals.

Anticipated Cost and Benefits:

The overwhelming majority of public roads are currently covered by DOT
regulations and their related State traffic control manuals. Moreover,
private roads constitute the minority of total roads, and some local
governments extend coverage to these roads. Accordingly, OSHA will be
solely responsible for regulating only a fraction of all highway work.
The costs of compliance for those solely regulated by OSHA will,
therefore, be much lower than those estimated for compliance with DOT
regulations. Because DOT has found no significant costs of compliance
for revisions of the MUTCD over the years, the costs of compliance for
OSHA's direct final rule likewise will not be significant under
Executive Order 12866.

Risks:

OSHA believes that the adoption of the direct final rule will have a
direct impact on the safety of workers engaged in work zone activities,
although the extent of this risk reduction has not been quantified at
this point.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Direct Final Rule 01/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
Russell B. Swanson
Director, Directorate of Construction
Department of Labor
Occupational Safety and Health Administration
Room N3468
200 Constitution Avenue NW
FP Building
Washington, DC 20210
Phone: 202 693-2020
Fax: 202 693-1689
Email: [email protected]
RIN: 1218-AB88
BILLING CODE 4510-23-S

[[Page 61237]]

DEPARTMENT OF TRANSPORTATION (DOT)

Statement of Regulatory Priorities
The Department of Transportation (DOT) consists of ten operating
administrations, the Bureau of Transportation Statistics and the Office
of the Secretary, each of which has statutory responsibility for a wide
range of regulations. For example, DOT regulates safety in the
aviation, motor carrier, railroad, mass transit, motor vehicle,
maritime, commercial space, and pipeline transportation areas. DOT
regulates aviation consumer and economic issues and provides financial
assistance and writes the necessary implementing rules for programs
involving highways, airports, mass transit, the maritime industry,
railroads, and motor vehicle safety. It writes regulations carrying out
such disparate statutes as the Americans with Disabilities Act and the
Uniform Time Act. It regulates the construction and operation of
bridges over navigable waters, the prevention of oil pollution, and the
security of commercial aviation and passenger vessels. Finally, DOT has
responsibility for developing policies that implement a wide range of
regulations that govern internal programs such as acquisition and
grants, access for the disabled, environmental protection, energy
conservation, information technology, occupational safety and health,
property asset management, seismic safety, security, and the use of
aircraft and vehicles.
The Department has adopted a regulatory philosophy that applies to all
its rulemaking activities. This philosophy is articulated as follows:
DOT regulations must be clear, simple, timely, fair, reasonable, and
necessary. They will be issued only after an appropriate opportunity
for public comment, which must provide an equal chance for all affected
interests to participate, and after appropriate consultation with other
governmental entities. The Department will fully consider the comments
received. It will assess the risks addressed by the rules and their
costs and benefits, including the cumulative effects. The Department
will consider appropriate alternatives, including nonregulatory
approaches. It will also make every effort to ensure that legislation
does not impose unreasonable mandates.
The Department's regulatory policies and procedures provide a
comprehensive internal management and review process for new and
existing regulations and ensure that the Secretary and other
appropriate appointed officials review and concur in all significant
DOT rules. DOT continually seeks to improve its regulatory process. The
Department's creation of an electronic, Internet-accessible docket that
can also be used to submit comments electronically; the use of direct
final rulemaking; and the use of regulatory negotiation are three
examples of this. During the next year, the Department will be taking
steps to further improve our regulations by ensuring timely completion
of quality rulemaking actions. We will be creating an Internet site
where the public can access up-to-date information about the status of
our significant rulemakings. We will also be developing a ``list
serve'' for our Internet-accessible rulemaking dockets to permit the
public to sign up for email notification when the Department issues a
rulemaking document.
In addition, the Department continues to engage in a wide variety of
activities to help cement the partnerships between its agencies and its
customers that will produce good results for transportation programs
and safety. These have included summits with front-line regulators and
representatives of regulated industries. In addition, the Department's
agencies have established a number of continuing partnership mechanisms
in the form of rulemaking advisory committees.
Throughout the Department, we are also actively engaged in the review
of existing rules to determine whether they need to be revised or
revoked. These reviews are in accordance with section 610 of the
Regulatory Flexibility Act, the Department's regulatory policies and
procedures, and Executive Order 12866. This also includes determining
if the rules would be more understandable if they are written using the
plain language approach. Appendix D to our Regulatory Agenda highlights
our efforts in this area.
Office of the Secretary of Transportation (OST)
The Office of the Secretary (OST) oversees the regulatory process for
the Department. OST implements the Department's regulatory policies and
procedures and is responsible for ensuring the involvement of top
management in regulatory decisionmaking. Through the General Counsel's
office, OST is also responsible for ensuring that the Department
complies with Executive Order 12866 and other legal and policy
requirements affecting rulemaking, including new statutes and Executive
orders. Although OST's principal role concerns the review of the
Department's significant rulemakings, this office has the lead role in
the substance of projects concerning aviation economic rules and those
affecting the various elements of the Department.
OST provides guidance and training regarding compliance with
regulatory requirements and process for use by personnel throughout the
Department. OST also plays an instrumental part in the Department's
efforts to improve our economic analyses, risk assessment, and
regulatory flexibility analyses.
OST also leads and coordinates the Department's response to
Administration and congressional proposals that concern the regulatory
process. The General Counsel's Office works closely with
representatives of other agencies, the Office of Management and Budget,
the White House, and congressional staff to provide information on how
various proposals would affect the ability of the Department to perform
its safety, infrastructure, and other missions.
During fiscal year 2002, OST expects to publish a notice of proposed
rulemaking (NPRM) on whether it should readopt its rules governing
airline computer reservation systems (CRS) and, if so, whether they
should be strengthened, and if they should be applied to the sale of
airline services over the Internet. OST expects to substantially
complete work on a CRS final rule during the fiscal year. OST also
expects to publish two NPRMs to implement provisions of the Aviation
Investment and Reform Act for the 21st Century, signed into law in
April 2000. One NPRM will seek to amend 14 CFR part 382, DOT's Air
Carrier Access Act (ACAA) implementing rule, to cover foreign carriers
operating to and from the United States or code sharing with the U.S.
carriers. Another NPRM will propose to require air carriers to file
with DOT detailed information on the disability-related complaints they
receive to be used for enforcement, educational and other relevant
purposes by DOT, disabled air travelers and Congress. OST also expects
to substantially complete work on a final rule on the reporting
requirements during FY 2002.
OST is continually incorporating new technology into its rulemaking
process through the docket management system (DMS). The DMS stores
electronic images in unalterable form. It includes all rulemaking and
support documents, public comments, and other documents

[[Page 61238]]

included in the public docket. This electronic docket is accessible via
the Internet, and now accepts electronic filing of comments. OST and
the General Counsel's Office include hyperlinks to other useful DOT
regulatory Web sites, including the public rulemaking dockets, and
contacts for many issues of special interest to the public (http://
regs.dot.gov/).
United States Coast Guard (USCG)
The United States Coast Guard's statutory responsibilities include
protecting the marine environment; enforcing U.S. laws and
international treaties; performing search and rescue; and ensuring
marine safety and security.
The majority of the regulatory actions issued by the Coast Guard are
classified as routine and frequent because they take effect for a
limited time and at specific locations. These temporary actions allow
local Coast Guard units to ensure safety during marine events. The
Coast Guard issues approximately 20 regulations annually that set
national standards or respond to specific statutory mandates. The
Marine Safety Council, a board of senior Coast Guard Leaders, approves
each of these rulemaking projects, monitors the Coast Guard's
regulatory program, and advises the Commandant on regulatory matters.
The following are significant aspects of the Coast Guard's regulatory
program:
The Coast Guard continues using plain language format for its
notices and regulations. Plain language updates will be an
important part of the Coast Guard's review of all
regulations under the Regulatory Flexibility Act. The Coast
Guard recognizes that this format facilitates better
understanding of regulations and promotes more public
participation.
The Coast Guard encourages early public involvement in
rulemaking through a variety of public meetings and the
ongoing work of ten advisory committees. In addition,
public comments are requested on existing rules identified
for analysis each year and identified in Appendix D of the
fall agenda.
Recognizing that it should issue only necessary regulations
tailored to impose the least burden on society, the Coast
Guard has developed a broad Prevention Through People
Program, which develops and encourages a wide variety of
voluntary actions by industry and individuals to improve
marine safety. To support this effort, the Coast Guard has
several Quality Partnerships.
Finally, to ensure that all regulations are necessary, each
agenda item specifies how it supports at least one of the
goals of the Coast Guard's Strategic Plan. Strategic goals
include maritime safety, protection of natural resources,
maritime security, maritime mobility, and national defense.
Federal Aviation Administration (FAA)
The FAA issues regulations to provide a safe, secure, and efficient
global aviation system for civil aircraft. In an effort to make sure
their rules are concise and easy to understand, the FAA re-examined the
use of plain language in their regulations. The result of this review
was revisions to 14 CFR part 11, which delineates the process for
rulemaking changes. This rulemaking effort is only the first of several
planned revisions to the regulations. Other actions include:
Supporting the FAA's Safety Agenda on Safer Skies. This agenda
is based on a comprehensive review of the causes of
aviation accidents and is designed to bring about a five-
fold (80 percent) reduction in fatal accidents. The
reformed rulemaking process supports this agenda by
ensuring that appropriate resources are available to
support those rulemaking projects identified as the
agency's highest priority. Projects related to controlled
flight into terrain, loss of control of an aircraft,
uncontained engine failures, runway incursions, weather,
pilot decisionmaking, and cabin safety are some of the
focus areas identified that may result in rulemaking,
advisory and guidance materials.
Continuing to involve the aviation community early in the
regulatory process. The Aviation Rulemaking Advisory
Committee completed numerous reports and recommendations,
leading to the publication of seven regulatory actions and
issuance of several advisory circulars and other guidance
materials. The FAA Aging Transport Nonstructural Systems
Plan addresses concerns with potential safety issues
associated with problems that may develop in transport
category airplanes systems as a result of wear and
degradation in service. One important component of the plan
is use of the Aging Transport Nonstructural Systems
Rulemaking Advisory Committee to provide a mechanism for
public input to FAA activities. The FAA will receive
recommendation from the Committee in the form of
regulations, guidance materials and training requirements
supporting enhanced airworthiness for airplane systems.
Continuing to harmonize the U.S. aviation regulations with
those of other countries. The harmonization of the U.S.
regulations with the European Joint Aviation Regulations
(JAR) is the FAA's most comprehensive long-term rulemaking
effort. The differences worldwide in certification
standards, practices and procedures, and operating rules
must be identified and minimized to reduce the regulatory
burden on the international aviation system. The
differences between the FAA regulations and the
requirements of other nations impose a heavy burden on U.S.
aircraft manufacturers and operators. Harmonization and
standardization should help the U.S. aerospace industry
remain internationally competitive. While the overall
effort to achieve this is global, it will be accomplished
by many small, individual, nonsignificant rulemaking
projects. The FAA has published 30 regulations based on
recommendations of ARAC that will lead to harmonizing FAA
regulations and Joint Aviation Requirements.
Continuing to recognize the needs of small entities by
complying with the Small Business Regulatory Enforcement
Fairness Act and addressing small entity concerns whenever
appropriate in rulemaking documents. In response to the
Act, the FAA has established a Small Entity Contact, a Web
site on FAA's home page, a toll free number, and an e-mail
address for receipt of inquiries.
Ensuring that the congressional mandates for rulemaking
deadlines established by the FAA Reauthorization Act of
1996 are met. One mandate is the issuance of a final rule
16 months after the close of the comment period on the
proposed rule.
Top regulatory priorities for 2001-2002 include a duty limitations and
rest requirements proposal to ensure that pilots are sufficiently
rested for duty, and final rules concerning certification of airports
and thermal acoustic insulation flammability and fractional ownership.
Federal Highway Administration (FHWA)
The FHWA anticipates that its priority for fiscal year 2002 will be
continuing implementation of the

[[Page 61239]]

Transportation Equity Act for the 21st Century (TEA-21), which
reauthorizes the surface transportation programs administered by the
FHWA. The FHWA will continue to implement this legislation in the least
burdensome and restrictive way possible consistent with the FHWA's
mission. The FHWA will continue to pursue regulatory reform in areas
where project development can be streamlined or accelerated,
duplicative requirements can be consolidated, recordkeeping
requirements can be reduced or simplified, and the decisionmaking
authority of our State and local partners can be increased.
Federal Motor Carrier Safety Administration (FMCSA)
The FMCSA is the newest agency in the Department of Transportation. It
was established on January 1, 2000, by the Motor Carrier Safety
Improvement Act of 1999 (MCSIA) (Pub. L. 106-159). As required by
MCSIA, FMCSA has developed a strong Safety Action Plan to guide it
toward the goal of reducing the number of fatalities resulting from
crashes involving large trucks. Setting new performance standards for
vehicles, drivers, and motor carriers through regulation will raise the
bar for safety in commercial operations. The FMCSA now is responsible
for most of the functions of the former Office of Motor Carriers in the
Federal Highway Administration. Several new regulatory initiatives are
required by MCSIA. Over the next year, the new FMCSA is committed to
developing an effective and efficient regulatory program that meets the
expectations of Congress, its stakeholders and partners, and the
general public. This will assist the new agency in meeting one of the
stated goals of MCSIA to reduce the number and severity of large-truck
involved crashes through expedited completion of rulemaking
proceedings.
National Highway Traffic Safety Administration (NHTSA)
The statutory responsibilities of the National Highway Traffic Safety
Administration (NHTSA) relating to motor vehicles include reducing the
number of and mitigating the effects of motor vehicle crashes and
related fatalities and injuries, providing motor vehicle information to
consumers, and improving automotive fuel efficiency. NHTSA pursues
policies that encourage the development of nonregulatory approaches
when feasible in meeting its statutory mandates. It issues new
standards and regulations or amendments to existing standards and
regulations when appropriate. It ensures that regulatory alternatives
reflect a careful assessment of the problem and a comprehensive
analysis of the benefits, costs, and other impacts associated with the
proposed regulatory action. Finally, it considers alternatives
consistent with the Administration's regulatory principles.
In addition to numerous programs that focus on the safety and
performance of the motor vehicle, the Agency is engaged in a variety of
programs to improve driver behavior. These programs emphasize the human
aspects of motor vehicle safety and recognize the important role of the
States in this common pursuit. This goal is accomplished through a
number of means, including encouraging initiatives in such areas as
safety belt use, child safety-seat use, activities aimed at combating
impaired driving and aggressive driving, and consumer information
activities.
NHTSA is conducting several program evaluations that are designed to
review and evaluate the actual benefits, costs, and overall
effectiveness of existing standards and regulations. For example, it
will continue evaluating Standard 208's new measures to improve the
safety performance of air bags, Standard 214's dynamic side-impact
requirements, the use/misuse of air bag on-off switches, and odometer
fraud. It is also evaluating the efficacy of child safety seat
registration for increasing consumer response to recalls of defective
seats. NHTSA is starting two evaluations of safety equipment for heavy
trucks and tractor trailers: antilock brake systems (Standard 121) and
rear impact guards (Standards 223 and 224).
NHTSA's regulatory program includes additional proposals that will be
undertaken in order to allow design flexibility, promote new
technology, and encourage market competition and consumer choice.
Federal Railroad Administration (FRA)
The Federal Railroad Administration (FRA) exercises regulatory
authority over all areas of railroad safety.
Fashioning regulations that have favorable benefit-to-cost ratios and
that, where feasible, incorporate flexible performance standards,
requires cooperative action by all affected parties. In order to foster
an environment of collaborative rulemaking, FRA established the
Railroad Safety Advisory Committee (RSAC). The purpose of RSAC is to
develop consensus recommendations for regulatory action on issues
referred to it by FRA. Where consensus is achieved, and FRA believes it
serves the public interest, the resulting rule is very likely to be
better understood, more widely accepted, more cost-beneficial, and more
correctly applied. Where consensus cannot be achieved, however, FRA
will fulfill its regulatory role without the benefit of RSAC's
recommendations.
The RSAC has met on a quarterly basis so far and currently has working
groups addressing the following tasks: (1) The development of
regulations governing track and railroad maintenance equipment; (2) the
review of FRA regulations for their applicability to historic
railroads; (3) the development of safety standards for locomotive
crashworthiness; (4) the development of safety standards for locomotive
working conditions; (5) the development of locomotive event recorder
accident survivability standards; (6) the development of regulations
governing the use of processor-based signal and train control systems;
(7) the development of a new accident reporting threshold; (8) the
revision of FRA's accident/incident reporting regulations to ensure
conformity with OSHA's revised occupational injury and illness
reporting regulations; and (9) the revision of regulations governing
the use of utility employees.
In addition to RSAC, FRA continues to use collaborative rulemaking to
address passenger safety issues. FRA established a working group to
address Passenger Equipment Safety Standards and published a final rule
in the first phase of this rulemaking initiative in May 1999 based on
its recommendations. FRA also employed a working group to develop
Passenger Train Emergency Preparedness regulations. FRA continues to
conduct research related to the second phase of the rule, and expects
to convene a reconstituted working group on Passenger Safety Standards
in late 2001. FRA also engaged in extensive public outreach to develop
regulations regarding the use of train whistles, and published an NPRM
in January 2000.
Federal Transit Administration (FTA)
The Federal Transit Administration (FTA) provides financial assistance
to State and local governments for mass transportation purposes. The
regulatory activity of FTA focuses on establishing the terms and
conditions of Federal financial assistance available under the Federal
transit laws.

[[Page 61240]]

FTA's policy regarding regulations is to:
Implement statutory authorities in ways that provide the
maximum net benefits to society;
Keep paperwork requirements to a minimum;
Allow for as much local flexibility and discretion as is
possible within the law;
Ensure the most productive use of limited Federal resources;
Protect the Federal interest in local investments; and
Incorporate good management principles into the grant
management process.
As mass transportation needs have changed over the years, so have the
requirements for Federal financial assistance under the Federal transit
laws and related statutes. FTA's regulatory priorities for 2001-2002
are to continue to issue rulemakings required under the Transportation
Equity Act for the 21st Century (TEA-21), to amend existing regulations
as needed, and to update existing regulations for plain language.
FTA will publish a rule implementing the Clean Fuels Formula Grant
Program authorized by TEA-21. The program will assist eligible
applicants in meeting the objectives of reducing transit bus emissions
and supporting emerging markets for clean fuel technologies.
TEA-21 also requires that FTA and FHWA amend the joint Environmental
and Statewide and Metropolitan Transportation Planning rules which will
be of significant interest to States, transit agencies, local
governmental bodies, and environmental groups.
Maritime Administration (MARAD)
MARAD administers Federal laws and programs designed to promote and
maintain a U.S. merchant marine capable of meeting the Nation's
shipping needs for both national security and domestic and foreign
commerce.
MARAD's regulatory objectives and priorities reflect the Agency's
responsibility of ensuring the availability of adequate and efficient
water transportation services for American shippers and consumers. To
advance these objectives, MARAD issues regulations, which are
principally administrative and interpretive in nature, when
appropriate, in order to provide a net benefit to the U.S. maritime
industry.
MARAD's regulatory priorities are to update existing regulations and
to reduce unnecessary burden on the public.
Research and Special Programs Administration (RSPA)
The Research and Special Programs Administration (RSPA) has
responsibility for rulemaking under two programs. Through the Associate
Administrator for Hazardous Materials Safety, RSPA administers
regulatory programs under Federal hazardous materials transportation
law and the Federal Water Pollution Control Act, as amended by the Oil
Pollution Act of 1990. Through the Associate Administrator for Pipeline
Safety, RSPA administers regulatory programs under the Federal pipeline
safety laws and the Federal Water Pollution Control Act, as amended by
the Oil Pollution Act of 1990.
In the area of hazardous materials transportation, the regulatory
priority is to clarify through rulemaking the applicability of
regulations to the loading, unloading, and storage of hazardous
materials incidental to their movement in commerce. Clarifying the
applicability of the regulations will facilitate compliance with them
and also clarify when other requirements of Federal, State, local, and
tribal governments apply.
Bureau of Transportation Statistics (BTS)
The Bureau of Transportation Statistics (BTS) is responsible for
collecting, compiling, analyzing, and making accessible information on
the Nation's transportation systems; identifying needs for new
information and analysis and implementing programs to meet those needs;
and enhancing the quality and effectiveness of the Department's
statistical programs through research, the development of guidelines,
coordination with related information-gathering activities conducted by
other Federal agencies, and the promotion of improvements in data
acquisition, archiving, dissemination, and use.
BTS's Office of Airline Information (OAI) collects airline financial
and operating statistical data, covering both passenger and cargo
traffic. This information gives the Government consistent and
comprehensive economic and market data on individual airline operations
and is used, for instance, in supporting policy initiatives,
negotiating international bilateral aviation agreements, awarding
international route authorities, and meeting international treaty
obligations. The aviation, travel, and tourism communities value this
information for a variety of purposes, such as conducting analyses of
on-time performance, denied boardings, market trends, and economic
analyses.
During FY 2002, BTS expects to publish a notice of proposed rulemaking
(NPRM) and final rule concerning airline delays and cancellations. BTS
is exploring the feasibility of collecting information as to the causes
of flight delays and cancellations. As part of a pilot project
examining the feasibility of developing a uniform collection
methodology, four volunteer air carriers have been providing to BTS, on
a confidential basis, flight delay and cancellation causal data. BTS
hopes to develop a reporting system that would allow relevant causal
information to be disseminated to the traveling public. In addition, a
reporting system would enable the Department to better identify the
causes of delays and evaluate its efforts to mitigate such causes.
BTS' long-range regulatory priority in the aviation area is to conduct
a complete review and modernization of the Passenger Origin and
Destination Survey. BTS can make significant improvements by providing
data to meet the needs of DOT and other users in a way that takes
advantage of the information revolution and matches the dramatically
changing airline industry.
BTS, in conjunction with the Office of the Secretary, is in the
process of performing a zero-base review of the financial and traffic
data to determine what, if any, revisions can be made to the current
data collections to ensure that these collections fully support the
Department's mandated aviation responsibilities. Moreover, the review
will seek to identify potential savings to the affected air carriers
and the Government that can be accomplished through the application of
advanced information technologies to the collection, processing,
validation, and dissemination of aviation data. BTS's review and
modernization of the Passenger Origin and Destination Survey will be
incorporated as part of this zero-base review.
Saint Lawrence Seaway Development Corporation (SLSDC)
The Saint Lawrence Seaway Development Corporation (SLSDC) is a wholly
owned Government corporation created by Congress in 1954. The primary
operating service of the SLSDC is to ensure the safe transit of

[[Page 61241]]

commercial and noncommercial vessels through the two U.S. locks and
navigation channels of the Saint Lawrence Seaway System. The SLSDC
works jointly with its Canadian counterpart to operate and maintain
this deep draft waterway between the Great Lakes and the Atlantic
Ocean. The SLSDC also works jointly with its Canadian counterpart on
all matters related to rules and regulations, overall operations,
vessel inspection, traffic control, navigation aids, safety, operating
dates, and trade development programs.
The regulatory priority of the SLSDC is to provide its customers with
the safest, most reliable, and most efficient Seaway System possible.
_______________________________________________________________________

DOT--U.S. Coast Guard (USCG)

-----------

PROPOSED RULE STAGE

-----------

98. +SALVAGE AND MARINE FIREFIGHTING REQUIREMENTS; VESSEL RESPONSE
PLANS FOR OIL (USCG-1998-3417)
Priority:

Other Significant

Legal Authority:

33 USC 1321

CFR Citation:

33 CFR 155

Legal Deadline:

None

Abstract:

Current vessel response plan regulations require that the owners or
operators of vessels carrying groups I through V petroleum oil as a
primary cargo identify in their response plans a salvage company with
expertise and equipment, and a company with firefighting capability
that can be deployed to a port nearest to the vessel's operating area
within 24 hours of notification (groups I-IV) or a discovery of a
discharge (group V). Numerous requests for clarification revealed
widespread misunderstanding and confusion regarding the regulatory
language, which will make the implementation of this requirement
difficult. Based on comments received after the Vessel Response Plan
final rule publication (61 FR 1052; January 12, 1996) and during a
Coast Guard hosted workshop, the Coast Guard intends to better define
the terms ``salvage expertise and equipment'' and ``vessel firefighting
capability'' requirements and will reconsider the 24-hour deployment
requirement which was scheduled to go into effect on February 18, 1998.
Therefore, the Coast Guard suspended the effective dates of the 24-hour
deployment requirements as published in the final rule. The Coast Guard
will continue with this project to better define the requirements. This
rulemaking supports the Coast Guard's strategic goals of maritime
safety and protection of the natural resources. This rulemaking is DOT-
significant because it concerns a matter of substantial public interest
or controversy.

Statement of Need:

This rulemaking is intended to reduce the impact of oil spills from
vessels.

Summary of Legal Basis:

The statutory authority for this rulemaking is 33 U.S.C. 1321.

Alternatives:

The Coast Guard hosted a workshop to solicit comments from the public
on potential alternatives to the salvage and marine firefighting
requirements contained in the vessel response plan rule.

Anticipated Cost and Benefits:

Undetermined

Risks:

The purpose of this rulemaking is to better define the terms ``salvage
expertise and equipment'' and ``vessel firefighting capability''
requirements and to reconsider the 24-hour deployment requirement. The
objective is to improve response and reduce environmental damage from
oil spills.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Final Rule - Par63 FR 7069nsion 02/12/98
Final Rule - Par66 FR 3876nsion 01/17/01
NPRM 02/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Additional Information:

Partial suspension of regulations created through the Vessel Response
Plan final rule, docket no. 91-034, RIN 2115-AD81. The project was
originally titled ``Salvage and Firefighting Equipment; Vessel Response
Plans.'' The change was made in order to distinguish this project from
other similarly titled projects within the Coast Guard.

Agency Contact:
Douglas Lincoln
Project Manager, G-MOR-3
Department of Transportation
U.S. Coast Guard
2100 Second Street SW
Washington, DC 20593-0001
Phone: 202 267-0448
RIN: 2115-AF60
_______________________________________________________________________

DOT--USCG

99. +TANK LEVEL OR PRESSURE MONITORING DEVICES (USCG-2001-9046)
Priority:

Other Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

46 USC 3703

CFR Citation:

46 CFR 32; 33 CFR 157

Legal Deadline:

Final, Statutory, August 1991, Section 4110 of the Oil Pollution Act of
1990 (OPA 90).

Final, Judicial, May 2002.

Abstract:

The U.S. Court of Appeals for the District of Columbia issued a Writ of
Mandamus requiring the Coast Guard to promulgate regulations for tank
level or pressure monitoring (TLPM) devices as mandated by OPA 90. This
regulatory project will establish performance standards for TLPM
devices and require tank vessels to install such devices. This project
is considered economically significant because of substantial public
and industry interest and possible significant economic impact of the
rulemaking. This rulemaking falls under the Coast Guard's strategic
goal of protection of natural resources.

Statement of Need:

This rulemaking is required by section 4110 of the Oil Pollution Act of
1990, P.L. 101-380.

[[Page 61242]]

Summary of Legal Basis:

This rule is required by section 4110 of the Oil Pollution Act of 1990
as determined by the U.S. Court of Appeals for the D.C. circuit in May
2001. The Coast Guard is under a Writ of Mandamus to publish a rule
requiring the use of Tank Vessel Pressure Monitoring devices.

Alternatives:

Alternatives considered for analysis include two performance standards,
however, the same cost will be achieved using either standard. We also
considered the applicability of the rule to different types of vessels.
Variations of these alternatives are presented as eight options in the
NPRM.

Anticipated Cost and Benefits:

The present value cost of the proposed rule over the 13-year period of
analysis (2002-2014) would range from approximately $64 million to $211
million depending on the option selected. Virtually all of the costs
will be incurred during the 3-year or 5-year phase-in period. Under the
most expensive option, the cost in nominal terms is estimated to be $80
million. Over the 13-year period of analysis, this analysis estimates
that TLPM devices will reduce the amount of oil spilled in the United
States by an estimated range of 211 barrels to 1,425 barrels, depending
on the option selected.

Risks:

This rule addresses the risk of slow leakage from tank vessels that
might otherwise go undetected. It is one of the many statutory
requirements mandated by the Oil Pollution Act of 1990, which
eliminates a number of oil pollution risks.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 49877 10/01/01
NPRM Comment Period End 11/30/01
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Energy Effects:

Statement of Energy Effects planned as required by Executive Order
13211.

Additional Information:

This project is reopened with a new RIN and DMS docket number. The
Coast Guard is reopening this project per writ of mandamus by the D.C.
Circuit Court directing the Coast Guard to implement certain provisions
of the Oil Pollution Act of 1990. It was previously captioned with
docket number 90-071, and RIN 2115-AD69.

