Download - Federal Register/Vol. 66, No. 140/Friday, July 20, 2001

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Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001

The FEDERAL REGISTER is published daily, Monday throughFriday, except official holidays, by the Office of the FederalRegister, National Archives and Records Administration,Washington, DC 20408, under the Federal Register Act (44 U.S.C.Ch. 15) and the regulations of the Administrative Committee ofthe Federal Register (1 CFR Ch. I). The Superintendent ofDocuments, U.S. Government Printing Office, Washington, DC20402 is the exclusive distributor of the official edition.The Federal Register provides a uniform system for makingavailable to the public regulations and legal notices issued byFederal agencies. These include Presidential proclamations andExecutive Orders, Federal agency documents having generalapplicability and legal effect, documents required to be publishedby act of Congress, and other Federal agency documents of publicinterest.Documents are on file for public inspection in the Office of theFederal Register the day before they are published, unless theissuing agency requests earlier filing. For a list of documentscurrently on file for public inspection, see http://www.nara.gov/fedreg.The seal of the National Archives and Records Administrationauthenticates the Federal Register as the official serial publicationestablished under the Federal Register Act. Under 44 U.S.C. 1507,the contents of the Federal Register shall be judicially noticed.The Federal Register is published in paper and on 24x microfiche.It is also available online at no charge as one of the databaseson GPO Access, a service of the U.S. Government Printing Office.The online edition of the Federal Register is issued under theauthority of the Administrative Committee of the Federal Registeras the official legal equivalent of the paper and microfiche editions(44 U.S.C. 4101 and 1 CFR 5.10). It is updated by 6 a.m. eachday the Federal Register is published and it includes both textand graphics from Volume 59, Number 1 (January 2, 1994) forward.GPO Access users can choose to retrieve online Federal Registerdocuments as TEXT (ASCII text, graphics omitted), PDF (AdobePortable Document Format, including full text and all graphics),or SUMMARY (abbreviated text) files. Users should carefully checkretrieved material to ensure that documents were properlydownloaded.On the World Wide Web, connect to the Federal Register at http://www.access.gpo.gov/nara. Those without World Wide Web accesscan also connect with a local WAIS client, by Telnet toswais.access.gpo.gov, or by dialing (202) 512-1661 with a computerand modem. When using Telnet or modem, type swais, then login as guest with no password.For more information about GPO Access, contact the GPO AccessUser Support Team by E-mail at [email protected]; by fax at(202) 512–1262; or call (202) 512–1530 or 1–888–293–6498 (tollfree) between 7 a.m. and 5 p.m. Eastern time, Monday–Friday,except Federal holidays.The annual subscription price for the Federal Register paperedition is $638, or $697 for a combined Federal Register, FederalRegister Index and List of CFR Sections Affected (LSA)subscription; the microfiche edition of the Federal Registerincluding the Federal Register Index and LSA is $253. Six monthsubscriptions are available for one-half the annual rate. The chargefor individual copies in paper form is $9.00 for each issue, or$9.00 for each group of pages as actually bound; or $2.00 foreach issue in microfiche form. All prices include regular domesticpostage and handling. International customers please add 25% forforeign handling. Remit check or money order, made payable tothe Superintendent of Documents, or charge to your GPO DepositAccount, VISA, MasterCard or Discover. Mail to: New Orders,Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA15250–7954.There are no restrictions on the republication of material appearingin the Federal Register.How To Cite This Publication: Use the volume number and thepage number. Example: 66 FR 12345.

SUBSCRIPTIONS AND COPIES

PUBLICSubscriptions:

Paper or fiche 202–512–1800Assistance with public subscriptions 512–1806

General online information 202–512–1530; 1–888–293–6498Single copies/back copies:

Paper or fiche 512–1800Assistance with public single copies 512–1803

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Contents Federal Register

III

Vol. 66, No. 140

Friday, July 20, 2001

Administration on AgingSee Aging Administration

Aging AdministrationNOTICESMeetings:

American Indian/Alaskan Native Tribal Representatives;tribal consultation on Indian elder issues, 37965

Agriculture DepartmentSee Animal and Plant Health Inspection ServiceSee Foreign Agricultural ServiceSee Rural Utilities Service

Animal and Plant Health Inspection ServicePROPOSED RULESPoultry improvement:

National Poultry Improvement Plan and auxiliaryprovisions—

Plan participants and participating flocks; new ormodified sampling and testing procedures, 37919–37932

Arts and Humanities, National FoundationSee National Foundation on the Arts and the Humanities

Centers for Disease Control and PreventionNOTICESGrant and cooperative agreement awards:

World Health Organization/Regional Office for Africa,37965–37966

Grants and cooperative agreements; availability, etc.:Human immunodeficiency virus (HIV)—

HIV and sexually transmitted diseases; routinelyrecommended counseling and testing inambulatory care clinics and emergency rooms;research studies, 37966–37969

Kenya; HIV/AIDS prevention activities expansion,37971–37973

Social and environmental interventions to prevent;research studies, 37969–37971

Zimbabwe; international health/global AIDS programstrengthening masters of public health program,37973–37974

Children and Families AdministrationSee Refugee Resettlement OfficeNOTICESAgency information collection activities:

Proposed collection; comment request, 37974–37975

Commerce DepartmentSee International Trade AdministrationSee National Oceanic and Atmospheric AdministrationNOTICESAgency information collection activities:

Submission for OMB review; comment request, 37946–37947

Committee for the Implementation of Textile AgreementsNOTICESCotton, wool, and man-made textiles:

Cambodia, 37951

Commodity Futures Trading CommissionPROPOSED RULESSecurity futures products:

Listing standards and conditions for trading, 37932–37939

Customs ServiceNOTICESCustomhouse broker license cancellation, suspension, etc.:

A.J. Murray Co., Inc., et al., 38053–38059Trade name recordation applications:

French Dermatological Laboratory, 38059Labo.Derma, 38059–38060

Education DepartmentNOTICESAgency information collection activities:


Employment and Training AdministrationNOTICESAdjustment assistance:

Bechtel Jacobs LLC, 38027Adjustment assistance and NAFTA transitional adjustment

assistance:American Nickeloid Co. et al., 38026–38027

NAFTA transitional adjustment assistance:Lucent Technologies et al., 38027–38029

Employment Standards AdministrationNOTICESAgency information collection activities:

Proposed collection; comment request, 38029–38030Minimum wages for Federal and federally-assisted

construction; general wage determination decisions,38030–38031

Energy DepartmentSee Federal Energy Regulatory CommissionNOTICESElectricity export and import authorizations, permits, etc.:

Aquila Energy Marketing Corp., 37952

Environmental Protection AgencyRULESAir quality implementation plans; approval and

promulgation; various States:Maryland, 37914–37916Missouri, 37904–37908, 37916–37918Pennsylvania, 37908–37914

PROPOSED RULESAir programs:

Stratospheric ozone protection—Hydrochlorofluorocarbons (HCFCs); production and

consumption control; allowance system, 38063–38105

Air quality implementation plans:Preparation, adoption, and submittal—

Regional haze standards; best available retrofittechnology determinations; implementationguidelines, 38107–38135

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IV Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Contents

Air quality implementation plans; approval andpromulgation; various States:

Maryland, 37943Missouri, 37941–37943Pennsylvania, 37942

NOTICESAir pollution control:

Citizens suits; proposed settlements—Natural Resources Defense Council et al., 37955–37956

Environmental statements; availability, etc.:Agency statements—

Comment availability, 37956–37957Weekly receipts, 37957

Integrated risk information system:Health effects of chronic exposure to chemical

substances; information request, 37957–37959Meetings:

Recreation waters; national beach guidance and grantperformance criteria; public forums, 37959–37960

Pesticide registration, cancellation, etc.:Triphenyltin hydroxide, 37960–37961

Reports and guidance documents; availability, etc.:Marine and estuarine sediment-associated contaminants

with amphipod Leptocheirus plumulosus; methodsfor assessing chronic toxicity, 37961

Pesticide registrants—Pesticide resistance management labeling, 37962–37963

Superfund; response and remedial actions, proposedsettlements, etc.:

Century 21 Paint, Inc. Site, OH, 37963

Federal Aviation AdministrationRULESAirworthiness directives:

Boeing, 37884–37886

Federal Communications CommissionPROPOSED RULESCommon carrier servicees:

Access charges—Special access lines; presubscribed interexchange

carrier charge; general support facility costsreallocation; withdrawn, 37943–37944

NOTICESCommon carrier services:

Federal-State Joint Board on Universal Service—Reconsideration petitions; record update; comment

request, 37963–37964

Federal Energy Regulatory CommissionNOTICESElectric rate and corporate regulation filings:

Portland General Electric Co. et al., 37953–37955Applications, hearings, determinations, etc.:

Aera Energy LLC et al., 37952–37953

Federal Reserve SystemNOTICESBanks and bank holding companies:

Permissible nonbanking activities, 37964

Food and Drug AdministrationNOTICESAgency information collection activities:

Reporting and recordkeeping requirements, 37975–37976Submission for OMB review; comment request, 37977–

37978

Committees; establishment, renewal, termination, etc.:Medical Devices Advisory Committee et al.; public

advisory panels or committees; voting memebers,37978–37980

Foreign Agricultural ServiceNOTICESAgency information collection activities:

Proposed collection; comment request, 37945

Health and Human Services DepartmentSee Aging AdministrationSee Centers for Disease Control and PreventionSee Children and Families AdministrationSee Food and Drug AdministrationSee Health Resources and Services AdministrationSee Refugee Resettlement OfficeNOTICESAgency information collection activities:


Health Resources and Services AdministrationNOTICESGrants and cooperative agreements; availability, etc.:

Children’s Hospitals Graduate Medical EducationPayment Program, 37980–37988

Rural Health Outreach and Network DevelopmentProgram, 37989–37994

Housing and Urban Development DepartmentNOTICESGrants and cooperative agreements; availability, etc.:

Facilities to assist homeless—Excess and surplus Federal property, 37998–37999

Internal Revenue ServiceRULESIncome taxes:

Foreign trusts and estates; recognition of gain on certaintransfers, 37897–37902

Foreign trusts that have U.S. beneficiaries, 37886–37897

International Trade AdministrationNOTICESAntidumping:

Preserved mushrooms from—Indonesia; correction, 38061

Justice DepartmentRULESOrganization, functions, and authority delegations:

Inspector General Office, 37902–37904PROPOSED RULESPrivacy Act; implementation, 37939–37940NOTICESPrivacy Act:

Systems of records, 38000

Labor DepartmentSee Employment and Training AdministrationSee Employment Standards AdministrationSee Mine Safety and Health AdministrationSee Occupational Safety and Health AdministrationNOTICESAgency information collection activities:



VFederal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Contents

Grants and cooperative agreements; availability, etc.:Customized Employment Program for people with

disabilities, 38001–38014High School/High Tech Start-Up Program for youths with

disabilities, 38014–38025

Merit Systems Protection BoardNOTICESSenior Executive Service:

Performance Review Board; membership, 38037

Mine Safety and Health AdministrationNOTICESAgency information collection activities:

Proposed collection; comment request, 38031–38032

National Foundation on the Arts and the HumanitiesNOTICESAgency information collection activities:

Proposed collection; comment request, 38037

National Oceanic and Atmospheric AdministrationNOTICESPermits:

Endangered and threatened species, 37947–37950

Nuclear Regulatory CommissionNOTICESEnvironmental statements; availability, etc.:

Kerr-McGee Corp., 38038–38040Yankee Atomic Electric Co., 38040–38041

Meetings:Integrated Materials Performance Evaluation Program

Lessons Learned, 38041Applications, hearings, determinations, etc.:

Vermont Yankee Nuclear Power Corp.; correction, 38037

Occupational Safety and Health AdministrationNOTICESNationally recognized testing laboratories, etc.:

TUV Product Services GmbH, 38032–38037

Personnel Management OfficeRULESEmployment:

Recruitment and relocation bonuses and retentionallowances, 37883–37884

Public Health ServiceSee Centers for Disease Control and PreventionSee Food and Drug AdministrationSee Health Resources and Services Administration

Refugee Resettlement OfficeNOTICESGrants and cooperative agreements; availability, etc.:

Refugee Resettlement Program—Refugees in local areas of high need, 37994–37998

Rural Utilities ServiceNOTICESEnvironmental statements; notice of intent:

South Mississippi Electric Power Association, 37945–37946

Securities and Exchange CommissionNOTICESMeetings; Sunshine Act, 38046Self-regulatory organizations; proposed rule changes:

Chicago Board Options Exchange, Inc., 38046–38049National Association of Securities Dealers, Inc., 38049–

38051Applications, hearings, determinations, etc.:

Intermagnetics General Corp., 38041–38042Public utility holding company filings, 38042–38046

Small Business AdministrationNOTICESDisaster loan areas:

Virginia and West Virginia, 38051

Surface Transportation BoardNOTICESEnvironmental statements; availability, etc.:

East Baton Rouge Parish, LA; Illinois Central RailroadCo.; construction and operation, 38051

Railroad operation, acquisition, construction, etc.:Union Pacific Railroad Co., 38051–38052

Railroad services abandonment:Union Pacific Railroad Co., 38052–38053

Textile Agreements Implementation CommitteeSee Committee for the Implementation of Textile

Agreements

Transportation DepartmentSee Federal Aviation AdministrationSee Surface Transportation Board

Treasury DepartmentSee Customs ServiceSee Internal Revenue ServiceNOTICESAgency information collection activities:

Submission for OMB review; comment request, 38053

Veterans Affairs DepartmentPROPOSED RULESAdjudication; pensions, compensation, dependency, etc.;

and disabilities rating schedule:Women veterans who lose breast due to service-

connected disability; special monthly compensation,37940–37941

Separate Parts In This Issue

Part IIEnvironmental Protection Agency, 38063–38105

Part IIIEnvironmental Protection Agency, 38107–38135

Reader AidsConsult the Reader Aids section at the end of this issue forphone numbers, online resources, finding aids, reminders,and notice of recently enacted public laws.


CFR PARTS AFFECTED IN THIS ISSUE

A cumulative list of the parts affected this month can be found in theReader Aids section at the end of this issue.

VI Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Contents

5 CFR575...................................37883

9 CFRProposed Rules:145...................................37919147...................................37919

14 CFR39.....................................37884

17 CFRProposed Rules:41.....................................37932

26 CFR1 (2 documents) .............37886,

37897

28 CFR0.......................................3790227.....................................37902Proposed Rules:16.....................................37939

38 CFRProposed Rules:3.......................................379404.......................................37940

40 CFR52 (5 documents) ...........37904,

37906, 37908, 37914, 37916Proposed Rules:51.....................................3810852 (5 documents) ...........37941,

37942, 3794382.....................................38064

47 CFRProposed Rules:1.......................................37943

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This section of the FEDERAL REGISTERcontains regulatory documents having generalapplicability and legal effect, most of whichare keyed to and codified in the Code ofFederal Regulations, which is published under50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold bythe Superintendent of Documents. Prices ofnew books are listed in the first FEDERALREGISTER issue of each week.

Rules and Regulations Federal Register

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Vol. 66, No. 140


OFFICE OF PERSONNELMANAGEMENT

5 CFR Part 575

RIN 3206–AJ08

Recruitment and Relocation Bonusesand Retention Allowances

AGENCY: Office of PersonnelManagement.ACTION: Final rule.

SUMMARY: The Office of PersonnelManagement is issuing final regulationsto provide agencies with greaterflexibility to use recruitment andrelocation bonuses and retentionallowances. These regulations willallow agencies to pay recruitment andrelocation bonuses and retentionallowances to prevailing rate (wage)employees.

DATES: These final regulations willbecome effective on July 20, 2001.FOR FURTHER INFORMATION CONTACT:Jeanne Jacobson, (202) 606–2858; FAX:(202) 606–0824; email:[email protected].

SUPPLEMENTARY INFORMATION: OnJanuary 19, 2001, the Office ofPersonnel Management (OPM)published proposed regulations toamend the recruitment and relocationbonus and retention allowanceregulations in 5 CFR part 575, subpartsA, B, and C, to provide agencies withadditional flexibility to use theseincentives (66 FR 5491). The proposedregulations would allow agencies togrant a retention allowance to a currentemployee likely to leave for otherFederal employment under certainlimited circumstances. The proposedregulations also would allow agencies topay recruitment and relocation bonusesand retention allowances to anemployee in a prevailing rate (wage)position, as defined in 5 U.S.C.5342(a)(3).

These final regulations contain onlythose provisions from the proposedregulations that allow agencies to payrecruitment and relocation bonuses andretention allowances to prevailing rate(wage) employees. Comments receivedfrom Federal agencies strongly supportthe proposal to allow the payment ofrecruitment and relocation bonuses andretention allowances to wageemployees. One agency asked that OPMissue the final regulations implementingthis authority as quickly as possible sothat it may use these incentivesimmediately to help address criticalrecruitment and retention problems. Inresponse to these concerns, we areissuing final regulations to allowagencies to use recruitment, relocation,and retention payments immediately forprevailing rate (wage) positions.

We received many comments on ourproposal to allow agencies to grant aretention allowance to a currentemployee likely to leave for otherFederal employment under certaincircumstances. The commenters raisedvarious issues concerning the criteria forpaying a retention allowance in thesecircumstances, and additional time isneeded to consider these issues.

Executive Order 12866, RegulatoryReview

This rule has been reviewed by theOffice of Management and Budget inaccordance with Executive Order 12866.

Regulatory Flexibility ActI certify that these regulations will not

have a significant economic impact ona substantial number of small entitiesbecause they will apply only to Federalagencies and employees.

Waiver of Delay in Effective DatePursuant to 5 U.S.C. 553(d)(3), I find

that good cause exists to make theseregulations effective in less than 30days. In their comments to OPM,agencies expressed an urgent need touse the recruitment and relocationbonus and retention allowanceauthorities as soon as possible to helpaddress serious problems in recruitingand retaining prevailing rate (wage)employees. Since use of the recruitmentand relocation bonus and retentionallowance authorities is discretionary,waiving the 30-day delay in the effectivedate of these regulations will not placean administrative burden on anyFederal agency.

List of Subjects in 5 CFR Part 575Government employees, Wages.

Office of Personnel ManagementSteven R. Cohen,Acting Director.

Accordingly, OPM is amending part575 of title 5, Code of FederalRegulations, as follows:

PART 575—RECRUITMENT ANDRELOCATION BONUSES; RETENTIONALLOWANCES; SUPERVISORYDIFFERENTIALS

1. The authority citation for part 575continues to read as follows:

Authority: 5 U.S.C. 1104(a)(2), 5753, 5754,and 5755; secs. 302 and 404 of the FederalEmployees Pay Comparability Act of 1990(FEPCA) (Pub. L. 101–509), 104 Stat. 1462and 1466, respectively; E.O. 12748, 3 CFR,1992 Comp., p. 316.

Subpart A—Recruitment Bonuses

2. In § 575.102, paragraph (a)(5) isamended by removing ‘‘or’’; paragraph(a)(6) is amended by removing ‘‘.’’ andinserting in its place ‘‘; or’’; and a newparagraph (a)(7) is added to read asfollows:

§ 575.102 Delegation of authority.(a) * * *(7) A prevailing rate position, as

defined in 5 U.S.C. 5342(a)(3).* * * * *

Subpart B—Relocation Bonuses


§ 575.202 Delegation of authority.(a) * * *(7) A prevailing rate position, as

defined in 5 U.S.C. 5342(a)(3).* * * * *

Subpart C—Retention Allowances


§ 575.302 Delegation of authority.(a) * * *

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37884 Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Rules and Regulations

(7) A prevailing rate position, asdefined in 5 U.S.C. 5342(a)(3).* * * * *[FR Doc. 01–18034 Filed 7–19–01; 8:45 am]BILLING CODE 6325–39–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 2000–NM–330–AD; Amendment39–12336; AD 2001–15–02]

RIN 2120–AA64

Airworthiness Directives; BoeingModel 747 Series Airplanes PoweredBy Pratt & Whitney JT9D–3 and –7Series Engines

AGENCY: Federal AviationAdministration, DOT.ACTION: Final rule.

SUMMARY: This amendment supersedesan existing airworthiness directive (AD),applicable to certain Boeing Model 747series airplanes, that currently requiresrepetitive inspections and torque checksof the hanger fittings and strut forwardbulkhead of the forward engine mountand adjacent support structure, andcorrective actions, if necessary. Theexisting AD also provides for optionalterminating action for the repetitiveinspections and checks. Thisamendment requires certain newrepetitive torque checks and thepreviously optional terminating action.The actions specified by this AD areintended to prevent loose fasteners andassociated damage to the hanger fittingsand bulkhead of the forward enginemount, which could result in separationof the engine from the airplane.DATES: Effective August 24, 2001.

The incorporation by reference ofBoeing Alert Service Bulletin 747–54A2203, dated August 31, 2000, aslisted in the regulations, was approvedpreviously by the Director of the FederalRegister as of December 6, 2000 (65 FR69862, November 21, 2000).ADDRESSES: The service informationreferenced in this AD may be obtainedfrom Boeing Commercial AirplaneGroup, P.O. Box 3707, Seattle,Washington 98124–2207. Thisinformation may be examined at theFederal Aviation Administration (FAA),Transport Airplane Directorate, RulesDocket, 1601 Lind Avenue, SW.,Renton, Washington; or at the Office ofthe Federal Register, 800 North CapitolStreet, NW., suite 700, Washington, DC.FOR FURTHER INFORMATION CONTACT:Tamara Anderson, Aerospace Engineer,

Airframe Branch, ANM–120S, FAA,Seattle Aircraft Certification Office,1601 Lind Avenue, SW., Renton,Washington 98055–4056; telephone(425) 227–2771; fax (425) 227–1181.SUPPLEMENTARY INFORMATION: Aproposal to amend part 39 of the FederalAviation Regulations (14 CFR part 39)by superseding AD 2000–23–16,amendment 39–11988 (65 FR 69862,November 21, 2000), which isapplicable to certain Boeing Model 747series airplanes, was published in theFederal Register on February 15, 2001(66 FR 10387). The action proposed tocontinue to require repetitiveinspections and torque checks of thehanger fittings and strut forwardbulkhead of the forward engine mountand adjacent support structure, andcorrective actions, if necessary. Theaction also proposed to mandate certainnew repetitive torque checks and thepreviously optional terminating action.

CommentsInterested persons have been afforded

an opportunity to participate in themaking of this amendment. Dueconsideration has been given to thecomments received.

Request to Eliminate RepetitiveInspections/Checks and TerminatingAction

One commenter states that, if theinitial torque check shows no loosefastener is installed, the repetitiveinspections/checks and terminatingaction should not be required. Thecommenter’s rationale for this request isthat the cause of the loose fasteners isincorrect grip length of fastenersinstalled during a strut and wingmodification.

The FAA infers that the commenter isstating that, if the fastener is not looseat the time of the initial inspection, itwill not become loose later, and isrequesting that we remove theserequirements from this AD. The FAAdoes not concur. If the wrong grip-length of fastener is installed, damage ofthe fastener thread run-out may haveoccurred during initial installation ofthe fastener due to shanking of thefastener. This could lead to a problemwith the durability of the fastener. Nochange to the final rule is necessary inthis regard.

Reduce Torque Values for LooseFastener Check

One commenter requests that the FAArevise the proposed rule to reduce thetorque values for the loose fastenercheck to the minimum value. As anexample, the commenter refers to thetorque value of 250 inch-pounds for the

NAS6706 fastener listed in Table 1 ofFigure 3 of Boeing Alert Service Bulletin747–54A2203, dated August 31, 2000.The commenter states that this valueshould be 220 inch-pounds because thatis the minimum installation torquerequired.

The FAA does not concur with thecommenter’s request. The difference intorque value to which the commenterrefers is very small. If an operatordetermines that a fastener is NOT looseat a torque value of 220 inch-pounds butIS loose at a torque value of 250 inch-pounds, the operator may apply for analternative method of complianceaccording to the provisions of paragraph(d) of this AD. No change to the finalrule is necessary in this regard.

Clarify Instructions for Torque Check

One commenter requests that the FAAclarify how the torque check should beaccomplished. The commenterspecifically asks whether or not thefastener head should be retained iftorque is applied to the nut end.

The FAA does not concur that anyfurther clarification on this issue isnecessary. The applicable servicebulletin specifies that the torque checkis intended to test whether the fastenerrotates. The fastener head should not beretained because, if it is retained, it maybe impossible to determine whether thefastener rotated before reaching thespecified torque in Figure 3 of theservice bulletin. No change to the finalrule is necessary in this regard.

Explanation of Change to AlternativeMethod of Compliance (AMOC)Paragraph

Since the issuance of the proposedrule, the FAA has approved AMOCs forAD 2000–23–16. AMOCs approvedpreviously in accordance with AD2000–23–16 are considered acceptablefor compliance with correspondingactions in this AD. Accordingly, a newparagraph (d)(2) has been added to thisfinal rule.

ConclusionAfter careful review of the available

data, including the comments notedabove, the FAA has determined that airsafety and the public interest require theadoption of the rule with the changepreviously described. The FAA hasdetermined that this change will neitherincrease the economic burden on anyoperator nor increase the scope of theAD.

Cost ImpactThere are approximately 366 Model

747 series airplanes of the affecteddesign in the worldwide fleet. The FAA


37885Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Rules and Regulations

estimates that 115 airplanes of U.S.registry will be affected by this AD.

The detailed visual inspections thatare currently required by AD 2000–23–16 take approximately 8 work hours perairplane to accomplish, at an averagelabor rate of $60 per work hour. Basedon these figures, the cost impact of theinspections currently required by theexisting AD on U.S. operators isestimated to be $55,200, or $480 perairplane, per inspection.

The torque checks that are currentlyrequired by AD 2000–23–16 takeapproximately 24 work hours perairplane to accomplish, at an averagelabor rate of $60 per work hour. Basedon these figures, the cost impact of thetorque checks currently required by theexisting AD on U.S. operators isestimated to be $165,600, or $1,440 perairplane, per check.

The new torque checks required bythis AD also will take approximately 8work hours per airplane to accomplish,at an average labor rate of $60 per workhour. Based on these figures, the costimpact of this torque check on U.S.operators is estimated to be $55,200, or$480 per airplane, per check.

The terminating action required bythis AD will take approximately 24work hours per airplane to accomplish,at an average labor rate of $60 per workhour. Required parts will costapproximately $300 per airplane. Basedon these figures, the cost impact of theterminating action required by this ADon U.S. operators is estimated to be$200,100, or $1,740 per airplane.

The cost impact figures discussedabove are based on assumptions that nooperator has yet accomplished any ofthe requirements of this AD action, andthat no operator would accomplishthose actions in the future if this ADwere not adopted. The cost impactfigures discussed in AD rulemakingactions represent only the timenecessary to perform the specific actionsactually required by the AD. Thesefigures typically do not includeincidental costs, such as the timerequired to gain access and close up,planning time, or time necessitated byother administrative actions.

Regulatory Impact

The regulations adopted herein willnot have a substantial direct effect onthe States, on the relationship betweenthe national Government and the States,or on the distribution of power andresponsibilities among the variouslevels of government. Therefore, it isdetermined that this final rule does nothave federalism implications underExecutive Order 13132.

For the reasons discussed above, Icertify that this action (1) is not a‘‘significant regulatory action’’ underExecutive Order 12866; (2) is not a‘‘significant rule’’ under DOTRegulatory Policies and Procedures (44FR 11034, February 26, 1979); and (3)will not have a significant economicimpact, positive or negative, on asubstantial number of small entitiesunder the criteria of the RegulatoryFlexibility Act. A final evaluation hasbeen prepared for this action and it iscontained in the Rules Docket. A copyof it may be obtained from the RulesDocket at the location provided underthe caption ADDRESSES.

List of Subjects in 14 CFR Part 39Air transportation, Aircraft, Aviation

safety, Incorporation by reference,Safety.

Adoption of the AmendmentAccordingly, pursuant to the

authority delegated to me by theAdministrator, the Federal AviationAdministration amends part 39 of theFederal Aviation Regulations (14 CFRpart 39) as follows:

PART 39—AIRWORTHINESSDIRECTIVES


Authority: 49 U.S.C. 106(g), 40113, 44701.

§ 39.13 [Amended]2. Section 39.13 is amended by

removing amendment 39–11988 (65 FR80301, December 21, 2000), and byadding a new airworthiness directive(AD), amendment 39–12336, to read asfollows:2001–15–02 Boeing: Amendment 39–12336.

Docket 2000–NM–330–AD. SupersedesAD 2000–23–16, Amendment 39–11988.

Applicability: Model 747 series airplanes,certificated in any category, as listed inBoeing Alert Service Bulletin 747–54A2203,dated August 31, 2000; except Model 747series airplanes having serial numbers 21048and 20887.

Note 1: This AD applies to each airplaneidentified in the preceding applicabilityprovision, regardless of whether it has beenmodified, altered, or repaired in the areasubject to the requirements of this AD. Forairplanes that have been modified, altered, orrepaired so that the performance of therequirements of this AD is affected, theowner/operator must request approval for analternative method of compliance inaccordance with paragraph (d)(1) of this AD.The request should include an assessment ofthe effect of the modification, alteration, orrepair on the unsafe condition addressed bythis AD; and, if the unsafe condition has notbeen eliminated, the request should includespecific proposed actions to address it.

Compliance: Required as indicated, unlessaccomplished previously.

To prevent loose fasteners and associateddamage to the hanger fittings and strutforward bulkhead of the forward enginemount, which could result in separation ofthe engine from the airplane, accomplish thefollowing:

Restatement of Requirements of AD 2000–23–16

Repetitive Inspections/Checks(a) Within 60 days after December 6, 2000

(the effective date of AD 2000–23–16,amendment 39–11988): Perform a detailedvisual inspection and torque check asspecified in Part 2 of the AccomplishmentInstructions of Boeing Alert Service Bulletin747–54A2203, dated August 31, 2000, todetect loose fasteners and associated damageto the hanger fittings and bulkhead of theforward engine mount, in accordance withFigure 1 of the alert service bulletin.

Note 2: For the purposes of this AD, adetailed visual inspection is defined as: ‘‘Anintensive visual examination of a specificstructural area, system, installation, orassembly to detect damage, failure, orirregularity. Available lighting is normallysupplemented with a direct source of goodlighting at intensity deemed appropriate bythe inspector. Inspection aids such as mirror,magnifying lenses, etc., may be used. Surfacecleaning and elaborate access proceduresmay be required.’’

(1) If no loose fastener or associateddamage is detected, repeat the inspections/checks thereafter at the applicable intervalsspecified in Figure 1 of the alert servicebulletin until accomplishment of theterminating action specified in paragraph (c)of this AD.

Note 3: Where there are differencesbetween the AD and the alert servicebulletin, the AD prevails.

Corrective Actions

(2) If any loose fastener or associateddamage is detected, before further flight,perform the applicable corrective actions(torque check, rework or replacement offittings), as specified in Figure 1 of the alertservice bulletin. Repeat the inspections/checks thereafter at the applicable intervalsspecified in Figure 1 of the alert servicebulletin until accomplishment of theterminating action specified in paragraph (c)of this AD. Where the alert service bulletinspecifies that the manufacturer may becontacted for disposition of certain correctiveactions (rework or replacement of fittings),this AD requires such rework and/orreplacement to be done in accordance witha method approved by the Manager, SeattleAircraft Certification Office (ACO), FAA; orin accordance with data meeting the typecertification basis of the airplane approvedby a Boeing Company designated engineeringrepresentative (DER) who has beenauthorized by the Manager, Seattle ACO, tomake such findings. For a repair method tobe approved by the Manager, Seattle ACO, asrequired by this paragraph, the Manager’sapproval letter must specifically referencethis AD.



New Requirements of this AD

Repetitive Checks/ Inspections/CorrectiveActions

(b) Within 18 months after the effectivedate of this AD: Do the torque checkspecified in Part 3 of the AccomplishmentInstructions of Boeing Alert Service Bulletin747–54A2203, dated August 31, 2000, todetect loose fasteners of the hanger fittings ofthe forward engine mount.

(1) If no loose fastener is detected, repeatthe torque check thereafter at intervals not toexceed 1,200 flight cycles or 18 months,whichever occurs first, until accomplishmentof the terminating action specified inparagraph (c) of this AD.

(2) If any loose fastener is detected, beforefurther flight, perform the applicablecorrective actions as specified in Figure 4,Figure 5, or Part 6, as applicable, of theAccomplishment Instructions of the alertservice bulletin.

(i) If Figure 4 or Figure 5 of theAccomplishment Instructions of the alertservice bulletin is used to do the correctiveactions for the fitting; thereafter, repeat thedetailed visual inspection required byparagraph (a) of this AD at the applicableintervals specified in Figure 1 of the alertservice bulletin, and repeat the torque checkfor that fitting at intervals not to exceed 180flight cycles. Accomplish the terminatingaction for that fitting as specified in Part 6of the Accomplishment Instructions of thealert service bulletin within 18 months afterfinding any loose fastener or 60 months afterthe effective date of this AD, whicheveroccurs first.

(ii) If Part 6 of the AccomplishmentInstructions of the alert service bulletin isused to do the corrective actions for thefitting, this constitutes terminating action forthe repetitive inspections/checks for thatfitting only.

(3) If any associated damage is found,before further flight, repair in accordancewith a method approved by the Manager,Seattle ACO, or in accordance with datameeting the type certification basis of theairplane approved by a Boeing Company DERwho has been authorized by the Manager,Seattle ACO, to make such findings. For arepair method to be approved by theManager, Seattle ACO, as required by thisparagraph, the Manager’s approval lettermust specifically reference this AD. If anydamage to any fitting is found, before furtherflight, do the applicable corrective actionsspecified in Part 4 or Part 5 of theAccomplishment Instructions of the alertservice bulletin; this constitutes terminatingaction for the repetitive inspections/checksfor that fitting only.

(4) If any loose fastener is detected duringany repeat inspection/check specified inparagraph (b)(2)(i) of this AD, before furtherflight, accomplish the terminating action forthat fitting as specified in Part 6 of theAccomplishment Instructions of the alertservice bulletin.

Terminating Action

(c) Within 60 months after the effectivedate of this AD: Accomplish all actions in theterminating action specified in Part 6 of the

Accomplishment Instructions of Boeing AlertService Bulletin 747–54A2203, dated August31, 2000. Accomplishment of this paragraphconstitutes terminating action for therepetitive inspections/checks required byparagraphs (a) and (b) of this AD. Where thealert service bulletin specifies that themanufacturer may be contacted fordisposition of certain corrective actions(rework or replacement of fittings), this ADrequires such rework and/or replacement tobe done in accordance with a methodapproved by the Manager, Seattle ACO; or inaccordance with data meeting the typecertification basis of the airplane approvedby a Boeing Company DER who has beenauthorized by the Manager, Seattle ACO, tomake such findings. For a repair method tobe approved by the Manager, Seattle ACO, asrequired by this paragraph, the Manager’sapproval letter must specifically referencethis AD.

Note 4: Installation of twoBACW10BP*APU washers on Group Afasteners accomplished during modificationin accordance with Boeing Service Bulletin747–54A2159, dated November 3, 1994,Revision 1, dated June 1, 1995, or Revision2, dated March 14, 1996; and pin or boltprotrusion as specified in the 747 StructuralRepair Manual, Chapter 51–30–02 (bothreferenced in Boeing Alert Service Bulletin747–54A2203, dated August 31, 2000); isconsidered acceptable for compliance withthe terminating action specified in paragraph(c) of this AD.

Alternative Methods of Compliance(d)(1) An alternative method of compliance

or adjustment of the compliance time thatprovides an acceptable level of safety may beused if approved by the Manager, SeattleACO. Operators shall submit their requeststhrough an appropriate FAA PrincipalMaintenance Inspector, who may addcomments and then send it to the Manager,Seattle ACO.

(2) Alternative methods of compliance,approved previously in accordance with AD2000–23–16, amendment 39–11988, areapproved as alternative methods ofcompliance for corresponding actions in thisAD.

Note 5: Information concerning theexistence of approved alternative methods ofcompliance with this AD, if any, may beobtained from the Seattle ACO.

Special Flight Permits(e) Special flight permits may be issued in

accordance with sections 21.197 and 21.199of the Federal Aviation Regulations (14 CFR21.197 and 21.199) to operate the airplane toa location where the requirements of this ADcan be accomplished.

Incorporation by Reference(f) Except as provided by paragraph (a)(2),

(b)(3), and (c) of this AD, the actions shall bedone in accordance with Boeing AlertService Bulletin 747–54A2203, dated August31, 2000. The incorporation by reference ofthat document was approved previously bythe Director of the Federal Register as ofDecember 6, 2000 (65 FR 69862, November21, 2000). Copies may be obtained from

Boeing Commercial Airplane Group, P.O.Box 3707, Seattle, Washington 98124–2207.Copies may be inspected at the FAA,Transport Airplane Directorate, 1601 LindAvenue, SW., Renton, Washington; or at theOffice of the Federal Register, 800 NorthCapitol Street, NW., suite 700, Washington,DC.

Effective Date

(g) This amendment becomes effective onAugust 24, 2001.

Issued in Renton, Washington, on July 13,2001.Donald L. Riggin,Acting Manager, Transport AirplaneDirectorate, Aircraft Certification Service.[FR Doc. 01–18138 Filed 7–19–01; 8:45 am]BILLING CODE 4910–13–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8955]

RIN 1545–A075

Foreign Trusts That Have U.S.Beneficiaries

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Final regulations.

SUMMARY: This document contains finalregulations under section 679 of theInternal Revenue Code relating totransfers of property by U.S. persons toforeign trusts having one or more UnitedStates beneficiaries. The finalregulations affect United States personswho transfer property to foreign trusts.DATES: Effective Date: These regulationsare effective July 20, 2001.

Applicability Date: For dates ofapplicability, see § 1.679–7.FOR FURTHER INFORMATION CONTACT:Willard W. Yates at (202) 622–3880 (nota toll-free number).SUPPLEMENTARY INFORMATION:

BackgroundOn August 7, 2000, the IRS and

Treasury published a notice of proposedrulemaking (REG–209038–89) in theFederal Register (65 FR 48185) invitingcomments relating to the treatment ofU.S. persons who transfer property toforeign trusts that have one or more U.S.beneficiaries. Comments responding tothe notice of proposed rulemaking werereceived and a public hearing was heldon November 8, 2000. Afterconsideration of all of the comments,the proposed regulations are adopted asrevised by this Treasury decision. Therevisions are discussed below.



Explanation of Provisions

Comments Relating to § 1.679–2: TrustsTreated as Having a U.S. Beneficiary

A. Benefit to a U.S. Person

Under § 1.679–2(a)(1) of the proposedregulations, a foreign trust that hasreceived property from a U.S. transferoris treated as having a U.S. beneficiaryunless during the taxable year of theU.S. transferor both of the followingtests are satisfied: (i) No part of theincome or corpus of the trust may bepaid or accumulated to or for the benefitof, either directly or indirectly, a U.S.person; and (ii) if the trust is terminatedat any time during the taxable year, nopart of the income or corpus of the trustcould be paid to or for the benefit of,either directly or indirectly, a U.S.person.

Section 1.679–2(a)(2)(i) of theproposed regulations provides that, forpurposes of applying these tests, incomeor corpus is considered to be paid oraccumulated to or for the benefit of aU.S. person during a taxable year of theU.S. transferor if during that year,directly or indirectly, income may bedistributed to, or accumulated for thebenefit of a U.S. person, or corpus maybe distributed to, or held for the futurebenefit of, a U.S. person. Thisdetermination is made without regard towhether income or corpus is actuallydistributed to a U.S. person during thatyear, and without regard to whether aU.S. person’s interest in the trustincome or corpus is contingent on afuture event. The proposed regulationsprovide a narrow exception with respectto certain contingent beneficiarieswhose interests in the trust are soremote as to be negligible.

One commenter suggests that § 1.679–2(a)(2) of the proposed regulations(specifically, Example 5 of § 1.679–2(a)(2)(iii)) is overly broad. Thecommenter suggests that a foreign trustshould not be treated as having a U.S.beneficiary where the trust’s only assetconsists of stock of a foreigncorporation, the trust will terminate oneyear after the death of a U.S. transferor,whereupon distributions of corpus orincome may be made to a U.S. person,and the trust receives no income fromthe corporation during the term of itsexistence. The commenter argues thatbecause the foreign trust receives noincome from the foreign corporationduring the trust’s existence, the U.S.person’s status as a beneficiary providesthe U.S. person with nothing of valueand, therefore, the foreign trust shouldnot be treated as having a U.S.beneficiary.

The commenter’s argument overlooksthe clear legislative intent underlyingsection 679 that a foreign trust will betreated as having a U.S. beneficiary evenin situations where there exists only thepossibility of distribution of income orcorpus to or the accumulation of corpusfor the benefit of a U.S. person. H.R.Rep. No. 658, 94th Cong., 1st Sess., at210 (1975). The fact that a foreign trustholds an asset, such as the stock of aforeign corporation, that produces noincome during the term of the trust’sexistence is of no import for purposes ofdetermining whether the trust will betreated as having a U.S. beneficiary. Thedetermining factor in such a situation isthat the trust holds corpus for the futurebenefit of a U.S. person, regardless ofwhether the corpus consists of stockwith respect to which no dividendshave been paid or some other asset thatproduces no current income.Accordingly, the final regulations adoptthe rule of the proposed regulations.

B. Records and DocumentsSection 1.679–2(a)(4) of the proposed

regulations provides that a trust may betreated as having a U.S. beneficiary byreference, inter alia, to written and oralagreements and understandings notcontained in the trust document, and towhether the terms of the trustinstrument are actually or reasonablyexpected to be disregarded by theparties to the trust. A commenter statesthat this rule creates new and unclearrules for purposes of determiningwhether an arrangement constitutes atrust for Federal income tax purposes.

The determination as to whether anarrangement will be treated as a trust ismade pursuant to the rules set forth in§ 301.7701–4 of the regulations. Theregulations under section 679 addressonly the determination of whether aforeign trust will be treated as having aU.S. beneficiary. The final regulationsare not intended to provide factors inaddition to the rules of § 301.7701–4 forpurposes of determining whether anarrangement constitutes a trust forFederal income tax purposes.

C. Trusts Acquiring a U.S. BeneficiaryThe proposed regulations anticipate

situations where the beneficiary of aforeign trust may change. Section 1.679–2(c)(1) of the proposed regulationsprovides that if a foreign trust is nottreated as having a U.S. beneficiary(within the meaning of § 1.679–2(a)) butsubsequently is treated as having a U.S.beneficiary, the U.S. transferor is treatedas having additional income in the firsttaxable year of the U.S. transferor inwhich the trust is treated as having aU.S. beneficiary. The amount of the

additional income is equal to the trust’sundistributed net income, as defined insection 665(a), at the end of the U.S.transferor’s immediately precedingtaxable year and is subject to the rulesof section 668, providing for an interestcharge on accumulation distributionsfrom foreign trusts.

A commenter suggests that the ruletreating the U.S. transferor as havingadditional income in the first year theforeign trust acquires the U.S.beneficiary exceeds the authority ofsection 679, noting that in most casesthe transferor will not have received anyincome from the trust.

Section 1.679–2(c)(1) of the proposedregulations follows closely thelegislative history underlying section679 regarding the U.S. transferor’srecognition of additional income. Thelegislative history provides that theamount of the additional income shallbe the foreign trust’s undistributed netincome, i.e., accumulated income thatwould be taxable to a beneficiary upondistribution, as of the close of theimmediately preceding taxable year.H.R. Rep. No. 658, 94th Cong., 1st Sess.,at 211, Fn. 13 (1975). In short, thelegislative history provides that the U.S.transferor’s additional income shallreceive the same treatment asaccumulation distributions tobeneficiaries of a foreign trust.Accumulated income distributions tobeneficiaries of foreign trusts are subjectto the interest charge provided for insection 668. Accordingly, the provisionfor additional income in § 1.679–2(c)(1)of the final regulations, as well as theapplication of the interest chargeprovided for in section 668, arenecessary to carry out the legislativepurpose of section 679. The rule of theproposed regulations is adopted by thefinal regulations without change.

Comments Relating to § 1.679–3:Transfers

A. Indirect Transfers—PrincipalPurpose of Tax Avoidance

Section 1.679–3(a) of the proposedregulations broadly defines the termtransfer as any direct, indirect, orconstructive transfer by a U.S. person toa foreign trust. Section 1.679–3(c) of theproposed regulations provides rules fordetermining when there is an indirecttransfer. Under § 1.679–3(c)(1) of theproposed regulations, a transfer to aforeign trust by any person to whom aU.S. person transfers property (referredto as an intermediary) is treated as anindirect transfer by a U.S. person if thetransfer is made pursuant to a plan oneof the principal purposes of which is theavoidance of U.S. tax. Section 1.679–



3(c)(2) of the proposed regulationsdeems a transfer to have been madepursuant to such a plan if certainconditions are present.

The deemed-principal-purpose test of§ 1.679–3(c)(2) of the proposedregulations is similar to the deemed-principal-purpose test in § 1.643(h)–1(a)of the regulations, which concernsdistributions from foreign trusts to U.S.persons through intermediaries, exceptthat the presumption in the proposedregulations applies without regard to theperiod of time between the transfer fromthe U.S. person to the intermediary andfrom the intermediary to the foreigntrust. In contrast, the deemed-principal-purpose test of § 1.643(h)–1(a)(2)(ii)applies only if property is distributed tothe U.S. person during the periodbeginning 24 months before and ending24 months after the intermediary’sreceipt of property from the foreigntrust. A commenter suggests that asimilar time limit should be provided in§ 1.679–3(c)(2) with respect to outboundtransfers.

In the context of section 643(h),Treasury and the IRS weighed thepotential for abuse in that area againstthe possible adverse effect that thedeemed-principal-purpose test couldhave on legitimate transactions, andconcluded that a time limitation in§ 1.643(h)–1(a)(2) was appropriate.However, Treasury and the IRS believethe potential for abuse is greater in thecase of outbound transfers to foreigntrusts than in the case of inbound trustdistributions to U.S. beneficiaries.Congress enacted section 679 in order toprevent the tax-free accumulation ofincome earned by foreign trusts overlong periods of time that providedforeign trusts with an unwarrantedadvantage over domestic trusts. H.R.Rep. No. 658, 94th Cong., 1st Sess., at207 (1975). Providing for a timelimitation to the application of § 1.679–3(c) could allow for easy circumventionof Congress’ purpose in enacting section679. Treasury and the IRS recognize thatsome transfers that were not intended toavoid U.S. tax may come within thepresumption in the absence of a specifictime limit. However, under suchcircumstances § 1.679–3(c)(2)(ii)provides taxpayers with a way to rebutthe application of the deemed-principal-purpose test. Therefore, the finalregulations do not include a timelimitation to the application of § 1.679–3(c)(2)(i).

B. Indirect Transfers—CorporateDistributions

One commenter asked about theapplication of the indirect transfer rulesset forth in § 1.679–3(c) of the proposed

regulations to successive corporatedistributions up a chain of wholly-owned corporations to an ultimateshareholder that is a foreign trust. Thecommenter expressed concern that, ifone of the lower-tier corporations werea domestic corporation, § 1.679–3(c) ofthe proposed regulations couldpotentially treat the distributions as anindirect transfer from the domesticcorporation to the foreign trust thatwould be subject to the general rule of§ 1.679–1.

Even if the distributions werecharacterized as an indirect transferfrom a domestic corporation to a foreigntrust under § 1.679–3(c), the indirecttransfer would generally be treated as atransfer for fair market value under thefinal sentence of § 1.679–4(b)(1) andwould therefore be excepted from thegeneral rule of § 1.679–1 pursuant to§ 1.679–4(a)(4). Therefore, no specialrules have been added to the finalregulations to address this situation.

C. Transfers to Entities Owned byForeign Trusts

Section 1.679–3(f) of the proposedregulations provides specific rulesregarding transfers by a U.S. person toan entity owned by a foreign trust if theU.S. person is related to the foreigntrust. The transfer is treated as a transferfrom the U.S. person to the foreign trust,followed by a transfer from the foreigntrust to the entity owned by the foreigntrust, unless the U.S. persondemonstrates to the satisfaction of theCommissioner that the transfer to theentity is properly attributable to the U.S.person’s ownership interest in theentity. A commenter noted potentialconflicts with this rule and judicialdoctrines concerning constructivecorporate distributions.

Section 1.679–3(f) is not intended tooverride judicial doctrines concerningconstructive corporate distributions. Forexample, if judicial doctrines wouldrecharacterize a direct transfer ofproperty by a domestic corporation toan entity owned by a foreign trust as aconstructive dividend of the property tothe domestic corporation’s shareholderfollowed by a constructive transfer ofthe property by that shareholder to theforeign trust and a constructivecontribution by the foreign trust to theentity owned by the foreign trust, thenthose judicial doctrines would apply(and § 1.679–3(f) would not apply) tothe transaction.

Comments Relating to § 1.679–4:Exceptions to General Rule—Transfersto Trusts Described in Section 501(c)(3)

Section 1.679–4(a)(3) of the proposedregulations provides an exception to the

general rule of § 1.679–1 for transfers toa foreign trust that has already receiveda ruling or determination letter from theIRS recognizing the trust’s tax exemptstatus under section 501(c)(3), providedthat the letter has been neither revokednor modified. Commenters questionedthe requirement that a foreign trustobtain a ruling or determination letterfrom the IRS recognizing the trust’s taxexempt status under section 501(c)(3).They assert that the requirement mayinterfere with a U.S. person’s ability tomake contributions to a foreigncharitable entity that may not befamiliar with U.S. tax laws and may nothave any reason to obtain adetermination letter from the IRS. Theysuggest that the final regulations requireonly that the U.S. transferor disclose tothe IRS, at such time and in suchmanner as the IRS may provide, that thetransfer has been made and that thetransferor believes the transferee is anorganization described in section501(c)(3).

In response to commenters’ concerns,the final regulations eliminate therequirement that the foreign trustreceive a ruling or determination letterfrom the IRS recognizing the trust’s tax-exempt status under section 501(c)(3).The final regulations provide insteadthat the general rule of § 1.679–1 doesnot apply to any transfer of property toa foreign trust that is described insection 501(c)(3). However, taxpayersshould be aware that, under Notice 97–34 (1997–1 C.B. 422), the U.S. transferorhas a reporting obligation on Form 3520with respect to such a transfer, unlessthe foreign trust has received a ruling ordetermination letter from the IRSrecognizing the trust’s tax exempt statusunder section 501(c)(3). Moreover, if theIRS subsequently determines that theforeign trust is not described in section501(c)(3), the exception will not applyfor any taxable year of the U.S.transferor, and the U.S. transferor maybe subject to interest and penalties, ifapplicable.

Clarification Regarding Section 958The final regulations clarify the

language of § 1.958–1(b) of the proposedregulations with respect to persons whoare treated as owners under sections 671through 679 of any portion of a foreigntrust that includes the stock of a foreigncorporation.

Special AnalysesIt has been determined that this

Treasury decision is not a significantregulatory action as defined inExecutive Order 12866. Therefore, aregulatory assessment is not required. Italso has been determined that section



553(b) of the Administrative ProcedureAct (5 U.S.C. chapter 5) does not applyto these regulations and, because theregulations do not impose a collectionof information on small entities, theRegulatory Flexibility Act (5 U.S.C.chapter 6) does not apply. Therefore, aRegulatory Flexibility Analysis is notrequired. Pursuant to section 7805(f) ofthe Internal Revenue Code, the notice ofproposed rulemaking preceding theseregulations was submitted to the ChiefCounsel for Advocacy of the SmallBusiness Administration for commenton its impact on small businesses.

Drafting Information

The principal author of these finalregulations is Willard W. Yates of theOffice of Associate Chief Counsel(International). However, otherpersonnel from the IRS and TreasuryDepartment participated in theirdevelopment.

List of Subjects in 26 CFR Part 1

Income taxes, Reporting andrecordkeeping requirements.

Adoption of Amendments to theRegulations

Accordingly, 26 CFR part 1 isamended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citationfor part 1 is amended by adding entriesin numerical order to read in part asfollows:

Authority: 26 U.S.C. 7805 * * *

Section 1.679–1 also issued under 26U.S.C. 643(a)(7) and 679(d).

Section 1.679–2 also issued under 26U.S.C. 643(a)(7) and679(d).,


Section 1.679–4 also issued under 26U.S.C. 643(a)(7), 679(a)(3) and 679(d).



* * *

Par. 2. Sections 1.679–0, 1.679–1,1.679–2, 1.679–3, 1.679–4, 1.679–5,1.679–6, and 1.679–7 are added underthe undesignated center heading‘‘Grantors and Others Treated asSubstantial Owners’’ to read as follows:

§ 1.679–0 Outline of major topics.

This section lists the majorparagraphs contained in §§ 1.679–1through 1.679–7 as follows:

§ 1.679–1 U.S. transferor treated as ownerof foreign trust.

(a) In general.

(b) Interaction with sections 673 through678.

(c) Definitions.(1) U.S. transferor.(2) U.S. person.(3) Foreign trust.(4) Property.(5) Related person.(6) Obligation.(d) Examples.

§ 1.679–2 Trusts treated as having a U.S.beneficiary.

(a) Existence of U.S. beneficiary.(1) In general.(2) Benefit to a U.S. person(i) In general.(ii) Certain unexpected beneficiaries.(iii) Examples.(3) Changes in beneficiary’s status.(i) In general.(ii) Examples.(4) General rules.(i) Records and documents.(ii) Additional factors.(iii) Examples.(b) Indirect U.S. beneficiaries.(1) Certain foreign entities.(2) Other indirect beneficiaries.(3) Examples.(c) Treatment of U.S. transferor upon

foreign trust’s acquisition or loss of U.S.beneficiary.

(1) Trusts acquiring a U.S. beneficiary.(2) Trusts ceasing to have a U.S.

beneficiary.(3) Examples.

§ 1.679–3 Transfers.

(a) In general.(b) Transfers by certain trusts.(1) In general.(2) Example.(c) Indirect transfers.(1) Principal purpose of tax avoidance.(2) Principal purpose of tax avoidance

deemed to exist.(3) Effect of disregarding intermediary.(i) In general.(ii) Special rule.(iii) Effect on intermediary.(4) Related parties.(5) Examples.(d) Constructive transfers.(1) In general.(2) Examples.(e) Guarantee of trust obligations.(1) In general.(2) Amount transferred.(3) Principal repayments.(4) Guarantee.(5) Examples.(f) Transfers to entities owned by a foreign

trust.(1) General rule.(2) Examples.

§ 1.679–4 Exceptions to general rule.

(a) In general.(b) Transfers for fair market value.(1) In general.(2) Special rule.(i) Transfers for partial consideration.(ii) Example.

(c) Certain obligations not taken intoaccount.

(d) Qualified obligations.(1) In general.(2) Additional loans.(3) Obligations that cease to be qualified.(4) Transfers resulting from failed qualified

obligations.(5) Renegotiated loans.(6) Principal repayments.(7) Examples.

§ 1.679–5 Pre-immigration trusts.

(a) In general.(b) Special rules.(1) Change in grantor trust status.(2) Treatment of undistributed income.(c) Examples.

§ 1.679–6 Outbound migrations ofdomestic trusts.

(a) In general.(b) Amount deemed transferred.(c) Example.

§ 1.679–7 Effective dates.

(a) In general.(b) Special rules.

§ 1.679–1 U.S. transferor treated as ownerof foreign trust.

(a) In general. A U.S. transferor whotransfers property to a foreign trust istreated as the owner of the portion ofthe trust attributable to the propertytransferred if there is a U.S. beneficiaryof any portion of the trust, unless anexception in § 1.679–4 applies to thetransfer.

(b) Interaction with sections 673through 678. The rules of this sectionapply without regard to whether theU.S. transferor retains any power orinterest described in sections 673through 677. If a U.S. transferor wouldbe treated as the owner of a portion ofa foreign trust pursuant to the rules ofthis section and another person wouldbe treated as the owner of the sameportion of the trust pursuant to section678, then the U.S. transferor is treatedas the owner and the other person is nottreated as the owner.

(c) Definitions. The followingdefinitions apply for purposes of thissection and §§ 1.679–2 through 1.679–7:

(1) U.S. transferor. The term U.S.transferor means any U.S. person whomakes a transfer (as defined in § 1.679–3) of property to a foreign trust.

(2) U.S. person. The term U.S. personmeans a United States person as definedin section 7701(a)(30), a nonresidentalien individual who elects undersection 6013(g) to be treated as aresident of the United States, and anindividual who is a dual residenttaxpayer within the meaning of§ 301.7701(b)–7(a) of this chapter.

(3) Foreign trust. Section7701(a)(31)(B) defines the term foreign



trust. See also § 301.7701–7 of thischapter.

(4) Property. The term property meansany property including cash.

(5) Related person. A person is arelated person if, without regard to thetransfer at issue, the person is—

(i) A grantor of any portion of the trust(within the meaning of § 1.671–2(e)(1));

(ii) An owner of any portion of thetrust under sections 671 through 679;

(iii) A beneficiary of the trust; or(iv) A person who is related (within

the meaning of section 643(i)(2)(B)) toany grantor, owner or beneficiary of thetrust.

(6) Obligation. The term obligationmeans any bond, note, debenture,certificate, bill receivable, accountreceivable, note receivable, openaccount, or other evidence ofindebtedness, and, to the extent notpreviously described, any annuitycontract.

(d) Examples. The following examplesillustrate the rules of paragraph (a) ofthis section. In these examples, A is aresident alien, B is A’s son, who is aresident alien, C is A’s father, who is aresident alien, D is A’s uncle, who is anonresident alien, and FT is a foreigntrust. The examples are as follows:

Example 1. Interaction with section 678. Acreates and funds FT. FT may provide for theeducation of B by paying for books, tuition,room and board. In addition, C has the powerto vest the trust corpus or income in himselfwithin the meaning of section 678(a)(1).Under paragraph (b) of this section, A istreated as the owner of the portion of FTattributable to the property transferred to FTby A and C is not treated as the ownerthereof.

Example 2. U.S. person treated as owner ofa portion of FT. D creates and funds FT forthe benefit of B. D retains a power describedin section 676 and § 1.672(f)–3(a)(1). Atransfers property to FT. Under sections 676and 672(f), D is treated as the owner of theportion of FT attributable to the propertytransferred by D. Under paragraph (a) of thissection, A is treated as the owner of theportion of FT attributable to the propertytransferred by A.

§ 1.679–2 Trusts treated as having a U.S.beneficiary.