Agency Contact:
LCDR Glen Mine
Project Manager, G-MSR-2
Department of Transportation
U.S. Coast Guard
2100 Second Street SW
Washington, DC 20593-0001
Phone: 202 267-1303
RIN: 2115-AG10
_______________________________________________________________________

DOT--USCG

-----------

FINAL RULE STAGE

-----------

100. +MARINE TRANSPORTATION-RELATED FACILITY RESPONSE PLANS FOR
HAZARDOUS SUBSTANCES (USCG-1999-5705)
Priority:

Other Significant

Legal Authority:

33 USC 1321(j); PL 101-380

CFR Citation:

33 CFR 154

Legal Deadline:

None

Abstract:

This project would implement provisions of the Oil Pollution Act of
1990 that require an owner or operator of a marine transportation-
related facility transferring bulk hazardous substances to develop and
operate in accordance with an approved response plan. The regulations
would apply to marine transportation-related facilities that, because
of their location, could cause harm to the environment by discharging a
hazardous substance into or on the navigable waters or adjoining
shoreline. A separate rulemaking, under RIN 2115-AE88, was developed in
tandem with this rulemaking and addresses hazardous substances response
plan requirements for tank vessels. This project supports the Coast
Guard's strategic goals of maritime safety and protection of natural
resources by reducing the amount of chemicals entering the environment,
as well as reducing the consequence of pollution incidents. This action
is considered significant because of substantial public and industry
interest.

Statement of Need:

This rulemaking is intended to reduce the impact from hazardous
substance spills from marine transportation-related facilities.

Summary of Legal Basis:

Section 4202(a) of the Oil Pollution Act of 1990 (OPA 90), codified at
33 U.S.C. 1321(j)(5), mandates that the President issue regulations
requiring the preparation of oil and hazardous substance discharge
response plans. Although section 4202(b)(4) of OPA 90 established an
implementation schedule for these response plans for oil, it did not
establish a deadline for submission or approval of hazardous substances
response plans. The Coast Guard has issued separate final rules
governing response plan requirements for vessels carrying oil in bulk
as cargo and facilities that handle, store, or transport oil in bulk.
Under 33 U.S.C. 1321, ``hazardous substances'' are designated by the
Administrator of the Environmental Protection Agency. The Administrator
has designated 297 chemicals as hazardous substances under this
section. The Coast Guard has identified 82 hazardous substances
currently carried in bulk by vessels, and transferred to or from marine
transportation-related facilities.

Alternatives:

The Coast Guard intends to determine what types of response strategies
would be required to address spills of different types of hazardous
substances. For some substances, containment and recovery may be the
appropriate response. However, some of the spilled substances may not
be recoverable from the water and other actions may be necessary. Plans
are required, by statute, to address responses to a ``worst case
discharge.'' For facilities, a ``worst case discharge'' is ``the
largest foreseeable discharge in adverse weather conditions.''

Anticipated Cost and Benefits:

The potential costs of this rulemaking may include the costs of
developing and implementing a hazardous substance response plan,
maintaining contracts for response resources, reviewing and updating
hazardous substance response plans, maintaining any required equipment,
and training and exercising response personnel. Potential benefits
include reduced risk of human exposure and enhanced environmental
quality from improved

[[Page 61243]]

ability to respond to, contain, and recover spilled hazardous
substances. The analysis indicates that this project will not be
economically significant. A regulatory assessment addressing costs and
benefits of this rule is available in the public docket.

Risks:

Response plans are required by statute. A response plan will not
prevent a discharge of a hazardous substance, but it may improve the
response and help to minimize personal injury and damage to the
environment. This rule should not affect the economic viability of
facilities involved in transferring hazardous substances in bulk or
have a significant impact on the volume of hazardous substances shipped
by marine transportation-related facilities. Most facilities involved
in transferring hazardous substances in bulk have developed plans, but
there have not been requirements for standardization.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 61 FR 20084 05/03/96
Notice of Public61 FR 34775 07/03/96
ANPRM Comment Period End 09/03/96
NPRM 65 FR 17416 03/31/00
NPRM Comment Period End 06/29/00
Interim Final Rule 08/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Additional Information:

Old Docket Number CGD 94-048. Public hearings regarding this rulemaking
were held in Washington, DC, on July 30, 1996; Houston, TX, on August
5, 1996; and Houston, TX, on February 26 and 27, 1997. Public meetings
for the NPRM were held in New Orleans, LA, on May 10 and 11, 2000.

Agency Contact:
LT Michael Roldan
Project Manager, G-MSO
Department of Transportation
U.S. Coast Guard
2100 Second Street SW
Washington, DC 20593-0001
Phone: 202 267-0106
RIN: 2115-AE87
_______________________________________________________________________

DOT--USCG

101. +TANK VESSEL RESPONSE PLANS FOR HAZARDOUS SUBSTANCES (USCG-1998-
4354)
Priority:

Other Significant

Legal Authority:

33 USC 1231; 33 USC 1321(j); PL 101-380

CFR Citation:

33 CFR 155

Legal Deadline:

None

Abstract:

This project would implement provisions of the Oil Pollution Act of
1990 that require an owner or operator of a tank vessel carrying bulk
hazardous substances to develop and operate in accordance with an
approved response plan. The regulations would apply to vessels
operating on the navigable waters or within the Exclusive Economic Zone
(EEZ) of the United States that carry bulk hazardous substances. A
separate rulemaking under RIN 2115-AE87 would address hazardous
substances response plan requirements for marine transportation-related
facilities. This project supports the Coast Guard's strategic goals of
maritime safety and protection of natural resources by reducing the
amount of chemicals entering the environment, as well as reducing the
consequences of pollution incidents. This project is considered
significant because of substantial public and industry interest.

Statement of Need:

This rulemaking is intended to reduce the impact from hazardous
substance spills from vessels.

Summary of Legal Basis:

Section 4202(a) of the Oil Pollution Act of 1990 (OPA 90), codified at
33 U.S.C. 1321(j)(5), mandates that the President issue regulations
requiring the preparation of oil and hazardous substance discharge
response plans. Although 4202(b)(4) of OPA 90 established an
implementation schedule for these response plans for oil, it did not
establish a deadline for submission or approval of hazardous substances
response plans. The Coast Guard has issued separate final rules
governing response plan requirements for vessels carrying oil in bulk
as cargo and facilities that handle, store, or transport oil in bulk.
Under section 1321, ``hazardous substances'' are designated by the
Administrator of the Environmental Protection Agency. The Administrator
has designated 297 chemicals as hazardous substances under this
section. The Coast Guard has identified 82 hazardous substances
currently carried in bulk by vessels.

Alternatives:

The Coast Guard intends to determine what types of response strategies
would be required to address spills of different types of hazardous
substances. For some substances, containment and recovery may be the
appropriate response. However, some spilled substances may not be
recoverable from the water and other actions may be necessary. Plans
are required, by statute, to address responses to a ``worst case
discharge.'' For vessels, a ``worst case discharge'' is ``a discharge
in adverse weather conditions of its entire cargo.''

Anticipated Cost and Benefits:

The potential costs of this rulemaking may include the costs of
developing and implementing a hazardous substance response plan,
maintaining contracts for spill-response resources, reviewing and
updating hazardous substance response plans, maintaining any required
equipment, and training and exercising response personnel. Potential
benefits include reduced risk to human health, enhanced environmental
quality from improved ability to respond to, contain, and recover
spilled hazardous substances and a reduction in the severity of the
impact of accidental hazardous substance discharges. A regulatory
assessment addressing costs and benefits of this rule is available in
the public docket.

Risks:

Response plans are required by statute. A response plan will not
prevent a discharge of a hazardous substance, but it may improve the
response and help to minimize personal injury and damage to the
environment. This rule should not affect the economic viability of
vessels involved in transferring hazardous substances in bulk, or have
a significant impact on the volume of hazardous substances shipped by
vessel. Most vessels carrying hazardous substances in bulk have
developed response plans, but there have not been requirements for
standardization.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 61 FR 20084 05/03/96

[[Page 61244]]

Notice of Public61 FR 34775 07/03/96
ANPRM Comment Period End 09/03/96
NPRM 64 FR 13734 03/22/99
Notice of Public64 FR 31994 06/15/99
NPRM Comment Period Extended 06/15/99
NPRM Comment Period End 06/21/99
NPRM Extended Comment Period End 08/30/99
Interim Final Rule 02/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Additional Information:

Old Docket Number CGD 94-032.

Public meetings regarding this rulemaking were held in Washington, DC,
on July 30, 1996; Houston, TX, on August 5, 1996; and Houston, TX, on
February 26 and 27, 1997. Public meetings for the NPRM were held in
Houston, TX on August 12 and 13, 1999.

Agency Contact:
LT Michael Roldan
Project Manager, G-MSO
Department of Transportation
U.S. Coast Guard
2100 Second Street SW
Washington, DC 20593-0001
Phone: 202 267-0106
RIN: 2115-AE88
_______________________________________________________________________

DOT--Federal Aviation Administration (FAA)

-----------

PROPOSED RULE STAGE

-----------

102. +FLIGHT CREWMEMBER DUTY PERIOD LIMITATIONS, FLIGHT TIME
LIMITATIONS, AND REST REQUIREMENTS
Priority:

Other Significant

Legal Authority:

49 USC 106(g); 49 USC 40113; 49 USC 40119; 49 USC 44101; 49 USC 44701
to 44701; 49 USC 44705; 49 USC 44709 to 44711; 49 USC 44712; 49 USC
44713; 49 USC 44715; 49 USC 44716 to 44717; 49 USC 44722; 49 USC 44901;
49 USC 44903 to 44904; 49 USC 44912

CFR Citation:

14 CFR 121; 14 CFR 135

Legal Deadline:

None

Abstract:

This rulemaking would amend the regulations on duty period limitations,
flight time limitations, and rest requirements for flight crewmembers
engaged in air transportation. The FAA proposes additional changes in
response to comments received on the NPRM. The changes are necessary to
ensure that the rules will continue to provide the minimum level of
safety. This rulemaking responds to public and congressional interest
in regulating flight crewmember rest requirements, NTSB Safety
Recommendations, petitions for rulemaking, and scientific data. This
action is considered significant because of substantial public
interest.

Statement of Need:

The aviation community requires 24-hour activities to meet operational
demands. Growths in long-haul, regional, overnight cargo, and short-
haul domestic operations are increasing. Therefore, shift work, night
work, irregular work schedules, and time zone changes will continue to
be commonplace.

With this growth, the scientific knowledge about sleep, sleep
disorders, circadian physiology, fatigue, and performance decrements
has also grown. Some of the scientific knowledge has indicated that
aviators experience performance-impairing fatigue from sleep loss
resulting from current flight and duty practices.

In addition, industry and individuals have told the FAA that the
current regulations are confusing and difficult to enforce. Therefore,
a second purpose of the rulemaking is to establish consistent and clear
duty period limitations and rest requirements for all types of
operations.

Summary of Legal Basis:

Section 44701, title 49 of the United States Code states that the
Administrator shall promote safety of flight of civil aircraft in air
commerce by prescribing minimum standards required in the interest of
safety.

Alternatives:

One obvious alternative would be to continue with the current rules,
however, these regulations are rapidly becoming obsolete. As a second
alternative, one commenter asked that the FAA develop a standard and
then allow each carrier to design a rest/duty program that would meet
that standard while accommodating differences in operations. While this
works for certain rules, such as training regulations where the
standard is training to proficiency, there is no way to apply this
application to individual pilots on a daily basis.

Anticipated Cost and Benefits:

Undetermined.

Risks:

Although there has been only one identifiable accident due to pilot
fatigue, fatigue is increasingly becoming the focus of possible causes
following all accidents. Pilot reports of being fatigued to the point
of incapacity are not uncommon, and intuitively, it is reasonable,
given the sheer volume of air traffic, to expect fatigue to be a factor
in future accidents if the regulations are not corrected.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 60 FR 65951 12/20/95
NPRM Comment Period End 03/19/96
NPRM Comment Per61 FR 11492d to 6/19/96 03/20/96
SNPRM 12/00/01
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

Additional Information:

Project Number: AFS-94-443R

ANALYSIS: Regulatory Evaluation, 12/20/95, 60 FR 65951

[[Page 61245]]

Agency Contact:
Alberta Brown
Air Transportation Division
Department of Transportation
Federal Aviation Administration
800 Independence Avenue SW
Washington, DC 20591
Phone: 202 267-8321

Quentin Smith
Department of Transportation
Federal Aviation Administration
800 Independence Avenue SW.
Washington, DC 20591
Phone: 202 267-8166
RIN: 2120-AF63
_______________________________________________________________________

DOT--FAA

-----------

FINAL RULE STAGE

-----------

103. +IMPROVED FLAMMABILITY STANDARDS FOR THERMAL/ACOUSTIC INSULATION
MATERIALS USED IN TRANSPORT CATEGORY AIRPLANES
Priority:

Other Significant

Legal Authority:

49 USC 106(g); 49 USC 44701; 49 USC 44702; 49 USC 44704

CFR Citation:

14 CFR 25

Legal Deadline:

None

Abstract:

This document proposes upgraded flammability standards that
specifically address flame propagation and entry of an external fire
into the airplane (burnthrough) under realistic fire scenarios. The
proposed standards are intended to reduce the incidence and severity of
cabin fires, particularly those ignited in inaccessible areas where
thermal/acoustic insulation materials are typically installed. Also the
proposed standards would provide an increased level of safety with
respect to post-crash fires by delaying the entry of such a fire into
the cabin, thereby providing additional time for evacuation and
enhancing survivability. The new standards would apply to new type
designs, and newly manufactured airplanes entering parts 91, 121, 125,
and 135 service. This action is significant because of substantial
public interest.

Statement of Need:

Service history and laboratory testing demonstrate that the current
flammability requirements applicable to thermal/acoustic insulation
materials may not be providing the intended protection against the
spread of fires. Additionally, the FAA considers that increased
protection against external fire penetrating the fuselage can be
provided by proper selection of the same material. These new test
methods would not only provide for increased in-flight fire safety, by
reducing the flammability of thermal/acoustic insulation blankets, but
would provide increased time for evacuation during externally fed, post
crash fires by increasing fuselage burnthrough resistance.

Summary of Legal Basis:

49 USC 4401 empowers the Administrator to prescribe regulations and
minimum standards in the interest of safety for aircraft and equipment.

Alternatives:

The FAA considered several options to identify the least intrusive and
most cost effective alternative to increase the level of safety for
insulation materials. The alternatives considered were as follows: (1)
Utilize the industry test instead of the requirements proposed; this
would not screen out certain types of materials shown to propagate a
fire under more realistic conditions, but would screen out the worst
performers. (2) Limit replacement of insulation materials to only
certain parts of the airplane; it is not feasible to specify areas of
the airplane that are more crucial than others. This would be an
economic consideration that would not address safety issues. (3) Change
the effectivity or compliance times to reduce the number of airplanes
affected; the proposal will be designed to optimize costs versus
benefits in this regard. Changes to either would be less than optimal.
(4) Propose some combination of the above. Other combinations would
either reduce the level of safety or be less cost-effective.

Anticipated Cost and Benefits:

The total costs of this rule is $68.0 million, or $36.5 million
discounted to present value if only blanket material changes are made
to the aircraft. If manufacturers need to make configuration changes to
the aircraft as well as material changes to their drawings, the FAA
estimates that total costs would be $103.1 million or $68.2 million
discounted to present value. The FAA is unable to quantify the benefits
for this rule. However, preventing the loss of one airplane and its
passengers over the 20-year period is not likely. Assuming such a loss
would occur at the midpoint of the analysis, or in 2009, with 169
passengers, the nondiscounted loss would be $455.5 million, or $231.5
million discounted to present value (again, assuming society's
willingness to pay $2.7 million to avoid a fatality). This loss does
not include the value of the airplane. Even without loss of life, as
several of the incidents show, a hull loss could exceed tens of
millions of dollars. The FAA therefore has determined that this
proposed rule would be cost beneficial.

Risks:

The FAA is aware of several events in which the flammability
characteristics of thermal/acoustic insulation material may have been a
contributing factor of airplane fires. The FAA initiated investigations
and research to determine the appropriateness of applying existing
Bunsen burner flammability criteria to thermal/acoustic insulation, as
typically installed in concealed and inaccessible areas. This rule is
necessary to decrease the risk of fires on airplanes and to improve
airplane fire safety.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 56992 09/20/00
NPRM Comment Period End 01/18/01
Final Rule 05/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Additional Information:

Project Number: ANM-99-086R.

ANALYSIS: Regulatory Evaluation, 04/00/01

Agency Contact:
Jeff Gardlin
Aircraft Certification Service
Department of Transportation
Federal Aviation Administration
1601 Lind Avenue SW
Renton, WA 98055-4056
Phone: 425 227-2136
RIN: 2120-AG91

[[Page 61246]]

_______________________________________________________________________

DOT--FAA

104. +CERTIFICATION OF AIRPORTS
Priority:

Other Significant

Legal Authority:

49 USC 106(g); 49 USC 40113; 49 USC 40119; 49 USC 44101; 49 USC 44701
to 44706; 49 USC 44709 to 40711; 49 USC 44713; 49 USC 44716 to 44717;
49 USC 44719; 49 USC 44722; 49 USC 44901; 49 USC 44903 to 44904; 49 USC
44912; 49 46105

CFR Citation:

14 CFR 121; 14 CFR 139

Legal Deadline:

None

Abstract:

This action proposes to revise the current airport certification
regulation and to establish certification requirements for airports
serving scheduled air carrier operations in aircraft with 10 to 30
seats. In addition, changes are proposed to address National
Transportation Safety Board recommendations and petitions for
exemptions and rulemaking. A section of an air carrier operation
regulation also would be amended to conform with proposed changes to
airport certification requirements. The FAA believes that these
proposed revisions are necessary to ensure safety in air transportation
and to provide a comparable level of safety at all certificated
airports. This action is significant because of substantial public
interest.

Statement of Need:

The last major revision to the airport certification regulation
occurred in 1987, and since then, industry practices, and technology
have changed. To respond to such changes, the FAA is proposing to
revise the regulation to clarify and update several requirements.
Additionally, with the passage of the 1996 FAA Reauthorization Act,
Congress provided the FAA the necessary authority to certificate
airports serving scheduled air carrier operations with 10 to 30 seat
aircraft, except in the State of Alaska (in addition to existing
authority to regulate airports serving air carrier operations using
aircraft with more than 30 seats). To achieve a comparable level of
safety at all covered airports, FAA now proposes to exercise this
authority and amend the regulation to incorporate airports serving
smaller air carrier aircraft into the FAA's airport certification
program. Also, the 2000 FAA Reauthorization Act (P.L. 106-181) mandates
publication of the NPRM within 60 days of the Act's enactment; and
publication of the final rule within one year of the close of comment
period for airports serving smaller air carrier aircraft.

Summary of Legal Basis:

FAA has general and specific authority to regulate airports as set out
in 49 USC 106(g) and 44701.

Alternatives:

The FAA has considered several alternative approaches to this proposed
rulemaking and has attempted to minimize the potential economic impact
of the proposal, especially the impact on small entities. In addition,
this action fulfills the FAA's responsiblilty to meet deadlines
established by Congress to certificate airports serving scheduled air
carrier operations with 10 to 30 seat aircraft, except for the State of
Alaska. The FAA considered alternatives based on two issues. Issue 1
was the revision of 14 CFR 139, and Issue 2 was the certification of
airports serving scheduled operations of small air carrier aircraft
with 10-30 passenger seats. The FAA determined that it was necessary to
revise 14 CFR 139 and that the revised part 139 should include the
certification of airports serving scheduled air carrier operations with
10 to 30 passenger seat aircraft.

Anticipated Cost and Benefits:

Most of the costs of this proposed rule are associated with the
proposed improvements to safety and operational requirements. Most of
these costs result from the expansion of ARFF services. The present
value of the total cost of the rule over a 10-year period is
approximately $46 million, which includes training, additional
emergency response protection, wildlife management, and an updated
airport certification manual that better reflects current best
practices. With the tremendous cost of aviation accidents, the proposed
rule provides the potential for enhanced safety for a reasonable cost.
The expected benefit of this proposed rule is an enhanced level of
safety resulting in reduced fatalities, injuries, and property damage
at airports with scheduled air carrier operations, particularly
operations in aircraft configured with 10 to 30 passenger seats. The
cost of a single accident of a 30-seat scheduled passenger aircraft is
greater than the total cost of the proposal. Other benefits of this
proposal include provisions for snow and ice control, wildlife
management, and training.

Risks:

The purpose of this rulemaking is to expand and enhance the safety
benefits of the current regulation by providing, to the extent
possible, a comparable level of safety at all airports used by air
carriers.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 65 FR 38636 06/21/00
Correction 65 FR 50669 08/21/00
NPRM Comment Per65 FR 50945d 08/22/00
NPRM Comment Period End 09/19/00
NPRM Comment Period End 11/03/00
Final Action 01/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Additional Information:

Project Number: AAS-97-072R.

ANALYSIS: Regulatory Evaluation, 06/21/00

Agency Contact:
Linda Bruce
Office of Civil Aviation Security
Department of Transportation
Federal Aviation Administration
800 Independence Avenue SW
Washington, DC 20591
Phone: 202 267-8553
RIN: 2120-AG96
_______________________________________________________________________

DOT--Federal Motor Carrier Safety Administration (FMCSA)

-----------

FINAL RULE STAGE

-----------

105. +HOURS OF SERVICE OF DRIVERS; DRIVER REST AND SLEEP FOR SAFE
OPERATIONS (RULEMAKING RESULTING FROM A SECTION 610 REVIEW)
Priority:

Economically Significant. Major under 5 USC 801.

[[Page 61247]]

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

49 USC 31136; 49 USC 31502; PL 74-255; PL 84-939; PL 98-554; PL 103-
311; PL 104-59; PL 104-88; PL 106-159

CFR Citation:

49 CFR 1.73; 49 CFR 395

Legal Deadline:

Other, Statutory, March 1, 1996, ANPRM. PL 104-88,sec 408(a).

NPRM, Statutory, November 5, 1997, PL 104-88, sec 408(b).

Final, Statutory, November 5, 1999, PL 104-88, sec 408(b).

Abstract:

This action would revise the regulations for commercial motor vehicle
driver rest requirements and duty period limitations for safe highway
transportation. A broad rulemaking is required by the ICC Termination
Act of 1995 (ICCTA). Other congressional actions prior to the ICCTA
require modifications to the current rules.

This rulemaking responds to public and congressional interest in
regulating commercial motor vehicle driver rest requirements, the
NTSB's safety recommendations, petitions for rulemaking, and scientific
data. There is substantial public and congressional interest in the
regulation of medium- and heavy-duty truck and bus drivers' sleep, off-
duty, and working periods of time. The FMCSA has proposed new rules
based upon comments and scientific data submitted to the advance notice
of proposed rulemaking docket. The proposal includes an initial
regulatory flexibility analysis, a cost-benefit analysis, an unfunded
mandates analysis, and a paperwork reduction analysis. This action is
considered significant because of substantial public and congressional
interest.

Statement of Need:

The motor carrier industry requires 24-hour activities to meet the
operational demands of a healthy U.S. economy. Growth in long-haul,
regional, overnight, local, for-hire and private carriage operations is
increasing with the unprecedented growth of the U.S. economy.
Therefore, night work, shift work, and irregular work schedules
continue to be commonplace.

The scientific knowledge about sleep, sleep disorders, circadian
physiology, fatigue, and performance decrements has also grown. One of
the purposes of this rulemaking is to incorporate as much of the
scientific knowledge as possible into the applicable regulations.

Summary of Legal Basis:

Section 31136 of title 49, United States Code, authorizes the Secretary
of Transportation to prescribe minimum safety standards for commercial
motor vehicles (Motor Carrier Safety Act of 1984, Pub. L. 98-554, Title
II, October 30, 1984). Regulations prescribed under this section must
ensure that: (1) commercial motor vehicles are operated safely; (2) the
responsibilities imposed on operators of commercial motor vehicles do
not impair their ability to operate the vehicle safely (3) the physical
condition of operators of commercial motor vehicles is adequate to
enable them to operate the vehicles safely; and (4) the operation of
commercial motor vehicles does not have a deleterious effect on the
physical condition of the operators.

Section 31502 of Title 49, United States Code, authorizes the Secretary
of Transportation to prescribe maximum hours-of-service and
qualifications requirements for operators of motor carriers when needed
to promote the safety of operations (Motor Carrier Act of 1935, Pub. L.
74-255, August 9, 1935; and Migrant Farm Workers-Regulation of
Interstate Transportation Act, Public Law 84-939, August 3, 1956).

Section 113 of the Hazardous Materials Transportation Authorization Act
of 1994 (Pub. L. 103-311, August 26, 1994) requires the Secretary of
Transportation to prescribe regulations amending part 395 to improve
the compliance by commercial motor vehicle drivers and motor carriers
with HOS requirements and the effectiveness and efficiency of Federal
and State enforcement officers reviewing such compliance.

Section 345 of the National Highway System Designation Act of 1995
(Pub. L. 104-159, November 28, 1995) created four specific exemptions
from the hours-of-service-of-drivers requirements of part 395. A fifth
exemption applied only to commercial driver licensing-related
requirements requiring testing of operators for alcohol and controlled
substances. The Secretary of Transportation was authorized to conduct
rulemaking, except for the water well drilling hours-of-service
exemption, to negate or modify the exemptions upon a determination,
after a rulemaking proceeding, that the exemption is not in the public
interest and would have a significant adverse impact on the safety of
commercial motor vehicles.

Section 408 of the ICC Termination Act of 1995 (Pub. L. 104-88,
December 29, 1995) requires the Federal Highway Administration
(functions transferred to the Federal Motor Carrier Safety
Administration under Pub. L. 106-159) to issue a final rule dealing
with a variety of fatigue-related issues pertaining to commercial motor
vehicle safety (including 8 hours of continuous sleep after 10 hours of
driving, loading and unloading operations, automated and tamper-proof
recording devices, rest and recovery cycles, fatigue and stress in
longer combination vehicles, fitness for duty, and other appropriate
regulatory and enforcement countermeasures for reducing fatigue-related
incidents and increasing driver-alertness).

Alternatives:

The FMCSA proposes replacing the current rules with an alternative set
of rules based upon scientific knowledge and submitted comments. The
FMCSA is considering different regulations for different types of
drivers and operations.

The FMCSA will also consider modifying the information collection
burdens that have been placed upon the motor carrier industry,
including the following types of recordkeeping methods: (1) Reducing
the required items on the record of duty status (log book); (2) adding
electronic on-board recording devices to commercial motor vehicles; (3)
eliminating all FMCSA hours-of-service record keeping requirements
while relying exclusively on the duplicative hours-of-work record
keeping system required by the U.S. Department of Labor under the Fair
Labor Standards Act of 1938, as amended.

The FMCSA is proposing a revision to the hours-of-service regulations
to require motor carriers to provide their drivers with better
opportunities to obtain sleep than the current rules, and thereby
reduce the number of fatigue-related crashes involving these drivers.
We estimate that 755 fatalities and 19,705 injuries occur each year on
the Nation's roads because of drowsy, tired or fatigued CMV drivers.

[[Page 61248]]

than 12 hours. Under current rules, a driver can reach the 60-hour on-
duty limit in 4 days and 4 hours, and the 70-hour limit in less than 5
days. Third, long-haul and regional drivers (who spend one or more
nights away from their normal work reporting locations) would be
required, eventually, to use electronic on-board recording devices
(EOBRs). These proposed changes would abandon a one-size-fits-all
approach to work-rest cycles and adopt different rest periods for
different types of operations.

The FMCSA has received more than 51,000 comments to date. As we are
committed to fully exploring all issues and concerns of stakeholders,
we held eight public hearings in may, June and July 2000, and followed
up three public roundtable discussions in September and October 2000 on
issues that attracted significant comment in the hearings.

The roundtables drew broad public participation and elicited in-depth
discussion and exchange of supporting data on critical issues,
including issues surrounding the economic analyses and assumptions used
by the agency. The discussions provided the agency with information
requiring careful analysis. This will help the FMCSA identify any
necessary changes to the proposal that would address stakeholders'
divergent concerns and support the development of a successful rule.

The FY 2001 Department of Transportation Appropriations Act, Pub. L.
106-346, includes language that prohibits the Department from adopting
a final rule before October 1, 2001. This is consistent with the
Department's pledge to carefully review and consider the extensive
record that has been established on the rulemaking before deciding on
the next appropriate step in the rulemaking process.

Anticipated Cost and Benefits:

The FMCSA has placed a Preliminary Regulatory Evaluation (PRE) in the
docket. The PRE evaluates five options, based on identified key
parameters. The selected option, which divides the industry into
different types of motor carrier operations, is projected to save 115
lives and 2,995 injuries per year with a total net benefit of almost
$3.359 billion, assuming that 15 percent of CMV-involved crashes are
fatigue-related. Readers are directed to the PRE and the preamble of
the NPRM for additional information.