(a) Existence of U.S. beneficiary—(1)In general. The determination ofwhether a foreign trust has a U.S.beneficiary is made on an annual basis.A foreign trust is treated as having aU.S. beneficiary unless during thetaxable year of the U.S. transferor—

(i) No part of the income or corpus ofthe trust may be paid or accumulated toor for the benefit of, directly orindirectly, a U.S. person; and

(ii) If the trust is terminated at anytime during the taxable year, no part ofthe income or corpus of the trust could

be paid to or for the benefit of, directlyor indirectly, a U.S. person.

(2) Benefit to a U.S. person—(i) Ingeneral. For purposes of paragraph (a)(1)of this section, income or corpus may bepaid or accumulated to or for the benefitof a U.S. person during a taxable yearof the U.S. transferor if during that year,directly or indirectly, income may bedistributed to, or accumulated for thebenefit of, a U.S. person, or corpus maybe distributed to, or held for the futurebenefit of, a U.S. person. Thisdetermination is made without regard towhether income or corpus is actuallydistributed to a U.S. person during thatyear, and without regard to whether aU.S. person’s interest in the trustincome or corpus is contingent on afuture event.

(ii) Certain unexpected beneficiaries.Notwithstanding paragraph (a)(2)(i) ofthis section, for purposes of paragraph(a)(1) of this section, a person who is notnamed as a beneficiary and is not amember of a class of beneficiaries asdefined under the trust instrument isnot taken into consideration if the U.S.transferor demonstrates to thesatisfaction of the Commissioner thatthe person’s contingent interest in thetrust is so remote as to be negligible.The preceding sentence does not applywith respect to persons to whomdistributions could be made pursuant toa grant of discretion to the trustee or anyother person. A class of beneficiariesgenerally does not include heirs whowill benefit from the trust under thelaws of intestate succession in the eventthat the named beneficiaries (ormembers of the named class) have alldeceased (whether or not stated as anamed class in the trust instrument).

(iii) Examples. The followingexamples illustrate the rules ofparagraphs (a)(1) and (2) of this section.In these examples, A is a resident alien,B is A’s son, who is a resident alien, Cis A’s daughter, who is a nonresidentalien, and FT is a foreign trust. Theexamples are as follows:

Example 1. Distribution of income to U.S.person. A transfers property to FT. The trustinstrument provides that all trust income isto be distributed currently to B. Underparagraph (a)(1) of this section, FT is treatedas having a U.S. beneficiary.

Example 2. Income accumulation for thebenefit of a U.S. person. In 2001, A transfersproperty to FT. The trust instrument providesthat from 2001 through 2010, the trustee ofFT may distribute trust income to C or mayaccumulate the trust income. The trustinstrument further provides that in 2011, thetrust will terminate and the trustee maydistribute the trust assets to either or both ofB and C, in the trustee’s discretion. If thetrust terminates unexpectedly prior to 2011,all trust assets must be distributed to C.

Because it is possible that income may beaccumulated in each year, and that theaccumulated income ultimately may bedistributed to B, a U.S. person, underparagraph (a)(1) of this section FT is treatedas having a U.S. beneficiary during each ofA’s tax years from 2001 through 2011. Thisresult applies even though no U.S. personmay receive distributions from the trustduring the tax years 2001 through 2010.

Example 3. Corpus held for the benefit ofa U.S. person. The facts are the same as inExample 2, except that from 2001 through2011, all trust income must be distributed toC. In 2011, the trust will terminate and thetrustee may distribute the trust corpus toeither or both of B and C, in the trustee’sdiscretion. If the trust terminatesunexpectedly prior to 2011, all trust corpusmust be distributed to C. Because duringeach of A’s tax years from 2001 through 2011trust corpus is held for possible futuredistribution to B, a U.S. person, underparagraph (a)(1) of this section FT is treatedas having a U.S. beneficiary during each ofthose years. This result applies even thoughno U.S. person may receive distributionsfrom the trust during the tax years 2001through 2010.

Example 4. Distribution upon U.S.transferor’s death. A transfers property to FT.The trust instrument provides that all trustincome must be distributed currently to Cand, upon A’s death, the trust will terminateand the trustee may distribute the trustcorpus to either or both of B and C. BecauseB may receive a distribution of corpus uponthe termination of FT, and FT couldterminate in any year, FT is treated as havinga U.S. beneficiary in the year of the transferand in subsequent years.

Example 5. Distribution after U.S.transferor’s death. The facts are the same asin Example 4, except the trust instrumentprovides that the trust will not terminateuntil the year following A’s death. Upontermination, the trustee may distribute thetrust assets to either or both of B and C, inthe trustee’s discretion. All trust assets areinvested in the stock of X, a foreigncorporation, and X makes no distributions toFT. Although no U.S. person may receive adistribution until the year after A’s death,and FT has no realized income during anyyear of its existence, during each year inwhich A is living corpus may be held forfuture distribution to B, a U.S. person. Thus,under paragraph (a)(1) of this section FT istreated as having a U.S. beneficiary duringeach of A’s tax years from 2001 through theyear of A’s death.

Example 6. Constructive benefit to U.S.person. A transfers property to FT. The trustinstrument provides that no income orcorpus may be paid directly to a U.S. person.However, the trust instrument provides thattrust corpus may be used to satisfy B’s legalobligations to a third party by making apayment directly to the third party. Underparagraphs (a)(1) and (2) of this section, FTis treated as having a U.S. beneficiary.

Example 7. U.S. person with negligiblecontingent interest. A transfers property toFT. The trust instrument provides that allincome is to be distributed currently to C,and upon C’s death, all corpus is to be



distributed to whomever of C’s three childrenis then living. All of C’s children arenonresident aliens. Under the laws ofintestate succession that would apply to FT,if all of C’s children are deceased at the timeof C’s death, the corpus would be distributedto A’s heirs. A’s living relatives at the timeof the transfer consist solely of two brothersand two nieces, all of whom are nonresidentaliens, and two first cousins, one of whom,E, is a U.S. citizen. Although it is possibleunder certain circumstances that E couldreceive a corpus distribution under theapplicable laws of intestate succession, foreach year the trust is in existence A is ableto demonstrate to the satisfaction of theCommissioner under paragraph (a)(2)(ii) ofthis section that E’s contingent interest in FTis so remote as to be negligible. Provided thatparagraph (a)(4) of this section does notrequire a different result, FT is not treated ashaving a U.S. beneficiary.

Example 8. U.S. person with non-negligiblecontingent interest. A transfers property toFT. The trust instrument provides that allincome is to be distributed currently to D, A’suncle, who is a nonresident alien, and uponA’s death, the corpus is to be distributed toD if he is then living. Under the laws ofintestate succession that would apply to FT,B and C would share equally in the trustcorpus if D is not living at the time of A’sdeath. A is unable to demonstrate to thesatisfaction of the Commissioner that B’scontingent interest in the trust is so remoteas to be negligible. Under paragraph (a)(2)(ii)of this section, FT is treated as having a U.S.beneficiary as of the year of the transfer.

Example 9. U.S. person as member of classof beneficiaries. A transfers property to FT.The trust instrument provides that all incomeis to be distributed currently to D, A’s uncle,who is a nonresident alien, and upon A’sdeath, the corpus is to be distributed to D ifhe is then living. If D is not then living, thecorpus is to be distributed to D’sdescendants. D’s grandson, E, is a residentalien. Under paragraph (a)(2)(ii) of thissection, FT is treated as having a U.S.beneficiary as of the year of the transfer.

Example 10. Trustee’s discretion inchoosing beneficiaries. A transfers propertyto FT. The trust instrument provides that thetrustee may distribute income and corpus to,or accumulate income for the benefit of, anyperson who is pursuing the academic studyof ancient Greek, in the trustee’s discretion.Because it is possible that a U.S. person willreceive distributions of income or corpus, orwill have income accumulated for hisbenefit, FT is treated as having a U.S.beneficiary. This result applies even if,during a tax year, no distributions oraccumulations are actually made to or for thebenefit of a U.S. person. A may not invokeparagraph (a)(2)(ii) of this section because aU.S. person could benefit pursuant to a grantof discretion in the trust instrument.

Example 11. Appointment of remainderbeneficiary. A transfers property to FT. Thetrust instrument provides that the trusteemay distribute current income to C, or mayaccumulate income, and, upon termination ofthe trust, trust assets are to be distributed toC. However, the trust instrument furtherprovides that D, A’s uncle, may appoint a

different remainder beneficiary. Because it ispossible that a U.S. person could be namedas the remainder beneficiary, and becausecorpus could be held in each year for thefuture benefit of that U.S. person, FT istreated as having a U.S. beneficiary for eachyear.

Example 12. Trust not treated as having aU.S. beneficiary. A transfers property to FT.The trust instrument provides that the trusteemay distribute income and corpus to, oraccumulate income for the benefit of C. Upontermination of the trust, all income andcorpus must be distributed to C. Assume thatparagraph (a)(4) of this section is notapplicable under the facts and circumstancesand that A establishes to the satisfaction ofthe Commissioner under paragraph (a)(2)(ii)of this section that no U.S. persons arereasonably expected to benefit from the trust.Because no part of the income or corpus ofthe trust may be paid or accumulated to orfor the benefit of, either directly or indirectly,a U.S. person, and if the trust is terminatedno part of the income or corpus of the trustcould be paid to or for the benefit of, eitherdirectly or indirectly, a U.S. person, FT is nottreated as having a U.S. beneficiary.

Example 13. U.S. beneficiary becomes non-U.S. person. In 2001, A transfers property toFT. The trust instrument provides that, aslong as B remains a U.S. resident, nodistributions of income or corpus may bemade from the trust to B. The trustinstrument further provides that if B becomesa nonresident alien, distributions of income(including previously accumulated income)and corpus may be made to him. If B remainsa U.S. resident at the time of FT’stermination, all accumulated income andcorpus is to be distributed to C. In 2007, Bbecomes a nonresident alien and remains sothereafter. Because income may beaccumulated during the years 2001 through2007 for the benefit of a person who is a U.S.person during those years, FT is treated ashaving a U.S. beneficiary under paragraph(a)(1) of this section during each of thoseyears. This result applies even though Bcannot receive distributions from FT duringthe years he is a resident alien and eventhough B might remain a resident alien whois not entitled to any distribution from FT.Provided that paragraph (a)(4) of this sectiondoes not require a different result and that Aestablishes to the satisfaction of theCommissioner under paragraph (a)(2)(ii) ofthis section that no other U.S. persons arereasonably expected to benefit from the trust,FT is not treated as having a U.S. beneficiaryunder paragraph (a)(1) of this section duringtax years after 2007.

(3) Changes in beneficiary’s status—(i)In general. For purposes of paragraph(a)(1) of this section, the possibility thata person that is not a U.S. person couldbecome a U.S. person will not cause thatperson to be treated as a U.S. person forpurposes of paragraph (a)(1) of thissection until the tax year of the U.S.transferor in which that individualactually becomes a U.S. person.However, if a person who is not a U.S.person becomes a U.S. person for the

first time more than 5 years after thedate of a transfer to the foreign trust bya U.S. transferor, that person is nottreated as a U.S. person for purposes ofapplying paragraph (a)(1) of this sectionwith respect to that transfer.

(ii) Examples. The followingexamples illustrate the rules ofparagraph (a)(3) of this section. In theseexamples, A is a resident alien, B is A’sson, who is a resident alien, C is A’sdaughter, who is a nonresident alien,and FT is a foreign trust. The examplesare as follows:

Example 1. Non-U.S. beneficiary becomesU.S. person. In 2001, A transfers property toFT. The trust instrument provides that allincome is to be distributed currently to C andthat, upon the termination of FT, all corpusis to be distributed to C. Assume thatparagraph (a)(4) of this section is notapplicable under the facts and circumstancesand that A establishes to the satisfaction ofthe Commissioner under paragraph (a)(2)(ii)of this section that no U.S. persons arereasonably expected to benefit from the trust.Under paragraph (a)(3)(i) of this section, FTis not treated as having a U.S. beneficiaryduring the tax years of A in which C remainsa nonresident alien. If C first becomes aresident alien in 2004, FT is treated as havinga U.S. beneficiary commencing in that yearunder paragraph (a)(3) of this section. Seeparagraph (c) of this section regarding thetreatment of A upon FT’s acquisition of aU.S. beneficiary.

Example 2. Non-U.S. beneficiary becomesU.S. person more than 5 years after transfer.The facts are the same as in Example 1,except C first becomes a resident alien in2007. FT is treated as not having a U.S.beneficiary under paragraph (a)(3)(i) of thissection with respect to the property transferby A. However, if C had previously been aU.S. person during any prior period, the 5-year exception in paragraph (a)(3)(i) of thissection would not apply in 2007 because itwould not have been the first time C becamea U.S. person.

(4) General rules—(i) Records anddocuments. Even if, based on the termsof the trust instrument, a foreign trust isnot treated as having a U.S. beneficiarywithin the meaning of paragraph (a)(1)of this section, the trust maynevertheless be treated as having a U.S.beneficiary pursuant to paragraph (a)(1)of this section based on the following—

(A) All written and oral agreementsand understandings relating to the trust;

(B) Memoranda or letters of wishes;(C) All records that relate to the actual

distribution of income and corpus; and(D) All other documents that relate to

the trust, whether or not of anypurported legal effect.

(ii) Additional factors. For purposesof determining whether a foreign trust istreated as having a U.S. beneficiarywithin the meaning of paragraph (a)(1)of this section, the following additionalfactors are taken into account—



(A) If the terms of the trust instrumentallow the trust to be amended to benefita U.S. person, all potential benefits thatcould be provided to a U.S. personpursuant to an amendment must betaken into account;

(B) If the terms of the trust instrumentdo not allow the trust to be amended tobenefit a U.S. person, but the lawapplicable to a foreign trust may requirepayments or accumulations of incomeor corpus to or for the benefit of a U.S.person (by judicial reformation orotherwise), all potential benefits thatcould be provided to a U.S. personpursuant to the law must be taken intoaccount, unless the U.S. transferordemonstrates to the satisfaction of theCommissioner that the law is notreasonably expected to be applied orinvoked under the facts andcircumstances; and

(C) If the parties to the trust ignore theterms of the trust instrument, or if it isreasonably expected that they will doso, all benefits that have been, or arereasonably expected to be, provided toa U.S. person must be taken intoaccount.

(iii) Examples. The followingexamples illustrate the rules ofparagraph (a)(4) of this section. In theseexamples, A is a resident alien, B is A’sson, who is a resident alien, C is A’sdaughter, who is a nonresident alien,and FT is a foreign trust. The examplesare as follows:

Example 1. Amendment pursuant to locallaw. A creates and funds FT for the benefitof C. The terms of FT (which, according tothe trust instrument, cannot be amended)provide that no part of the income or corpusof FT may be paid or accumulated during thetaxable year to or for the benefit of any U.S.person, either during the existence of FT orat the time of its termination. However,pursuant to the applicable foreign law, FTcan be amended to provide for additionalbeneficiaries, and there is an oralunderstanding between A and the trustee thatB can be added as a beneficiary. Underparagraphs (a)(1) and (a)(4)(ii)(B) of thissection, FT is treated as having a U.S.beneficiary.

Example 2. Actions in violation of theterms of the trust. A transfers property to FT.The trust instrument provides that no U.S.person can receive income or corpus from FTduring the term of the trust or at thetermination of FT. Notwithstanding the termsof the trust instrument, a letter of wishesdirects the trustee of FT to provide for theeducational needs of B, who is about to begincollege. The letter of wishes contains adisclaimer to the effect that its contents areonly suggestions and recommendations andthat the trustee is at all times bound by theterms of the trust as set forth in the trustinstrument. Under paragraphs (a)(1) and(a)(4)(ii)(C) of this section, FT is treated ashaving a U.S. beneficiary.

(b) Indirect U.S. beneficiaries—(1)Certain foreign entities. For purposes ofparagraph (a)(1) of this section, anamount is treated as paid oraccumulated to or for the benefit of aU.S. person if the amount is paid to oraccumulated for the benefit of—

(i) A controlled foreign corporation, asdefined in section 957(a);

(ii) A foreign partnership, if a U.S.person is a partner of such partnership;or

(iii) A foreign trust or estate, if suchtrust or estate has a U.S. beneficiary(within the meaning of paragraph (a)(1)of this section).

(2) Other indirect beneficiaries. Forpurposes of paragraph (a)(1) of thissection, an amount is treated as paid oraccumulated to or for the benefit of aU.S. person if the amount is paid to oraccumulated for the benefit of a U.S.person through an intermediary, such asan agent or nominee, or by any othermeans where a U.S. person may obtainan actual or constructive benefit.

(3) Examples. The following examplesillustrate the rules of this paragraph (b).Unless otherwise noted, A is a residentalien. B is A’s son and is a residentalien. FT is a foreign trust. Theexamples are as follows:

Example 1. Trust benefitting foreigncorporation. A transfers property to FT. Thebeneficiary of FT is FC, a foreign corporation.FC has outstanding solely 100 shares ofcommon stock. B owns 49 shares of the FCstock and FC2, also a foreign corporation,owns the remaining 51 shares. FC2 hasoutstanding solely 100 shares of commonstock. B owns 49 shares of FC2 andnonresident alien individuals own theremaining 51 FC2 shares. FC is a controlledforeign corporation (as defined in section957(a), after the application of section958(a)(2)). Under paragraphs (a)(1) and(b)(1)(i) of this section, FT is treated ashaving a U.S. beneficiary.

Example 2. Trust benefitting another trust.A transfers property to FT. The terms of FTpermit current distributions of income to B.A transfers property to another foreign trust,FT2. The terms of FT2 provide that no U.S.person can benefit either as to income orcorpus, but permit current distributions ofincome to FT. Under paragraph (a)(1) of thissection, FT is treated as having a U.S.beneficiary and, under paragraphs (a)(1) and(b)(1)(iii) of this section, FT2 is treated ashaving a U.S. beneficiary.

Example 3. Trust benefitting another trustafter transferor’s death. A transfers propertyto FT. The terms of FT require that all incomefrom FT be accumulated during A’s lifetime.In the year following A’s death, a share of FTis to be distributed to FT2, another foreigntrust, for the benefit of B. Under paragraphs(a)(1) and (b)(1)(iii) of this section, FT istreated as having a U.S. beneficiary beginningwith the year of A’s transfer of property toFT.

Example 4. Indirect benefit through use ofdebit card. A transfers property to FT. The

trust instrument provides that no U.S. personcan benefit either as to income or corpus.However, FT maintains an account with FB,a foreign bank, and FB issues a debit card toB against the account maintained by FT andB is allowed to make withdrawals. Underparagraphs (a)(1) and (b)(2) of this section, FTis treated as having a U.S. beneficiary.

Example 5. Other indirect benefit. Atransfers property to FT. FT is administeredby FTC, a foreign trust company. FTC formsIBC, an international business corporationformed under the laws of a foreignjurisdiction. IBC is the beneficiary of FT. IBCmaintains an account with FB, a foreignbank. FB issues a debit card to B against theaccount maintained by IBC and B is allowedto make withdrawals. Under paragraphs(a)(1) and (b)(2) of this section, FT is treatedas having a U.S. beneficiary.

(c) Treatment of U.S. transferor uponforeign trust’s acquisition or loss of U.S.beneficiary—(1) Trusts acquiring a U.S.beneficiary. If a foreign trust to which aU.S. transferor has transferred propertyis not treated as having a U.S.beneficiary (within the meaning ofparagraph (a) of this section) for anytaxable year of the U.S. transferor, butthe trust is treated as having a U.S.beneficiary (within the meaning ofparagraph (a) of this section) in anysubsequent taxable year, the U.S.transferor is treated as having additionalincome in the first such taxable year ofthe U.S. transferor in which the trust istreated as having a U.S. beneficiary. Theamount of the additional income isequal to the trust’s undistributed netincome, as defined in section 665(a), atthe end of the U.S. transferor’simmediately preceding taxable year andis subject to the rules of section 668,providing for an interest charge onaccumulation distributions from foreigntrusts.

(2) Trusts ceasing to have a U.S.beneficiary. If, for any taxable year of aU.S. transferor, a foreign trust that hasreceived a transfer of property from theU.S. transferor ceases to be treated ashaving a U.S. beneficiary, the U.S.transferor ceases to be treated as theowner of the portion of the trustattributable to the transfer beginning inthe first taxable year following the lasttaxable year of the U.S. transferor duringwhich the trust was treated as having aU.S. beneficiary (unless the U.S.transferor is treated as an owner thereofpursuant to sections 673 through 677).The U.S. transferor is treated as makinga transfer of property to the foreign truston the first day of the first taxable yearfollowing the last taxable year of theU.S. transferor during which the trustwas treated as having a U.S. beneficiary.The amount of the property deemed tobe transferred to the trust is the portionof the trust attributable to the prior



transfer to which paragraph (a)(1) of thissection applied. For rules regarding therecognition of gain on transfers toforeign trusts, see section 684.

(3) Examples. The rules of thisparagraph (c) are illustrated by thefollowing examples. A is a residentalien, B is A’s son, and FT is a foreigntrust. The examples are as follows:

Example 1. Trust acquiring U.S.beneficiary. (i) In 2001, A transfers stock witha fair market value of $100,000 to FT. Thestock has an adjusted basis of $50,000 at thetime of the transfer. The trust instrumentprovides that income may be paid currentlyto, or accumulated for the benefit of, B andthat, upon the termination of the trust, allincome and corpus is to be distributed to B.At the time of the transfer, B is a nonresidentalien. A is not treated as the owner of anyportion of FT under sections 673 through677. FT accumulates a total of $30,000 ofincome during the taxable years 2001through 2003. In 2004, B moves to the UnitedStates and becomes a resident alien. Assumeparagraph (a)(4) of this section is notapplicable under the facts and circumstances.

(ii) Under paragraph (c)(1) of this section,A is treated as receiving an accumulationdistribution in the amount of $30,000 in 2004and immediately transferring that amountback to the trust. The accumulationdistribution is subject to the rules of section668, providing for an interest charge onaccumulation distributions.

(iii) Under paragraphs (a)(1) and (3) of thissection, beginning in 2005, A is treated as theowner of the portion of FT attributable to thestock transferred by A to FT in 2001 (whichincludes the portion attributable to theaccumulated income deemed to beretransferred in 2004).

Example 2. Trust ceasing to have U.S.beneficiary. (i) The facts are the same as inExample 1. In 2008, B becomes a nonresidentalien. On the date B becomes a nonresidentalien, the stock transferred by A to FT in2001 has a fair market value of $125,000 andan adjusted basis of $50,000.

(ii) Under paragraph (c)(2) of this section,beginning in 2009, FT is not treated as havinga U.S. beneficiary, and A is not treated as theowner of the portion of the trust attributableto the prior transfer of stock. For rulesregarding the recognition of gain on thetermination of ownership status, see section684.

§ 1.679–3 Transfers.(a) In general. A transfer means a

direct, indirect, or constructive transfer.(b) Transfers by certain trusts—(1) In

general. If any portion of a trust istreated as owned by a U.S. person, atransfer of property from that portion ofthe trust to a foreign trust is treated asa transfer from the owner of that portionto the foreign trust.

(2) Example. The following exampleillustrates this paragraph (b):

Example. In 2001, A, a U.S. citizen, createsand funds DT, a domestic trust. A has thepower to revest absolutely in himself the title

to the property in DT and is treated as theowner of DT pursuant to section 676. In2004, DT transfers property to FT, a foreigntrust. A is treated as having transferred theproperty to FT in 2004 for purposes of thissection.

(c) Indirect transfers—(1) Principalpurpose of tax avoidance. A transfer toa foreign trust by any person(intermediary) to whom a U.S. persontransfers property is treated as anindirect transfer by a U.S. person to theforeign trust if such transfer is madepursuant to a plan one of the principalpurposes of which is the avoidance ofUnited States tax.

(2) Principal purpose of tax avoidancedeemed to exist. For purposes ofparagraph (c)(1) of this section, atransfer is deemed to have been madepursuant to a plan one of the principalpurposes of which was the avoidance ofUnited States tax if—

(i) The U.S. person is related (withinthe meaning of paragraph (c)(4) of thissection) to a beneficiary of the foreigntrust, or has another relationship with abeneficiary of the foreign trust thatestablishes a reasonable basis forconcluding that the U.S. transferorwould make a transfer to the foreigntrust; and

(ii) The U.S. person cannotdemonstrate to the satisfaction of theCommissioner that—

(A) The intermediary has arelationship with a beneficiary of theforeign trust that establishes areasonable basis for concluding that theintermediary would make a transfer tothe foreign trust;

(B) The intermediary actedindependently of the U.S. person;

(C) The intermediary is not an agentof the U.S. person under generallyapplicable United States agencyprinciples; and

(D) The intermediary timely compliedwith the reporting requirements ofsection 6048, if applicable.

(3) Effect of disregardingintermediary—(i) In general. Except asprovided in paragraph (c)(3)(ii) of thissection, if a transfer is treated as anindirect transfer pursuant to paragraph(c)(1) of this section, then theintermediary is treated as an agent of theU.S. person, and the property is treatedas transferred to the foreign trust by theU.S. person in the year the property istransferred, or made available, by theintermediary to the foreign trust. Thefair market value of the propertytransferred is determined as of the dateof the transfer by the intermediary to theforeign trust.

(ii) Special rule. If the Commissionerdetermines, or if the taxpayer candemonstrate to the satisfaction of the

Commissioner, that the intermediary isan agent of the foreign trust undergenerally applicable United Statesagency principles, the property will betreated as transferred to the foreign trustin the year the U.S. person transfers theproperty to the intermediary. The fairmarket value of the property transferredwill be determined as of the date of thetransfer by the U.S. person to theintermediary.

(iii) Effect on intermediary. If atransfer of property is treated as anindirect transfer under paragraph (c)(1)of this section, the intermediary is nottreated as having transferred theproperty to the foreign trust.

(4) Related parties. For purposes ofthis paragraph (c), a U.S. transferor istreated as related to a U.S. beneficiaryof a foreign trust if the U.S. transferorand the beneficiary are related forpurposes of section 643(i)(2)(B), withthe following modifications—

(i) For purposes of applying section267 (other than section 267(f)) andsection 707(b)(1), ‘‘at least 10 percent’’is used instead of ‘‘more than 50percent’’ each place it appears; and

(ii) The principles of section267(b)(10), using ‘‘at least 10 percent’’instead of ‘‘more than 50 percent,’’apply to determine whether twocorporations are related.

(5) Examples. The rules of thisparagraph (c) are illustrated by thefollowing examples:

Example 1. Principal purpose of taxavoidance. A, a U.S. citizen, creates andfunds FT, a foreign trust, for the benefit of A’schildren, who are U.S. citizens. In 2004, Adecides to transfer an additional 1000X to theforeign trust. Pursuant to a plan with aprincipal purpose of avoiding the applicationof section 679, A transfers 1000X to I, aforeign person. I subsequently transfers1000X to FT. Under paragraph (c)(1) of thissection, A is treated as having made atransfer of 1000X to FT.

Example 2. U.S. person unable todemonstrate that intermediary actedindependently. A, a U.S. citizen, creates andfunds FT, a foreign trust, for the benefit of A’schildren, who are U.S. citizens. On July 1,2004, A transfers XYZ stock to D, A’s uncle,who is a nonresident alien. D immediatelysells the XYZ stock and uses the proceeds topurchase ABC stock. On January 1, 2007, Dtransfers the ABC stock to FT. A is unable todemonstrate to the satisfaction of theCommissioner, pursuant to paragraph (c)(2)of this section, that D acted independently ofA in making the transfer to FT. Underparagraph (c)(1) of this section, A is treatedas having transferred the ABC stock to FT.Under paragraph (c)(3) of this section, D istreated as an agent of A, and the transfer isdeemed to have been made on January 1,2007.

Example 3. Indirect loan to foreign trust.A, a U.S. citizen, previously created andfunded FT, a foreign trust, for the benefit of



A’s children, who are U.S. citizens. On July1, 2004, A deposits 500X with FB, a foreignbank. On January 1, 2005, FB loans 450X toFT. A is unable to demonstrate to thesatisfaction of the Commissioner, pursuant toparagraph (c)(2) of this section, that FB hasa relationship with FT that establishes areasonable basis for concluding that FBwould make a loan to FT or that FB actedindependently of A in making the loan.Under paragraph (c)(1) of this section, A isdeemed to have transferred 450X directly toFT on January 1, 2005. Under paragraph(c)(3) of this section, FB is treated as an agentof A. For possible exceptions with respect toqualified obligations of the trust, and thetreatment of principal repayments withrespect to obligations of the trust that are notqualified obligations, see § 1.679–4.

Example 4. Loan to foreign trust prior todeposit of funds in foreign bank. The factsare the same as in Example 3, except that Amakes the 500X deposit with FB on January2, 2005, the day after FB makes the loan toFT. The result is the same as in Example 3.

(d) Constructive transfers—(1) Ingeneral. For purposes of paragraph (a) ofthis section, a constructive transferincludes any assumption or satisfactionof a foreign trust’s obligation to a thirdparty.

(2) Examples. The rules of thisparagraph (d) are illustrated by thefollowing examples. In each example, Ais a U.S. citizen and FT is a foreign trust.The examples are as follows:

Example 1. Payment of debt of foreigntrust. FT owes 1000X to Y, an unrelatedforeign corporation, for the performance ofservices by Y for FT. In satisfaction of FT’sliability to Y, A transfers to Y property witha fair market value of 1000X. Underparagraph (d)(1) of this section, A is treatedas having made a constructive transfer of theproperty to FT.

Example 2. Assumption of liability offoreign trust. FT owes 1000X to Y, anunrelated foreign corporation, for theperformance of services by Y for FT. Aassumes FT’s liability to pay Y. Underparagraph (d)(1) of this section, A is treatedas having made a constructive transfer ofproperty with a fair market value of 1000Xto FT.

(e) Guarantee of trust obligations—(1)In general. If a foreign trust borrowsmoney or other property from anyperson who is not a related person(within the meaning of § 1.679–1(c)(5))with respect to the trust (lender) and aU.S. person (U.S. guarantor) that is arelated person with respect to the trustguarantees (within the meaning ofparagraph (e)(4) of this section) theforeign trust’s obligation, the U.S.guarantor is treated for purposes of thissection as a U.S. transferor that hasmade a transfer to the trust on the dateof the guarantee in an amountdetermined under paragraph (e)(2) ofthis section. To the extent thisparagraph causes the U.S. guarantor to

be treated as having made a transfer tothe trust, a lender that is a U.S. personshall not be treated as having transferredthat amount to the foreign trust.

(2) Amount transferred. The amountdeemed transferred by a U.S. guarantordescribed in paragraph (e)(1) of thissection is the guaranteed portion of theadjusted issue price of the obligation(within the meaning of § 1.1275–1(b))plus any accrued but unpaid qualifiedstated interest (within the meaning of§ 1.1273–1(c)).

(3) Principal repayments. If a U.S.person is treated under this paragraph(e) as having made a transfer by reasonof the guarantee of an obligation,payments of principal to the lender bythe foreign trust with respect to theobligation are taken into account on andafter the date of the payment indetermining the portion of the trustattributable to the property deemedtransferred by the U.S. guarantor.

(4) Guarantee. For purposes of thissection, the term guarantee—

(i) Includes any arrangement underwhich a person, directly or indirectly,assures, on a conditional orunconditional basis, the payment ofanother’s obligation;

(ii) Encompasses any form of creditsupport, and includes a commitment tomake a capital contribution to thedebtor or otherwise maintain itsfinancial viability; and

(iii) Includes an arrangement reflectedin a comfort letter, regardless of whetherthe arrangement gives rise to a legallyenforceable obligation. If anarrangement is contingent upon theoccurrence of an event, in determiningwhether the arrangement is a guarantee,it is assumed that the event hasoccurred.

(5) Examples. The rules of thisparagraph (e) are illustrated by thefollowing examples. In all of theexamples, A is a U.S. resident and FTis a foreign trust. The examples are asfollows:

Example 1. Foreign lender. X, a foreigncorporation, loans 1000X of cash to FT inexchange for FT’s obligation to repay theloan. A guarantees the repayment of 600X ofFT’s obligation. Under paragraph (e)(2) ofthis section, A is treated as having transferred600X to FT.

Example 2. Unrelated U.S. lender. Thefacts are the same as in Example 1, except Xis a U.S. person that is not a related personwithin the meaning of § 1.679–1(c)(5). Theresult is the same as in Example 1.

(f) Transfers to entities owned by aforeign trust—(1) General rule. If a U.S.person is a related person (as defined in§ 1.679–1(c)(5)) with respect to a foreigntrust, any transfer of property by theU.S. person to an entity in which the

foreign trust holds an ownershipinterest is treated as a transfer of suchproperty by the U.S. person to theforeign trust followed by a transfer ofthe property from the foreign trust to theentity owned by the foreign trust, unlessthe U.S. person demonstrates to thesatisfaction of the Commissioner thatthe transfer to the entity is properlyattributable to the U.S. person’sownership interest in the entity.

(2) Examples. The rules of thisparagraph (f) are illustrated by thefollowing examples. In all of theexamples, A is a U.S. citizen, FT is aforeign trust, and FC is a foreigncorporation. The examples are asfollows:

Example 1. Transfer treated as transfer totrust. A creates and funds FT, which istreated as having a U.S. beneficiary under§ 1.679–2. FT owns all of the outstandingstock of FC. A transfers property directly toFC. Because FT is the sole shareholder of FC,A is unable to demonstrate to the satisfactionof the Commissioner that the transfer isproperly attributable to A’s ownershipinterest in FC. Accordingly, under thisparagraph (f), A is treated as havingtransferred the property to FT, followed by atransfer of such property by FT to FC. Under§ 1.679–1(a), A is treated as the owner of theportion of FT attributable to the propertytreated as transferred directly to FT. Under§ 1.367(a)–1T(c)(4)(ii), the transfer ofproperty by FT to FC is treated as a transferof the property by A to FC.

Example 2. Transfer treated as transfer totrust. The facts are the same as in Example1, except that FT is not treated as having aU.S. beneficiary under § 1.679–2. Under thisparagraph (f), A is treated as havingtransferred the property to FT, followed by atransfer of such property by FT to FC. A isnot treated as the owner of FT for purposesof § 1.679–1(a). For rules regarding therecognition of gain on the transfer, seesection 684.

Example 3. Transfer not treated as transferto trust. A creates and funds FT. FC hasoutstanding solely 100 shares of commonstock. FT owns 50 shares of FC stock, and Aowns the remaining 50 shares. On July 1,2001, FT and A each transfer 1000X to FC.A is able to demonstrate to the satisfaction ofthe Commissioner that A’s transfer to FC isproperly attributable to A’s ownershipinterest in FC. Accordingly, under thisparagraph (f), A’s transfer to FC is not treatedas a transfer to FT.

§ 1.679–4 Exceptions to general rule.(a) In general. Section 1.679–1 does

not apply to—(1) Any transfer of property to a

foreign trust by reason of the death ofthe transferor;

(2) Any transfer of property to aforeign trust described in sections402(b), 404(a)(4), or 404A;

(3) Any transfer of property to aforeign trust described in section501(c)(3) (without regard to therequirements of section 508(a)); and



(4) Any transfer of property to aforeign trust to the extent the transfer isfor fair market value.

(b) Transfers for fair market value—(1) In general. For purposes of thissection, a transfer is for fair marketvalue only to the extent of the value ofproperty received from the trust,services rendered by the trust, or theright to use property of the trust. Forexample, rents, royalties, interest, andcompensation paid to a trust aretransfers for fair market value only tothe extent that the payments reflect anarm’s length price for the use of theproperty of, or for the services renderedby, the trust. For purposes of thisdetermination, an interest in the trust isnot property received from the trust. Forpurposes of this section, a distributionto a trust with respect to an interest heldby such trust in an entity other than atrust or an interest in certain investmenttrusts described in § 301.7701–4(c) ofthis chapter, liquidating trusts describedin § 301.7701–4(d) of this chapter, orenvironmental remediation trustsdescribed in § 301.7701–4(e) of thischapter is considered to be a transfer forfair market value.

(2) Special rule—(i) Transfers forpartial consideration. For purposes ofthis section, if a person transfersproperty to a foreign trust in exchangefor property having a fair market valuethat is less than the fair market value ofthe property transferred, the exceptionin paragraph (a)(4) of this sectionapplies only to the extent of the fairmarket value of the property received.

(ii) Example. This paragraph (b) isillustrated by the following example:

Example. A, a U.S. citizen, transfersproperty that has a fair market value of1000X to FT, a foreign trust, in exchange for600X of cash. Under this paragraph (b),§ 1.679–1 applies with respect to the transferof 400X (1000X less 600X) to FT.

(c) Certain obligations not taken intoaccount. Solely for purposes of thissection, in determining whether atransfer by a U.S. transferor that is arelated person (as defined in § 1.679–1(c)(5)) with respect to the foreign trustis for fair market value, any obligation(as defined in § 1.679–1(c)(6)) of thetrust or a related person (as defined in§ 1.679–1(c)(5)) that is not a qualifiedobligation within the meaning ofparagraph (d)(1) of this section shall notbe taken into account.

(d) Qualified obligations—(1) Ingeneral. For purposes of this section, anobligation is treated as a qualifiedobligation only if—

(i) The obligation is reduced towriting by an express writtenagreement;

(ii) The term of the obligation doesnot exceed five years (for purposes ofdetermining the term of an obligation,the obligation’s maturity date is the lastpossible date that the obligation can beoutstanding under the terms of theobligation);

(iii) All payments on the obligationare denominated in U.S. dollars;

(iv) The yield to maturity is not lessthan 100 percent of the applicableFederal rate and not greater that 130percent of the applicable Federal rate(the applicable Federal rate for anobligation is the applicable Federal ratein effect under section 1274(d) for theday on which the obligation is issued,as published in the Internal RevenueBulletin (see § 601.601(d)(2) of thischapter));

(v) The U.S. transferor extends theperiod for assessment of any income ortransfer tax attributable to the transferand any consequential income taxchanges for each year that the obligationis outstanding, to a date not earlier thanthree years after the maturity date of theobligation (this extension is notnecessary if the maturity date of theobligation does not extend beyond theend of the U.S. transferor’s taxable yearfor the year of the transfer and is paidwithin such period); when properlyexecuted and filed, such an agreementis deemed to be consented to forpurposes of § 301.6501(c)–1(d) of thischapter; and

(vi) The U.S. transferor reports thestatus of the loan, including principaland interest payments, on Form 3520 forevery year that the loan is outstanding.

(2) Additional loans. If, while theoriginal obligation is outstanding, theU.S. transferor or a person related to thetrust (within the meaning of § 1.679–1(c)(5)) directly or indirectly obtainsanother obligation issued by the trust, orif the U.S. transferor directly orindirectly obtains another obligationissued by a person related to the trust,the original obligation is deemed tohave the maturity date of any suchsubsequent obligation in determiningwhether the term of the originalobligation exceeds the specified 5-yearterm. In addition, a series of obligationsissued and repaid by the trust (or aperson related to the trust) is treated asa single obligation if the transactionsgiving rise to the obligations arestructured with a principal purpose toavoid the application of this provision.

(3) Obligations that cease to bequalified. If an obligation treated as aqualified obligation subsequently failsto be a qualified obligation (e.g.,renegotiation of the terms of theobligation causes the term of theobligation to exceed five years), the U.S.

transferor is treated as making a transferto the trust in an amount equal to theoriginal obligation’s adjusted issue price(within the meaning of § 1.1275–1(b))plus any accrued but unpaid qualifiedstated interest (within the meaning of§ 1.1273–1(c)) as of the date of thesubsequent event that causes theobligation to no longer be a qualifiedobligation. If the maturity date isextended beyond five years by reason ofthe issuance of a subsequent obligationby the trust (or person related to thetrust), the amount of the transfer willnot exceed the issue price of thesubsequent obligation. The subsequentobligation is separately tested todetermine if it is a qualified obligation.

(4) Transfers resulting from failedqualified obligations. In general, atransfer resulting from a failed qualifiedobligation is deemed to occur on thedate of the subsequent event that causesthe obligation to no longer be a qualifiedobligation. However, based on all of thefacts and circumstances, theCommissioner may deem a transfer tohave occurred on any date on or afterthe issue date of the original obligation.For example, if at the time the originalobligation was issued, the transferorknew or had reason to know that theobligation would not be repaid, theCommissioner could deem the transferto have occurred on the issue date of theoriginal obligation.

(5) Renegotiated loans. Any loan thatis renegotiated, extended, or revised istreated as a new loan, and any transferof funds to a foreign trust after suchrenegotiation, extension, or revisionunder a pre-existing loan agreement istreated as a transfer subject to thissection.

(6) Principal repayments. Thepayment of principal with respect toany obligation that is not treated as aqualified obligation under thisparagraph is taken into account on andafter the date of the payment indetermining the portion of the trustattributable to the property transferred.

(7) Examples. The rules of thisparagraph (d) are illustrated by thefollowing examples. In the examples, Aand B are U.S. residents and FT is aforeign trust. The examples are asfollows:

Example 1. Demand loan. A transfers 500Xto FT in exchange for a demand note thatpermits A to require repayment by FT at anytime. A is a related person (as defined in§ 1.679–1(c)(5)) with respect to FT. BecauseFT’s obligation to A could remainoutstanding for more than five years, theobligation is not a qualified obligation withinthe meaning of paragraph (d) of this sectionand, pursuant to paragraph (c) of this section,it is not taken into account for purposes of



determining whether A’s transfer is eligiblefor the fair market value exception ofparagraph (a)(4) of this section. Accordingly,§ 1.679–1 applies with respect to the full500X transfer to FT.

Example 2. Private annuity. A transfers4000X to FT in exchange for an annuity fromthe foreign trust that will pay A 100X peryear for the rest of A’s life. A is a relatedperson (as defined in § 1.679–1(c)(5)) withrespect to FT. Because FT’s obligation to Acould remain outstanding for more than fiveyears, the obligation is not a qualifiedobligation within the meaning of paragraph(d)(1) of this section and, pursuant toparagraph (c) of this section, it is not takeninto account for purposes of determiningwhether A’s transfer is eligible for the fairmarket value exception of paragraph (a)(4) ofthis section. Accordingly, § 1.679–1 applieswith respect to the full 4000X transfer to FT.

Example 3. Loan to unrelated foreign trust.B transfers 1000X to FT in exchange for anobligation of the trust. The term of theobligation is fifteen years. B is not a relatedperson (as defined in § 1.679–1(c)(5)) withrespect to FT. Because B is not a relatedperson, the fair market value of the obligationreceived by B is taken into account forpurposes of determining whether B’s transferis eligible for the fair market value exceptionof paragraph (a)(4) of this section, eventhough the obligation is not a qualifiedobligation within the meaning of paragraph(d)(1) of this section.

Example 4. Transfer for an obligation withterm in excess of 5 years. A transfers propertythat has a fair market value of 5000X to FTin exchange for an obligation of the trust. Theterm of the obligation is ten years. A is arelated person (as defined in § 1.679–1(c)(5))with respect to FT. Because the term of theobligation is greater than five years, theobligation is not a qualified obligation withinthe meaning of paragraph (d)(1) of thissection and, pursuant to paragraph (c) of thissection, it is not taken into account forpurposes of determining whether A’s transferis eligible for the fair market value exceptionof paragraph (a)(4) of this section.Accordingly, § 1.679–1 applies with respectto the full 5000X transfer to FT.

Example 5. Transfer for a qualifiedobligation. The facts are the same as inExample 4, except that the term of theobligation is 3 years. Assuming the otherrequirements of paragraph (d)(1) of thissection are satisfied, the obligation is aqualified obligation and its adjusted issueprice is taken into account for purposes ofdetermining whether A’s transfer is eligiblefor the fair market value exception ofparagraph (a)(4) of this section.

Example 6. Effect of subsequent obligationon original obligation. A transfers propertythat has a fair market value of 1000X to FTin exchange for an obligation that satisfiesthe requirements of paragraph (d)(1) of thissection. A is a related person (as defined in§ 1.679–1(c)(5)) with respect to FT. Two yearslater, A transfers an additional 2000X to FTand receives another obligation from FT thathas a maturity date four years from the datethat the second obligation was issued. Underparagraph (d)(2) of this section, the originalobligation is deemed to have the maturity

date of the second obligation. Underparagraph (a) of this section, A is treated ashaving made a transfer in an amount equalto the original obligation’s adjusted issueprice (within the meaning of § 1.1275–1(b))plus any accrued but unpaid qualified statedinterest (within the meaning of § 1.1273–1(c))as of the date of issuance of the secondobligation. The second obligation is testedseparately to determine whether it is aqualified obligation for purposes of applyingparagraph (a) of this section to the secondtransfer.

§ 1.679–5 Pre-immigration trusts.(a) In general. If a nonresident alien

individual becomes a U.S. person andthe individual has a residency startingdate (as determined under section7701(b)(2)(A)) within 5 years afterdirectly or indirectly transferringproperty to a foreign trust (the originaltransfer), the individual is treated ashaving transferred to the trust on theresidency starting date an amount equalto the portion of the trust attributable tothe property transferred by theindividual in the original transfer.

(b) Special rules—(1) Change ingrantor trust status. For purposes ofparagraph (a) of this section, if anonresident alien individual who istreated as owning any portion of a trustunder the provisions of subpart E of partI of subchapter J, chapter 1 of theInternal Revenue Code, subsequentlyceases to be so treated, the individual istreated as having made the originaltransfer to the foreign trust immediatelybefore the trust ceases to be treated asowned by the individual.

(2) Treatment of undistributedincome. For purposes of paragraph (a) ofthis section, the property deemedtransferred to the foreign trust on theresidency starting date includesundistributed net income, as defined insection 665(a), attributable to theproperty deemed transferred.Undistributed net income for periodsbefore the individual’s residencystarting date is taken into account onlyfor purposes of determining the amountof the property deemed transferred.

(c) Examples. The rules of this sectionare illustrated by the followingexamples:

Example 1. Nonresident alien becomesresident alien. On January 1, 2002, A, anonresident alien individual, transfersproperty to a foreign trust, FT. On January 1,2006, A becomes a resident of the UnitedStates within the meaning of section7701(b)(1)(A) and has a residency startingdate of January 1, 2006, within the meaningof section 7701(b)(2)(A). Under paragraph (a)of this section, A is treated as a U.S.transferor and is deemed to transfer theproperty to FT on January 1, 2006. Underparagraph (b)(2) of this section, the propertydeemed transferred to FT on January 1, 2006,

includes the undistributed net income of thetrust, as defined in section 665(a),attributable to the property originallytransferred.

Example 2. Nonresident alien loses powerto revest property. On January 1, 2002, A, anonresident alien individual, transfersproperty to a foreign trust, FT. A has thepower to revest absolutely in himself the titleto such property transferred and is treated asthe owner of the trust pursuant to sections676 and 672(f). On January 1, 2008, the termsof FT are amended to remove A’s power torevest in himself title to the propertytransferred, and A ceases to be treated as theowner of FT. On January 1, 2010, A becomesa resident of the United States. Underparagraph (b)(1) of this section, for purposesof paragraph (a) of this section A is treatedas having originally transferred the propertyto FT on January 1, 2008. Because this dateis within five years of A’s residency startingdate, A is deemed to have made a transfer tothe foreign trust on January 1, 2010, hisresidency starting date. Under paragraph(b)(2) of this section, the property deemedtransferred to the foreign trust on January 1,2010, includes the undistributed net incomeof the trust, as defined in section 665(a),attributable to the property deemedtransferred.


(a) In general. Subject to theprovisions of paragraph (b) of thissection, if an individual who is a U.S.person transfers property to a trust thatis not a foreign trust, and such trustbecomes a foreign trust while the U.S.person is alive, the U.S. individual istreated as a U.S. transferor and isdeemed to transfer the property to aforeign trust on the date the domestictrust becomes a foreign trust.

(b) Amount deemed transferred. Forpurposes of paragraph (a) of this section,the property deemed transferred to thetrust when it becomes a foreign trustincludes undistributed net income, asdefined in section 665(a), attributable tothe property previously transferred.Undistributed net income for periodsprior to the migration is taken intoaccount only for purposes ofdetermining the portion of the trust thatis attributable to the propertytransferred by the U.S. person.

(c) Example. The following exampleillustrates the rules of this section. Forpurposes of the example, A is a residentalien, B is A’s son, who is a residentalien, and DT is a domestic trust. Theexample is as follows:

Example. Outbound migration of domestictrust. On January 1, 2002, A transfersproperty to DT, for the benefit of B. OnJanuary 1, 2003, DT acquires a foreign trusteewho has the power to determine whether andwhen distributions will be made to B. Undersection 7701(a)(30)(E) and § 301.7701–7(d)(ii)(A) of this chapter, DT becomes a



foreign trust on January 1, 2003. Underparagraph (a) of this section, A is treated astransferring property to a foreign trust onJanuary 1, 2003. Under paragraph (b) of thissection, the property deemed transferred tothe trust when it becomes a foreign trustincludes undistributed net income, asdefined in section 665(a), attributable to theproperty deemed transferred.

§ 1.679–7 Effective dates.

(a) In general. Except as provided inparagraph (b) of this section, the rulesof §§ 1.679–1, 1.679–2, 1.679–3, and1.679–4 apply with respect to transfersafter August 7, 2000.

(b) Special rules. (1) The rules of§ 1.679–4(c) and (d) apply to anobligation issued after February 6, 1995,whether or not in accordance with apre-existing arrangement orunderstanding. For purposes of the rulesof § 1.679–4(c) and (d), if an obligationissued on or before February 6, 1995, ismodified after that date, and themodification is a significantmodification within the meaning of§ 1.1001–3, the obligation is treated as ifit were issued on the date of themodification. However, the penaltyprovided in section 6677 applies only toa failure to report transfers in exchangefor obligations issued after August 20,1996.

(2) The rules of § 1.679–5 apply topersons whose residency starting date isafter August 7, 2000.

(3) The rules of § 1.679–6 apply totrusts that become foreign trusts afterAugust 7, 2000.

Par. 3. In § 1.958–1, the first sentenceof paragraph (b) is revised to read asfollows:

§ 1.958–1 Direct and indirect ownership ofstock.

* * * * *(b) * * * For purposes of paragraph

(a)(2) of this section, stock owned,directly or indirectly, by or for a foreigncorporation, foreign partnership, foreigntrust (within the meaning of section7701(a)(31)) described in sections 671through 679, or other foreign trust orforeign estate (within the meaning ofsection 7701(a)(31)) shall be consideredas being owned proportionately by itsshareholders, partners, grantors or otherpersons treated as owners undersections 671 through 679 of any portionof the trust that includes the stock, orbeneficiaries, respectively. * * ** * * * *

§ 1.958–2 [Amended]

Par. 4. In § 1.958–2, paragraph(c)(1)(ii)(b) is amended by removing the

language ‘‘678’’ and adding ‘‘679’’ in itsplace.

Robert E. Wenzel,Deputy Commissioner of Internal Revenue.

Approved: July 9, 2001.Mark Weinberger,Assistant Secretary of the Treasury (TaxPolicy).[FR Doc. 01–17971 Filed 7–19–01; 8:45 am]BILLING CODE 4830–01–P


Internal Revenue Service

26 CFR Part 1

[TD 8956]

RIN 1545–AY25

Recognition of Gain on CertainTransfers to Certain Foreign Trustsand Estates

AGENCY: Internal Revenue Service (IRS),Treasury.ACTION: Final regulations.

SUMMARY: This document contains finalregulations under section 684 of theInternal Revenue Code relating torecognition of gain on certain transfersto certain foreign trusts and estates. Theregulations affect United States personswho transfer property to foreign trustsand estates.DATES: Effective Date: These regulationsare effective July 20, 2001.

Applicability Date: These regulationsare applicable to transfers of property toforeign trusts and foreign estates afterAugust 7, 2000.FOR FURTHER INFORMATION CONTACT:Karen A. Rennie-Quarrie, (202) 622–3880 (not a toll-free number).SUPPLEMENTARY INFORMATION:

BackgroundThis document contains final

regulations relating to the Income TaxRegulations (CFR part 1) under section684 of the Internal Revenue Code(Code). On August 7, 2000, Treasuryand the IRS published a notice ofproposed rulemaking (REG–108522–00)in the Federal Register (65 FR 48198)under section 684 of the Code relatingto gain recognition on transfers ofproperty by U.S. persons to foreigntrusts and estates. Commentsresponding to the notice of proposedrulemaking were received and a publichearing was held on November 8, 2000.After consideration of all comments, theproposed regulations are adopted asfinal regulations as revised by thisTreasury decision.

Explanation of Provisions

I. Comments and Changes to § 1.684–1:Recognition of Gain on Transfers toCertain Foreign Trusts and Estates

Under the proposed regulations, aU.S. person who transfers property to aforeign trust or estate generally mustrecognize gain immediately even ifdeferral might otherwise be permittedunder another provision of the Code.

One commenter questioned theauthority for the conclusion in § 1.684–1(d) Example 4 that a U.S. person mustrecognize gain immediately upon thetransfer of appreciated property to aforeign trust in exchange for a privateannuity. The general rule in section684(a) provides, in part, that the transferto the foreign trust is treated as a saleor exchange for an amount equal to thefair market value of the propertytransferred and the transferor mustrecognize the gain in the property,except as provided in regulations. Thelanguage of section 684(a) does notprovide for any deferral of this gain.Moreover, the legislative history offormer section 1491 (the predecessor ofsection 684 regarding transfers ofproperty by U.S. persons to foreigntrusts) makes it clear that Congress didnot look favorably upon deferral in thecontext of transfers to foreign trusts inexchange for private annuities: ‘‘Thecommittee believes that any policy infavor of permitting deferral of tax inprivate annuity transactions should notapply to a private annuity transactionwith a foreign trust.’’ S. Rep. No. 94–938, at 217, n.5 (1976). Therefore,Treasury and the IRS do not believe itwould be appropriate to adoptregulations that would permit deferralin such a case. The final regulationsretain Example 4 without modification.

II. Comments and Changes to § 1.684–2:Transfers

The proposed regulations define theterm transfer broadly to mean anydirect, indirect, or constructive transfer.Section 1.684–2(e) of the proposedregulations provides that if any portionof a foreign trust is treated as owned bya U.S. person and such portion ceasesto be treated as owned by such U.S.person, the U.S. person is treated ashaving transferred the assets of suchportion to a foreign trust immediatelybefore the trust is no longer treated asowned by the U.S. person. Section1.684–2(e)(2) Example 2 illustrates thisrule in the case of the death of thegrantor.

One commenter questioned theauthority for the position that death isa transfer to which section 684 applies.Section 684(a) expressly applies to ‘‘any



transfer of property by a United Statesperson to a foreign estate or trust’’(emphasis added). Section 679 alsogenerally applies to transfers of propertyby U.S. persons to foreign trusts. In thecase of section 679, however, section679(a)(2)(A) specifically exceptstransfers by reason of death from theapplication of the general rule of section679. This exception implies thatCongress believed that, unless otherwiseexcepted, a transfer by reason of deathwould be a transfer to which section 679applied. Because Congress provided noexception in section 684 for transfers byreason of death, it follows that section684 applies to such transfers. Additionalsupport for this conclusion is found inthe information reporting rules insection 6048(a)(3)(A)(ii), which providesthat a ‘‘reportable event’’ includes ‘‘thetransfer of any money or property(directly or indirectly) to a foreign trustby a United States person, including atransfer by reason of death’’ (emphasisadded). Although section 684 generallyapplies to transfers by reason of death,§ 1.684–3(c) provides an exception tothe general rule of gain recognition inthe case of certain transfers at death.

One commenter requested guidanceconcerning a transfer of property by adomestic trust (that is not treated asowned by another person) to a foreigntrust as a result of the testamentaryexercise of a limited power ofappointment with respect to thedomestic trust. Treasury and the IRSbelieve that, under general principlesregarding limited powers ofappointment, the domestic trust, andnot the holder of the limited power ofappointment, is the transferor of theproperty. Accordingly, the domestictrust must recognize gain under thegeneral rule of § 1.684–1(a) unless anexception applies. The final regulationsdo not include any special rules forsuch transfers.

One commenter asked about theinteraction of § 1.684–2(d) and § 1.684–2(e) in the context of an actual transferof property from a foreign trust that istreated as owned by a U.S. person toeither a foreign charitable organizationor a U.S. charity. Under § 1.684–2(d) ofthe proposed regulations, if any portionof a trust is treated as owned by a U.S.person, a transfer of property from thatportion of the trust to a foreign trust istreated as a transfer from the owner.Under § 1.684–2(e) of the proposedregulations, if a portion of a foreign trustthat is treated as owned by a U.S. personceases to be treated as owned by theU.S. person, the U.S. person is treatedas having transferred the assets of thatportion of the trust to a foreign trustimmediately before such portion is no

longer treated as owned by the U.S.person.

The commenter noted that § 1.684–2(e) of the proposed regulation could beread to apply in situations where aportion of a foreign trust ceases to betreated as owned by a U.S. personbecause of an actual transfer of propertyfrom the trust. The final regulationsclarify that § 1.684–2(e) does not apply(and that § 1.684–2(d) may apply) whenany portion of a trust ceases to beowned by a U.S. person by reason of anactual transfer of property from thetrust. As a result, the general rule of gainrecognition under § 1.684–1(a) wouldnot apply to an actual transfer by aforeign trust that is treated as owned bya U.S. person to a foreign charitabletrust that meets the requirements of§ 1.684–3(b), or to a U.S. charity, evenif the transfer causes the portion of thetrust to cease to be owned by the U.S.person.

III. Comments and Changes to § 1.684–3: Exceptions to the General Rule ofGain Recognition

Section 1.684–3(a) of the proposedregulations provides that a U.S. personwho transfers property to a foreign trustis not required to recognize gain on thetransfer to the extent that any person istreated as the owner of the trust undersection 671. One commenter questionedwhether the term any person includesforeign persons. Although notspecifically addressed in the finalregulations, it is understood that theterm any person includes foreign as wellas U.S. persons.

Section 1.684–3(b) of the proposedregulations provides an exception fortransfers to a foreign trust that hasalready received a ruling ordetermination letter from the IRSrecognizing the trust’s tax exempt statusunder section 501(c)(3), provided thatthe letter has been neither revoked normodified. Commenters questioned therequirement that a foreign trust obtain aruling or determination letter from theIRS recognizing the trust’s tax exemptstatus under section 501(c)(3). Theyassert that the requirement may interferewith a U.S. person’s ability to makecontributions to a foreign charitableentity that may not be familiar with U.S.tax laws and may not have any reasonto obtain a determination letter from theIRS. They suggest that the finalregulations require only that the U.S.transferor disclose to the IRS, at suchtime and in such manner as the IRS mayprovide, that the transfer has been madeand that the U.S. transferor believes thetransferee is an organization describedin section 501(c)(3).

In response to commenters’ concerns,the final regulations eliminate therequirement that the foreign trustreceive a ruling or determination letterfrom the IRS recognizing the trust’s taxexempt status under section 501(c)(3).The final regulations provide, instead,that the general rule of gain recognitiondoes not apply to any transfer ofproperty to a foreign trust that isdescribed in section 501(c)(3) (withoutregard to the requirements of section508(a)). However, taxpayers should beaware that, under Notice 97–34 (1997–1 C.B. 422), the U.S. transferor has areporting obligation on Form 3520 withrespect to such a transfer, unless theforeign trust has received a ruling ordetermination letter from the IRSrecognizing the trust’s tax exempt statusunder section 501(c)(3). Moreover, if theIRS subsequently determines that theforeign trust is not described in section501(c)(3), the exception will not applyand the U.S. transferor will be requiredto recognize gain as of the time of theoriginal transfer, and may be subject tointerest and penalties, if applicable.

Section 1.684–3(c) of the proposedregulations provides an exception fortransfers of property by reason of thedeath of the U.S. transferor if both of thefollowing requirements are satisfied: (1)The property is included in the U.S.transferor’s gross estate for Federalestate tax purposes, and (2) the basis ofthe property in the hands of the foreigntrust is determined under section1014(a). One commenter questionedwhether section 684 would apply in thecase of an individual who is a U.S.person for income tax purposes, but anon-domiciliary for estate tax purposes,with the result that the property of theindividual would be entitled to a step-up in basis, but would not be includedin the individual’s gross estate. Thefinal regulations eliminate therequirement that the property beincluded in the U.S. transferor’s grossestate and allow the exception to applyas long as the basis of the property inthe hands of the foreign trust isdetermined under section 1014(a).

Another commenter requested thatthe final regulations confirm thatsection 1032 applies to provide fornonrecognition of gain on issuer stocktransferred to a foreign trust. Thecommenter noted that under formersection 1491, no excise tax was imposedon a transfer of stock by a foreigncorporation to a foreign trust if thecorporation was not required torecognize gain on the transfer undersection 1032. See Notice 97–18 (1997–1 C.B. 389, Sec. II.A.1). In response tothis comment, § 1.684–3(e) of the finalregulations provides a new exception



for transfers of stock (including treasurystock) by a domestic corporation to aforeign trust if the domestic corporationis not required to recognize gain on thetransfer under section 1032.

Commenters also suggested thatcontributions by U.S. persons to foreigncompensatory trusts described insections 402(b), 404(a)(4), or 404Ashould be exempt from gain recognitionunder section 684. Treasury and the IRShave considered the proposed exceptionbut do not believe it is consistent withthe intended purpose of section 684.Accordingly, the final regulations do notinclude an exception for transfers toforeign compensatory trusts. However,the exception for transfers of stock towhich section 1032 would apply may beavailable in appropriate cases fortransfers of stock of a domestic parentcompany to a foreign compensatorytrust set up by a foreign subsidiary.

Another commenter requested anexception for transfers of life insurancecontracts to foreign trusts. Thecommenter noted that the proceeds oflife insurance contracts do not generallygive rise to any taxable gain if held bya U.S. individual or trust. Congress hasrecognized that life insurance contractsmight be used to effectuateinappropriate outbound transfers ofproperty. As part of the repeal of section1491 in 1997, Congress enacted section1035(c), which provides regulatoryauthority to deny the nonrecognitiontreatment given to exchanges of lifeinsurance contracts under section1035(a) where the exchange has theeffect of transferring property to anyperson other than a U.S. person. PublicLaw 105–34, § 1131(b)[(c)](1). Becauseof the potential for abuse and the lackof a compelling reason for creating anexception for offshore transfers of lifeinsurance contracts, Treasury and theIRS have concluded that such anexception is not warranted.

IV. Comments and Changes to § 1.684–4: Outbound Migration of DomesticTrusts

Section 1.684–4 of the proposedregulation provides that if a U.S. persontransfers property to a domestic trustand, for any reason, the domestic trustbecomes a foreign trust, the domestictrust will be deemed to have transferredall of its assets to a foreign trust and thedomestic trust must immediatelyrecognize gain. The proposedregulations do, however, incorporate therelief for inadvertent migrations that isset forth in § 301.7701–7(d)(2).

One commenter suggested that thefinal regulations should extend theinadvertent migration rules of§ 301.7701–7(d)(2) to apply to

§ 301.7701–7(f), which deals with theelection by certain trusts to remaindomestic trusts. Under § 301.7701–7(d)(2), in the event of an inadvertentchange in any person that has the powerto make a substantial decision of thetrust that would cause the domestic orforeign residency of the trust to change(e.g., an inadvertent change from a U.S.trustee to a foreign trustee by reason ofthe U.S. trustee’s death), the trust isallowed 12 months to make necessarychanges to avoid a change in the trust’sresidency (e.g., the replacement of theforeign successor trustee with a U.S.successor trustee). The commentersuggests that a trust with an election inforce under § 301.7701–7(d)(2) shouldbe allowed a similar amount of time tomake necessary changes if a U.S. trusteeis inadvertently replaced by a foreigntrustee.

The final regulations do not includesuch a rule. Under § 301.7701–7(f), atrust generally can elect to remain adomestic trust if it was in existence onAugust 20, 1996, and it was treated asa domestic trust on August 19, 1996.Section 301.7701–7(f)(4)(ii) providesthat such an election terminates ifsubsequent changes are made to thetrust that result in the trust no longerhaving any reasonable basis for beingtreated as a domestic trust under section7701(a)(30) prior to its amendment bythe Small Business Job Protection Act of1996 (SBJP Act), Pub. L. 104–188, 110Stat. 1755. Whereas the ‘‘control test’’ ofsection 7701(a)(30)(E)(ii), as enacted bythe SBJP Act, contains a relativelybright-line test for purposes ofdetermining a trust’s status, therebynecessitating the inadvertent migrationrule of § 301.7701–7(d)(2), thedetermination of domestic or foreignstatus prior to the SBJP Act wasgoverned by less objective criteria.

Under pre-SBJP Act law, aninadvertent short-term replacement of adomestic trustee by a foreign trusteewould not necessarily cause a change inthe trust’s status. Accordingly, a specificinadvertent migration rule for§ 301.7701–7(f) is not appropriate.Instead, as set forth in § 301.7701–7(f)(4)(ii), an election under § 301.7701–7(f) will not be terminated unless thetrust has no reasonable basis for beingtreated as a domestic trust under pre-SBJP Act law.

Special AnalysesIt has been determined that this

Treasury decision is not a significantregulatory action as defined inExecutive Order 12866. Therefore, aregulatory assessment is not required. Italso has been determined that section553(b) of the Administrative Procedure

Act (5 U.S.C. chapter 5) does not applyto these regulations and, because theregulations do not impose a collectionof information on small entities, theRegulatory Flexibility Act (5 U.S.C.chapter 6) does not apply. Therefore, aRegulatory Flexibility Analysis is notrequired. Pursuant to section 7805(f) ofthe Internal Revenue Code, the notice ofproposed rulemaking preceding theseregulations was submitted to the ChiefCounsel for Advocacy of the SmallBusiness Administration for commenton its impact on small businesses.

Drafting Information

The principal author of theseregulations is Karen A. Rennie-Quarrieof the Office of Associate Chief Counsel(International). However, otherpersonnel from the IRS and TreasuryDepartment participated in theirdevelopment.


Income taxes, Reporting andrecordkeeping requirements.

Adoption of Amendments to theRegulations

Accordingly, 26 CFR part 1 isamended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citationfor part 1 is amended by adding entriesin numerical order to read in part asfollows:

Authority: 26 U.S.C. 7805 * * *Section 1.684–1 also issued under 26

U.S.C. 643(a)(7) and 684(a).Section 1.684–2 also issued under 26




U.S.C. 643(a)(7) and 684(a). * * *

Par. 2. Sections 1.684–1, 1.684–2,1.684–3, 1.684–4 and 1.684–5 are addedunder the undesignated centerheading‘‘Miscellaneous’’ to read as follows:

§ 1.684–1 Recognition of gain on transfersto certain foreign trusts and estates.

(a) Immediate recognition of gain—(1)In general. Any U.S. person whotransfers property to a foreign trust orforeign estate shall be required torecognize gain at the time of the transferequal to the excess of the fair marketvalue of the property transferred overthe adjusted basis (for purposes ofdetermining gain) of such property inthe hands of the U.S. transferor unlessan exception applies under theprovisions of § 1.684–3. The amount of



gain recognized is determined on anasset-by-asset basis.

(2) No recognition of loss. Under thissection a U.S. person may not recognizeloss on the transfer of an asset to aforeign trust or foreign estate. A U.S.person may not offset gain realized onthe transfer of an appreciated asset to aforeign trust or foreign estate by a lossrealized on the transfer of a depreciatedasset to the foreign trust or foreignestate.

(b) Definitions. The followingdefinitions apply for purposes of thissection:

(1) U.S. person. The term U.S. personmeans a United States person as definedin section 7701(a)(30), and includes anonresident alien individual who electsunder section 6013(g) to be treated as aresident of the United States.

(2) U.S. transferor. The term U.S.transferor means any U.S. person whomakes a transfer (as defined in § 1.684–2) of property to a foreign trust orforeign estate.

(3) Foreign trust. Section7701(a)(31)(B) defines foreign trust. Seealso § 301.7701–7 of this chapter.

(4) Foreign estate. Section7701(a)(31)(A) defines foreign estate.

(c) Reporting requirements. A U.S.person who transfers property to aforeign trust or foreign estate mustcomply with the reporting requirementsunder section 6048.

(d) Examples. The following examplesillustrate the rules of this section. In allexamples, A is a U.S. person and FT isa foreign trust. The examples are asfollows:

Example 1. Transfer to foreign trust. Atransfers property that has a fair market valueof 1000X to FT. A’s adjusted basis in theproperty is 400X. FT has no U.S. beneficiarywithin the meaning of § 1.679–2, and noperson is treated as owning any portion ofFT. Under paragraph (a)(1) of this section, Arecognizes gain at the time of the transferequal to 600X.

Example 2. Transfer of multiple properties.A transfers property Q, with a fair marketvalue of 1000X, and property R, with a fairmarket value of 2000X, to FT. At the time ofthe transfer, A’s adjusted basis in property Qis 700X, and A’s adjusted basis in propertyR is 2200X. FT has no U.S. beneficiary withinthe meaning of § 1.679–2, and no person istreated as owning any portion of FT. Underparagraph (a)(1) of this section, A recognizesthe 300X of gain attributable to property Q.Under paragraph (a)(2) of this section, A doesnot recognize the 200X of loss attributable toproperty R, and may not offset that lossagainst the gain attributable to property Q.

Example 3. Transfer for less than fairmarket value. A transfers property that has afair market value of 1000X to FT in exchangefor 400X of cash. A’s adjusted basis in theproperty is 200X. FT has no U.S. beneficiarywithin the meaning of § 1.679–2, and no

person is treated as owning any portion ofFT. Under paragraph (a)(1) of this section, Arecognizes gain at the time of the transferequal to 800X.

Example 4. Exchange of property forprivate annuity. A transfers property that hasa fair market value of 1000X to FT inexchange for FT’s obligation to pay A 50Xper year for the rest of A’s life. A’s adjustedbasis in the property is 100X. FT has no U.S.beneficiary within the meaning of § 1.679–2,and no person is treated as owning anyportion of FT. A is required to recognize gainequal to 900X immediately upon transfer ofthe property to the trust. This result applieseven though A might otherwise have beenallowed to defer recognition of gain underanother provision of the Internal RevenueCode.

Example 5. Transfer of property to relatedforeign trust in exchange for qualifiedobligation. A transfers property that has a fairmarket value of 1000X to FT in exchange forFT’s obligation to make payments to A duringthe next four years. FT is related to A asdefined in § 1.679–1(c)(5). The obligation istreated as a qualified obligation within themeaning of § 1.679–4(d), and no person istreated as owning any portion of FT. A’sadjusted basis in the property is 100X. A isrequired to recognize gain equal to 900Ximmediately upon transfer of the property tothe trust. This result applies even though Amight otherwise have been allowed to deferrecognition of gain under another provisionof the Internal Revenue Code. Section 1.684–3(d) provides rules relating to transfers forfair market value to unrelated foreign trusts.

§ 1.684–2 Transfers.(a) In general. A transfer means a

direct, indirect, or constructive transfer.(b) Indirect transfers—(1) In general.

Section 1.679–3(c) shall apply todetermine if a transfer to a foreign trustor foreign estate, by any person, istreated as an indirect transfer by a U.S.person to the foreign trust or foreignestate.

(2) Examples. The following examplesillustrate the rules of this paragraph (b).In all examples, A is a U.S. citizen, FTis a foreign trust, and I is A’s uncle, whois a nonresident alien. The examples areas follows:

Example 1. Principal purpose of taxavoidance. A creates and funds FT for thebenefit of A’s cousin, who is a nonresidentalien. FT has no U.S. beneficiary within themeaning of § 1.679–2, and no person istreated as owning any portion of FT. In 2004,A decides to transfer additional propertywith a fair market value of 1000X and anadjusted basis of 600X to FT. Pursuant to aplan with a principal purpose of avoiding theapplication of section 684, A transfers theproperty to I. I subsequently transfers theproperty to FT. Under paragraph (b) of thissection and § 1.679–3(c), A is treated ashaving transferred the property to FT.

Example 2. U.S. person unable todemonstrate that intermediary actedindependently. A creates and funds FT forthe benefit of A’s cousin, who is a

nonresident alien. FT has no U.S. beneficiarywithin the meaning of § 1.679–2, and noperson is treated as owning any portion ofFT. On July 1, 2004, A transfers propertywith a fair market value of 1000X and anadjusted basis of 300X to I, a foreign person.On January 1, 2007, at a time when the fairmarket value of the property is 1100X, Itransfers the property to FT. A is unable todemonstrate to the satisfaction of theCommissioner, under § 1.679–3(c)(2)(ii), thatI acted independently of A in making thetransfer to FT. Under paragraph (b) of thissection and § 1.679–3(c), A is treated ashaving transferred the property to FT. Underparagraph (b) of this section and § 1.679–3(c)(3), I is treated as an agent of A, and thetransfer is deemed to have been made onJanuary 1, 2007. Under § 1.684–1(a), Arecognizes gain equal to 800X on that date.

(c) Constructive transfers. Section1.679–3(d) shall apply to determine if atransfer to a foreign trust or foreignestate is treated as a constructivetransfer by a U.S. person to the foreigntrust or foreign estate.

(d) Transfers by certain trusts—(1) Ingeneral. If any portion of a trust istreated as owned by a U.S. person, atransfer of property from that portion ofthe trust to a foreign trust is treated asa transfer from the owner of that portionto the foreign trust.

(2) Examples. The following examplesillustrate the rules of this paragraph (d).In all examples, A is a U.S. person, DTis a domestic trust, and FT is a foreigntrust. The examples are as follows:

Example 1. Transfer by a domestic trust.On January 1, 2001, A transfers propertywhich has a fair market value of 1000X andan adjusted basis of 200X to DT. A retains thepower to revoke DT. On January 1, 2003, DTtransfers property which has a fair marketvalue of 500X and an adjusted basis of 100Xto FT. At the time of the transfer, FT has noU.S. beneficiary as defined in § 1.679–2 andno person is treated as owning any portionof FT. A is treated as having transferred theproperty to FT and is required to recognizegain of 400X, under § 1.684–1, at the time ofthe transfer by DT to FT.

Example 2. Transfer by a foreign trust. OnJanuary 1, 2001, A transfers property whichhas a fair market value of 1000X and anadjusted basis of 200X to FT1. At the time ofthe transfer, FT1 has a U.S. beneficiary asdefined in § 1.679–2 and A is treated as theowner of FT1 under section 679. On January1, 2003, FT1 transfers property which has afair market value of 500X and an adjustedbasis of 100X to FT2. At the time of thetransfer, FT2 has no U.S. beneficiary asdefined in § 1.679–2 and no person is treatedas owning any portion of FT2. A is treatedas having transferred the property to FT2 andis required to recognize gain of 400X, under§ 1.684–1, at the time of the transfer by FT1to FT2.

(e) Deemed transfers when foreigntrust no longer treated as owned by aU.S. person—(1) In general. If anyportion of a foreign trust is treated as



owned by a U.S. person under subpartE of part I of subchapter J, chapter 1 ofthe Internal Revenue Code, and suchportion ceases to be treated as owned bythat person under such subpart (otherthan by reason of an actual transfer ofproperty from the trust to which§ 1.684–2(d) applies), the U.S. personshall be treated as having transferred,immediately before (but on the samedate that) the trust is no longer treatedas owned by that U.S. person, the assetsof such portion to a foreign trust.

(2) Examples. The following examplesillustrate the rules of this paragraph (e).In all examples, A is a U.S. citizen andFT is a foreign trust. The examples areas follows:

Example 1. Loss of U.S. beneficiary.—(i)On January 1, 2001, A transfers property,which has a fair market value of 1000X andan adjusted basis of 400X, to FT. At the timeof the transfer, FT has a U.S. beneficiarywithin the meaning of § 1.679–2, and A istreated as owning FT under section 679.Under § 1.684–3(a), § 1.684–1 does not causeA to recognize gain at the time of the transfer.

(ii) On July 1, 2003, FT ceases to have aU.S. beneficiary as defined in § 1.679–2(c)and as of that date neither A nor any otherperson is treated as owning any portion ofFT. Pursuant to § 1.679–2(c)(2), if FT ceasesto be treated as having a U.S. beneficiary, Awill cease to be treated as owner of FTbeginning on the first day of the first taxableyear following the last taxable year in whichthere was a U.S. beneficiary. Thus, onJanuary 1, 2004, A ceases to be treated asowner of FT. On that date, the fair marketvalue of the property is 1200X and theadjusted basis is 350X. Under paragraph(e)(1) of this section, A is treated as havingtransferred the property to FT on January 1,2004, and must recognize 850X of gain at thattime under § 1.684–1.

Example 2. Death of grantor. (i) The initialfacts are the same as in paragraph (i) ofExample 1.

(ii) On July 1, 2003, A dies, and as of thatdate no other person is treated as the ownerof FT. On that date, the fair market value ofthe property is 1200X, and its adjusted basisequals 350X. Under paragraph (e)(1) of thissection, A is treated as having transferred theproperty to FT immediately before his death,and generally is required to recognize 850Xof gain at that time under § 1.684–1.However, an exception may apply under§ 1.684–3(c).

Example 3. Release of a power. (i) OnJanuary 1, 2001, A transfers property that hasa fair market value of 500X and an adjustedbasis of 200X to FT. At the time of thetransfer, FT does not have a U.S. beneficiarywithin the meaning of § 1.679–2. However, Aretains the power to revoke the trust. A istreated as the owner of the trust undersection 676 and, therefore, under § 1.684–3(a), A is not required to recognize gainunder § 1.684–1 at the time of the transfer.

(ii) On January 1, 2007, A releases thepower to revoke the trust and, as of that date,neither A nor any other person is treated asowning any portion of FT. On that date, the

fair market value of the property is 900X, andits adjusted basis is 200X. Under paragraph(e)(1) of this section, A is treated as havingtransferred the property to FT on January 1,2007, and must recognize 700X of gain at thattime.

(f) Transfers to entities owned by aforeign trust. Section 1.679–3(f)provides rules that apply with respect totransfers of property by a U.S. person toan entity in which a foreign trust holdsan ownership interest.

§ 1.684–3 Exceptions to general rule ofgain recognition.

(a) Transfers to grantor trusts. Thegeneral rule of gain recognition under§ 1.684–1 shall not apply to any transferof property by a U.S. person to a foreigntrust to the extent that any person istreated as the owner of the trust undersection 671. Section 1.684–2(e) providesrules regarding a subsequent change inthe status of the trust.

(b) Transfers to charitable trusts. Thegeneral rule of gain recognition under§ 1.684–1 shall not apply to any transferof property to a foreign trust that isdescribed in section 501(c)(3) (withoutregard to the requirements of section508(a)).

(c) Certain transfers at death. Thegeneral rule of gain recognition under§ 1.684–1 shall not apply to any transferof property by reason of death of theU.S. transferor if the basis of theproperty in the hands of the foreigntrust is determined under section1014(a).

(d) Transfers for fair market value tounrelated trusts. The general rule of gainrecognition under § 1.684–1 shall notapply to any transfer of property for fairmarket value to a foreign trust that is nota related foreign trust as defined in§ 1.679–1(c)(5). Section 1.671–2(e)(2)(ii)defines fair market value.

(e) Transfers to which section 1032applies. The general rule of gainrecognition under § 1.684–1 shall notapply to any transfer of stock (includingtreasury stock) by a domesticcorporation to a foreign trust if thedomestic corporation is not required torecognize gain on the transfer undersection 1032.

(f) Certain distributions to trusts. Forpurposes of this section, a transfer doesnot include a distribution to a trust withrespect to an interest held by such trustin an entity other than a trust or aninterest in certain investment trustsdescribed in § 301.7701–4(c) of thischapter, liquidating trusts described in§ 301.7701–4(d) of this chapter, orenvironmental remediation trustsdescribed in § 301.7701–4(e) of thischapter.

(g) Examples. The following examplesillustrate the rules of this section. In all

examples, A is a U.S. citizen and FT isa foreign trust. The examples are asfollows:

Example 1. Transfer to owner trust. In2001, A transfers property which has a fairmarket value of 1000X and an adjusted basisequal to 400X to FT. At the time of thetransfer, FT has a U.S. beneficiary within themeaning of § 1.679–2, and A is treated asowning FT under section 679. Underparagraph (a) of this section, § 1.684–1 doesnot cause A to recognize gain at the time ofthe transfer. See § 1.684–2(e) for rules thatmay require A to recognize gain if the trustis no longer owned by A.

Example 2. Transfer of property at death:Basis determined under section 1014(a). (i)The initial facts are the same as Example 1.

(ii) A dies on July 1, 2004. The fair marketvalue at A’s death of all property transferredto FT by A is 1500X. The basis in theproperty is 400X. A retained the power torevoke FT, thus, the value of all propertyowned by FT at A’s death is includible in A’sgross estate for U.S. estate tax purposes.Pursuant to paragraph (c) of this section, Ais not required to recognize gain under§ 1.684–1 because the basis of the property inthe hands of the foreign trust is determinedunder section 1014(a).

Example 3. Transfer of property at death:Basis not determined under section 1014(a).

(i) The initial facts are the same asExample 1.

(ii) A dies on July 1, 2004. The fair marketvalue at A’s death of all property transferredto FT by A is 1500X. The basis in theproperty is 400X. A retains no power overFT, and FT’s basis in the property transferredis not determined under section 1014(a).Under § 1.684–2(e)(1), A is treated as havingtransferred the property to FT immediatelybefore his death, and must recognize 1100Xof gain at that time under § 1.684–1.

Example 4. Transfer of property for fairmarket value to an unrelated foreign trust. Asells a house with a fair market value of1000X to FT in exchange for a 30-year noteissued by FT. A is not related to FT asdefined in § 1.679–1(c)(5). FT is not treatedas owned by any person. Pursuant toparagraph (d) of this section, A is notrequired to recognize gain under § 1.684–1.


(a) In general. If a U.S. persontransfers property to a domestic trust,and such trust becomes a foreign trust,and neither trust is treated as owned byany person under subpart E of part I ofsubchapter J, chapter 1 of the InternalRevenue Code, the trust shall be treatedfor purposes of this section as havingtransferred all of its assets to a foreigntrust and the trust is required torecognize gain on the transfer under§ 1.684–1(a). The trust must also complywith the rules of section 6048.

(b) Date of transfer. The transferdescribed in this section shall bedeemed to occur immediately before,but on the same date that, the trust



meets the definition of a foreign trust setforth in section 7701(a)(31)(B).

(c) Inadvertent migrations. In theevent of an inadvertent migration, asdefined in § 301.7701–7(d)(2) of thischapter, a trust may avoid theapplication of this section by complyingwith the procedures set forth in§ 301.7701–7(d)(2) of this chapter.

(d) Examples. The following examplesillustrate the rules of this section. In allexamples, A is a U.S. citizen, B is a U.S.citizen, C is a nonresident alien, and Tis a trust. The examples are as follows:

Example 1. Migration of domestic trustwith U.S. beneficiaries. A transfers propertywhich has a fair market value of 1000X andan adjusted basis equal to 400X to T, adomestic trust, for the benefit of A’s childrenwho are also U.S. citizens. B is the trustee ofT. On January 1, 2001, while A is still alive,B resigns as trustee and C becomes successortrustee under the terms of the trust. Pursuantto § 301.7701–7(d) of this chapter, T becomesa foreign trust. T has U.S. beneficiarieswithin the meaning of § 1.679–2 and A is,therefore, treated as owning FT under section679. Pursuant to § 1.684–3(a), neither A norT is required to recognize gain at the time ofthe migration. Section 1.684–2(e) providesrules that may require A to recognize gainupon a subsequent change in the status of thetrust.

Example 2. Migration of domestic trustwith no U.S. beneficiaries. A transfersproperty which has a fair market value of1000X and an adjusted basis equal to 400Xto T, a domestic trust for the benefit of A’smother who is not a citizen or resident of theUnited States. T is not treated as owned byanother person. B is the trustee of T. OnJanuary 1, 2001, while A is still alive, Bresigns as trustee and C becomes successortrustee under the terms of the trust. Pursuantto § 301.7701–7(d) of this chapter, T becomesa foreign trust, FT. FT has no U.S.beneficiaries within the meaning of § 1.679–2 and no person is treated as owning anyportion of FT. T is required to recognize gainof 600X on January 1, 2001. Paragraph (c) ofthis section provides rules with respect to aninadvertent migration of a domestic trust.

§ 1.684–5 Effective date.

Sections 1.684–1 through 1.684–4apply to transfers of property to foreigntrusts and foreign estates after August 7,2000.

Robert E. Wenzel,Deputy Commissioner of Internal Revenue.

Approved: July 9, 2001.

Mark Weinberger,Assistant Secretary of the Treasury (TaxPolicy).[FR Doc. 01–17972 Filed 7–19–01; 8:45 am]

BILLING CODE 4830–01–P

DEPARTMENT OF JUSTICE

Office of the Attorney General

28 CFR Parts 0 and 27

[A.G. Order No. 2492–2001]

Office of the Inspector General

AGENCY: Department of Justice.ACTION: Final rule.

SUMMARY: This rule amends theDepartment’s organizational regulationsto revise the description of the functionsand responsibilities of the Office of theInspector General. The amendmentsconcern the jurisdiction of the Office ofthe Inspector General to investigateallegations of misconduct by employeesof the Federal bureau of Investigationand Drug Enforcement Administration.This rule also makes conformingchanges to the Department’s existingregulations concerning the investigationof whistleblower disclosures made byemployees of the FBI.EFFECTIVE DATE: July 11, 2001.FOR FURTHER INFORMATION CONTACT:Kevin R. Jones, Deputy AssistantAttorney General, Office of Legal Policy,U.S. Department of Justice, Washington,DC 20530, (202) 514–4604.SUPPLEMENTARY INFORMATION: TheAttorney General is amending currentDepartment of Justice regulations, inPart 0, Subpart E–4 of title 28, Code ofFederal Regulations, describing thejurisdiction and functions of the Officeof the Inspector General (OIG).Currently, evidence and non-frivolousallegations of serious misconduct byemployees of the Federal Bureau ofInvestigation (FBI) and DrugEnforcement Administration (DEA)must be reported to the FBI Office ofProfessional Responsibility (FBI–OPR)and the DEA Office of ProfessionalResponsibility (DEA–OPR), respectively.The OIG refers to FBI–OPR and DEA–OPR allegations of misconduct withintheir respective jurisdictions forappropriate action. The OIG refers to theDepartment’s Office of ProfessionalResponsibility (OPR) allegations ofserious misconduct (1) by Departmentattorneys relating to the exercise of theirauthority to investigate, litigate, orprovide legal advice; and (2) byDepartment law enforcement personnelrelating to (or in connection with)allegations of misconduct by aDepartment attorney that relate to theexercise of the attorney’s authority toinvestigate, litigate, or provide legaladvice. At the request of the InspectorGeneral, the Deputy Attorney Generalmay assign to the OIG a matter within

the jurisdiction of FBI–OPR, DEA–OPR,or DOJ–OPR.

Pursuant to these amendments, allevidence and non-frivolous allegationsof criminal wrongdoing and seriousadministrative misconduct byDepartment of Justice employees shallbe reported to the OIG except for thoseallegations concerning seriousmisconduct by Department attorneys orinvestigators that are within thejurisdiction of OPR. With respect toevidence and non-frivolous allegationsof criminal wrongdoing and seriousadministrative misconduct byemployees of the FBI and DEA, the OIGwill determine whether it willinvestigate such allegations or whetherthey will be investigated by FBI–OPR orDEA–OPR.

This rule also makes changes to theDepartment’s existing regulations in 28CFR 27.1(b) with respect to theinvestigations of whistleblowerdisclosures made by employees of theFBI, in order to conform with theprovisions of Part 0, Subpart E–4, asamended, regarding the authority of theOIG. In addition, this rule makes atechnical change to § 27.4 to reflectrecent change in name of the Office ofAttorney Personnel Management to theOffice of Attorney Recruitment andManagement.

Certifications and Determinations

Administrative Procedure Act

This rule relates to matters of agencymanagement or personnel, and istherefore exempt from the usualrequirements of prior notice andcomment and a 30-day delay in theeffective date. See 5 U.S.C. 553(a)(2).Moreover, to the extent that rulemakingprocedures are otherwise applicable, theDepartment finds that this is exemptfrom the requirements of prior noticeand comment as a rule of agencyorganization, procedure, or practice. See5 U.S.C. 553(b)(A). Similarly, theeffective date of the rule need not bedelayed for 30 days after publicationbecause the rule is not a ‘‘substantiverule.’’ See 5 U.S.C. 553(d); 5 U.S.C.552(a)(1)(D).

Small Business Regulatory EnforcementFairness Act of 1996

This rule is not a major rule asdefined by section 251 of the SmallBusiness Regulatory EnforcementFairness Act of 1996, 5 U.S.C. 804. It isa rule relating to agency management orpersonnel and is therefore excludedfrom the scope of a covered ‘‘rule’’ forpurposes of Chapter 8 of Title 5, U.S.C.See 5 U.S.C. 804(3)(B). Moreover, to theextent that this rule would be



considered to be a rule of agencyorganization, procedure, or practice, it isexcluded from the scope of a covered‘‘rule’’ pursuant to 5 U.S.C. 804(3)(C).The amendments relate to the AttorneyGeneral’s determination with respect tohow Department of Justice componentsshall handle certain matters within theauthority of the Attorney General ashead of the Department of Justice, andthe Department has determined that thisrule does not substantially affect therights or obligations of non-agencyparties.

Accordingly, because this action isnot a covered ‘‘rule,’’ it is exempt fromthe requirement for the Department tosubmit a report to each House ofCongress and to the Comptroller Generalbefore this rule can take effect, asprovided in 5 U.S.C. 801(a)(1).

Regulatory Flexibility Act

The Attorney General, in accordancewith the Regulatory Flexibility Act, 5U.S.C. 605(b), has reviewed this ruleand, by approving it, certifies that thisregulation will not have a significanteconomic impact on a substantialnumber of small entities.

Executive Order 12866

This rule has been drafted andreviewed in accordance with ExecutiveOrder 12866, Regulatory Planning andReview. The Department of Justice hasdetermined that this is not a ‘‘significantregulatory action’’ under section 3(f) ofExecutive Order 12866, and that itrelates to a matter of agencyorganization, management, orpersonnel. See Executive Order 12866,section 3(d)(3). Accordingly, this rulehas not been reviewed by the Office ofManagement and Budget.


This rule will not have substantialdirect effects on the States, on therelationship between the nationalgovernment and the States, or ondistribution of power andresponsibilities among the variouslevels of government. Therefore, inaccordance with Executive Order 12612,it is determined that this rule does nothave sufficient federalism implicationsto warrant the preparation of aFederalism Assessment.

Executive Order 12988—Civil JusticeReform

This rule meets the applicablestandards set forth in sections 3(a) and3(b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

This rule will not result in theexpenditure by State, local, and tribal

government, in the aggregate, or by theprivate sector, of $100,000,000 or morein any one year, and it will notsignificantly or uniquely affect smallgovernments. Therefore, no actions weredeemed necessary under the provisionsof the Unfunded Mandates Reform Actof 1995.

List of Subjects

28 CFR Part 0

Authority delegations (Governmentagencies), Government employees,Organization and functions(Government agencies), Whistleblowing.

28 CFR Part 27

Government Employees, JusticeDepartment, Organization and functions(Government agencies), Whistleblowing.

Accordingly, by virtue of theauthority vested in me as AttorneyGeneral, including 5 U.S.C. 301 and 28U.S.C. 509 and 510, Part 0, Subpart E–4, and Part 27 of title 28 of the Code ofFederal Regulations, are amended asfollows:

PART 0—ORGANIZATION OF THEDEPARTMENT OF JUSTICE

1. The authority citation of part 0continues to read as follows:

Authority: 5 U.S.C. 301; 28 U.S.C. 509,510, 515–519.

2. Paragraph (a) of section 0.29c isrevised to read as follows:

§ 0.29c Reporting allegations of employeemisconduct.

(a) Reporting to the OIG. Evidence andnon-frivolous allegations of criminalwrongdoing or serious administrativemisconduct by Department employeesshall be reported to the OIG, or to asupervisor or a Department component’sinternal affairs office for referral to theOIG, except as provided in paragraph (b)of this section.* * * * *

3. Paragraph (c) of § 0.29c is amendedby adding the words ‘‘by the OIG’’between the words ‘‘reported’’ and ‘‘to’’.

4. Paragraph (d) of § 0.29c is amendedby adding the words ‘‘by the OIG’’between the words ‘‘reported’’ and ‘‘to’’.

5. In § 0.29d, paragraph (a) is revisedto read as follows:

§ 0.29d Whistleblower protection for FBIemployees.

(a) Protected disclosures by FBIemployees. Disclosures of informationby an FBI employee that the employeereasonably believes evidences aviolation of any law, rule, or regulation,or mismanagement, gross waste offunds, an abuse of authority, or a

substantial and specific danger to publichealth or safety are protecteddisclosures when they are reported asprovided in § 27.1 of this chapter. Anyoffice or official (other than the OIG orDOJ–OPR) receiving a protecteddisclosure shall promptly report suchdisclosure to the OIG or DOJ–OPR. TheOIG or DOJ–OPR may refer suchallegations to FBI–OPR for investigationunless the Deputy Attorney Generaldetermines that such referral shall notbe made.* * * * *

6. Section 0.29e is amended by:a. Revising paragraphs (a)(1), (a)(2),

(a)(3), and (a)(5);b. Amending the introductory text in

paragraph (a)(6) by removing ‘‘anotherinternal investigative component’’ andby adding in its place ‘‘DOJ–OPR’’;

c. Amending paragraph (a)(6)(i) byremoving ‘‘the component’’ and byadding in its place ‘‘DOJ–OPR’’;

d. Amending paragraph (a)(7) byremoving ‘‘the other investigativecomponent’’ and by adding in its place‘‘DOJ–OPR’’; to read as follows:

§ 29e Relationship to other departmentalunits.

(a) * * *(1) The OIG refers to DOJ–OPR

allegations of misconduct within DOJ–OPR’s jurisdiction and may refer toanother component the investigation ofan allegation of misconduct on the partof an employee of that component;

(2) The OIG may refer to a Departmentcomponent’s internal affairs officeallegations of misconduct within thatoffice’s jurisdiction or may investigatesuch allegations on its own;

(3) DOJ–OPR refers to the OIGallegations involving misconduct byDepartment attorneys or investigatorsthat do not relate to the exercise of anattorney’s authority to investigate,litigate, or provide legal advice.

(4) * * *(5) All Department components report

to the OIG all non-frivolous allegationsof criminal wrongdoing and seriousadministrative misconduct involvingany of their employees exceptallegations involving Departmentattorneys and investigators that relate toan attorney’s authority to litigate,investigate, or provide legal advice.* * * * *

§ 0.29h Specific authorities of theInspector General.

7. Paragraph (a) of section 0.29h isamended by removing ‘‘the’’ between‘‘to’’ and ‘‘administration’’ and byadding in its place ‘‘criminalwrongdoing and administrative



misconduct of Department employeesand’’.

PART 27—WHISTLEBLOWERPROTECTION FOR FEDERAL BUREAUOF INVESTIGATION EMPOYEES


Authority: 5 U.S.C. 301, 3151; 28 U.S.C.509, 510, 515–519; President’s Memorandumto the Attorney General, Delegation ofResponsibilities Concerning FBI EmployeesUnder the Civil Service Reform Act of 1978,3 CFR p. 284 (1997).

9. In § 27.1, paragraph (b) is revised toread as follows:

§ 27.1 Making a protected disclosure.

* * * * *(b) Any office or official (other than

the OIG or OPR) receiving a protecteddisclosure shall promptly report suchdisclosure to the OIG or OPR forinvestigation. The OIG and OPR shallproceed in accordance with proceduresestablishing their respectivejurisdiction. The OIG or OPR may refersuch allegations to FBI–OPR forinvestigation unless the DeputyAttorney General determines that suchreferral shall not be made.

§ 27.4 Corrective action and other relief;Director, Office of Attorney Recruitment andManagement.

10. In § 27.4, the heading is revised toread as shown above.

11. In § 27.4, paragraph (a) isamended by removing ‘‘AttorneyPersonnel Management’’ and by addingin its place ‘‘Attorney Recruitment andManagement’’.

Dated: July 11, 2001.John Ashcroft,Attorney General.[FR Doc. 01–18087 Filed 7–19–01; 8:45 am]BILLING CODE 4410–AR–M

ENVIRONMENTAL PROTECTIONAGENCY

40 CFR Part 52

[MO 123–1123a; FRL–7015–9]

Approval and Promulgation ofImplementation Plans; State ofMissouri

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Direct final rule.

SUMMARY: EPA is announcing it isapproving a revision to the MissouriState Implementation Plan (SIP). EPA isapproving a revision to Missouri rule

‘‘Control of Emissions From IndustrialSurface Coating Operations.’’ Thisrevision will ensure consistencybetween the state and Federallyapproved rules, and ensure Federalenforceability of the state’s air programrule revision pursuant to section 110 ofthe Clean Air Act.EFFECTIVE DATE: This direct final rulewill be effective September 18, 2001unless EPA receives adverse commentsby August 20, 2001. If adversecomments are received, EPA willpublish a timely withdrawal of thedirect final rule in the Federal Registerinforming the public that the rule willnot take effect.ADDRESSES: Comments may be mailed toWayne Kaiser, EnvironmentalProtection Agency, Air Planning andDevelopment Branch, 901 North 5thStreet, Kansas City, Kansas 66101.

Copies of the state submittal(s) areavailable at the following addresses forinspection during normal businesshours: Environmental ProtectionAgency, Air Planning and DevelopmentBranch, 901 North 5th Street, KansasCity, Kansas 66101; and theEnvironmental Protection Agency, Airand Radiation Docket and InformationCenter, Air Docket (6102), 401 M Street,SW., Washington, DC 20460.FOR FURTHER INFORMATION CONTACT:Wayne Kaiser at (913) 551–7603.SUPPLEMENTARY INFORMATION:Throughout this document whenever‘‘we, us, or our’’ is used, we mean EPA.

This section provides additionalinformation by addressing the followingquestions:

What is a SIP?What is the Federal approval process for a

SIP?What does Federal approval of a state

regulation mean to me?What is being addressed in this notice?Have the requirements for approval of a

SIP revision been met?What action is EPA taking?

What Is a SIP?

Section 110 of the Clean Air Act(CAA) requires states to develop airpollution regulations and controlstrategies to ensure that state air qualitymeets the national ambient air qualitystandards established by us. Theseambient standards are established undersection 109 of the CAA, and theycurrently address six criteria pollutants.These pollutants are: Carbon monoxide,nitrogen dioxide, ozone, lead,particulate matter, and sulfur dioxide.

Each state must submit theseregulations and control strategies to usfor approval and incorporation into theFederally enforceable SIP.

Each Federally approved SIP protectsair quality primarily by addressing airpollution at its point of origin. TheseSIPs can be extensive, containing stateregulations or other enforceabledocuments and supporting informationsuch as emission inventories,monitoring networks, and modelingdemonstrations.

What Is the Federal Approval Processfor a SIP?

In order for state regulations to beincorporated into the Federallyenforceable SIP, states must formallyadopt the regulations and controlstrategies consistent with state andFederal requirements. This processgenerally includes a public notice,public hearing, public comment period,and a formal adoption by a state-authorized rulemaking body.

Once a state rule, regulation, orcontrol strategy is adopted, the statesubmits it to us for inclusion into theSIP. We must provide public notice andseek additional public commentregarding the proposed Federal actionon the state submission. If adversecomments are received, they must beaddressed prior to any final Federalaction by us.

All state regulations and supportinginformation approved by us undersection 110 of the CAA are incorporatedinto the Federally approved SIP.Records of such SIP actions aremaintained in the Code of FederalRegulations (CFR) at Title 40, Part 52,entitled ‘‘Approval and Promulgationsof Implementation Plans.’’ The actualstate regulations which are approved arenot reproduced in their entirety in theCFR outright but are ‘‘incorporated byreference,’’ which means that we haveapproved a given state regulation witha specific effective date.

What Does Federal Approval of a StateRegulation Mean to Me?

Enforcement of the state regulationbefore and after it is incorporated intothe Federally approved SIP is primarilya state responsibility. However, after theregulation is Federally approved, we areauthorized to take enforcement actionagainst violators. Citizens are alsooffered legal recourse to addressviolations as described in the CAA.

What Is Being Addressed in ThisNotice?

The state of Missouri has requestedthat EPA approve as a revision to theMissouri SIP recently adopted revisionsto rule 10 CSR 10–5.330, ‘‘Control ofEmissions From Industrial SurfaceCoating Operations.’’ This rule is



applicable in the St. Louisnonattainment area.

This rule was revised to deleteconditions for aerospace manufactureand rework facilities which are alsocontained in rule 10 CSR 10–5.295,‘‘Control of Emissions From AerospaceManufacture and Rework Facilities.’’This revision eliminates duplicaterequirements for these facilities, butdoes not relax any applicablerequirements.

Have the Requirements for Approval ofa SIP Revision Been Met?

The state submittal has met the publicnotice requirements for SIP submissionsin accordance with 40 CFR section51.102. The submittal also satisfied thecompleteness criteria of 40 CFR part 51,Appendix V. In addition, as explainedabove and in more detail in thetechnical support document which ispart of this notice, the revisions meetthe substantive SIP requirements of theCAA, including section 110 andimplementing regulations.

What Action Is EPA Taking?EPA is processing this action as a

direct final action because the revisionsmake routine changes to the existingrules which are noncontroversial.Therefore, we do not anticipate anyadverse comments.

Administrative RequirementsUnder Executive Order 12866 (58 FR

51735, October 4, 1993), this action isnot a ‘‘significant regulatory action’’ andtherefore is not subject to review by theOffice of Management and Budget. Thisaction merely approves state law asmeeting Federal requirements andimposes no additional requirementsbeyond those imposed by state law.Accordingly, the Administrator certifiesthat this rule will not have a significanteconomic impact on a substantialnumber of small entities under theRegulatory Flexibility Act (5 U.S.C. 601et seq.). Because this rule approvespreexisting requirements under statelaw and does not impose any additionalenforceable duty beyond that requiredby state law, it does not contain anyunfunded mandate or significantly oruniquely affect small governments, asdescribed in the Unfunded MandatesReform Act of 1995 (Public Law 104–4).For the same reason, this rule also doesnot significantly or uniquely affect thecommunities of tribal governments, as

specified by Executive Order 13084 (63FR 27655, May 10, 1998). This rule willnot have substantial direct effects on thestates, on the relationship between thenational government and the states, oron the distribution of power andresponsibilities among the variouslevels of government, as specified inExecutive Order 13132 (64 FR 43255,August 10, 1999), because it merelyapproves a state rule implementing aFederal standard, and does not alter therelationship or the distribution of powerand responsibilities established in theCAA. This rule also is not subject toExecutive Order 13045 (62 FR 19885,April 23, 1997), because it is noteconomically significant.

In reviewing SIP submissions, ourrole is to approve state choices,provided that they meet the criteria ofthe CAA. In this context, in the absenceof a prior existing requirement for thestate to use voluntary consensusstandards (VCS), we have no authorityto disapprove a SIP submission forfailure to use VCS. It would thus beinconsistent with applicable law forEPA, when it reviews a SIP submission,to use VCS in place of a SIP submissionthat otherwise satisfies the provisions ofthe CAA. Thus, the requirements ofsection 12(d) of the NationalTechnology Transfer and AdvancementAct of 1995 (15 U.S.C. 272 note) do notapply. As required by section 3 ofExecutive Order 12988 (61 FR 4729,February 7, 1996), in issuing this rule,we have taken the necessary steps toeliminate drafting errors and ambiguity,minimize potential litigation, andprovide a clear legal standard foraffected conduct. EPA has compliedwith Executive Order 12630 (53 FR8859, March 15, 1988) by examining thetakings implications of the rule inaccordance with the ‘‘AttorneyGeneral’s Supplemental Guidelines forthe Evaluation of Risk and Avoidance ofUnanticipated Takings’’ issued underthe Executive Order. This rule does notimpose an information collectionburden under the provisions of thePaperwork Reduction Act of 1995 (44U.S.C. 3501 et seq.).

The Congressional Review Act, 5U.S.C. section 801 et seq., as added bythe Small Business RegulatoryEnforcement Fairness Act of 1996,generally provides that before a rulemay take effect, the agencypromulgating the rule must submit a

rule report, which includes a copy ofthe rule, to each House of the Congressand to the Comptroller General of theUnited States. We will submit a reportcontaining this rule and other requiredinformation to the United States Senate,the United States House ofRepresentatives, and the ComptrollerGeneral of the United States prior topublication of the rule in the FederalRegister. A major rule cannot take effectuntil 60 days after it is published in theFederal Register. This action is not a‘‘major rule’’ as defined by 5 U.S.C.804(2).

Under section 307(b)(1) of the CAA,petitions for judicial review of thisaction must be filed in the United StatesCourt of Appeals for the appropriatecircuit by September 18, 2001. Filing apetition for reconsideration by theAdministrator of this final rule does notaffect the finality of this rule for thepurposes of judicial review nor does itextend the time within which a petitionfor judicial review may be filed, andshall not postpone the effectiveness ofsuch rule or action. This action may notbe challenged later in proceedings toenforce its requirements. (See section307(b)(2).)

List of Subjects 40 CFR Part 52

Environmental protection, Airpollution control, Hydrocarbons,Incorporation by reference,Intergovernmental relations, Ozone,Reporting and recordkeepingrequirements.

Dated: June 29, 2001.William Rice,Acting Regional Administrator, Region 7.

Chapter I, title 40 of the Code ofFederal Regulations is amended asfollows:

PART 52—[AMENDED]


Authority: 42 U.S.C. 7401 et seq.

Subpart AA—Missouri

2. In § 52.1320(c) the table is amendedunder Chapter 5 by revising the entryfor ‘‘10–5.330’’ to read as follows:

§ 52.1320 Identification of plan.

* * * * *(c) * * *



EPA—APPROVED MISSOURI REGULATIONS

Missouri citation Title State effectivedate

EPA approvaldate Explanation

Missouri Department of Natural Resources

* * * * * * *

Chapter 5—Air Quality Standards and Air Pollution Control Regulations for the St. Louis Metropolitan Area

* * * * * * *10–5.330 ................................. Control of Emissions From Industrial Surface Coating Oper-

ations.12/30/00 7/20/01 66 FR

37906

* * * * * * *

* * * * *[FR Doc. 01–18089 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 52

[MO 119–1119a; FRL–7015–8]



SUMMARY: EPA is approving a StateImplementation Plan (SIP) revisionsubmitted by the state of Missouri. Thisapproval pertains to revisions to a rulewhich controls emissions fromaluminum foil rolling sources in the St.Louis, Missouri, nonattainment area.The effect of this approval is to ensureFederal enforceability of the state airprogram rules and to maintainconsistency between the state-adoptedrules and the approved SIP.DATES: This direct final rule will beeffective on September 18, 2001 unlessEPA receives adverse comments byAugust 20, 2001. If adverse commentsare received, EPA will publish a timelywithdrawal of the direct final rule in theFederal Register and inform the publicthat the rule will not take effect.ADDRESSES: Comments may be mailed toWayne Kaiser, Air Planning andDevelopment Branch, 901 North 5thStreet, Kansas City, Kansas 66101.

Copies of documents relative to thisaction are available for publicinspection during normal businesshours at the above listed Region 7location. The interested personswanting to examine these documents

should make an appointment with theoffice at least 24 hours in advance.

FOR FURTHER INFORMATION CONTACT:Wayne Kaiser at (913) 551–7603.

SUPPLEMENTARY INFORMATION:Throughout this document whenever‘‘we, us, or our’’ is used, we mean EPA.This section provides additionalinformation by addressing the followingquestions:

What Is a SIP?What Is the Federal Approval Process for

a SIP?What Does Federal Approval of a State

Regulation Mean to Me?What Is Being Addressed in this

Document?Have the Requirements for Approval of a

SIP Revision Been Met?What Action Is EPA Taking?

What Is a SIP?

Section 110 of the Clean Air Act(CAA) requires states to develop airpollution regulations and controlstrategies to ensure that state air qualitymeets the national ambient air qualitystandards established by EPA. Theseambient standards are established undersection 109 of the CAA, and theycurrently address six criteria pollutants.These pollutants are: carbon monoxide,nitrogen dioxide, ozone, lead,particulate matter, and sulfur dioxide.

Each state must submit theseregulations and control strategies to EPAfor approval and incorporation into theFederally enforceable SIP.





All state regulations and supportinginformation approved by EPA undersection 110 of the CAA are incorporatedinto the Federally approved SIP.Records of such SIP actions aremaintained in the Code of FederalRegulations (CFR) at Title 40, Part 52,entitled ‘‘Approval and Promulgation ofImplementation Plans.’’ The actual stateregulations which are approved are notreproduced in their entirety in the CFRoutright but are ‘‘incorporated byreference,’’ which means that we haveapproved a given state regulation witha specific effective date.


Enforcement of the state regulationbefore and after it is incorporated intothe Federally approved SIP is primarilya state responsibility. However, after theregulation is Federally approved, we areauthorized to take enforcement actionagainst violators. Citizens are alsooffered legal recourse to addressviolations as described in section 304 ofthe CAA.



What Is Being Addressed in ThisDocument?

On October 25, 2000, we received arequest from the Missouri Department ofNatural Resources to approve as a SIPrevision amendments to rule 10 CSR10–5.451, ‘‘Control of Emissions FromAluminum Foil Rolling.’’

This rule specifies operatingprocedures, materials requirements, andcontrol equipment specifications for thereduction of volatile organic compoundsfrom aluminum foil rolling mills in theSt. Louis ozone nonattainment area.There is only one source subject to thisrule.

Revisions to the rule were minor.References to the final boiling point ofthe rolling lubricants in sections(3)(A)(1)(B) and (3)(A)(2)(B) wererevised for clarification. Section (5)(A)was revised to refer to the most currentAmerican Society for Testing andMaterials test method, and to addclarifying language regarding theemissions standards to which the testmethod applies. A minor typographicalcorrection was made to section(3)(A)(2)(A).

This rule was adopted by the MissouriAir Conservation Commission andbecame state effective on September 30,2000.


The state submittal has met the publicnotice requirements for SIP submissionsin accordance with 40 CFR 51.102. Thesubmittal also satisfied thecompleteness criteria of 40 CFR part 51,appendix V. In addition, as explainedabove and in more detail in thetechnical support document which ispart of this document, the revisionmeets the substantive SIP requirementsof the CAA, including section 110 andimplementing regulations.

What Action Is EPA Taking?We are processing this action as a

final action because the revisions makeroutine changes to the existing rules,which are noncontroversial. Therefore,we do not anticipate any adversecomments.


51735, October 4, 1993), this action isnot a ‘‘significant regulatory action’’ andtherefore is not subject to review by theOffice of Management and Budget. Thisaction merely approves state law asmeeting Federal requirements andimposes no additional requirementsbeyond those imposed by state law.Accordingly, the Administrator certifiesthat this rule will not have a significant

economic impact on a substantialnumber of small entities under theRegulatory Flexibility Act (5 U.S.C. 601et seq.). Because this rule approvespreexisting requirements under statelaw and does not impose any additionalenforceable duty beyond that requiredby state law, it does not contain anyunfunded mandate or significantly oruniquely affect small governments, asdescribed in the Unfunded MandatesReform Act of 1995 (Public Law 104–4).For the same reason, this rule also doesnot significantly or uniquely affect thecommunities of tribal governments, asspecified by Executive Order 13084 (63FR 27655, May 10, 1998). This rule willnot have substantial direct effects on thestates, on the relationship between thenational government and the states, oron the distribution of power andresponsibilities among the variouslevels of government, as specified inExecutive Order 13132 (64 FR 43255,August 10, 1999), because it merelyapproves a state rule implementing aFederal standard, and does not alter therelationship or the distribution of powerand responsibilities established in theCAA. This rule also is not subject toExecutive Order 13045 (62 FR 19885,April 23, 1997), because it is noteconomically significant.

In reviewing SIP submissions, ourrole is to approve state choices,provided that they meet the criteria ofthe CAA. In this context, in the absenceof a prior existing requirement for thestate to use voluntary consensusstandards (VCS), we have no authorityto disapprove a SIP submission forfailure to use VCS. It would thus beinconsistent with applicable law forEPA, when it reviews a SIP submission,to use VCS in place of a SIP submissionthat otherwise satisfies the provisions ofthe CAA. Thus, the requirements ofsection 12(d) of the NationalTechnology Transfer and AdvancementAct of 1995 (15 U.S.C. 272 note) do notapply. As required by section 3 ofExecutive Order 12988 (61 FR 4729,February 7, 1996), in issuing this rule,we have taken the necessary steps toeliminate drafting errors and ambiguity,minimize potential litigation, andprovide a clear legal standard foraffected conduct. EPA has compliedwith Executive Order 12630 (53 FR8859, March 15, 1988) by examining thetakings implications of the rule inaccordance with the ‘‘AttorneyGeneral’s Supplemental Guidelines forthe Evaluation of Risk and Avoidance ofUnanticipated Takings’’ issued underthe Executive Order. This rule does notimpose an information collectionburden under the provisions of the

Paperwork Reduction Act of 1995 (44U.S.C. 3501 et seq.).

The Congressional Review Act, 5U.S.C. 801 et seq., as added by the SmallBusiness Regulatory EnforcementFairness Act of 1996, generally providesthat before a rule may take effect, theagency promulgating the rule mustsubmit a rule report, which includes acopy of the rule, to each House of theCongress and to the Comptroller Generalof the United States. We will submit areport containing this rule and otherrequired information to the UnitedStates Senate, the United States Houseof Representatives, and the ComptrollerGeneral of the United States prior topublication of the rule in the FederalRegister. A major rule cannot take effectuntil 60 days after it is published in theFederal Register. This action is not a‘‘major rule’’ as defined by 5 U.S.C.804(2).


List of Subjects 40 CFR Part 52Environmental protection, Air

pollution control, Hydrocarbons,Incorporation by reference,Intergovernmental relations, Ozone,Reporting and recordkeepingrequirements.



PART 52—[AMENDED]




2. In § 52.1320(c) the table is amendedunder Chapter 5 by revising the entryfor ‘‘10–5.451’’ to read as follows:


* * * * *(c) * * *



EPA-APPROVED MISSOURI REGULATIONS

Missouri citation Title State effectivedate

EPA approvaldate Explanation

Missouri Department of Natural Resources

* * * * * * *Chapter 5—Air Quality Standards and Air Pollution Control Regulations for the St. Louis Metropolitan Area

* * * * * * *10–5.451 ........... Control of Emissions From Aluminum Foil Rolling ....................................... 09/30/00 7/20/01 66 FR

37908........................

* * * * * * *



40 CFR Part 52

[PA168–4109a; FRL–7013–7]

Approval and Promulgation of AirQuality Implementation Plans;Pennsylvania; Control of VOCs FromWood Furniture Manufacturing,Surface Coating Processes and OtherMiscellaneous Revisions


SUMMARY: EPA is approving revisions tothe Commonwealth of PennsylvaniaState Implementation Plan (SIP)submitted on October 4, 2000 by thePennsylvania Department ofEnvironmental Protection (DEP). Therevisions include the adoption of newVOC regulations for wood furnituremanufacturing operations. Theserevisions also add new definitions, andamend or delete certain existingdefinitions for terms used in regulationspertaining to volatile organic compound(VOC) sources. The revisions also clarifythe requirements Pennsylvania’s surfacecoating regulations. Lastly, the revisionsinclude minor amendments toPennsylvania’s regulations pertaining tosampling and testing methods. EPA isapproving these revisions to theCommonwealth of Pennsylvania SIP inaccordance with the requirements of theClean Air Act (CAA).DATES: This rule is effective onSeptember 18, 2001 without furthernotice, unless EPA receives adversewritten comment by August 20, 2001. IfEPA receives such comments, it willpublish a timely withdrawal of thedirect final rule in the Federal Register

and inform the public that the rule willnot take effect.ADDRESSES: Written comments shouldbe mailed to David L. Arnold, Chief, AirQuality Planning & Information ServicesBranch, Mailcode 3AP21, U.S.Environmental Protection Agency,Region III, 1650 Arch Street,Philadelphia, Pennsylvania 19103.Copies of the documents relevant to thisaction are available for publicinspection during normal businesshours at the Air Protection Division,U.S. Environmental Protection Agency,Region III, 1650 Arch Street,Philadelphia, Pennsylvania 19103, theAir and Radiation Docket andInformation Center, U.S. EnvironmentalProtection Agency, 401 M Street, SW.,Washington, DC 20460, and thePennsylvania Department ofEnvironmental Protection, Bureau of AirQuality, P.O. Box 8468, 400 MarketStreet, Harrisburg, Pennsylvania 17105.FOR FURTHER INFORMATION CONTACT: RoseQuinto, (215) 814–2182 or EllenWentworth, (215) 814–2034, at the EPARegion III address above, or by e-mail [email protected] [email protected]

SUPPLEMENTARY INFORMATION:

I. Description of the SIP Revision andEPA’s Action

The information in this section isorganized as follows:A. What Action Is EPA Taking Today?B. What Are the Provisions of the New and

Revised Regulations?C. Why Is EPA Approving These SIP

Revisions?D. What Is the Process for EPA Approval?