Risks:

Fatigue is increasingly becoming the focus of possible causes following
many crashes. Driver reports of being fatigued to the point of
incapacity are not uncommon, and intuitively, it is reasonable, given
the sheer volume of traffic, to expect fatigue to be a factor in future
crashes if the regulations are not corrected. Fatigue was identified by
the industry, public, and government as the highest priority safety
issue at a 1995 Truck and Bus Safety Summit in Kansas City, MO.

The FMCSA has established a goal to reduce by 50 percent over ten years
the number of fatalities from crashes involving any commercial motor
vehicle. The FMCSA anticipates its proposal will reduce fatigue-related
crashes by at least 15 percent each year to assist in its efforts to
meet its overall goal of 50 percent reduction in deaths.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 61 FR 57251 11/05/96
Notice of Meetin62 FR 6161 02/11/97
ANPRM Comment Period End 03/31/97
NPRM 65 FR 25540 05/02/00
Notice of Hearin65 FR 26166 05/05/00
Notice of Hearin65 FR 32070 05/22/00
Notice of change65 FR 34132 structure 05/26/00
NPRM; Correction65 FR 34904 05/31/00
Notice of Hearin65 FR 36809 06/12/00
Comment Period E65 FR 37956 06/19/00
Comment Period E65 FR 49780undtable Meetings 08/15/00
NPRM Comment Period End 12/15/00
Final Action 09/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses, Governmental Jurisdictions, Organizations

Government Levels Affected:

State, Local, Federal

Federalism:

This action may have federalism implications as defined in EO 13132.

Additional Information:

Transferred from RIN 2125-AD93.

During the agency's broad section 610 review of the 65-year history of
the rule and all its amendments and revisions, the agency identified
that RINs 2125-AD52, 2125-AD81, 2126-AA16, and 2126-AA29 also contain
pertinent actions that must be incorporated into this action.
Therefore, the agency incorporated them and has published a combined
proposal addressing the entire topic of hours-of-service of drivers and
related recordkeeping issues.

The DOT Docket Management System now identifies this rulemaking as
number FMCSA-1997-2350.

More Information on ALTERNATIVES:

The proposed rules would make three major changes. First, and most
importantly, the new rules would be science-based (related to sleep
cycles) and put all drivers in a 24-hour daily cycle. Second, they
would reduce the total number of hours behind the wheel in a given 24-
hour cycle to no more than 12 hours. Under current rules, a driver can
reach the 60-hour on-duty limit in 4 days and 4 hours, and the 70-hour
limit in less than 5 days. Third, long-haul and regional drivers (who
spend one or more nights away from their normal work reporting
locations) would be required, eventually, to use electronic on-board
recording devices (EOBRs). These proposed changes would abandon a one-
size-fits-all approach to work-rest cycles and adopt different rest
periods for different types of operations.

The NPRM is a proposal. The FMCSA has extensively solicited public
comments at 8 public hearings and 3 public roundtable discussions. The
agency has received more than 51,000 comments in docket no. FMCSA-97-
2350. The agency is reviewing these comments to ensure that it can make
appropriate decisions about the next steps in the rulemaking process.

[[Page 61249]]

Agency Contact:
David R. Miller
Transportation Specialist, Office of Policy, Plans and Regulations
Department of Transportation
Federal Motor Carrier Safety Administration
MC-PRR
400 Seventh Street SW.
Washington, DC
Phone: 202 366-5011
RIN: 2126-AA23
_______________________________________________________________________

DOT--National Highway Traffic Safety Administration (NHTSA)

-----------

PROPOSED RULE STAGE

-----------

106. +FRONTAL OFFSET PROTECTION
Priority:

Other Significant

Legal Authority:

49 USC 322; 49 USC 30111; 49 USC 30115; 49 USC 30117; 49 USC 30166

CFR Citation:

49 CFR 571.208

Legal Deadline:

None

Abstract:

The agency is considering establishing a Federal motor vehicle safety
standard for high speed frontal offset crash testing. The frontal
offset test is a crash test for automobiles and light trucks in which
the subject vehicles are run into a deformable honeycomb barrier. The
barrier contacts only 40 percent of the front of the vehicle simulating
an off-center frontal collision. The agency is considering adding the
offset test to the frontal occupant protection standard to measure
vehicle structural integrity and reduce the number and severity of
lower-body injuries.

Statement of Need:

While the Federal motor vehicle safety standards already contain a
frontal crash test, injuries and fatalities still occur in various
types of frontal crashes. The European Union determined that the best
test for frontal occupant protection would be an offset test with
belted test dummies. As part of the House of Representatives Conference
Report 104-785, to accompany H.R. 3675, the National Highway Traffic
Safety Administration was directed on September 16, 1996, to conduct
research ``...toward establishing a Federal motor vehicle safety
standard for frontal offset crash testing.'' Such a standard would
harmonize with the European Union frontal crash standard. Subsequent
research results with the 50th percentile male and the 5th percentile
female Hybrid III dummies suggest that additional safety benefits would
be provided for the neck and the upper and lower tibia under the offset
test conditions.

Summary of Legal Basis:

Section 30111,Title 49 of the United States Code, states the Secretary
shall prescribe motor vehicle safety standards. As part of the House of
Representatives Conference Report 104-785, to accompany H.R. 3675, the
National Highway Traffic Safety Administration was directed on
September 16, 1996, to conduct research ``...toward establishing a
Federal motor vehicle safety standard for frontal offset crash
testing.''

Alternatives:

Since this program is oriented primarily toward adopting an existing
European standard, the agency will focus on existing test procedures.
However, the agency is working through the national and international
biomechanical engineering community to develop better test devices such
as improved dummy legs. Comments will be sought on the best dummy
designs in the agency's proposal.

Anticipated Cost and Benefits:

A report prepared for the Australian Government estimates that adding
an offset test may result in a 15 percent reduction in ``Harm.'' Harm
is a calculation of the cost of trauma and is the product of the
frequency of injury and cost to the community. Most of these benefits
would be seen in reduction in lower body and leg injuries. The agency
has not determined the specific benefits of this test procedure.

The agency estimates that for vehicles that cannot currently pass this
test, vehicle modifications would cost $14 per vehicle. Based on an
estimate that 25 percent of the fleet would need to be modified, the
total annual cost to the consumers would be $60 million dollars.

Risks:

Current motor vehicles provide numerous occupant protection systems,
such as safety belts and strategically-placed energy absorption
materials such as foam padding. However, an estimated 3,300 people per
year are killed and 400,000 people per year are injured in frontal
offset crashes.

The agency knows of no disadvantages to implementing this requirement.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 06/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
Roger Saul
Director, Office of Crashworthiness Standards
Department of Transportation
National Highway Traffic Safety Administration
400 Seventh Street SW.
Washington, DC 20590
Phone: 202 366-1740
Fax: 202 366-4329
Email: [email protected]
RIN: 2127-AH73
_______________________________________________________________________

DOT--Federal Railroad Administration (FRA)

-----------

PROPOSED RULE STAGE

-----------

107. +STANDARDS FOR DEVELOPMENT AND USE OF PROCESSOR-BASED SIGNAL AND
TRAIN CONTROL SYSTEMS
Priority:

Other Significant

Legal Authority:

49 USC 20103

CFR Citation:

49 CFR 234; 49 CFR 236; 49 CFR 209

Legal Deadline:

None

Abstract:

Consistent with congressional mandate, FRA has continued its commitment
to supporting Positive Train Control (PTC) technology development,
testing and compatibility; and promoting deployment of PTC technology
in the

[[Page 61250]]

near future. In September 1997, FRA initiated joint fact finding
efforts through the Railroad Safety Advisory Committee (RSAC) Working
Group on PTC. The advice and recommendations of RSAC formed the basis
for proceeding to an NPRM that can facilitate introduction of advanced
technology, including systems that support PTC functions. The
rulemaking will address technical standards for all processor-based
signal and train control products, amending 49 CFR part 236.

Statement of Need:

Current FRA regulations do not adequately address the use of signal and
train control technology that is processor-based. In fact, application
of current regulations to processor-based systems can create
unnecessarily burdensome requirements. Recently, use of this technology
has begun to increase on the general system of North American
railroads, placing new demands on agency resources to ensure the safety
objectives contemplated by the current regulations are achieved. The
existence of federal regulations addressing this subject matter would
further encourage safe use of the technology, which would reduce the
risk of train-to-train collisions, better enforce speed restrictions,
and increase the level of protection to roadway workers and their
equipment. These improvements will likely result in fewer fatalities,
injuries, and economic damage associated with such risks. Given the
potential for substantial safety benefits that this program represents,
this initiative is extremely important to the agency.

Summary of Legal Basis:

FRA is issuing this proposal pursuant to its general rulemaking
authority. 49 U.S.C. 20103(a). Currently, railroads may discontinue or
materially alter a signal system initially required by the Secretary of
Transportation only with approval from the Secretary. 49 U.S.C. 20502.
Exercise of both of these powers has been delegated to the FRA
Administrator. 49 C.F.R. 1.49.

Alternatives:

Currently, FRA accepts waiver applications from railroads that seek
relief from FRA safety regulations in order to test new signal and
train control equipment. Since FRA must consider the safety
ramifications of each application on a case-by-case basis, this
procedure can take years.

Prior to this action, FRA has considered:(1) leaving the existing
regulatory requirement as is, and (2) adopting a single standard for
the design of processor-based signal and train control systems.
However, agency inaction would hinder introduction of new, safer
technology into railroad signal and train control; elimination of all
railroad signal and train control system regulation would be a total
abdication of the agency's statutory duties; and a single design
standard would inhibit innovative signal and train control system
designs.

Anticipated Cost and Benefits:

The proposed rule would provide flexible performance standards for the
design of processor-based signal and train control systems, but would
not mandate their usage. FRA believes that a railroad would adopt such
a system under one or more of the following conditions: (1) the new
system is safer; (2) the new system is less expensive; and (3)
continued maintenance of the existing system is no longer feasible. The
proposed rule would ensure that any replacement system is at least as
safe as the current system. Concerning existing processor-based
systems, the proposed rule would require railroads to adopt a software
management plan, which will ensure proper software configuration,
resulting in decreased risk of train accidents due to signal
malfunction. FRA has not quantified these benefits because of the
difficulties in estimating how many systems are likely to be affected
by this rule, what the incremental cost would be, and when the benefits
would accrue.

Most of the costs of this proposed rule are associated with safety
documentation required to demonstrate compliance with the performance
standard. As with many performance standards, this rule would require
substantial safety documentation from the railroad to demonstrate
compliance, both up front and during the life cycle of the system. It
appears that the primary cost involved in this proposed rule will be
the product risk assessment, a one-time expense presently incurred by
product suppliers. For current processor-based systems, railroads face
the cost of implementing a software management control plan, which is
less expensive than attempting to satisfy current requirements, which
did not contemplate the use of processor-based technology.

Overall, it appears that the benefits of the proposed rule outweigh the
costs.

Risks:

The risk category addressed by the proposed rule is that of accidents
that occur due to improper train operations and certain types of
vandalism. Types of accidents that may be prevented include train-to-
train collisions, derailments due to excessive train speed, and trains
penetrating the work limits of roadway workers.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 42351 08/10/01
NPRM Comment Period End 10/09/01
Final Rule 03/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses

Government Levels Affected:

Undetermined

Federalism:

Undetermined

Agency Contact:
David T. Matsuda
Trial Attorney
Department of Transportation
Federal Railroad Administration
400 Seventh Street SW.
Washington, DC 20590
Phone: 202 493-6046
RIN: 2130-AA94
_______________________________________________________________________

DOT--Federal Transit Administration (FTA)

-----------

PROPOSED RULE STAGE

-----------

108. +CLEAN FUELS FORMULA GRANT PROGRAM
Priority:

Other Significant

Legal Authority:

PL 105-178, sec 3008; 49 USC 5308

CFR Citation:

49 CFR 624

Legal Deadline:

None

Abstract:

Section 3008 of the Transportation Equity Act for the 21st Century
establishes the Clean Fuels Formula

[[Page 61251]]

Grant Program. This grant program will assist transit systems in
purchasing or leasing clean fuel vehicles; constructing clean fuel or
electrical re-charging facilities; modifying existing garage facilities
to accommodate clean fuel vehicles; repowering pre-1993 engines with
clean fuel technology which meets the current bus emission standards;
and retrofitting or rebuilding pre-1993 engines before their half-life
for rebuilding. This provision requires the Secretary to issue an
implementing regulation that sets forth eligibility requirements and an
apportionment formula for eligible projects. In FY 1999, all funds were
apportioned to earmarked projects. This action is considered
significant because of considerable congressional and public interest.

Statement of Need:

This rulemaking is intended to assist nonattainment and maintenance
areas in achieving or maintaining air quality attainment status. The
program also seeks to support emerging clean fuel and advanced
propulsion technologies for transit buses and to create markets for
these technologies.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 45551 08/28/01
NPRM Comment Period End 10/21/01
Final Rule 01/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Local

Agency Contact:
Scheryl Portee
Attorney Advisor
Department of Transportation
Federal Transit Administration
400 Seventh Street SW.
Washington, DC 20590
Phone: 202 366-1936
Fax: 202 366-3809
RIN: 2132-AA64
_______________________________________________________________________

DOT--Research and Special Programs Administration (RSPA)

-----------

PROPOSED RULE STAGE

-----------

109. +APPLICABILITY OF THE HAZARDOUS MATERIALS REGULATIONS TO LOADING,
UNLOADING, AND STORAGE
Priority:

Other Significant

Legal Authority:

49 USC 5101 to 5127

CFR Citation:

49 CFR 106 to 107; 49 CFR 171 to 180

Legal Deadline:

None

Abstract:

This rulemaking proposes to better define the applicability of the
Federal Hazardous Materials Regulations (HMR) in order to clarify the
relationship among Federal, State, local, and tribal agencies in the
regulation of hazardous materials. Under circumstances specified in
Federal statutes, the regulations of other Federal agencies (EPA and
OSHA) and non-Federal governments (States, localities, and Indian
tribes) must be consistent with or defer to RSPA's regulation of the
transportation of hazardous materials in commerce. However, other
Federal and non-Federal requirements are generally not limited where
hazardous materials are not in transportation. Activities relating to
loading, unloading, and storage of hazardous materials have become
areas of particular uncertainty and concern to both industry and non-
Federal governments. This action is significant because of the
substantial public interest in reducing uncertainty and avoiding
conflicting regulations.

Statement of Need:

In recent years, RSPA has issued interpretations and administrative
decisions on a case-by-case basis about whether particular activities
are in ``transportation'' and therefore subject to regulation under the
HMR. Because of increasing State and local regulation of hazardous
materials, RSPA concluded that an overall rulemaking is appropriate,
rather than just case-by-case decisions. RSPA believes that better
overall definitions of the applicability of the HMR will reduce
uncertainty by the regulated community and other regulatory agencies
(both Federal and non-Federal) as to which agency has regulatory
authority. Greater certainty in this regard should promote improved
compliance with the HMR and also with the requirements of other
regulatory agencies.

Summary of Legal Basis:

Section 5103 of title 49 U.S.C. specifies that the Secretary shall
prescribe regulations for the safe transportation of hazardous
materials in intrastate, interstate, and foreign commerce applicable
to, among others, any person who offers hazardous materials for
transportation or who transport hazardous materials in commerce. In
addition, section 5125 of title 49 U.S.C. sets forth the circumstances
under which differing non-Federal requirements are preempted.

Alternatives:

Commenters to the ANPRM and SANPRM suggested alternative ways to
describe the applicability of the HMR. One suggestion is to describe
the applicability of the HMR in relationship to specific transportation
functions. Another is to describe the applicability of the HMR over
specific regulated entities, such as those who offer hazardous
materials for transportation or those who transport hazardous
materials. RSPA is considering each of the alternatives proposed.

Anticipated Cost and Benefits:

RSPA made a preliminary determination that there is neither an increase
nor decrease in the costs of compliance with the HMR for persons who
offer hazardous materials for transportation or transport hazardous
materials in commerce. The preliminary regulatory evaluation was
entered into the docket and is available for review.

Risks:

Clarifying the applicability of the HMR should reduce uncertainty as to
which regulatory agency's requirements apply to any particular activity
involving hazardous materials and improve compliance with the HMR, the
requirements of EPA and OSHA, and non-Federal requirements. This should
result in improved compliance with the applicable regulatory
requirements, and improve hazardous materials transportation safety,
reduce risks to the environment from hazardous materials, and promote
workplace safety at facilities that manufacture or handle hazardous
materials.

[[Page 61252]]

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 61 FR 39522 07/29/96
ANPRM Comment Period End 11/30/96
SANPRM 64 FR 22718 04/27/99
Extension Comment Period Published for SANPRM 07/26/99
SANPRM Comment Period End 08/25/99
NPRM 66 FR 32420 06/14/01
NPRM Comment Per66 FR 40174d & Public Meetings 08/02/01
Comment Period E66 FR 40174 08/02/01
Comment Period End 11/30/01
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

State, Local, Tribal, Federal

Federalism:

This action may have federalism implications as defined in EO 13132.

Additional Information:

Docket No. HM-223. As a result of comments received to the ANPRM, we
have upgraded this rulemaking to significant.

Agency Contact:
Susan Gorsky
Senior Regulations Specialist
Department of Transportation
Research and Special Programs Administration
400 Seventh Street SW.
Washington, DC 20590
Phone: 202 366-8553
Email: [email protected]
RIN: 2137-AC68
BILLING CODE 4910-62-S

[[Page 61253]]

DEPARTMENT OF THE TREASURY (TREAS)

Statement of Regulatory Priorities
The primary missions of the Department of the Treasury are:
To promote prosperous and stable American and world economics,
including promoting domestic economic growth and maintaining our
Nation's leadership in global economic issues, supervising national
banks and thrift institutions, and helping to bring residents of
distressed communities into the economic mainstream;
To manage the Government's finances by protecting and collecting the
correct amount of revenue under the Internal Revenue Code and customs
laws, financing the Federal Government and managing its fiscal
operations, and producing our Nation's coins and currency; and
To safeguard our financial systems, protect our Nation's leaders, and
secure a safe and drug-free America by enforcing laws relating to
counterfeiting, Federal Government securities, firearms and explosives,
money laundering, foreign commerce in goods and financial instruments,
and smuggling and trafficking in contraband; protecting the President,
Vice President, certain foreign diplomatic personnel, and others; and
training Federal, State, and local law enforcement officers.
Consistent with these missions, most regulations of the Department and
its constituent bureaus are promulgated to interpret and implement the
laws as enacted by the Congress and signed by the President. Unless
circumstances require otherwise, it is the policy of the Department to
issue a notice of proposed rulemaking (NPRM) and carefully consider
public comments before adopting final regulations. Also, in particular
cases, the Department invites interested parties to submit views on
rulemaking projects while the NPRM is being developed, and holds public
hearings to discuss proposed rules.
To the extent permitted by law, it is the policy of the Department to
adhere to the regulatory philosophy and principles set forth in
Executive Order 12866, and to develop regulations that maximize
aggregate net benefits to society, while minimizing the economic and
paperwork burdens imposed on persons and businesses subject to those
regulations.
On October 26, 2001, the President signed into law the USA PARTRIOT
Act of 2001. In the coming months the Department of the Treasury will
accord the highest priority to developing and issuing regulations that
are within its jurisdiction that are necessary to implement this
historic anti-terrorism legislation.
Internal Revenue Service
The Internal Revenue Service (IRS), working with the Office of the
Assistant Secretary (Tax Policy), promulgates regulations that
interpret and implement the Internal Revenue Code and related tax
statutes. The purpose of these regulations is to carry out the tax
policy determined by Congress in a fair, impartial and reasonable
manner, taking into account the intent of Congress, the realities of
relevant transactions, the need for the Government to administer the
rules and monitor compliance, and the overall integrity of the Federal
tax system. The goal is to make the regulations practical and as clear
and simple as possible.
Most IRS regulations interpret tax statutes to resolve ambiguities or
fill gaps in the tax statutes. This includes interpreting particular
words, applying rules to broad classes of circumstances, and resolving
apparent and potential conflicts between various statutory provisions.
During fiscal year 2002, the IRS will accord priority to the following
regulatory projects:
Qualified Tuition Programs. Section 529 of the Internal
Revenue Code provides tax-deferred growth on college
savings that are contributed to a section 529 program.
Congress made significant amendments to section 529 in the
Economic Growth and Tax Relief Reconciliation Act of 2001
(EGTRRA). Earnings on college savings in a section 529
program are excluded from the gross income of a student if
used to pay qualified higher education expenses. The
Service expects to issue regulations that will clarify
various rules and definitions. Regulations are necessary
because many taxpayers will use a Qualified Tuition Program
to save for college.
Research Credit. Section 41 of the Internal Revenue Code,
enacted in 1981 and modified in 1986, provides a credit for
increasing research expenditures as an incentive to spur
increased research spending and thereby encourage economic
growth. Regulations dealing with the definition of credit-
eligible research expenses (and with the computation of the
credit) were proposed in January, 1997 and December, 1998.
The proposed regulations were adopted as final rules in
December, 2000. In Notice 2001-19, Treasury and the IRS
announced a review of the policies embodied in the final
research credit regulations. Treasury and the IRS intend to
issue another set of proposed regulations with a definition
of qualified research that is both more concordant with
congressional intent and more administrable than the
approach taken in the final rules adopted in December 2000.
Deduction and Capitalization of Expenditures. Section 162 of
the Internal Revenue Code allows a deduction for ordinary
and necessary expenses paid or incurred during the taxable
year in carrying on any trade or business. Under section
263, however, no deduction is allowed for any amount paid
out for new buildings, or for permanent improvements or
betterments, made to increase the value of any property or
estate, such as the cost of acquisition, construction, or
erection of buildings, machinery and equipment, and similar
property having a useful life substantially beyond the
taxable year. Case law interpreting section 263 establishes
that an expenditure generally must be capitalized if it
creates or enhances a separate and distinct asset or
produces a significant future benefit. The IRS intends to
publish proposed regulations to clarify the circumstances
in which taxpayers must capitalize expenditures that are
expected to create future benefits for the taxpayer, but do
not result in a separate and distinct tangible asset
(``self-created intangibles''). The proposed are expected
to address three primary issues: (1) whether costs incurred
in connection with self-created intangibles are subject to
capitalization under section 263; (2) if such costs are
subject to capitalization, the circumstances for which
capitalization is warranted (e.g., can recurring, day-to-
day expenditures of the taxpayer's business create
significant future benefits); and (3) if capitalization is
warranted, the types of costs that must be capitalized
(e.g., external costs, internal costs, direct costs,
indirect/overhead costs).
Required Notice Regarding Certain Pension Plan Amendments.
Section 204(h) of the Employee Retirement Income Security
Act (ERISA) requires the administrator of certain qualified
retirement plans to provide notices to

[[Page 61254]]

plan participants and others of certain reductions in the
rate of future benefit accruals under the plan. Section 659
of EGTRRA substantially amended section 204(h) of ERISA,
added section 4980F to the Internal Revenue Code, and
required notices to be given on the elimination or
reduction of early retirement benefits or retirement-type
subsidies. Section 4980F generally parallels section 204(h)
of ERISA, but also provides for an excise tax for failure
to comply with the notice requirements. The IRS expects to
issue a notice of proposed rulemaking that will provide
guidance on complying with the notice requirements of both
section 204(h) of ERISA, as amended by EGTRRA, and section
4980F. This guidance is needed in order to assist plan
administrators in complying with their obligations and to
ensure that participants receive the timely, understandable
and accurate notices required by the statute.
Relief from Joint and Several Liability. Section 3201 of the
IRS Restructuring and Reform Act of 1998 repealed section
6013(e) and added section 6015 to the Internal Revenue
Code, effective for liabilities unpaid as of July 22, 1998,
and for liabilities that arose after July 22, 1998. Prior
to July 22, 1998, section 6013(e) provided the only relief
from joint and several liability for married taxpayers who
elected to file a joint return (``innocent spouse''
relief). Section 6015 provides three types of relief from
joint and several liability: traditional ``innocent
spouse'' relief; allocation of liability for spouses no
longer married, legally separated, or not members of the
same household for 12 months; and equitable relief for
spouses who do not qualify for innocent spouse relief and
allocation of liability, if it is inequitable to hold them
liable for the joint liability. Proposed regulations under
section 6015 were issued in January 2001. The IRS intends
to issue final regulations regarding the three types of
relief from joint and several liability under section 6015,
as well as rules regarding the allocation of items, the
procedures for filing a claim for relief, and the rights of
the nonrequesting spouse.
Offers in Compromise. Temporary regulations were issued in
July 1999, which permit compromise of liabilities when
there is doubt as to the amount of the liability owed, when
there is doubt whether the full amount of the tax can be
collected, and when, in light of all the facts and
circumstances, compromise would promote effective tax
administration. A compromise may be entered into to promote
effective tax administration when collection of the full
liability would create economic hardship or where,
regardless of the taxpayer's financial circumstances,
exceptional circumstances exist such that collection of the
full liability would be detrimental to voluntary
compliance. In determining a taxpayer's ability to pay, the
temporary regulations require the IRS to evaluate the
taxpayer's individual facts and circumstances. Guidelines
published by the Secretary on national and local living
expenses are to be taken into account in making this
determination. A taxpayer may appeal the rejection of an
offer to compromise to the IRS Office of Appeals.
Collection Due Process. Section 3401 of the IRS Restructuring
and Reform Act of 1998 added to the Internal Revenue Code
sections 6320 and 6330 (Collection Due Process (CDP)
procedures), which provide taxpayers an opportunity for a
hearing before the Office of Appeals when a notice of tax
lien has been filed or a levy is proposed to be made
against them. These sections also provide for judicial
review of Appeals' determination. The CDP procedures
afforded new rights to taxpayers resulting in a significant
change in the Service's administrative collection process.
Temporary regulations were issued in January 1999, which
provide detailed guidance to taxpayers, practitioners and
Service employees for navigating the new procedural
landscape. In FY 2002, the IRS intends to issue final
regulations implementing the CDP procedures.
Recognition of Gain on Certain Distributions of Stock or
Securities under Section 355(e). Congress enacted section
355(e) of the Internal Revenue Code as part of the Taxpayer
Relief Act of 1997 and made technical corrections to that
section in the Internal Revenue Service Restructuring and
Reform Act of 1998. Section 355(e) provides that the
distributing corporation will recognize gain on certain
distributions that are part of a ``plan (or series of
related transactions)'' pursuant to which one or more
persons acquires directly or indirectly stock representing
a 50-percent or greater interest in the distributing or
controlled corporation. Regulations were proposed in
January of 2001 interpreting the phrase ``plan (or series
of related transactions).'' The IRS and Treasury intend to
revise those regulations and also intend to propose
regulations that will address the definition of an
acquisition.
Division and Geographical Source of Income in Global Dealing
Operations. In today's global capital markets, financial
institutions are trading in securities, currencies, and
sophisticated financial instruments in multiple
jurisdictions. Because of the cross-border nature of their
operations, these businesses face the risk of international
double taxation. That risk is exacerbated by various
regulatory provisions that are ill-suited for these types
of businesses. Proposed regulations were issued in 1998 for
public comment on the appropriate division and geographical
source of income in such global dealing operations.
Treasury and the IRS anticipate issuing a final rule during
fiscal year 2002 that reflects changes in response to the
comments that have been received.
Allocation of Losses on the Disposition of Stock and Other
Personal Property. The allocation of losses and expenses to
U.S. and foreign source income is relevant in computing the
amount of foreign taxes that may be claimed as a credit
against the U.S. tax on foreign source taxable income. In
general, a U.S. taxpayer's credit for foreign income taxes
on foreign source taxable income is limited to an amount
equal to what otherwise would have been the U.S. income tax
on such income. This limitation is separately computed with
respect to different categories of foreign source income.
Proposed regulations were issued for public comment in 1996
on how losses with respect to stock and other personal
property should be allocated to and among U.S. source
income and the various categories of foreign source income
in determining foreign source taxable income for these
purposes. In January 1999, portions of these regulations
were finalized and other portions were issued as temporary
rules with a request for further public comment. Because
the temporary regulations will sunset by operation of law
in January 2002, Treasury and the IRS anticipate issuing
final regulations prior to the sunset date with certain
changes in response to public comments.