A. What Action Is EPA Taking Today?

EPA is approving revisions to theCommonwealth of Pennsylvania SIPwhich were submitted on October 4,2000 by the Pennsylvania DEP. TheseSIP revisions amend 25 PA Code,Chapter 121, General Provisions, section121.1, Definitions, to include the

addition of new definitions, and therevision or deletion of certain existingdefinitions used in Chapter 129.

We are also approving revisions to 25PA Code, Chapter 129, Standards forSources, to add new sections, 129.101–129.107, Wood Furniture ManufacturingOperations, which establishpresumptive reasonably availablecontrol technology (RACT) for woodmanufacturing operations.

We are also approving revisions to 25PA Code, Chapter 129, Standards forSources, section 129.52, Surface CoatingProcesses, which clarifies which woodfurniture manufacturing facilities aresubject to section 129.52 and sections129.101–129.107.

Finally, we are approving revisions to25 PA Code, Chapter 139, Sampling andTesting, section 139.4, References, toreflect the correct name and address forthe Pennsylvania Department ofEnvironmental Protection and theBureau of Air Quality, and section139.14, Emissions of VOCs, to requirethat the test methods and procedures forthe content of total volatiles, solids andexempt solvents be equivalent to thosefound at subsection 139.4(1) and (5).

B. What Are the New and RevisedRegulations?

Chapter 121, General Provisions—Additions, Revisions, Deletions toSection 121.1, Definitions

This SIP revision adds definitions andrevises or deletes certain existingdefinitions to Chapter 121, GeneralProvisions, section 121.1 Definitions, forterms used in the substantive provisionsof Chapter 129, Pennsylvania’sregulations which contain VOCemission standards.

Additional definitions are providedfor the following: Adhesive, Alternativemethod, As applied, As Supplied,Basecoat, CPDS—Certified Product DataSheet, Coating, Coating solids or solids,Compliant coating, Continuous coater,Conventional air spray, Cosmetic



specialty coatings, Enamel, Equivalentmethod, MSDS—Material Safety DataSheet, Nonpermanent final finish,Normally closed container, Pollutionprevention, Sealer, Stain, Strippablespray booth coating, Substrate, Thinner,Touch-up and repair, Wash-offoperations, Waterborne coating, Woodfurniture, Wood furniture component,and Wood furniture manufacturingoperations.

The following definitions have beendeleted to eliminate inconsistenciesbetween definitions for the existingsurface coating requirements in section129.52, and the newly adoptedpresumptive RACT requirements forwood furniture manufacturingoperations in sections 129.101–129.107:Clear sealers, Opaque ground coats andenamels, Other coatings,Semitransparent spray stains, andSemitransparent wiping and glazingstains.

These amendments also includerevisions to the following existingdefinitions: Dip coating, Miscellaneousmetal parts and products, Process,Surface coating process, Topcoat, VOC-volatile organic compound, andWashcoat.

Chapter 129, Standard for Sources—Revisions to Section 129.52, SurfaceCoating Processes

The amendments to section 129.52,Surface Coating Processes, serve toclarify and simplify existingrequirements for surface coatingprocesses. Summaries of the revisedportions of section 129.52 are listedbelow.

Subsection 129.52(b)(1)—Theamendments delete the existinglanguage requiring adjustment to astandard solvent density and a solidsbasis. This adjustment is incorporatedinto revisions relating to allowablecontent of VOCs in surface coatings byprocess.

Subsection 129.52(b)(1)(i)—Thisamendment adds an equation forcalculating the VOC content of the ‘‘asapplied’’ coating on the basis of weightof VOC per volume of coating solids.

Subsection 129.52(b)(1)(ii)—Thisamendment adds an equation forcalculating the VOC content of dipcoatings on a 30-day rolling averagebasis. The methodology for calculatingthe VOC content includes the gallons ofthinner added to the coating in theprocess over any consecutive 30-dayperiod to replace evaporated solvent.

Subsection 129.52(b)(1)(iii)—Thisamendment adds an equation forcalculating the VOC content on the basisof weight of VOC per weight of coatingssolids.

Subsection 129.52(b)(1)(iv)—Theequation for dip-coating operations hasbeen deleted because it would haveestablished more stringent requirementsthan the Federal Control TechniqueGuideline (CTG) for Wood FurnitureManufacturing Operations. Paragraph(v) has been renumbered.

Subsection 129.52(b)2—The existingequation for calculating the percentageof emission reductions needed forcompliance purposes when usingcontrol equipment has been deleted. Anew equation has been added forcalculating the overall efficiency of thecontrol system based on the new unitsof measurement in the regulation, whichis the weight of VOC per volume ofsolids and weight of VOC per weight ofsolids.

Subsection 129.52(c)—Thisamendment deletes the existing list ofrequired records and adds recordkeeping requirements that areappropriate to the required methodsused to evaluate compliance asspecified in the Source Testing Manual.

Subsection 129.52(f)—Amendmentsto this subsection add terms that areconsistent with the ‘‘roller coating,’’ and‘‘cosmetic specialty coatings’’definitions specified in section 121.1,Definitions.

Subsection 129.52(g)—Thisamendment moves the existingrequirement for maintaining records fortwo years from section 129.52(c) tosection 129.52(g) to emphasize and addclarity to the amendments.

Subsection 129.52(h)—Thisamendment adds an exemption fromVOC emission limitations for smallquantities of coatings used fordetermination of product quality andcommercial acceptance, touch-up andrepair, and other small quantitycoatings. This subsection requires thefacility owner or operator to submit awritten request to the Department toexempt quantities of coating which donot exceed 50 gallons a year for a singlecoating, and a total of 200 gallons eachyear for all coatings combined for thefacility. The Department’s writtenapproval must be obtained prior to theuse of the exempted coatings.

Chapter 129, Section 129.91, Control ofMajor Sources of NOX and VOCs—Revisions to Section 129.91Subsection(a)

The amendment to subsection(a)clarifies the RACT requirementsapplicable to wood furnituremanufacturing facilities subject tosection 129.52, Category 11 (relating tosurface coating processes) and sections129.101–129.107 (wood furniture andmanufacturing operations).

Chapter 129, Standards for Sources—Addition of Sections 129.101–129.107,Wood Furniture ManufacturingOperations

This SIP revision adds sections129.101–107, Wood FurnitureManufacturing Operations, to 25 PACode, Chapter 129, Standards forSources, establishing requirements tocontrol VOC emissions from woodfurniture manufacturing operationsincluding wood furniture finishing,cleaning, and wash-off operations.These regulations are based upon EPA’sCTG for the control of VOCs from woodfurniture manufacturing operations andestablish presumptive RACTrequirements for certain woodmanufacturing operations. Summary ofthe provisions of the new regulationsare provided below.

Section 129.101, General Provisions andApplicability

Subsection 129.101(a) states thatsections 129.101–129.107 apply to eachwood furniture manufacturing facilitylocated in a Pennsylvania countylocated in the northeast ozone transportregion or in a county classified assevere, serious, moderate or marginalnonattainment for ozone, and whichemits or has the potential to emit (PTE)25 tons or more per year of VOCs fromwood furniture manufacturingoperations. The most stringent VOCemission limits will apply to a woodfurniture manufacturing operation thatmeets the applicable threshold limits forboth section 129.52, relating to surfacecoating processes, and sections129.101–129.107.

Subsection 129.101(b) requires theowner or operator of an existing woodfurniture manufacturing facility subjectto the conditions of subsection (a) aboveto comply with the requirements of thenew regulations within one year fromthe effective date of the finalrulemaking. This compliance deadlinedoes not apply to facilities which haveRACT determinations approved by EPAas SIP revisions prior to June 10, 2000.

Subsection 129.101(c) provides acompliance deadline for the owner oroperator of an existing wood furnituremanufacturing facility which increasesits actual emissions or PTE to 25 tonsper year or more of VOCs from woodfurniture manufacturing operations tocomply with this section and sections129.102–129.107. Within one (1) yearafter increasing actual VOC emissions orthe PTE to 25 tons per year or more, theowner or operator of the affected facilitymust comply with sections 129.101–129.107, except for those facilitieswhich have RACT determinations



approved by EPA as SIP revisions priorto June 10, 2000.

Subsection 129.101(d) establishes acompliance date for existing facilitiesthat install new sources. New sourcesinstalled at an existing facility mustmeet, at a minimum, the VOC emissionstandards of section 129.102 uponinstallation of the new source. Thisprovision does not exempt a newsource(s) installed at an existing facilityfrom applicable new source reviewrequirements.

Subsection 129.101(e) describes theinterface between the existing surfacecoating requirements in section 129.52,Surface Coating Processes, and thepresumptive RACT requirements forwood furniture manufacturing. If actualor potential VOC emissions wouldsubject the facility to both sections129.52 and 129.101–129.107, the owneror operator would only have todemonstrate compliance with the moststringent emissions limitations.

Subsection 129.101(f) describes theexemptions from the VOC emissionlimits in section 129.102. The limits inthis section do not apply to a coatingused exclusively for determiningproduct quality and commercialacceptance, touch-up and repair, andother small quantity coatings, if thequantity of coating does not exceed 50gallons per year for a single coating, anda total of 200 gallons per year for allcoatings combined for the facility. Theowner or operator of the facility mustsubmit a written request to theDepartment which must be approvedprior to the use of the coatings.

Section 129.102. Emission StandardThis section includes the emission

limits of VOCs for wood furnituremanufacturing sealers, topcoats, andstrippable spray booth coatings that areactually used for coating the substrate,and the methodology for compliance.

Section 129.103. Work PracticeStandards

This section establishes work practicestandards to reduce VOC emissionsfrom wood furniture manufacturingoperations. The work practice standardsinclude the development of a workpractice implementation plan andoperator training program, a leakinspection and maintenance plan, and acleaning and wash-off solventaccounting system.

Subsection 129.103(a) requires theowner or operator of a facility subject tothe requirements in sections 129.101–129.107 to develop and maintain awritten work practice implementationplan no later than 60 days after thecompliance date specified in section

129.101(b) or (c). The work practiceimplementation plan must include anoperator training program, spray boothcleaning requirements, storagerequirements, and applicationequipment requirements. The owner oroperator of the facility must complywith each provision of the work practiceimplementation plan. The written planmust be available for inspection by theDepartment. If the Departmentdetermines that the work practiceimplementation plan does notadequately address the criteria specifiedin subsections 129.103(b)–(j), the owneror operator must revise the plan.

Subsection 129.103(b) describes theelements of the operator trainingprogram. A copy of the requiredoperator training program must bemaintained with the work practiceimplementation plan. All new andexisting personnel, including contractpersonnel, who are involved in coating,cleaning or wash-off operations, orimplementation of the requirements insections 129.101–129.107, mustcomplete the operator training programaccording to the dates specified in thissubsection.

Subsection 129.103(c) lists therequirements for the leak inspection andmaintenance plan including inspectionschedules, inspection documentationmethods, and repair and maintenancetime frames.

Subsection 129.103(d) describes therequirements pertaining to the cleaningand wash-off solvent accounting system.A solvent accounting form must bedeveloped for recording informationpertaining to the solvents used incleaning and wash-off operations.

Subsection 129.103(e) provides workpractices for spray booth cleaning. Theowners or operators of a facility may notuse compounds containing more than8.0 percent by weight of VOC forcleaning spray booth components otherthan conveyors, continuous coaters andtheir enclosures, or metal filters, unlessthe spray booth is being refurbished.When a spray booth is beingrefurbished, no more than one gallon oforganic solvent can be used to preparethe booth prior to applying the newstrippable booth coating. The strippablebooth coating shall contain no morethan 0.8 lb VOC/lb solids (0.8 kg VOC/kg solids), as applied.

Section 129.03(f) pertains to storagerequirements. It requires the owner oroperator of a facility to use normallyclosed containers for storing coating,cleaning and wash-off materials.

Subsection 129.103(g) describes thework practice standards for applicationequipment and limits the use ofconventional air spray guns. The use of

conventional air spray guns isprohibited if the conventional air sprayguns are not used in accordance withthe procedures in subsection129.103(g)(1)–(6).

Subsection 129.103(h) describes thework practice standards used for linecleaning solvent. The solvent used forline cleaning must be pumped ordrained into a normally closedcontainer.

Subsection 129.103(i) describes thework practice standards for the solventused to clean spray guns. The solventused to clean spray guns must becollected into a normally closedcontainer.

Subsection 129.103(j) describes thework practice standards for the controlof emissions from wash-off operations.The emissions from wash-off operationsmust be controlled by using normallyclosed containers for the wash-offoperations, and by tilting or rotating thepart to drain as much of the solvent offas possible.

Section 129.104, ComplianceProcedures and MonitoringRequirements

This section describes complianceprocedures and monitoringrequirements used to demonstratecompliance with the presumptive RACTregulations for wood furnituremanufacturing operations. The owner oroperator of a facility subject to theemission standards of section 129.102must demonstrate compliance throughthe use of compliant coatings, add-oncontrol devices, an emissions-averagingapproach, or a combination of thesecompliance methods. When acombination of compliance options isselected, the owner or operator mustdemonstrate compliance with eachapplicable compliance technique.

Subsection 129.104(a) describes themethods and procedures an owner oroperator of the facility must used todemonstrate compliance with the VOCemission standards in section 129.102(relating to emission standards). Theowner or operator must maintain aCertified Product Data Sheet (CPDS) foreach coating that is subject to the VOCemission limits and maintain recordswhich demonstrate that each coating, asapplied, meets the applicable VOCemission limit. When a control systemis used to meet the VOC emission limits,the overall control efficiency must becalculated using the equations insubsection 129.104(a)(2).

Subsection 129.104(b) describes therequirements for initial compliance.

Subsection 129.104(b)(1) requires theowners or operators of a facilitydemonstrating compliance through the



use of compliant coatings to submit aninitial compliance status report inaccordance with subsection 129.106(a)specifying whether compliant sealers,topcoats and strippable spray boothcoatings are being used by the facility.

Subsection 129.104(b)(2) explains theinitial compliance requirements forfacilities using a continuous coater toapply sealers, topcoats, or both. Todemonstrate initial compliance, theowners or operators are required tosubmit an initial compliance statusreport. The report must specify eitherthat compliant sealers, topcoats, or both,as determined by the VOC content of thecoating in the reservoir and ascalculated from records, are being used,or that compliant sealers, topcoats, orboth, as determined by the VOC contentof the coating in the reservoir are beingused, and the viscosity of the coating inthe reservoir is being monitored.

Subsection 129.104(b)(3) requiresusers of control systems to include theoperating parameter values to bemonitored for the capture device, andthe results of the initial performancetesting, in the initial compliance report.The procedures and test methods mustmeet the requirements specified inChapter 139 (relating to sampling andtesting).

Subsection 129.104(b)(4) requires thatan owner or operator of a facility subjectto the work practice standards of section129.103 submit an initial compliancestatus report as required by subsection129.106(a).

Subsection 129.104(c) pertains tocontinuous compliance demonstrations,and requires the owner or operator of afacility subject to the presumptiveRACT requirements to submit acompliance certification in writing tothe Department with the semiannualreport required under subsection129.106(b).

Subsection 129.104(c)(1) requiresfacilities that use compliant coatings todemonstrate continuous compliance tomaintain records and prove that thecoatings used in their operations arecompliant coatings. The compliancecertification must also state thatcompliant sealers, topcoats, or both, andstrippable spray booth coatings havebeen used each day in the semiannualreporting period and must identify thedays of noncompliance and the reasonsfor noncompliance.

Subsection 129.104(c)(2) explains thecontinuous compliance requirements forfacilities using continuous coaters toapply sealers, topcoats, or both. Thecompliance certification submitted tothe Department must include astatement that compliant sealers,topcoats, or both have been used each

day in the semiannual reporting period.If the facility has not been in continuouscompliance, the certification mustinclude the days of noncompliance, andthe reason for noncompliance.

Subsection 129.104(c)(3) specifies therequirements for facilities thatdemonstrate continuous compliance byusing a control system. Owners oroperators of affected sources arerequired to install, calibrate, maintainand operate monitoring equipment thathas been approved, in writing, by theDepartment. If the facility is using acontrol system that is not described insection 129.104, approval by theDepartment must be obtained prior tousing the control system. The requestfor approval of the control system mustinclude the following: a description ofthe system, test data verifying theperformance of the system, theappropriate operating parameter valuesthat will be monitored, and themonitoring device that will be used todemonstrate continuous compliancewith the standard. The compliancecertification for the control system mustspecify that the control system has notbeen operated at a daily average valuegreater than or less than (as appropriate)the operating parameter value for eachday in the semiannual reporting period.If the operating parameter value is notin compliance, the certification mustidentify the days of noncompliance andthe reason for noncompliance.

Subsection 129.104(c)(4) requires thateach owner or operator of a facility thatis subject to the work practice standardsof section 129.103 demonstratecontinuous compliance by following thework practice implementation plan. Thecompliance certification must state thatthe work practice implementation planis being followed, or should otherwiseidentify the periods of noncompliancewith the work practice standards andthe reasons for noncompliance.

Subsection 129.104(d) requirescompliance certifications to be signedby a responsible official of the company.In addition to the certificationrequirements of this section, thecertification must state that based oninformation and inquiry, the statementsand information in the document aretrue, accurate and complete.

Section 129.105, Record keepingRequirements

This section establishes recordkeeping requirements for woodfurniture manufacturing operations. Theowners or operators of affected facilitiesmust keep adequate records todemonstrate compliance with therequirements in sections 129.101–129.107. The records must be

maintained for at least 5 years. Thissection also includes specific recordkeeping requirements for facilities usingcompliant coatings, continuous coaters,control systems, or a combination ofthese methods. The record keepingrequirements of subsections (a), (b), and(c) are to include the following:

(1) A certified product data for eachcoating and strippable spray boothcoating.

(2) Records of the VOC content of theas applied coating. lbs VOC/lb solids (kgVOC/kg solids), of each coating andstrippable spray booth coating, andcopies of data sheets documenting howthe as applied values were determined.Owners or operators applying sealers,topcoats or both, using continuouscoaters must also keep records ofsolvent and coating additions to thecontinuous coater reservoir andviscosity measurements.

Subsection 129.105(d) prescribesadditional record keeping requirementsfor control systems which includecopies of the calculations to support theequivalency of using a control systemand records of the daily average valueof each continuously monitoredparameter for each operating day. If allrecorded values for a monitoredparameter are within the rangeestablished during the initialperformance test, the owner or operatormay record that all values were withinthe range rather than calculating andrecording an average for that day.

Subsection 129.105(e) specifies that acopy of the work practiceimplementation plan and all recordsassociated with meeting therequirements of that plan must bemaintained on site. The records kept forthe work implementation plan must alsosatisfy the record keeping requirementsfor applicable provisions of the workpractice implementation plan includingthe operator training program, the leakinspection and maintenance plan, thecleaning and wash-off solventaccounting system, and restrictions onthe use of conventional air spray guns.

Subsection 129.105(f) requires theowner or operator of a facility thatcomplies with section 129.103 orsection 129.104(a)(1) to maintain a copyof the compliance certificationssubmitted in accordance with section129.106(a) and the semiannual reportsrequired by section 129.106(b).

Subsection 129.105(g) requires theowner or operator of a facility tomaintain a copy of the other informationsubmitted with the initial status reportrequired under 129.106(a) and thesemiannual reports required by section129.106(b).



Section 129.106, ReportingRequirements

This section establishes reportingrequirements for wood furnituremanufacturing operations subject to thepresumptive RACT requirements ofsections 129.101–129.107.

Subsection 129.106(a) requiresowners or operators of affected facilitiesto submit an initial compliance report tothe Department no later than 60 daysafter the compliance date specified insection 129.101(b) and (c). The reportmust include the items required undersection 129.104(b).

Subsection 129.106(b) requires thesubmittal of semiannual reportscertifying compliance for the previous 6months of wood furnituremanufacturing operations. The firstreport should be submitted to theDepartment within 30 calendar daysafter the end of the first six-monthperiod following the compliance date.Subsequent reports must be submittedwithin 30 calendar days after the end ofeach six-month period following thefirst report. Each semiannual reportmust include the information requiredby section 129.104(c) and (d), astatement of whether the facility was incompliance or noncompliance and, ifthe facility was in noncompliance, themeasures taken to bring the facility intocompliance.

Section 129.107, Special Provisions forFacilities Using an Emission AveragingApproach

This section allows the owners oroperators of manufacturing operationsto comply with the VOC emissionlimitations by averaging emissionsacross wood furniture finishing linesusing the emissions averaging approach.The wood furniture manufacturingoperation may use stains, basecoats,washcoats, sealers, and topcoats in anyemissions averaging program that meetsthe equivalency requirements in section129.51(a). The facility may use othercoatings for its emissions averagingprogram if the averaging approach meetsthe equivalency requirements. Theemissions averaging program submittedto the Department for approval prior touse must include a summary of thereasons why the facility would like tocomply with the emission limitationsthrough an equivalency determinationusing emissions averaging procedures.The program summary must alsoinclude an explanation of howaveraging can be used to meet theemission limitations and a descriptionof the types of coatings that will beincluded in the facility’s emissionsaveraging program. An additional 10%

reduction in emissions is requiredunder subsection (b) for affectedfacilities using the emissions averagingapproach.

Subsection 129.107(c) requires theowner or operator of the facility tosubmit a written summary to theDepartment explaining why theemissions averaging program should beused to demonstrate compliance. Thewritten summary must also explain howemissions averaging can be used to meetthe emissions limitations.

Subsection 129.107(d) requires theowner or operator of the facility todescribe the types of coatings that willbe included in the emissions averagingprogram. Coatings used in an averagingprogram may include basecoats, sealers,stains, topcoats, and washcoats.Coatings in the emissions averagingprogram cannot be applied using acontinuous coater unless the amount ofcoating used is determined on a dailybasis.

Subsection 129.107(e) specifies thatthe baseline for each coating included inthe emissions averaging program shallbe the lower of the actual or allowableemission rate as of the effective date ofthese regulations. The baseline emissionrate for the facility may not be higherthan what was presumed in the 1990emissions inventory for the facilityunless the Department has accountedfor the increase in emissions as growth.

Subsection 129.107(f) provides thatthe quantification procedures used inthe emissions averaging program mustdemonstrate that the facility’s actualemissions are less than the allowableemissions.

Subsection 129.107(g) requires thatthe emissions averaging programsubmitted to the Department includemonitoring, record keeping andreporting procedures that will allowDepartment inspectors or owners oroperators of facilities using an averagingapproach to determine the facility’scompliance status on a daily basis. Themonitoring, record keeping andreporting procedures must also includemethods for determining required datawhen monitoring, record keeping andreporting violations result in missing,inadequate or erroneous monitoring andrecord keeping.

Chapter 139, Sampling and Testing,Subchapter A. Sampling and TestingMethods and Procedures—Revisions toSection 139.4, References, and 139.14,Emissions of VOCs

Section 139.4, References—Therevisions to this section reflect the namechange from the PennsylvaniaDepartment of Environmental Resourcesto the Pennsylvania Department of

Environmental Protection, and the namechange from the Bureau of Air QualityControl to the Bureau of Air Quality.

Section 139.14, Emissions of VOCs—The amendments to this section requirethat the test methods and procedures forthe content of total volatiles, solids andexempt solvents be equivalent to thoselisted in section 139.4(1), Standards ofPerformance for New StationarySources, and 139.4(5), Source TestingManual.

C. Why Is EPA Approving These SIPRevisions?

Section 183(a) of the Clean Air Act(CAA) requires the EPA Administratorto issue control techniques guidelines(CTG)s for 11 categories of stationarysources of VOCs. On May 20, 1996, theEPA published a CTG document forcontrol of VOCs from wood furniturefinishing, cleaning and washoffoperations (61 FR 25223 (May 20, 1996).This CTG established a ‘‘presumptivenorm’’ RACT for the control of VOCs forwood furniture manufacturing facilitieslocated in marginal, moderate, serious,and severe ozone nonattainment areasor ozone transport regions, that emit orhave the PTE 25 tons per year or moreof VOCs. The CTG and model rule forwood furniture manufacturingoperations were developed by the EPAafter reaching consensus amongrepresentatives from the environmentalcommunity, the wood furnitureindustry, and state permitting agencies.On September 27, 1996, EPA publishedan addendum to the CTG whichspecified dates for the adoption andimplementation of the standards. EPA isapproving the addition of sections129.101–129.107, Wood FurnitureManufacturing Operations to 25 PACode, Chapter 129 because this additionimplements the Federal presumptiveRACT requirements for wood furnituremanufacturing operations established inEPA’s CTG for wood furnituremanufacturing operations as mandatedby Section 182 of the CAA.

EPA is approving the additions,deletions, and revisions to definitions inChapter 121, section 121.1, Definitions,because they are terms used in thesubstantive sections of Chapter 129 andsatisfy all applicable Federalrequirements and policies.

The revisions to section 129.52,relating to surface coating processes, arethe fourth in a series of changesimplementing the Commonwealth’sRegulatory Basics Initiative (RBI) andExecutive Order 1996–1. As part of theCommonwealth’s RBI, the PennsylvaniaDEP was tasked to review theCommonwealth’s existing regulationsand identify those that were more



stringent than Federal requirements,were obsolete, redundant, or no longernecessary. EPA is approving therevisions to section 129.52, SurfaceCoating Processes, because they clarifythe existing requirements for surfacecoating processes.

The amendment to section 129.91,Control of Major Sources of NOX andVOCs subsection (a) is approved since itwill serve to clarify the relationshipbetween the existing case-by-case RACTrequirements and the newly adoptedpresumptive RACT requirements forwood furniture manufacturingoperations.

The revisions to Chapter 139, sections139.4 and 139.14 are approved sincethey were also identified during theCommonwealth’s Regulatory BasicsInitiative. As stated previously, therevision to section 139.4 corrects thename for the Department, and therevision to section 139.14 adds severalapplicable terms.

D. What Is the Process for EPAApproval of This Action?

EPA is publishing this rule withoutprior proposal because the Agencyviews this as a noncontroversialamendment and anticipates no adversecomment. However, in the ‘‘ProposedRules’’ section of today’s FederalRegister, EPA is publishing a separatedocument that will serve as the proposalto approve the SIP revision if adversecomments are filed. This rule will beeffective on September 18, 2001 withoutfurther notice unless EPA receivesadverse comment by August 20, 2001. IfEPA receives adverse comment, EPAwill publish a timely withdrawal in theFederal Register informing the publicthat the rule will not take effect. EPAwill address all public comments in asubsequent final rule based on theproposed rule. EPA will not institute asecond comment period on this action.Any parties interested in commentingmust do so at this time. Please note thatif EPA receives adverse comment on anamendment, paragraph, or section ofthis rule and if that provision may besevered from the remainder of the rule,EPA may adopt as final those provisionsof the rule that are not the subject of anadverse comment.

II. Final ActionEPA is approving the revisions to the

Commonwealth of Pennsylvania SIPsubmitted by the Pennsylvania DEP onOctober 4, 2000. The revisions amendChapter 121, General Provisions, section121.1, Definitions; Chapter 129,Standards for Sources, section 129.52,Surface Coating Processes; Chapter 129,Standards for Sources, section 129.91,

Control of Major Sources of NOX andVOCs, subsection (a); add sections129.101–129.107, Wood FurnitureManufacturing Operations to Chapter129, Standards for Sources; and amendChapter 139, Sampling and Testing,sections 139.4 and 139.14. i

III. What Are the AdministrativeRequirements?

A. General RequirementsUnder Executive Order 12866 (58 FR

51735, October 4, 1993), this action isnot a ‘‘significant regulatory action’’ andtherefore is not subject to review by theOffice of Management and Budget. Forthis reason, this action is also notsubject to Executive Order 13211,‘‘Actions Concerning Regulations ThatSignificantly Affect Energy Supply,Distribution, or Use’’ (66 Fed. Reg.28355 May 22, 2001). This actionmerely approves state law as meetingFederal requirements and imposes noadditional requirements beyond thoseimposed by state law. Accordingly, theAdministrator certifies that this rulewill not have a significant economicimpact on a substantial number of smallentities under the Regulatory FlexibilityAct (5 U.S.C. 601 et seq.). Because thisrule approves pre-existing requirementsunder state law and does not imposeany additional enforceable duty beyondthat required by state law, it does notcontain any unfunded mandate orsignificantly or uniquely affect smallgovernments, as described in theUnfunded Mandates Reform Act of 1995(Public Law 104–4). This rule also doesnot have a substantial direct effect onone or more Indian tribes, on therelationship between the FederalGovernment and Indian tribes, or on thedistribution of power andresponsibilities between the FederalGovernment and Indian tribes, asspecified by Executive Order 13175 (65FR 67249, November 9, 2000), nor willit have substantial direct effects on theStates, on the relationship between thenational government and the States, oron the distribution of power andresponsibilities among the variouslevels of government, as specified inExecutive Order 13132 (64 FR 43255,August 10, 1999), because it merelyapproves a state rule implementing aFederal standard, and does not alter therelationship or the distribution of powerand responsibilities established in theClean Air Act. This rule also is notsubject to Executive Order 13045 (62 FR19885, April 23, 1997), because it is noteconomically significant.

In reviewing SIP submissions, EPA’srole is to approve state choices,provided that they meet the criteria of

the Clean Air Act. In this context, in theabsence of a prior existing requirementfor the State to use voluntary consensusstandards (VCS), EPA has no authorityto disapprove a SIP submission forfailure to use VCS. It would thus beinconsistent with applicable law forEPA, when it reviews a SIP submission,to use VCS in place of a SIP submissionthat otherwise satisfies the provisions ofthe Clean Air Act. Thus, therequirements of section 12(d) of theNational Technology Transfer andAdvancement Act of 1995 (15 U.S.C.272 note) do not apply. As required bysection 3 of Executive Order 12988 (61FR 4729, February 7, 1996), in issuingthis rule, EPA has taken the necessarysteps to eliminate drafting errors andambiguity, minimize potential litigation,and provide a clear legal standard foraffected conduct. EPA has compliedwith Executive Order 12630 (53 FR8859, March 15, 1988) by examining thetakings implications of the rule inaccordance with the ‘‘AttorneyGeneral’s Supplemental Guidelines forthe Evaluation of Risk and Avoidance ofUnanticipated Takings’’ issued underthe executive order. This rule does notimpose an information collectionburden under the provisions of thePaperwork Reduction Act of 1995 (44U.S.C. 3501 et seq.).

B. Submission to Congress and theComptroller General

The Congressional Review Act, 5U.S.C. 801 et seq., as added by the SmallBusiness Regulatory EnforcementFairness Act of 1996, generally providesthat before a rule may take effect, theagency promulgating the rule mustsubmit a rule report, which includes acopy of the rule, to each House of theCongress and to the Comptroller Generalof the United States. EPA will submit areport containing this rule and otherrequired information to the U.S. Senate,the U.S. House of Representatives, andthe Comptroller General of the UnitedStates prior to publication of the rule inthe Federal Register. This rule is not a‘‘major rule’’ as defined by 5 U.S.C.804(2).

C. Petitions for Judicial ReviewUnder section 307(b)(1) of the Clean

Air Act, petitions for judicial review ofthis action must be filed in the UnitedStates Court of Appeals for theappropriate circuit by September 18,2001. Filing a petition forreconsideration by the Administrator ofthis final rule approving revisions toPennsylvania’s volatile organiccompounds regulations, and theadoption of new regulations for woodfurniture manufacturing operations does



not affect the finality of this rule for thepurposes of judicial review nor does itextend the time within which a petitionfor judicial review may be filed, andshall not postpone the effectiveness ofsuch rule or action. This action may notbe challenged later in proceedings toenforce its requirements. (See section307(b)(2).


Environmental protection, Airpollution control, Hydrocarbons,Incorporation by reference,Intergovernmental relations, Ozone,Reporting and recordkeepingrequirements.

Dated: July 5, 2001.James W. Newsom,Acting Regional Administrator, Region III.

40 CFR part 52 is amended as follows:

PART 52—[AMENDED]



Subpart NN—Pennsylvania

2. Section 52.2020 is amended byadding paragraph (c)(152) to read asfollows:


* * * * *(c) * * *(152) Revisions to the Commonwealth

of Pennsylvania Regulations pertainingto certain VOC regulations submitted onOctober 4, 2000 by the PennsylvaniaDepartment of EnvironmentalProtection:

(i) Incorporation by reference.(A) Letter of October 4, 2000 from the

Pennsylvania Department ofEnvironmental Protection transmittingthe revisions to VOC regulations.

(B) Revisions to 25 PA Code, effectiveJune 10, 2000.

(1) Additions, Deletions andRevisions to Chapter 121, GeneralProvisions, section 121.1, Definitions.

(2) Revisions to Chapter 129,Standards for Sources, Sources of VOC,section 129.52, Surface CoatingProcesses.

(3) Revision to Chapter 129, Standardsfor Sources, section 129.91, Control ofMajor Sources of NOX and VOCs,subsection (a).

(4) Addition to Chapter 129,Standards for Sources of sections129.101–129.107, Wood FurnitureManufacturing Operations.

(5) Revisions to Chapter 139,Sampling and Testing, section 139.4,References, and section 139.14,Emissions of VOCs.

(ii) Additional Material.—Remainderof October 4, 2000 submittal.[FR Doc. 01–18186 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 52

[MD118–3073a; FRL–7014–1]

Approval and Promulgation of AirQuality Implementation Plans;Maryland; Control of VOC EmissionsFrom Organic Chemical Production


SUMMARY: EPA is taking direct finalaction to approve revisions to theMaryland State Implementation Plan(SIP). These revisions establishreasonable available control technology(RACT) to limit volatile organiccompound (VOC) emissions fromorganic chemical production. EPA isapproving these revisions in accordancewith the requirements of the Clean AirAct (CAA).DATES: This rule is effective onSeptember 18, 2001 without furthernotice, unless EPA receives adversewritten comment by August 20, 2001. IfEPA receives such comments, it willpublish a timely withdrawal of thedirect final rule in the Federal Registerand inform the public that the rule willnot take effect.ADDRESSES: Written comments shouldbe mailed to David L. Arnold, Chief, AirQuality Planning and InformationServices Branch, Mail Code 3AP21, U.S.Environmental Protection Agency,Region III, 1650 Arch Street,Philadelphia, Pennsylvania 19103.Copies of the documents relevant to thisaction are available for publicinspection during normal businesshours at the Air Protection Division,U.S. Environmental Protection Agency,Region III, 1650 Arch Street,Philadelphia, Pennsylvania 19103; theAir and Radiation Docket andInformation Center, U.S. EnvironmentalProtection Agency, 401 M Street, SW.,Washington, DC 20460; and MarylandDepartment of the Environment, 2500Broening Highway, Baltimore,Maryland, 21224.FOR FURTHER INFORMATION CONTACT: RoseQuinto, (215) 814–2182, or by e-mail [email protected] or Carol Febbo,(215) 814–2076, or by e-mail [email protected] or at the EPARegion III address above.


I. Background

On February 5, 2001, the State ofMaryland submitted formal revisions toits SIP. These revisions, submitted bythe Maryland Department of theEnvironment (MDE), consist ofamendments to COMAR 26.11.19Volatile Organic Compounds fromSpecific Processes to add a newregulation, COMAR 26.11.19.30 Controlof Volatile Organic Compounds fromOrganic Chemical Production.

II. Summary of the SIP Revision

The Code of Maryland Regulations26.11.19.30 Control of Volatile OrganicCompounds from Organic ChemicalProduction establishes RACT to controlVOCs from organic chemical productionsources located throughout the State ofMaryland. The subsections of theregulation are described below.

Subsections A. and B. Definitions andTerms Defined

These sections establish definitionsfor the terms ‘‘back-up control device,’’‘‘chemical intermediate,’’ ‘‘controldevice,’’ ‘‘organic chemical productioninstallation,’’ and ‘‘product condenser.’’

Subsection C. Applicability

In general, the regulations apply to aperson who owns or operates an organicchemical production installation at apremise that, on any day, has actualuncontrolled VOC emissions of 20pounds or more per day. However, thereare organic chemical productionfacilities to which COMAR 26.11.19.30does not apply. It does not apply to anorganic chemical productioninstallation that is subject to provisionsof the Federal Hazardous OrganicNESHAPs (National Emission Standardsfor Hazardous Air Pollutants). See 40CFR part 63, subparts F, G, H. Nor doesit apply to any process or installationthat is otherwise subject to regulationsunder COMAR 26.11.19 VolatileOrganic Compounds from SpecificProcesses except for COMAR26.11.19.01, 26.11.19 .02, and26.11.19.16.

Subsection D. General Requirements

(1) A person who owns or operates aninstallation at a premise that has totaluncontrolled VOC emissions of 100pounds or more per day shall duct eachprocess vent and exhaust line from anyinstallation with actual emissions of 20pounds or more per day, into a controldevice that has a VOC destruction orremoval efficiency of at least 90 percent,overall.



(2) A person who owns or operates aninstallation at a premise that has totaluncontrolled VOC emissions of 20pounds or more per day but less than100 pounds per day shall prepare amanual that identifies good operatingpractices and procedures designed tominimize VOC emissions from thepremises.

(3) The good operating practices andprocedures required in subsection D(2)shall be implemented by March 30,2001, and the manual be made availableto MDE upon request.

(4) A person who complies withsubsection D(1) and later cannot achievecompliance because of an unavoidableoutage or malfunction of the primarycontrol device shall either:

(a) Discontinue operation until theprimary control device is returned toproper service; or

(b) Use a back-up control device thatis approved by MDE.

(5) The back-up control device undersubsection D(4)(b) may not be usedmore than 10 percent of the annualoperating time of the affectedinstallation during any calendar yearunless a longer period is approved byMDE.

Subsection E. Demonstration ofCompliance

(1) Compliance shall be demonstratedusing the applicable VOC test methodsspecified in COMAR 26.11.01.04C orother test method approved by MDE.

(2) A product condenser that is partof an organic chemical installation isnot considered a control device.

EPA concurs with the MDE thatCOMAR 26.11.19.30 Control of VolatileOrganic Compounds from OrganicChemical Production establishes RACTto control VOCs from organic chemicalproduction sources located throughoutthe State of Maryland, and will result insignificant enforceable VOC emissionreductions. EPA has determined thatCOMAR 26.11.19.30 is approvable as aSIP revision.

III. Final ActionEPA is approving the SIP revisions

submitted by MDE on February 5, 2001to establish RACT to control VOCemissions from organic chemicalproduction. EPA is publishing this rulewithout prior proposal because theAgency views this as a noncontroversialamendment and anticipates no adversecomment. However, in the ‘‘ProposedRules’’ section of today’s FederalRegister, EPA is publishing a separatedocument that will serve as the proposalto approve the SIP revision if adversecomments are filed. This rule will beeffective on September 18, 2001 without

further notice unless EPA receivesadverse comment by August 20, 2001. IfEPA receives adverse comment, EPAwill publish a timely withdrawal in theFederal Register informing the publicthat the rule will not take effect. EPAwill address all public comments in asubsequent final rule based on theproposed rule. EPA will not institute asecond comment period on this action.Any parties interested in commentingmust do so at this time.

IV. Administrative Requirements

A. General Requirements

Under Executive Order 12866 (58 FR51735, October 4, 1993), this action isnot a ‘‘significant regulatory action’’ andtherefore is not subject to review by theOffice of Management and Budget. Forthis reason, this action is not subject toExecutive Order 13211, ‘‘ActionsConcerning Regulations ThatSignificantly Affect Energy Supply,Distribution, or Use’’ (see 66 FR 28355,May 22, 2001). This action merelyapproves state law as meeting federalrequirements and imposes no additionalrequirements beyond those imposed bystate law. Accordingly, theAdministrator certifies that this rulewill not have a significant economicimpact on a substantial number of smallentities under the Regulatory FlexibilityAct (5 U.S.C. 601 et seq.). Because thisrule approves pre-existing requirementsunder state law and does not imposeany additional enforceable duty beyondthat required by state law, it does notcontain any unfunded mandate orsignificantly or uniquely affect smallgovernments, as described in theUnfunded Mandates Reform Act of 1995(Public Law 104–4). This rule also doesnot have a substantial direct effect onone or more Indian tribes, on therelationship between the FederalGovernment and Indian tribes, or on thedistribution of power andresponsibilities between the FederalGovernment and Indian tribes, asspecified by Executive Order 13175 (65FR 67249, November 9, 2000), nor willit have substantial direct effects on theStates, on the relationship between thenational government and the States, oron the distribution of power andresponsibilities among the variouslevels of government, as specified inExecutive Order 13132 (64 FR 43255,August 10, 1999), because it merelyapproves a state rule implementing afederal standard, and does not alter therelationship or the distribution of powerand responsibilities established in theCAA. This rule also is not subject toExecutive Order 13045 (62 FR 19885,

April 23, 1997), because it is noteconomically significant.

In reviewing SIP submissions, EPA’srole is to approve state choices,provided that they meet the criteria ofthe CAA. In this context, in the absenceof a prior existing requirement for theState to use voluntary consensusstandards (VCS), EPA has no authorityto disapprove a SIP submission forfailure to use VCS. It would thus beinconsistent with applicable law forEPA, when it reviews a SIP submission,to use VCS in place of a SIP submissionthat otherwise satisfies the provisions ofthe CAA. Thus, the requirements ofsection 12(d) of the NationalTechnology Transfer and AdvancementAct of 1995 (15 U.S.C. 272 note) do notapply. As required by section 3 ofExecutive Order 12988 (61 FR 4729,February 7, 1996), in issuing this rule,EPA has taken the necessary steps toeliminate drafting errors and ambiguity,minimize potential litigation, andprovide a clear legal standard foraffected conduct. EPA has compliedwith Executive Order 12630 (53 FR8859, March 15, 1988) by examining thetakings implications of the rule inaccordance with the ‘‘AttorneyGeneral’s Supplemental Guidelines forthe Evaluation of Risk and Avoidance ofUnanticipated Takings’’ issued underthe executive order. This rule does notimpose an information collectionburden under the provisions of thePaperwork Reduction Act of 1995 (44U.S.C. 3501 et seq.).

B. Submission to Congress and theComptroller General

The Congressional Review Act, 5U.S.C. 801 et seq., as added by the SmallBusiness Regulatory EnforcementFairness Act of 1996, generally providesthat before a rule may take effect, theagency promulgating the rule mustsubmit a rule report, which includes acopy of the rule, to each House of theCongress and to the Comptroller Generalof the United States. EPA will submit areport containing this rule and otherrequired information to the U.S. Senate,the U.S. House of Representatives, andthe Comptroller General of the UnitedStates prior to publication of the rule inthe Federal Register. This rule is not a‘‘major rule’’ as defined by 5 U.S.C.804(2).

C. Petitions for Judicial ReviewUnder section 307(b)(1) of the Clean

Air Act, petitions for judicial review ofthis action, pertaining to revisions to theMaryland SIP establishing requirementsfor the control of VOC emissions fromorganic chemical production, must befiled in the United States Court of



Appeals for the appropriate circuit bySeptember 18, 2001. Filing a petition forreconsideration by the Administrator ofthis final rule does not affect the finalityof this rule for the purposes of judicialreview nor does it extend the timewithin which a petition for judicialreview may be filed, and shall notpostpone the effectiveness of such ruleor action. This action may not bechallenged later in proceedings toenforce its requirements. (See section307(b)(2).)


Environmental protection, Airpollution control, Incorporation byreference, Intergovernmental relations,Ozone, Reporting and record keepingrequirements.

Dated: July 9, 2001.William C. Early,Acting Regional Administrator, Region III.

40 CFR part 52 is amended as follows:

PART 52—[AMENDED]



Subpart V—Maryland

2. Section 52.1070 is amended byadding paragraph (c)(162) to read asfollows:


* * * * *(c) * * *(162) Revisions to the Maryland State

Implementation Plan submitted onFebruary 5, 2001 by the MarylandDepartment of the Environment:

(i) Incorporation by reference.(A) A letter dated February 5, 2001

from the Maryland Department of theEnvironment transmitting revisions tothe Maryland State ImplementationPlan, consisting of the addition ofCOMAR 26.11.19.30 Control of VolatileOrganic Compounds from OrganicChemical Production.

(B) Addition of new COMAR26.11.19.30 Control of Volatile OrganicCompounds from Organic ChemicalProduction, adopted by the Secretary ofthe Environment on December 6, 2000and effective on January 8, 2001,including the following:

(1) addition of new COMAR26.11.19.30 A. Definitions.

(2) addition of new COMAR26.11.19.30 B. Terms Defined.

(3) addition of new COMAR26.11.19.30.C. Applicability.

(4) addition of new COMAR26.11.19.30.D. General Requirements.

(5) addition of new COMAR26.11.19.30.E. Demonstration ofCompliance.

(ii) Additional Materials—Remainderof the February 5, 2001 submittal.[FR Doc. 01–18190 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 52

[MO 130–1130a; FRL–7016–4]



SUMMARY: EPA is announcing it isapproving a revision to the MissouriState Implementation Plan (SIP)pertaining to the rescission of four areaspecific particulate matter processweight rate rules. Rescission of theserules, which have been replaced by onestatewide rule, will simplify the SIP andensure consistency between theFederally approved SIP and the staterules.

DATES: This direct final rule will beeffective September 18, 2001 unlessEPA receives adverse comments byAugust 20, 2001. If adverse commentsare received, EPA will publish a timelywithdrawal of the direct final rule in theFederal Register informing the publicthat the rule will not take effect.ADDRESSES: Comments may be mailed toWayne Kaiser, EnvironmentalProtection Agency, Air Planning andDevelopment Branch, 901 North 5thStreet, Kansas City, Kansas 66101.

Copies of documents relative to thisaction are available for publicinspection during normal businesshours at the above listed Region 7location. The interested personswanting to examine these documentsshould make an appointment with theoffice at least 24 hours in advance.FOR FURTHER INFORMATION CONTACT:Wayne Kaiser at (913) 551–7603.SUPPLEMENTARY INFORMATION:Throughout this document whenever‘‘we, us, or our’’ is used, we mean EPA.This section provides additionalinformation by addressing the followingquestions:

What Is a SIP?What is the Federal approval process for a

SIP?What does Federal approval of a state

regulation mean to me?

What is being addressed in this action?Have the requirements for approval of a

SIP revision been met?What action is EPA taking?

What Is a SIP?

Section 110 of the Clean Air Act(CAA) requires states to develop airpollution regulations and controlstrategies to ensure that state air qualitymeets the national ambient air qualitystandards established by EPA. Theseambient standards are established undersection 109 of the CAA, and theycurrently address six criteria pollutants.These pollutants are: Carbon monoxide,nitrogen dioxide, ozone, lead,particulate matter, and sulfur dioxide.

Each state must submit theseregulations and control strategies to usfor approval and incorporation into theFederally enforceable SIP.





All state regulations and supportinginformation approved by EPA undersection 110 of the CAA are incorporatedinto the Federally approved SIP.Records of such SIP actions aremaintained in the Code of FederalRegulations (CFR) at Title 40, Part 52,entitled ‘‘Approval and Promulgation ofImplementation Plans.’’ The actual stateregulations which are approved are notreproduced in their entirety in the CFRoutright but are ‘‘incorporated byreference,’’ which means that we haveapproved a given state regulation witha specific effective date.




Enforcement of the state regulationbefore and after it is incorporated intothe Federally approved SIP is primarilya state responsibility. However, after theregulation is Federally approved, we areauthorized to take enforcement actionagainst violators. Citizens are alsooffered legal recourse to addressviolations as described in section 304 ofthe CAA.

What Is Being Addressed in ThisDocument?

In an effort to simplify its state rulesand to ensure statewide consistency, thestate of Missouri has consolidated itsfour area specific particulate matterprocess weight rate rules into one,equivalent, statewide rule, 10 CSR 10–6.400, ‘‘Restriction of Emission ofParticulate Matter From IndustrialProcesses.’’ We approved this statewiderule in the Missouri SIP on April 4,2001 (65 FR 17811).

Since the area specific rules are nowredundant, the state has requested thatwe rescind these rules from theFederally approved SIP. The rules beingrescinded are:

• 10 CSR 10–2.030, Restriction ofEmission of Particulate Matter FromIndustrial Processes




These rules pertain to the Kansas City,out state, Springfield, and St. Louisareas, respectively.

Rescinding these rules from the SIPwill simplify the SIP and ensureconsistency between the state rules andthe Federally approved SIP rules.


The state submittal has met the publicnotice requirements for SIP submissionsin accordance with 40 CFR 51.102. Thesubmittal also satisfied thecompleteness criteria of 40 CFR Part 51,Appendix V. In addition, as explainedabove and in more detail in thetechnical support document which ispart of this document, the revisionmeets the substantive SIP requirementsof the CAA, including section 110 andimplementing regulations.

What Action Is EPA Taking?We are processing this action as a

direct final action because the revision

makes a routine change to the existingrules which are noncontroversial.Therefore, we do not anticipate anyadverse comments.


51735, October 4, 1993), this action isnot a ‘‘significant regulatory action’’ andtherefore is not subject to review by theOffice of Management and Budget. Thisaction merely approves state law asmeeting Federal requirements andimposes no additional requirementsbeyond those imposed by state law.Accordingly, the Administrator certifiesthat this rule will not have a significanteconomic impact on a substantialnumber of small entities under theRegulatory Flexibility Act (5 U.S.C. 601et seq.). Because this rule approvespreexisting requirements under statelaw and does not impose any additionalenforceable duty beyond that requiredby state law, it does not contain anyunfunded mandate or significantly oruniquely affect small governments, asdescribed in the Unfunded MandatesReform Act of 1995 (Public Law 104–4).For the same reason, this rule also doesnot significantly or uniquely affect thecommunities of tribal governments, asspecified by Executive Order 13084 (63FR 27655, May 10, 1998). This rule willnot have substantial direct effects on thestates, on the relationship between thenational government and the states, oron the distribution of power andresponsibilities among the variouslevels of government, as specified inExecutive Order 13132 (64 FR 43255,August 10, 1999), because it merelyapproves a state rule implementing aFederal standard, and does not alter therelationship or the distribution of powerand responsibilities established in theCAA. This rule also is not subject toExecutive Order 13045 (62 FR 19885,April 23, 1997), because it is noteconomically significant.

In reviewing SIP submissions, ourrole is to approve state choices,provided that they meet the criteria ofthe CAA. In this context, in the absenceof a prior existing requirement for thestate to use voluntary consensusstandards (VCS), we have no authorityto disapprove a SIP submission forfailure to use VCS. It would thus beinconsistent with applicable law forEPA, when it reviews a SIP submission,to use VCS in place of a SIP submissionthat otherwise satisfies the provisions ofthe CAA. Thus, the requirements ofsection 12(d) of the NationalTechnology Transfer and AdvancementAct of 1995 (15 U.S.C. 272 note) do notapply. As required by section 3 ofExecutive Order 12988 (61 FR 4729,

February 7, 1996), in issuing this rule,we have taken the necessary steps toeliminate drafting errors and ambiguity,minimize potential litigation, andprovide a clear legal standard foraffected conduct. EPA has compliedwith Executive Order 12630 (53 FR8859, March 15, 1988) by examining thetakings implications of the rule inaccordance with the ‘‘AttorneyGeneral’s Supplemental Guidelines forthe Evaluation of Risk and Avoidance ofUnanticipated Takings’’ issued underthe Executive Order. This rule does notimpose an information collectionburden under the provisions of thePaperwork Reduction Act of 1995 (44U.S.C. 3501 et seq.).

The Congressional Review Act, 5U.S.C. section 801 et seq., as added bythe Small Business RegulatoryEnforcement Fairness Act of 1996,generally provides that before a rulemay take effect, the agencypromulgating the rule must submit arule report, which includes a copy ofthe rule, to each House of the Congressand to the Comptroller General of theUnited States. We will submit a reportcontaining this rule and other requiredinformation to the United States Senate,the United States House ofRepresentatives, and the ComptrollerGeneral of the United States prior topublication of the rule in the FederalRegister. A major rule cannot take effectuntil 60 days after it is published in theFederal Register. This action is not a‘‘major rule’’ as defined by 5 U.S.C.804(2).


List of Subjects 40 CFR Part 52

Environmental protection, Airpollution control, Incorporation byreference, Intergovernmental relations,Particulate matter, Reporting andrecordkeeping requirements.





PART 52—[AMENDED]




§ 52.1320 [Amended]

2. In § 52.1320(c) the table is amendedby:

e. Removing the entry under Chapter2 for 10–2.030;

f. Removing the entry under Chapter3 for 10–3.050;

g. Removing the entry under Chapter4 for 10–4.030;

h. Removing the entry under Chapter5 for 10–5.050.

[FR Doc. 01–18188 Filed 7–19–01; 8:45 am]



This section of the FEDERAL REGISTERcontains notices to the public of the proposedissuance of rules and regulations. Thepurpose of these notices is to give interestedpersons an opportunity to participate in therule making prior to the adoption of the finalrules.

Proposed Rules Federal Register

37919

Vol. 66, No. 140


DEPARTMENT OF AGRICULTURE

Animal and Plant Health InspectionService


[Docket No. 00–075–1]

National Poultry Improvement Plan andAuxiliary Provisions

AGENCY: Animal and Plant HealthInspection Service, USDA.ACTION: Proposed rule.

SUMMARY: We are proposing to amendthe National Poultry Improvement Plan(the Plan) and its auxiliary provisionsby providing new or modified samplingand testing procedures for Planparticipants and participating flocks.The proposed changes were voted onand approved by the voting delegates atthe Plan’s 2000 Millennial PlanConference. These changes would keepthe provisions of the Plan current withchanges in the poultry industry andprovide for the use of new sampling andtesting procedures.DATES: We invite you to comment onthis docket. We will consider allcomments that we receive by September18, 2001.ADDRESSES: Please send four copies ofyour comment (an original and threecopies) to: Docket No. 00–075–1,Regulatory Analysis and Development,PPD, APHIS, Suite 3C03, 4700 RiverRoad, Unit 118, Riverdale, MD 20737–1238. Please state that your commentrefers to Docket No. 00–075–1.

You may read any comments that wereceive on this docket in our readingroom. The reading room is located inroom 1141 of the USDA South Building,14th Street and Independence AvenueSW., Washington, DC. Normal readingroom hours are 8 a.m. to 4:30 p.m.,Monday through Friday, exceptholidays. To be sure someone is there tohelp you, please call (202) 690–2817before coming.

APHIS documents published in theFederal Register, and related

information, including the names oforganizations and individuals who havecommented on APHIS dockets, areavailable on the Internet at http://www.aphis.usda.gov/ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT: Mr.Andrew R. Rhorer, Senior Coordinator,Poultry Improvement Staff, NationalPoultry Improvement Plan, VeterinaryServices, APHIS, USDA, 1498 KlondikeRoad, Suite 200, Conyers, GA 30094–5104; (770) 922–3496.SUPPLEMENTARY INFORMATION:

Background

The National Poultry ImprovementPlan (NPIP, also referred to below as‘‘the Plan’’) is a cooperative Federal-State-industry mechanism forcontrolling certain poultry diseases. ThePlan consists of a variety of programsintended to prevent and control egg-transmitted, hatchery-disseminatedpoultry diseases. Participation in allplan programs is voluntary, but flocks,hatcheries, and dealers must qualify as‘‘U.S. Pullorum-Typhoid Clean’’ beforeparticipating in any other Plan program.Also, the regulations in 9 CFR part 82,subpart C, which provide for certaintesting, restrictions on movement, andother restrictions on certain chickens,eggs, and other articles due to thepresence of Salmonella enteritidis,prohibit hatching eggs or newly hatchedchicks from egg-type chicken breedingflocks from being moved interstateunless they are classified ‘‘U.S. S.Enteritidis Monitored’’ under the Planor have met equivalent requirements forS. enteritidis control, in accordancewith 9 CFR 145.23(d), under officialsupervision.

The Plan identifies States, flocks,hatcheries, and dealers that meet certaindisease control standards specified inthe Plan’s various programs. As a result,customers can buy poultry that hastested clean of certain diseases or thathas been produced under disease-prevention conditions.

The regulations in 9 CFR parts 145and 147 (referred to below as theregulations) contain the provisions ofthe Plan. The Animal and Plant HealthInspection Service (APHIS or theService) of the U.S. Department ofAgriculture (USDA or the Department)amends these provisions from time totime to incorporate new scientific

information and technologies within thePlan.

The proposed amendments discussedin this document are consistent with therecommendations approved by thevoting delegates to the National PlanConference that was held from June 29to July 1, 2000. Participants in the 2000National Plan Conferences representedflockowners, breeders, hatcherymen,and Official State Agencies from allcooperating States. The proposedamendments are discussed in greaterdetail below.

Discussion

DefinitionsWe are proposing to add a new

definition to § 145.1. We would definepublic exhibition as ‘‘a public show ofpoultry.’’ The regulations in§§ 145.23(b)(3)(vii), 145.33(b)(3)(vii),and 145.53(b)(3)(vii) require that allpoultry, including exhibition, exotic,and game birds, but excludingwaterfowl, going to public exhibitioneither come from U.S. Pullorum-Typhoid Clean or equivalent flocks orhave a negative pullorum-typhoid testwithin 90 days prior to going to publicexhibition. Given the presence of thatrequirement in the regulations, thevoting delegates at the 2000 PlanConference believed it would be usefulto define what is meant by the term‘‘public exhibition.’’

Debarment ProceduresWe are proposing to make two

changes to § 145.13, ‘‘Debarment fromparticipation.’’ First, we would amendthe first sentence of the section toprovide that the notice given by theOfficial State Agency to a Planparticipant of apparent noncompliancewould be in writing. The sectioncurrently calls for participants to benotified of their apparentnoncompliance; requiring that notice tobe in writing would serve to establish arecord that the notification had indeedbeen provided. Second, § 145.13currently refers to ‘‘§§ 50.21 through50.28–14 and §§ 50.30 through 50.33 ofthe rules of practice in 7 CFR part 50.’’In 1995, 7 CFR part 50 was revised andthe sections cited in § 145.13 wereredesignated; therefore, we areproposing to remove the specific sectioncitations mentioned in the previoussentence and replace them with areference to 7 CFR part 50.

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Authorized LaboratoriesWe are also proposing to add a new

paragraph (e) to § 145.2 to make it clearthat the Plan’s authorized laboratorieswill follow the laboratory protocolsoutlined in part 147 when determiningthe status of a participating flock withrespect to an official Plan classification.While there may be alternative testsavailable in some cases for Plandiseases, we believe that it is necessaryfor the purposes of consistency withinthe Plan, and to maintain the credibilityof the Plan’s programs, to explicitlyrequire the use of the official testsdescribed in part 147 when determiningthe status of a flock with respect to anofficial Plan classification.