[[Page 61255]]

Office of the Comptroller of the Currency
The Office of the Comptroller of the Currency (OCC) charters,
regulates, and supervises national banks to ensure a safe, sound, and
competitive national banking system that supports the citizens,
communities, and economy of the United States. The substantive content
of the OCC's regulations reflects four organizing principles that
support this mission:
The OCC's regulations help ensure safety and soundness by
establishing standards that set the limits of acceptable
conduct for national banks.
The OCC's regulations promote competitiveness by facilitating
a national bank's ability to develop new lines of business,
subject to any safeguards that are necessary to ensure that
the bank has the expertise to manage risk effectively and
adapt its business practices to deal responsibly with its
customers.
Regulations can also affect national banks' ability to compete
by contributing significantly to their costs. The OCC's
goal is to improve efficiency and reduce burden by updating
and streamlining its regulations and eliminating those that
no longer contribute significantly to the fulfillment of
its mission.
The OCC's regulations help assure fair access to financial
services for all Americans by removing unnecessary
impediments to the flow of credit to consumers and small
businesses, by encouraging national banks' involvement in
community development activities, and by implementing
Federal laws designed to protect consumers of financial
services.
The OCC's regulatory workload and plans are affected directly by new
statutes. Possible statutory changes are not addressed in this
Regulatory Plan, but may affect some of the planned rules directly, and
likely would affect how the OCC prioritizes its regulatory workload.
Important final rules issued during fiscal year 2001 (or expected to
be issued before publication of this Regulatory Plan) include:
Safety and Soundness Standards for Safeguarding Customer
Information (12 CFR part 30). This rule, issued jointly
with the other Federal banking agencies, established
standards governing the administrative, technical, and
physical safeguards of bank and customer records.
Consumer Protections for Depository Institution Sales of
Insurance (12 CFR part 14). This rule, issued jointly with
the other Federal banking agencies, prescribed consumer
protection regulations that apply to retail sales
practices, solicitations, advertising, or offers of any
insurance product by a depository institution or any person
that is engaged in such activities at an office of the
institution or on behalf of the institution.
Fiduciary Activities of National Banks (12 CFR part 9). The
OCC amended its regulations regarding the authority and
standards for national banks to conduct multi-state trust
operations. The rule provides enhanced guidance to national
banks engaging in fiduciary activities.
Investment Securities; Bank Activities and Operations;
Leasing (12 CFR parts 1, 7, and 23). This rule amended its
rules governing investment securities, bank activities and
operations, and leasing. These changes updated and revised
the OCC regulations to keep pace with developments in the
law and in the national banking system.
Debt Cancellation Contracts (12 CFR part 37). The OCC
published a notice of proposed rulemaking that addresses
debt cancellation contracts and debt suspension agreements.
The purposes of the customer protections are to facilitate
customers' informed choice about whether to purchase debt
cancellation contracts and debt suspension agreements,
based on an understanding of the costs, benefits, and
limitations of the products and to discourage inappropriate
or abusive sales practices. The proposed rule also promotes
safety and soundness by requiring national banks that
provide these products to maintain adequate loss reserves.
Operating Subsidiaries of Federal Branches and Agencies (12
CFR part 5). The rule will amend its regulations to enable
a Federal branch or agency to establish, acquire, or
maintain an operating subsidiary in generally the same
manner that a national bank may acquire or establish an
operating subsidiary.
The OCC's regulatory priorities for fiscal year 2002 include projects
in the following areas:
Risk-Based Capital Standards (12 CFR part 3). The OCC will
continue to work with the other Federal banking agencies to
update the risk-based capital standards to maintain, and,
where necessary, improve consistency in the agencies'
rules. Regulatory projects in this area may include the
following:
Collateralized Transactions. The rule would conform the banking
agencies' regarding the risk-based capital treatment of loans
collateralized in cash or government securities issued by members of
the Organization for Economic Cooperation and Development (OECD). The
rule would assign a zero risk weight for the portion of claims
collateralized by cash on deposit in a bank or securities issued or
guaranteed by the U.S. Government or its agencies or the central
government of an OECD country, provided that certain conditions are
met.
Risk-Based Capital Treatment of Recourse Transactions and Direct
Credit Substitutes. The OCC intends to finalize the rulemaking on
recourse and direct credit substitutes in which the OCC and other
federal banking agencies have sought comment on changes that would
result in more consistent treatment of recourse obligations and similar
transactions among the agencies, more consistent risk-based capital
treatment for certain types of transactions involving similar risk, and
capital requirements that more closely reflect a banking organization's
relative exposure to credit risk. This rule also would impose a dollar-
for-dollar capital charge on all subordinated positions, either
retained or purchased by a bank, that serve as credit enhancement on a
securitization.
Managed Assets. This rulemaking will seek information on approaches to
amend the risk-based capital guidelines to address the treatment of
assets under management in asset securitizations. Specifically, the
rulemaking will focus on the risks associated with management of assets
within a securitization structure, both for the originator as well as
servicer of such assets, as well as the appropriate framework within
which to assess capital charges, if appropriate, to address the risks.
Domestic Capital Framework (formerly referred to as Simplified Capital
Framework for Noncomplex Institutions). This rule would propose a
revised capital framework to be applied to domestic banks that would
not subject to the new Basel Capital Accord.
Claims on Securities Firms. This final rule would amend the risk-based
capital guidelines to lower the risk weight applied to certain claims
on, and claims guaranteed by, certain securities firms incorporated in
countries that are members of the Organization for

[[Page 61256]]

Economic Cooperation and Development (OECD) from 100 percent to 20
percent, subject to certain prudential requirements. This reduced risk
weighting applies to those securities firms that are subject to
supervision and regulation comparable to that imposed on banks,
including risk-based capital requirements that are no less stringent
than those imposed on banks under the Basel Accord and its market risk
amendment. This rule would implement a change made to the Basel Accord.
Merchant Banking Capital. This rule would amend the risk-based capital
guidelines to establish special minimum regulatory capital requirements
for equity investments in nonfinancial companies. The capital
requirement would apply symmetrically to equity investments of banks
and bank holding companies and would impose a series of marginal
capital charges on covered equity investments that increase with the
level of a banking organization's overall exposure to equity
investments relative to the organization's Tier 1 capital.
Securities Borrowing Transactions. This final rule generally would
lower the capital requirements for certain qualifying securities
borrowing transactions by permitting the collateralized portion of the
securities borrowing transactions to be subject to the market risk
capital requirements at 12 C.F.R. part 3, appendix B, as opposed to the
risk-based capital requirements at 12 C.F.R. part 3, appendix A. Among
other things, in order to qualify for the lower market risk capital
requirement under this joint interim rule, a bank must be subject to
the market risk capital requirements, and the securities borrowing
transaction must result in a receivable that arises from the posting of
the cash collateral. Only the portion of the receivable collateralized
by the market value of the securities borrowed qualifies for the lower
market risk capital requirement; noncollateralized portions must
continue to be risk weighted under the risk-based capital guidelines.
Electronic Banking (12 CFR part 7). The OCC published a
notice of proposed rulemaking that addressed ways to
facilitate national banks in their efforts to engage in
various forms of electronic banking. The proposal addresses
national banks' exercise of their federally authorized
powers through electronic means; the location of a national
bank that engages in electronic activities; and the
disclosures required when a national bank provides its
customers with access to other service providers through
hyperlinks in the bank's web site or other shared
electronic space. The OCC will be evaluating the comments
received and considering what changes, if any, should be
made to the OCC's rules affecting electronic banking.
Community Reinvestment Act Regulations (12 CFR part 25). The
OCC, along with the other Federal banking agencies,
published an advance notice of proposed rulemaking
soliciting comments on ways to improve the CRA regulation.
Based on the comments received, the OCC and other agencies
will consider the need for changes to the CRA rules and
will propose such changes as are deemed appropriate.
Real Estate Lending and Appraisals (12 CFR part 34). The OCC
intends to evaluate its rules governing adjustable rate
mortgage loans to determine whether the rule continues to
implement the Alternative Mortgage Transaction Parity Act
of 1982 effectively and whether consumer protection
safeguards are needed.
Implementation of Sections 1204-1206 of the Financial
Regulatory Relief and Economic Efficiency Act of 2000 (the
Act) (12 CFR part 5). The OCC intends to initiate a
rulemaking to implement the authority vested in national
banks by the Act to reorganize into a holding company
through a share exchange and to merge with a subsidiary or
affiliate.
Office of Thrift Supervision
As the primary Federal regulator of the thrift industry, the Office of
Thrift Supervision (OTS) has established regulatory objectives and
priorities to supervise thrift institutions effectively and
efficiently. These objectives include maintaining and enhancing the
safety and soundness of the thrift industry; a flexible, responsive
regulatory structure that enables savings associations to provide
credit and other financial services to their communities, particularly
housing mortgage credit; and a risk-focused, proactive approach to
supervision.
OTS continues to work with the other federal banking agencies on
regulations where the agencies share the responsibility to implement
statutory requirements. The agencies are working to update capital
standards to maintain, and, where necessary, improve consistency in the
agencies' rules. Regulatory projects in this area include the
following:
Risk-Based Capital Treatment of Recourse and Direct Credit
Substitutes; and Residuals in Securitizations. OTS expects
to issue a final rule jointly with the other federal
banking agencies that would treat recourse obligations and
direct credit substitutes comparably. The final rule would
use credit ratings and certain other alternative mechanisms
to match risk-based capital requirements more closely to a
depository institution's risk of loss in asset
securitizations. This rule would be published in tandem
with a final rule on residual interests that would better
align regulatory capital requirements with the risk
exposure of residual interests in asset securitizations and
other transfers of assets.
Managed Assets. This initiative, possibly in the form of an
advance notice of proposed rulemaking, would seek
information on approaches to amend the risk-based capital
guidelines to address the treatment of assets under
management in asset securitizations. Specifically, this
rulemaking would focus on the risks associated with
management of assets within a securitization structure,
both for the originator as well as servicer of such assets,
as well as the appropriate framework within which to assess
capital charges, if appropriate, to address the risks.
Capital Adequacy. The four Federal banking agencies expect to
issue a joint notice of proposed rulemaking seeking comment
on ways to modify the capital adequacy framework for those
domestic institutions that would not be subject to the
Basel Capital Accord.
Claims on Securities Firms. The four Federal banking agencies
expect to issue a final rule that would reduce the risk
weight assigned to claims on, and claims guaranteed by,
certain qualifying securities firms, subject to certain
prudential requirements.
Miscellaneous Capital Revisions. OTS also plans to issue a
final rule to make miscellaneous amendments to update its
capital rules.
OTS and the other Federal banking agencies anticipate reproposing a
rule implementing provisions of the Fair Credit Reporting Act (FCRA)
concerning information sharing with affiliates. The agencies informed
those institutions potentially affected by the rulemaking that any
final rule would not apply to

[[Page 61257]]

privacy notices sent before January 1, 2002 or before the effective
date of the final FCRA rule, whichever is later.
The four Federal banking agencies published a joint advance notice of
proposed rulemaking seeking comments on how to improve the Community
Reinvestment Act (CRA) regulations. The OTS, as well as the other
banking agencies, will consider changes to the CRA rules based upon the
comments received, and will propose such changes as are deemed
appropriate.
OTS also is reviewing its lending and subordinate organization
regulations to give thrifts additional flexibility, enabling them to
better serve their communities and compete with other lenders. OTS also
plans to issue a final rule revising its regulations governing
conversion from mutual to stock or mutual holding company form. OTS is
also reviewing its current holding company regulations to determine
whether and how they should be modified to reflect statutory changes
made by the Gramm-Leach-Bliley Act. Additionally, OTS is considering
possible amendments to its regulations governing directors and officers
of savings associations and the fiduciary activities of savings
associations.
Finally, OTS may revise its lending regulations, including the rules
implementing the Alternative Mortgage Transactions Parity Act, to
encourage responsible lending and limit the potential for predatory
lending practices.
United States Customs Service
The United States Customs Service (Customs) is responsible, among
other things, for administering laws concerning the importation of
goods into the United States. This includes inspecting imports,
collecting applicable duties, overseeing the activities of persons and
businesses engaged in importing, and enforcing the laws concerning
smuggling and trafficking in contraband. The regulatory priorities of
Customs for fiscal year 2002 are to continue to facilitate procedures
for legitimate commercial transactions and to provide further obstacles
to the flow of narcotics and other contraband into the United States.
During fiscal year 2001, one of Customs' priorities was to develop and
publish regulations to implement provisions of the Trade and
Development Act of 2000. To that end, Customs published the following
documents during the past fiscal year:
United States-Caribbean Basin Trade Partnership Act and
Caribbean Basin Initiative. This interim rule implements
the trade provisions for Caribbean Basin countries
contained in title II of the Trade and Development Act.
African Growth and Opportunity Act and Generalized System of
Preferences. This interim rule implements the trade
provisions for sub-Saharan Africa contained in title I of
the Trade and Development Act.
Refunds of Duties Paid on Imports of Certain Wool Products.
This rulemaking implements the provisions of section 505 of
title V of the Trade and Development Act. This rule set
forth the eligibility, documentation and procedural
requirements necessary to substantiate a refund claim for
duties paid on imports of certain wool products.
Duty-free Treatment for Certain Beverages Made with Caribbean
Rum. This interim rule implemented a change made by the
Trade and Development Act that enables certain spirituous
beverages to obtain duty-free treatment under specified
conditions when the beverages are processed in the
territory of Canada from rum that is the growth, product or
manufacture either of a CBI beneficiary country or of the
U.S. Virgin Islands.
Rules of Origin for Textile and Apparel Products. This
interim rule aligned the existing country of origin rules
for textile and apparel products with the statutory
amendments to section 334 of the Uruguay Round Agreements
Act as set forth in section 405 within title IV of the
Trade and Development Act.
During fiscal year 2001, one of Customs' priorities was to continue
moving forward with amendments reinventing its regulatory procedures
began under the authority granted by the Customs Modernization
provisions of the North American Free Trade Implementation Act
(``Customs Mod Act''). Customs' reinvention efforts, in accordance with
the principles of E.O. 12886, have involved and will continue to
involve significant input from the importing public. Of particular note
regarding Customs' progress implementing the Customs Mod Act, Customs,
during the last fiscal year, issued a proposal to revise the procedures
by which Customs will issue administrative rulings responding to
requests from prospective importers concerning how Customs will treat
their transactions.
During fiscal year 2002, Customs plans to continue its progress with
the Customs Mod Act. Customs plans during fiscal year 2002 to issue a
final rule regarding its administrative ruling procedures and to
propose revisions to its procedures regarding protests. In addition,
Customs' reinvention efforts continue to involve the testing of
programs to see if they work before proceeding with proposed rulemaking
to permanently establish the programs.
During fiscal year 2002, Customs also plans to undertake several other
regulatory actions that will affect the traveling and importing public,
customs brokers, carriers and commercial importers. Consistent with the
Customs Mod Act, Customs will accord priority to several projects to
foster the development of a more automated environment to expedite the
entry and release of imported commercial merchandise, and the
processing of merchandise for export. These regulations will benefit
the importing and exporting public by streamlining the work of Customs
officers and the trade community through improved efficiency and
reduced paperwork and administrative costs. Among these projects are:
Liquidations. Customs will propose regulations allowing
paperless procedures for extension and suspension of
liquidation notices, improving and clarifying the
administrative process and simplifying the regulations
pertaining to liquidations and extensions and suspensions
of liquidation.
Entry Reconciliation. Customs will continue to develop
through testing a ``reconciliation'' process that will
allow the delayed submission to Customs of information that
is undetermined at the time an entry summary or an import
activity summary statement is required to be submitted.
After Customs is satisfied with the testing, regulations
will be proposed to allow reconciliation on a permanent
basis.
Remote Location Filing. Customs will propose regulations
allowing electronic filing of entries from locations in the
United States other than the port of arrival of the
merchandise or the place at which the merchandise is
examined. Remote location filing will provide entry filers
(such as brokers and couriers) with greater flexibility and
will allow

[[Page 61258]]

Customs to make more efficient use of its resources.
Bureau of Alcohol, Tobacco and Firearms
The Bureau of Alcohol, Tobacco and Firearms (ATF) issues regulations
to enforce the Federal laws relating to the manufacture and commerce of
alcohol products, tobacco products, firearms and explosives. ATF's
regulations carry out these missions and are designed to:
Curb illegal traffic in, and criminal use of, firearms; and to
assist State, local and other Federal law enforcement
agencies in reducing crime and violence;
Facilitate investigations of violations of Federal explosives
laws and arson-for-profit schemes;
Regulate the alcohol, tobacco, firearms and explosives
industries, including the issuance of licenses and permits;
Assure the collection of all alcohol, tobacco, firearms and
ammunition taxes, and obtain a high level of voluntary
compliance with all laws governing those industries;
Suppress commercial bribery, consumer deception and other
prohibited practices in the alcoholic beverage industry;
and
Assist the States in their efforts to eliminate interstate
trafficking in, and the sale and distribution of,
cigarettes in avoidance of State taxes.
ATF intends to streamline its regulations applying to the brewing
industry by simplifying its brewery reports and operations and
eliminating obsolete regulatory provisions. Also, ATF will propose
minimum production standards for beer, thereby reducing formula filings
and a revised statement of net contents requirement for certain
container sizes.
ATF will continue, as a priority during Fiscal Year 2002,
modifications to its regulations governing commerce in explosives. ATF
is further analyzing its regulations governing storage requirements for
explosives, including fireworks explosive materials, and plans to issue
the notice of proposed rulemaking described in detail in part II of
this Regulatory Plan.
Financial Crimes Enforcement Network
The regulations of the Financial Crimes Enforcement Network (FinCEN)
constitute the core of Treasury's anti-money laundering initiatives and
are an essential component of Treasury's anti-narcotics effort. The
Bank Secrecy Act (BSA) authorizes the Secretary of the Treasury to
issue regulations requiring financial institutions to keep records and
file reports that are determined to have a high degree of usefulness in
criminal, tax or regulatory proceedings, and to implement counter-money
laundering programs and compliance procedures.
Since mid-1994, FinCEN has been engaged in a thorough review of its
regulatory policies and has been building a partnership between
Government and the financial sector to fight money laundering. The
cornerstone of that partnership is the recognition that only a
cooperative relationship between Government and industry can provide a
way to implement a three-pronged strategy of prevention, detection, and
enforcement against those who seek to use the financial system to
promote or further illegal activity. FinCEN recognizes that BSA
compliance imposes costs on the financial community and that
recordkeeping and reporting should be required only when the benefits
to law enforcement efforts are clear.
During fiscal year 2002, FinCEN will continue to review and revise its
existing regulations. FinCEN has issued two rules concerning the
application of the BSA to certain non-bank financial institutions
called money services businesses or ``MSBs.'' MSBs include currency
exchangers, check cashers, money order and traveler's check businesses,
and money transmitters. Under the first rule, MSBs would be required to
register with the Department of the Treasury by December 31, 2001.
Under the second rule, three categories of MSBs--money order and
traveler's check businesses and money transmitters--would be required
to report suspicious transactions beginning January 1, 2002. To ensure
the rules are implemented effectively and efficiently, FinCEN intends
to publish by early fiscal 2002 a rule extending the effective date of
the registration and suspicious activity reporting requirements. As a
result, MSBs will not be required to register until June 30, 2002, and
money order and traveler's check businesses and money transmitters will
not be required to report suspicious transactions until October 1,
2002. FinCEN also intends to publish a notice re-opening the comment
period for a prior notice of proposed rulemaking that would extend the
requirement to report suspicious transactions to casinos and card
clubs. Finally, FinCEN will publish for public comment a proposal to
require brokers and dealers in securities to report suspicious
transactions.
Bureau of the Public Debt
The Bureau of the Public Debt (BPD) administers regulations:
Governing transactions in government securities by government
securities brokers and dealers.
Implementing Treasury's borrowing authority, including rules
governing the sale and issue of marketable Treasury
securities.
Setting out the terms and conditions by which Treasury may
redeem (buy back) outstanding, unmatured marketable
Treasury securities through debt buyback operations.
Governing the acceptability and valuation of all collateral
pledged to secure deposits of public monies and other
financial interests of the federal government.
The Government Securities Act of 1986 (GSA) authorizes the Secretary
of the Treasury to prescribe rules governing financial responsibility,
the protection of customer funds and securities, recordkeeping,
reporting, audit, and large position reporting for all government
securities brokers and dealers, including financial institutions. These
rules fulfill the Treasury's statutory responsibility to safeguard the
efficient functioning of the government securities market and are
designed to prevent fraudulent and manipulative acts and practices and
to protect the integrity, efficiency and liquidity of the market. The
Department and BPD are committed to implementing rules that make sense
from both a regulatory and market efficiency perspective. Accordingly,
the Department and BPD seek to balance the benefits of regulation with
the compliance costs imposed on the government securities market and
its participants.
The rules setting out the terms and conditions for the sale and issue
of marketable book-entry Treasury bills, notes, and bonds are known as
the Uniform Offering Circular. These rules apply to securities held in
accounts in the book-entry system established by the Department and
operated by the Federal Reserve Banks, known as the commercial book-
entry system, as well as to securities held in accounts directly with
Treasury in the TreasuryDirect system. The Uniform Offering Circular
describes the types of securities offered for sale, the auction method
by which they are sold, the process for submitting bids, the process
for awarding securities

[[Page 61259]]

to successful bidders, and the authorized payment methods.
During fiscal year 2002, BPD will accord priority to rewriting the
Uniform Offering Circular in plain language. This will communicate the
auction rules in a more direct and effective manner. BPD will also give
priority to any further regulatory action the Department deems
appropriate regarding the net long position calculation and the 35
percent award limit in marketable Treasury securities auctions. An
advance notice of proposed rulemaking was published for comment on this
matter in July 2001.
Financial Management Service
The Financial Management Service (FMS) issues regulations to improve
the quality of Government financial management and to administer its
payments, collections, debt collection, and Governmentwide accounting
programs. During fiscal year 2002, FMS will continue to update its
regulations that implement the Cash Management Improvement Act of 1990
(CMIA). The CMIA requires the head of each executive agency, under
regulations prescribed by the Secretary of the Treasury, to provide for
the timely disbursement of Federal funds. FMS issued an implementing
regulation in December 1992. FMS issued a notice of proposed rulemaking
to update the CMIA in fiscal year 2001. FMS will issue a final rule
governing the CMIA in fiscal year 2002.
Also, FMS will revise its rule concerning the payment of Federal taxes
and the Treasury Tax and Loan Program (TT&L). This revision will
support operational changes to the system used for the collection of
corporate withholding taxes. In addition, FMS will streamline the TT&L
rule and write it in plain language.
During fiscal year 2002, FMS will propose revisions to its rule
governing the indorsement and payment of checks drawn on the United
States Treasury. The proposed revisions will relate to, among other
things, finality of payment, liability for checks bearing material
defects or alterations, and the use of powers of attorney.
Finally, FMS will continue to implement provisions of the Debt
Collection Improvement Act of 1996.
Community Development Financial Institutions Fund
The Community Development Financial Institutions Fund (Fund) was
established by the Community Development Banking and Financial
Institutions Act of 1994 (12 U.S.C. 4701 et seq.). The primary purpose
of the Fund is to promote economic revitalization and community
development through investments in, and assistance to, community
development financial institutions (CDFIs), principally through the
CDFI Program. The CDFI Program has four components: the Core Component,
the Intermediary Component, the Small and Emerging CDFI Assistance
Component, and the newly developed Native American CDFI Technical
Assistance Component. The Fund also administers the Bank Enterprise
Award (BEA) Program, which encourages insured depository institutions
to engage in eligible development activities and to make equity
investments in CDFIs.
In addition, the Fund is developing a new program, the New Markets Tax
Credit (NMTC) Program, which the Fund will administer, in coordination
with Treasury's Office of Tax Policy and the Internal Revenue Service.
The NMTC Program is intended to spur investments in businesses located
in low-income communities. Under the NMTC Program, taxpayers will be
provided a credit against Federal income taxes for qualified
investments made to acquire stock or other equity interests in
designated Community Development Entities (CDEs). Substantially all of
the proceeds of qualified investments must in turn be used by the CDE
to make qualified investments in low-income communities.
The Fund's fiscal year 2002 regulatory priority will focus on the NMTC
Program, by developing guidance regarding the submission of
applications for CDE certification and guidance regarding the
submission of applications for NMTC allocations.
_______________________________________________________________________

TREAS

-----------

PROPOSED RULE STAGE

-----------

110. REVISION OF BREWERY REGULATIONS AND ISSUANCE OF REGULATIONS FOR
TAVERNS ON BREWERY PREMISES (BREWPUBS)
Priority:

Other Significant

Legal Authority:

26 USC 5051 to 5056; 26 USC 5401 to 5417; 27 USC 205

CFR Citation:

27 CFR 7; 27 CFR 25

Legal Deadline:

None

Abstract:

ATF intends to streamline regulations applying to breweries. ATF will
eliminate obsolete regulatory provisions. A formula system for
manufactured beer products will replace statements of process attached
to the brewers notice. The annual notice for small brewers to pay the
reduced rate of tax will be eliminated. Separate regulations for
brewpubs will be added to part 25. A section will be added to part 25
to authorize and regulate the alternating use of brewery premises by
different brewers. Regulations authorizing the operation of brew-on-
premises facilities will be added to part 25.

Statement of Need:

ATF intends to streamline its regulations applying to the brewing
industry. These changes will simplify brewery reports and operations
and eliminate obsolete regulatory provisions. Specific changes would
include the implementation of a formula system for the breweries to
replace the statement of process; the establishment of a separate
subpart containing simplified regulations for brewpubs; authorizing
alternating brewery premises among different proprietors; eliminating
the annual notice to pay the reduced rate of tax for most breweries;
authorizing brewers to file the Brewer's Report of Operations on a
quarterly basis; and authorizing many brewers to take inventories
quarterly rather than monthly. The rule will also propose minimum
production standards for beer thereby reducing formula filings and a
revised statement of net contents requirement for certain container
sizes.

Summary of Legal Basis:

ATF has undertaken this review of brewery regulations as part of the
President's Regulatory Initiative. These regulations are issued under
the general authority of the Secretary of the Treasury to promulgate
regulations to implement the Internal Revenue Code and the Federal
Alcohol Administration Act.

Alternatives:

Not applicable. ATF believes that industry will support these
regulatory changes because they will streamline regulatory requirements
applying to the brewing industry.

[[Page 61260]]

Anticipated Cost and Benefits:

The proposed regulations will benefit the brewing industry by reducing
required inventories, notices, and other submissions to ATF.

Risks:

Not applicable.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 08/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
William Foster
Program Manager
Department of the Treasury
Bureau of Alcohol, Tobacco and Firearms
650 Massachusetts Avenue NW.
Washington, DC 20226
Phone: 202 927-8210
RIN: 1512-AB37
_______________________________________________________________________

TREAS

111. COMMERCE IN EXPLOSIVES (INCLUDING EXPLOSIVES IN THE FIREWORKS
INDUSTRY)
Priority:

Other Significant

Legal Authority:

5 USC 552(a); 31 USC 9303; 31 USC 9304; 40 USC 304(k); 18 USC 847; 18
USC 921 to 930; 18 USC 1261; 19 USC 1612; 19 USC 1613; 19 USC 1618; 26
USC 7101; 26 USC 7322 to 7326; 31 USC 9301

CFR Citation:

27 CFR 55

Legal Deadline:

None

Abstract:

Pursuant to section 610 of the Regulatory Flexibility Act, ATF
published a notice on January 10, 1997, seeking public comments on
whether it should revise its regulations, codified at 27 CFR part 55,
governing Commerce in Explosives (Including Explosives in the Fireworks
Industry). Based on comments received, ATF plans to initiate a
rulemaking to revise these regulations in 2001.

Statement of Need:

This notice of proposed rulemaking will address many of the issues in
part 55, Commerce in Explosives, especially the issues in requirements
for explosives, including fireworks explosive materials. Pursuant to
the periodic review requirements of the Regulatory Flexibility Act (5
U.S.C. 610), ATF published on January 10, 1997 a General Notice
initiating the review of a final rule published in 1990 concerning the
storage of fireworks explosives materials. The 1990 rule, which was
issued as a result of the number and severity of explosions occurring
on the premises of special fireworks plants, amended certain
regulations codified at 27 CFR part 55, generally concerning the
recordkeeping and storage of fireworks explosive materials. The
regulations also codified two fireworks related rulings issued in 1979
and 1985, and the provisions of Public Law 99-308 relating to black
powder. As a result of the public comments received in response to the
General Notice and further study of this issue, ATF will issue a notice
of proposed rulemaking covering this and related commerce and storage
of explosives issues.

Summary of Legal Basis:

18 U.S.C. 847 grants the Secretary of the Treasury broad discretion to
promulgate regulations necessary for the importation, manufacture,
distribution, and safe storage of explosives materials. 18 U.S.C. 846
authorizes the Secretary to prescribe precautionary measures to prevent
the recurrence of accidental explosions in which explosive materials
were involved. The General Notice and upcoming notice of proposed
rulemaking are also being issued pursuant to section 610 of the
Regulatory Flexibility Act (5 U.S.C. 610), which requires an agency to
review within 10 years of publication rules for which an agency
prepared a final regulatory flexibility analysis addressing the impact
of the rule on small businesses or other small entities.

Alternatives:

Alternatives will be examined in the context of public comments to the
notice of proposed rulemaking.

Anticipated Cost and Benefits:

Unknown at this time.

Risks:

Not applicable.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
General Notice o62 FR 1386ry Review 01/10/97
NPRM 04/00/02
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

None

Agency Contact:
James Ficaretta
Program Manager
Department of the Treasury
Bureau of Alcohol, Tobacco and Firearms
650 Massachusetts Avenue NW.
Washington, DC 20226
Phone: 202 927-8210
RIN: 1512-AB48
BILLING CODE 4810-25-S

[[Page 61261]]

DEPARTMENT OF VETERANS AFFAIRS (VA)

Statement of Regulatory Priorities
The Department of Veterans Affairs (VA) administers benefit programs
that recognize the important public obligations to those who served
this Nation. VA's regulatory responsibility is almost solely confined
to carrying out mandates of the laws enacted by Congress relating to
programs for veterans and their beneficiaries. VA's major regulatory
objective is to implement these laws with fairness, justice, and
efficiency.
Most of the regulations issued by VA involve at least one of three VA
components: The Veterans Benefits Administration, the Veterans Health
Administration, and the National Cemetery Administration. The primary
mission of the Veterans Benefits Administration is to provide high-
quality and timely nonmedical benefits to eligible veterans and their
beneficiaries. The primary mission of the Veterans Health
Administration is to provide high-quality health care on a timely basis
to eligible veterans through its system of medical centers, nursing
homes, domiciliaries, and outpatient medical and dental facilities. The
primary mission of the National Cemetery Administration is to bury
eligible veterans, members of the Reserve components, and their
dependents in VA National Cemeteries and to maintain those cemeteries
as national shrines in perpetuity as a final tribute of a grateful
Nation to honor the memory and service of those who served in the Armed
Forces.
The Department of Veterans Affairs' 2001 regulatory plan contains one
rulemaking action from the Veterans Benefits Administration and two
rulemaking actions from the Veterans Health Administration. The
Veterans Benefits Administration rulemaking is RIN 2900-AK64 ``Diseases
Specific to Radiation-Exposed Veterans.'' This proposes to amend the
Department's adjudication regulations concerning presumptive service
connection for certain diseases for veterans who participated in
radiation-risk activities during active service or while members of
reserve components during active duty for training or inactive duty
training. One of the Veterans Health Administration (VHA) rulemakings
is RIN 2900-AK08 ``Payment or Reimbursement for Emergency Treatment
Furnished at Non-VA Facilities,'' which amends the Department's medical
regulations by establishing a mechanism for payment or reimbursement
for certain non-VA emergency services furnished to veterans for
nonservice-connected conditions. The other VHA rulemaking is RIN 2900-
AK85 ``Copayments for Medications,'' which proposes to amend VA's
medical regulations to set forth copayment requirements for medications
provided to veterans by VA.
_______________________________________________________________________

-----------

PROPOSED RULE STAGE

-----------

112. DISEASES SPECIFIC TO RADIATION-EXPOSED VETERANS
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

38 USC 1112(c); PL 100-321

CFR Citation:

38 CFR 3.309(d)

Legal Deadline:

None

Abstract:

The Department of Veterans Affairs (VA) is proposing to amend its
adjudication regulations concerning presumptive service connection for
certain diseases for veterans who participated in radiation-risk
activities during active service or while members of reserve components
during active duty for training or inactive duty training. This
proposed amendment would add cancers of the bone, brain, colon, lung,
and ovary to the list of diseases which may be presumptively service-
connected and amend the definition of the term ``radiation-risk
activity.'' The intended effect of this amendment is to ensure that
veterans who may have been exposed to radiation during military service
have the same burden of proof as civilians exposed to ionizing
radiation who may be entitled to compensation for these cancers under
comparable Federal statutes.

Statement of Need:

This proposed amendment would add cancers of the bone, brain, colon,
lung, and ovary to the list of diseases that may be presumptively
service-connected and amend the definition of the term ``radiation-risk
activity.'' This proposed amendment would also ensure that veterans who
may have been exposed to radiation during military service have the
same burden of proof as civilians exposed to ionizing radiation who may
be entitled to compensation for these cancers under comparable Federal
statutes.

Summary of Legal Basis:

Section 501(a)(1) of title 38, United States Code, provides that the
Secretary of Veterans Affairs has the authority to promulgate
regulations regarding the nature and extent of proof and evidence in
order to establish entitlement to veterans' benefits. Pursuant to this
authority, VA proposes to amend 38 CFR 3.309(d)(2) to add bone, brain,
colon, lung, and ovarian cancers, which are covered under the Energy
Employees Occupational Illness Compensation Program Act or are covered
under the RECA Amendments but are currently not included in the list of
diseases in 38 U.S.C. 1112(c)(2) that are presumed to be service-
connected for radiation-exposed veterans. This regulation is not
required by statute or court order.

Alternatives:

Veterans may establish service connection for these five cancers under
38 U.S.C. 1110 or 1131 or the Veterans' Dioxin and Radiation Exposure
Compensation Standards Act, Public Law No. 98-542, 98 Stat. 2725
(1984). Doing so is difficult because, among other things, it requires
sound scientific and medical evidence establishing that it is at least
as likely as not the veteran's disease resulted from exposure to
radiation in service, based in part on an assessment of the amount of
radiation to which a veteran was exposed.

Anticipated Cost and Benefits:

This regulatory amendment will not have a significant economic impact
on a substantial number of small entities as they are defined in the
Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612. These amendments
would not directly affect any small entities. Only VA beneficiaries
could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b),
these amendments are exempt from the initial and final regulatory
flexibility analysis requirements of sections 603 and 604.

Risks:

This regulation will not increase or reduce risks to public health,
safety, or the environment.

[[Page 61262]]

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 41483 08/08/01
NPRM Comment Period End 10/09/01
Final Action 04/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Agency Contact:
Bill Russo
Attorney-Advisor, Compensation and Pension (211)
Department of Veterans Affairs
Veterans Benefits Administration
810 Vermont Avenue NW
Washington, DC 20420
Phone: 202 273-7211
Fax: 202 275-1728
Email: [email protected]
RIN: 2900-AK64
_______________________________________________________________________

-----------

FINAL RULE STAGE

-----------

113. PAYMENT OR REIMBURSEMENT FOR EMERGENCY TREATMENT FURNISHED AT NON-
VA FACILITIES
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

38 USC 501; 38 USC 1725; PL 106-117

CFR Citation:

38 CFR 17

Legal Deadline:

NPRM, Statutory, May 22, 2000, 180 days after effective date of PL 106-
117.

Abstract:

This document amends the Department of Veterans Affairs medical
regulations by establishing a mechanism for payment or reimbursement
for certain non-VA emergency services furnished to veterans for
nonservice-connected conditions. This amendment is necessary to
implement provisions of ``The Veterans Millennium Health Care and
Benefits Act.''

Statement of Need:

Public Law No. 106-117 ``The Veterans Millennium Health Care and
Benefits Act'' requires this amendment to implement its provisions.

Summary of Legal Basis:

38 U.S.C. 1725 authorizes VA to establish provisions for payment or
reimbursement for certain non-VA emergency services furnished to
Veterans for nonservice-connected conditions.

Alternatives:

The alternatives that the Department had to consider are the amount of
reimbursement and the location where claimants can file a claim.

Anticipated Cost and Benefits:

Cost projection for FY 2001 is $66 to $75 million. The FY 2003 budget,
in accordance with section 1725 of title 38, will provide an updated
estimate of the full year impact of this legislation expected to be
incurred in FY 2003.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Interim Final Ru66 FR 36467 07/12/01
Interim Final Rule Effective 05/29/00
Interim Final Rule Effective (38 CFR 17.004) 07/19/01
Interim Final Rule Comment Period End (Information Collection) 07/19/01
Interim Final Rule Comment Period End 09/10/01
Final Action 04/00/02
Regulatory Flexibility Analysis Required:

Undetermined

Government Levels Affected:

None

Agency Contact:
Roscoe G. Butler
Chief, Policy and Operations (10C3)
Department of Veterans Affairs
Veterans Health Administration
810 Vermont Avenue NW
Washington, DC 20420
Phone: 202 273-8302
Fax: 202 273-9609
Email: [email protected]
RIN: 2900-AK08
_______________________________________________________________________

114. COPAYMENTS FOR MEDICATIONS
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

PL 106-117; 38 USC 1722A

CFR Citation:

38 CFR 17

Legal Deadline:

None

Abstract:

This rule proposes to amend VA's medical regulations to set forth
copayment requirements for medications provided to veterans by VA.

Statement of Need:

This rule is intended to make the copayments for medications more in
line with industry standards.

Summary of Legal Basis:

Public Law 106-117 amended 38 U.S.C. 1722A to allow the copayment
amount to be increased.

Alternatives:

Although the amount could be set at a number of different levels, we
attempted to establish a rate in line with industry standards.

Anticipated Cost and Benefits:

We anticipate that this will increase collections $250 million
annually.

Risks:

None.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 66 FR 36960 07/16/01
NPRM Comment Period End 09/14/01
Final Action 12/00/01
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

[[Page 61263]]

Agency Contact:
Nancy Howard
Senior Program Analyst (174)
Department of Veterans Affairs
Veterans Health Administration
810 Vermont Avenue NW
Washington, DC 20420
Phone: 202 273-8198
Fax: 202 273-4897
Email: [email protected]
RIN: 2900-AK85
BILLING CODE 8320-01-S

[[Page 61264]]

ENVIRONMENTAL PROTECTION AGENCY (EPA)

Statement of Priorities
The President has made it clear that he expects the American people to
get full value for every taxpayer dollar government spends, and they
will from the EPA. The environmental challenges we face in the 21st
century are too important to allow us to do anything but use our
resources wisely, efficiently, and effectively.
The President has called for Governmentwide management reforms that
will, when implemented, make the Federal Government more accountable
while improving the government services we provide to the American
people. In order to improve the regulatory process within EPA, we
established a task force to examine the Agency's rulemaking process,
and to recommend ways to improve the internal process and strengthen
the supporting science and analysis. The task force concluded that the
regulatory process is essentially sound but improvements should be made
in several areas to more effectively carry out our mission.
Better Science and Economic Analyses⁵⁶ Today's environmental problems are far more complex than they
were in the past, and there has been a dramatic expansion in the
universe of scientific, economic and social issues that we must
consider. Our decisions must reflect the latest findings in relevant,
high quality research, both in science and economics. To strengthen the
analyses that support EPA decisions, we will involve scientists and
economists in more prominent ways throughout our decisionmaking process
-- in identifying needed information and research, developing a range
of alternative approaches, and selecting from available options.
Administrator Whitman is also designating senior experts in both
science and economics to advise her on the strengths and weaknesses of
EPA analyses and provide Agency leadership in improving analytical
consistency and quality.
Broader Consideration of Policy Options⁵⁶ To produce the best environmental outcomes at an acceptable
cost, EPA decisionmakers must consider a broader array of policy
options, including innovative alternatives and market-based approaches.
We will strengthen analysis of policy issues by more systematically
identifying relevant issues and providing regulatory workgroups with
better training and support. We will engage EPA's senior managers more
actively in selecting options and consult more effectively with
internal policy advisors, co-regulators, and stakeholders. As we
develop and consider available options, we will pay more attention to
implementation -- how EPA regions and states will be affected, what
kinds of compliance assistance will be needed, and how we can tell if
we're achieving desired results.
Greater Accountability⁵⁶ The task force found that the policymaking process in place at
EPA is well designed and can function effectively, but greater
accountability is needed to ensure that managers and staff properly
follow the process. Senior managers will take greater responsibility
for setting strategic direction, assuring high quality analysis of
relevant issues, and selecting the best available options. We are
creating a better management system to ensure thorough analyses and
timely decision points, and that process requirements are met. We will
also evaluate the effectiveness of the regulatory development process
and of the regulations themselves.
Better Management of Significant Nonregulatory Decisions⁵⁶ Finally, we are developing a system to better manage significant
nonregulatory actions that will provide the cross-agency attention that
these decisions deserve. We have included three of these nonregulatory
actions in this year's Plan (Persistent, Bioaccumulative, and Toxic
(PBT) Pollutants Strategy (RIN 2070-AD45), TSCA Policy Statement on
Oversight of Transgenic Organisms (RIN 2070-AD13), and the
Acceptability of Using Human Subjects (RIN 2070-AD57).
Better Environmental Results
All of these reforms are designed to help us reach the goal of making
our air cleaner, our water purer, and our land better protected. This
will be the ultimate measure of our success. Everything we do should be
looked at through that prism. Will this make the air cleaner? Will this
make the water purer? To that end we continue to apply new methods to
protect the environment by building flexibility into regulations up
front, through nonregulatory approaches where effective, by creating
strong partnerships with States and conducting extensive public
outreach.
EPA's Regulatory Plan will address 34 of the most important actions
currently under development or review. These actions will have a
significant effect on public health and the environment. The
accompanying regulatory agenda identifies more than 350 additional
rules, policies and voluntary programs that are also underway.
The following are specific EPA priorities that will help us achieve
cleaner air, purer water and better protected lands.
Cleaner air⁵⁶ Enact the President's multi-emission bill
Focus on reducing indoor air pollution, especially as it
relates to children
Promote energy conservation
Purer water⁵⁶ Take a broader watershed approach to address water
quality issues
Begin to bring America's water infrastructure up to date
Land better protected⁵⁶ Expand our efforts to reclaim the thousands of
brownfields that continue to scar too many neighborhoods.
Highlights of the Regulatory Plan Rules and Policies
Office of Air and Radiation⁵⁶ EPA remains committed to taking advantage of the flexibility
granted by the Clean Air Act that enables companies, States, and
communities to meet clean air goals with cost-effective approaches. The
following are the most significant of our air activities.
In 1997, we established new, more stringent air quality standards for
ozone and particulate matter based on new scientific and technical
information indicating that new standards were needed to protect public
health and the environment. In 1999, the D.C. Circuit Court found that
the Clean Air Act provision authorizing the new standards is
unconstitutional as EPA applied it. We successfully appealed this
decision to the United States Supreme Court, and we are now working on
an implementation program to respond to the Court's decision.
To date, our air toxics program has focused primarily on getting broad
emission reductions from large industrial sources through technology-
based standards. Since 1990, EPA has issued standards affecting 77
different industries, such as petroleum refineries and chemical
manufacturing plants.

[[Page 61265]]

When fully implemented, these standards will reduce more than one
million tons of toxic air emissions per year. Through other efforts
such as phasing-out of lead in gasoline, we have also significantly
reduced air toxics from cars and trucks.
We are continuing to set technology-based standards for large
industries. The rules listed in this year's Regulatory Plan -- covering
industrial boilers, institutional/commercial boilers, wood
manufacturing, reciprocating engines, combustion turbines, and
automobile painting operations -- are among the most significant
remaining categories to be regulated under this program. While working
on these standards, we are beginning to evaluate those sources with
standards already in place to determine if the remaining risk from
these sources warrants additional regulation. We are also implementing
our Urban Air Toxics Strategy, which focuses on 33 air toxics that pose
the greatest risk in the largest number of urban areas and presents our
plan, both nationally and more locally, to reduce those toxics.
Finally, to better understand and measure risks from air toxics, we are
also conducting important health research and improving our emissions
inventories, modeling capability, and monitoring network.
Office of Water⁵⁶ Congress has directed the EPA to work with States, tribes and
other Federal agencies to help finance water infrastructure, to set
national drinking water standards, to protect wetlands, to control
discharges from industries and sewage treatment plants, and to reduce
nonpoint pollution. To fulfill these goals, the Office of Water is
undertaking, among others, the following actions:
Under the Safe Drinking Water Act (SDWA) Amendments of 1996:
We will finalize a rule that will allow States and/or systems to adopt
multimedia programs which reduce radon risks from indoor air and
drinking water in combination.
The SWDA requires EPA to revise the existing 50 parts per billion
(ppb) standard for arsenic in drinking water. In January 2001, we
published a new standard for arsenic in drinking water that would
require public water supplies to reduce arsenic to 10 ppb by 2006. We
have delayed the effective date of this rule until February 22, 2002 to
allow time for expert review of key issues, review of this standard,
and requested further public comment. This is to assure that
communities that need to reduce arsenic in drinking water can proceed
with confidence that the final standard is based on sound science and
accurate cost and benefit estimates.
The SDWA also requires EPA to review and revise, if appropriate, all
National Primary Drinking Water Regulations no less frequently than
once every six years (6-Year Review). According to SDWA, any revisions
of drinking water regulations must maintain, or increase, the level of
public health protection provided; however, EPA may identify regulatory
changes that will streamline or reduce existing requirements without
lessening the level of public health protection. The purpose of the
review is to determine whether new data, technology, or other factors
exist that justify revisions to existing NPDWRs. The outcome of the
review will be a Federal Register preliminary notice for comment making
available the results of our review. Following a review of public
comments, we will issue a second notice with our final regulatory
review determination together with a rulemaking schedule for any
regulation the Agency determines warrants revision.
We are also taking a number of important steps under the Clean Water
Act:
To control the discharge of pollutants from point sources, we are
developing effluent limitations guidelines for the construction and
development industry. Water quality improvements will result from a
reduction in storm water and sediment discharged from construction
sites and from sediment generated from stream bank erosion. Other
expected benefits include protection of fishery and wildlife habitat
and downstream urban flood control.
We will issue a rule to minimize the adverse impacts associated with
cooling water intakes. Most costs would be borne by entities that own
or operate steam electric power plants. The expected benefits will be
significant reductions in aquatic organisms killed or injured by
impingement (being pinned against screens or other parts of a cooling
water intake structure) or entrainment (being drawn into cooling water
systems and subjected to thermal, physical or chemical stresses).
In July 2000 we published a final rule amending the Agency's existing
regulations implementing Total Maximum Daily Load (TMDL) program. The
rule sought to provide for a more complete accounting of impaired
waters, track progress towards restoration, clarify and provide more
specificity regarding the scope and content of TMDLs, require
implementation plans, and reasonable assurance that these plans would
be implemented, and speed up the pace of TMDL establishment.
On October 18, 2001 we delayed the effective date of the July 2000
rule by 18 months to April 30, 2003. The delay in effective date would
allow the Agency time to reconsider specific aspects of the rule and to
develop an effective national program that involves the active
participation and support of all levels of government and local
communities. Over the next several months, we will conduct a
stakeholder process, propose necessary changes by spring 2002, and hope
to adopt such changes by April 30, 2003.
Office of Prevention, Pesticides, and Toxic Substances⁵⁶ Because of the potentially serious consequences of human
exposure to endocrine disrupting chemicals, Congress included specific
provisions on endocrine disruption in the Food Quality Protection Act.
It also amended the Safe Drinking Water Act in 1996 to require EPA to
develop an endocrine disruptor screening program and to screen for
endocrine disruptors found in drinking water sources. The Agency has
established an Endocrine Disruptor Screening and Testing Program based
on the recommendations of the advisory committee we established to
consider human health and ecological effects, and hormonal effects of
pesticides, industrial chemicals and drinking water contaminants. In
2002-2003 we will standardize and validate assays in the screening
battery and complete the priority setting system. We will issue a
proposed procedural rule in 2002.
EPA is evaluating how our current policy on the protection of human
subjects in testing should apply to testing that is not conducted or
supported by the Agency. Current policy does not address non-EPA
research. EPA will also be seeking public comment on a series of issues
related to Agency use of human research data in pesticide
decisionmaking. We believe this will serve two important Agency goals:
ensuring the availability of sound and appropriate scientific data in
its decisions, and protection of the interests, rights and safety of
human research subjects. We may issue one or more documents, which may
include policy statements, rulemaking or requests for public comment.
Almost a million children under 5 years of age have blood-lead levels
exceeding the Center for Disease

[[Page 61266]]

Control's level of concern (10 ug/dl), and reducing childhood exposure
to lead-based paint activities continues to be a priority. Elevated
blood-lead levels can damage intelligence and create neuro-behavioral
problems in young children, and can cause other health problems in
children and adults. We are considering proposed approaches to address
lead risks associated with renovation and remodeling activities, and
investigating the lead risks associated with bridges and structures.
In FY 2002, EPA will issue final amendments to the current Toxic
Substances Control Act (TSCA) Inventory Update Rule (IUR). The proposed
rule requires chemical manufacturers to report to EPA data on exposure-
related information and the industrial and consumer end uses of
chemicals they produce or import. EPA will also consider other
amendments to the existing IUR. These include removing the inorganic
chemicals exemption; providing information to better assess and manage
risks of inorganic chemicals; improving the linkages of IUR data to
other data sources to enhance the data's usefulness; and altering the
confidential business information (CBI) claim procedures to reduce the
frequency of CBI claims, allowing the public greater access to relevant
information on toxic chemicals. EPA has held meetings with
representatives of the chemical industry, environmental groups,
environmental justice leaders, labor groups, State governments and
other Federal agencies to ensure public involvement in the TSCA
Inventory Update Rule Amendments Project.
EPA has developed National Action Plans under a national strategy to
address priority Persistent Bioaccumulative Toxic (PBT) pollutants.
These pollutants pose risks because they are toxic, persist in
ecosystems, and accumulate in fish and up the food chain. The PBT
challenges remaining stem from the pollutants' ability to travel long
distances, to transfer rather easily among air, water, and land, and to
linger for generations. Through this strategy, we will create an
enduring cross-office system that will address the cross-media issues
associated with priority PBT pollutants. In FY 2002, we expect to issue
the draft action plan for benzo(a)pyrene, and to issue the final action
plans for alkyl-lead and mercury. We will also continue developing
other action plans as outlined in the PBT Strategy.
Office of Solid Waste and Emergency Response⁵⁶ The Office of Solid Waste and Emergency Response (OSWER) is
planning actions to reduce burden on the regulated community and
provide regulatory innovations under the Resource Conservation and
Recovery Act (RCRA), the Federal law governing hazardous waste
management. Several actions of significance are listed below.
We are planning to reduce the burden imposed by RCRA reporting and
recordkeeping requirements.
We will revise current Federal hazardous waste regulations to
encourage recycling and better management of cathode ray tubes, the
display components of televisions and computer monitors. The goal is to
minimize the disposal of lead, increase resource recovery, and enhance
protection of human health and the environment.
OSWER will revise current RCRA regulations that apply to recycling of
hazardous wastes in the manufacturing of zinc fertilizers. We are
considering establishing a more consistent application of recycling
requirements to zinc fertilizer products and establishing a set of
standards for contaminants in RCRA-regulated zinc fertilizers that are
more appropriate to fertilizers. We are also considering specifying
more appropriate, protective requirements for management of zinc-
bearing hazardous secondary materials prior to recycling.
Office of Policy, Economics, and Innovation⁵⁶ OPEI has taken the lead in EPA's re-examination of its
regulatory process to assure that all regulatory actions are
scientifically sound, cost-effective, and reflect decisions based on a
broad consideration of policy options. OPEI will continue its work to
assure that our procedural and policy reforms are implemented
throughout the Agency.
We have also designed a variety of incentives to encourage high
performing facilities to participate in the National Environmental
Performance Track. These include actions which recognize and highlight
the achievements of the facilities that successfully fulfill the
requirements for entry, but also include other incentives.
We are offering some of those incentives through administrative
actions, but others will require changes in existing Federal
regulations. We are now changing regulations that set reporting
requirements for facilities covered by the MACT provisions of the Clean
Air Act. Facilities meeting the criteria for membership in Performance
Track would be eligible for reduced reporting and some other
provisions, and facilities that more than meet goals for emissions
reductions under MACT via pollution prevention means would qualify for
some additional reduced reporting. We are also reducing reporting
requirements for participating publicly owned treatment works (POTWs),
under the Clean Water Act. A third change would allow POTWs to notify
the public of any violations of permits by the indirect dischargers
using the POTWs' services by placing notices on the Internet (rather
than using paid newspaper advertisements). The last change would be a
pilot test of consolidated reporting (an idea explored extensively in
the past several years). This is likely to begin with one or two
industry sectors, and to be modeled on pilot efforts explored in EPA's
Common Sense Initiative. We will consolidate various periodic reports
required under CAA, CWA, RCRA, and other statutes into one report,
eliminating duplicate reporting and other difficulties. If this test is
successful, EPA will consider widening the applicability to Performance
Track facilities in other industry sectors.
Summary⁵⁶ In developing all of these actions, EPA is committed to
flexible, cost-effective programs that offer increased protections for
public health and the environment and get full value for our
investments.
_______________________________________________________________________

EPA

-----------

PRERULE STAGE

-----------

115. ACCEPTABILITY OF RESEARCH USING HUMAN SUBJECTS
Priority:

Other Significant

Legal Authority:

7 USC 136a; 21 USC 346a

CFR Citation:

40 CFR 26 (Revision)

Legal Deadline:

None

Abstract:

EPA is evaluating how its current policy with respect to the protection
of

[[Page 61267]]

human subjects in testing should be applied to testing not conducted or
supported by the Agency. Current EPA regulations apply to research
conducted or supported by the Agency or ``otherwise subject to
regulation.'' The action needed to give effect to the ``otherwise
subject to regulation'' phrase has not been taken. In addition, EPA
will seek public comment on issues related to Agency use of human
research data in pesticide decisionmaking. EPA believes the process
being initiated will serve two important Agency goals: ensuring the
availability of sound and appropriate scientific data in its decisions,
and protection of the interests, rights and safety of human research
subjects. EPA may issue one or more documents, which may include policy
statements, rulemaking or requests for public comment.

Statement of Need:

In July 1998, the Agency committed that EPA would not consider human
research on pesticides in support of decisions under the Food Quality
Protection Act revisions to FIFRA and FFDCA unless a policy were in
place that could assure any such studies met the highest scientific and
ethical standards. The Agency convened a special joint subcommittee of
the FIFRA Scientific Advisory Panel and the EPA Science Advisory Board
to advise on this policy. The subcommittee has completed its work. If
deemed acceptable for consideration, some human research already
performed could significantly affect the Agency's risk assessments of
some pesticides. Clarification of Agency policy with respect to use of
human data is thus needed.

Summary of Legal Basis:

FIFRA sec. 3 authorizes EPA to define data requirements supporting
pesticide decisions and to establish guidelines for conducting research
to support pesticide decisions. FFDCA sec. 408 authorizes EPA to
consider available and reliable data in support of pesticide tolerance
decisions.

Alternatives:

Still to be identified.

Anticipated Cost and Benefits:

No analysis has been performed yet.

Risks:

No analysis has been performed yet.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 07/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal

Additional Information:

SAN No. 4610

Sectors Affected:

32532 Pesticide and Other Agricultural Chemical Manufacturing

Agency Contact:
Vanessa Vu
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7201
Washington, DC 20460
Phone: 202 260-6900
Fax: 202 401-0849
Email: [email protected]

John Carley
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7501C
Phone: 703 305-7019
Email: [email protected]
RIN: 2070-AD57
_______________________________________________________________________

EPA

116. 6-YEAR REVIEW OF EXISTING NATIONAL PRIMARY DRINKING WATER
REGULATIONS
Priority:

Other Significant

Legal Authority:

42 USC 300f et seq

CFR Citation:

Not Yet Determined

Legal Deadline:

Other, Statutory, August 6, 2002, Complete review for contaminants with
NPDWRs promulgated prior to August 1996.

Abstract:

The Safe Drinking Water Act (SDWA) requires EPA to review and revise,
if appropriate, all National Primary Drinking Water Regulations
(NPDWRs) no less frequently than once every six years. According to
SDWA, any revisions of drinking water regulations must maintain, or
increase, the level of public health protection provided; however, EPA
may identify regulatory changes that will streamline or reduce existing
requirements without lessening the level of public health protection.
As a part of this action, EPA will do two things: (1) develop an
overall protocol for conducting each six year review; and (2) review
the chemical contaminants (with the exception of arsenic which is being
revised and atrazine which is being reviewed on an accelerated schedule
for which NPDWRS were promulgated prior to 1996). No new requirements
will be imposed by this action. The purpose of the review is to
determine whether new data, technology, or other factors exist that
justify revisions to existing NPDWRs. The outcome of each review will
be a Federal Register notice making available the results of the
Agency's review and a rulemaking schedule for the regulations the
Agency believes are appropriate candidates for revision at this time.
EPA may decide that any of the following need to be revised: maximum
contaminant level goals, maximum contaminant levels, analytical
methods, monitoring, treatment, recordkeeping and reporting
requirements. EPA plans extensive stakeholder outreach and consultation
in the development of the protocol and throughout the review process.

Statement of Need:

The review of each existing NPDWR is necessary to determine whether
there are more current data, since the NPDWR was promulgated, that
suggest a regulatory revision may be appropriate to maintain, or
improve, the level of public health protection. Data considered as a
part of the review include changes in risk assessment, changes in
analytical feasibility (where appropriate), changes in treatment
feasibility, other issues that may be relevant to the specific NPDWR,
and occurrence and exposure. NPDWRs identified as candidates for
revision will be those where the review suggests a regulatory revision
will significantly improve public health protection or significantly
reduce costs while at least maintaining the current level of public
health protection.