HatcheriesParagraph (a) of § 145.6 contains

minimum requirements with respect tosanitation practices in participatinghatcheries. Those provisions wereestablished in 1971 and have beenamended once, in 1984. To bring theprovisions of § 145.6 up to date, we areproposing to revise that paragraph asfollows:

• Egg room walls, ceilings, floors, airfilters, drains, and humidifiers shouldbe cleaned and disinfected at least twotimes per week. Cleaning anddisinfection procedures should be asoutlined in § 147.24.

• Incubator room walls, ceilings,floors, doors, fan grills, vents, and ductsshould be cleaned and disinfected aftereach set or transfer. Incubator roomsshould not be used for storage. Plenumsshould be cleaned at least weekly. Eggtrays and buggies should be cleaned anddisinfected after each transfer. Cleaningand disinfection procedures should beas outlined in § 147.24.

• Hatcher walls, ceilings, floors,doors, fans, vents, and ducts should becleaned and disinfected after eachhatch. Hatcher rooms should be cleanedand disinfected after each hatch andshould not be used for storage. Plenumsshould be cleaned after each hatch.Cleaning and disinfection proceduresshould be as outlined in § 147.24.

• Chick/poult processing equipmentand rooms should be thoroughlycleaned and disinfected after eachhatch. Chick/poult boxes should becleaned and disinfected before beingreused. Vaccination equipment shouldbe cleaned and disinfected after eachuse. Cleaning and disinfectionprocedures should be as outlined in§ 147.24.

• Hatchery residue, such as chick/poult down, eggshells, infertile eggs,and dead germs, should be disposed ofpromptly and in a manner satisfactoryto the Official State Agency.

• The entire hatchery should be keptin a neat, orderly condition and cleanedand disinfected after each hatch.

• Effective insect and rodent controlprograms should be implemented.

The procedures and practicesdescribed above are routinely observedin the industry today and are consideredto be essential to the maintenance ofproper hatchery sanitation. Ourproposed changes, therefore, wouldbring the provisions of the Plan in linewith the current practices observedthroughout the industry.

Blood TestingSection 145.14, ‘‘Blood testing,’’

currently states, among other things,that ostrich, emu, rhea, and cassowarycandidates for official Planclassifications must be blood testedwhen at least 12 months of age or uponreaching sexual maturity, depending onthe species and at the discretion of theOfficial State Agency. In this document,we are proposing to amend thatprovision to state that ostrich, emu,rhea, and cassowary candidates are to beblood tested when more than 12 monthsof age. This proposed change wouldmake the blood testing provisions forostrich, emu, rhea, and cassowarycandidates consistent with theprovisions for other species of birds in§ 145.14 by simply providing theminimum age at which the birds may betested. As ostriches, emus, rheas, andcassowaries typically reach sexualmaturity somewhere between 18 monthsto 3 years of age, depending on thespecies, this proposed change would notprevent an Official State Agency fromtaking sexual maturity into accountwhen determining the appropriatetesting age.

Also in § 145.14, we would amendfootnote 1 in § 145.14(a) to provide thecurrent address of the APHIS staff thatcan provide the criteria and proceduresfor Department approval of antigens andreagents. That staff has been relocatedfrom Riverdale, MD, to Ames, IA.

Paragraph (a)(9)(ii) of § 145.14requires that serum samples thatproduce positive reactions for pullorum-typhoid on the microagglutination testbe retested at an authorized laboratoryin accordance with themicroagglutination test procedures setforth in § 147.5. If the reaction to theretest is positive in dilutions of 1:40 orgreater, additional examination must beperformed on the bird from which theserum sample was drawn and its flock.The procedures for themicroagglutination test found in § 147.5,however, refer to the use of a 1:20dilution for the microagglutination test,not the 1:40 dilution cited in § 145.14.

It is the 1:40 dilution that is correct;therefore, we are proposing to amendparagraphs (c) and (d) of § 147.5 so thatthey refer to the correct dilution. Thisproposed change would also necessitateamending § 147.5(d)(2) to replace areference to 10-microliter serum samplewith a reference to a 5-microliter serumsample.

U.S. S. Enteritidis Clean, Egg-TypeChickens

We are proposing to amend§ 145.23(d) to change the name of theprogram described in that paragraphfrom ‘‘U.S. S. Enteritidis Monitored’’ to‘‘U.S. S. Enteritidis Clean.’’ Virtually allof the egg-type chicken breeders in thePlan participate in the current U.S. S.Enteritidis Monitored program, and theincidence of Salmonella enteritidis (SE)in their flocks is extremely low. Becausethe monitoring and prevention elementsof this program have been so effective,the program has become oriented moretoward maintaining the freedom offlocks from SE. Our proposed change tothe name of the program would reflectthis new focus and provide a measureof credit to the flockowners who havebeen integral to the program’s success.As part of this proposed change, wewould remove the illustrative design forthe U.S. S. Enteritidis Monitoredclassification in § 145.10(1), as thatdesign would no longer be necessary. Areference to § 145.23(d) would be addedto § 145.10(m), which contains theillustrative design for the current U.S. S.Enteritidis Clean classification for meat-type chickens.

Within § 145.23(d), paragraph (d)(iv)calls for participating flocks to bemaintained in compliance with§§ 147.21, 147.24(a), and 147.26, whichrelate to flock sanitation and goodmanagement practices. In thisdocument, we are proposing to amend§ 145.23(d)(iv) to also state that rodentsand other pests should be effectivelycontrolled. Rodents have been found tobe a reservoir of Salmonella,particularly SE, so reducing oreliminating the presence of rodents andother pests from areas where flocks arekept would help to maintain the flocks’freedom from Salmonella.

Paragraph (d)(vi) of § 145.23 currentlyprovides that a federally licensed SEbacterin may be used in multiplierbreeding flocks that have beenbacteriologically examined and foundnegative for SE. Because someSalmonella vaccines may cause positivereactions to pullorum-typhoid testsadministered to a flock, we areproposing to amend § 145.23(d)(vi) toallow flockowners to delay vaccinationuntil after the flock has been tested for


37921Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Proposed Rules

pullorum-typhoid testing as describedin § 145.23(d)(1)(vii). We would retainthe current option of keeping a sampleof 350 birds unvaccinated until the flockreaches 4 months of age and has beentested in accordance with§ 145.23(d)(1)(vii) and found negative.We would, however, amend that optionto specify that the birds in the flockmust have been vaccinated using aninjectable bacterin or live vaccine thatdoes not spread. Currently, theregulations in § 145.23(d)(vi) do notdifferentiate between the use of vaccinesor bacterins that may spread to otherbirds and those that do not.

U.S. M. Gallisepticum Clean, Meat-TypeChickens

The regulations in § 145.33(c)(2)currently require participants handlingU.S. M. Gallisepticum Clean products(i.e., poultry breeding stock, hatchingeggs, baby poultry, and started poultry)to keep those products separate fromother products that are not classifiedU.S. M. Gallisepticum Clean. While thatparagraph directs that the products bekept separate, it offers no specificguidance as to how that should beaccomplished. In this document, we areproposing to amend § 145.33(c)(2) tostate that the necessary separation canbe achieved through the use of separatehatchers and incubators, separate hatchdays, and the hatchery sanitation andbiosecurity procedures detailed in§§ 147.22, 147.23, and 147.24. The stepstaken by the Plan participant would besubject to the review and approval ofthe Official State Agency to ensure thatthey are being implemented in a mannerthat adequately protects the integrity ofthe M. Gallisepticum Clean products.

U.S. S. Enteritidis Clean, Meat-TypeChickens

Paragraph (h)(1)(i) of § 145.33provides, in part, that a meat-typechicken breeding flock may be eligiblefor the U.S. S. Enteritidis Cleanclassification if the flock originated froma U.S. S. Enteritidis Clean flock or ifmeconium from the chicks in the flockand a sample of chicks that died within7 days after hatching have beenexamined bacteriologically for SE at anauthorized laboratory and any group DSalmonella samples have beenserotyped. We are proposing to amendthose criteria that pertain to eligibilitybased on testing to state that a flock maybe eligible if any one of the followingsamples has been examinedbacteriologically for SE at an authorizedlaboratory and any group D Salmonellasamples have been serotyped:

• A 25-gram sample of meconiumfrom the chicks in the flock collected

and cultured as described in proposed§ 147.12(a)(5) (current § 147.18—theproposed redesignation of this section isdiscussed later in this document); or

• A sample of chick papers collectedand cultured as described in § 147.12(c);or

• A sample of 10 chicks that diedwithin 7 days after hatching.

These proposed changes would clarifythe provisions of § 145.33 (h)(1)(i) byspecifying the size of the meconiumsample that must be collected andcultured and the number of dead chicksthat must be examined and by providinga reference to the applicable meconiumcollection and culturing proceduresfound in existing § 147.18 (which, asnoted above and discussed later in thisdocument, we would redesignate as§ 147.12(a)(5)). This proposed changewould also provide for the use of chickpaper culturing conducted inaccordance with existing § 147.12(c) asan additional means of qualifying aflock for the U.S. S. Enteritidis Cleanclassification. We believe that any oneof these three methods would providean accurate assessment of the SE statusof a flock seeking to qualify for thisclassification.

In addition to the proposed changesdescribed above, we are also proposingto make several other changes to theprovisions regarding the U.S. S.Enteritidis Clean classification for meat-type chickens. First, the introductorytext of § 145.33(h) currently states, inpart, that the classification is intendedfor primary meat-type breeders. (Aprimary breeding flock is currentlydefined in § 145.1 as ‘‘[a] flockcomposed of one or more generationsthat is maintained for the purpose ofestablishing, continuing, or improvingparent lines.’’) As we believe that thisclassification could be beneficial andfeasible in any meat-type chickenbreeding flock, and not just primarybreeding flocks, we would remove theword ‘‘primary’’ from the introductorytext of § 145.33(h).

Second, § 145.33(h)(1)(iv) currentlyprovides that environmental samplesmust be collected by an AuthorizedAgent (i.e., a person designated by theOfficial State Agency). In order to allowothers to assist the Authorized Agentand thus reduce the time required forthe collection of samples in some cases,we are proposing to amend§ 145.33(h)(1)(iv) to provide that theenvironmental samples may also becollected under the supervision of anAuthorized Agent.

Third, § 145.33(h)(1)(vi) currentlyprovides that hatching eggs produced bya flock must be collected as quickly aspossible, handled as described in

§ 147.22, and sanitized or fumigated. Inthis document, we are proposing toremove the reference to sanitizing andfumigation, as § 147.22 alreadydescribes hatching egg sanitationprocedures and standard industrypractice no longer includes fumigationof hatching eggs.

Finally, § 145.33(h)(3) currentlyprovides that 25 randomly selected livebirds from the flock must bebacteriologically examined for SE asdescribed in § 147.11 if SE is isolatedfrom an environmental sample collectedfrom the flock. In this document, we areproposing to add the option ofexamining 500 cloacal swabs collectedin accordance with existing§ 147.12(a)(2) in addition to, or in placeof, the examination of 25 live birds. Theregulations currently provide for the useof cloacal swab examination in othersituations, and we believe that thisprocedure would provide Planparticipants with an effective primary orsupplemental means of assessing the SEstatus of a flock following the isolationof SE in an environmental sample.

Rules of PracticeSections 145.24, 145.34, 145.44, and

145.54 all currently provide conditionsthat must be met for a State to attain‘‘clean State’’ status under specific Plandisease classifications. There arecurrently a total of nine separate ‘‘cleanState’’ classifications (one in § 145.24,two in § 145.34, five in § 145.44, andone in § 145.54). In each case, theregulations provide that the Service willrevoke a State’s ‘‘clean State’’classification if any of the prescribedconditions are discontinued, but willnot do so until it has conducted aninvestigation and the Official StateAgency has been given an opportunityfor a hearing. In only two of the ninecases—i.e., § 145.44(d)(2) and (e)(2)—dothe regulations specify that the hearingwill be held in accordance with rules ofpractice adopted by the Administrator.Because the adoption of rules of practiceby the Administrator is necessary in allcases prior to such administrativehearings, we are proposing to amend§§ 145.24, 145.34, 145.44, and 145.54 tospecify that hearings regarding therevocation of a State’s ‘‘clean State’’classification will be held in accordancewith rules of practice adopted by theAdministrator.

U.S. ApprovedUnder § 145.53(a), a breeding flock

may be classified as U.S. Approved if allbirds in the flock observed byAuthorized Agents or State Inspectorsare found to conform with the criteriafor the breed represented, as contained



in the Standard of Perfection publishedby the American Poultry Association,Inc. (APA) or the breeder’sspecifications for the stock representedin the flock, and such specifications areon file with the Official State Agency. Ittakes a great deal of training to becomean official APA judge for the variouswaterfowl, exhibition poultry, and gamebird breeds represented in the Plan, andmost State NPIP organizations do nothave people trained in those standardsof perfection. The U.S. Approvedclassification has already been removedfrom provisions regarding theclassification of egg-type chickenbreeding flocks (§ 145.23), meat-typechicken breeding flocks (§ 145.33), andturkey breeding flocks (§ 145.43). Giventhat it appears that there is no longer thenecessary support in place to maintainthe U.S. Approved classification forwaterfowl, exhibition poultry, and gamebird breeding flocks, we are proposingto remove the U.S. Approvedclassification from § 145.53. As part ofthis proposed change, we would alsoremove the illustrative design for theU.S. Approved classification from§ 145.10(a), as there would no longer bea corresponding classification for thedesign in the provisions of the Plan.

Testing for Antibodies to AvianMycoplasma

Paragraph (e)(2) of § 147.7 provides aprocedure to test for antibodies to avianmycoplasma by hemagglutinationinhibition (HI). The test uses theconstant antigen, titered-sera method formeasuring antibodies to M.gallisepticum, M. synoviae, or M.meleagridis. The second-to-last and lastsentences of § 147.7(e)(2)(ii)(B) currentlystate ‘‘[t]he desired endpoint is 4 HA[i.e., hemagglutination] units. The wellcontaining the 1:4 dilution should givea complete HA while the 1:8 dilutionshould show less than complete HA.’’These two sentences appear to havebeen included in error, as they apply tothe HA titer of the diluted antigen usedin the test, and not to the HA titer of thestock antigen, which is the focus of thestep being described. The dilution of thestock antigen is described in theparagraph that follows, i.e.,§ 147.7(e)(2)(ii)(C). Therefore, becausethey do not apply to the step beingdescribed, we are proposing to removethe final two sentences of§ 147.7(e)(2)(ii)(B).

Bacteriological Examination ofSalmonella

Paragraph (a) of § 147.11 describes thelaboratory procedure recommended forthe bacteriological examination ofSalmonella in egg- and meat-type

chickens, waterfowl, exhibition poultry,and game birds. In this document, weare proposing to amend thoseprocedures by:

• Restricting the scope of theparagraph to the examination of culturescollected from birds (and modifyingillustration 1 accordingly) and movingthe provisions of current § 147.11(a)relating to the examination ofenvironmental cultures, includingillustration 2, to § 147.12;

• Removing the recommended non-selective enrichment step;

• Increasing the sample size ofpullorum-typhoid reactor birds from ‘‘atleast four birds’’ to ‘‘up to 25 birds;’’

• Modifying sample collection andpooling recommendations;

• Offering specific suggestions forplating media; and

• Recommending delayed secondaryenrichment in cases where the initialselective enrichment procedure yieldsnegative results.

These proposed changes, which havebeen incorporated into the revisedprocedure set forth in revised§ 147.11(a) at the end of this document,were recommended by the NPIP’sSalmonella Technical Committee andare intended to provide a more effectiveand scientifically valid procedure forthe identification of Salmonella in egg-and meat-type chickens, waterfowl,exhibition poultry, and game birds. Aspart of this proposed change, we wouldalso update the literature citationcontained in footnote 7 to § 147.11(a)(1)so that it refers to the most recentedition of the publication cited.

Collection, Isolation, and Identificationof Salmonella

Section 147.12 currently describesprocedures for collecting environmentalsamples and cloacal swabs forbacteriological examination. In thisdocument, we are proposing to expandthe scope of that section to includeprocedures for collection, isolation, andidentification of Salmonella fromenvironmental samples, cloacal swabs,chick box papers, and meconiumsamples, and we would revise the titleof the section to reflect this broaderscope.

The procedure for sampling in brothfound in § 147.12(a)(1)(i) currentlystates that authorized laboratories willprovide capped tubes containing Hajnaor Mueller-Kauffmann tetrathionatebrilliant green sterile enrichment brothfor each sample. Because other types ofsterile enrichment broth are nowavailable, we are proposing to removethe reference to Hajna or Mueller-Kauffmann tetrathionate brilliant greenenrichment broths in order to provide

for the use by authorized laboratories ofother appropriate sterile enrichmentbroths.

The provisions regarding the use ofdrag swabs found in § 147.12(a)(3)currently refer to exposing gauze pads tothe surface of floor litter and nest boxareas and provide instructions for theassembly of drag swabs using gauzepads. Commercially made spongesdesigned for use in drag swabs are nowavailable, so we are proposing to amendthe introductory text of § 147.12(a)(3) toprovide for the use of either gauze padsor commercially available sponges as acomponent of a drag swab sampler.

Paragraph (a)(3)(iv) of § 147.12describes the procedure for collectingsamples from nest boxes. The samplingprocedure described in that paragraphentails wiping down assorted locationsin about 10 percent of the total nestingarea, then sealing the sample in a sterilebag for submission to an authorizedlaboratory. We have determined thatthis procedure could also be used forcollecting samples from an egg belt,which is another environment fromwhich Salmonella could be isolated.Therefore, we are proposing to amend§ 147.12(a)(3)(iv) to provide for the useof the described sampling technique onboth nest boxes and egg belts.

Paragraph (c) of § 147.12 providesinstructions for collecting samples fromchick box papers. We are proposing tomove the provisions of § 147.12(c) to§ 147.12(a)(4) in order to place it amongthe other provisions of § 147.12regarding the collection of samples. Inmoving those provisions, we would alsoadd to the introductory text of theparagraph a reminder to Planparticipants that it is important that thepaper be removed from the chick boxbefore the box is placed in the broodinghouse. This would help to maintain theintegrity of the sample taken from thechick box papers by preventing thepotential introduction of contaminantsfrom the brooding house. We would alsoadd a new paragraph (a)(4)(iii) thatwould provide that the laboratory towhich the collected samples or chickbox papers are sent must follow theprocedure set forth in proposed§ 147.12(a)(5) (current § 147.18) fortesting chick meconium for Salmonella.

As noted earlier in this document inthe discussion of the proposed changesto § 147.11, we are proposing to movethe provisions of § 147.11(a) regardingthe examination of environmentalcultures, including illustration 2, into§ 147.12; those provisions wouldbecome new § 147.12(b). In addition, weare also proposing to move theprovisions of current § 147.18, whichprovides a procedure for testing chick



meconium for Salmonella, into § 147.12as new paragraph (a)(5). We believe thatthis proposed relocation of thoseprovisions would result in theregulations becoming more focused,with § 147.11 concentrating onprocedures for culturing pullorum-typhoid reactors and birds from SE-positive environments and § 147.12concentrating on procedures forculturing environmental samples, chickpapers, and meconium. As a result ofthese proposed moves, it would benecessary for § 147.12(a)(5)(vi) (current§ 147.18(f)) to direct that the processingof suspect Salmonella colonies fromchick meconium samples be conductedin accordance with § 147.12(b), ratherthan § 147.11.

Proposed new § 147.12(b) wouldprovide two different enrichmentprocedures, i.e., tetrathionateenrichment with delayed secondaryenrichment and pre-enrichmentfollowed by selective enrichment. Theseculturing procedures for environmentaland other samples, which have beendrawn from the combined bird/environment culturing proceduresfound in current § 147.11(a), are setforth in proposed § 147.12(b) at the endof this document. Illustration 2, whichwould be revised to reflect the morespecific procedures, would be placed atthe end of the new paragraph.

Hatching Egg and Hatchery SanitationWe are proposing to revise § 147.22,

‘‘Hatching egg sanitation,’’ to reflectchanges in industry practice and updatethe language used in the section. Therevised section would reflect thediscontinuance of egg fumigation as aroutine measure and would include arecommendation for cleaning anddisinfecting vehicles used fortransporting eggs and chicks or poults,but would otherwise not differsubstantively from existing § 147.22.

Similarly, we are also proposing torevise § 147.23, ‘‘Hatchery sanitation,’’to reflect changes in industry practiceand update the language used in thesection. As is the case with ourproposed revision of § 147.22, revised§ 147.23 would reflect thediscontinuance of egg fumigation as aroutine measure. This revised sectionwould also recommend the use of newchick papers, in addition to clean ornew boxes, for the distribution of day-old chicks, poults, or other newlyhatched poultry. Otherwise, revised§ 147.23 would not differ substantivelyfrom existing § 147.23.

Cleaning and DisinfectingWe are proposing to update § 147.24,

which describes recommended

procedures for cleaning and disinfectingstructures and equipment used by Planparticipants. We would reorganize theprovisions of the section so thatparagraph (a) would deal with poultryhouses, paragraph (b) with hatchers andhatchery rooms, and paragraph (c) withdelivery trucks and their drivers andhelpers. In each paragraph, we wouldexpand upon the recommendationsprovided in current § 147.24 in order toprovide more specific guidanceregarding cleaning and disinfectionprocedures. Specifically, in § 147.24(a),we would revise paragraph (a)(1) torecommend the following:

• Remove all live ‘‘escaped’’ and deadbirds from the building;

• Blow dust from equipment andother exposed surfaces;

• Empty the residual feed from thefeed system and feed pans and removeit from the building;

• Disassemble feeding equipment anddump and scrape as needed to removeany and all feed cake and residue. Cleanup spilled feed around the tank andclean out the tank; and

• Rinse down and wash out theinside of the feed tank to decontaminatethe surfaces and allow to dry.

We would also amend paragraph(a)(3) to include recommendations forwashing down the entire inside surfacesof the building and all the installedequipment such as curtains, ventilationducts and openings, fans, fan housingsand shutters, feeding equipment,watering equipment, etc., and usinghigh pressure and high volume waterspray to soak into and remove the dirtto decontaminate the building.

We would amend paragraph (b) torecommend the use of cleaning agentsand sanitizers that are registered by theU.S. Environmental Protection Agencyas germicidal, fungicidal,pseudomonocidal, and tuberculocidal.We would also recommend:

• Removing loose organic debris bysweeping, scraping, vacuuming,brushing, or scrubbing, or by hosingsurfaces with high pressure water;

• Using hot water (at least 140 °F) forcleaning hatching trays and chickseparator equipment;

• Using a cleaner/sanitizer that canpenetrate protein and fatty deposits andallowing the chemical to cling to treatedsurfaces at least 10 minutes beforerinsing off, then manually scrubbing anyremaining deposits of organic materialuntil they are removed; and

• Applying disinfectant to thecleaned walls and using a clean andsanitized squeegee to remove excesswater, working down from ceilings towalls to floors and being careful not torecontaminate cleaned areas.

Because current paragraph (c) appliesto the cleaning of hatchery equipment,we would move that paragraph intoparagraph (b), which, as noted above,applies to the cleaning and disinfectionof hatchers and hatchery rooms.

Finally, we would establish a newparagraph (c), which would providerecommendations regarding thedisinfection of delivery trucks andbiosecurity practices for truck driversand their helpers. Specifically, wewould recommend that truck tires bethoroughly sprayed with disinfectantbefore the truck leaves the main roadand enters the farm driveway, and thatdrivers and helpers observe thefollowing practices:

• Put on sturdy, disposable plasticboots or clean rubber boots beforegetting out of the truck cab. Put on aclean smock or coveralls and a hairnetbefore entering the poultry house.

• After loading eggs or unloadingchicks/poults, remove the dirty smock/coveralls and place in a plastic garbagebag before loading in the truck. Be sureto keep clean coveralls separate fromdirty ones.

• Reenter the cab of the truck andremove boots before placing feet ontofloorboards. Remove hairnet and leavewith disposable boots on farm.

• Sanitize hands using appropriatehand sanitizer.

• Return to the hatchery or go to thenext farm and repeat the process.

These proposed amendments to§ 147.24, which were recommended bythe NPIP Cleaning and DisinfectionTechnical Committee, would serve toreinforce the existing provisions of thesection and thus increase theeffectiveness of the cleaning anddisinfection measures applied to poultryhouses, hatchers and hatchery rooms,and delivery trucks and the biosecuritypractices observed by personnelentering the farm, thus reducing the riskthat participating flocks and productswould be exposed to disease.

Fumigation

Section 147.25 currently refers tofumigation as ‘‘an essential part of asanitation program.’’ As notedpreviously, fumigation is no longer usedroutinely within the poultry industry.Therefore, we are proposing to amend§ 147.25 so that the section simply statesthat fumigation may be used forsanitizing eggs and hatchery equipmentor rooms as part of a sanitation program,thus deemphasizing the role offumigation.



1 The broiler industry, in particular, is heavilyconcentrated. Tyson Foods had weekly sales ofready-to-cook chicken that averaged 154.3 millionpounds in 1999. The 10 largest broiler companiesaccounted for 429.6 million pounds per week in1999, approximately half of the Nation’s production(WATT PoultyUSA, January 2000).

2 WATT Poultry USA, January 2000.3 ‘‘Chickens and Eggs, Final Estimates 1994–97,’’

USDA/NASS, December 1998.’’4 1997 Census of Agriculture.

Isolation, Sanitation, and GoodManagement Practices

Section 147.26 describes proceduresfor establishing isolation andmaintaining sanitation and goodmanagement practices for the control ofSalmonella and Mycoplasma infections.In this document, we are proposing toamend § 147.26 as follows:

• We would amend paragraph (a)(1)to specify that the conditions underwhich visitors may be allowed mustminimize the introduction ofSalmonella and Mycoplasma, and notsimply ‘‘insure sanitation’’ as currentlyprovided.

• We would combine paragraphs(a)(2) and (a)(3), which require breederfarms to be kept free of market birds andother domesticated fowl, respectively.

• We would amend the requirementin paragraph (a)(4) that requires deadbirds to be disposed of by burning, deepburial, or burial in special disposal pits.Because some of those methods may beprohibited in some areas, we wouldamend that requirement to simply statethat dead birds are to be disposed of bylocally approved methods.

• We would amend paragraph (b)(5)to require that a rodent control programbe established. That paragraph currentlyrequires only that the rodent populationand other pests be kept in controlwithout requiring an active program forthat purpose.

These proposed changes wererecommended by a committee ofscientists appointed to review § 147.26by the Plan’s General ConferenceCommittee and would serve to updatethe provisions of that section.

General Conference Committee

Paragraph (b) of § 147.43 describes theprocedures for the nomination andelection of regional committee membersto serve on the General ConferenceCommittee (GCC). In order to broadenthe pool of potential nominees, we areproposing to amend § 147.43(b) to addprovisions for the solicitation ofnominees. Under these proposedprovisions, the process for solicitingnominations for regional committeemembers would include, but not belimited to:

• Advertisements in at least twoindustry journals, such as thenewsletters of the American Associationof Avian Pathologists, the NationalChicken Council, the United EggProducers, and the National TurkeyFederation;

• A Federal Register announcement;and

• Special inquiries for nominationsfrom universities or colleges with

minority/disability enrollments andfaculty members in poultry science orveterinary science.

Further, in order to promote a morediverse pool of nominees, we wouldrequire that at least one nominee fromeach region be from anunderrepresented group, e.g.,minorities, women, or persons withdisabilities. These proposed changes areintended to increase awareness of GCCmembership opportunities by providingfor the active solicitation of nominationsfrom industry, scientific, and universityor college groups.

Miscellaneous

In addition to the proposed changesdescribed above, we are also proposingto make several nonsubstantive editorialchanges to improve clarity and correcterroneous citations to several sectionswithin the regulations.

Executive Order 12866 and RegulatoryFlexibility Act

This proposed rule has been reviewedunder Executive Order 12866. The rulehas been determined to be notsignificant for the purposes of ExecutiveOrder 12866 and, therefore, has notbeen reviewed by the Office ofManagement and Budget.

The proposed changes contained inthis document are based on therecommendations of representatives ofmember States, hatcheries, dealers,flockowners, and breeders who tookpart in the Plan’s 2000 National PlanConference. The proposed changeswould amend the Plan and its auxiliaryprovisions by providing new ormodified sampling and testingprocedures for Plan participants andparticipating flocks. The proposedchanges were voted on and approved bythe voting delegates at the Plan’s 2000National Plan Conference. Thesechanges would keep the provisions ofthe plan current with changes in thepoultry industry and provide for the useof new sampling and testing procedures.

The plan serves as a ‘‘seal ofapproval’’ for eggs and poultryproducers in the sense that tests andprocedures recommended by the Planare considered optimal for the industry.In all cases, the changes proposed inthis document have been generated bythe industry itself with the goal ofreducing disease risk and increasingproduct marketability. Becauseparticipation in the plan is voluntary,individuals are likely to remain in theprogram as long as the costs ofimplementing the program are lowerthan the added benefits they receivefrom the program.

The proposed changes contained inthis document generally either updatetesting procedures and sanitationguidelines or revise NPIP’sadministrative operations, with the aimof better safeguarding the health of theNation’s poultry industry. TheRegulatory Flexibility Act requires thatagencies consider the economic effectsof their rules on small entities. We donot expect that the changes proposed inthis document would result insignificant economic effects on smallentities.

The Small Business Administrationdefines size standards for industriesusing the North American IndustryClassification System (NAICS). Underthis system, a firm classified within‘‘Chicken Egg Production’’ (NAICS code112310) is considered small if its annualreceipts are $9 million or less. For firmsclassified within ‘‘Broilers and OtherMeat Type Chicken Production’’ (NAICScode 112320), the small-entity criterionis annual receipts of $750,000 or less.

The egg and poultry industries arehighly integrated vertically, with mostproduction owned or under contract tolarge-scale processing and marketingfirms.1 For example, broilers for TysonFoods, the world’s largest producer,came in 1999 from 6,060 farms (98percent under contract), and its eggscame from breeder flocks on 1,388farms.2

In 1997, an average of 303,604,000egg-producing layers produced 77,532million eggs.3 The number of egg-producing farms and their sizedistribution is not known, but it isreasonable to assume that some of themmay be small entities, operating eitherindependently or under contract.

Also in 1997, there were 13,458 farmsthat sold layers, pullets, and pulletchicks, and 23,937 farms that soldbroilers and other meat-type chickens.4Regarding the latter, a farm would needto produce about 275,000 broilers a yearin order to reach annual sales of at least$500,000, according to Census ofAgriculture and other NationalAgricultural Statistics Service (NASS)



5 In 1997, the average liveweight equivalent priceof broiler was $0.377 per pound, and the averageweght was 4.835 pounds. Thus, the average pricereceived per broiler was $1.82.

6 The 1997 Censur of Agriculture indicates that 52percent of broiler-producing farms sold at lest200,000 broilers.

data.5 By this measure, about one-half ofbroiler farms can be considered small.6

Clearly, some of the poultry and egg-producing farms that would be affectedby this proposed rule are small.However, the procedural andadministrative changes proposed are notexpected to have a significant economicimpact on any entities, either large orsmall.

Under these circumstances, theAdministrator of the Animal and PlantHealth Inspection Service hasdetermined that this action would nothave a significant economic impact ona substantial number of small entities.

Executive Order 12372This program/activity is listed in the

Catalog of Federal Domestic Assistanceunder No. 10.025 and is subject toExecutive Order 12372, which requiresintergovernmental consultation withState and local officials. (See 7 CFR part3015, subpart V.)

Executive Order 12988This proposed rule has been reviewed

under Executive Order 12988, CivilJustice Reform. If this proposed rule isadopted: (1) All State and local laws andregulations that are in conflict with thisrule will be preempted; (2) noretroactive effect will be given to thisrule; and (3) administrative proceedingswill not be required before parties mayfile suit in court challenging this rule.

Paperwork Reduction ActThis proposed rule contains no new

information collection or recordkeepingrequirements under the PaperworkReduction Act of 1995 (44 U.S.C. 3501et seq.).

List of Subjects in 9 CFR Parts 145 and147

Animal diseases, Poultry and poultryproducts, Reporting and recordkeepingrequirements.

Accordingly, we propose to amend 9CFR parts 145 and 147 as follows:

PART 145—NATIONAL POULTRYIMPROVEMENT PLAN

1. The authority citation for part 145would be revised to read as follows:

Authority: 7 U.S.C. 429; 7 CFR 2.22, 2.80,and 371.4.

2. In § 145.1, a definition of publicexhibition would be added, inalphabetical order, to read as follows:

§ 145.1 Definitions.

* * * * *Public exhibition. A public show of

poultry.* * * * *

3. In § 145.2, a new paragraph (e)would be added to read as follows:

§ 145.2 Administration.

* * * * *(e) An authorized laboratory of the

National Poultry Improvement Plan willfollow the laboratory protocols outlinedin part 147 of this chapter whendetermining the status of a participatingflock with respect to an official Planclassification.* * * * *

4. Section 145.6 would be amended asfollows:

a. By revising paragraph (a).b. In paragraph (b), by removing the

word ‘‘which’’ and adding the word‘‘that’’ in its place.

c. In paragraph (c), by removing theword ‘‘shall’’ and adding the word‘‘should’’ in its place.

d. In paragraph (d), in both the firstand second sentences, by removing theword ‘‘shall’’ and adding the word‘‘should’’ in its place.

§ 145.6 Specific provisions forparticipating hatcheries.

(a) Hatcheries must be kept in sanitarycondition, acceptable to the OfficialState Agency. The procedures outlinedin §§ 147.22 through 147.25 of thischapter will be considered as a guide indetermining compliance with thisprovision. The minimum requirementswith respect to sanitation include thefollowing:

(1) Egg room walls, ceilings, floors, airfilters, drains, and humidifiers shouldbe cleaned and disinfected at least twotimes per week. Cleaning anddisinfection procedures should be asoutlined in § 147.24 of this chapter.

(2) Incubator room walls, ceilings,floors, doors, fan grills, vents, and ductsshould be cleaned and disinfected aftereach set or transfer. Incubator roomsshould not be used for storage. Plenumsshould be cleaned at least weekly. Eggtrays and buggies should be cleaned anddisinfected after each transfer. Cleaningand disinfection procedures should beas outlined in § 147.24 of this chapter.

(3) Hatcher walls, ceilings, floors,doors, fans, vents, and ducts should becleaned and disinfected after eachhatch. Hatcher rooms should be cleanedand disinfected after each hatch andshould not be used for storage. Plenumsshould be cleaned after each hatch.Cleaning and disinfection proceduresshould be as outlined in § 147.24 of thischapter.

(4) Chick/poult processing equipmentand rooms should be thoroughlycleaned and disinfected after eachhatch. Chick/poult boxes should becleaned and disinfected before beingreused. Vaccination equipment shouldbe cleaned and disinfected after eachuse. Cleaning and disinfectionprocedures should be as outlined in§ 147.24 of this chapter.

(5) Hatchery residue, such as chick/poult down, eggshells, infertile eggs,and dead germs, should be disposed ofpromptly and in a manner satisfactoryto the Official State Agency.

(6) The entire hatchery should be keptin a neat, orderly condition and cleanedand disinfected after each hatch.

(7) Effective insect and rodent controlprograms should be implemented.* * * * *

§ 145.10 [Amended]5. In § 145.10, paragraphs (a) and (l)

would be removed and reserved andparagraph (m) would be amended byadding the words ‘‘§ 145.23(d) and’’immediately after the word ‘‘See’’ .

§ 145.13 [Amended]6. In § 145.13, the introductory text of

the section would be amended asfollows:

a. In the first sentence, by adding thewords ‘‘in writing’’ immediately afterthe words ‘‘are notified’’.

b. In the sixth sentence, by removingthe words ‘‘§§ 50.21 through 50.28–14and §§ 50.30 through 50.33 of’’.

c. In the seventh sentence, byremoving the citation ‘‘7 CFR50.2(e),(g),(h), and (l)’’ and adding thecitation ‘‘7 CFR 50.10’’ in its place.

7. Section 145.14 would be amendedas follows:

a. In the introductory text of thesection, by revising the first sentence.

b. In paragraph (a)(1), footnote 1, byremoving the words ‘‘VeterinaryBiologics, 4700 River Road, Unit 148,Riverdale, Maryland 20737–1237’’ andadding the words ‘‘Center for VeterinaryBiologics, 510 South 17th Street, Suite104, Ames IA 50010–8197’’ in theirplace.

§ 145.14 Blood testing.Poultry must be more than 4 months

of age when blood tested for an officialclassification: Provided, That turkeycandidates under subpart D of this partmay be blood tested at more than 12weeks of age; game bird candidatesunder subpart E of this part may beblood tested when more than 4 monthsof age or upon reaching sexual maturity,whichever comes first; and ostrich, emu,rhea, and cassowary candidates undersubpart F of this part may be blood



tested when more than 12 months ofage. * * ** * * * *

8. Section 145.23, would be amendedas follows:

a. In paragraph (d), by revising theintroductory text.

b. In paragraph (d)(1)(i), by removingthe word ‘‘Monitored’’ and adding theword ‘‘Clean’’ in its place.

c. By revising paragraphs (d)(1)(iv)and (d)(1)(vi).

§ 145.23 Terminology and classification;flocks and products.

* * * * *(d) U.S. S. Enteritidis Clean. This

classification is intended for egg-typebreeders wishing to assure theircustomers that the hatching eggs andchicks produced are certified free ofSalmonella enteritidis.

(1) * * ** * * * *

(iv) The flock is maintained incompliance with §§ 147.21, 147.24(a),and 147.26 of this chapter. Rodents andother pests should be effectivelycontrolled;* * * * *

(vi) If a Salmonella vaccine is usedthat causes positive reactions withpullorum-typhoid antigen, one of thefollowing options must be utilized:

(A) Administer the vaccine after thepullorum-typhoid testing is done asdescribed in paragraph (d)(1)(vii) of thissection.

(B) If an injectable bacterin or livevaccine that does not spread is used,keep a sample of 350 birds unvaccinatedand banded for identification until theflock reaches at least 4 months of age.Following negative serological andbacteriological examinations asdescribed in paragraph (d)(1)(vii) of thissection, vaccinate the banded, non-vaccinated birds.* * * * *

§ 145.24 [Amended]9. In § 145.24, paragraph (a)(2), at the

end of the last sentence, the words ‘‘inaccordance with rules of practiceadopted by the Administrator’’ wouldbe added immediately after the word‘‘hearing’’.


a. By revising paragraph (c)(2).b. In paragraph (h), the introductory

text, by removing the word ‘‘primary’’.c. By revising paragraph (h)(1)(i).d. In paragraph (h)(1)(iv), by adding

the words ‘‘or under the supervision of’’immediately after the word ‘‘by’’.

e. By revising paragraph (h)(1)(vi).f. In paragraph (h)(3), the first

sentence, by removing the word ‘‘in’’

immediately before the words‘‘paragraph (h)(1)(iv)’’ and by adding thewords ‘‘and/or 500 cloacal swabscollected in accordance with§ 147.12(a)(2) of this chapter’’immediately before the word ‘‘must’’.

§ 145.33 Terminology and classification;flocks and products.

* * * * *(c) * * *(2) A participant handling U.S. M.

Gallisepticum Clean products must keepthese products separate from otherproducts through the use of separatehatchers and incubators, separate hatchdays, and proper hatchery sanitationand biosecurity (see §§ 147.22, 147.23,and 147.24) in a manner satisfactory tothe Official State Agency: Provided,That U.S. M. Gallisepticum Clean chicksfrom primary breeding flocks must beproduced in incubators and hatchers inwhich only eggs from flocks qualifiedunder paragraph (c)(1)(i) of this sectionare set.* * * * *

(h) * * *(1) * * *(i) The flock originated from a U.S. S.

Enteritidis Clean flock, or one of thefollowing samples has been examinedbacteriologically for S. enteritidis at anauthorized laboratory and any group DSalmonella samples have beenserotyped:

(A) A 25-gram sample of meconiumfrom the chicks in the flock collectedand cultured as described in§ 147.12(a)(5) of this chapter; or

(B) A sample of chick papers collectedand cultured as described in § 147.12(c)of this chapter; or

(C) A sample of 10 chicks that diedwithin 7 days after hatching.* * * * *

(vi) Hatching eggs produced by theflock are collected as quickly as possibleand are handled as described in § 147.22of this chapter.* * * * *

§ 145.34 [Amended]

11. In § 145.34, paragraphs (a)(2) and(b)(2) would each be amended byadding the words ‘‘in accordance withrules of practice adopted by theAdministrator’’ immediately after theword ‘‘hearing’’.

§ 145.44 [Amended]

12. In § 145.44, paragraphs (a)(2),(b)(2), and (c)(2) would be eachamended by adding the words ‘‘inaccordance with rules of practiceadopted by the Administrator’’immediately after the word ‘‘hearing’’.

§ 145.53 [Amended]13. In § 145.53, paragraph (a) would

be removed and reserved.

§ 145.54 [Amended]14. In § 145.54, paragraph (a)(2)

would be amended by adding the words‘‘in accordance with rules of practiceadopted by the Administrator’’immediately after the word ‘‘hearing’’.

PART 147—AUXILIARY PROVISIONSON NATIONAL POULTRYIMPROVEMENT PLAN

15. The authority citation for part 147would be revised to read as follows:

Authority: 7 U.S.C. 429; 7 CFR 2.22, 2.80,and 371.4.

§ 147.5 [Amended]16. Section 147.5 would be amended

as follows:a. In paragraph (c), by removing the

numbers ‘‘1:20’’ and adding thenumbers ‘‘1:40’’ in their place.

b. In paragraph (d), the introductorytext, by removing the numbers ‘‘1:20’’and adding the numbers ‘‘1:40’’ in theirplace.

c. In paragraph (d)(2), by removing thewords ‘‘10 microliters (0.01 cc.)’’ andadding the words ‘‘5 microliters (0.005cc.)’’ in their place.

§ 147.7 [Amended]17. In § 147.7, paragraph (e)(2)(ii)(B)

would be amended by removing thethird and fourth sentences.

18. In § 147.11, paragraph (a) wouldbe revised to read as follows:

§ 147.11 Laboratory procedurerecommended for the bacteriologicalexamination of Salmonella.

(a) For egg-and meat-type chickens,waterfowl, exhibition poultry, and gamebirds. All reactors to the Pullorum-Typhoid tests, up to 25 birds, and birdsfrom Salmonella enteritidis (SE)positive environments should becultured in accordance with both thedirect (paragraph (a)(1)of this section)and selective enrichment (paragraph(a)(2) of this section) proceduresdescribed in this section. Careful aseptictechnique should be used whencollecting all tissue samples.

(1) Direct culture (refer to illustration1 to this section). Grossly normal ordiseased liver, heart, pericardial sac,spleen, lung, kidney, peritoneum,gallbladder, oviduct, misshapen ova ortestes, inflamed or unabsorbed yolk sac,and other visibly pathological tissueswhere purulent, necrotic, orproliferative lesions are seen (includingcysts, abscesses, hypopyon, andinflamed serosal surfaces) should besampled for direct culture using either



7 Biochemical identification charts may beobtained from ‘‘A Laboratory Manual for theIsolation and Identification of Avian Pathogens,’’chapter 2, Salmonellosis. Fourth edition, 1998,American Association of Avian Pathologists, Inc.,Kennett Square, PA 19348.

flamed wire loops or sterile swabs.Since some strains may not dependablysurvive and grow in certain selectivemedia, inoculate non-selective plates(such as blood or nutrient agar) andselective plates (such as MacConkey[MAC] and brilliant green novobiocin[BGN] for pullorum-typhoid and MAC,BGN, and xylose-lysine-tergitol 4 [XLT4] for SE). After inoculating the plates,pool the swabs from the various organsinto a tube of non-selective broth (suchas nutrient or brain-heart infusion).Refer to illustration 1 for recommendedbacteriological recovery andidentification procedures.7 Proceedimmediately with collection of organsand tissues for selective enrichmentculture.

(2) Selective enrichment culture (referto illustration 1 to this section). Collectand culture organ samples separatelyfrom intestinal samples, with intestinaltissues collected last to prevent cross-contamination. Samples from thefollowing organs or sites should becollected for culture in selectiveenrichment broth:

(i) Heart (apex, pericardial sac, andcontents if present);

(ii) Liver (portions exhibiting lesionsor, in grossly normal organs, the drainedgallbladder and adjacent liver tissues);

(iii) Ovary-Testes (entire inactiveovary or testes, but if ovary is active,include any atypical ova);

(iv) Oviduct (if active, include anydebris and dehydrated ova);

(v) Kidneys and spleen; and(vi) Other visibly pathological sites

where purulent, necrotic, orproliferative lesions are seen.

(3) From each bird, aseptically collect10 to 15 grams of each organ or sitelisted in paragraph (a)(2) of this section.Mince, grind, or blend and place in asterile plastic bag. All the organs or siteslisted in paragraph (a)(2) of this sectionfrom the same bird may be pooled intoone bag. Do not pool samples from morethan one bird. Add sufficienttetrathionate enrichment broth to give a1:10 (sample to enrichment) ratio.Follow the procedure outlined inillustration 1 for the isolation andidentification of Salmonella.

(4) From each bird, aseptically collect10 to 15 grams of each of the followingparts of the digestive tract: Crop wall,duodenum, jejunum (including remnantof yolk sac), both ceca, cecal tonsils, andrectum-cloaca. Mince, grind, or blendtissues and pool them into a sterileplastic bag. Do not pool tissues fromdifferent birds into the same sample.Add sufficient tetrathionate enrichmentbroth to give a 1:10 (sample to

enrichment) ratio. Follow the procedureoutlined in illustration 1 for theisolation and identification ofSalmonella.

(5) After selective enrichment,inoculate selective plates (such as MACand BGN for pullorum-typhoid andMAC, BGN, and XLT 4) for SE.Inoculate three to five Salmonella-suspect colonies from plates into triplesugar iron (TSI) and lysine iron agar(LIA) slants. Screen colonies byserological (i.e., serogroup) andbiochemical procedures (e.g., theAnalytical Profile Index forEnterobacteriaceae [API]) as shown inillustration 1. As a supplement toscreening three to five Salmonella-suspect colonies on TSI and LIA slants,a group D colony lift assay may beutilized to signal the presence of hard-to-detect group D Salmonella colonieson agar plates.

(6) If the initial selective enrichmentis negative for Salmonella, a delayedsecondary enrichment (DSE) procedureis used. Leave the tetrathionate-enrichedsample at room temperature for 5 to 7days. Transfer 1 mL of the culture into10 mL of fresh tetrathionate enrichmentbroth, incubate at 37 °C for 20 to 24hours, and plate as before.

(7) Serogroup all isolates identified assalmonellae and serotype all serogroupD1 isolates. Phage-type all SE isolates.BILLING CODE 3410–34–U



Illustration 1.—Procedure for culturing Pullorum-Typhoid reactors and birds from SE-positive environments.



* * * * *19. Section 147.12 would be amended

as follows:a. By revising the section heading.b. In paragraph (a), the introductory

text, by removing the word ‘‘shall’’ andadding the word ‘‘should’’ in its place.

c. In paragraph (a)(1)(i), by removingthe words ‘‘(Hajna or Mueller-Kauffmann Tetrathionate BrilliantGreen)’’.

d. In paragraph (a)(3), theintroductory text, by adding the words‘‘(or commercially available spongesdesigned for this purpose)’’ immediatelybefore the words ‘‘, a key component’’.

e. In paragraph (a)(3)(ii), by removingthe words ‘‘paragraph (a)(1)’’ and addingthe words ‘‘paragraph (a)(3)(i)’’ in theirplace.

f. In paragraph (a)(3)(iv), by revisingthe first two sentences.

g. By adding new paragraphs (a)(4)and (a)(5).

h. By removing paragraph (c),redesignating paragraph (b) as paragraph(c), and adding a new paragraph (b).

§ 147.12 Procedures for collection,isolation, and identification of Salmonellafrom environmental samples, cloacalswabs, chick box papers, and meconiumsamples.

* * * * *(a) * * *(3) * * *(iv) Nest box or egg belt sampling

technique. Collect nest box or egg beltsamples by using two 3-by-3 inch sterilegauze pads premoistened with double-strength skim milk and wiping the padsover assorted locations in about 10percent of the total nesting area or theegg belt. * * ** * * * *

(4) Chick box papers. Samples fromchick box papers may bebacteriologically examined for thepresence of Salmonella. The Planparticipant may collect the samples inaccordance with paragraph (a)(4)(i) ofthis section or submit chick box papersdirectly to a laboratory in accordancewith paragraph (a)(4)(ii) of this section.It is important that the paper beremoved from the chick box before thebox is placed in the brooding house.

(i) Instructions for collecting samplesfrom chick box papers:

(A) Collect 1 chick box paper for each10 boxes of chicks placed in a houseand lay the papers on a clean surface.

(B) Clean your hands and put on latexgloves. Do not apply disinfectant to thegloves. Change gloves after collectingsamples from 10 chick box papers orany time a glove is torn.

(C) Saturate a sterile 3-by-3 inch gauzepad with double-strength skim milk (seefootnote 12 to this section) and rub thepad across the surface of five chick boxpapers. Rub the pad over at least 75percent of each paper and use sufficientpressure to rub any dry meconium offthe paper. Pouring a small amount ofdouble-strength skim milk (1 to 2tablespoons) on each paper will make iteasier to collect samples.

(D) After collecting samples from 10chick box papers, place the two gauzepads used to collect the samples (i.e.,one pad per 5 chick box papers) into an18 oz. Whirl-Pak bag and add 1 to 2tablespoons of double-strength skimmilk.

(E) Promptly refrigerate the Whirl-Pakbags containing the samples andtransport them, on ice or otherwiserefrigerated, to a laboratory within 48hours of collection. The samples may befrozen for longer storage if the Planparticipant is unable to transport themto a laboratory within 48 hours.

(ii) The Plan participant may sendchick box papers directly to alaboratory, where samples may becollected as described in paragraph(a)(4)(i) of this section. To send chickbox papers directly to a laboratory:

(A) Collect 1 chick box paper for each10 boxes of chicks placed in a houseand place the chick papers immediatelyinto large plastic bags and seal the bags.

(B) Place the plastic bags containingthe chick box papers in a clean box andtransport them within 48 hours to alaboratory. The plastic bags do notrequire refrigeration.

(iii) The laboratory must follow theprocedure set forth in paragraph (a)(5) ofthis section for testing chick meconiumfor Salmonella.

(5) Chick meconium testing procedurefor Salmonella.

(i) Record the date, source, and flockdestination on the ‘‘MeconiumWorksheet.’’

(ii) Shake each plastic bag ofmeconium until a uniform consistencyis achieved.

(iii) Transfer a 25 gm sample ofmeconium to a sterile container. Add225 mL of a preenrichment broth toeach sample (this is a 1:10 dilution),mix gently, and incubate at 37 °C for18–24 hours.

(iv) Enrich the sample with selectiveenrichment broth for 24 hours at 42 °C.

(v) Streak the enriched sample ontobrilliant green novobiocin (BGN) agarand xylose-lysine-tergitol 4 (XLT4) agar.

(vi) Incubate both plates at 37 °C for24 hours and process suspectSalmonella colonies according toparagraph (b) of this section.

(b) Isolation and identification ofSalmonella. Either of the twoenrichment procedures in thisparagraph may be used.

(1) Tetathionate enrichment withdelayed secondary enrichment (DSE):

(i) Add tetrathionate enrichment brothto the sample to give a 1:10 (sample toenrichment) ratio. Incubate the sampleat 37 or 41.5 °C for 20 to 24 hours asshown in illustration 2.

(ii) After selective enrichment,inoculate selective plates (such as BGNand XLT4). Incubate the plates at 37 °Cfor 20 to 24 hours. Inoculate three tofive Salmonella-suspect colonies fromthe plates into triple sugar iron (TSI)and lysine iron agar (LIA) slants.Incubate the slants at 37 °C for 20 to 24hours. Screen colonies by serological(i.e., serogroup) and biochemical (e.g.,API) procedures as shown in illustration2. As a supplement to screening three tofive Salmonella-suspect colonies on TSIand LIA slants, a group D colony liftassay may be utilized to signal thepresence of hard-to-detect group DSalmonella colonies on agar plates.

(iii) If the initial selective enrichmentis negative for Salmonella, use a DSEprocedure. Leave the originaltetrathionate-enriched sample at roomtemperature for 5 to 7 days. Transfer 1mL of the culture into 10mL of freshtetrathionate enrichment broth, incubateat 37 °C for 20 to 24 hours, and plateas in paragraph (b)(1)(ii) of this section.

(iv) Serogroup all isolates identifiedas Salmonella and serotype allserogroup D isolates. Phage-type allSalmonella enteritidis isolates.

(2) Pre-enrichment followed byselective enrichment. (See illustration2.)



Illustration 2.—Culture procedures for environmental samples, chick papers, or meconium.



* * * * *

§ 147.18 [Removed]20. Section 147.18 would be removed.21. Section 147.22 would be revised

to read as follows:

§ 147.22 Hatching egg sanitation.Hatching eggs should be collected

from the nests at frequent intervals and,to aid in the prevention ofcontamination with disease-causingorganisms, the following practicesshould be observed:

(a) Cleaned and disinfectedcontainers, such as egg flats, should beused in collecting the nest eggs forhatching. Egg handlers shouldthoroughly wash their hands with soapand water prior to and after eggcollection. Clean outer garments shouldbe worn.

(b) Dirty eggs should not be used forhatching purposes and should becollected in a separate container fromthe nest eggs. Slightly soiled nest eggsmay be gently dry cleaned by hand.

(c) Hatching eggs should be stored ina designated egg room under conditionsthat will minimize egg sweating. Theegg room walls, ceiling, floor, door,heater, and humidifier should becleaned and disinfected after every eggpickup. Cleaning and disinfectionprocedures should be as outlined in§ 147.24.

(d) The egg processing area should becleaned and disinfected daily.

(e) Effective rodent and insect controlprograms should be implemented.

(f) The egg processing building or areashould be designed, located, andconstructed of such materials as toassure that proper egg sanitationprocedures can be carried out, and thatthe building itself can be easily,effectively, and routinely sanitized.

(g) All vehicles used for transportingeggs or chicks/poults should be cleanedand disinfected after use. Cleaning anddisinfection procedures should be asoutlined in § 147.24.

22. Section 147.23 would be revisedto read as follows:

§ 147.23 Hatchery sanitation.An effective program for the

prevention and control of Salmonellaand other infections should include thefollowing measures:

(a) An effective hatchery sanitationprogram should be designed andimplemented.

(b) The hatchery building should bearranged so that separate rooms areprovided for each of the four operations:Egg receiving, incubation and hatching,chick/poult processing, and egg tray andhatching basket washing. Traffic and

airflow patterns in the hatchery shouldbe from clean areas to dirty areas (i.e.,from egg room to chick/poult processingrooms) and should avoid tracking fromdirty areas back into clean areas.

(c) The hatchery rooms, and tables,racks, and other equipment in themshould be thoroughly cleaned anddisinfected frequently. All hatcherywastes and offal should be burned orotherwise properly disposed of, and thecontainers used to remove suchmaterials should be cleaned andsanitized after each use.

(d) The hatching compartments ofincubators, including the hatching trays,should be thoroughly cleaned anddisinfected after each hatch.

(e) Only clean eggs should be used forhatching purposes.

(f) Only new or cleaned anddisinfected egg cases should be used fortransportation of hatching eggs. Soiledegg case fillers should be destroyed.

(g) Day-old chicks, poults, or othernewly hatched poultry should bedistributed in clean, new boxes and newchick papers. All crates and vehiclesused for transporting birds should becleaned and disinfected after each use.


a. In paragraph (a), the introductorytext, by removing the words ‘‘, hatcheryrooms and delivery trucks’’.

b. By revising paragraphs (a)(1) and(a)(3).

c. In paragraph (b), the introductorytext, by adding the words ‘‘and hatcheryrooms’’ immediately after the word‘‘hatchers’’.

d. By revising paragraph (b)(1).e. In paragraph (b)(3), by removing the

word ‘‘sanitized’’ and adding the word‘‘disinfected’’ in its place.

f. By redesignating paragraph (c) asparagraph (b)(4) and adding a newparagraph (c).

§ 147.24 Cleaning and disinfecting.

* * * * *(a) * * *(1) Remove all live ‘‘escaped’’ and

dead birds from the building. Blow dustfrom equipment and other exposedsurfaces. Empty the residual feed fromthe feed system and feed pans andremove it from the building.Disassemble feeding equipment anddump and scrape as needed to removeany and all feed cake and residue. Cleanup spilled feed around the tank andclean out the tank. Rinse down andwash out the inside of the feed tank todecontaminate the surfaces and allow todry.* * * * *

(3) Wash down the entire insidesurfaces of the building and all the

installed equipment such as curtains,ventilation ducts and openings, fans, fanhousings and shutters, feedingequipment, watering equipment, etc.Use high pressure and high volumewater spray (for example 200 poundsper square inch and 10 gallons perminute or more) to soak into andremove the dirt to decontaminate thebuilding. Scrub the walls, floors, andequipment with a hot soapy watersolution. Rinse to remove soap.* * * * *

(b) * * *(1) Use cleaning agents and sanitizers

that are registered by the U.S.Environmental Protection Agency asgermicidal, fungicidal,pseudomonocidal, and tuberculocidal.Use manufacturer’s recommendeddilution. Remove loose organic debrisby sweeping, scraping, vacuuming,brushing, or scrubbing, or by hosingsurface with high pressure water (forexample 200 pounds per square inchand 10 gallons per minute or more).Remove trays and all controls and fansfor separate cleaning. Use hot water(minimum water temperature of 140 °F)for cleaning hatching trays and chickseparator equipment. Thoroughly wetthe ceiling, walls, and floors with astream of water, then scrub with a hardbristle brush. Use a cleaner/sanitizerthat can penetrate protein and fattydeposits. Allow the chemical to cling totreated surfaces at least 10 minutesbefore rinsing off. Manually scrub anyremaining deposits of organic materialuntil they are removed. Rinse until thereis no longer any deposit on the walls,particularly near the fan opening, andapply disinfectant. Use a clean andsanitized squeegee to remove excesswater, working down from ceilings towalls to floors and being careful not torecontaminate cleaned areas.* * * * *

(c) The egg and chick/poult deliverytruck drivers and helpers should use thefollowing good biosecurity practiceswhile picking up eggs or deliveringchicks/poults:

(1) Spray truck tires thoroughly withdisinfectant before leaving the mainroad and entering the farm driveway.

(2) Put on sturdy, disposable plasticboots or clean rubber boots beforegetting out of the truck cab. Put on aclean smock or coveralls and a hairnetbefore entering the poultry house.

(3) After loading eggs or unloadingchicks/poults, remove the dirty smock/coveralls and place into plastic garbagebag before loading in the truck. Be sureto keep clean coveralls separate fromdirty ones.



1 7 U.S.C. 1 et seq.2 Pub. L. 106–554, 114 Stat. 2763. The text of the

CFMA may be accessed on the Internet at http://agriculture.house.gov/txt5660.pdf.

3 See section 251(a) of the CFMA. This tradingpreviously had been prohibited by section2(a)(1)(B)(v) of the CEA.

4 The term ‘‘security futures product’’ is definedin section 1a(32) of the CEA and section 3(a)(56) ofthe Exchange Act to mean ‘‘a security future or anyput, call, straddle, option, or privilege on anysecurity future.’’ The term ‘‘security future’’ isdefined in section 1a(31) of the CEA and section3(a)(55)(A) of the Exchange Act to include futurescontracts on individual securities and on narrow-based security indexes: The term ‘‘narrow-basedsecurity index’’ is defined in section 1a(25) of theCEA and section 3(a)(55)(B) of the Exchange Act.Because the CFMA also provides that options onsecurity futures cannot be traded until at leastDecember 21, 2003, security futures are the onlysecurity futures product that may be available fortrading until that date.

5 The CFMA also prescribes the dates on whichsecurity futures trading can commence.

(4) Reenter the cab of the truck andremove boots before placing feet ontofloorboards. Remove hairnet and leavewith disposable boots on farm.

(5) Sanitize hands using appropriatehand sanitizer.

(6) Return to the hatchery or go to thenext farm and repeat the process.

§ 147.25 [Amended]

24. Section 147.25 would be amendedby removing the words ‘‘as an essential’’and adding the words ‘‘or rooms as a’’in their place.


a. By revising paragraph (a).b. In paragraph (b)(5), by removing the

word ‘‘Keep’’ and adding the words‘‘Establish a rodent control program tokeep’’ in its place.

c. By removing paragraph (b)(10) andredesignating paragraphs (b)(11) through(b)(15) as paragraphs (b)(10) through(b)(14), respectively.

§ 147.26 Procedures for establishingisolation and maintaining sanitation andgood management practices for the controlof Salmonella and Mycoplasma infections.

(a) The following procedures arerequired for participation under the U.S.Sanitation Monitored, U.S. M.Gallisepticum Clean, U.S. M. SynoviaeClean, U.S. S. Enteritidis Monitored,and U.S. S. Enteritidis Cleanclassifications:

(1) Allow no visitors except undercontrolled conditions to minimize theintroduction of Salmonella andMycoplasma. Such conditions must beapproved by the Official State Agencyand the Service;

(2) Maintain breeder flocks on farmsfree from market birds and otherdomesticated fowl. Follow properisolation procedures as approved by theOfficial State Agency;

(3) Dispose of all dead birds by locallyapproved methods.* * * * *

26. In § 147.43, paragraph (b) wouldbe revised to read as follows:

§ 147.43 General Conference Committee.

* * * * *(b) The regional committee members

and their alternates will be elected bythe official delegates of their respectiveregions, and the member-at-large will beelected by all official delegates. Theremust be at least two nominees for eachposition, the voting will be by secretballot, and the results will be recorded.At least one nominee from each regionmust be from an underrepresentedgroup (minorities, women, or personswith disabilities). The process forsoliciting nominations for regional

committee members will include, butnot be limited to: Advertisements in atleast two industry journals, such as thenewsletters of the American Associationof Avian Pathologists, the NationalChicken Council, the United EggProducers, and the National TurkeyFederation; a Federal Registerannouncement; and special inquiries fornominations from universities orcolleges with minority/disabilityenrollments and faculty members inpoultry science or veterinary science.* * * * *

Done in Washington, DC, this 11th day ofJuly 2001.Bobby R. Acord,Acting Administrator, Animal and PlantHealth Inspection Service.[FR Doc. 01–17805 Filed 7–19–01; 8:45 am]BILLING CODE 3410–34–U

COMMODITY FUTURES TRADINGCOMMISSION

17 CFR Part 41

RIN 3038–AB73

Listing Standards and Conditions forTrading Security Futures Products

AGENCY: Commodity Futures TradingCommission.ACTION: Proposed rules.

SUMMARY: The Commodity FuturesTrading Commission (‘‘CFTC’’ or‘‘Commission’’) proposes Rules 41.21through 41.25 under the CommodityExchange Act (‘‘CEA’’).1 These proposedrules relate to new statutory provisionsenacted by the Commodity FuturesModernization Act of 2000 (‘‘CFMA’’) 2

that specify listing standards andconditions for trading of security futuresproducts. These proposed rules alsoestablish requirements related to thereporting of data, trading halts, positionlimits, and special provisions relating tocontract design of cash-settled securityfutures products and the physicaldelivery of security futures products.DATES: Comments must be received onor before August 20, 2001.ADDRESSES: Comments should be sent tothe Commodity Futures TradingCommission, Three Lafayette Centre,1155 21st Street, NW., Washington, DC20581, attention: Office of theSecretariat. Comments may be sent byfacsimile transmission to 202–418–5521, or by e-mail to [email protected].

Reference should be made to ‘‘ListingStandards and Conditions for SecurityFutures.’’FOR FURTHER INFORMATION CONTACT:Richard A. Shilts, Acting Director,Division of Economic Analysis; ThomasM. Leahy, Jr., Financial InstrumentsUnit Chief, Division of EconomicAnalysis; or Gabrielle A. Sudik,Attorney, Office of the General Counsel,Commodity Futures TradingCommission, Three Lafayette Centre,1155 21st Street, NW., Washington, D.C.20581. Telephone: 202–418–5000. E-mail: ([email protected]),([email protected]), or([email protected]).SUPPLEMENTARY INFORMATION: TheCommodity Futures TradingCommission today proposes for publiccomment new rules 41.21 through 41.25under part 41, 17 CFR part 41, under theCommodity Exchange Act as amendedby the Commodity FuturesModernization Act of 2000 (7 U.S.C. 1et seq., as amended by Appendix E ofPub. L. 106–554, 114 Stat. 2763).

Table of Contents

I. BackgroundII. Section-By-Section AnalysisIII. Request For CommentsIV. Costs And Benefits Of The Proposed

RulesV. Related Matters

A. Paperwork Reduction ActB. Regulatory Flexibility Act

VI. Statutory AuthorityText of Proposed Rules

I. BackgroundOn December 21, 2000, the CFMA

was signed into law. Among otherthings, the CFMA lifted the ban onsingle stock and narrow-based stockindex futures (‘‘security futures’’).3 Inaddition, the CFMA established aframework for the joint regulation ofsecurity futures products 4 by the CFTCand the Securities and ExchangeCommission (‘‘SEC’’).5



Specifically, principal-to-principal transactionsbetween institutions cannot commence untilAugust 21, 2001 and retail transactions cannotcommence until December 21, 2001. Both startingdates are conditioned upon the registration of afutures association as a national securitiesassociation under the Exchange Act. Section 202(a)of the CFMA; Section 6(g)(5) of the Exchange Act.

6 The Accord was codified in the Securities ActAmendments of 1982, which amended section 2 ofthe Securities Act of 1933, section 3 of theSecurities Exchange Act of 1934, and section2(a)(1)(B) of the Commodity Exchange Act.

7 See id.

8 See 66 FR 29517–23 (May 31, 2001). In thatnotice, the Commission proposed new regulationsthat would provide notice procedures for a nationalsecurities exchange, a national securitiesassociation, or an alternative trading system tobecome a designated contract market in securityfutures products. By registering with theCommission, a national securities exchange, anational securities association, or an alternativetrading system is, by definition, a designatedcontract market for purposes of trading securityfutures products. Hence, references in the proposedrules to designated contract markets include notice-registered contract markets, except where otherwisenoted.

9 Section 251 of the CFMA added subparagraph(D) to section 2(a)(1) of the CEA.

Prior to enactment of the CFMA, theShad-Johnson Accord (‘‘Accord’’) 6

governed trading in contracts of sale forfuture delivery (‘‘futures contracts’’ or‘‘futures’’) on securities and securityindexes. Negotiated by the Chairmen ofthe SEC and the CFTC in 1982 andsigned into law in 1983, the Accordpermitted futures exchanges to offerfutures contracts on security indexes ifthe contracts satisfied certain statutorycriteria: (1) The contract had to be cash-settled; (2) the contract could not bereadily susceptible to manipulation; and(3) the underlying securities had tomeasure and reflect the entire market ora substantial segment of the market, i.e.,it was a ‘‘broad-based’’ security index.The Accord prohibited any futures onsecurity indexes that did not meet thesecriteria.7

In addition to repealing theprohibition on certain types of securityfutures, the CFMA amended the CEAand the Securities Exchange Act of 1934(‘‘Exchange Act’’) by adding a definitionof ‘‘narrow-based security index.’’Futures contracts on security indexesthat are narrow-based security indexeswill be jointly regulated by the CFTCand the SEC under the frameworkestablished by the CFMA. Section2(a)(1)(D) of the CEA and section 6(h) ofthe Exchange Act establish listingstandards and conditions for entitieswishing to list and trade security futuresproducts.

It is important that the listingstandards and conditions in the CEAand the Exchange Act be easilyunderstood and applied by boards oftrade. The rules proposed today addressissues related to these standards andestablish uniform requirements relatedto position limits, as well as provisionsto minimize the potential formanipulation and disruption to thefutures markets and underlyingsecurities markets. Additionalconditions related to trading halts andacceptable procedures for cashsettlement will be addressed in a futurejoint rulemaking by the Commissionand the SEC.

II. Section-by-Section Analysis

Purpose and ScopeSection 251 of the CFMA amends

section 2 of the CEA by providing thatin order for a board of trade to listsecurity futures products, the securityfutures products and the securitiesunderlying the security futures productsmust meet a number of standards andconditions termed ‘‘listing standards.’’Boards of trade may list for trading onlysecurity futures products that conformto the conditions and criteria specifiedin section 2(a)(1)(D)(i) of the CEA,which, among other criteria, requiresthat security futures products not bereadily susceptible to manipulation.Except as otherwise provided in a rule,regulation or order, the underlyingsecurity or securities must be registeredpursuant to section 12 of the ExchangeAct and must be based upon commonstock or such other equity securities asthe Commission and the SEC jointlydetermine appropriate. These listingstandards also relate to rules regardingsettlement; who may deal in securityfutures products; prohibitions on dualtrading; the prevention of pricemanipulation; and rules governingsurveillance, audit trails, trading halts,and margin requirements. Theseproposed rules would implement theseprovisions of the CFMA and enumeratecertain requirements and conditions forlisting and trading security futuresproducts.

Furthermore, section 6(h)(2) of theExchange Act, as amended by section206 of the CFMA, provides that securityfutures products must conform to listingstandards that the national securitiesexchange or national securitiesassociation registered under section 15Aof the Exchange Act (‘‘exchange orassociation’’) files with the SEC undersection 19(b) of the Exchange Act.Section 6(h)(2) of the Exchange Act alsorequires that a national securitiesexchange or national securitiesassociation meet the requirements ofsection 2(a)(1)(D)(i) of the CEA. Inaddition, section 6(h)(3)(C) of theExchange Act imposes the additionalrequirement that the exchange orassociation’s listing standards forsecurity futures products must be noless restrictive than comparable listingstandards for security options. The SECmay issue guidance for boards of tradeas to the listing standards that wouldsatisfy this requirement.

Security futures products may betraded on any board of trade that isdesignated as a contract market by theCommission pursuant to section 5 of theCEA or that is registered with theCommission as a derivatives transaction

execution facility (‘‘DTF’’) pursuant tosection 5a of the CEA. In addition,section 5f(a) of the CEA permits certainentities that are otherwise regulated bythe SEC to be designated contractmarkets for the limited purpose oftrading security futures products.Specifically, any board of trade that isregistered with the SEC as a nationalsecurities exchange pursuant to section6(a) of the Exchange Act, is registeredwith the SEC as a national securitiesassociation pursuant to section 15A(a)of the Exchange Act, or is an alternativetrading system (‘‘ATS’’) as defined bysection 1a(1) of the CEA shall be adesignated contract market in securityfutures products if certain conditionsare met.8

Section 41.21 Requirements forUnderlying Securities

Paragraph (a) of proposed section41.21 addresses security futuresproducts based on a single security.Paragraph (a) implements therequirements of sections 2(a)(1)(D)(i)(I)and (III) of the CEA 9 by providing thata security futures product based on asingle security may be traded if, exceptas otherwise provided by a rule,regulation or order, the security isregistered pursuant to section 12 of theExchange Act and the security iscommon stock or other equity securityas the Commission and the SECdetermine appropriate. Furthermore,security futures products must conformto other regulations issued by the SEC,in accordance with section 6(h) of theExchange Act, as amended by section206 of the CFMA.

Paragraph (b) of proposed section41.21 addresses security futuresproducts based on two or moresecurities. Subsection (b) implements asubstantive provision of section 1a ofthe CEA, as amended by section 101 ofthe CFMA, by providing that a futurescontract based on an index comprised oftwo or more securities may be traded asa security futures product if: (1) Theindex meets the narrow-based securityindex definition found in section 1a(25)



10 Section 1a(25) of the CEA defines a narrow-based security index as an index: (i) that iscomprised of nine or fewer component securities;(ii) in which a component security comprises morethan 30 percent of the index’s weighting; (iii) inwhich the five highest weighted componentsecurities in the aggregate comprise more than 60percent of the index’s weighting; or (iv) in whichthe lowest weighted component securitiescomprising, in the aggregate, 25 percent of theindex’s weighting have an aggregate dollar value ofaverage daily trading volume of less than $50million or, in the case of an index with 15 or morecomponent securities, $30 million.

11 Section 4f of the CEA, as amended by section252(b) of the CFMA, allows brokers and dealersregistered with the SEC to register with theCommission as futures commission merchants orintroducing brokers so long as they adhere tocertain requirements regarding transactions inconnection with security futures products.

of the CEA; 10 (2) the securities areregistered pursuant to section 12 of theExchange Act; (3) the securities arecommon stock or other equity securitiesas the Commission and the SECdetermine appropriate; and (4) thesecurities meet the listing standardsrequired by the SEC pursuant to section6(h) of the Exchange Act.

Paragraph (c) of proposed section41.21 is reserved for rulemakingpursuant to section 2(a)(1)(D)(v) of theCEA, which allows the Commission andthe SEC to jointly modify the criteria ofsections 2(a)(1)(D)(i)(I) and2(a)(1)(D)(i)(III) of the CEA.

Section 41.22 Required Certifications

Section 2(a)(1)(D)(vii) of the CEAmakes it unlawful for a designatedcontract market or registered derivativestransaction execution facility to list fortrading or execution a security futuresproduct unless it has provided theCommission with a certification that thesecurity futures product and the boardof trade meet specified requirements.Accordingly, as discussed below,paragraphs (b) through (j) of proposedsection 41.22 require designatedcontract markets and registeredderivatives transaction executionfacilities to certify that they meet thespecified requirements of section2(a)(1)(D)(vii) of the CEA. In addition,paragraph (a) of proposed § 41.22requires a designated contract market orregistered derivatives transactionexecution facility to certify that thesecurity or securities underlying asecurity futures product meet therequirements of proposed rule 41.21,including the requirement that thesecurities underlying a security futuresproduct conform to the listingsstandards filed with the SEC undersection 19(b) of the Exchange Act, asdiscussed above.

Section 2(a)(1)(D)(i)(II) of the CEAprovides that, if a security futuresproduct is not cash-settled, thedesignated contract market or registeredderivatives transaction executionfacility must have arrangements with aclearing agency registered with the SECfor the payment and delivery of the

securities underlying the securityfutures product. Paragraph (b) ofproposed § 41.22 implements thisprovision by requiring a certificationthat the designated contract market orregistered derivatives transactionexecution facility will comply with thisrequirement.

Section 2(a)(1)(D)(i)(V) of the CEAprovides that only futures commissionmerchants, introducing brokers,commodity trading advisors, commoditypool operators or associated personssubject to suitability rules comparable tothose of a national securities associationregistered pursuant to section 15A(a) ofthe Exchange Act (including notice-registered brokers or dealers) 11 maysolicit, accept orders for, or otherwisedeal in any transaction in or inconnection with security futuresproducts. Paragraph (d) of proposed§ 41.22 implements this provision byrequiring a certification that only theseentities and persons, except to theextent otherwise permitted under theExchange Act and the rules andregulations thereunder, may acceptorders for or otherwise deal in securityfutures products.

Section 2(a)(1)(D)(i)(VI) of the CEAprovides that security futures productsmust be subject to the prohibitionagainst dual trading in section 4j of theCEA or section 11(a) of the ExchangeAct. Paragraph (e) of proposed § 41.22implements this requirement byrequiring a designated contract marketor registered derivatives transactionexecution facility to prohibit dualtrading in accordance with proposedsection 41.27.

Notice designated contract marketsare exempt from the provisions ofsection 4j of the CEA by virtue ofsection 5f(b)(1)(B). A notice designatedcontract market therefore does not needto certify that it is acting in accordancewith proposed rule 41.27. However, itshould be noted that notice designatedcontract markets are still bound by theprohibition against dual trading undersection 11(a) of the Exchange Act andany accompanying rules andregulations.

Section 2(a)(1)(D)(i)(VII) of the CEArequires that designated contractmarkets and registered derivativestransaction execution facilities maintainprocedures to prevent manipulation ofthe price of security futures products,any underlying security, an option on

such security, or an option on a groupor index including such security.Paragraph (f) of proposed § 41.22requires a certification that trading inthe security futures product will not bereadily susceptible to manipulation ofthe price of such security futuresproduct or of the price of anyunderlying security or securities or anyoption thereon.

Section 2(a)(1)(D)(i)(VIII) of the CEArequires designated contract marketsand registered derivatives transactionexecution facilities on which securityfutures products are traded tocoordinate surveillance with marketsthat trade the underlying security or anyrelated security, in order to detectmanipulation and insider trading. Thisrequirement is proposed to beimplemented by paragraph (g) ofproposed § 41.22, which requires that aboard of trade certify that it is a memberof the Intermarket Surveillance Group(the ‘‘ISG’’).

The Intermarket Surveillance Groupwas created under the auspices of theSEC in 1983 as a forum to ensure thatnational securities exchanges andnational securities associationsadequately share surveillanceinformation and coordinate inquiriesand investigations designed to addresspotential intermarket manipulations andtrading abuses. All national securitiesexchanges and national securitiesassociations are full members of the ISG.Full members routinely share a greatdeal of surveillance and investigatoryinformation, and this framework hasproven to be an essential mechanism toensure that there is adequateinformation sharing and investigatorycoordination for potential intermarketmanipulations and trading abuses.

In view of the growth of stock indexfutures contracts, since 1987, severalfutures exchanges and non-U.S.exchanges and associations have beenaffiliate members of the ISG. Affiliatemembers are required to shareinformation on a more limited basiswith the ISG.

To ensure that boards of trade haveprocedures in place for the coordinatedsurveillance required by section2(a)(1)(D)(i)(VIII) of the CEA, theCommission believes that it is essentialthat all boards of trade that tradesecurity futures products be fullmembers of the ISG. In view of thisproposed requirement and recognizingthe essential role played by the ISG, asnoted above, the Commission alsobelieves that the ISG should grant fullmemberships to all boards of trade thattrade security futures products upon a



12 The Commission understands that the SECconcurs with the Commission’s belief regarding therequirement that boards of trade trading securityfutures become full ISG members and that suchboards of trade be granted full ISG membership.

13 The proposed rules regarding marginrequirements will be published in the near future.Once the margin requirement rules are published,the final version of these rules will note the partand section wherein margin requirements can befound.

14 Section 1a(29) of the CEA defines registeredentities as designated contract markets, registeredderivatives transaction execution facilities,registered derivatives clearing organizations, andnotice-designated contract markets.

good-faith showing that such entitiesmeet the criteria for full membership.12

Section 2(a)(1)(D)(i)(IX) of the CEArequires that designated contractmarkets and registered derivativestransaction execution facilities onwhich security futures products aretraded have audit trails in place tofacilitate the coordinated surveillancerequired by subclause (VIII). Paragraph(h) of proposed § 41.22 implements thisrequirement. The Commission believesthat the audit trails already in place ondesignated contract markets can servethis purpose. Based on futuredevelopments of markets for securityfutures products, modifications may beappropriate.

Section 2(a)(1)(D)(i)(X) of the CEArequires that designated contractmarkets and registered derivativestransaction execution facilities have inplace procedures to coordinate tradinghalts between boards of trade. Paragraph(i) of proposed § 41.22 requires a boardof trade to certify that it has suchprocedures in place.

Alternative trading systems, nationalsecurities associations registeredpursuant to section 15A(a) of theSecurities Exchange Act of 1934 ornational securities exchanges registeredpursuant to section 6(a) of the SecuritiesExchange Act of 1934 of which analternative trading system is a memberdo not need to make certifications underparagraphs (g), (h), and (i) of thissection, as provided by sections2(a)(1)(D)(i)(VIII)–(X).

Section 2(a)(1)(D)(i)(XI) of the CEArequires that the margin requirementsfor security futures products complywith the regulations prescribedpursuant to section 7(c)(2)(B) of theExchange Act. Paragraph (j) of proposed§ 41.22 implements this section byrequiring a certification of compliancewith the margin requirements currentlybeing drafted in a separaterulemaking.13

Section 41.23 Listing of SecurityFutures Products for Trading

Section 2(a)(1)(D)(vii) of the CEAprescribes that a designated contractmarket or registered derivativestransaction execution facility mustprovide the Commission with acertification of compliance with section

2(a)(1)(D)(i) of the CEA before trading orexecuting a security futures product.Paragraph (a) of proposed § 41.23implements this requirement bydescribing the documents that must befiled with the Commission, includingdocuments and certifications requiredby proposed §§ 41.22 and 41.25.

Paragraph (b) of proposed § 41.23prescribes the procedures for voluntarysubmission by designated contractmarkets or registered derivativestransaction execution facilities ofsecurity futures products forCommission approval, as permitted bysection 5c(c)(2) of the CEA. Noticedesignated contract markets would notbe permitted to request Commissionapproval of security futures products,since they are exempt from theprovisions of 5c of the CEA by virtue ofsection 5f(b)(1)(D) of the CEA.

Section 41.24 Rule AmendmentsRelating to Security Futures Products

Section 5c(c)(1) of the CEA, asenacted by section 113 of the CFMA,provides that a registered entity mayimplement a rule or rule amendment bycertifying that the new rule or ruleamendment complies with the CEA.14

Paragraph (a) of proposed § 41.24requires designated contract markets(including notice designated contractmarkets) and registered derivativesclearing organizations to file with theCommission any rule or ruleamendment. Designated contractmarkets pursuant to section 5 of theCEA and registered derivatives clearingorganizations pursuant to section 5b ofthe CEA (but not notice designatedclearing organizations), must follow theprocedures for self-certification of rulesand rule amendments relating tosecurity futures contained in proposed§ 41.24(a)(4).

Paragraph (b) of proposed § 41.24would mandate that the procedures ofparagraph (a) also apply to the self-certification of rules relating to securityfutures products by registeredderivatives transaction executionfacilities, notwithstanding proposed§ 37.7.

Paragraph (c) of proposed § 41.24would allow a designated contractmarket, registered derivativestransaction execution facility, orregistered derivatives clearingorganization to submit rules forCommission approval, as permitted bysection 5c(c)(2) of the CEA. However,notice designated contract markets

would not be permitted to requestCommission approval of rules, sincesection 5f of the CEA exempts theseentities from section 5c(c)(2) of the CEA.

Section 41.25 Additional Conditionsfor Trading Security Futures Products

Section 2(a)(1)(D)(i)(VII) of the CEArequires that trading in a securityfutures product not be readilysusceptible to manipulation of the priceof the security futures product, the priceof any underlying security, option onsuch security, or option on a group orindex of including such securities.Proposed § 41.25 establishesrequirements in this regard related todata reporting, trading halts, positionlimits, and certain contract designfeatures. Paragraph (a) of proposed§ 41.25 establishes requirements that arecommon to all security futures products,while paragraphs (b) and (c) establishrequirements for cash-settled andphysical delivery contracts,respectively.

Paragraph (a)(1) of proposed § 41.25requires designated contract marketsand registered derivatives transactionexecution facilities to comply with part16 of the Commission’s regulationsregarding the daily reporting of marketdata. Paragraph (a)(2) is reserved for theestablishment of rules providing forregulatory halts for trading in securityfutures products, which will beaddressed in a separate rulemaking.Paragraph (a)(3) requires designatedcontract markets and registeredderivatives transaction executionfacilities to establish speculativeposition limits or positionaccountability rules for security futuresproducts, generally based on the averagedaily trading volume of the underlyingsecurity during the most recent six-month period.

Specifically, the Commission isproposing to require boards of trade toadopt speculative position limit orposition accountability rules for listedsecurity futures. The level of theposition limit and whether a positionlimit is required depends upon thetrading activity and capitalization of thesecurity or securities underlying thesecurity future. The speculative positionlimit level adopted by a board of tradeshould be consistent with the obligationin section 2(a)(1)(D)(i)(VII) of the CEAthat the designated contract market orregistered derivatives transactionexecution facility maintain proceduresto prevent manipulation of the price ofthe security futures product and theunderlying security or securities.

The position limit levels proposed inthis rule are set at levels comparable tothe limits that currently apply to



15 7 U.S.C. 19.16 See section 1a(25)(A) of the CEA and section

3(a)(55)(B) of the Exchange Act.

options on individual securities.However, the proposed position limitrequirements for security futures differfrom individual security option positionlimit rules in several ways. In thisregard, the proposed limits would onlyapply to an expiring security futurescontract during its five last trading days.The Commission believes that it isduring that time period that thepotential for manipulation based on anextraordinarily large futures positionwould most likely occur. Further, forsecurity futures contracts based on asecurity that has an average dailytrading volume greater than 20 millionshares, the Commission believes that thethreat of manipulation is sufficientlyreduced such that an exchange couldsubstitute a position accountability rulefor a fixed position limit. Under such arule, a trader holding a position in asecurity future that exceeded athreshold level determined by theexchange (e.g., no more than 22,500contracts of 100 shares) would agree toprovide information to the exchangeregarding that position and consent tohalt increasing the position if requestedby the exchange.

Paragraph (b) of proposed § 41.25relates to security futures products thatare cash settled. This paragraphprovides that the cash-settlementprovisions of security futures productsmust be reliable and acceptable, reflectthe price of the underlying security orsecurities, and not be readilysusceptible to manipulation. Paragraph(b) is in part reserved for specific rulesrelating to special requirementsregarding the cash-settlement price,which will be addressed in a separaterulemaking.

Paragraph (c) of proposed § 41.25relates to security futures products thatare settled by actual delivery of theunderlying security or securities. Thisparagraph provides that a board of trademust effect physical delivery through aclearing agency registered pursuant tosection 17A of the Exchange Act. Thisprovision implements section2(a)(1)(D)(i)(II) of the CEA, whichrequires that, if a security futuresproduct is not cash settled, the board oftrade on which the product is tradedmust have arrangements in place withsuch a clearing agency for payment anddelivery of the underlying securities.

III. Request for CommentsThe Commission solicits comments

on all aspects of Proposed Rules 41.21through 41.25 under the CEA. Inparticular, do the proposed filing andcertification procedures representeffective and reasonable ways to ensurethat the requirements of the CEA and

the Exchange Act are satisfied? Inaddition, the Commission seekscomments on whether the proposedposition limit provisions are appropriateto deter manipulation in security futuresproducts, and whether it is desirable toestablish the applicable position limitlevels based on average daily tradingvolume and capitalization of theunderlying securities. The Commissionalso seeks comment on whether anypotential manipulation of securityfutures products is more likely to occurat contract expiration than at othertimes. Commenters are welcome to offertheir views on any other matter raisedby the proposed rules.

IV. Costs and Benefits of the ProposedRules

Section 15 of the CEA requires theCommission to consider the costs andbenefits of its action before issuing anew regulation.15 The Commissionunderstands that, by its terms, section15 does not require the Commission toquantify the costs and benefits of a newregulation or to determine whether thebenefits of the proposed regulationoutweigh its costs. Nor does it requirethat each proposed rule be analyzed inisolation when that rule is a componentof a larger package of rules or rulerevisions. Rather, section 15 simplyrequires the Commission to ‘‘considerthe costs and benefits’’ of its action.

Section 15 further specifies that costsand benefits shall be evaluated in lightof five broad areas of market and publicconcern: Protection of marketparticipants and the public; efficiency,competitiveness, and financial integrityof futures markets; price discovery;sound risk management practices; andother public interest considerations.Accordingly, the Commission could inits discretion give greater weight to anyone of the five enumerated areas ofconcern and could in its discretiondetermine that, notwithstanding itscosts, a particular rule was necessary orappropriate to protect the public interestor to effectuate any of the provisions orto accomplish any of the purposes of theCEA.

The proposed rules constitute onepart of a package of related ruleprovisions. The rules provide guidanceand establish procedures for tradingfacilities in order to facilitatecompliance with governing laws relatedto security futures products.

The Commission has considered thecosts and benefits of the proposed rulesas a totality, in light of the specific areasof concern identified in section 15. Theproposed rules should have no effect,

from the standpoint of imposing costs orcreating benefits, on the financialintegrity or price discovery function ofthe futures and options markets or onthe risk management practices of tradingfacilities or others. The proposed rulesalso should have no material effect onthe protection of market participantsand the public and should not impactthe efficiency and competition of themarkets.

Accordingly, the Commission hasdetermined to propose the rulesdiscussed above. The Commissioninvites public comment on theapplication of the cost-benefit provisionof section 15 of the CEA in regard to theproposed rules. Commenters also areinvited to submit any data that they mayhave quantifying the costs and benefitsof the proposed rules.

V. Related Matters

A. Paperwork Reduction Act

The Paperwork Reduction Act(‘‘PRA’’) of 1995 (44 U.S.C. 3501 et seq.)imposes certain requirements on federalagencies (including the Commission) inconnection with their conducting orsponsoring any collection ofinformation as defined by the PRA. Thisproposed rulemaking containsinformation collection requirementswithin the meaning of the PRA. TheCommission has submitted a copy ofthis part to the Office of Managementand Budget (OMB) for its review inaccordance with 44 U.S.C. 3507(d).

Collection of Information: Part 41,Relating to Security Futures Products,OMB Control Number 3038–XXXX.

An agency may not conduct orsponsor, and a person is not required torespond to, an information collectionunless it displays a currently valid OMBcontrol number. The Commission iscurrently requesting a control numberfor this information collection fromOMB.

As noted above, the CFMA lifted theban on trading single stock and narrow-based stock index futures andestablished a framework for the jointregulation of these products by theCommission and the SEC. In addition,the CFMA amended the CEA and theExchange Act by adding a definition of‘‘narrow-based security index,’’ whichestablishes an objective test of whethera security index is narrow-based.16

Futures contracts on security indexesthat meet the statutory definition arejointly regulated by the Commission andthe SEC. Futures contracts on indexesthat do not meet the statutory definition



17 5 U.S.C. 601 et seq.18 See 47 FR 18618–21 (April 30, 1982).19 See id. at 18619 (discussing contract markets).20 See 66 FR 14262, 14268 (March 9, 2001).

remain under the sole jurisdiction of theCommission.

The effect of proposed rules 41.22,41.23, 41.24, and 41.25 will be toincrease the burden previouslysubmitted to OMB by 750 hoursresulting from the preparation ofmaterials to be filed with theCommission in connection with thelisting of security futures products bydesignated contract markets andregistered derivatives transactionexecution facilities.

The estimated burden of proposedrules 41.22, 41.23, 41.24, and 41.25 wascalculated as follows:

Estimated number of respondents: 15.Total annual responses: 50.Estimated average number of hours

per response: 1.Estimated total number of hours of

annual burden: 750.This annual reporting burden

represents an increase of 750 hours asa result of the proposed new rules.

Organizations and individualsdesiring to submit comments on theinformation collection requirementsshould direct them to the Office ofInformation and Regulatory Affairs,OMB, Room 10235 New ExecutiveBuilding, Washington, DC 20503,Attention: Desk Officer for theCommodity Futures TradingCommission.

The Commission considers commentsby the public on this proposedcollection of information in:

• Evaluating whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the Commission, includingwhether the information will have apractical use;

• Evaluating the accuracy of theCommission’s estimate of the burden ofthe proposed collection of information,including the validity of themethodology and assumptions used;

• Enhancing the quality, usefulness,and clarity of the information to becollected; and

• Minimizing the burden of collectionof information on those who are torespond, including through the use ofappropriate automated, electronic,mechanical, or other technologicalcollection techniques or other forms ofinformation technology (e.g., permittingelectronic submission of responses).

OMB is required to make a decisionconcerning the collection of informationcontained in these proposed regulationsbetween 30 and 60 days afterpublication of this document in theFederal Register. A comment to OMB isbest assured of having its full effect ifOMB receives it within 30 days ofpublication. This does not affect the

deadline for the public to comment tothe Commission on the proposedregulations.

Copies of the information collectionsubmission to OMB are available fromthe Commission from the CFTCClearance Officer, 1155 21st Street, NW,Washington, DC 20581, (202) 418–5160.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act(‘‘RFA’’) requires federal agencies, inpromulgating rules, to consider theimpact of those rules on small entities.17

The rules adopted herein would affectcontract markets and other tradingfacilities. The Commission haspreviously established certaindefinitions of ‘‘small entities’’ to be usedin evaluating the impact of its rules onsmall entities in accordance with theRFA.18 In its previous determinations,the Commission has concluded thatcontract markets are not small entitiesfor the purpose of the RFA.19 TheCommission has also recently proposeddetermining that the other tradingfacilities subject to its jurisdiction, forreasons similar to those applicable tocontract markets, would not be smallentities for purposes of the RFA.20

Accordingly, the Commission doesnot expect the rules, as proposed herein,to have a significant economic impacton a substantial number of smallentities. Therefore, the ActingChairman, on behalf of the Commission,hereby certifies, pursuant to 5 U.S.C.605(b), that the proposed amendmentswill not have a significant economicimpact on a substantial number of smallentities. The Commission invites thepublic to comment on this finding andon its proposed determination thattrading facilities such as registeredderivatives transaction executionfacilities are not small entities forpurposes of the RFA.

VI. Statutory Authority

The Commission has the authority topropose these rules pursuant to sections1a, 2(a)(1)(D), and 5c(c) of the CEA, [7U.S.C. 1a, 2(a)(1)(D), and 7a–2(c)].


Security futures products.

Text of Proposed Rules

In accordance with the foregoing,Title 17, chapter I of the Code of FederalRegulations is proposed to be amendedas follows:

PART 41—SECURITY FUTURESPRODUCTS

1. The authority citation for Part 41 isproposed to be revised to read asfollows:

Authority: 7 U.S.C. 1a(25), 2(a), 6j, 7a–2(c)and 12a(5).

2. Subpart C is proposed to be addedto read as follows:

Subpart C—Requirements and Standardsfor Security Futures Products

Sec.41.21 Requirements for underlying

securities.41.22 Required certifications.41.23 Listing of security futures products

for trading.41.24 Rule amendments to security futures

products.41.25 Additional conditions for trading

security futures products.

Subpart C—Requirements andStandards for Listing Security FuturesProducts

§ 41.21 Requirements for underlyingsecurities.

(a) Security futures products based ona single security. A security future iseligible to be traded only if the securityunderlying the security future is:

(1) A security registered pursuant tosection 12 of the Securities ExchangeAct of 1934;

(2) The security is:(i) Common stock, or(ii) Such other equity security as the

Commission and the SEC jointly deemappropriate; and,

(3) The security conforms with thelisting standards that the designatedcontract market or registered derivativestransaction execution facility has filedwith the SEC under section 19(b) of theSecurities Exchange Act of 1934.

(b) Security futures product based ontwo or more securities. An index of twoor more securities is eligible to be tradedas a security future only if:

(1) The index is a narrow-basedsecurity index as defined in section1a(25) of the Act;

(2) The securities in the index areregistered pursuant to section 12 of theSecurities Exchange Act of 1934;

(3) The securities in the index are:(i) Common stock, or(ii) Such other equity securities as the

Commission and the SEC jointly deemappropriate; and,

(4) The index conforms with thelisting standards that the designatedcontract market or registered derivativestransaction execution facility has filedwith the SEC under section 19(b) of theSecurities Exchange Act of 1934.

(c) [Reserved for future rulemakingregarding exemptions to the listing



1 As noted in the preamble, the cross-reference tothe margin requirement rule will be inserted in thefinal rules when those proposed rules arepublished.

standards set forth in paragraphs (a) and(b) of this section.]

§ 41.22 Required certifications.It shall be unlawful for a designated

contract market or registered derivativestransaction execution facility to list fortrading or execution a security futuresproduct unless the designated contractmarket or registered derivativestransaction execution facility hasprovided the Commission with acertification that the specific securityfutures product or products and thedesignated contract market or registeredderivatives transaction executionfacility meet, as applicable, thefollowing criteria:

(a) The underlying security orsecurities satisfy the requirements of§ 41.21;

(b) If the security futures product isnot cash settled, arrangements are inplace with a clearing agency registeredpursuant to section 17A of theSecurities Exchange Act of 1934 for thepayment and delivery of the securitiesunderlying the security futures product;

(c) [Reserved for common clearingfollowing compliance date];

(d) Only futures commissionmerchants, introducing brokers,commodity trading advisors, commoditypool operators or associated personssubject to suitability rules comparable tothose of a national securities associationregistered pursuant to section 15A(a) ofthe Securities Exchange Act of 1934 andthe rules and regulations thereunder,except to the extent otherwise permittedunder the Securities Exchange Act of1934 and the rules and regulationsthereunder, will solicit, accept anyorder for, or otherwise deal in anytransaction in or in connection withsecurity futures products;

(e) If the board of trade is a designatedcontract market pursuant to section 5 ofthe Act or is a registered derivativestransaction execution facility pursuantto section 5a of the Act, dual trading inthese security futures products isrestricted in accordance with § 41.27;

(f) Trading in the security futuresproducts is not readily susceptible tomanipulation of the price of suchsecurity futures product, nor to causingor being used in the manipulation of theprice of any underlying security, optionon such security, or option on a groupor index including such securities,consistent with the conditions fortrading of § 41.25;

(g) The board of trade is a member ofthe Intermarket Surveillance Group. Aboard of trade that is an alternativetrading system, national securitiesassociation registered pursuant tosection 15A(a) of the Securities

Exchange Act of 1934 or nationalsecurities exchange registered pursuantto section 6(a) of the SecuritiesExchange Act of 1934 of which suchalternative trading system is a member,does not need to make this certification;

(h) An audit trail is in place tofacilitate coordinated surveillanceamong the board of trade, any market onwhich any security underlying asecurity futures product is traded, andany market on which any relatedsecurity is traded. A board of trade thatis an alternative trading system, nationalsecurities association registeredpursuant to section 15A(a) of theSecurities Exchange Act of 1934 ornational securities exchange registeredpursuant to section 6(a) of the SecuritiesExchange Act of 1934 of which suchalternative trading system is a member,does not need to make this certification;

(i) Procedures are in place tocoordinate regulatory trading haltsbetween the board of trade and marketson which any security underlying thesecurity futures product is traded andother markets on which any relatedsecurity is traded. A board of trade thatis an alternative trading system, nationalsecurities association registeredpursuant to section 15A(a) of theSecurities Exchange Act of 1934 ornational securities exchange registeredpursuant to section 6(a) of the SecuritiesExchange Act of 1934 of which suchalternative trading system is a member,does not need to make this certification;and

(j) The margin requirements for thesecurity futures product will complywith the provisions specified in rule[XX].1

§ 41.23 Listing of security futuresproducts for trading.

(a) Initial listing of products fortrading. To list new security futuresproducts for trading, a designatedcontract market or registered derivativestransaction execution facility shallsubmit to the Commission at itsWashington, D.C. headquarters, either inelectronic or hard-copy form, to bereceived by the Commission no laterthan the day prior to the initiation oftrading, a filing that:

(1) Is labeled ‘‘Listing of SecurityFutures Product;’

(2) Includes a copy of the product’srules, including its terms andconditions;

(3) Includes the certifications requiredby § 41.22;

(4) Includes a certification that theterms and conditions of the contractcomply with the additional conditionsfor trading of § 41.25; and

(5) If the board of trade is a designatedcontract market pursuant to section 5 ofthe Act or a registered derivativestransaction execution facility pursuantto section 5a of the Act, it includes acertification that the security futuresproduct complies with the Act and rulesthereunder.

(b) Voluntary submission of securityfutures products for Commissionapproval. A designated contract marketor registered derivatives transactionexecution facility may request that theCommission approve any securityfutures product under the procedures of§ 40.5 of this chapter, provided howeverthat the registered entity shall includethe certification required by § 41.22with its submission under § 40.5 of thischapter. Notice designated contractmarkets may not request Commissionapproval of security futures products.

§ 41.24 Rule amendments to securityfutures products.

(a) Self-certification of rules and ruleamendments by designated contractmarkets and registered derivativesclearing organizations. A designatedcontract market or registered derivativesclearing organization may implementany new rule or rule amendmentrelating to a security futures product bysubmitting to the Commission at itsWashington, DC headquarters, either inelectronic or hard-copy form, to bereceived by the Commission no laterthan the day prior to theimplementation of the rule or ruleamendment, a filing that

(1) Is labeled ‘‘Security FuturesProduct Rule Submission’’;

(2) Includes a copy of the new rule orrule amendment;

(3) Includes a certification that thedesignated contract market or registeredderivatives clearing organization hasfiled the rule or rule amendment withthe Securities and ExchangeCommission, if such a filing is required;and

(4) If the board of trade is a designatedcontract market pursuant to section 5 ofthe Act or is a registered derivativesclearing organization pursuant tosection 5b of the Act, it includes thedocuments and certifications required tobe filed with the Commission pursuantto § 40.6 of this chapter, including acertification that the security futuresproduct complies with the Act and rulesthereunder.

(b) Self-certification of rules byregistered derivatives transactionexecution facilities. Notwithstanding



§ 37.7 of this chapter, a registeredderivatives transaction executionfacility may only implement a new ruleor rule amendment relating to a securityfutures product if the registeredderivatives transaction executionfacility has certified the rule or ruleamendment pursuant to the proceduresof paragraph (a) of this section.

(c) Voluntary submission of rules forCommission review and approval. Adesignated contract market, registeredderivatives transaction executionfacility, or a registered derivativesclearing organization clearing securityfutures products may request that theCommission approve any rule orproposed rule or rule amendmentrelating to a security futures productunder the procedures of § 40.5 of thischapter, provided however that theregistered entity shall include thecertifications required by § 41.22 withits submission under § 40.5 of thischapter. Notice designated contractmarkets may not request Commissionapproval of rules.

§ 41.25 Additional conditions for tradingfor security futures products.

(a) Common provisions.—(1)Reporting of data. The designatedcontract market or registered derivativestransaction execution facility shallcomply with chapter 16 of this titlerequiring the daily reporting of marketdata.

(2) Regulatory Trading Halts.[Reserved for contemporaneousrulemaking.]

(3) Speculative Position Limits. Thedesignated contract market or registeredderivatives transaction executionfacility shall have rules in placeestablishing position limits or positionaccountability procedures for theexpiring futures contract month. Thedesignated contract market or registeredderivatives transaction executionfacility shall,

(i) Adopt a net position limit nogreater than 13,500 (100-share) contractsapplicable to positions held during thelast five trading days of an expiringcontract month; except where,

(A) For security futures productswhere, for the most recent six-monthperiod, the average daily trading volumein the underlying security exceeds 20million shares, or exceeds 15 millionshares and there are more than 40million shares of the underlyingsecurity outstanding, the designatedcontract market or registered derivativestransaction execution facility may adopta net position limit no greater than22,500 (100-share) contracts applicableto positions held during the last fivetrading days of an expiring contractmonth; or

(B) For security futures productswhere, for the most recent six-monthperiod, the average daily trading volumein the underlying security exceeds 20million shares and there are more than40 million shares of the underlyingsecurity outstanding, the designatedcontract market or registered derivativestransaction execution facility may adopta position accountability rule. Uponrequest by the designated contractmarket or registered derivativestransaction execution facility, traderswho hold net positions greater than22,500 (100-share) contracts, or suchlower level specified by exchange rules,must provide information to theexchange and consent to halt increasingtheir positions when so ordered by theexchange.

(ii) For a security futures productcomprised of more than one security, tobe eligible for paragraphs (a)(3)(i)(A)and (a)(3)(i)(B) of this section, theaverage daily trading volume requiredmust apply to the least liquid securityin the index.

(iii) Exchanges may approveexemptions from these position limitspursuant to rules that are consistentwith § 150.3 of this chapter.

(b) Special requirements for cash-settled contracts. For cash-settledsecurity futures products, the cash-settlement price must be reliable andacceptable, be reflective of prices in theunderlying securities market and be notreadily susceptible to manipulation. Tomeet these requirements, the designatedcontract market or registered derivativestransaction execution facility must haverules providing that: [Reserved forcontemporaneous rulemaking.]

(c) Special requirements for physicaldelivery contracts. For security futuresproducts settled by actual delivery ofthe underlying security or securities,payment and delivery of the underlyingsecurity or securities must be effectedthrough a clearing agency that isregistered pursuant to section 17A of theSecurities Exchange Act of 1934.

Issued in Washington, DC, on July 12 ,2001, by the Commission.Jean A. Webb,Secretary.[FR Doc. 01–17904 Filed 7–19–01; 8:45 am]BILLING CODE 6351–01–P


28 CFR Part 16[AAG/A Order No. 235–2001]

Privacy Act of 1974; Implementation

AGENCY: Department of Justice.ACTION: Proposed rule.

SUMMARY: The Department of Justicecurrently exempts the following systemof records from subsection (d) of thePrivacy Act, pursuant to 5 U.S.C.552a(j)(2): Controlled Substances ActNonpublic Records (JUSTICE/JMD–002).This proposed rule makes changes toreflect the current statutory authority, aswell as the primary reason forexempting the system.

DATES: Submit any comments by August20, 2001.

ADDRESSES: Address all comments toMary Cahill, Management and PlanningStaff, Justice Management Division,Department of Justice, 1400 NationalPlace Building, Washington, DC 20530.

FOR FURTHER INFORMATION CONTACT:Mary Cahill, (202) 307–1823.

SUPPLEMENTARY INFORMATION: Thesystem notice for ‘‘ControlledSubstances Act Nonpublic Records(JUSTICE/JMD–002)’’ is being publishedin full text in the Notice section oftoday’s Federal Register.

This order relates to individualsrather than small business entities.Nevertheless, pursuant to therequirements of the RegulatoryFlexibility Act, 5 U.S.C. 601–612, thisorder will not have a significanteconomic impact on a substantialnumber of small entities.

List of Subjects in Part 16

Administrative practices andprocedures, Courts, Freedom ofInformation Act, Privacy Act, andGovernment in Sunshine Act.

Pursuant to the authority vested in theAttorney General by 5 U.S.C. 552a anddelegated to me by Attorney GeneralOrder No. 793–78, it is proposed toamend 28 CFR Part 16 as follows:

1. The authority for Part 16 continuesto read as follows:

Authority: 5 U.S.C. 301, 552, 552a, 552b(g),553; 18 U.S.C. 4203(a)(1); 28 U.S.C. 509, 510,534; 31 U.S.C. 3717, 9701.

2. It is proposed to amend § 16.76 byrevising paragraph (b)(1) as follows:

§ 16.76 Exemption of Justice ManagementDivision.* * * * *

(b) Exemption from subsection (d) isjustified for the following reasons:

(1) Access to and use of the nonpublicrecords maintained in this system arerestricted by law. Section 3607(b) ofTitle 18 U.S.C. (enacted as part of theSentencing Reform Act of 1984, PublicLaw 98–473, Chapter II) provides thatthe sole purpose of these records shallbe for use by the courts in determiningwhether a person found guilty of



violating section 404 of the ControlledSubstances Act qualifies:

(i) For the disposition available under18 U.S.C. 3607(a) to persons with noprior conviction under a Federal orState law relating to controlledsubstances, or

(ii) For an order, under 18 U.S.C.3607(c), expunging all official records(except the nonpublic records to beretained by the Department of Justice) ofthe arrest and any subsequent criminalproceedings relating to the offense.* * * * *

Dated: July 13, 2001.Janis A. Sposato,Acting Assistant Attorney General forAdministration.[FR Doc. 01–18155 Filed 7–19–01; 8:45 am]BILLING CODE 4410–FB–M

DEPARTMENT OF VETERANSAFFAIRS


RIN 2900–AK66

Special Monthly Compensation forWomen Veterans Who Lose a Breastas a Result of a Service-ConnectedDisability

AGENCY: Department of Veterans Affairs.ACTION: Proposed rule.

SUMMARY: This document proposes toamend the Department of VeteransAffairs (VA) adjudication regulations toprovide for payment of special monthlycompensation for a woman veteran wholoses one or both breasts as a result ofservice-connected disability. Theintended effect of this amendment is toimplement legislation authorizing VA toprovide this benefit.DATES: Comments must be received byVA on or before August 20, 2001.ADDRESSES: Mail or hand-deliverwritten comments to: Director, Office ofRegulations Management (02D),Department of Veterans Affairs, 810Vermont Ave., NW, Room 1154,Washington, DC 20420; or fax commentsto (202) 273–9289; or e-mail commentsto [email protected] should indicate that they aresubmitted in response to ‘‘RIN 2900–AK66.’’ All comments received will beavailable for public inspection in theOffice of Regulations Management,Room 1158, between the hours of 8:00a.m. and 4:30 p.m., Monday throughFriday (except holidays).FOR FURTHER INFORMATION CONTACT:Caroll McBrine, M.D., Consultant,Regulations Staff (211A), Compensation

and Pension Service, Veterans BenefitsAdministration, 810 Vermont Avenue,NW., Washington, DC 20420, telephone(202) 273–7210.SUPPLEMENTARY INFORMATION: Section1114(k) of title 38, United States Code,provides a list of service-connecteddisabilities for which Congress hasauthorized a special benefit to be paid,independent of any other compensationprovided under section 1114 forschedular disability rated under 38 CFRpart 4, VA’s Schedule for RatingDisabilities. This additionalcompensation is commonly referred toas special monthly compensation ‘‘k’’ orSMC ‘‘k.’’ Section 302 of the VeteransBenefits and Health Care ImprovementAct of 2000, Public Law 106–419, 114Stat. 1822, amended section 1114(k) bymaking anatomical loss of one or bothbreasts (including loss by mastectomy)by a woman veteran a conditionwarranting this special monthlycompensation.

The provisions governing specialmonthly compensation under 38 U.S.C.1114(k) are codified in title 38 of theCode of Federal Regulations underparagraph (a) of § 3.350, which is titled‘‘Special monthly compensationratings.’’ Paragraph (a) currently statesthat special monthly compensationunder 38 U.S.C. 1114(k) is payable foreach anatomical loss or loss of use ofone hand, one foot, both buttocks, oneor more creative organs, blindness ofone eye having only light perception,deafness of both ears, having absence ofair and bone conduction, or completeorganic aphonia with constant inabilityto communicate by speech. In order toimplement Public Law 106–419, wepropose to remove ‘‘or’’ preceding‘‘complete organic aphonia’’ in thisparagraph and to add following‘‘speech’’ the phrase ‘‘or, in the case ofa woman veteran, the anatomical loss ofone or both breasts (including loss bymastectomy).’’

We also propose to add newparagraph (7) under paragraph (a) todefine ‘‘anatomical loss of a breast’’ forpurposes of this benefit. Consistent withthe assignment of special monthlycompensation for certain other losses,for example, for loss of use of a foot,only when there is complete, but notpartial, peroneal nerve paralysis, wepropose to require that there becomplete loss of breast tissue in order toqualify for this benefit. Therefore‘‘anatomical loss of a breast’’ wouldexist when there is complete surgicalremoval of breast tissue (or theequivalent loss of breast tissue due toinjury). Various types of breastsurgery—radical mastectomy, modified

radical mastectomy, simple (or total)mastectomy, and wide local excision(including partial mastectomy,lumpectomy, tylectomy,segmentectomy, and quadrantectomy)—are defined under diagnostic code 7626(breast surgery) in 38 CFR 4.116. Radicalmastectomy, modified radicalmastectomy, and simple (or total)mastectomy would be the equivalent of‘‘anatomical loss of a breast’’ becausethey entail complete removal of breasttissue, but wide local excision, definedas removal of a portion of the breasttissue, would not be because it involvesless than complete removal of breasttissue. We therefore propose thatparagraph (7) state that ‘‘anatomical lossof a breast’’ exists when there iscomplete surgical removal of breasttissue (or the equivalent loss of breasttissue due to injury) and that as definedin 38 CFR 4.116, radical mastectomy,modified radical mastectomy, andsimple (or total) mastectomy result inanatomical loss of a breast, but widelocal excision, with or withoutsignificant alteration of size or form,does not.

The exclusion of wide local excision,which can range from undetectableremoval of a small amount of breasttissue up to any extent of breast surgeryless than a simple (total) mastectomy,would eliminate the need to attempt todefine how much removal of breasttissue less than complete removalwould qualify for the benefit. There isno standard or feasible way to definesuch partial removal of breast tissue, soproposing that nothing short of totalmastectomy (or equivalent loss of breasttissue due to injury) will qualify asanatomical loss of a breast would ensureconsistency in assigning this benefit.

In addition, as we have done for otherconditions that warrant special monthlycompensation listed in 38 CFR 4.116,the section of the rating schedule thataddresses gynecological conditions anddisorders of the breast, we propose toannotate all evaluations underdiagnostic code 7626 (breast surgery)except for zero percent (which isassigned for wide local excision) with areference to a footnote instructing ratersto review for entitlement to SpecialMonthly Compensation. The footnote,which is in the current regulation,reads: ‘‘Review for entitlement tospecial monthly compensation under§ 3.350 of this chapter.’’ We alsopropose to amend an existing note at thebeginning of § 4.116, which now readsin part, ‘‘When evaluating any claiminvolving loss or loss of use of one ormore creative organs, refer to § 3.350 ofthis chapter to determine whether theveteran may be entitled to special



monthly compensation,’’ to include areference to anatomical loss of one orboth breasts. These provisions willpromote consideration of the newprovision by raters.

Paperwork Reduction ActThis document contains no provisions

constituting a collection of informationunder the Paperwork Reduction Act (44U.S.C. 3501–3520).

Regulatory Flexibility ActThe Secretary hereby certifies that

this regulatory amendment will nothave a significant economic impact ona substantial number of small entities asthey are defined in the RegulatoryFlexibility Act (RFA), 5 U.S.C. 601–612.The reason for this certification is thatthese amendments would not directlyaffect any small entities. Only VAbeneficiaries could be directly affected.Therefore, pursuant to 5 U.S.C. 605(b),these amendments are exempt from theinitial and final regulatory flexibilityanalysis requirements of sections 603and 604.

There is no Catalog of FederalDomestic Assistance program numberfor this benefit.

List of Subjects

38 CFR Part 3Administrative practice and

procedure, Claims, Disability benefits,Health care, Pensions, Veterans,Vietnam.

38 CFR Part 4Disability benefits, Pension,

Individuals with disabilities, Veterans.Approved: July 12, 2001.

Anthony J. Principi,Secretary of Veterans Affairs.

For the reasons set forth in thepreamble, 38 CFR part 3 is proposed tobe amended as follows:

PART 3—ADJUDICATION

Subpart A—Pension, Compensation,and Dependency and IndemnityCompensation

1. The authority citation for part 3,subpart A continues to read as follows:

Authority: 38 U.S.C. 501(a), unlessotherwise noted.

2. In § 3.350, paragraph (a)introductory text, the first sentence isrevised; and a new paragraph (a)(7) isadded immediately following theauthority citation for paragraph (a)(6), toread as follows:

§ 3.350 Special monthly compensationratings.* * * * *

(a) * * * Special monthlycompensation under 38 U.S.C. 1114(k)is payable for each anatomical loss orloss of use of one hand, one foot, bothbuttocks, one or more creative organs,blindness of one eye having only lightperception, deafness of both ears,having absence of air and boneconduction, complete organic aphoniawith constant inability to communicateby speech or, in the case of a womanveteran, the anatomical loss of one orboth breasts (including loss bymastectomy). * * ** * * * *

(7) Anatomical loss of a breast existswhen there is complete surgical removalof breast tissue (or the equivalent loss ofbreast tissue due to injury). As definedin 38 CFR 4.116, radical mastectomy,modified radical mastectomy, andsimple (or total) mastectomy result inanatomical loss of a breast, but widelocal excision, with or withoutsignificant alteration of size or form,does not.(Authority: 38 U.S.C. 501, 1114(k))

* * * * *

PART 4—SCHEDULE FOR RATINGDISABILITIES

Subpart B—Disability Ratings


Authority: 38 U.S.C. 1155, unlessotherwise noted.

4. Section 4.116, Note 2 is amendedby removing ‘‘one or more creativeorgans,’’ and adding, in it place, ‘‘one ormore creative organs or anatomical lossof one or both breasts,’’.

5. Diagnostic code 7626 in 38 CFR4.116 is revised to read as follows:

§ 4.116 Schedule of ratings—gynecological conditions and disorders ofthe breast.

Rating

* * * * *7626 Breast, surgery of:Following radical mastectomy:

Both ............................................... 1 80One ............................................... 1 50

Following modified radical mastec-tomy:Both ............................................... 1 60One ............................................... 1 40

Following simple mastectomy orwide local excisio with significantalteration of size or form:Both ............................................... 1 50One ............................................... 1 30

Following wide local excision withoutsignificant alteration of size orform:

Rating

Both or one ................................... 0

Note: For VA purposes:1 Radical mastectomy means removal of the

entire breast, underlying pectoral muscles, andregional lymph nodes up to thecoracoclavicular ligament.

2 Modified radical mastectomy means re-moval of the entire breast and axillary lymphnodes (in continuity with the breast). Pectoralmuscles are left intact.

3 Simple (or total) mastectomy means re-moval of all of the breast tissue, nipple, and asmall portion of the overlying skin, but lymphnodes and muscles are left intact.

4 Wide local excision (including partial mas-tectomy, lumpectomy, tylectomy,segmentectomy, and quadrantectomy) meansremoval of a portion of the breast tissue.



40 CFR Part 52

[MO 123–1123; FRL–7016–1]


AGENCY: Environmental ProtectionAgency (EPA).ACTION: Proposed action.