Summary of Legal Basis:

Section 1412(b)(9) of the SDWA, as amended in 1996, requires that the
Administrator shall, not less often than every 6 years, review and
revise, as

[[Page 61268]]

appropriate, each primary drinking water regulation. SDWA also mandates
that any revision maintain, or provide for greater, protection of the
health of persons.

Alternatives:

The review ends with a decision by EPA that the NPDWR is, or is not, a
candidate for regulatory revision at this time. NPDWRs may be
eliminated from further consideration for regulatory revision at this
time for one or more of the following reasons: (1) no data were
identified that suggest the need for regulatory revision; (2) some
potential changes were identified but are likely to result in little or
no improvement in public health protection or cost savings; (3) an
update of the risk assessment is in process or planned for the near
future; or (4) the review identified significant data gaps or research
needs that need to be addressed to determine the appropriateness of any
regulatory revision. EPA will determine, on a case-by-case basis,
whether to initiate activity to address these data gaps/research needs.
Otherwise, EPA does not plan any further review/revision of these
NPDWRs until the next review cycle. If EPA identifies the NPDWR as a
candidate for revision, the Agency will begin the rulemaking process.
The first part of this process will be to perform all of the analyses
required to consider alternative regulatory options and to develop a
Notice of Proposed Rulemaking (NPRM) for public comment. If the results
of these analyses continue to suggest a regulatory revision is
appropriate, and after taking the public comments received into
consideration, EPA will promulgate regulatory revisions to the NPDWR.

Anticipated Cost and Benefits:

EPA is not performing detailed cost and benefit analyses during the
review phase because such analyses are premature until the Agency has
identified specific regulatory options. EPA will conduct the cost and
benefit analyses as a part of the rulemaking phase for those NPDWRs
identified as potential candidates for revision.

Risks:

As a part of the review, EPA is identifying any relative source
contribution assumptions that may need further evaluation and factoring
this consideration into the decision whether or not to designate the
NDPWR as a candidate for regulatory revision. For those NPDWRs that EPA
identifies as candidates for revision, the Agency will evaluate
relative source contribution assumptions in more detail as a part of
the rulemaking phase. Therefore, no statement of the magnitude of the
risk, relative to other risks within EPA's jurisdiction, can be made
during the review phase.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Notice of Preliminary Decision 01/00/02
Notice of Final Decision 08/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

None

Additional Information:

SAN No. 4424

Sectors Affected:

22131 Water Supply and Irrigation Systems

Agency Contact:
Judy Lebowich
Environmental Protection Agency
Water
4607
Washington, DC 20460
Phone: 202 260-7595
Fax: 202 260-3762
Email: [email protected]

Wynne Miller
Environmental Protection Agency
Water
4607
Washington, DC 20460
Phone: 202 260-0259
Fax: 202 260-3762
Email: [email protected]
RIN: 2040-AD67
_______________________________________________________________________

EPA

-----------

PROPOSED RULE STAGE

-----------

117. REGULATORY INCENTIVES FOR THE NATIONAL ENVIRONMENTAL ACHIEVEMENT
TRACK PROGRAM
Priority:

Other Significant

Legal Authority:

Not Yet Determined

CFR Citation:

Not Yet Determined

Legal Deadline:

None

Abstract:

The National Environmental Achievement Track is designed to recognize
facilities that consistently meet their legal requirements and have
implemented high-quality environmental management systems, and to
encourage them to achieve more by continuously improving their
environmental performance and informing and involving the public.
Facilities gain entrance to Achievement Track by submitting an
application that documents that four specific criteria are met. To
promote participation in the program and the environmental and other
benefits that will come with it, EPA intends to offer several
incentives. Among those incentives are the adjustments in current
regulatory requirements that are the subjects of this rulemaking. These
include reducing the frequency of reports required under the Maximum
Achievable Control Technology (MACT) provisions of the Clean Air Act;
streamlined by publically owned treatment works (POTWs) under the Clean
Water Act; and opportunity for Achievement Track facilities to
consolidate reporting under various environmental statutes into a
single report.

Statement of Need:

The Administrator of EPA has announced the National Environmental
Performance Track Program, of which the Achievement Track program is
the first element to be implemented. By identifying facilities that
have better environmental performance than others, and by requiring
them to commit to goals for sustained improvements, EPA expects the
environment to greatly benefit: Facilities that are able to qualify for
the program will make a public commitment to reducing specific aspects
of their impacts on the environment, and the program is likely to
induce other facilities to make changes in their operations that will
bring about analogous reductions in their environmental impacts. In
order to attract significant numbers of facilities, Achievement Track
will provide incentives for joining, in the form of substantial
benefits to the facilities that qualify. EPA is considering alterations
in reporting and other requirements (to be available only to
Achievement Track facilities) that

[[Page 61269]]

would be made available as a result of this rulemaking. Extensive input
(written comments and several public meetings) from stakeholders has
convinced EPA that benefits such as these are crucial to achieving the
intended environmental benefits of the Achievement Track program.

Summary of Legal Basis:

All of the modifications under consideration are modifications of
existing regulations, promulgated over the past several years under
statutes that include the CAA, CWA, EPCRA, SDWA, and others. Within
these statutes, EPA has discretion to set reporting frequencies, the
contents of reports, monitoring, and other specifics, based on an
assessment of the need for information to implement the statutes.

Alternatives:

Deliberations within the Agency, and among stakeholders and EPA, have
convinced EPA that a full and robust set of incentives is crucial to
the successful implementation of Achievement Track. EPA developed a
list of over forty different candidate incentives, and discussed many
of these during a set of public meetings held during the design phase
of the National Environmental Performance Track. Several incentives can
be implemented through EPA administrative actions, but some potential
incentives would require changes in existing regulations. The specific
incentives being considered here resulted from intense analysis and
debate within EPA and the Administrator's judgment that they contribute
to achieving the program's aims. During the rulemaking process, EPA
will consider various alternatives for these incentives, ranging from
substantial changes in reporting frequency and content to no changes.
EPA is also considering initiating rulemaking on other incentives
beyond the ones discussed here.

Anticipated Cost and Benefits:

Overall, EPA expects there to be a net reduction in compliance costs
for facilities that participate in Achievement Track. Facilities would
have direct reductions in the efforts required to collect, summarize
and report various data elements, and would potentially benefit from a
streamlining of their environmental reporting information systems and
from an integration of those data systems into company environmental
management systems. EPA and some State regulatory authorities are
likely to see modest increases in workload (and therefore in costs),
mostly in the revising permits. This effect would be moderated by the
fact that only a fraction of regulated facilities are expected to
qualify for Achievement Track. Finally, because Achievement Track is
designed to induce environmental improvements among those facilities
that seek and obtain entrance to the program, EPA anticipates tangible
environmental benefits to be realized.

Risks:

The risks of the intended rulemaking appear minimal. The criteria and
the screening process for Achievement Track will identify and admit
only facilities that operate significantly above the norm of other
facilities. Because facilities must carry out their Achievement Track
actions in the public spotlight, and because EPA expects that
facilities will strive to stay qualified for the program, there is only
a very small likelihood that mistakes would be made, and any such
mistakes could easily be reversed. The actions being contemplated in
this rulemaking entail mostly reporting changes, not substantive
changes in permitted release rates or other actions that would directly
impinge on the environment. All of these factors serve to limit the
risks to the environment from the intended rulemaking.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 01/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses, Governmental Jurisdictions

Government Levels Affected:

State

Federalism:

Undetermined

Additional Information:

SAN No. 4473

Agency Contact:
Frederick W. Talcott
Environmental Protection Agency
Office of the Administrator
2129
Washington, DC 20460
Phone: 202 260-2768
Fax: 202 401-3998
Email: [email protected]

Daniel J. Fiorino
Environmental Protection Agency
Office of the Administrator
2129
Phone: 202 260-2749
Fax: 202 401-3998
Email: [email protected]
RIN: 2090-AA13
_______________________________________________________________________

EPA

118. NAAQS: SULFUR DIOXIDE (RESPONSE TO REMAND)
Priority:

Other Significant

Legal Authority:

42 USC 7409 CAA sec 109

CFR Citation:

40 CFR 50.4; 40 CFR 50.5

Legal Deadline:

None

Abstract:

On November 15, 1994, the Environmental Protection Agency (EPA)
proposed not to revise the existing 24-hour and annual primary
standards. The EPA sought public comment on the need to adopt
additional regulatory measures to address the health risk to asthmatic
individuals posed by short-term peak sulfur dioxide exposure. On March
7, 1995, EPA proposed implementation strategies for reducing short-term
high concentrations of sulfur dioxide emissions in the ambient air. On
May 22, 1996, EPA published its final decision not to revise the
primary sulfur dioxide NAAQS. The notice stated that EPA would shortly
propose a new implementation strategy to assist States in addressing
short-term peaks of sulfur dioxide. The new implementation strategy -
the Intervention Level Program - was proposed on January 2, 1997. In
July 1996, the American Lung Association and the Environmental Defense
Fund petitioned the U.S. Court of Appeals for the D.C. Circuit for a
judicial review of EPA's decision not to establish a new 5-minute
NAAQS. On January 30, 1998, the court found that EPA did not

[[Page 61270]]

adequately explain its decision and remanded the case so EPA could
explain its rationale more fully. EPA published a schedule for
responding to the remand in the May 5, 1998 Federal Register. Since
that notice, EPA has continued to work on the proposed response to the
remand by reviewing additional SO2 air quality information. EPA
published an informational notice in the Federal Register on January 9,
2001 (66 FR 1665).

Statement of Need:

Brief exposures to elevated concentrations of sulfur dioxide, while at
exercise, may cause bronchoconstriction, sometimes accompanied by
symptoms (coughing, wheezing, and shortness of breath), in mild to
moderate asthmatic individuals. The existing sulfur dioxide National
Ambient Air Quality Standard (NAAQS) provides substantial protection
against short-term peak sulfur dioxide levels. At issue is whether
additional measures are needed to further reduce the health risk to
asthmatic individuals.

Summary of Legal Basis:

Title I of the Clean Air Act.

Alternatives:

The March 7, 1995, proposal notice sought public comment on three
alternatives to further reduce the public health risk to asthmatic
individuals posed by short-term peak sulfur dioxide exposures. These
included: (a) a new 5-minute NAAQS; (b) a new program under section 303
of the Act; and (c) a targeted monitoring program to ensure sources
likely to cause or contribute to high 5-minute peaks are in attainment
with the existing standard. The January 2, 1997, notice proposed an
alternative program under section 303 of the Act that will assist
States in addressing high 5-minute peaks.

Anticipated Cost and Benefits:

A draft regulatory impact analysis was completed and made available for
public comment at the time of the January 2, 1997 proposal.

Risks:

Exposure analyses indicate from the national perspective that the
likelihood of exposure to high 5-minute sulfur dioxide concentrations
is very low. Asthmatic individuals in the vicinity of certain sources
or source categories, however, may be at higher risk of exposure than
the population as a whole.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM NAAQS Revie59 FR 58958 11/15/94
NPRM NAAQS Imple60 FR 12492Part 51) 03/07/95
Final Rule NAAQS61 FR 25566 05/22/96
NPRM Revised NAA62 FR 210entation (Part 51) 01/02/97
Notice Schedule 63 FR 24782e to NAAQS Remand 05/05/98
Notice Informati66 FR 1665tice 01/09/01
Notice Determined To Be
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal, State, Local, Tribal

Additional Information:

SAN No. 1002

Agency Contact:
Susan Stone
Environmental Protection Agency
Air and Radiation
MD-15
RTP, NC 27711
Phone: 919 541-1146
Fax: 919 541-0237
Email: [email protected]

Karen Martin
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-5274
Fax: 919 541-0237
Email: [email protected]
RIN: 2060-AA61
_______________________________________________________________________

EPA

119. IMPLEMENTATION OF OZONE AND PARTICULATE MATTER (PM) NATIONAL
AMBIENT AIR QUALITY STANDARDS (NAAQS) AND REGIONAL HAZE REGULATIONS
Priority:

Other Significant

Legal Authority:

Clean Air Act, title I

CFR Citation:

40 CFR 50; 40 CFR 51; 40 CFR 52; 40 CFR 81

Legal Deadline:

None

Abstract:

On July 18, 1997, EPA issued new, updated air quality standards for
ozone (62 FR 38856) and particulate matter (PM) (62 FR 38652). On
November 17, 1998, EPA made available for comment proposed
implementation guidance on implementing the revised ozone and PM NAAQS
and regional haze program. On May 14, 1999, however, the U.S. Court of
Appeals for the D.C. Circuit issued an opinion concerning the revised
ozone and particulate matter NAAQS (American Trucking Assoc., Inc. et
al. v. USEPA, No. 97-1440 (May 14, 1999)) in which the Court stated,
among other things, that the revised 8-hour ozone standard cannot be
enforced. The Court also vacated the revised PM10 NAAQS and remanded
the PM2.5 NAAQS. On June 28, 1999, EPA requested a rehearing of the
case before the Court, but the request was denied. The Department of
Justice then filed a petition in January 2000 seeking U.S. Supreme
Court review, and the Court subsequently agreed to review the case.
Meanwhile, to assure that areas were not left without an air-quality
standard, EPA took action on 7/6/00 to reinstate the previous 1-hour
standard in approximately 3000 counties across the U.S. On February 27,
2001, the U.S. Supreme Court issued a ruling largely upholding EPA's
positions on the issues in question, the most significant exception
being the determination that EPA must reconsider its approach to
implementing the revised ozone standard. EPA is now working to address
this element of the Supreme Court decision, as well as another issue
stemming from the earlier D.C. Circuit Court decision. EPA is also
developing guidelines for determining Best Available Retrofit
Technology (BART) under the Regional Haze Regulations, as well as
moving forward on other revisions to the Regional Haze Regulations to
incorporate the efforts of the Western Regional Air Partnership (WRAP).

Statement of Need:

Development of programs for ozone and PM are necessary to implement any
revised NAAQS under title 1 of the Clean Air Act.

[[Page 61271]]

Summary of Legal Basis:

Title I of the Clean Air Act.

Alternatives:

This entry comprises the set of actions the Agency plans to take to
implement the new ozone and fine particulate standards. The major
alternative facing the Agency was whether to implement the standards
strictly on a state-by-state basis, as has been the norm in the past,
or to take Federal action to address the fact that emissions from one
State affect the ability of other States to achieve the standards. The
other major set of alternatives involved various possible strategies
for infrastructure design, such as the designations of nonattainment
areas and the requirements that will apply to them.

Anticipated Cost and Benefits:

EPA prepared a regulatory impact analysis (RIA) for the final ozone and
PM NAAQS, as well as the regional haze reduction program.

Risks:

The risks addressed by this implementation plan are those of not
attaining the National Ambient Air Quality Standards for Ozone and
Particulate Matter.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
ANPRM 61 FR 65764 12/13/96
Notice Proposed 61 FR 65752 12/13/96
NPRM Regional Ha62 FR 41138 07/31/97
Notice Review Sc62 FR 55201PM2.5 Standard 10/23/97
Final Rule Areas63 FR 31013hour ozone standard 06/05/98
Final Rule Addit63 FR 39432 meeting 1-hour ozone standard 07/22/98
Draft Guidance I63 FR 65593on Planning 11/17/98
Final Rule Addit64 FR 30911 Meeting 1-Hour Ozone NAAQS: 96-98 D06/09/99
Final Rule Regio64 FR 35713 07/01/99
Final Action Rei65 FR 45182of 1-hr standard 07/20/00
NPRM BART Guidan66 FR 381080) 07/20/01
NPRM WRAP Rule (SAN 4495) 01/00/02
Final Action BART Guidance (SAN 4450) 07/00/02
Final Action WRAP Rule (SAN 4495) 01/00/03
Final Action ImpDeterminedn Guidance To Be
Regulatory Flexibility Analysis Required:

Government Levels Affected:

None

Additional Information:

SAN No. 3553

Agency Contact:
Denise Gerth
Environmental Protection Agency
Air and Radiation
MD-15
Research Triangle Park, NC 27711
Phone: 919 541-5550
Fax: 919 541-0824
Email: [email protected]

John Silvasi
Environmental Protection Agency
Air and Radiation
MD-15
Research Triangle Park, NC 27711
Phone: 919 541-5666
Fax: 919 541-0824
Email: [email protected]
RIN: 2060-AF34
_______________________________________________________________________

EPA

120. OPERATING PERMITS: REVISIONS (PART 70)
Priority:

Other Significant

Legal Authority:

42 USC 7661 et seq

CFR Citation:

40 CFR 51; 40 CFR 52; 40 CFR 70

Legal Deadline:

None

Abstract:

In response to litigation on the operating permits rule regulations, 40
CFR part 70, to provide more effective implementation of part 70, and
to address comments provided in response to notices of proposed
rulemaking, parts 70, 51 and 52 are being revised. The changes
streamline the procedures for revising stationary-source operating
permits issued by State and local permitting authorities under title V
of the Clean Air Act.

Statement of Need:

These revised rules will allow more streamlined procedures for revising
operating permits. These revisions reflect the principles articulated
in the President's and the Vice President's March 16, 1995 report
Reinventing Environmental Regulation. That report established as goals
for environmental regulation the building of partnerships between EPA
and State and local agencies, minimizing costs, providing flexibility
in implementing programs, tailoring solutions to the problem, and
shifting responsibility to State and local programs.

Summary of Legal Basis:

Clean Air Act, Title V

Alternatives:

In response to concerns expressed in comments on the draft final
rulemaking, the EPA discussed alternatives with representatives from
State and local permitting authorities and industry and environmental
groups, and desires public comment on some of the proposed
alternatives. EPA will then consider public comments before
promulgating a final rule.

Anticipated Cost and Benefits:

The administrative cost of implementing these proposed rules by
permitting authorities, EPA, and permitted sources has not yet been
estimated, but is expected to be lower than the cost of the current
rule. Administrative costs include a range of costs which cover the
source's preparing an application through EPA's and the permitting
authority's effort to complete the process.

Risks:

All major sources of air pollution are required to have a permit to
operate by the Clean Air Act. No adverse effect on the public health or
ecosystems should result from this action, because the rule will
require permit revisions with significant environmental impact to
undergo public and EPA review.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 59 FR 44460 08/29/94
Supplemental NPR60 FR 20804 04/27/95
Supplemental NPR60 FR 45530 08/31/95
NPRM 03/00/02
Final Action 03/00/03

[[Page 61272]]

Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses, Governmental Jurisdictions

Government Levels Affected:

State, Local

Additional Information:

SAN No. 3412

Agency Contact:
Ray Vogel
Environmental Protection Agency
Air and Radiation
MD-12
Research Triangle Park, NC 27711
Phone: 919 541-3153
Email: [email protected]
RIN: 2060-AF70
_______________________________________________________________________

EPA

121. NESHAP: PLYWOOD AND COMPOSITE WOOD PRODUCTS
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

42 USC 7412(d)

CFR Citation:

40 CFR 63

Legal Deadline:

Final, Statutory, November 15, 2000.

Abstract:

This project is to develop national emission standards for hazardous
air pollutants (NESHAP) by establishing maximum achievable control
technology (MACT) for facilities manufacturing wood panels and
engineered wood products. MACT standards are under development to
reduce the release of hazardous air pollutants (HAP) from all
industries to protect the public health and environment. Emissions of
HAP from this industry have been associated with, but are not limited
to, the drying of wood and binders. This rule is anticipated to apply
to the manufacture of products involving wood and some kind of binder
or bonding agent. This project may include, but is not limited to,
facilities that manufacture waferboard, hardboard fiber board (MDF),
oriented strandboard (OSB), medium density fiberboard, particleboard,
strawboard, hardwood and softwood plywood, glue-laminated lumber,
laminated veneer lumber, and engineered wood products. The source
category may also include lumber drying kilns at sawmills which are
located on the same site as a facility that manufactures any of the
wood products mentioned above. The project may also include some
coatings operations. The name of the source category was formerly
Plywood and Particleboard MACT.

Statement of Need:

Plywood and Composite Wood Products is a source category listed to be
regulated under Section 112 of the Clean Air Act.

Summary of Legal Basis:

Clean Air Act Section 112

Alternatives:

The principal alternatives are to set standards at or beyond the
``floor'' level of stringency. The ``floor'' is the minimum stringency
implied by the congressionally given formula in section 112 of the
Clean Air Act.

Anticipated Cost and Benefits:

Risks:

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Final Action 03/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Additional Information:

SAN No. 3820

Sectors Affected:

32121 Veneer, Plywood, and Engineered Wood Product Manufacturing

Agency Contact:
Mary Tom Kissell
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-4516
Fax: 919 541-0246
Email: [email protected]

Kent C. Hustvedt
Environmental Protection Agency
Air and Radiation
MD-13
Phone: 919 541-5395
Fax: 919 541-0246
Email: [email protected]
RIN: 2060-AG52
_______________________________________________________________________

EPA

122. NESHAP: RECIPROCATING INTERNAL COMBUSTION ENGINE
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

42 USC 7412 CAA sec 112; PL 101-549

CFR Citation:

40 CFR 63

Legal Deadline:

Final, Statutory, November 15, 2000.

Abstract:

The stationary reciprocating internal combustion engine source category
is listed as a major source of hazardous air pollutants (HAPs) under
section 112 of the Clean Air Act (CAA). A major source is one which
emits more than 10 tons/yr of one HAP or more than 25 tons/yr of a
combination of 189 HAPs. The EPA will gather information on HAP
emissions from internal combustion engines and determine the
appropriate maximum achievable control technology (MACT) to reduce HAP
emissions. The EPA will use information that has already been
developed, if possible, by gathering information by working with State/
local agencies, vendors, manufacturers of internal combustion engines,
owners and operators of internal combustion engines, and
environmentalists.

[[Page 61273]]

Statement of Need:

Reciprocating Internal Combustion Engines is a source category listed
to be regulated under Section 112 of the Clean Air Act.

Summary of Legal Basis:

Section 112 of the Clean Air Act

Alternatives:

Anticipated Cost and Benefits:

In Section 112 of the Clean Air Act, Congress found that there is
sufficient evidence of risk to warrant a broad, technology-based MACT
program to reduce toxic emissions nationwide. Therefore, separate cost/
benefit analyses are not conducted for individual rulemakings within
the MACT program.

Risks:

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 06/00/02
Final Action 06/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses, Governmental Jurisdictions

Government Levels Affected:

None

Additional Information:

SAN No. 3656

Agency Contact:
Sims Roy
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-5263
Fax: 919 541-5450
Email: [email protected]

Robert J. Wayland
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-1045
Fax: 919 541-5450
Email: [email protected]
RIN: 2060-AG63
_______________________________________________________________________

EPA

123. NESHAP: COMBUSTION TURBINE
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

42 USC 7412 CAA sec 112

CFR Citation:

44 CFR 63

Legal Deadline:

Final, Statutory, November 15, 2000.

Abstract:

The combustion turbine source category is listed as a major source of
hazardous air pollutants (HAPs) under section 112 of the Clean Air Act
(CAA). A major source is one which emits more than 10 tons/yr of one
HAP or more than 25 tons/yr of a combination of 189 HAPs. Combustion
turbines also emit NOx, SO2, CO, and PM. Combustion turbines are
already regulated for NOx and SO2 emissions under section 111 of the
CAA. The EPA will gather information on HAP emissions from combustion
turbines and determine the appropriate maximum achievable control
technology (MACT) to reduce HAP emissions. The EPA information that has
already been developed will be used if possible and additional
information will be gathered by working with State/local agencies,
vendors, manufacturers of combustion turbines, owners and operators of
combustion turbines, and environmentalists.

Statement of Need:

Combustion Turbines is a source category listed to be regulated under
Section 112 of the Clean Air Act.

Summary of Legal Basis:

Section 112 of the Clean Air Act

Alternatives:

Anticipated Cost and Benefits:

Risks:

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 05/00/02
Final Action 05/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses, Governmental Jurisdictions

Government Levels Affected:

None

Additional Information:

SAN No. 3657

[[Page 61274]]

Agency Contact:
Sims Roy
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-5263
Fax: 919 541-5450
Email: [email protected]

Robert J. Wayland
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-1045
Fax: 919 541-5450
Email: [email protected]
RIN: 2060-AG67
_______________________________________________________________________

EPA

124. NESHAP: INDUSTRIAL, COMMERCIAL AND INSTITUTIONAL BOILERS AND
PROCESS HEATERS
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect the private sector under PL 104-4.

Legal Authority:

42 USC 7412

CFR Citation:

40 CFR 63

Legal Deadline:

Final, Statutory, November 15, 2000.

Abstract:

The Clean Air Act, as amended in 1990, requires EPA to develop emission
standards for sources of hazardous air pollutants (HAPs). Industrial
boilers, institutional/commercial boilers and process heaters are among
the potential source categories to be regulated under section 112 of
the CAA. Emissions of HAPs will be addressed by this rulemaking for
both new and existing sources. EPA promulgated an NSPS for these source
categories in 1987 and 1990. The standards for the NESHAP are to be
technology-based and are to require the maximum achievable control
technology (MACT) as described in section 112 of the CAA.

Statement of Need:

Industrial boilers, institutional/commercial boilers, and process
heaters are source categories listed to be regulated under Section 112
of the Clean Air Act.

Summary of Legal Basis:

Section 112 of the Clean Air Act.

Alternatives:

Alternatives will be explored as the proposal is developed. At this
early stage, no alternatives have yet been identified.

Anticipated Cost and Benefits:

It is expected that this rule will result in significant costs to the
affected industry, including costs for recordkeeping and reporting.
These costs will be identified as the proposal is developed.

Risks:

In Section 112 of the Clean Air Act, Congress found that there is
sufficient evidence of risk to warrant a broad, technology-based MACT
program to reduce toxic emissions nationwide. Therefore, separate risk
analyses are not conducted for individual rulemakings within the MACT
program. The risks from this industry are those normally associated
with combustion, such as exposure to particulate matter and sulfur
oxides.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 05/00/02
Final Action 05/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

None

Additional Information:

SAN No. 3837

Agency Contact:
James Eddinger
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-5426
Fax: 919 541-5450
Email: [email protected]

William Maxwell
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-5430
Fax: 919 541-5450
Email: [email protected]
RIN: 2060-AG69
_______________________________________________________________________

EPA

125. NESHAP: SURFACE COATING OF AUTOMOBILES AND LIGHT-DUTY TRUCKS
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

42 USC 7401 et seq

CFR Citation:

40 CFR 63

Legal Deadline:

None

Abstract:

The Clean Air Act, as amended in 1990, requires EPA to develop emission
standards for sources of hazardous air pollutants (HAPs). The surface
coating of new automobiles and light-duty trucks is among the source
categories to be regulated under section 112 of the CAA. Emissions of
HAPs will be addressed by this rulemaking for both new and existing
sources. EPA promulgated an NSPS for this source category in 1980. The
standards for the NESHAP are to be technology-based are are to require
the maximum achievable control technology as described in section 112
of the CAA.

Statement of Need:

Surface coating of automobiles and ligh-duty trucks is a source
category listed to be regulated under section 112 of the CAA.

Summary of Legal Basis:

Section 112 of the Clean Air Act

Alternatives:

Alternatives have been explored as the proposal has been developed. The
alternatives include the minimum required ``floor'' level of control
and other more stringent options.

Anticipated Cost and Benefits:

This rule will result in significant costs to the affected industry,
including costs for recordkeeping and reporting. These costs are being
identified as the proposal is being developed, and will be addressed in
a Regulatory Impact Analysis accompanying the proposed rule.

Risks:

In Section 112 of the Clean Air Act, Congress found that there is
sufficient evidence of risk to warrant a broad, technology-based MACT
program to reduce toxic emissions nationwide.

[[Page 61275]]

Therefore, separate risk analyses are normally not conducted for
individual rulemakings within the MACT program. The risks from this
industry are those normally associated with surface coating operations,
such as exposure to coating solvents which are hazardous air
pollutants.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Final Action 03/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses

Government Levels Affected:

State, Local

Additional Information:

SAN No. 3907

Agency Contact:
Dave Salman
Environmental Protection Agency
Air and Radiation
(MD-13)
Research Triangle Park, NC 27711
Phone: 919 541-0859
Fax: 919 541-5689
Email: [email protected]

Dianne Byrne
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-5689
Fax: 919 541-5342
Email: [email protected]
RIN: 2060-AG99
_______________________________________________________________________

EPA

126. REVIEW OF THE NATIONAL AMBIENT AIR QUALITY STANDARDS FOR
PARTICULATE MATTER
Priority:

Economically Significant

Legal Authority:

42 USC 7408; 42 USC 7409

CFR Citation:

40 CFR 50

Legal Deadline:

Final, Statutory, July 1, 2002, Under the Clean Air Act - the next
standards review is to be completed July 2002.