SUMMARY: EPA proposes to approve arevision to the Missouri StateImplementation Plan (SIP). EPA isapproving a revision to Missouri rule‘‘Control of Emissions From IndustrialSurface Coating Operations.’’ Thisrevision will ensure consistencybetween the state and Federallyapproved rules, and ensure Federalenforceability of the state’s air programrule revision pursuant to section 110 ofthe Clean Air Act.

In the final rules section of theFederal Register, EPA is approving thestate’s submittal as a direct final rulewithout prior proposal because theAgency views this as a noncontroversialrevision amendment and anticipates norelevant adverse comments to thisaction. A detailed rationale for theapproval is set forth in the direct finalrule. If no relevant adverse commentsare received in response to this action,no further activity is contemplated inrelation to this action. If EPA receivesrelevant adverse comments, the directfinal rule will be withdrawn and allpublic comments received will beaddressed in a subsequent final rulebased on this proposed action. EPA willnot institute a second comment periodon this action. Any parties interested in



commenting on this action should do soat this time.DATES: Comments on this proposedaction must be received in writing byAugust 20, 2001.ADDRESSES: Comments may be mailed toWayne Kaiser, EnvironmentalProtection Agency, Air Planning andDevelopment Branch, 901 North 5thStreet, Kansas City, Kansas 66101.FOR FURTHER INFORMATION CONTACT:Wayne Kaiser at (913) 551–7603.SUPPLEMENTARY INFORMATION: See theinformation provided in the direct finalrule which is located in the rulessection of the Federal Register.

Dated: June 29, 2001.William Rice,Acting Regional Administrator, Region 7.[FR Doc. 01–18090 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 52

[MO 119–1119; FRL–7015–7]



SUMMARY: EPA proposes to approve theState Implementation Plan (SIP)revision submitted by the state ofMissouri. This approval pertains torevisions to a rule which controlsemissions from aluminum foil rollingsources in the St. Louis, Missouri,nonattainment area. In the final rulessection of the Federal Register, EPA isapproving the state’s SIP revision as adirect final rule without prior proposalbecause the Agency views this as anoncontroversial revision amendmentand anticipates no relevant adversecomments to this action. A detailedrationale for the approval is set forth inthe direct final rule. If no relevantadverse comments are received inresponse to this action, no furtheractivity is contemplated in relation tothis action. If EPA receives relevantadverse comments, the direct final rulewill be withdrawn and all publiccomments received will be addressed ina subsequent final rule based on thisproposed action. EPA will not institutea second comment period on this action.Any parties interested in commentingon this action should do so at this time.

DATES: Comments on this proposedaction must be received in writing byAugust 20, 2001.ADDRESSES: Comments may be mailed toWayne Kaiser, EnvironmentalProtection Agency, Air Planning andDevelopment Branch, 901 North 5thStreet, Kansas City, Kansas 66101.FOR FURTHER INFORMATION CONTACT:Wayne Kaiser at (913) 551–7603.SUPPLEMENTARY INFORMATION: See theinformation provided in the direct finalrule which is located in the rulessection of the Federal Register.



40 CFR Part 52

[PA168–4109b; FRL–7013–6]

Approval and Promulgation of AirQuality Implementation Plans;Pennsylvania; Control of VOCs fromWood Furniture Manufacturing,Surface Coating Processes and OtherMiscellaneous Revisions

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Proposed rule.

SUMMARY: EPA is proposing to approveState Implementation Plan (SIP)revisions submitted by theCommonwealth of Pennsylvania. Therevisions include the adoption of newVOC regulations for wood furnituremanufacturing operations. Theserevisions also add new definitions, andamend or delete certain existingdefinitions for terms used in regulationspertaining to volatile organic compound(VOC) sources. The revisions also clarifythe requirements Pennsylvania’s surfacecoating regulations. Lastly, the revisionsinclude minor amendments toPennsylvania’s regulations pertaining tosampling and testing methods. theaddition, revision or deletion of termsused in regulations pertaining to volatileorganic compound (VOC) sources, andto amend certain VOC surface coatingregulations. In the Final Rules section ofthis Federal Register, EPA is approvingthe State’s SIP submittal as a direct finalrule without prior proposal because theAgency views this as a noncontroversialsubmittal and anticipates no adversecomments. A more detailed descriptionof the state submittal and EPA’sevaluation are included in a Technical

Support Document (TSD) prepared insupport of this rulemaking action. Acopy of the TSD is available, uponrequest, from the EPA Regional Officelisted in the ADDRESSES section of thisdocument. If no adverse comments arereceived in response to this action, nofurther activity is contemplated. If EPAreceives adverse comments, the directfinal rule will be withdrawn and allpublic comments received will beaddressed in a subsequent final rulebased on this proposed rule. EPA willnot institute a second comment period.Any parties interested in commentingon this action should do so at this time.Please note that if EPA receives adversecomment on an amendment, paragraph,or section of this rule and if thatprovision may be severed from theremainder of the rule, EPA may adoptas final those provisions of the rule thatare not the subject of an adversecomment.

DATES: Comments must be received inwriting by August 20, 2001.

ADDRESSES: Written comments shouldbe addressed to David Arnold, Chief,Air Quality Planning and InformationServices Branch, Mailcode 3AP21, U.S.Environmental Protection Agency,Region III, 1650 Arch Street,Philadelphia, Pennsylvania 19103.Copies of the documents relevant to thisaction are available for publicinspection during normal businesshours at the Air Protection Division,U.S. Environmental Protection Agency,Region III, 1650 Arch Street,Philadelphia, Pennsylvania 19103; andthe Pennsylvania Department ofEnvironmental Resources Bureau of AirQuality Control, P.O. Box 8468, 400Market Street, Harrisburg, Pennsylvania17105.

FOR FURTHER INFORMATION CONTACT: RoseQuinto, (215) 814–2182 or EllenWentworth, (215) 814–2034 at the EPARegion III address above, or by e-mail [email protected] [email protected]

SUPPLEMENTARY INFORMATION: Forfurther information, please see theinformation provided in the direct finalaction, with the same title, that islocated in the ‘‘Rules and Regulations’’section of this Federal Registerpublication.

Dated: July 5, 2001.

James W. Newsom,Acting Regional Administrator, Region III.[FR Doc. 01–18187 Filed 7–19–01; 8:45 am]





40 CFR Part 52

[MD118–3073b; FRL–7013–9]

Approval and Promulgation of AirQuality Implementation Plans;Maryland; Control of VOC EmissionsFrom Organic Chemical Production


SUMMARY: EPA proposes to approverevisions to the Maryland StateImplementation Plan (SIP). Therevisions establish reasonably availablecontrol technology (RACT) to controlvolatile organic compound (VOC)emissions from organic chemicalproduction. EPA is proposing toapprove these revisions in accordancewith the requirements of the Clean AirAct (CAA). In the ‘‘Rules andRegulations’’ section of this FederalRegister, EPA is approving the State’sSIP submittal as a direct final rulewithout prior proposal because theAgency views this as a noncontroversialsubmittal and anticipates no adversecomments. A detailed rationale for theapproval is set forth in the direct finalrule. If EPA receives no adversecomments, EPA will not take furtheraction on this proposed rule. If EPAreceives adverse comments, EPA willwithdraw the direct final rule and it willnot take effect. EPA will address allpublic comments in a subsequent finalrule based on this proposed rule. EPAwill not institute a second commentperiod on this action. Any partiesinterested in commenting on this actionshould do so at this time.DATES: Comments must be received inwriting by August 20, 2001.ADDRESSES: Written comments shouldbe addressed to David L. Arnold, Chief,Air Quality Planning and InformationServices Branch, Mail Code 3AP21, U.S.Environmental Protection Agency,Region III, 1650 Arch Street,Philadelphia, Pennsylvania 19103.Copies of the documents relevant to thisaction are available for publicinspection during normal businesshours at the Air Protection Division,U.S. Environmental Protection Agency,Region III, 1650 Arch Street,Philadelphia, Pennsylvania 19103; andthe Maryland Department of theEnvironment, 2500 Broening Highway,Baltimore, Maryland, 21224.FOR FURTHER INFORMATION CONTACT: RoseQuinto, (215) 814–2182, or by e-mail [email protected] or Carol Febbo,

(215) 814–2076, or by e-mail [email protected] or at the EPARegion III address above.SUPPLEMENTARY INFORMATION: Forfurther information, please see theinformation provided in the direct finalaction, with the same title, that islocated in the ‘‘Rules and Regulations’’section of this Federal Registerpublication.

Dated: July 9, 2001.William C. Early,Acting Regional Administrator, Region III.[FR Doc. 01–18191 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


40 CFR Part 52

[MO 130–1130; FRL–7016–3]

Approval and Promulgation ofImplementation Plans; State ofMissouri.


SUMMARY: EPA proposes to approve theState Implementation Plan (SIP)revision submitted by the state ofMissouri for the purpose of rescindingfour redundant particulate matterprocess weight rate rules. In the finalrules section of the Federal Register,EPA is approving the state’s SIP revisionas a direct final rule without priorproposal because the Agency views thisas a noncontroversial revisionamendment and anticipates no relevantadverse comments to this action. Adetailed rationale for the approval is setforth in the direct final rule. If norelevant adverse comments are receivedin response to this action, no furtheractivity is contemplated in relation tothis action. If EPA receives relevantadverse comments, the direct final rulewill be withdrawn and all publiccomments received will be addressed ina subsequent final rule based on thisproposed action. EPA will not institutea second comment period on this action.Any parties interested in commentingon this action should do so at this time.DATES: Comments on this proposedaction must be received in writing byAugust 20, 2001.ADDRESSES: Comments may be mailed toWayne Kaiser, EnvironmentalProtection Agency, Air Planning andDevelopment Branch, 901 North 5thStreet, Kansas City, Kansas 66101.FOR FURTHER INFORMATION CONTACT:Wayne Kaiser at (913) 551–7603.

SUPPLEMENTARY INFORMATION: See theinformation provided in the direct finalrule which is located in the rulessection of the Federal Register.


FEDERAL COMMUNICATIONSCOMMISSION

47 CFR Part 1

[CC Docket No. 96–262; FCC 01–166]

Access Charge Reform

AGENCY: Federal CommunicationsCommission.ACTION: Proposed rule; withdrawal.

SUMMARY: In this document, the FederalCommunications Commission(Commission) considered whether itshould terminate its inquiry into theassessment of a presubscribedinterexchange carrier charge (PICC) onthe special access lines provided byprice cap local exchange carriers (LECs)to interexchange carriers and others.Since the Commission began thisinquiry, several developments causedthe Commission to conclude that it wasno longer necessary to considerpermitting these LECs to assess PICCson their special access lines.Accordingly, in this document theCommission terminated its inquiry intothe assessment of such charges but itdeclared that this docket shall remainopen for other purposes.DATES: The inquiry instituted in theproposed rule published June 6, 1997, at62 FR 31040 is terminated as of July 20,2001 with respect to the Commission’sproposal to permit price cap LECs toassess a PICC on their special accesslines.

FOR FURTHER INFORMATION CONTACT:Richard Lerner, Deputy Chief,Competitive Pricing Division, at (202)418–1520, or Allen A. Barna, GeneralAttorney, Competitive Pricing Division,at (202) 418–1536. The address isCompetitive Pricing Division, CommonCarrier Bureau, FederalCommunications Commission, 445 12thStreet, SW., Washington, DC 20554.SUPPLEMENTARY INFORMATION: This is asummary of the Commission’s Order inCC Docket No. 96–262, FCC 01–166,Access Charge Reform, adopted May 17,2001, and released on May 21, 2001.The full text of this document isavailable for public inspection Monday



1 See proposed rule published at 62 FR 31040(June 6, 1997).

through Thursday from 8:00 a.m. to 4:30p.m. and Friday from 8:00 a.m. to 11:30a.m. in the FCC Reference Center, RoomCY–A257, 445 12th Street, SW,Washington, DC 20554. The completetext of the document may be purchasedfrom the Commission’s duplicatingcontractor, ITS, Inc., at 1231 20th StreetNW, Washington, DC 20036 (202–857–3800). This Order contains no new ormodified information collections subjectto the Paperwork Reduction Act of 1995,Public Law 104–13.

Synopsis of the OrderIn the Further Notice of Proposed

Rulemaking 1 included in Access ChargeReform, Price Cap Performance Reviewfor Local Exchange Carriers, TransportRate Structure and Pricing, End UserCommon Line Charges, First Report andOrder, in CC Docket Nos. 96–262, 94–1, 91–213, 95–72, 12 FCC Rcd 15982,16155 (1997), 62 FR 31868 (June 11,1997) (First Report and Order), aff’d,Southwestern Bell Telephone Co. v.FCC, 153 F.3d 523 (8th Cir. 1998), theCommission tentatively concluded thatit should permit price cap LECs toassess a PICC on their special accesslines to enable them to recover some ofthe common line costs assigned to thefederal jurisdiction that they incur inproviding switched access service toresidential and single line businesslines. Commenters unanimouslyopposed that proposal. In this Order, theCommission declined to permit theassessment of such special access PICCsand terminated its inquiry into such anassessment.

Final Regulatory Flexibility AnalysisAs required by the Regulatory

Flexibility Act (RFA), 5 U.S.C. 603, the

First Report and Order included anInitial Regulatory Flexibility Analysis(IRFA) with reference to the FurtherNotice of Proposed Rulemaking foundtherein. First Report and Order, 12 FCCRcd at 16170–16172. In the IRFA, theCommission noted that there werethirteen incumbent price cap LECs atthat time, that it had limited to thoseLECs the scope of its proposal to permitthe assessment of PICCs on specialaccess lines, and that it had tentativelyconcluded that each of those LECs hadmore than 1500 employees and,therefore, that none was a small entity.First Report and Order, 12 FCC Rcd at16171–16172. The Commission soughtpublic comment on its special accessPICC proposal, its tentative conclusions,and the related IRFA. No commentswere received concerning theconclusion that those price cap carrierswere not small entities, the limitation ofthe special access PICC proposal to suchcarriers, or the related provisions of theIRFA.

As of April 30 of this year, fourRegional Bell Operating Companies andeight other LECs were subject to pricecap regulation. See Material to be Filedin Support of 2001 Annual Access TariffFilings, Tariff Review Plans, DA 01–1105 (Com.Car.Bur., Comp. Pricing Div.,Apr. 30, 2001), para. 3. While one ormore of these eight other LECs may haveless than 1500 employees, the Orderwill not have a significant economicimpact on those LECs or any other smallentities for the reasons set forth in thefollowing paragraph. This FinalRegulatory Flexibility Analysisconforms to the RFA, as amended by theSmall Business Regulatory EnforcementFairness Act of 1966 (SBREFA), 5 U.S.C.801(a)(1)(A).

Under the RFA, there will not be asignificant economic impact on a

substantial number of small entitiesresulting from this Order. As explainedabove, this Order simply terminates theCommission’s inquiry into whether itshould permit price cap LECs to assessPICCs on their special access lines toenable them to recover some of theircommon line costs. Because this Orderdoes not require or otherwise authorizeany change in the provision of accessservices or the recovery of common linecosts by these carriers, there will not beany significant economic impact onthese carriers or on any of theircustomers including small entities. TheCommission will send a copy of thisOrder, including this final certification,to Congress pursuant to the SBREFA,see 5 U.S.C. 801 (a)(1)(A), and anothercopy to the Chief Counsel for Advocacyof the Small Business Administration,see 5 U.S.C. 605(b).

Ordering Clause

Pursuant to the authority contained insections 1, 4(i), 4(j), 201–209, and 403of the Communications Act of 1934, asamended, 47 U.S.C. 151, 154(i), 154(j),201–209, and 403, that the inquiryinitiated in CC Docket No. 96–262 intothe assessment by price cap carriers ofa presubscribed interexchange carriercharge on their special access lines ishereby TERMINATED but that thisdocket shall REMAIN OPEN for otherpurposes.


Communications common carriers,Telecommunications.

Federal Communications Commission.

Magalie Roman Salas,Secretary.[FR Doc. 01–17499 Filed 7–19–01; 8:45 am]



This section of the FEDERAL REGISTERcontains documents other than rules orproposed rules that are applicable to thepublic. Notices of hearings and investigations,committee meetings, agency decisions andrulings, delegations of authority, filing ofpetitions and applications and agencystatements of organization and functions areexamples of documents appearing in thissection.

Notices Federal Register

37945

Vol. 66, No. 140



Foreign Agricultural Service

Notice of Request for Extension of aCurrently Approved InformationCollection

AGENCY: Foreign Agricultural Service,USDA.ACTION: Notice and request forcomments.

SUMMARY: In accordance with thePaperwork Reduction Act of 1995, thisnotice announces that the ForeignAgricultural Service (FAS) intends torequest an extension for a currentlyapproved information collectionprocedure for entry of specialty sugarsinto the United States as described in 7CFR Part 2011.DATES: Comments should be received onor before September 18, 2001, to beassured of consideration.ADDRESSES: Mail or deliver comments toRichard J. Blabey, Director, ImportPolicies and Programs Division, ForeignAgricultural Service, U.S. Department ofAgriculture, Stop 1021, 1400Independence Ave., SW., Washington,DC 20250–1021, (202) 720–2916.FOR FURTHER INFORMATION CONTACT:Richard J. Blabey, at the address above,or telephone at (202) 720–2916, or e-mail at [email protected] INFORMATION:

Title: Specialty Sugar ImportCertificates.

OMB Number: 0551–0025.Expiration Date of Approval:

September 30, 2001.Type of Request: Extension of a

currently approved informationcollection.

Abstract: The quota systemestablished by PresidentialProclamation 4941 of May 5, 1982,prevented the importation of certainsugars used for specialized purposeswhich originated in countries which didnot have quota allocations. Therefore,

the regulation at 15 CFR part 2011(Allocation of Tariff-Rate Quota onImported Sugars, Syrups and Molasses,subpart B—Specialty Sugar) establishedterms and conditions under whichcertificates are issued permitting U.S.importers holding certificates to enterspecialty sugars from specialty sugarsource countries under the sugar tariff-rate quotas (TRQ). Nothing in thissubpart affects the ability to enterspecialty sugars at the over-TRQ dutyrates. Applicants for certificates for theimport of specialty sugars must supplythe information required by 15 CFR2011.205 to be eligible to receive aspecialty sugar certificate. The specificinformation required on an applicationmust be collected from those who wishto participate in the program in order togrant specialty sugar certificates, ensurethat imported specialty sugar does notdisrupt the current domestic sugarprogram, and administer the issuance ofthe certificates effectively.

Estimate of Burden: Public reportingburden for this collection of informationis estimated to average 2 hours perresponse.

Respondents: Importers.Estimated Number of Respondents:

30.Estimated Number of Responses per

Respondent: 1.Estimated Total Annual Burden on

Respondents: 60 hours.Copies of this information collection

can be obtained from Kimberly Chisley,the Agency Information CollectionCoordinator, at (202) 720–2568.

Request for CommentsThe public is invited to submit

comments and suggestions to the aboveaddress regarding the accuracy of theburden estimate, ways to minimize theburden, including through the use ofautomated collection techniques orother forms of the informationtechnology, or any other aspect of thiscollection of information. Comments onthe issues covered by the PaperworkReduction Act are most useful to OMBif received within 30 days of publicationof the Notice and Request forComments, but must be submitted nolater than 60 days from the date ofpublication to be assured ofconsideration. All responses to thisnotice will be summarized and includedin the request for OMB approval. Allcomments will also become a matter ofpublic record. Persons with disabilities

who require an alternative means forcommunication of information (Braille,large print, audiotape, etc.) shouldcontact the USDA Target Center at (202)720–2600 (voice and TDD).

Signed at Washington, DC, on July 5, 2001.Mattie R. Sharpless,Acting Administrator, Foreign AgriculturalService.[FR Doc. 01–18141 Filed 7–19–01; 8:45 am]BILLING CODE 3410–10–M


Rural Utilities Service

South Mississippi Electric PowerAssociation; Notice of Intent

AGENCY: Rural Utilities Service, USDA.ACTION: Notice of intent to hold a publicmeeting and prepare an environmentalassessment.

SUMMARY: Notice is hereby given thatthe Rural Utilities Service (RUS),pursuant to the National EnvironmentalPolicy Act of 1969, the Council onEnvironmental Quality Regulations forImplementing the NationalEnvironmental Policy Act (40 CFR parts1500–1508), and RUS EnvironmentalPolicies and Procedures (7 CFR part1794), proposes to prepare anEnvironmental Assessment related topossible financing assistance to SouthMississippi Electric Power Associationrelated to the construction andoperation of 475 megawatts of simplecycle, combustion turbine electricgeneration plants in Mississippi.

Meeting Information: RUS and SouthMississippi Electric Power Associationwill conduct a public meeting onThursday, August 9, 2001, from 7:00p.m. until 9:00 p.m. at the headquartersof South Mississippi Electric PowerAssociation, located at 7037 USHighway 49, Hattiesburg, Mississippi.

Government agencies, privateorganizations, and the public are invitedto participate in the planning andanalysis of the proposed project.Representatives of RUS and SouthMississippi Electric Power Associationwill be available at the public meetingto discuss RUS’ environmental reviewprocess, describe the project andalternatives under consideration,discuss the scope of environmentalissues to be considered, answerquestions, and accept oral and written

VerDate 11<MAY>2000 12:28 Jul 19, 2001 Jkt 194001 PO 00000 Frm 00001 Fmt 4703 Sfmt 4703 E:\FR\FM\20JYN1.SGM pfrm09 PsN: 20JYN1

37946 Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Notices

comments. Written comments will beaccepted for 30 days after the publicscoping meeting.FOR FURTHER INFORMATION CONTACT: BobQuigel, Engineering and EnvironmentalStaff, Rural Utilities Service, at (202)720–0468. Mr. Quigel’s E-mail addressis [email protected]. Information isalso available from Joey Ward of SouthMississippi Electric Power Associationat (601) 268–2083. Mr. Ward’s E-mailaddress is [email protected] INFORMATION: SouthMississippi Electric Power Associationproposes to construct three GE LM6000combustion turbines with a nameplaterating of 47 megawatts each at a siteapproximately 2 miles south ofSylvarena in Smith County, Mississippi,three GE 7EAs with a nameplate ratingof 83.5 megawatts each at a site locatedapproximately 6 miles east of SilverCreek, in Jefferson Davis County,Mississippi, and one GE 7EA at itsexisting Moselle Generating Plant whichis located approximately 1 mile north ofMoselle in Jones County, Mississippi.

Alternatives considered by RUS andSouth Mississippi Electric PowerAssociation include: (a) No action, (b)purchased power, (c) load managementand conservation of energy, (d)renewable energy, (e) combined cycle,and (f) various site locations.

An alternatives evaluation and sitingstudy for the projects was submitted toRUS by South Mississippi ElectricPower Association. The alternativesevaluation and siting study are availablefor public review at RUS in Room 2242,1400 Independence Avenue, SW,Washington, DC, and at theheadquarters of South MississippiElectric Power Association, 7037 USHighway 49, Hattiesburg, Mississippi.This document will also be available atthe Prentiss Public Library, Prentiss,Mississippi; the Evon A. Ford Library,208 Spring Street, Taylorsville,Mississippi; the Floyd A. RobinsonMemorial Library, 150 Main Street,Raleigh, Mississippi; the Laurel-JonesLibrary, 530 Commerce Street, Laurel,Mississippi; and Ellisville PublicLibrary, 110 Court Street, Ellisville,Mississippi.

From information provided in thealternatives evaluation and siteselection study, input that may beprovided by government agencies,private organizations, and the public,South Mississippi Electric PowerAssociation will have prepared anenvironmental analysis to be submittedto RUS for review. RUS will use theenvironmental analysis to determine thesignificance of the impacts of theprojects and may adopt it as its

environmental assessment of theprojects. RUS’ environmentalassessment of the projects will beavailable for review and comment for 30days.

Should RUS determine, based on theenvironmental assessment of theproject, that the impacts of theconstruction and operation of theprojects will not have a significantenvironmental impact, it will prepare afinding of no significant impact. Publicnotification of a finding of no significantimpact will be published in the FederalRegister and in newspapers with acirculation in the areas where theprojects are proposed to be located.

Any final action by RUS related to theproposed project will be subject to, andcontingent upon, compliance withenvironmental review requirements asprescribed by Council on EnvironmentalQuality and RUS environmental policiesand procedures.

Dated: July 12, 2001.Glendon D. Deal,Acting Director, Engineering andEnvironmental Staff.[FR Doc. 01–17934 Filed 7–19–01; 8:45 am]BILLING CODE 3410–15–P

DEPARTMENT OF COMMERCE

[I.D. 071701A]

Submission for OMB Review;Comment Request

The Department of Commerce hassubmitted to the Office of Managementand Budget (OMB) for clearance thefollowing proposal for collection ofinformation under the provisions of thePaperwork Reduction Act (44 U.S.C.Chapter 35).

Agency: National Oceanic andAtmospheric Administration (NOAA).

Title: Dr. Nancy Foster ScholarshipProgram.

Form Number(s): CD–346.OMB Approval Number: 0648–0432.Type of Request: Regular submission.Burden Hours: 3,517.Number of Respondents: 2,000.Average Hours Per Response: 4.75

hours for an application, 45 minutes fora letter of recommendation, 90 minutesfor an annual report, 5 minutes for a ‘‘noconcurrent work’’ statement, 45 minutesfor a CD–346, and 1 hour for abiography/photograph submission.

Needs and Uses: The Dr. Nancy FosterScholarship Program recognizesoutstanding scholarship by providingfinancial support to graduate studentspursuing masters and doctoral degreesin the areas of marine biology,oceanography, and maritime

archaeology. Applicants must submitinformation that allows NOAA to makescholarship selections and thoseapplicants selected to receivescholarships must submit additionalinformation that enables NOAA toarrange funding and track theiracademic progress.

Affected Public: Individuals orhouseholds.

Frequency: One-time, annual.Respondent’s Obligation: Required to

obtain or retain a benefit.OMB Desk Officer: David Rostker,

(202) 395–3897.Copies of the above information

collection proposal can be obtained bycalling or writing Madeleine Clayton,Departmental Paperwork ClearanceOfficer, (202) 482–3129, Department ofCommerce, Room 6086, 14th andConstitution Avenue, NW, Washington,DC 20230 (or via the Internet [email protected]).

Written comments andrecommendations for the proposedinformation collection should be sentwithin 30 days of publication of thisnotice to David Rostker, OMB DeskOfficer, Room 10202, New ExecutiveOffice Building, Washington, DC 20503.

Dated: July 13, 2001.Madeleine Clayton,Departmental Paperwork Clearance Officer,Office of the Chief Information Officer.[FR Doc. 01–18203 Filed 7–19–01; 8:45 am]BILLING CODE 3510–JT–S


National Oceanic and AtmosphericAdministration

[I.D. 071701B]


AGENCY: National Oceanic andAtmospheric Administration (NOAA)SUPPLEMENTARY INFORMATION: TheDepartment of Commerce has submittedto the Office of Management and Budget(OMB) for clearance the followingproposal for collection of informationunder the provisions of the PaperworkReduction Act (44 U.S.C. Chapter 35).

Title: Southeast Region LogbookFamily of Forms.

Form Number(s): None.OMB Approval Number: 0648-0016.Type of Request: Regular submission.Burden Hours: 1,400.Number of Respondents: 350.Average Hours Per Response: 10

minutes per trip form, 30 minutes perannual form

Needs and Uses: Participants in theAtlantic snapper-grouper and mackerel


37947Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Notices

fisheries in the Southeast Region arecurrently required to submit catch andeffort logbooks for their fishing trips.The NMFS proposes that fishermen alsobe required to submit information aboutdockside prices, trip operating costs,and annual fixed costs. The data will beused in analyses of the economic effectsof proposed regulations.

Affected Public: Business and otherfor-profit organizations.

Frequency: By trip, annual.Respondent’s Obligation: Mandatory.OMB Desk Officer: David Rostker,

(202) 395-3897. Copies of the aboveinformation collection proposal can beobtained by calling or writingMadeleine Clayton, DepartmentalPaperwork Clearance Officer, (202) 482-3129, Department of Commerce, Room6086, 14th and Constitution Avenue,NW, Washington, DC 20230 (or via theInternet at [email protected]).

Written comments andrecommendations for the proposedinformation collection should be sentwithin 30 days of publication of thisnotice to David Rostker, OMB DeskOfficer, Room 10202, New ExecutiveOffice Building, Washington, DC 20503.

Dated: July 13, 2001.Madeleine Clayton,Departmental Paperwork Clearance Officer,Office of the Chief Information Officer.[FR Doc. 01–18204 Filed 7–19–01; 8:45 am]BILLING CODE 3510–22–S



[I.D. 062701C]

Endangered and Threatened Species;Take of Anadromous Fish

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Receipt of applications forscientific research permits.

SUMMARY: NMFS has receivedapplications for Endangered Species Act(ESA) scientific research permits from:Bureau of Land Management (BLM) inEugene, OR; Cascade General, Inc. (CGI)in Portland, OR; Western WashingtonUniversity (WWU) in Bellingham, WA;Lower Willamette Group (LWG) inPortland, OR; Northwest FisheriesScience Center (NWFSC), NMFS inSeattle, WA; Weyerhaeuser in FederalWay, WA; King County Department ofTransportation (KCDOT) in KingCounty, WA; City of Bellingham, WA;Oregon State University (OSU) in

Corvallis, OR; Oregon MetallurgicalCorporation (OREMET) in Portland, OR;United States Forest Service (USFS) inCorvallis, OR; Port Blakely Tree Farms(PBF) in Tenino, WA; and United StatesFish and Wildlife Service (USFWS) inVancouver, WA.DATES: Comments or requests for apublic hearing on any of the newapplications or the modification requestmust be received no later than 5 p.m.Pacific daylight time on August 20,2001.ADDRESSES: Written comments on theapplications should be sent to ProtectedResources Division (PRD), F/NWO3, 525NE Oregon Street, Suite 500, Portland,OR 97232–2737 (503/230–5400).Comments may also be sent via fax to503/230–5435. The documents are alsoavailable on the Internet at http://www.nwr.noaa.gov/. Comments will notbe accepted if submitted via e-mail orthe Internet.FOR FURTHER INFORMATION CONTACT:Cherelle Blazer, Portland, OR, phone:503/231–2001, fax: 503/230–5435, e-mail: [email protected] INFORMATION: Thefollowing ESA-listed evolutionarysignificant units (ESUs) are covered inthis notice:

Chinook salmon (Oncorhynchustshawytscha): Threatened Snake River(SR) fall-run, Threatened SR spring/summer-run, Endangered UpperColumbia River (UCR), ThreatenedUpper Willamette River (UWR),Threatened Lower Columbia River(LCR), Threatened Puget Sound (PS)

Steelhead (O. mykiss): ThreatenedSnake River Basin (SRB), EndangeredUCR, Threatened Middle ColumbiaRiver (MCR), Threatened LCR,Threatened UWR

Chum salmon (O. keta): ThreatenedColumbia River (CR)

Sockeye salmon (O. nerka):Endangered SR

New Applications ReceivedBLM is seeking a 5–year permit (1256)

to take adult and juvenile UWR chinooksalmon and OC coho salmon in WolfCreek, Siuslaw River, Esmond CreekBasin, North Creek, Pugh Creek, BierceCreek, Siuslaw River mainstem, andUpper Lake Creek in OR. The purposesof the study are to: (1) collect data onfish abundance and presence, adultescapement, and habitat needs prior tostream enhancement; (2) evaluatehabitat restoration projects, migrationtime, non-salmon species presence andsmoltification size; and (3) performwatershed analysis. The study willbenefit UWR chinook salmon and OCcoho salmon by determining changes in

fish habitat due to management projectsas compared to natural fluctuation. BLMproposes to observe fish by snorkelingduring habitat and spawning surveys,and capture (using backpackelectrofishing, seining, dipnetting, androtary trapping), handle, and releasejuvenile and adult salmonids. Some fishwill be marked with a subcutaneousinjection of colored dye using Panjetneedles. BLM also requests juvenile fishindirect mortality associated with thestudy.

CGI is seeking a 3–year permit (1326)to take adult and juvenile UWR chinooksalmon, LCR chinook salmon, UWRsteelhead, and LCR steelhead associatedwith scientific research to be conductedat Swan Island in the Portland Harborlocated in the lower Willamette River.The purpose of this study is to test afreshwater air screen for use inpreventing or minimizing fish entryonto a floating dry dock facility. Theresearch will benefit listed species bydetermining their presence and testingnew methods of moving fish away fromdry dock areas during operations thusproviding useful information forprotecting listed species at dry dockfacilities. CGI proposes to capture (usingboat electrofishing and intake portholenets), anesthetize, identify, measure,check for marks, weigh, and releasejuvenile salmonids. Adult fish that maybe encountered will not be netted. CGIalso requests juvenile fish indirectmortality associated with the study.

WWU is seeking a 5–year permit(1327) to take adult and juvenile UWRchinook salmon and UWR steelhead onthe Willamette and McKenzie Rivers.The purpose of this study is to identifyand rank sources of stress in thewatershed, create a valid process fordifferentiation between anthropogenicand natural impacts on streams used asreceiving waters associated with pulpand paper mill operation, and make anecological risk assessment specificallyaimed at point-non-point sourcepollution in the Upper Willamette-Lower McKenzie watershed. The studywill benefit UWR chinook salmon andUWR steelhead recovery throughecological assessment and stressoridentification in the watershed. WWUproposes to capture (using boatelectrofishing), identify, and releasejuvenile fish. No attempt will be madeto net or capture adult listed fish. WWUalso requests juvenile fish indirectmortality associated with the study.

LWG is seeking a 4–year permit(1328) to take adult and juvenile UWRchinook salmon, LCR chinook salmon,UWR steelhead, and LCR steelheadduring scientific research efforts on theLower Willamette River. The purpose of



the study is to investigate juvenilesalmon residence time and distributionand use the data to determine potentialexposure of listed fish to contaminatedsediment associated with an EPAsuperfund project. The study willbenefit threatened species in thePortland harbor by generatingpopulation distribution information thatcan be used to design a remediationprogram to minimize sediment impacts,and aid management of futuredevelopment and conservation ofvaluable fish habitat. LWG proposes tocapture (using boat electrofishing),handle, anesthetize, measure, check formarks and tags, and release juvenilesalmonids. Adult fish that may beencountered will not be netted. LWGalso requests juvenile fish indirectmortality associated with the study.

NWFSC is seeking a 5–year permit(1329) to take juvenile SR fall-runchinook salmon, SR spring/summer-runchinook salmon, UCR chinook salmon,UWR chinook salmon, LCR chinooksalmon, SRB steelhead, UCR steelhead,MCR steelhead, UWR steelhead, LCRsteelhead, CR chum salmon, and SRsockeye salmon in the Lower ColumbiaRiver estuary. The purpose of the studyis to determine the presence andabundance of fall and spring chinooksalmon, coho salmon, and chum salmonin the estuary and Lower ColumbiaRiver; determine the relationshipbetween juvenile salmon and LowerColumbia River estuarine habitat; andobtain information about flow change,sediment input, and habitat availabilityfor the development of a numericalmodel. The study will benefit listedsalmonids by serving as the basis forestuarine restoration and preservationplans for endangered salmonid stocks.The NWFSC proposes to place beachseines at eight sampling sites near theAstoria Bridge and trapnets in four sitesin Cathlamet Bay. NWFSC proposes tocapture, anesthetize, scan for tags,measure, weigh, and release juvenilesalmonids. Monthly up to ten fish ofeach species at each of the twelvesampling sites are proposed to besacrificed for stomach content, scale,and otolith analysis.

Weyerhaeuser is seeking a 5–yearpermit (1330) to take juvenile LCRsteelhead in Harrington Creek in theToutle River Basin, WA. The purpose ofthe study is to increase understanding ofthe relationship between aquaticorganisms and their habitat, determinehow forest management and restorationinfluence the aquatic ecosystem, andproduce reliable scientific data for thedevelopment of effective forestmanagement practices that better protectaquatic resources. This research will

benefit listed salmonids through data onthe natural habitat recovery process andby identification of the consequences ofvarious stressors to listed species.Weyerhaeuser proposes to observe fishduring snorkeling surveys, capture(using backpack electrofishing),anesthetize, identify, measure, weigh,and release fish for data collectionincluding water typing and populationsurveys. Weyerhaeuser also requestsindirect mortality associated with thisactivity.

KCDOT is seeking a 5–year permit(1331) to take juvenile PS chinooksalmon associated with roadmaintenance activities to be conductedin multiple river basins in WA. KCDOTproposes to temporary exclude aquaticlife from maintenance/constructionareas in addition to evaluating theeffectiveness of stream, culvertreplacement, wetlands, and riparianhabitat projects. Maintenance activitiesare to replace or upgrade streamcrossing to allow fish passage. Theactivities will benefit PS chinooksalmon by providing and improvingaccess into previously inaccessiblestream reaches for all life stages. Theroad maintenance activities may alsoinclude habitat improvements such asriparian plantings and in-stream habitatstructures. KCDOT proposes to capture(using backpack electrofishing, seines,fry traps, and dipnets), handle, andrelease juvenile PS chinook salmon.KCDOT also requests indirect mortalityassociated with the study.

The City of Bellingham is seeking a 3–year permit (1332) to take juvenile PSchinook salmon associated withscientific research to be conducted inthe Nooksack River Basin of WhatcomCounty, WA. The purpose of the studyis to gather information to prepare aHabitat Conservation Plan (HCP)addressing their diversion activities inthe Nooksack River Basin. The proposedstudy will provide three types ofinformation to help determine how flowvolumes in the river affect theavailability of habitat used by listedsalmonids: (1) Fish distribution in theproject area; (2) periodicity of fishoccurrence in the project area; and (3)habitat use in the project area. Theresearch will benefit PS chinook salmonby providing scientifically-sound, site-specific data that will enable the City ofBellingham to develop an HCPaddressing water withdrawal operationsand habitat conservation measures thatwill minimize or avoid incidental takeof listed species. The City of Bellinghamproposes to capture (using beach seinesand fyke nets), handle, and releasejuvenile PS chinook salmon. The City of

Bellingham also requests indirectmortality associated with the study.

OSU is seeking a 3–year permit (1333)to take adult and juvenile UWR chinooksalmon, LCR chinook salmon, UWRsteelhead, and LCR steelhead in theWillamette River, McKenzie River, andthe Columbia River. The purpose of thestudy is to evaluate floodplain andriparian restoration, test theeffectiveness of new assessment toolsfor conservation planning, and improveaquatic habitat. The study will benefitlisted salmonids by helping todetermine the actions needed to restoreof ecological processes in salmon andsteelhead habitat. OSU proposes tocapture (using boat electrofishing),identify, measure, examine forabnormalities, and release juvenile fish.Adult fish that may be encountered willnot be netted. OSU also requestsjuvenile fish indirect mortalityassociated with the study.

OREMET is seeking a 3–year permit(1334) to take juvenile UWR chinooksalmon and UWR steelhead in theCalapooia River and Oak Creektributaries to the Willamette River. Thepurpose of the study is to evaluatestream health and occurrence ofjuvenile listed salmonids in areasdownstream from a titanium plant andto determine the effectiveness ofwastewater treatment. The benefit of thestudy on listed salmonids is thecontinued treatment of effluent whichprovides a consistent perennial flow ofwater in Oak Creek. OREMET proposesto use backpack electrofishing tocapture fish which will then bemeasured, identified, and released.

USFS is seeking a 5–year permit(1335) to take adult and juvenile CRchum salmon in three tributaries of theColumbia River in Washington state.The purpose of the study is to assesswatershed conditions and limitingfactors, and determine watershed healthunder the Northwest Forest Plan. Theactivities will benefit listed fish byproviding the USFS with information toimprove forest management. USFSproposes to capture (using backpackelectrofishing), anesthetize, measure,and release fish. USFS also requestsjuvenile fish indirect mortalityassociated with the research.

PBF is seeking a 2–year permit (1336)to take juvenile UWR chinook salmon,UWR steelhead, LCR chinook salmon,LCR steelhead, and OC coho salmon invarious lakes, rivers, and creeks in theWillamette and Columbia River systemsand Oregon coastal drainages. Thepurpose of the study is to evaluatefactors limiting fish distribution instreams owned by PBF and to determinewater quality. Data collected will benefit



listed fish by being used to conserve andrestore critical habitat. PBF proposes tocapture (using backpack electrofishingand dipnetting), handle, and releasejuvenile fish.

OSU is seeking a 2–year permit (1337)to take adult and juvenile UWR chinooksalmon and UWR steelhead in RickreallCreek, OR. The purpose of the study isto assess the seasonal composition anddistribution of fishes and determineassociations of all life stages of fish withavailable habitat, level of disturbance,and hydrological patterns. The studywill benefit listed salmonids bygenerating data that will aid inimproved creek management. OSUproposes to capture (using dipnetting,beach seining, fyke and hoop netting,backpack electrofishing, angling, andtrammel netting), handle, and releaseadult and juvenile fish. OSU alsorequests juvenile fish indirect mortalityassociated with the research.

USFWS is seeking a 5–year permit(1338) to take adult and juvenile LCRchinook salmon, LCR steelhead, and CRchum salmon in Hardy Springs,Hamilton Springs, and the mainstemColumbia River. The purposes of thestudy are to: (1) examine factors limitingchum salmon production, (2) enhanceand restore chum salmon production,(3) evaluate nearby tributaries forrestoration, and (4) evaluate therelationship between mainstemColumbia River and tributary chumsalmon populations. The study willbenefit listed chum salmon by providinginformation on their freshwater lifehistory that can be used in ColumbiaRiver water management and recoveryplanning. Adult listed fish are proposedto be captured (by seine, weir, or tanglenet), anesthetized, bio-sampled, markedwith a jaw tag or opercle punch, radiotagged, and released. Juvenile listed fishare proposed to be captured (by fykenet, weir, or screw trap), marked usinga photonic dye injector or BismarkBrown Y, and released. USFWS alsorequests adult and juvenile fish indirectmortality associated with the study.


Phil Williams,Acting Chief, Endangered Species Division,Office of Protected Resources, NationalMarine Fisheries Service.[FR Doc. 01–18205 Filed 7–19–01; 8:45 am]

BILLING CODE 3510–22–S



[I.D. 071201B]

Endangered and Threatened Species;Take of Anadromous Fish

AGENCY: National Marine FisheriesService (NMFS), National Oceanic andAtmospheric Administration (NOAA),Commerce.ACTION: Receipt of applications forscientific research permits.

SUMMARY: NMFS has receivedapplications for Endangered Species Act(ESA) scientific research permits fromthe Columbia River Inter-Tribal FishCommission at Portland, OR (CRITFC);Oregon State University at Corvallis, OR(OSU); the Shoshone-Bannock Tribes atFort Hall, ID (SBT); Gary Thorgaard ofthe School of Biological Sciences,Washington State University atPullman, WA (WSU); the ThompsonCreek Mining Company at Challis, ID(TCM); and has received an applicationfrom the Oregon Department ofEnvironmental Quality at Portland, OR(ODEQ) for modification 1 to scientificresearch permit 1205.DATES: Comments or requests for apublic hearing on any of the newapplications or the modification requestmust be received no later than 5 p.m.Pacific daylight time on August 20,2001.

ADDRESSES: Written comments andrequests for copies of the permitapplications should be sent to ProtectedResources Division (PRD), F/NWO3, 525NE Oregon Street, Suite 500, Portland,OR 97232–2737 (503/230–5400).Comments may also be sent via fax to503/230–5435. The documents are alsoavailable on the Internet at http://www.nwr.noaa.gov/. Comments will notbe accepted if submitted via e-mail orthe Internet.FOR FURTHER INFORMATION CONTACT:Robert Koch, Portland, OR, phone: 503–230–5424, Fax: 503–230–5435, e-mail:[email protected].


Species Covered in This Notice

The following species andevolutionarily significant units (ESU’s)are covered in this notice:

Chinook salmon (O. tshawytscha):threatened, naturally produced andartificially propagated, Snake River(SnR) spring/summer; threatened SnRfall.

Steelhead (O. mykiss): threatenedSnR, threatened middle Columbia River(MCR).

Sockeye salmon (Oncorhynchusnerka): endangered Snake River (SnR).

New Applications ReceivedCRITFC requests a 5–year permit

(1339) for annual takes of adult,threatened, SnR steelhead and adult,threatened, SnR spring/summer chinooksalmon associated with scientificresearch to be conducted in thefollowing tributaries of the ImnahaRiver in OR: Cow, Lightning, Horse, BigSheep, Camp, Little Sheep, Freezeout,Grouse, Crazyman, and GumbootCreeks. The purpose of the research isto acquire information on the status(escapement abundance, geneticstructure, life history traits) of steelheadin the Imnaha River Basin. The researchwill benefit the ESA-listed species byproviding information that fisheriesmanagers can use to determine ifrecovery actions are increasing wild andnatural Snake River salmonidpopulations. Establishing baselineinformation on steelhead populationstatus in the Imnaha River Basin willaid in guiding future managementactions. ESA-listed adult salmon andsteelhead are proposed to be collectedusing temporary/portable picket weirs.Non-target species that are collected(chinook salmon) are proposed to bemeasured and released. ESA-listed adultsteelhead that are collected areproposed to be sampled for biologicalinformation, sampled for fin tissues andscales, marked with opercular punches,tagged with Tyvek disc tags, andreleased or examined for opercularpunches and Tyvek disc tags, sampledfor biological information, and released.ESA-listed adult fish indirect mortalitiesassociated with the research are alsorequested. ESA-listed adult fishcarcasses are also proposed to becollected and sampled for tissues and/or scales and biological information.

OSU requests a 1–year permit (1340)for takes of adult and juvenile,threatened, naturally produced andartificially propagated, SnR spring/summer chinook salmon; adult andjuvenile, threatened, SnR steelhead; andadult and juvenile, threatened, MCRsteelhead associated with research to beconducted in tributaries of the ImnahaRiver, the Snake River, Joseph Creek,the Grande Ronde River, and the JohnDay River in OR. The research isdesigned to determine how salmonidfishes respond to riparian diversity andhow riparian diversity changes overtime. The research will build aframework for designing riparianrestoration programs in northeast



Oregon. The researchers will surveyboth in-stream and riparian zonecharacteristics where riparian litter,terrestrial insects, aquatic insects, andfish will be quantified. ESA-listed adultand juvenile salmon and steelhead areproposed to be observed/harassedduring snorkel surveys. In addition,ESA-listed adult and juvenile steelheadare proposed to be captured with hook-and-line with barbless flies, sampled forbiological information, sampled forstomach contents, and released. AnyESA-listed juvenile chinook salmoncaptured using hook-and-line will beimmediately released. ESA-listed fishindirect mortalities associated with theresearch are also requested.

SBT requests a 5–year permit (1341)for annual takes of juvenile, endangered,SnR sockeye salmon associated with astudy designed to evaluate the annualsockeye salmon smolt emigration fromPettit and Alturas Lakes in ID. Theinformation is needed to estimateoverwinter survival, downstreammigration survival, and downstreammigration timing. The research will alsoallow SBT researchers to evaluatevarious release strategies and tocalculate smolt-to-adult return rates.The proposed research will benefit thespecies by providing managers withinformation on the relative success ofthe Pettit and Alturas Lakes sockeyesalmon reintroduction program. Theresearch will also provide informationthat resource managers can use to makedecisions on future releases of sockeyesalmon from the Idaho Department ofFish and Game’s captive broodstockprogram in areas where sockeye salmonhave been extirpated. Sockeye salmonsmolts are proposed to be capturedusing a rotary screw trap on AlturasLake Creek and a weir on Pettit LakeCreek. After being captured, the ESA-listed sockeye salmon juveniles areproposed to be sampled for biologicalinformation and released or tagged withpassive integrated transponders andreleased. In addition, to determine trapefficiencies, a portion of the ESA-listedjuvenile sockeye salmon to be capturedare proposed to be marked with a smallcut on the caudal fin, released upstreamof the traps, captured at the traps asecond time, inspected for the caudalfin mark, and released. Juvenile,threatened, naturally produced, SnRspring/summer chinook salmon are alsoproposed to be captured at the AlturasLake location, sampled for biologicalinformation, and released during theresearch effort directed at sockeyesalmon. ESA-listed juvenile fish indirectmortalities associated with the researchare also requested. Takes of ESA-listed

species associated with SBT’s researchactivities were previously authorizedunder scientific research permit 998which expired on December 31, 2000.

Gary Thorgaard of the School ofBiological Sciences, WSU requests a 3–year permit (1342) for a research projectinvolving the use of small quantities ofsperm collected from adult, threatened,SnR spring/summer chinook salmonand adult, threatened, SnR steelhead.The objective of the research is to assessthe impact of hatchery rearing on thegenetic makeup of salmonid fishes,which may in turn influence theirbehavior, physiology, and ability tosurvive in nature. The research seeks todetermine the extent to which wild andhatchery salmon and steelhead maydiffer in their behavioral andphysiological responses. If differencesare detected, it is possible that hatcheryrearing methods could be adjusted toreduce those differences over time byaltering selection patterns in thehatcheries. Hybrid fish are proposed tobe produced in a laboratory settingusing ESA-listed fish sperm and eggsacquired from non-listed hatchery fish.The hybrid fish are proposed to bereared to the parr life stage; subjected tostandardized tests designed to analyzethe behavioral, physiological, andgenetic changes that occur duringdomestication; and euthanized at thecompletion of the experiment. Thebehavioral and physiological traits ofthe hybrid fish will then be comparedto those of hatchery fish produced usingthe same eggs. Dr. Thorgaard proposesto acquire the ESA-listed fish sperm tobe used for the experiment from NezPerce Tribe biologists, who areauthorized to collect male gametes fromESA-listed salmon and steelhead forcryopreservation purposes under aseparate authorization issued to theColumbia River Inter-Tribal FishCommission.

TCM requests a 5–year permit (1343)for annual takes of juvenile, threatened,naturally produced, SnR spring/summerchinook salmon and juvenile,threatened, SnR steelhead associatedwith research designed to monitor theaquatic fish populations in theThompson Creek and Squaw Creekdrainages in the vicinity of ThompsonCreek Mine. Thompson Creek Mine is alarge, open pit molybdenum mineoperation located in the Salmon Riversubbasin, Custer County, Idaho. Themine currently discharges runoff intoThompson and Squaw Creeks,tributaries to the Salmon River. Annualbiological monitoring is proposed todetermine the effects of mine operationson the aquatic life in Thompson andSquaw Creeks. The monitoring is

required by the Idaho Department ofEnvironmental Quality and the U.S.Environmental Protection Agency undera National Pollutant DischargeElimination System permit. Thebiomonitoring project will benefit allaquatic species, including chinooksalmon and steelhead, in that annualmonitoring will detect any adverseimpacts to the aquatic species as a resultof mining operations. ESA-listedjuvenile salmon and steelhead areproposed to be observed/harassedduring snorkel surveys. ESA-listedjuvenile fish are also proposed to becaptured using electrofishing, sampledfor biological information, and released.ESA-listed juvenile fish indirectmortalities associated with the researchare also requested.

Modification Request Received

ODEQ requests modification 1 toscientific research permit 1205. Permit1205 authorizes ODEQ an annual take ofjuvenile, threatened, Southern Oregon/Northern California Coast coho salmon(Oncorhynchus kisutch) associated withresearch designed to assess thecondition of randomly selected streamsin southwestern Oregon. The researchinvolves collecting samples or data on arange of parameters including benthicmacroinvertebrates, periphyton, non-native and invasive riparian plantspecies, chemical water quality,bacteriological water quality, streamhabitat condition, fish and amphibianassemblages, and water temperature.ODEQ’s research is coordinated with theU.S. Environmental Protection Agencyand is mandated by the Clean WaterAct. For modification 1, ODEQ requestsannual takes of ESA-listed Snake Riversalmon and steelhead juvenilesassociated with an expansion of theresearch effort to the Snake River Basin.ESA-listed juvenile salmon andsteelhead are proposed to be capturedusing electrofishing, examined,measured, and released. ESA-listedjuvenile fish indirect mortalities are alsorequested. Modification 1 is requestedto be valid for the duration of the permitwhich expires on December 31, 2002.


Phil Williams,Acting Chief, Endangered Species Division,Office of Protected Resources, NationalMarine Fisheries Service.[FR Doc. 01–18206 Filed 7–19–01; 8:45 am]




COMMITTEE FOR THEIMPLEMENTATION OF TEXTILEAGREEMENTS

Adjustment of Import Limits for CertainCotton, Wool and Man-Made FiberTextile Products Produced orManufactured in Cambodia

July 17, 2001.AGENCY: Committee for theImplementation of Textile Agreements(CITA).ACTION: Issuing a directive to theCommissioner of Customs adjustinglimits.

EFFECTIVE DATE: July 20, 2001.FOR FURTHER INFORMATION CONTACT: RoyUnger, International Trade Specialist,Office of Textiles and Apparel, U.S.Department of Commerce, (202) 482–4212. For information on the quotastatus of these limits, refer to the QuotaStatus Reports posted on the bulletinboards of each Customs port, call (202)927–5850, or refer to the U.S. Customswebsite at http://www.customs.gov. Forinformation on embargoes and quota re-openings, refer to the Office of Textilesand Apparel website at http://www.otexa.ita.doc.gov.

SUPPLEMENTARY INFORMATION:Authority: Section 204 of the Agricultural

Act of 1956, as amended (7 U.S.C. 1854);Executive Order 11651 of March 3, 1972, asamended.

The current limits for certain categoriesare being adjusted for swing.

A description of the textile andapparel categories in terms of HTSnumbers is available in theCORRELATION: Textile and ApparelCategories with the Harmonized TariffSchedule of the United States (seeFederal Register notice 65 FR 82328,published on December 28, 2000). Alsosee 66 FR 2412, published on January11, 2001.

J. Hayden Boyd,Acting Chairman, Committee for theImplementation of Textile Agreements.

Committee for the Implementation of TextileAgreementsJuly 17, 2001.

Commissioner of Customs,Department of the Treasury, Washington, DC

20229.Dear Commissioner: This directive

amends, but does not cancel, the directiveissued to you on January 8, 2001, by theChairman, Committee for the Implementationof Textile Agreements. That directiveconcerns imports of certain cotton, wool,man-made fiber, silk blend and othervegetable fiber textiles and textile products,produced or manufactured in Cambodia andexported during the twelve-month period

which began on January 1, 2001 and extendsthrough December 31, 2001.

Effective on July 20, 2001, you are directedto adjust the limits for the followingcategories, as provided for in the agreementbetween the Governments of the UnitedStates and Cambodia:

Category Adjusted twelve-monthlimit 1

331/631 .................... 990,093 dozen pairs.334/634 .................... 208,852 dozen.335/635 .................... 83,989 dozen.338/339 .................... 3,071,350 dozen.340/640 .................... 969,105 dozen.345 ........................... 121,461 dozen.347/348/647/648 ...... 3,685,620 dozen.352/652 .................... 494,833 dozen.438 ........................... 100,127 dozen.445/446 .................... 129,043 dozen.638/639 .................... 1,105,686 dozen.645/646 .................... 260,743 dozen.

1 The limits have not been adjusted to ac-count for any imports exported after December31, 2000.

The Committee for the Implementation ofTextile Agreements has determined thatthese actions fall within the foreign affairsexception of the rulemaking provisions of 5U.S.C. 553(a)(1).

Sincerely,J. Hayden Boyd,Acting Chairman, Committee for theImplementation of Textile Agreements.[FR Doc. 01–18184 Filed 7–19–01; 8:45 a.m.BILLING CODE 3510–DR–S

DEPARTMENT OF EDUCATION


AGENCY: Department of Education.SUMMARY: The Acting Leader,Regulatory Information ManagementGroup, Office of the Chief InformationOfficer invites comments on thesubmission for OMB review as requiredby the Paperwork Reduction Act of1995.DATES: Interested persons are invited tosubmit comments on or before August20, 2001.ADDRESSES: Written comments shouldbe addressed to the Office ofInformation and Regulatory Affairs,Attention: Lauren Wittenberg, ActingDesk Officer, Department of Education,Office of Management and Budget, 72517th Street, NW., Room 10235, NewExecutive Office Building, Washington,DC. 20503 or should be electronicallymailed to the internet [email protected] INFORMATION: Section3506 of the Paperwork Reduction Act of1995 (44 U.S.C. Chapter 35) requiresthat the Office of Management andBudget (OMB) provide interestedFederal agencies and the public an early

opportunity to comment on informationcollection requests. OMB may amend orwaive the requirement for publicconsultation to the extent that publicparticipation in the approval processwould defeat the purpose of theinformation collection, violate State orFederal law, or substantially interferewith any agency’s ability to perform itsstatutory obligations. The ActingLeader, Regulatory InformationManagement Group, Office of the ChiefInformation Officer, publishes thatnotice containing proposed informationcollection requests prior to submissionof these requests to OMB. Eachproposed information collection,grouped by office, contains thefollowing: (1) Type of review requested,e.g. new, revision, extension, existing orreinstatement; (2) Title; (3) Summary ofthe collection; (4) Description of theneed for, and proposed use of, theinformation; (5) Respondents andfrequency of collection; and (6)Reporting and/or Recordkeepingburden. OMB invites public comment.

Dated: July 16, 2001.William Burrow,Acting Leader Regulatory InformationManagement, Office of the Chief InformationOfficer.

Office of Postsecondary Education

Type of Review: Extension.Title: Application for Ability to

Benefit Testing Approval.Frequency: Annually.Affected Public: Businesses or other

for-profit; Individuals or household;Not-for-profit institutions.

Reporting and Recordkeeping HourBurden:

Responses: 150,090.Burden Hours: 77,040.

Abstract: The Secretary will publish alist of approved tests which can be usedby postsecondary educationalinstitutions to establish the ability tobenefit for a student who does not havea high school diploma or its equivalentfor Student Financial AssistancePrograms.

Requests for copies of the proposedinformation collection request may beaccessed from http://edicsweb.ed.gov, orshould be addressed to Vivian Reese,Department of Education, 400 MarylandAvenue, SW, Room 4050, RegionalOffice Building 3, Washington, D.C.20202–4651. Requests may also beelectronically mailed to the internetaddress [email protected] orfaxed to 202–708–9346. Please specifythe complete title of the informationcollection when making your request.

Comments regarding burden and/orthe collection activity requirements



should be directed to Joseph Schubart at(202) 708–9266 or via his internetaddress [email protected] who use atelecommunications device for the deaf(TDD) may call the Federal InformationRelay Service (FIRS) at 1–800–877–8339.