Abstract:

On July 18, 1997, the EPA published a final rule revising the national
ambient air quality standards (NAAQS) for particulate matter (PM) (62
FR 38652). While retaining the PM10 standard levels, new standards were
added for fine particles (PM2.5) to provide increased protection
against both health and environmental effects of PM. On the same day, a
Presidential Memorandum (62 FR 38421, July 16, 1997) was published
that, among other things, directed EPA to complete the next review of
the PM NAAQS by July 2002. The EPA's plans and schedule for the next
periodic review of the PM NAAQS were published on October 23, 1997 (62
FR 55201). Due to the unprecedented volume of new research, the
completion of the Criteria Document has been extended and as a result
the overall schedule for the review of the PM NAAQS is anticipated to
extend beyond the original target of July 2002. As with other NAAQS
reviews, a rigorous assessment of relevant scientific information will
be presented in a Criteria Document (CD), and the preparation of this
document is currently under way by the EPA's National Center for
Environmental Assessment. The EPA's Office of Air Quality Planning and
Standards will also prepare a Staff Paper (SP) for the Administrator
which will evaluate the policy implications of the key studies and
scientific information contained in the CD and additional technical
analyses and identify critical elements that EPA staff believe should
be considered in reviewing the standards. The SP and CD will be
reviewed by the Clean Air Scientific Advisory Committee (CASAC) and the
public both will reflect the input received through these reviews. As
the PM NAAQS review is completed, the Administrator's proposal to
revise or reaffirm the PM NAAQS will be published with a request for
public comment. Input received during the public comment period will be
reflected in the Administrator's final decision.

Statement of Need:

As established in the Clean Air Act, the national ambient air quality
standards for particulate matter are to be reviewed every five years.

Summary of Legal Basis:

Section 109 of the Clean Air Act (42 USC 7409) directs the
Administrator to propose and promulgate ``primary'' and ``secondary''
national ambient air quality standards for pollutants identified under
section 108 (the ``criteria'' pollutants). The ``primary'' standards
are established for the protection of public health, while
``secondary'' standards are to protect against public welfare or
ecosystem effects.

Alternatives:

The main alternatives for the Administrator's decision on the review of
the national ambient air quality standards for particulate matter are
whether to reaffirm or revise the existing standards.

Anticipated Cost and Benefits:

Costs and benefits of revising or reaffirming the national ambient air
quality standards for particulate matter cannot be determined at
present; a regulatory impact analysis will be conducted along with the
review of the standards.

Risks:

The current national ambient air quality standards for particulate
matter are intended to protect against public health risks associated
with morbidity or premature mortality from cardiopulmonary disease.
During the course of this next review, a risk assessment will be
conducted to evaluate health risks associated with retention or
revision of the particulate matter standards.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 08/00/02
Final Action 07/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Undetermined

Additional Information:

SAN No. 4255

[[Page 61276]]

Agency Contact:
Mary A. Ross
Environmental Protection Agency
Air and Radiation
MD-15
Research Triangle Park, NC 27711
Phone: 919 541-5170
Fax: 919 541-0237
Email: [email protected]

Karen Martin
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-5274
Fax: 919 541-0237
Email: [email protected]
RIN: 2060-AI44
_______________________________________________________________________

EPA

127. TRANSPORTATION CONFORMITY AMENDMENTS: RESPONSE TO MARCH 2, 1999,
COURT DECISION
Priority:

Other Significant

Legal Authority:

42 USC 7401 to 7671q

CFR Citation:

40 CFR 93

Legal Deadline:

None

Abstract:

The Clean Air Act requires EPA to promulgate rules that establish the
criteria and procedures for determining whether highway and transit
plans, programs, and projects conform to State air quality plans.
Conformity means that the transportation actions will not cause or
worsen violations of air quality standards or delay timely attainment
of the standards. The original conformity rule was finalized on
November 24, 1993, and most recently amended on August 15, 1997. On
March 2, 1999, the U.S. Court of Appeals overturned certain provisions
of the 1997 conformity amendments. This rulemaking will amend the
conformity rule in compliance with the court decision. The rulemaking
will formalize the May 14, 1999 EPA guidance and the June 18, 1999 DOT
guidance that was issued to guide action on this issue until a
rulemaking could be issued. Specifically, the rulemaking will clarify
the types of projects that can be implemented in the absence of a
conforming transportation plan. It will also explain EPA's process for
reviewing newly submitted air quality plans and when those submissions
can be used for conformity purposes.

Statement of Need:

The U.S. Court of Appeals remanded some provisions of EPA's conformity
rule. The conformity rule must be amended in compliance with the court
decision.

Summary of Legal Basis:

The Clean Air Act requires transportation plans, programs, and projects
to conform to state air quality plans. The Clean Air Act also requires
EPA to establish rules for how to determine the conformity of
transportation actions.

Alternatives:

EPA's alternatives are constrained by the court decision.

Anticipated Cost and Benefits:

This amendment will not change the results of the economic analysis
performed for the original transportation conformity rule, which was
summarized in the preamble to that rule on 11/24/93 at 58 FR 62214.

Risks:

Transportation conformity is a process designed to help achieve
attainment with the National Ambient Air Quality Standards. The risks
addressed by the rule are therefore those risks associated with non-
achievment of such standards.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/01
Final Action 06/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal, State, Local, Tribal

Additional Information:

SAN No. 4340

Agency Contact:
Kathryn Sargeant
Environmental Protection Agency
Air and Radiation
NFEVL
Ann Arbor, MI 48105
Phone: 734 214-4441
Fax: 734 214-4052
Email: [email protected]
RIN: 2060-AI56
_______________________________________________________________________

EPA

128. RULEMAKINGS FOR THE PURPOSE OF REDUCING INTERSTATE OZONE TRANSPORT
Priority:

Economically Significant. Major under 5 USC 801.

Legal Authority:

Not Yet Determined

CFR Citation:

40 CFR 51

Legal Deadline:

None

Abstract:

The Clean Air Act (CAA) requires that a state implementation plan (SIP)
contain provisions to prevent a State's facilities or sources from
contributing significantly to air pollution that is transported
downwind to other States, exacerbating their inability to meet the
national ambient air quality standards for ozone. Through a 2-year
effort known as the Ozone Transport Assessment Group (OTAG), EPA worked
in partnership with the 37 easternmost States and the District of
Columbia, industry representatives, and environmental groups to address
ozone precursor and ozone transport. This multiyear collaboration
resulted in the most comprehensive analysis of ozone transport ever
conducted. The OTAG States voted in favor of a range of strategies to
reduce nitrogen oxide emissions from utilities and other major sources.
Building on the recommendations of OTAG, EPA issued a rule known as the
NOx SIP Call (10/27/98, 63 FR 57355) requiring 22 States and the
District of Columbia to submit revisions to their SIPs to address the
regional transport of nitrogen oxides (a precursor to ozone formation
known as NOx). By reducing emissions of NOx, the actions directed by
these plans will decrease the formation and transport of ozone across
State boundaries in the eastern half of the United States. On March 3,
2000, the Court of Appeals issued a decision largely upholding the NOx
SIP Call, but remanded four narrow issues to EPA for further rulemaking
action. In an August 30, 2000 Court Order, emission reduction measures
are required to be in place by May 31, 2004. On June 8, 2001, the D.C.
Circuit made a related decision concerning the NOx SIP Call Technical
Amendment rulemakings which largely upheld Phase I of the NOx SIP Call,
but remanded one issue to EPA. EPA is now addressing in a

[[Page 61277]]

separate rulemaking the remanded issues mentioned above -- see SAN 4433
in today's Regulatory Agenda. Another issue remanded, or remanded and
vacated, in the technical amendments and section 126 court decisions
dealing with growth projections will be addressed separately. A notice
of data availability was published on 8/3/01 which made new data
publicly available for notice-and-comment. Final action is expected in
November 2001. In addition to the SIP Call provisions, Federal
Implementation Plans (FIPs) may also be needed to reduce regional
transport if any affected State fails to adequately revise its SIP to
comply with the NOx SIP call (see SAN 4096 in today's Regulatory
Agenda). In addition to the SIP Call remedy, the Clean Air Act also
gave States the right to petition EPA to take other Federal action to
prevent ozone transport that affects downwind States. Accordingly,
under section 126 of the CAA, eight northeastern States filed petitions
requesting EPA to make findings and require decreases in NOx emissions
from certain stationary sources in upwind.

Statement of Need:

It has long been recognized that ozone transport is a major factor in
the difficulty many States are having in attaining the clean-air
standards for ozone. This was made more clear by the OTAG analysis
outlined above.

Summary of Legal Basis:

Clean Air Act Sections 110 and 126

Alternatives:

The Clean Air Act specifies the SIP Call process, the FIP process, and
the Section 126 petition process as alternate approaches to remedying
the problem of ozone transport. EPA intends to use these alternatives
as appropriate in an integrated program.

Anticipated Cost and Benefits:

As outlined in the Regulatory Impact Analysis for the NOx SIP Call, the
rule will result in significant improvements in premature mortality,
chronic asthma, chronic and acute bronchitis, upper and lower
respiratory symptoms, work days lost, decreased worker productivity,
visibility in urban and suburban areas, increases in yields of
commercial forests currently exposed to elevated ozone levels, and
reductions in loadings of nitrogen to sensitivity estuaries, helping
State and local government reach target reduction goals for estuaries
such as Chesapeake Bay, Albermarle-Pamlico Sound and Long Island Sound.
Due to practical analytical limitations, we cannot quantify and/or
monetize all potential benefits of this action. Within these
limitations, the quantified and monetized benefits were estimated in
the Regulatory Impact Analysis to range from $1.1 Billion to $4.2
Billion annually. Annual costs were estimated at $1.7 Billion. All
figures are in 1990 dollars.

Risks:

The risks addressed by this action are the likelihood of experiencing
increased health and environmental effects associated with
nonattainment of the National Ambient Air Quality Standard for ozone.
These effects are briefly described above in the ``costs and benefits''
section, and they are outlined in detail in the Regulatory Impact
Analysis for the NOx SIP Call.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Final Action NOx63 FR 57355 10/27/98
NPRM NOx FIPs (S63 FR 56393 10/21/98
Final Action Sec64 FR 28250ndings 05/25/99
Final Action Sec65 FR 2674pprovals and Remedy 01/18/00
NODA Notice of D66 FR 40609ility for the NOx SIP Call & Section08/03/01
NPRM Response to NOx SIP Call Court Decision (SAN 4433) 12/00/01
Final Action Response to Remands Concerning Growth Factors 01/00/02
Final Action Response to NOx SIP Call Court Decision (SAN 4433)04/00/02
Final Action NOxDetermined 4096) To Be
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

State

Additional Information:

SAN No. 4466

Agency Contact:
Jan King
Environmental Protection Agency
Air and Radiation
MD-15
Research Triangle Park, NC 27711
Phone: 919 541-5665
Fax: 919 541-0824
Email: [email protected]

Carla Oldham
Environmental Protection Agency
Air and Radiation
MD-15
Research Triangle Park, NC 27711
Phone: 919 541-3347
Fax: 919 541-0824
Email: [email protected]
RIN: 2060-AJ20
_______________________________________________________________________

EPA

129. ELECTRIC UTILITY STEAM GENERATING UNIT MACT REGULATION
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect State, local or tribal goverments and the
private sector.

Legal Authority:

42 USC 7412

CFR Citation:

40 CFR 63

Legal Deadline:

NPRM, Judicial, December 15, 2003.

Final, Judicial, December 15, 2004.

Abstract:

In December 2000, the EPA determined that regulation of hazardous air
pollutant emissions (HAP) from oil- and coal-fired electric utility
steam generating units was necessary and appropriate. This finding was
based on the results of the study mandated by section 112(n)(1)(A) of
the Clean Air Act, as amended. The regulation(s) will be developed
under section 112 and will result in standards based on the use of
maximum achievable control technology (MACT). The primary benefit will
be the reduction of mercury emissions to the atmosphere from coal-fired
units but other HAP will also be reduced. Small businesses and State/
local/tribal governments could be impacted (particularly those
governments owning or operating oil- or coal-fired electric generation
facilities).

[[Page 61278]]

Statement of Need:

Oil and coal-fired electric utility steam generating units were added
(December 20, 2000) to the list of source categories to be regulated
under section 112 of the Clean Air Act, as amended.

Summary of Legal Basis:

Section 112 of the Clean Air Act, as amended.

Alternatives:

Alternatives will be identified as the proposal is developed.

Anticipated Cost and Benefits:

It is anticipated that this rule will result in significant costs to
the affected industry, including Federal, State, and local entities
that own/operate electric utility steam generating units. These costs
will be identified as the proposal is developed.

Risks:

Risk information will become available as the proposal is developed.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 12/00/03
Final Rule 12/00/04
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses, Governmental Jurisdictions

Government Levels Affected:

Federal, State, Local

Federalism:

This action may have federalism implications as defined in EO 13132.

Energy Effects:

Statement of Energy Effects planned as required by Executive Order
13211.

Additional Information:

SAN No. 4571

Sectors Affected:

221112 Fossil Fuel Electric Power Generation

Agency Contact:
Robert J. Wayland
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-1045
Fax: 919 541-5450
Email: [email protected]

William Maxwell
Environmental Protection Agency
Air and Radiation
MD-13
Research Triangle Park, NC 27711
Phone: 919 541-5430
Fax: 919 541-5450
Email: [email protected]
RIN: 2060-AJ65
_______________________________________________________________________

EPA

130. LEAD-BASED PAINT ACTIVITIES; TRAINING AND CERTIFICATION FOR
RENOVATION AND REMODELING
Priority:

Other Significant. Major under 5 USC 801.

Unfunded Mandates:

Undetermined

Legal Authority:

15 USC 2603 TSCA Title IV; PL 102-550 sec 402(c)(3)

CFR Citation:

40 CFR 745

Legal Deadline:

Final, Statutory, October 28, 1996.

Abstract:

Under section 402(c)(2) of the Toxic Substances Control Act (TSCA)
Title IV, EPA conducted a study of the extent to which persons engaged
in renovation and remodeling activities in target housing are exposed
to lead in the conduct of such activities or disturb lead and create a
lead-based paint hazard. EPA must use the results of this study and
consult with interested parties to determine which categories of
renovation and remodeling activities require training and
certification. EPA must then revise the training and certification
regulations originally developed for individuals performing lead-based
paint abatement under section 402(c)(a) of TSCA Title IV to apply them
to the renovation and remodeling categories. If EPA determines that any
category does not require certification, EPA must publish an
explanation of the basis for that determination.

Statement of Need:

Childhood lead poisoning is a pervasive problem in the United States,
with almost a million young children having more than 10 ug/dl of lead
in their blood, (Center for Disease Control's level of concern).
Although there have been dramatic declines in blood-lead levels due to
reductions of lead in paint, gasoline, and food sources, remaining
paint in older houses continues to be a significant source of childhood
lead poisoning. These rules will help insure that individuals and firms
conducting lead-based paint activities will do so in a way that
safeguards the environment and protects the health of building
occupants, especially children under 6 years old.

Summary of Legal Basis:

This regulation is mandated by TSCA section 402(c). TSCA Section 402(c)
directs EPA to address renovation and remodeling activities by first
conducting a study of the extent to which persons engaged in various
types of renovation and remodeling activities are exposed to lead in
the conduct of such activities or disturb lead and create a lead-based
paint hazard on a regular basis. Section 402(c) further directs the
Agency to revise the lead-based paint activities regulations (40 CFR
part 745 subpart L) to include renovation or remodeling activities that
create lead-based paint hazards. In order to determine which
contractors are engaged in such activities the Agency is directed to
utilize the results of the study and consult with the representatives
of labor organizations, lead-based paint activities contractors,
persons engaged in remodeling and renovation, experts in health
effects, and others.

Alternatives:

TSCA Section 402(c) states that should the Administrator determine that
any category of contractors engaged in renovation or remodeling does
not require certification; the Administrator may publish an explanation
of the basis for that determination.

Anticipated Cost and Benefits:

EPA's quantitative cost estimates fall into four categories: Training
Costs, Work Practice Costs, Clearance Testing Costs, and Administrative
Costs. The estimates vary depending upon the option selected. In most
cases we expect that requirements related to Clearance Testing and Work
Practices will contribute the most to overall rule cost. The benefits
analysis will not

[[Page 61279]]

provide direct quantitative measures of each (or any) option. EPA does
not have a complete risk assessment (with dose-response functions) that
would permit direct quantitative estimates. We do have other data, such
as estimated loadings of Pb generated by renovation work, number and
type of renovation events, demographics of the exposed population, and
the costs of various health effects previously linked to Pb exposure.
With the available information we are able utilize several qualitative
approaches to frame the benefits associated with an effective
renovation rule.

Risks:

These rules are aimed at reducing the prevalence and severity of lead
poisoning, particularly in children. The Agency has concluded that many
R&R work activities can produce or release large quantities of lead and
may be associated with elevated blood lead levels. These activities
include, but are not limited to: sanding, cutting, window replacement,
and demolition. Lead exposure to R&R workers appears to by less of a
problem than to building occupants (especially young children). Some
workers (and homeowners) are occasionally exposed to high levels of
lead. Any work activity that produces dust and debris may create a lead
exposure problem.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 08/00/02
Final Action 08/00/03
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses, Governmental Jurisdictions, Organizations

Government Levels Affected:

Federal, State, Local, Tribal

Additional Information:

SAN No. 3557

Sectors Affected:

23321 Single Family Housing Construction; 23322 Multifamily Housing
Construction; 23521 Painting and Wall Covering Contractors; 23551
Carpentry Contractors; 23599 All Other Special Trade Contractors; 53111
Lessors of Residential Buildings and Dwellings; 531311 Residential
Property Managers; 54138 Testing Laboratories

Agency Contact:
Mike Wilson
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7404
Washington, DC 20460
Phone: 202 260-4664
Fax: 202 260-0770
Email: [email protected]

Julie Simpson
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7404
Washington, DC 20460
Phone: 202 260-7873
Fax: 202 260-0770
Email: [email protected]
RIN: 2070-AC83
_______________________________________________________________________

EPA

131. ENDOCRINE DISRUPTOR SCREENING PROGRAM
Priority:

Other Significant

Legal Authority:

15 USC 2603 TSCA; 21 USC 346(a) FFDCA; 42 USC 300(a)(17) SDWA; 7 USC
136 FIFRA

CFR Citation:

Not Yet Determined

Legal Deadline:

Final, Statutory, August 3, 1999.

Abstract:

This final policy statement will set forth EPA's Endocrine Disruptor
Screening Program and the procedures to be followed by regulated
entities and the Agency. EPA published a proposed policy statement
setting forth the Screening Program on December 28, 1998. In the final
policy statement, EPA will describe the screens and tests that it will
require as part of the Program. It also will address certain issues
related to implementing the Program. The major actions in 2001-2003
will be the standardization and validation of assays in the screening
battery and the completion of the priority setting system.

Statement of Need:

The Endocrine Disruptor Screening Program fulfills the statutory
direction and authority to screen pesticide chemicals and drinking
water contaminants for their potential to disrupt the endocrine system
and adversely affect human health.

Summary of Legal Basis:

The mandate to screen pesticide chemicals for estrogenic effects that
may affect human health is the Federal Food, Drug and Cosmetic Act
(FFDCA) as amended in the Food Quality Protection Act (21 U.S.C.
346a(p)). FFDCA also provides EPA authority to require testing of
substances that may have an effect that is cumulative to that of a
pesticide chemical. Discretionary authority to test contaminants in
sources of drinking water is in the Safe Drinking Water Act as amended
in 1996 (42 U.S.C. 300j-17). General authority to test chemicals and
pesticides is in TSCA (15 U.S.C. 2603) and FIFRA (7 U.S.C. 136)
respectively.

Alternatives:

A Federal role is mandated under cited authority. There is no
alternative to role of the Federal Government on this issue to ensure
that pesticides, commercial chemicals and contaminants are screened and
tested for endocrine disruption potential. A limited amount of testing
may be conducted voluntarily but this will fall far short of the
systematic screening which is necessary to protect public health and
the environment and ensure the public that all important substances
have been adequately evaluated.

Anticipated Cost and Benefits:

It is too early to project the costs and benefits of this program
accurately. However, as a rough estimate, the screening battery is
estimated to cost $200,000 per chemical. It is also too early to
quantify the benefits of this program mathmetically. The goal of the
program is to reduce the risks identified in Paragraph 22 below.

Risks:

Evidence is continuing to mount that wildlife and humans may be at risk
from exposure to chemicals operating through a endocrine mediated
pathway. Preliminary studies show decreases on IQ tests and increases
in aggression in children. Severe malformations of the genitals of boys
has increased steadily over the last two decades. Wildlife effects have
been more thoroughly documented. Abnormalities in birds, marine
mammals, fish and shellfish have been documented in the U.S., Europe,
Japan, Canada, and Australia which have been linked to specific
chemical exposures. Evidence is sufficient for the U.S. to proceed on a
two track strategy: research on the basic science regarding endocrine
disruption and screening to identify which chemicals are capable of

[[Page 61280]]

interacting with the endocrine system. The combination of research and
test data developed by this program will enable EPA to take action to
reduce chemical risks.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Notice - Outline63 FR 42852ng Program 08/11/98
Notice - Propose63 FR 71542 Program and Request for Comment 12/28/98
NPRM - Proposed Procedural Rule 06/00/02
Final Action - Final Screening Program 06/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal

Additional Information:

SAN No. 4143

In August 2000, the Agency submited the required Status Report to
Congress.

Agency Contact:
Gary Timm
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7201
Washington, DC 20460
Phone: 202 260-3573
Fax: 202 401-1282
Email: [email protected]

Anthony Maciorowski
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7201
Washington, DC 20460
Phone: 202 260-3573
Fax: 202 401-1282
Email: [email protected]
RIN: 2070-AD26
_______________________________________________________________________

EPA

132. PESTICIDE EMERGENCY EXEMPTION REGULATIONS
Priority:

Other Significant

Legal Authority:

7 USC 136(p)

CFR Citation:

40 CFR 166

Legal Deadline:

None

Abstract:

EPA will propose revisions to its regulations on emergency exemptions
under section 18 of the Federal Insecticide, Fungicide and Rodenticide
Act. Emergency exemptions allow temporary use of a pesticide not in
accordance with registration requirements when emergency conditions
exist. In the 1995 Presidential Reinvention Initiative, EPA identified
a number of issues, which have been refined through informal
discussions with States, user groups, and other stakeholders.

Statement of Need:

Stakeholders, including States and Federal agencies, have requested
that EPA review its regulations for the FIFRA section 18 emergency
exemption process. States and Federal agencies are the only applicants
for emergency exemptions. Representatives of States have recommended
modifications to the current process for application, review and
approval of emergency exemptions. If adopted, the changes would reduce
unnecessary burden to both applicants and EPA, expedite decisions on
applications (which is critical in emergency situations) and
potentially reduce risk to human health and the environment.

Summary of Legal Basis:

FIFRA sec. 18 authorizes EPA to temporarily exempt States from the
requirements of registration to alleviate an emergency condition.

Alternatives:

Several measures for streamlining or improving the emergency exemption
process are being considered by the Agency. EPA has analyzed these
measures and has received considerable comment, both formally and
informally, from stakeholders. Since this rule generally constitutes
regulatory relief, and is not expected to cause any economic impact,
options with varying cost do not apply.

Anticipated Cost and Benefits:

Because this regulation would provide regulatory relief, no costs are
anticipated. Potential benefits include the reduced burden and cost to
States and Federal agencies that apply for emergency exemptions,
reduced burden to EPA, and, in some cases, reduced risk to human health
and the environment. Indirect benefits may accrue to users of
pesticides under emergency exemptions if changes result in faster
review and approval, or greater availability of pesticides. No economic
assessment of costs and benefits has yet been conducted.

Risks:

In general, the measures being considered are intended to achieve
efficiencies and reduce burdens, not to reduce risks.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 07/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal, State, Tribal

Additional Information:

SAN No. 4216

Sectors Affected:

9241 Administration of Environmental Quality Programs

Agency Contact:
Joseph Hogue
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7506C
Washington, DC 20460
Phone: 703 308-9072
Fax: 703 305-5884
Email: [email protected]

Jean M. Frane
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7506C
Washington, DC 20460
Phone: 703 305-5944
Email: [email protected]
RIN: 2070-AD36
_______________________________________________________________________

EPA

133. PLANT INCORPORATED PROTECTANTS (PIPS); EXEMPTION FOR
PIPS THAT ACT BY PRIMARILY AFFECTING THE PLANT
Priority:

Other Significant

Legal Authority:

7 USC 136 et seq; 21 USC 346a et seq

CFR Citation:

40 CFR 174

[[Page 61281]]

Legal Deadline:

None

Abstract:

EPA is considering the addition of plant-incorporated protectants that
act by primarily affecting the plant to its plant-incorporated
protectants exemptions at 40 CFR 174. Substances which plants produce
for protection against pests, and the genetic material necessary to
produce them, are pesticides under the Federal Insecticide, Fungicide
and Rodenticide Act (FIFRA), if humans intend these substances to
``prevent, repel or mitigate any pest.'' These substances are also
``chemical pesticide residues'' under the Federal Food, Drug, and
Cosmetic Act (FFDCA). EPA has determined that it will no longer issue
split registrations for biotechnology products. Therefore, EPA is
concurrently considering the exemption of plant-incorporated
protectants derived through genetic engineering from sexually
compatible plants from the requirement of a tolerance under section 408
of the FFDCA. Due to public interest and new scientific information,
additional public comment on this proposal, originally published in
1994, was requested in a recent Supplemental Proposal (66 FR 37855).

Statement of Need:

Publication of the policy document ``Coordinated Framework for the
Regulation of Biotechnology'' established a framework using existing
statutes for inter-Agency regulation of biotechnology products. EPA
began the process of establishing an internal framework for regulation
of biotechnology under it's product-specific statutes through the
finalization of the first set of plant-incorporated protectants rules.
These rules are necessary to continue the development of and further
define EPA's framework for regulation of products derived through
biotechnology. The proposed exemption of plant incorporated protectants
that act by primarily affecting the plant from requirements under FIFRA
was originally published in 1994. At that time, it was not necessary to
consider exemptions from the requirement of a tolerance under FFDCA
simultaneously with FIFRA exemptions. Therefore, it will be neccessary
to publish a NPRM proposing the FFDCA exemption before a Final Action
on the FIFRA and FFDCA exemptions can be considered.

Summary of Legal Basis:

Under FIFRA (7 USC 136 et seq) and section 408 of the FFDCA (21 USC
346a), EPA has the authority to require the registration of pesticides
and to establish tolerances, or exemptions from the requirement of a
tolerance as appropriate, of pesticidal residues in food. As EPA will
no longer issue split registrations for pesticides, these decisions
must be considered simultaneously.

Alternatives:

The choice is either to provide an exemption or not to. There are no
other alternatives to evaluate.

Anticipated Cost and Benefits:

The anticipated costs and benefits are based on those associated with
the recently finalized exemption for PIPs derived through conventional
breeding from sexually compatible plants. No costs are associated with
this action. Benefits would include a reduction in regulatory oversight
and the use of associated resources.

Risks:

This rule is an exemption, so potential risk will be examined to ensure
implementation would not present a risk to public health or to the
environment.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM FIFRA Exemp59 FR 60496 11/23/94
Supplemental NPR61 FR 37891 07/22/96
Supplemental NPR62 FR 27132 05/16/97
Supplemental NPR64 FR 19958 04/23/99
Supplemental NPR66 FR 37855 07/19/01
NPRM FFDCA Tolerance Exemption 09/00/02
Final Action FFDCA Tolerance Exemption 12/00/03
Final Action FIFRA Exemption 12/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Businesses, Organizations

Government Levels Affected:

Federal

Additional Information:

SAN No. 4612

This action is a continuation of the action described in RIN 2070-AC02.
Since several pieces of that action are now finalized, the Agency is
spliting this piece into a separate Agenda entry so that it can
continue to be tracked separately.

Sectors Affected:

32532 Pesticide and Other Agricultural Chemical Manufacturing; 111 Crop
Production; 54171 Research and Development in the Physical Sciences and
Engineering Sciences

Agency Contact:
Elizabeth Milewski
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7201
Washington, DC 20460
Phone: 202 260-0699
Fax: 202 260-0949
Email: [email protected]

Janet Andersen
Environmental Protection Agency
Office of Prevention, Pesticides and Toxic Substances
7511C
Phone: 703 308-8128
Fax: 703 308-7026
RIN: 2070-AD56
_______________________________________________________________________

EPA

134. OFFICE OF SOLID WASTE BURDEN REDUCTION PROJECT
Priority:

Other Significant

Legal Authority:

42 USC 6907; 42 USC 6912(a); 42 USC 6921 to 6927; 42 USC 6930; 42 USC
6934; 42 USC 6935; 42 USC 6937 to 6939; 42 USC 6944; 42 USC 6949(a); 42
USC 6974; PL 104-13

CFR Citation:

40 CFR 260; 40 CFR 261; 40 CFR 264; 40 CFR 265; 40 CFR 266; 40 CFR 268;
40 CFR 270

Legal Deadline:

None

Abstract:

EPA plans to reduce the burden imposed by the RCRA reporting and
recordkeeping requirements to help meet the Federal Governmentwide goal
established by the Paperwork Reduction Act (PRA).

In June 1999, EPA published a Notice of Data Availability (NODA) in the
Federal Register (64 FR 32859) to seek comment on a number of burden
reduction ideas. After reviewing the

[[Page 61282]]

comments received on the NODA, EPA is drafting a proposed rulemaking to
implement many of these ideas. The proposals are designed to eliminate
duplicative and nonessential paperwork.

The main ideas being considered for the proposed rulemaking are: (1)
eliminating or modifying one-third of the 334 RCRA-required notices and
reports that are sent by the regulated community to states and EPA; (2)
eliminating the RCRA emergency response training requirements that
overlap with the Occupational Safety and Health Administration
requirements; (3) eliminating the need for facilities to record
personnel descriptions; (4) decreasing the owner/operator self-
inspection frequency of hazardous waste tanks to weekly; (5) providing
states and EPA with the opportunity to lengthen owner/operator self-
inspection frequencies on a case-by-case basis for containers,
containment buildings, and tanks; (6) eliminating the Land Disposal
Restrictions generator waste determinations, recycler notifications and
certifications, hazardous debris notifications and characteristic waste
determinations, and streamlining the characteristic waste notification
procedures; and (7) modifying the groundwater monitoring requirements
for hazardous waste facilities.

Statement of Need:

The Paperwork Reduction Act of 1995 establishes a Federal
Governmentwide goal to reduce the paperwork and reporting burden it
imposes. The RCRA Burden Reduction Initiative Proposed Rulemaking makes
the regulatory changes necessary to meet this goal.

Summary of Legal Basis:

This action is not required by statute or court order.

Alternatives:

Reducing recordkeeping and reporting will require changes in our
regulations. There was no alternative to a rulemaking. The Agency
sought opinions from the regulated community on various burden
reduction possibilities.

Anticipated Cost and Benefits:

Our cost-benefit analysis showed a savings of $120 million and 929,000
hours. The proposed rule will have minimal impact on the protectiveness
of the RCRA regulations. The proposal will eliminate or streamline
paperwork requirements that are unnecessary because they add little to
the protectiveness of the RCRA regulations.

Risks:

The proposed rule will have no risk impacts.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
Notice of Data A64 FR 32859 06/18/99
NPRM 01/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal, State, Local, Tribal

Additional Information:

SAN No. 4084

Applicable SIC codes: Chemicals and Allied Products (28), Primary Metal
Industries (33), Fabricated Metals (34), Industrial Machinery and
Equipment (35), Electrical Equipment (36), Transportation Equipment
(37), Other Manufacturing, Transportation and Utilities (40-49),
Wholesale Trade (50-51), Services (70-89) and Other SIC Groups

Sectors Affected:

323 Printing and Related Support Activities; 324 Petroleum and Coal
Products Manufacturing; 325 Chemical Manufacturing; 326 Plastics and
Rubber Products Manufacturing; 331 Primary Metal Manufacturing; 332
Fabricated Metal Product Manufacturing; 334 Computer and Electronic
Product Manufacturing; 562 Waste Management and Remediation Services

Agency Contact:
Robert Burchard
Environmental Protection Agency
Solid Waste and Emergency Response
5302W
Washington, DC 20460
Phone: 703 308-8450
Fax: 703 308-8433
Email: [email protected]
RIN: 2050-AE50
_______________________________________________________________________

EPA

135. RECYCLING OF CATHODE RAY TUBES (CRTS) AND MERCURY-CONTAINING
EQUIPMENT: CHANGES TO HAZARDOUS WASTE REGULATIONS
Priority:

Other Significant

Legal Authority:

42 USC 6912(a); 42 USC 6921; 42 USC 6922; 42 USC 6923; 42 USC 6924; 42
USC 6925

CFR Citation:

40 CFR 261; 40 CFR 273

Legal Deadline:

None

Abstract:

This action will ultimately revise the existing Federal hazardous waste
regulations to encourage recycling and better management of Cathode Ray
Tubes (CRTs) by proposing a conditional exclusion from the definition
of solid waste for CRTs being recycling. A CRT is display component of
a television or computer monitor. A CRT is made largely of specialized
glasses, some of which contain lead to protect the user from X-rays
inside the CRT. Due to the lead, when they are disposed of or
reclaimed, some CRTs are hazardous wastes under the Federal Resource
Conservation and Recovery Act (RCRA) regulations. This rule will also
propose to streamline RCRA requirements for managing mercury-containing
equipment by adding such equipment to the universal waste rule. This
rule is planned in response to a June 9, 1998 recommendation on CRT
recycling from the Common Sense Initiative (CSI) Council to the
Environmental Protection Agency (EPA), and in response to a petition
from the Utilities Solid Waste Activities Group regarding mercury-
containing equipment. CSI is a consensus-based process for developing
cleaner, cheaper, smarter environmental improvements that includes
representatives of: industry; environmental groups; community groups;
environmental justice groups; labor and, Federal, State, local, and
tribal governments. The goal of this proposal is to improve management
and encourage recycling, thereby minimizing disposal of lead,
increasing resource recovery, and enhancing protection of human health
and the environment.

[[Page 61283]]

Statement of Need:

This proposal is needed to respond to recommendations of the
Electronics Subcommittee of the CSI Council regarding CRT recycling,
and also to respond to a petition from the Utilities Solid Waste
Activities Group regarding management of mercury-containing equipment.
It is also needed to streamline RCRA requirements for these materials
to encourage better management and recycling.

Summary of Legal Basis:

This action is not required by statute or court order.

Alternatives:

EPA plans to solicit comments on alternative management requirements,
including notification and tracking, accumulation requirements,
requirements for CRT glass processors, export requirements, and
disposal requirements.

Anticipated Cost and Benefits:

EPA estimates that this proposal, if finalized, would result in annual
savings of up to 3 million dollars to reduce administrative,
transportation, and management costs compared to current regulations.

Risks:

The risks are undetermined.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 02/00/02
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Government Levels Affected:

Federal, State, Local, Tribal

Additional Information:

SAN No. 4092

Sectors Affected:

334411 Electron Tube Manufacturing

Agency Contact:
Marilyn Goode
Environmental Protection Agency
Solid Waste and Emergency Response
5304W
Washington, DC 20460
Phone: 703 308-8800
Fax: 703 308-0522
Email: [email protected]
RIN: 2050-AE52
_______________________________________________________________________

EPA

136. NPDES PERMIT REQUIREMENTS FOR MUNICIPAL SANITARY SEWER COLLECTION
SYSTEMS, MUNICIPAL SATELLITE COLLECTION SYSTEMS, AND SANITARY SEWER
OVERFLOWS
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

This action may affect State, local or tribal goverments.

Legal Authority:

33 USC 1311 CWA sec 301; 33 USC 1314 CWA sec 304; 33 USC 1318 CWA sec
308; 33 USC 1342 CWA sec 402; 33 USC 1361 CWA sec 501(a)

CFR Citation:

40 CFR 122.38; 40 CFR 122.41; 40 CFR 122.42

Legal Deadline:

None

Abstract:

EPA is developing a notice of proposed rulemaking that would propose a
broad-based reevaluation framework for sanitary sewer collection
systems under the NPDES program. The Agency is proposing standard
permit conditions for inclusion in permits for publicly owned treatment
works (POTWs) and municipal sanitary sewer collection systems. The
standard requirements address reporting, public notification, and
recordkeeping requirements for sanitary sewer overflows (SSOs),
capacity assurance, management, operation and maintenance requirements
for municipal sanitary sewer collection systems; and a prohibition on
SSOs.

Statement of Need:

The proposed regulation is intended to address three interrelated
issues: (1) The risks to health and the environment caused by SSOs; (2)
The need to protect and enhance local, State and Federal investments in
sewer system infrastructure; and (3) The need to provide a clear and
consistent regulatory program for collection systems.

Risks to health/environment: EPA estimates that about 40,000 SSO events
occur each year, and perhaps ten times this many instances occur where
sewage backs up into basements. These events lead to a variety of
damages, including exposure of people to health risks; lowered water
quality; and property damage and clean-up costs.

Protection of Investments in Sewer System Infrastructure : Sanitary
sewer collection systems represent a major national investment in
community infrastructure. EPA estimates that these systems have a
replacement value of $1 to $2 trillion. Another source estimates that
wastewater collection and treatment systems represent about 10 to 15
percent of the value of all publicly owned infrastructure in the United
States. The substantial frequency of SSOs and other collection system
failures indicates that operation, maintenance, repair and
rehabilitation of sewer systems need to improve.

Providing Clear and Consistent Regulatory Program for Collection
Systems - States are implementing the existing NPDES regulations for
sanitary sewer collection systems in widely differing ways.

Summary of Legal Basis:

EPA is considering whether to publish a proposed rule that would
require NPDES permits for municipal sanitary sewer collection systems
to contain a standard provision for better operation and management of
systems to avoid SSOs, increased attention to system planning, and
better notification to the public in the event of an overflow. These
proposed standard permit conditions would derive from Clean Water Act
(CWA) sections 304(i), 308, and 402(a). Section 402(a) of the CWA
authorizes EPA to prescribe permit conditions as necessary to carry out
the provisions of the CWA, including permit conditions on data and
information collection and reporting. Section 308 of the CWA authorizes
EPA to require NPDES permittees to establish, maintain, and report
records for determining whether there has been a violation of the CWA.
The prohibition of SSO discharges is a technology-based limitation that
is based, in part, on CWA section 301(a) which prohibits a discharge to
waters of the United States except in compliance with an NPDES permit.
The prohibition is also based on EPA's interpretation of the Act that
discharges from a separate sanitary sewer system need to meet effluent
limitations based on secondary treatment as defined by EPA and any more
stringent limitation necessary to meet water quality standards.

Legal authority for the requirements for municipal satellite collection
systems derives from the definition of ``publicly owned treatment
works.'' CWA section 212(2)(A) defines ``treatment works'' to include
``any devices and systems used in the storage, treatment, recycling,
and

[[Page 61284]]

reclamation of municipal sewage or industrial wastes of a liquid nature
. . . including . . . intercepting sewers, outfall sewers, sewage
collection systems . . . .'' EPA regulations define the term ``publicly
owned treatment works'' similarly at 40 CFR 122.2 and 403.1.

Alternatives:

NPDES requirements for municipal sanitary sewer collection systems
currently under consideration include the five major alternatives
discussed below. The first alternative would require NPDES permits for
municipal sanitary sewer collection systems to contain a standard
provision for better operation and management of systems to avoid SSOs,
increased attention to system planning, and better notification to the
public in the event of an overflow. The second alternative would
involve extending the requirements of the proposed rule to privately
owned satellite collection systems. The third alternative would be to
change the technology-based standard for discharges from sanitary
sewers from secondary treatment to best available technology
economically achievable (BAT)/ best practicable control technology
currently available (BCT). The fourth alternative would be a no action
alternative. The fifth alternative would be a prescriptive capacity,
management, operation, and maintenance provision. In addition to these
alternatives, a number of municipalities have suggested additional
alternatives which are being considered.

Anticipated Cost and Benefits:

EPA estimates that the total annual incremental cost for municipalities
and Federal/State permitting authorities to comply could range from
$93.5 million to $126.5 million. EPA estimates the total annual
monetized benefits would range from $36 million to $97 million. The
benefits are based on estimates of the benefits to water quality and
the benefits associated with ``smarter'' management, operation and
maintenance (MOM). The estimated range of benefits associated with
water quality including benefits from: reduced human exposure to SSOs,
leading to fewer cases of illness; increased opportunities for
recreation, tourism, and fishing; and less property damage due to
basement backups, ranged from $12 to $73 million annually. The range of
benefits associated with improved water quality and better planning and
MOM are estimated to result in a national cost savings of $24 million
annually.

Risks:

EPA estimates that there are at least 40,000 SSO events per year and an
additional 400,000 occurrences of sewage backing up into basements. The
health and environmental risks attributed to SSOs vary depending on a
number of factors including location and season (potential for public
exposure), frequency, volume, the amount and type of pollutants present
in the discharge, and the uses, conditions, and characteristics of the
receiving waters. SSOs can release raw sewage to areas where they
present high risks of human exposure, such as streets, private
property, basements, and receiving waters used for drinking water,
fishing and shellfishing, or contact recreation. The most immediate
health risks associated with SSOs are potential exposure to bacteria,
viruses, and other pathogens. EPA estimates that these overflow events
cause an estimated 1.8 to 3.6 million illnesses per year. Major groups
of disease-causing organisms or agents associated with untreated SSOs
include: bacteria, viruses, protozoa, and helminths (intestinal worms).
These pathogens can cause diseases range in severity from mild
gastroenteritis (causing stomach cramps and diarrhea) to diseases that
can be life-threatening, such as cholera, infectious hepatitis,
dysentery, and severe gastroenteritis. Adverse health consequences can
be more severe for children, the elderly, and those with weakened
immune systems. In addition to pathogens, raw sewage may contain
metals, synthetic chemicals (including endocrine system disruptors),
nutrients, pesticides, and oils, which also can be detrimental to the
health of humans and wildlife.

SSOs may affect the quality and uses of waters of the United States.
Adverse water quality impacts from SSOs may include changes to the
physical characteristics and viability of aquatic habitats, causing
fish kills. Sewage spills and overflows (including sewage overflows
from combined sewers and sanitary sewers, malfunctioning sewage
treatment plants and pump stations, sewage spills and sewer-line
breaks) are the leading identified cause of beach closures and swimming
advisories in the United States.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 04/00/02
Final Action 04/00/03
Regulatory Flexibility Analysis Required:

Small Entities Affected:

Governmental Jurisdictions

Government Levels Affected:

Federal, State, Local, Tribal

Federalism:

This action may have federalism implications as defined in EO 13132.

Additional Information:

SAN No. 3999

Note: This rule was formerly known as ``Revisions to NPDES Requirements
for Compliance Reporting and Collection System Discharges.''

Sectors Affected:

22132 Sewage Treatment Facilities

Agency Contact:
Kevin Weiss
Environmental Protection Agency
Water
4203M
Washington, DC 20460
Phone: 202 564-0742
Fax: 202 564-6392
Email: [email protected]

Sharie Centilla
Environmental Protection Agency
Water
4203M
Washington, DC 20460
Phone: 202 564-0697
Fax: 202 564-6392
Email: [email protected]
RIN: 2040-AD02
_______________________________________________________________________

EPA

137. EFFLUENT GUIDELINES AND STANDARDS FOR THE CONSTRUCTION AND
DEVELOPMENT INDUSTRY
Priority:

Economically Significant. Major under 5 USC 801.

Unfunded Mandates:

Undetermined

Legal Authority:

33 USC 1311 CWA 301; 33 USC 1314 CWA 304; 33 USC 1316 CWA 306; 33 USC
1317 CWA 307; 33 USC 1318 CWA 308; 33 USC 1342 CWA 402; 33 USC 1361 CWA
501

CFR Citation:

40 CFR 450

[[Page 61285]]

Legal Deadline:

NPRM, Judicial, March 31, 2002.

Final, Judicial, March 31, 2004.

Abstract:

The effluent guidelines will apply to construction activities
associated with new development, as well as to those associated with
re-development activities. The regulations will address storm water
runoff from construction sites during the active phase of construction,
as well as post-construction runoff. Construction activity is a major
source of sediment and other pollutants discharged to the nation's
waters. Industries potentially affected by this rulemaking include land
developers, home builders, builders of commercial and industrial
property, and other private and public sector construction site owners
and operators. EPA will develop design criteria for erosion and
sediment controls and storm water best management practices (BMPs).
These requirements will be implemented in NPDES storm water permits
issued to construction site owners and operators.

Statement of Need:

The 1998 National Water Quality Inventory Report to Congress indicates
that 35 percent of assessed stream miles are not supporting their
designated use. Siltation contributes to 38 percent of reported water
quality problems in impaired rivers and streams. Construction and
development projects contribute to stream impairment, because erosion
and sediment controls (ESC) are not properly designed for active
construction projects. The frequency of performance failure for ESCs is
high due to inappropriate application, improper sizing, and lack of
maintenance. For post construction projects, permanent
hydromodification degrades 20 percent of the impaired river miles.

Summary of Legal Basis:

The Clean Water Act authorizes EPA to establish effluent limitations
guidelines and standards to limit the pollutants discharged from point
sources. In addition, EPA is bound by a provision in a consent decree
entered in settlement of Natural Resources Defense Council et al. v.
Reilly (D.D.C. No.89-2980) to propose regulations for this industry by
March 31, 2002.

Alternatives:

The Clean Water Act directs EPA to establish a technology basis for the
effluent guidelines. Limitations are based on the performance of
specific technology levels, such as the best available technology
economically achievable. EPA is considering a range of pollution
control technologies and is also considering construction site size
exemptions to reduce the impact on small dischargers.

Anticipated Cost and Benefits:

EPA expects effluent reduction benefits from more than 20,000
construction projects each year. The types of benefits associated with
the effluent guidelines for construction and development involve
improvements to surface water quality. The benefits from the guidelines
will occur from improved control over stormwater and sediment
discharged from construction sites. In addition, the guidelines will
contribute to a reduction in stream bank erosion, the source of
significant downstream sedimentation, flooding, and habitat
destruction. The costs associated with this regulation will include
capital costs to install best management practices (BMP) for active and
post construction controls.

Risks:

EPA estimates that 2.2 million acres of agricultural and forest are
developed each year for residential and nonresidential projects. The
active construction processes require land clearing and grading that
contribute to stormwater and sediment discharges. The impervious
surfaces that are created within developed watersheds increase the
stormwater volume and velocity and accelerate stream bank erosion and
downstream sedimentation.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 03/00/02
Final Action 03/00/04
Regulatory Flexibility Analysis Required:

Yes

Small Entities Affected:

Businesses

Government Levels Affected:

Federal, State, Local, Tribal

Federalism:

Undetermined

Additional Information:

SAN No. 4280

For more information on construction and development visit Web site:
NPRM-http://www.epa.gov /ost/guide/construction

Sectors Affected:

23 Construction; 23311 Land Subdivision and Land Development; 23321
Single Family Housing Construction; 23322 Multifamily Housing
Construction; 23331 Manufacturing and Industrial Building Construction;
23332 Commercial and Institutional Building Construction; 23411 Highway
and Street Construction; 23412 Bridge and Tunnel Construction; 23491
Water, Sewer, and Pipeline Construction; 23492 Power and Communication
Transmission Line Construction; 23493 Industrial Nonbuilding Structure
Construction; 23499 All Other Heavy Construction; 23593 Excavation
Contractors; 23594 Wrecking and Demolition Contractors

Agency Contact:
Eric Strassler
Environmental Protection Agency
Water
4303
Washington, DC 20460
Phone: 202 260-7150
Fax: 202 260-7185
Email: [email protected]

Jesse Pritts
Environmental Protection Agency
Water
4303
Washington, DC 20460
Phone: 202 260-7191
Fax: 202 260-7185
Email: [email protected]
RIN: 2040-AD42
_______________________________________________________________________

EPA

138. MINIMIZING ADVERSE ENVIRONMENTAL IMPACT FROM COOLING WATER INTAKE
STRUCTURES AT EXISTING FACILITIES UNDER SECTION 316(B) OF THE CLEAN
WATER ACT, PHASE 2
Priority:

Economically Significant. Major status under 5 USC 801 is undetermined.

Unfunded Mandates:

Undetermined

Legal Authority:

33 USC 1311 CWA sec 301; 33 USC 1316 CWA sec 306; 33 USC 1326 CWA sec
316; 33 USC 1361 CWA sec 501

CFR Citation:

40 CFR 9, 122, 123, 124 and 125

Legal Deadline:

NPRM, Judicial, February 28, 2002.

[[Page 61286]]

Final, Judicial, August 28, 2003.

Abstract:

This rulemaking affects, at a minimum, existing electricity generating
facilities that employ cooling water intake structures and whose intake
flow levels exceed a minimum threshold to be determined by EPA during
the rulemaking. Section 316(b) of the Clean Water Act provides that any
standard established pursuant to sections 301 or 306 of the Clean Water
Act and applicable to a point source shall require that the location,
design, construction, and capacity of cooling water intake structures
reflect the best technology available for minimizing adverse
environmental impact. A primary purpose of the rulemaking is to
minimize any adverse environmental impact that may be associated with
the impingement and entrainment of fish and other aquatic organisms by
cooling water intake structures. Impingement refers to trapping fish
and other aquatic life on intake screens or similar devices where they
may be injured or killed. Entrainment occurs when smaller aquatic
organisms, eggs, and larvae are drawn into a cooling system, and then
pumped back out, often with significant injury or mortality due to
heat, physical stress or exposure to chemicals.

Statement of Need:

In the absence of national regulations, Permit Directors have
implemented cooling water intake limitations incompletely and
inconsistently and, in some cases, permit issuance or reissuance has
been significantly delayed. Tons of fish and other aquatic organisms
may be cropped annually as a result of cooling water intake structures
at a single large facility. By court order, EPA must propose and take
final action on this regulation. This regulation may have substantial
ecological benefits.

Summary of Legal Basis:

This action is required under an amended consent decree in settlement
of Riverkeeper Inc. et al. v. Whitman, 93 Civ. 0314 (AGS) (U.S.D.C.,
Southern District of New York, November 21, 2000).

Alternatives:

The analysis will cover various sizes and types of potentially
regulated facilities. EPA is considering whether to regulate site-by-
site, nationally, or on the basis of broad categories of water body
types.

Anticipated Cost and Benefits:

Costs are not yet determined. A qualitative assessment of benefits at
several large facilities indicates the potential for significant
benefits when large intakes are controlled. Costs and benefits are
generally expected to be smaller at facilities that use smaller amounts
of cooling water.

Risks:

Cooling water intake structures may pose significant risks for aquatic
ecosystems.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 02/00/02
Final Action 08/00/03
Regulatory Flexibility Analysis Required:

Undetermined

Small Entities Affected:

Businesses, Governmental Jurisdictions

Government Levels Affected:

Federal, State, Local, Tribal

Additional Information:

SAN No. 4474

Split from RIN 2040-AC34.

Sectors Affected:

21 Mining; 22111 Electric Power Generation; 22133 Steam and Air-
Conditioning Supply; 311 Food Manufacturing; 3122 Tobacco
Manufacturing; 313 Textile Mills; 321 Wood Product Manufacturing; 322
Paper Manufacturing; 324 Petroleum and Coal Products Manufacturing; 325
Chemical Manufacturing; 326 Plastics and Rubber Products Manufacturing;
327 Nonmetallic Mineral Product Manufacturing; 331 Primary Metal
Manufacturing; 332 Fabricated Metal Product Manufacturing; 333
Machinery Manufacturing; 334 Computer and Electronic Product
Manufacturing; 335 Electrical Equipment, Appliance and Component
Manufacturing; 336 Transportation Equipment Manufacturing; 61131
Colleges, Universities and Professional Schools

Agency Contact:
Deborah Nagle
Environmental Protection Agency
Water
4303
Washington, DC 20460
Phone: 202 260-2656
Fax: 202 260-7185
Email: [email protected]

Debra Hart
Environmental Protection Agency
Water
4303
Washington, DC 20460
Phone: 202 260-0905
Fax: 202 260-7185
Email: [email protected]
RIN: 2040-AD62
_______________________________________________________________________

EPA

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FINAL RULE STAGE

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139. NEW SOURCE REVIEW (NSR) IMPROVEMENT
Priority:

Other Significant

Legal Authority:

CAA as amended, title I

CFR Citation:

40 CFR 51.160 to 51.166; 40 CFR 52.21; 40 CFR 52.24

Legal Deadline:

None

Abstract:

This action is to revise the CAA new source review (NSR) regulations,
which govern the preconstruction air quality review and permitting
programs that are implemented by States and the Federal Government for
new and modified major stationary sources of air pollution. This
rulemaking will deregulate -- that is, exclude from major NSR program
requirements -- those activities of sources that, with respect to air
pollution, have little environmental impact. The rulemaking will
encourage pollution control and pollution prevention projects at
existing sources. Control technology requirements will be clarified
with respect to when and how they apply to sources that are covered.
The action seeks to more clearly define the appropriate roles and
requirements of sources, permitting authorities and Federal land
managers and EPA in the protection of air-quality-related values

[[Page 61287]]

in Federal Class I areas (i.e., certain national parks and wilderness
areas) under the NSR regulations. State, local, and tribal permitting
agencies will be given more flexibility to implement program
requirements in a manner that meets their specific air quality
management needs. Consequently, the rulemaking decreases the number of
activities that are subject to NSR requirements and also expedites the
permitting process for those sources that are subject to NSR. This
action is designed to reduce the regulatory burden over all industries
without respect to commercial size or capacity; therefore, it should
have no detrimental impact on small businesses. This action also
addresses several pending petitions for judicial review and
administrative action pertaining to NSR applicability requirements and
control technology review requirements. Regulations that will be
affected are State implementation plan requirements for review of new
sources and modifications to existing sources (40 CFR 51.160-166), the
Federal prevention of significant deterioration program (40 CFR 52.21),
and Federal restriction on new source construction (40 CFR 52.24).
Finally, this NSR Improvement effort also includes a separate
rulemaking (SAN 4390, Utility Sector New Source Review (NSR)
Alternative Compliance Program), which will provide industries with the
flexibility to focus more on existing pollution sources, with the goal
of achieving as good or better environmental results than could be
achieved by focusing strictly on new sources.

Statement of Need:

This effort was initiated to examine complaints from the regulated
community that the current regulatory scheme is too complex, needlessly
delays projects, and unduly restricts source flexibility. The goal of
this effort is to address industry's concerns without sacrificing the
environmental benefits embodied in the present approach; that is,
protecting and improving local air quality, and stimulating pollution
prevention and advances in control technologies. In 1996, this effort
was considered far enough along to be proposed for public comment, and
a proposed rule was issued. Thereafter, EPOA has conducted numerous
meetings with interested stakeholders. More recently, the Agency has
been conducting a review of the NSR program in response to a
recommendation from the President's National Energy Policy Development
Group. EPA is examning the impact of the NSR regulations, including
administrative interpreataion and implementation, on investment in new
utility and refinery generation capacity, energy efficiency and
environmental protection. EPA plans to report to the President on the
impact of NSR on the three areas mentioned above. At that time we will
also make recommendations on whether improvements to the NSR program
are needed to provide more flexibility and certainty, while ensuring
protection of the environment. Many of the approaches proposed in 1996
to improve NSR are being considered as part of review recommended by
the President's National Energy Policy Development Group.

Summary of Legal Basis:

There are no applicable statutory or judicial deadlines for the NSR
reform rulemaking effort. However, the rule will address three
outstanding settlement agreements: CMA Exhibit B, Top-down BACT, and
the applicability test for modifications at utilities (WEPCO).

Alternatives:

In January 1996, EPA, as part of another regulatory streamling measure,
merged portions of a separate rulemaking to implement the 1990 CAA
Amendments with the Reform effort. The combined package was proposed in
the Federal Register on July 23, 1996. On July 24. 1998, EPA issued
another Federal Register notice seeking comment on two applicability
provisions. On February 2-3, 1999, EPA convened a public meeting to
listen to new stakeholder proposals for streamlining NSR applicability
and control technology requirements. Stakeholder groups submitted
written proposals during May and June 1999. Additionally, EPA conducted
extensive stakeholder meetings as part of the NSR review recommended by
the President's National Energy Policy Development Group. EPA continues
to review the alternatives presented by interested stakeholders.

Anticipated Cost and Benefits:

From a cost perspective, the proposed rulemaking represents a decrease
in applications and recordkeeping costs to industry of at least $13
million per year, as compared to the pre-existing program, based
primarily on the fact that fewer sources will need to apply for major
source permits. In addition, the cost to State and local agencies will
be reduced by approximately $1.4 million per year. The Federal
Government should realize a savings of approximately $116,000 per year.
Additional cost reductions, which are difficult to quantify, will be
realized due to the streamlining effect of the rulemaking on the
permitting process, for example, the opportunity costs for shorter time
periods between permit application and project completion and reduced
uncertainty in planning for future source growth.

Risks:

This is a procedural rule applicable to a wide variety of source
categories. Moreover, it applies to criteria pollutants for which NAAQS
have been established. This action is considered environmentally
neutral. However, any potential risks are considered in the NAAQS
rulemaking from a national perspective.

Timetable:
_______________________________________________________________________
Action DFR Cite

_______________________________________________________________________
NPRM 61 FR 38249 07/23/96
Final Action 03/00/02
Regulatory Flexibility Analysis Required:

Government Levels Affected:

Federal, State

Additional Information:

SAN No. 3259