[FR Doc. 01–18147 Filed 7–19–01; 8:45 am]BILLING CODE 4000–01–P

DEPARTMENT OF ENERGY

[Docket Nos. EA–147–B and EA–148–B]

Applications to Export Electric Energy;Aquila Energy Marketing Corporation

AGENCY: Office of Fossil Energy, DOE.ACTION: Notice of applications.

SUMMARY: Under separate applications,Aquila Energy Marketing Corporation(‘‘AEM’’) has applied for renewal of itsauthority to transmit electric energyfrom the United States to Mexico and toCanada pursuant to section 202(e) of theFederal Power Act.DATES: Comments, protests or requeststo intervene must be submitted on orbefore August 6, 2001.ADDRESSES: Comments, protests orrequests to intervene should beaddressed as follows: Office of Coal &Power Imports/Exports (FE–27), Officeof Fossil Energy, U.S. Department ofEnergy, 1000 Independence Avenue,SW., Washington, DC 20585–0350 (FAX202–287–5736).FOR FURTHER INFORMATION CONTACT:Rosalind Carter (Program Office) 202–586–7983 or Michael Skinker (ProgramAttorney) 202–586–2793.SUPPLEMENTARY INFORMATION: Exports ofelectricity from the United States to aforeign country are regulated andrequire authorization under section202(e) of the Federal Power Act (FPA)(16 U.S.C. 824a(e)).

On June 19, 1997, in Docket EA–147,the Office of Fossil Energy (FE) of theDepartment of Energy (DOE) authorizedAEM to transmit electric energy fromthe United States to Mexico using theinternational electric transmissionfacilities of San Diego Gas and ElectricCompany, El Paso Electric Company,Central Power and Light Company, andComision Federal de Electricidad, thenational electric utility of Mexico. Thattwo-year authorization was renewed onAugust 11, 1999, in Docket EA–147–Aand will expire on August 11, 2001.

On August 13, 1997, in Docket EA–148, FE authorized AEM to transmitelectric energy from the United States toCanada using the international electric

transmission facilities owned by BasinElectric Power Cooperative, BonnevillePower Administration, CitizensUtilities, Eastern Maine ElectricCooperative, Detroit Edison, JointOwners of the Highgate Project, LongSault, Inc., Maine Electric PowerCompany, Maine Public ServiceCompany, Minnesota Power, Inc.,Minnkota Power Cooperative, New YorkPower Authority, Niagara MohawkPower Corporation, Northern StatesPower, and Vermont ElectricTransmission Company. That two-yearauthorization was renewed on August11, 1999, in Docket EA–148–A and willexpire on August 11, 2001. On July 5,2001, AEM filed applications with FEfor renewal of both exportauthorizations for a term of two years orsuch other term as DOE may deemappropriate. DOE will consider renewalof the authorization for a period of fiveyears.

DOE notes that the circumstancesdescribed in these applications arevirtually identical to those for whichexport authority had previously beengranted in FE Orders EA–147 and EA–148. Consequently, DOE believes that ithas adequately satisfied itsresponsibilities under the NationalEnvironmental Policy Act of 1969through the documentation of acategorical exclusion in the FE DocketsEA–147 and EA–148 proceedings.

In its applications, AEM requestedexpedited processing of this renewalapplication so that there would be nogap in its authority to export and it maycontinue exporting electric energy toCanada and to Mexico withoutinterruption. Accordingly, DOE hasshortened the comment period to 15days.

Procedural Matters: Any persondesiring to become a party to thisproceeding or to be heard by filingcomments or protests to theseapplications should file a petition tointervene, comment or protest at theaddress provided above in accordancewith §§ 385.211 or 385.214 of theFERC’s Rules of Practice and Procedures(18 CFR 385.211, 385.214). Fifteencopies of each petition and protestshould be filed with the DOE on orbefore the date listed above.

Comments on the AEM application toexport electric energy to Mexico shouldbe clearly marked with Docket EA–147–B. Comments on the AEM application toexport electric energy to Canada shouldbe clearly marked with Docket EA–148–B. Additional copies are to be fileddirectly with David Stevenson, AquilaEnergy Marketing Corporation, 1100Walnut Street, Suite 3300, Kansas City,Missouri 64106 AND Kathryn A.

Flaherty, Attorney for Aquila EnergyMarketing Corporation, BlackwellSanders Peper Martin, 13710 FNBParkway, Suite 200, Omaha, Nebraska68154.

Copies of these applications will bemade available, upon request, for publicinspection and copying at the addressprovided above or by accessing theFossil Energy Home Page at http://www.fe.doe.gov. Upon reaching theFossil Energy Home page, select‘‘Electricity Regulation,’’ then ‘‘PendingProcedures’’ from the options menus.

Issued in Washington, DC, on July 16,2001.Anthony J. Como,Deputy Director, Electric Power Regulation,Office of Coal & Power Imports/Exports,Office of Coal & Power Systems, Office ofFossil Energy.[FR Doc. 01–18165 Filed 7–19–01; 8:45 am]BILLING CODE 6450–01–P


Federal Energy RegulatoryCommission

[Docket No. RP01–484–000]

Aera Energy LLC, Amoco Productionet al.; Complainants v. El Paso NaturalGas Company; Respondent; Notice ofComplaint

July 16, 2001.Take notice that on July 13, 2001,

pursuant to Rule 206 of the Rules ofPractice and Procedure of the FederalEnergy Regulatory Commission(Commission) 18 CFR 385.206, AeraEnergy LLC, Amoco ProductionCompany, BP Energy Company,Burlington Resources Oil & GasCompany LP, Conoco Inc., Coral EnergyResources LP, ONEOK EnergyMarketing & Trading Company, L.P.,Pacific Gas and Electric Company,Panda Gila River L.P., Public UtilitiesCommission of the State of California,Southern California Edison Company,Southern California Gas Company andTexaco Natural Gas Inc. (JointComplainants) filed a complaint underSection 5 of the Natural Gas Act, againstEl Paso Natural Gas Company (El Paso).

Complainants allege that El Paso’sover-selling of firm capacity inconjunction with unlimited growth ofdemands by its ‘‘full requirements’’customers, results in unjust,unreasonable and undulydiscriminatory services on the El Pasosystem, in violation of Sections 5 and 7of the Natural Gas Act, theCommission’s regulations thereunder,and El Paso’s obligations under the 1996rate case settlement.



Any person desiring to be heard or toprotest this filing should file a motionto intervene or protest with the FederalEnergy Regulatory Commission, 888First Street, NE., Washington, DC 20426,in accordance with Rules 211 and 214of the Commission’s Rules of Practiceand Procedure (18 CFR 385.211 and385.214). All such motions or protestsmust be filed on or before August 2,2001. Protests will be considered by theCommission in determining theappropriate action to be taken, but willnot serve to make protestants parties tothe proceeding. Any person wishing tobecome a party must file a motion tointervene. Answers to the complaintshall also be due on or before August 2,2001. Copies of this filing are on filewith the Commission and are availablefor public inspection. This filing mayalso be viewed on the web at http://www.ferc.gov using the ‘‘RIMS’’ link,select ‘‘Docket#’’ and follow theinstructions (call 202–208–2222 forassistance). Comments, protests andinterventions may be filed electronicallyvia the Internet in lieu of paper. See, 18CFR 385.2001(a)(1)(iii) and theinstructions on the Commission’s website under the ‘‘e-Filing’’ link.

David P. Boergers,Secretary.[FR Doc. 01–18146 Filed 7–19–01; 8:45 am]BILLING CODE 6717–01–P


Federal Energy RegulatoryCommission

[Docket No. ER01–1685–001, et al.]

Portland General Electric Company, etal.; Electric Rate and CorporateRegulation Filings

July 16, 2001.

Take notice that the following filingshave been made with the Commission:

1. Portland General Electric Company

[Docket No. ER01–1685–001]

Take notice that on July 11, 2001,Portland General Electric Company(PGE) filed substitute tariff sheets in itsOpen Access Transmission Tariff incompliance with the Commission’s June1, 2001 order in the above-referenceddocket. Portland General Electric Co., 95FERC 61,341 (2001). PGE requests thatthe Commission make the revised tariffsheets effective as of April 2, 2001.

Comment date: August 1, 2001, inaccordance with Standard Paragraph Eat the end of this notice.

2. Public Service Company ofOklahoma

[Docket No. ER01–1790–001]

Take notice that on July 11, 2001,Public Service Company of Oklahoma(PSO) tendered for filing in compliancewith the Commission’s letter order ofJune 12, 2001, a Supplement to theInterconnection Agreement withCalpine Oneta Power, L.P. AEP requestsan effective date of June 12, 2001.Copies of PSO’s filing has been servedupon the Calpine and the OklahomaCorporation Commission.


3. Gray County Wind Energy, LLC

[Docket No. ER01–1972–001]

Take notice that on July 11, 2001,Gray County Wind Energy, LLC (GrayCounty) tendered for filing designationsfor two long term power purchaseagreements and revised tariff sheets toGray County’s FERC Electric Tariff,Original Volume No.1 in compliancewith the Letter Order issued on July 3,2001 in this Docket No. ER01–1972–000. The tariff revision incorporates aprohibition on power purchases fromany affiliated public utility with afranchised service territory absent a ratefiling under Section 205 of the FederalPower Act.


4. Allegheny Energy ServiceCorporation, on behalf of AlleghenyEnergy Supply Company, LLC,Monongahela Power Company, ThePotomac Edison Company and WestPenn Power Company, (AlleghenyPower)

[Docket No. ER00–2309–002]

Take notice that on July 10, 2001,Allegheny Energy Service Corporationon behalf of Allegheny Energy SupplyCompany, LLC (AE Supply), ThePotomac Edison Company and WestPenn Power Company (AlleghenyPower) filed First Revised Sheet No. 7to AE Supply’s First Revised RateSchedule FERC No. 3 in accordancewith the Commission’s Order of July 2,2001 at Docket No. ER00–2309–001, 96FERC 61,002 (2001).

Copies of the filing have beenprovided to the customer, the PublicUtilities Commission of Ohio, thePennsylvania Public UtilityCommission, the Maryland PublicService Commission, the Virginia StateCorporation Commission and the WestVirginia Public Service Commission.

Comment date: July 31, 2001, inaccordance with Standard Paragraph Eat the end of this notice.

5. Pro-Energy Development LLC

[Docket No. ER01–2463–000]Take notice that on June 29, 2001, Pro

Energy Development LLC petitioned theCommission for acceptance of ProEnergy Development LLC Rate ScheduleFERC No. 1; the granting of certainblanket approvals; including theauthority to sell electricity at marketbased rates and the waiver of certainCommission regulations.

Pro Energy Development LLC intendsto engage in wholesale electric powerand energy purchases and sales as amarketer. Pro Energy Development LLCis not in the business of generating ortransmitting electric power.


6. American Transmission CompanyLLC

[Docket No. ER01–2560–000]Take notice that on July 11, 2001,

American Transmission Company LLC(ATCLLC) tendered for filing a Firm andNon-Firm Point-to-Point ServiceAgreement between ATCLLC andCalpine Energy Services, L.P. ATCLLCrequests an effective date of June 29,2001.


7. Northeast Empire LimitedPartnership #2

[Docket No. ER01–2561–000]Take notice that Northeast Empire

Limited Partnership #2 (NELP#2), onJuly 11, 2001, tendered for filing anapplication for approval of market-basedrate schedules to sell capacity, energyand ancillary services to WPS EnergyServices, Inc. pursuant to Section 205 ofthe Federal Power Act.

NELP#2 requests that the Commissionaccept these Rate Schedules for filing byAugust 10, 2001.


8. Competitive Energy Services, LLC


Competitive Energy Services, LLC (CES)petitioned the Commission foracceptance of CES Rate Schedule FERCNo. 1; the granting of certain blanketapprovals, including the authority tosell electricity at market-based rates;and the waiver of certain Commissionregulations.



CES intends to engage in wholesaleelectric power and energy purchasesand sales as a marketer. CES is not inthe business of generating ortransmitting electric power.


9. Jackson County Power, LLC


Jackson County Power, LLC (JacksonCounty), an electric power developerorganized under the laws of Delaware,petitioned the Commission foracceptance of its market-based ratetariff, waiver of certain requirementsunder Subparts B and C of Part 35 of theCommission’s regulations, andpreapproval of transactions under Part34 of the regulations. Jackson County isdeveloping an 1,072 MW (summerrated) gas fired generating facility inJackson County, Ohio, six miles south ofJackson, Ohio.


10. Arizona Public Service Company

[Docket No. ER01–2564–000]Take notice that on July 11, 2001, the

Arizona Public Service Companytendered for filing proposed revisions toArizona Public Service Company’s fueladjustment clause contained in certainwholesale power agreements on filewith the Commission.

A copy of this filing has been servedon all parties on the service list.


11. American Electric Power ServiceCorporation


Kentucky Power Company tendered forfiling a letter agreement with FoothillsGenerating, L.L.C. AEP requests aneffective date of June 20, 2001. Copiesof Kentucky Power Company’s filing hasbeen served upon the Kentucky PublicService Commission.


12. Public Service Company of NewMexico


Public Service Company of New Mexico(PNM) submitted for filing an executedcopy of a Wholesale RequirementsPower Sale and Services Agreement(Agreement) dated June 29, 2001 (the

requested effective date for theAgreement), between PNM and Texas-New Mexico Power Company (TNMP).The Agreement, which runs from July 1,2001 through December 31, 2006, andwhich is being filed as a ServiceAgreement under PNM’s FERC ElectricTariff, First Revised Volume No. 3.Beginning January 1, 2003, and throughthe remainder of the Agreement, PNMwill be TNMP’s sole provider ofresources to serve its New Mexico retailload requirements. PNM’s filing isavailable for public inspection at itsoffices in Albuquerque, New Mexico.

Copies of this filing have been servedupon TNMP and the New Mexico PublicRegulation Commission.


13. PPL Large Scale DistributedGeneration II, LLC.

[Docket No. EL01–102–000]Take notice that on July 12, 2001, PPL

Large Scale Distributed Generation II,LLC (Applicant) tendered for filing withthe Federal Energy RegulatoryCommission (Commission) a petition fordeclaratory order disclaimingjurisdiction.

The Applicant intends to developcertain electric generating facilities to belocated in Illinois, Arizona andPennsylvania. Applicant is seeking adisclaimer of jurisdiction in connectionwith a lease financing involving thosefacilities.


14. Midwest Energy, Inc.

[Docket No. ER01–2461–000]Take notice that on June 28, 2001,

Midwest Energy, Inc. (Midwest)tendered for filing with the FederalEnergy Regulatory Commission(Commission) an executed TransactionService Agreement between Midwestand City of Colby, Kansas.

Midwest states that the agreement wasserved on the Kansas CorporationCommission.


15. San Diego Gas & Electric Company,Complainant, v. Sellers of Energy andAncillary Services Into MarketsOperated By the CaliforniaIndependent System OperatorCorporation and the California PowerExchange, Respondents

[Docket No. EL00–95–040]Investigation of Practices of the

California Independent System

Operator and the California PowerExchange

[Docket No. EL00–98–038]

Investigation of Wholesale Rates ofPublic Utility Sellers of Energy andAncillary Services In the WesternSystems Coordinating Council

[Docket No. EL01–68–003]

Take notice that on July 10, 2001, theCalifornia Independent System OperatorCorporation (ISO) tendered for filingchanges to the ISO Tariff to comply withthe Commission’s June 19, 2001, orderin the above-captioned proceeding, SanDiego Gas & Electric Co. v. Sellers ofEnergy and Ancillary Services IntoMarkets Operated by the CaliforniaIndependent System Operator and theCalifornia Power Exchange, et al., 95FERC ¶61,418 (2001). The ISO alsotendered for filing changes to the ISOTariff to comply with the Commission’sMay 25, 2001, order in the above-captioned proceeding, San Diego Gas &Electric Co. v. Sellers of Energy andAncillary Services Into MarketsOperated by the California IndependentSystem Operator and the CaliforniaPower Exchange, et al., 95 FERC¶61,275 (2001) and to reflect therejection of Amendment No. 31 to theISO Tariff in the Commission’sNovember 1, 2000, order in the above-captioned proceeding, San Diego Gas &Electric Co. v. Sellers of Energy andAncillary Services Into MarketsOperated by the California IndependentSystem Operator and the CaliforniaPower Exchange, et al., 93 FERC¶61,121 (2000). The ISO states that thisfiling has been served upon all partiesin this proceeding.


Standard Paragraph

E. Any person desiring to be heard orto protest such filing should file amotion to intervene or protest with theFederal Energy Regulatory Commission,888 First Street, NE., Washington, DC20426, in accordance with Rules 211and 214 of the Commission’s Rules ofPractice and Procedure (18 CFR 385.211and 385.214). All such motions orprotests should be filed on or before thecomment date. Protests will beconsidered by the Commission indetermining the appropriate action to be



taken, but will not serve to makeprotestants parties to the proceeding.Any person wishing to become a partymust file a motion to intervene. Copiesof this filing are on file with theCommission and are available for publicinspection. This filing may also beviewed on the web at http://www.ferc.gov using the ‘‘RIMS’’ link,select ‘‘Docketι ’’ and follow theinstructions (call 202–208–2222 forassistance). Comments, protests andinterventions may be filed electronicallyvia the Internet in lieu of paper. See, 18CFR 385.2001(a)(1)(iii) and theinstructions on the Commission’s website under the ‘‘e-Filing’’ link.

David P. Boergers,Secretary.[FR Doc. 01–18145 Filed 7–19–01; 8:45 am]BILLING CODE 6717–01–P


[FRL–7013–1]

Proposed Consent Decree, Clean AirAct Citizen Suit

AGENCY: Environmental ProtectionAgency.ACTION: Notice of proposed consentdecree; request for public comment.

SUMMARY: In accordance with section113(g) of the Clean Air Act, as amended(‘‘Act’’), 42 U.S.C. 7413(g), notice ishereby given of a proposed PartialConsent Decree, which was lodged withthe United States District Court for theDistrict of Columbia by the UnitedStates Environmental Protection Agency(‘‘EPA’’) on June 29, 2001, to address alawsuit filed by the Natural ResourcesDefense Council, EnvironmentalDefense Fund, Conservation LawFoundation, Clean Air Council, NaturalResources Council of Maine, and SierraClub (collectively referred to as‘‘NRDC’’). This lawsuit, which was filedpursuant to section 304(a) of the Act, 42U.S.C. 7604(a), claims EPA failed tomeet a mandatory deadline undersection 110(c) of the Act, 42 U.S.C.7410(c), to promulgate federalimplementation plans (‘‘FIPs’’)establishing attainment demonstrationsfor certain ozone nonattainment areasclassified as serious or severe andlocated in the eastern part of the UnitedStates and to impose sanctions in thoseareas. NRDC v. EPA, No. 1:99CV02976(D.D.C.).DATES: Written comments on theproposed consent decree must bereceived by August 20, 2001.

ADDRESSES: Written comments shouldbe sent to Jan M. Tierney, Air andRadiation Law Office (2344A), Office ofGeneral Counsel, U.S. EnvironmentalProtection Agency, 1200 PennsylvaniaAve., NW., Washington, DC 20460.Copies of the proposed Partial ConsentDecree are available from Phyllis J.Cochran, (202) 564–5566. A copy of theproposed Partial Consent Decree waslodged with the Clerk of the UnitedStates District Court for the District ofColumbia on June 29, 2001.SUPPLEMENTARY INFORMATION: In itscomplaint, NRDC alleges that EPA hasa mandatory duty to promulgate FIPsand impose sanctions on 13nonattainment areas located in 14 Statesand the District of Columbia. On June12, 2000, EPA and NRDC filed with thecourt a Partial Consent Decree thataddressed 9 of the 13 areas (‘‘June 2000Decree’’). See also 64 FR 71453 (Dec. 21,1999) (notice under 113(g) of PartialConsent Decree). At that time, three ofthe areas that were the subject ofNRDC’s complaint were not subject tothe 1-hour ozone standard pursuant toa determination by EPA under 40 CFR50.9(b) that the areas had attained the 1-hour standard and that the 1-hourstandard no longer applied. See 64 FR30911 (June 9, 1999). These three areasare the Boston-Lawrence-Worcesternonattainment area, located inMassachusetts and New Hampshire; thePortsmouth-Dover-Rochesternonattainment area, located in NewHampshire; and the Providencenonattainment area, Rhode Island.However, at the time the June 2000Decree was entered by the court, EPAhad proposed to reinstate theapplicability of the 1-hour standard,including designations, in those areas.64 FR 57424 (Oct. 25, 1999) (preamblelanguage) and 64 FR 60477 (Nov. 5,1999) (regulatory text). Paragraph 5a ofthe June 2000 Decree provided that theparties agreed to stay the case withrespect to those three areas andprovided that the stay would expire ifany of certain events occurred,including a final action by EPAreinstating the 1-hour standard and theassociated 1-hour designations in thoseareas. On July 20, 2000, EPA took finalaction reinstating the 1-hour standardand the associated designations in allareas for which EPA had previouslydetermined that standard did not apply.Subsequently, the parties negotiated theproposed Partial Consent Decree toaddress NRDC’s claims for these threeareas.

The three areas addressed in theproposed Partial Consent Decree are allcurrently designated nonattainment but,

based on monitoring data from 1998–2000, have air quality meeting the 1-hour standard. The proposed PartialConsent Decree provides that EPA willpromulgate a full attainmentdemonstration FIP for each area if aviolation of the 1-hour ozone standardoccurs in the future in that area. Seeparagraphs 2 and 3. For the Boston andPortsmouth areas, EPA’s obligation topropose a FIP would ripen in Septemberof the year following the year in whichthe violation occurs and EPA’sobligation to finalize a FIP would ripen9 months later—the following June.Because EPA currently does not have anattainment demonstration submissionfor the Providence area, the proposedPartial Consent Decree provides anadditional six months for EPA topropose a FIP. Thus, EPA’s obligation topropose a FIP for Providence wouldripen in March of the second yearfollowing the violation and EPA’sobligation to finalize a FIP would ripen9 months later—in December of thatsame year.

Paragraph 4 of the proposed PartialConsent Decree sets forth the threecircumstances under which EPA’sobligation to propose or promulgate aFIP will be extinguished: (1) The datethat EPA fully approves an attainmentdemonstration SIP for an area; (2) thedate EPA redesignates an area fromnonattainment to attainment; or (3) onceEPA has approved a SIP or promulgateda FIP under the NOX SIP Call for eachupwind state for an area, the latestsource compliance date in an approvedSIP or promulgated FIP.

For a period of thirty (30) daysfollowing the date of publication of thisnotice, the Agency will receive writtencomments relating to the proposedPartial Consent Decree from personswho were not named as parties orinterveners to the litigation in question.EPA or the Department of Justice maywithdraw or withhold consent to theproposed Partial Consent Decree if thecomments disclose facts orconsiderations that indicate that suchconsent is inappropriate, improper,inadequate, or inconsistent with therequirements of the Act. Unless EPA orthe Department of Justice determine,following the comment period, thatconsent is inappropriate, the finalPartial Consent Decree will be enteredwith the court and will establishdeadlines for promulgation of FIPsconsistent with the conditions of thePartial Consent Decree.



Dated: July 9, 2001.John T. Hannon,Acting Associate General Counsel.[FR Doc. 01–18196 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


[ER–FRL–6620–2]

Environmental Impact Statements andRegulations: Availability of EPAComments

Availability of EPA commentsprepared pursuant to the EnvironmentalReview Process (ERP), under Section309 of the Clean Air Act and Section102(2)(c) of the National EnvironmentalPolicy Act as amended. Requests forcopies of EPA comments can be directedto the Office of Federal Activities AT(202) 564–7167.

An explanation of the ratings assignedto draft environmental impactstatements (EISs) was published in FRdated April 14, 2000 (65 FR 20157).

Draft EISsERP No. D–AFS–E65056–FL Rating

LO, Ocklawaha River RestorationProject, Continued Occupation ofFlorida National Forest Lands, Portionsof Kirkpatrick Dam, Rodman Reservoirand Eureka Lock and Dam inConjunction with Partial Restoration ofthe Ocklawaha River, Operation andMaintenance, Permit Issuance andImplementation, Marion and PutnamCounties, FL.

Summary: EPA has not identified anypotential environmental impactsrequiring substantive changes to theproposal. The temporary impacts causedby the release of nutrients should not bea factor in delaying projectimplementation.

ERP No. D–AFS–J65343–MT RatingEC2, North Elkhorns Vegetation Project,Elkhorn Wildlife Management Unit,Implementation, Strawberry Butte Area,Helena National Forest, JeffersonCounty MT.

Summary: EPA expressedenvironmental concerns with thelimited range of alternatives evaluatedand asked for additional explanationand additional alternatives analysis. Ofthe two action alternatives presentedEPA favored logging during winter onsnow to reduce erosion and sedimenttransport. EPA requests that the finalEIS provide information regardingimpacts to wetlands and air qualityimpacts to fully assess and mitigate allpotential impacts.

ERP No. D–AFS–L65382–ID RatingNS, Meadow Face Stewardship Pilot

Project, Implementation, Nez PerceNational Forest, Clearwater RangerDistrict, Idaho County, ID.

Summary: EPA Region 10 used ascreening tool to conduct a limitedreview of this action. Based upon thisscreen, EPA does not foresee having anyenvironmental objections to theproposed project. Therefore, EPA willnot be conducting a detailed review.

ERP No. D–BLM–K65340–NV RatingEC2, Reno Clay Plant Project, Constructand Operate an Open-Pit Clay Mine andOre Processing Facility, Plan-of-Operations, Oil-Dri Corporation ofNevada, Hungry Valley, WashoeCounty, NV.

Summary: EPA expressed concernsregarding potential impacts to air andwater quality, soils, vegetation, wildlife,and cultural resources; andrecommended that the FEIS includeadditional information regarding theseimpacts, mitigation measures to reduceor offset impacts, and bonding.

ERP No. D–FRC–C05147–NY RatingEC2, Upper Hudson River HydroelectricProject, Relicensing the E.J. West Project(FERC–No. 2318–002), Stewart BridgeProject (FERC–No. 2047–004), HudsonRiver Project (FERC–No. 2482–014) andFeeder Dam Hydroelectric Project(FERC–No. 2554–003), Saratoga, Fultonand Hamilton Counties, NY.

Summary: EPA expressed concernsregarding potential impacts to aquaticresources and wetlands. EPA alsorequested additional information onalternatives and the consultationprocess with tribal nations.

ERP No. D–HUD–K81026–CA RatingEC2, West Hollywood Gateway Project,Constructing from Santa MonicaBoulevard, Romaine Street LaBreaAvenue and Formosa Avenue, Public/Private Partnership, City of WestHollywood, Los Angeles County, CA.

Summary: EPA expressed concerns,and requested additional informationregarding: impacts to traffic and airquality in the region, proposed trafficmitigation measures and environmentaljustice impacts.

ERP No. D–USA–E11049–KY RatingEC1, U.S. Army Armor Center and FortKnox Northern Training Complex,Construction and Operation of a Multi-Purpose Digital Training Ranger and aSeries of Maneuver Areas, Drop andLanding Zones, Fort Knox, KY.

Summary: Environmental concernsresult from off- and on-post impactsattendant to the increased intensity/duration of proposed training upgrades.Army will have to work with localentities to mitigate adverse effects onencroaching residential/commercialdevelopment.

ERP No. D2–AFS–J65143–00 RatingE02, Flat Canyon Federal Coal LeaseTract (UTU–77114), Application forLeasing, Manit-La Sal National Forest,Ferron-Price Ranger District, Sanpeteand Emery Counties, UT.

Summary: EPA expressedenvironmental objections with theproposed coal mine expansion which isexpected to adversely impact currentwater quality problems of high salinity,phosphorus and effluent toxicity.Depending on the selected dischargelocation, the expansion may expand thearea of water quality problems into arelatively pristine watershed.Subsidence from the underground minemay also adversely affect fen wetlandsand riparian habitat.

Final EISsERP No. F–AFS–F61020–MN

Boundary Waters Canoe AreaWilderness Fuel Treatment,Implementation, Superior NationalForest, Cook, Lake and St. Louis, MN.

Summary: The USFS addressed EPA’sconcerns in a clearly written FEIS. EPAconcurs with the USFS selection ofModified Alternative B in implementingcontrolled burns in the blowdown areato reduce the risk of wildfires andprotect public safety.

ERP No. F–AFS–J65324–WY State ofWyoming School Section 16 T.12N.,R.83W., 6th P.M., Issuing a Forest RoadSpecial-Use-Permit for Access,Medicine Bow-Routt National Forests,Brush Creek/Hayden Ranger District,Carbon County, WY.

Summary: No formal comment letterwas sent to the preparing agency.

ERP No. F–AFS–K65230–CA FuelsReduction for Community ProtectionPhase 1 Project on the Six RiversNational Forest, Proposes to ReduceFuels High Severity Burned Stands,Lower Trinity Ranger District,Humboldt and Trinity Counties, CA.


ERP No. F–AFS–K65359–00 NorthernSierra Amendment to the Toiyabe Landand Resource Management, To Unifyand Revise Management Direction,Humboldt-Toiyabe National Forest,Carson Ranger District, StanislausNational Forest, Lake Tahoe BasinManagement Unit, Douglas and WashoeCounties, NV and Alpine and ToulomneCounties, CA.


ERP No. F–AFS–L65370–OR SouthBend Weigh and Safety StationEstablishment, Special Use Permit forConstruction, Maintenance andOperation, Deschute National ForestLands along US 97 near the Newberry



National Volcanic Monument,Deschutes County, OR.


ERP No. F–NPS–K65209–00 DeathValley National Park GeneralManagement Plan, Implementation,Mojave Desert, Inyo and San BernardinoCounties, CA and Nye and EsmeraldaCounties, NV.


ERP No. F–NPS–K65212–CA MojaveNational Preserve General ManagementPlan, Implementation, San BernardinoCounty, CA.


Dated: July 17, 2001.Joseph C. Montgomery,Director, NEPA Compliance Division, Officeof Federal Activities.[FR Doc. 01–18201 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–M


[ER–FRL–6620–1]

Environmental Impact Statements;Notice of Availability

Responsible AgencyOffice of FederalActivities, General

Information (202)564–7167 ORwww.epa.gov/oeca/ofa.Weekly receipt of Environmental Impact

Statements filed July 9, 2001 ThroughJuly 13, 2001 pursuant to 40 CFR1506.9.

EIS No. 010252, Final EIS, USA, AZ,Yuma Proving Ground MultipurposeInstallation, Diversification of Missionand Changes to Land Use, NPDESGeneral Permit and COE Section 404Permit, Yuma and La Pas Counties,AZ, Wait Period Ends: August 20,2001, Contact: Junior D. Kerns (520)328–2148.

EIS No. 010254, Draft EIS, AFS, MT,Gold/Boulder/Sullivan (GBS),Implementation of Timber Harvestand Associated Activities PrescribedBurning, Kootenai National Forest,Rexford Ranger District, LincolnCounty, MT, Comment Period Ends:September 4, 2001, Contact: RonKomac (406) 296–2536.

EIS No. 010255, Final EIS, FRC, FL, MS,AL, Florida Gas Transmission (FGT)Phase V Expansion Project, FGTNatural Gas Pipeline and AssociatedAbove Ground Facilities,Construction and Operation,Approvals and Permit Issuance,Several Counties of FL, AL and MS ,Wait Period Ends: August 20, 2001,

Contact: David Boergers (202) 208–2088.

EIS No. 010256, Draft EIS, COE, NJ, NewJersey Shore Protection Study, ToDetermine a Feasible Hurricane andStorm Damage Reduction Plan,between Manasquan Inlet to BarnegatInlet, Boroughs of Point PleasantBeach, Bay Head, MantolokingLavallette, Seaside Heights andSeaside Park, and Townships of Buck,Dover and Berkeley, NJ, CommentPeriod Ends: September 4, 2001,Contact: Beth Brandreth (215) 656–6558.

EIS No. 010258, Final EIS, GSA, DC,Bureau of Alcohol, Tobacco andFirearms National HeadquartersBuilding, Site Acquisition, Design andConstruction, Washington, D.C., WaitPeriod Ends: August 27, 2001,Contact: Dawud Abdur-Rahman (202)260–3368.

EIS No. 010259, Draft EIS, GSA, MD,Suitland Federal Center, Constructionand Operation of a 226-acre FederalEmployment Center, ProgrammaticDevelopment Plan and Phase IImplementation, Prince George’sCounty, MD, Comment Period Ends:September 4, 2001, Contact: JagBhargava (202) 708–6944.

EIS No. 010260, SECOND FINALSUPPLE, DOE, SC, Savannah RiverSite Salt Processing Alternatives,Evaluation for Separating High-Activity and Low-Activity Fractionsof Liquid High-Level Radio-activeWaste and Potential EnvironmentalImpacts of Alternatives to the In-Tank-Precipitation Process (ITP),Aiken and Barnwell Counties, SC,Wait Period Ends: August 20, 2001,Contact: Andrew R. Grainger (800)881–7292. This document is availableon the Internet at tis.eh.doe.gov/nepa/docs/docs.htm.

EIS No. 010261, FINAL EIS, IBR, CA,Colusa Basin Drainage District,Developing an Integrated ResourceManagement Program for the Controlof Flooding, Glenn, Colusa and YoloCounties, CA, Wait Period Ends:August 20, 2001, Contact: Russ Smith(530) 275–1554.

Amended NoticesEIS No. 010153, Draft Supplement,

BLM, MT, Zortman and LanduskyMines Reclamation Plan,Modifications and Mine LifeExtensions, Updated Information ToAnalyze Additional ReclamationAlternatives, Approval of MineOperation, Mine Reclamation andCOE Section 404 Permit, Little RockyMountains, Philip County, MT,Comment Period Ends: August 9,2001, Contact: Scott Haight (406) 538–

1930. Revision of FR Notice Publishedon 5/11/2001: CEQ Review PeriodEnding on 7/9/2001 has beenExtended to 8/9/2001.

EIS No. 010188, DRAFT EIS, AFS, MT,Burned Area Recovery, Proposal toReduce Fuels, Improve WatershedConditions and Reforest BurnedLands, Sula, Darby, West Fork andStevensville Ranger Districts,Bitterroot National Forest, RavalliCounty, MT , Comment Period Ends:July 31, 2001, Contact: Craig Bobzien(406) 363–7100. Revision of FR NoticePublished on 6/1/2001: CEQ ReviewPeriod Ending 7/16/2001 has beenExtended to 7/31/2001.Dated: July 17, 2001.

Joseph C. Montgomery,Director, NEPA Compliance Division, Officeof Federal Activities.[FR Doc. 01–18202 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


[FRL–7015–5]

Integrated Risk Information System(IRIS); Notice; Request for Information

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice; administrative changesin the Integrated Risk InformationSystem.

SUMMARY: IRIS is an EPA data base thatcontains EPA scientific consensuspositions on human health effects thatmay result from chronic exposure tochemical substances in theenvironment. In this action, EPA isannouncing an upcoming change to thelocation and phone number of EPA’scontractor-operated IRIS hotline andpublically-accessible records center, anda redesign of the IRIS web site, availablefor public view and comment.DATES: Comments should be submittedby September 18, 2001.ADDRESSES: Comments on theredesigned web site should be made tothe IRIS webmaster via thequestionnaire on line at www.epa.gov/iris/whatsnew.htm. Comments on theweb site may also be mailed to the IRISSubmission Desk, c/o Courtney R.Johnson, U.S. Environmental ProtectionAgency, (8601D), 1200 PennsylvaniaAvenue, N.W., Washington, DC 20460.FOR FURTHER INFORMATION CONTACT: Forgeneral information on the IRISprogram, contact Amy Mills (Mail Code8601D), U.S. Environmental ProtectionAgency, 1200 Pennsylvania Avenue,NW., Washington, DC 20460, or call



(202) 564–3204, or send electronic mailinquiries to [email protected].


Background

IRIS is an EPA data base containingAgency consensus scientific positionson potential adverse human healtheffects that may result from chronic (orlifetime) exposure to chemicalsubstances found in the environment.IRIS currently provides health effectsinformation on over 500 specificchemical substances. A companionFederal Register notice today providesadditional background on the IRISprogram and data base, and requestspublic comment on which substances toadd or update.

EPA has provided outreach tofacilitate the use and understanding ofthe data base. These efforts include atelephone hotline (513–569–7254)which provides answers to publicinquiries about access to IRIS, thecontent of specific IRIS healthassessments, and risk assessmentmethodologies. EPA also operates areading room (located in EPA’s AndrewW. Breidenbach EnvironmentalResearch Center, 26 West Martin LutherKing Dr., Cincinnati, OH) where thepublic may, by appointment, viewbackground files supporting IRISassessments. Further, EPA provides IRISon the Internet for public access atwww.epa.gov/iris.

Today’s Actions

(1) EPA is moving the hotlinefunction and reading room to theWashington, DC area. The hotline willbe accessed via a new phone number,fax number, and email address. Thisinformation will be shown on the IRISweb site (www.epa.gov/iris) no laterthan September 30, 2001. The address ofthe new reading room will be providedconcurrently on the IRIS web site.

(2) In response to user requests, EPAhas undertaken a redesign of the IRISweb site. This change does not involvea change to the scientific content ofIRIS; rather, it presents the data base ina more easily navigable and searchableformat. The new redesign will beavailable by August 1, 2001, for publicview and comment for 60 days. It willbe accessible from the IRIS web site atwww.epa.gov/iris. EPA invites IRISusers to visit the new site and providefeedback to several questions posted.After the test period ends and allcomments are considered, EPA plans toreplace the current web site with theredesigned site.

Dated: July 10, 2001.George W. Alapas,Acting Director, National Center forEnvironmental Assessment.[FR Doc. 01–18197 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


[FRL–7015–6]

Integrated Risk Information System(IRIS); Notice; Request for Information

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice; request for informationon needs for health assessments onEPA’s Integrated Risk InformationSystem.

SUMMARY: IRIS is an EPA data base thatcontains EPA scientific consensuspositions on human health effects thatmay result from chronic exposure tochemical substances in theenvironment. On February 22, 2001,EPA announced the 2001 IRIS agendaand solicited scientific information fromthe public for consideration in assessinghealth effects from specific chemicalsubstances. Today, EPA is requestinginformation from the public to defineneeds for new and revised healthassessments on IRIS in 2002–2005.DATES: Information should be submittedby September 18, 2001.ADDRESSES: Please send information inresponse to this notice to the IRISSubmission Desk, c/o Courtney R.Johnson, National Center forEnvironmental Assessment (8601D),U.S. Environmental Protection Agency,Washington, DC 20460. Alternatively,you may submit your responseelectronically to [email protected] information must besubmitted in WordPerfect or as an ASCIIfile. Information will also be acceptedon 3.5’’ floppy disks. All information inelectronic form must be identified as anIRIS Submission.FOR FURTHER INFORMATION CONTACT: Forgeneral information on the IRISprogram, contact Amy Mills, NationalCenter for Environmental Assessment(Mail Code 8601D), U.S. EnvironmentalProtection Agency, 1200 PennsylvaniaAvenue, NW., Washington, DC 20460,or call (202) 564–3204, or sendelectronic mail inquiries [email protected].


BackgroundIRIS is an EPA data base containing

Agency consensus scientific positions

on potential adverse human healtheffects that may result from chronic (orlifetime) exposure to chemicalsubstances found in the environment.IRIS currently provides health effectsinformation on over 500 specificchemical substances.

IRIS contains substance-specificsummaries of qualitative andquantitative health information insupport of the first two steps of the riskassessment process, i.e., hazardidentification and dose-responseevaluation. Combined with specificsituational exposure assessmentinformation, the summary health hazardinformation in IRIS may be used as asource in evaluating potential publichealth risks from environmentalcontaminants.

History of the IRIS ProgramEPA began the IRIS program in 1985

to build consensus opinions across theAgency on the potential health effects ofchemical substances of concern toProgram Offices and Regional Offices.The IRIS program has continuallyprovided toxicity values andcarcinogenicity assessments for thehazard and dose-response componentsof risk assessment. IRIS information hasbeen used by Agency regulatory officesand in site-specific risk assessments.States and other organizations have alsochosen to adopt IRIS information intheir risk-based decision-making.

In response to public interest inaccess to IRIS, EPA released IRIS to thepublic in 1988(53 FR 20162). In 1993,EPA requested public comment on peerreview procedures for IRIS healthassessments and on public involvementin IRIS assessment development andreview (58 FR 11490). In 1995, EPAinitiated the IRIS Pilot, whereby variousimprovements were tested includingprocedures for peer review, publicinvolvement, and consensus review.Many of these procedures were thenadopted for the permanent IRIS program(61 FR 14570). In 1996, EPA providedaccess to IRIS on EPA’s Internet site,enabling easier access for the Agencyand the public. In 1997, EPA made theInternet site the official repository forIRIS.

Between 1998 and 2001, EPA hasimplemented numerous improvementsidentified in the IRIS Pilot, includingpublishing an annual Federal Registerdocument announcing the IRIS agendafor the year, and requesting scientificinformation from the public to considerin new assessments. During this period,EPA also initiated evaluations or re-evaluations of over 100 chemicals forthe IRIS program. As the use anddemand for the IRIS data base continues



to grow, EPA plans to continue updatingolder assessments and adding new ones.

Process for Building and Updating IRIS

EPA will continue building andupdating the IRIS data base in 2002. TheAgency recognizes that many of theassessments on IRIS may need updatingto incorporate new scientificinformation and methodologies.Further, many additional substancesmay be candidates for adding to IRIS.However, due to limited resources inthe Agency to address the spectrum ofneeds, EPA develops an annual list ofpriority substances for assessmentdevelopment. Substances are chosen forone or more of the following reasons: (1)Agency statutory, regulatory, or programimplementation need; (2) new scientificinformation or methodology is availablethat might significantly change currentIRIS information; (3) interest to otherlevels of government or the public; and(4) most of the scientific assessmentwork has been completed while meetingother Agency requirements and only amodest additional effort will be neededto complete the review anddocumentation for IRIS. The annualagenda is then refined based onavailable staff and other resources tocarry out the assessments.

Purpose of the Needs Assessment

EPA is responding to the U.S. Senaterequest that EPA solicit public input indefining needs for new and updatedspecific chemical substances on the IRISdata base. Senate Report 106–410specifically states,

The committee requests that EPA conductneeds assessments with public input todetermine the need for increasing [this]annual rate of updates to existing IRIS filesduring 2002–2005, as well as the need to addnew IRIS files for chemicals not nowincluded.

Information submitted in response tothis Federal Register document will beused to help plan the IRIS agenda for2002–2005. Specifically, the Agency isseeking information addressing thefollowing questions:

1. How do you/your organization useIRIS? What actions or decisions arebased on information in IRIS?

2. What additional chemicalsubstance assessments do you need onIRIS? For each, why is this assessmentneeded?

3. For existing chemical substanceassessments on IRIS, which do youthink are in greatest need of scientificupdate? What is the basis for identifyingthese assessments for update (e.g.,newer study available, newermethodology to apply)?

4. What additional types of substance-specific Agency consensus informationwould you like to have on IRIS? Forexample, EPA is considering addingconsensus health assessments forexposures of less than chronic duration,such as acute and possibly othersubchronic exposures. Would these newtypes of information be of value to you?If so, how important would thisinformation be to you in comparison tohaving updated information on chronichealth effects?

5. EPA is currently testingcollaborative efforts with externalparties on the development ofassessments for IRIS (66 FR 11165). Thepurpose is to involve the scientificknowledge and capability oforganizations outside of EPA to improvethe quality of IRIS supportingdocuments. External parties mayinclude other government agencies,industries, universities, professionalorganizations, and other non-governmental organizations. EPA willevaluate the efficiency of the processand quality of documents produced todetermine if the collaborative programshould be expanded. Do you favorEPA’s collaboration with externalparties as a means of developingassessments for IRIS? If so, how couldthis collaboration be conducted?

EPA will compile the informationreceived from the public in response tothis notice along with internal EPAassessments of need, and develop asummary document that will beavailable for viewing on the IRIS website. EPA expects to complete thesummary document in December 2001.

Dated: July 10, 2001.George W. Alapas,Acting Director, National Center forEnvironmental Assessment.[FR Doc. 01–18198 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


[FRL–7015–4]

Beaches Environmental Assessmentand Coastal Health Act;Announcement of Public Forums forDraft National Beach Guidance andGrant Performance Criteria forRecreation Waters

AGENCY: Environmental ProtectionAgency.ACTION: Notice.

SUMMARY: The Environmental ProtectionAgency (EPA) is announcing five publicforums to assist the public in their

review of the draft National BeachGuidance and Grant PerformanceCriteria for Recreation Waters and inpreparing comments. EPA hasdeveloped and is requesting publiccomments on the draft Guidance, andthe document describes specificperformance criteria for grant applicantsto meet to be awarded grants.

Beaches Environmental Assessmentand Coastal Health Act (BEACH Act)signed into law on October 10, 2000,amends the Clean Water Act (CWA), toreduce the risk of disease to users of theNation’s recreational waters. TheBEACH Act authorizes the EPA topublish performance criteria formonitoring and assessment of coastalrecreation waters and the promptnotification of exceeding applicablewater quality standards. The BEACHAct also requires EPA to develop thecriteria in cooperation with appropriateFederal, State, tribal, and local officialsand provide public notice and anopportunity for comment.

EPA is now encouraging all Federal,State, and local environmental andhealth officials, environmentalorganizations, and the public to attendthe public forums and submit commentson the Guidance.DATES: See SUPPLEMENTARY INFORMATIONfor dates of public forums.ADDRESSES: A copy of the document canalso be obtained by downloading the filelocated at www.epa.gov/waterscience/beaches/grants on the Internet. SeeSUPPLEMENTAL INFORMATION for locationsof public forums.FOR FURTHER INFORMATION CONTACT:Mimi Dannel, 202–260–1897.SUPPLEMENTARY INFORMATION:

I. Guidance Document

What Is the Statutory Authority for theGuidance Document?

The statutory authority for BEACHGuidance Document is section 406(b) ofthe Clean Water Act as amended by theBEACH Act, Pub. L. No. 106–284, 114Stat. 970 (2000). It provides in part:‘‘The Administrator must publishperformance criteria for monitoring andassessment of coastal recreation watersand the prompt notification ofexceeding applicable water qualitystandards.’’

What Are the Major Components of theGuidance Document?

The document contains five chaptersand accompanying appendices whichprovide both guidance and grantperformance criteria. Chapter 1 explainsthe legislation and human healthconcerns with microbial contaminationof recreation waters. Chapter 2 describes



the nine grant performance criteria.Chapter 3 introduces the risk-basedbeach evaluation and classificationprocess to prioritize waters. Chapter 4describes beach monitoring and beachassessment for sampling and detectingbacteria, and Chapter 5 explains thepublic notification and riskcommunication to inform the publicabout risks when swimming inbacterially polluted water.

How Can I Obtain a Copy of theDocument?

A copy of the document can also beobtained by downloading the filelocated at www.epa.gov/waterscience/beaches/grants on the Internet.

II. Public Forums

What Is the Purpose of the PublicForums?

The public forums will assist thestakeholders and the public in theirreview of the draft Guidance and inpreparing comments to submit to EPA.

Will Formal Comments on the GuidanceBe Taken at the Public Forums?

No. The public forums are notintended to be a mechanism to submitformal comments, but rather aninformation session instructing how tosubmit comments. EPA will laterannounce in the Federal Register theavailability of the document, and will atthat time announce a formal commentperiod.

Who Should Attend?All levels of beach water quality

managers and public health officials, aswell as the general public should attend.

How Do I Register for the PublicForums?

The public forums are free, butregistration is requested/appreciateddue to seating. To register for the publicforums, visit www.epa.gov/waterscience/beaches/meeting.html onthe Internet.

When and Where Will the PublicForums Be Held?

The dates and cities of the publicforums are:

1. July 31, 2001, 8:30 a.m. to 5:00p.m., Wilmington, DE, WyndhamGarden Hotel, 700 King St.,Wilmington,DE 19801; (302) 655–0400, 1–800–996–3426.

2. August 3, 2001, 8:30 a.m. to 5:00p.m., San Diego, CA, Town and CountryResort & Convention Center, 500 HotelCircle N., San Diego, CA 92108; (619)291–7131, 1–800–772–8527.3. August21, 2001, 8:30 a.m. to 5:00 p.m.,Jacksonville, FL, Radisson Riverwalk

Hotel, 1515 Prudential Drive,Jacksonville, FL 32207; (904) 396–5100,1–800–333–3333.

4. August 23, 2001, 8:30 a.m. to 5:00p.m., New Orleans, LA, Le MeridienNew Orleans, 614 Canal Street, NewOrleans, LA 70130–9946; (504) 525–6500, 1–800–543–4300.

5. August 23, 2001, 8:30 a.m. to 5:00p.m., Chicago, IL, The AmbassadorWest, 1300 N State Pkwy, Chicago, IL60610; (312) 787–3700, 1–800–996–3426.

Dated: July 13, 2001.Louise P. Wise,Acting Director, Office of Science andTechnology.[FR Doc. 01–18195 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P


[OPP–30119; FRL–6789–7]

Triphenyltin Hydroxide (TPTH); Noticeof Final Determination for Terminationof the TPTH Special Review

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice.

SUMMARY: In a Federal Register noticepublished October 20, 2000, EPAproposed to terminate the specialreview of the pesticide active ingredienttriphenyltin hydroxide (TPTH) based onthe determination that the benefits ofuse outweigh the risks. The Agencysolicited public comments for a 30–dayperiod. There were no commentssubmitted, and the Agency believes thatthe benefits of TPTH use continue tooutweigh the risks. Thus, with thisnotice, EPA is announcing that it hasterminated the TPTH Special Review.DATES: This decision is effective onAugust 20, 2001.FOR FURTHER INFORMATION CONTACT:Wilhelmena Livingston, Special Reviewand Reregistration Division (7508C),Office of Pesticide Programs,Environmental Protection Agency, 1200Pennsylvania Ave., NW., Washington,DC 20460; telephone number: (703)308–8025; fax number: (703) 308–8005;e-mail address:[email protected].


I. General Information

A. Does this Action Apply to Me?

This action is directed to the publicin general. This action may, however, beof interest to those persons who are ormay be required to conduct testing of

chemical substances under the FederalFood, Drug and Cosmetic Act (FFDCA)or the Federal Insecticide, Fungicide,and Rodenticide Act (FIFRA). Thisaction may be of particular interest topesticide registrants with registeredproducts which contain TPTH as anactive ingredient, or to agriculturalproducers or mixers, loaders, orapplicators using products containingTPTH as an active ingredient. Sinceother entities may also be interested, theAgency has not attempted to describe allthe specific entities that may be affectedby this action. If you have any questionsregarding the applicability of this actionto a particular entity, consult the personlisted under FOR FURTHER INFORMATIONCONTACT.

B. How Can I Get AdditionalInformation, Including Copies of thisDocument and Other RelatedDocuments?

1. Electronically. You may obtainelectronic copies of this document, andcertain other related documents thatmight be available electronically, fromthe EPA Internet Home Page at http://www.epa.gov/. To access thisdocument, on the Home Page select‘‘Laws and Regulations,’’ ‘‘Regulationsand Proposed Rules,’’ and then look upthe entry for this document under the ‘‘Federal Register—EnvironmentalDocuments.’’ You can also go directly tothe Federal Register listings at http://www.epa.gov/fedrgstr/. In addition,related documents for TPTH may beaccessed through the Home Page for theOffice of Pesticide Programs at http://www.epa.gov/pesticides/reregistration/status.htm .

2. In person. The Agency hasestablished an official record for thisaction under docket control numberOPP–30119. The official record consistsof the documents specifically referencedin this action, any public commentsreceived during an applicable commentperiod,and other information related tothis action, including any informationclaimed as Confidential BusinessInformation (CBI). This official recordincludes the documents that arephysically located in the docket, as wellas the documents that are referenced inthose documents. The public version ofthe official record does not include anyinformation claimed as CBI. The publicversion of the official record, whichincludes printed, paper versions of anyelectronic comments submitted duringan applicable comment period, isavailable for inspection in the PublicInformation and Records IntegrityBranch (PIRIB), Rm. 119, Crystal Mall#2, 1921 Jefferson Davis Hwy.,Arlington, VA, from 8:30 a.m. to 4 p.m.,



Monday through Friday, excluding legalholidays. The PIRIB telephone numberis (703) 305–5805.

II. Response to Comments Submitted onEPA’s Proposed Determination toTerminate Special Review

No comments were received duringthe 30–day public comment period.

III. EPA’s Decision Regarding theSpecial Review

Special Review is a decisionmakingprocess designed to help EPA determinewhether the Agency should initiateformal procedures, such as involuntarycancellation or suspension of a pesticideregistration or the imposition ofmodified terms and conditions ofregistration because use of the pesticidemay cause unreasonable adverse effectson the environment (40 CFR 154.1(a)).This notice concludes EPA’sadministrative special review of therisks and benefits of TPTH, which wasinitiated in the Federal Register noticeof January 9, 1985 (50 FR 1107). In theOctober 20, 2000 Federal Registernotice (65 FR 204) (FRL–6496–3), EPAannounced its intent to terminate theTPTH Special Review. As stated in thatdocument, based on its risk and benefitsassessments, EPA has concluded thatthe benefits provided from thecontinued existing uses of TPTHoutweigh the risks. There were nocomments received in response to theOctober 20, 2000, proposal to terminatethe TPTH Special Review. Accordingly,for the reasons set forth in the October20, 2000 notice, EPA is announcing thatit has terminated the TPTH SpecialReview.

List of Subjects

Environmental protection, Chemicals,Pesticides and pests.

Dated: July 11, 2001.Stephen L. Johnson,Assistant Administrator for Prevention,Pesticides and Toxic Substances.

[FR Doc. 01–18200 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–S


[FRL–7015–1 ]

Methods for Assessing the ChronicToxicity of Marine and EstuarineSediment-Associated ContaminantsWith the Amphipod Leptocheirusplumulosus—First Edition

AGENCY: Environmental ProtectionAgency (EPA).

ACTION: Notice of Availability ofMethods for Assessing the ChronicToxicity of Marine and EstuarineSediment-associated Contaminants withthe Amphipod Leptocheirusplumulosus—First Edition.

SUMMARY: The U.S. EnvironmentalProtection Agency (EPA) and the U.S.Army Corps of Engineers (USACE) arepublishing a technical manual thatdescribes procedures for testing anestuarine organism in the laboratory toevaluate the potential toxicity ofcontaminants in whole sediments. Thisdocument supplements (but does notreplace) procedures originally publishedin 1994 (EPA/600/6–94/025), formeasuring acute sediment toxicity inmarine and estuarine sediments. Thisdocument includes a new method forevaluating sublethal effects of sediment-associated contaminants utilizing long-term sediment exposures.

Availability of Document

Copies of the complete document,titled Methods for Assessing theChronic Toxicity of Marine andEstuarine Sediment-associatedContaminants with the AmphipodLeptocheirus plumulosus—First Edition(EPA/600/R–01/020) can be obtainedfrom the National Service Center forEnvironmental Publications, P.O. Box42419, Cincinnati, OH., 45242 by phoneat 1–800–490–9198 or on their web siteat www.epa.gov/ncepihom/orderpub.html. A pdf version of thisdocument will be made available to beviewed or downloaded from the Officeof Science and Technology’s home pageon the Internet at www.epa.gov/OST.FOR FURTHER INFORMATION CONTACT: D.Scott Ireland, EPA, Standards andHealth Protection Division (4305),Office of Science and Technology, ArielRios Building, 1200 PennsylvaniaAvenue, NW., Washington, DC 20460;or call (202) 260–6091; fax (202) 260–9830; or e-mail [email protected] INFORMATION:BACKGROUND INFORMATION Sedimentcontamination is a widespreadenvironmental problem that canpotentially pose a threat to a variety ofaquatic ecosystems. Sediment functionsas a reservoir for common contaminantssuch as pesticides, herbicides,polychlorinated biphenyls (PCBs),polycyclic aromatic hydrocarbons(PAHs), and metals such as lead,mercury, and arsenic.

This technical manual describesprocedures for testing an estuarineorganism in the laboratory to evaluatethe potential toxicity of contaminants in

whole sediments. Sediments may becollected from the field or spiked withcompounds in the laboratory. Toxicitymethods are outlined for the estuarineamphipod, Leptocheirus plumulosus.Toxicity tests with this amphipod areconducted for 28 days in 1–L chamberscontaining 175 mL of sediment and abut725 mL of overlying water. Overlyingwater is renewed three times per weekand test organisms are fed during thetoxicity tests. The endpoints of the 28day test with L. plumulosus are survival,growth, and reproduction. This 28 daysediment toxicity test with L.plumulosus is recommended for usewith sediment with varying levels ofsalinity from oligohaline to fully marineenvironments (from 1‰ to 35‰salinity). The long-term sedimentexposures with L. plumulosus arestarted with neonate (newborn)amphipods. After termination of the 28day sediment exposure, the offspring arecounted and the dry-weight or length ofthe adult amphipods is measured. Theuse of this uniform sediment testingprocedure is expected to increase dataaccuracy and precision, facilitate testreplication, and increase thecomparative value of test results. Thismethod provides a basis for consistentcross-program decision making withinthe EPA. Each EPA program will,however, retain the flexibility ofdeciding when and how to use this testand whether identified risks wouldtrigger actions. This method alsoprovides a consistent testing protocolfor other Federal agencies, States, andTribes. This technical manual has noimmediate or direct regulatoryconsequence. It does not impose legallybinding requirements, and may notapply to a particular situationdepending on the circumstances. TheEPA or USACE may change thistechnical manual in the future.

This technical manual has beensubjected to review by EPA’s NationalHealth and Environmental EffectsResearch Laboratory and Office ofScience and Technology and approvedfor publication. Mention of trade namesor commercial products does notconstitute endorsement by the Agencyor recommendation for use.


Geoffrey H. Grubbs,

Director, Office of Science and Technology.[FR Doc. 01–18194 Filed 7–19–01; 8:45 am]





[OPP–00646A; FRL–6769–1]

Pesticides; Final Guidance forPesticide Registrants onPesticideResistance ManagementLabeling

AGENCY: Environmental ProtectionAgency (EPA).ACTION: Notice of availability.

SUMMARY: The Agency is announcingthe availability of a final PesticideRegistration Notice PR-Notice titled‘‘Guidance for Pesticide Registrants onPesticide Resistance ManagementLabeling.’’ This PR-Notice was issued bythe Agency on June 19, 2001, and isidentified as PR-Notice 2001-OPP–00646A. PR-Notices are issued by theOffice of Pesticide Programs (OPP) toinform pesticide registrants and otherinterested persons about importantpolicies, procedures and registrationrelated decisions, and serve to provideguidance to pesticide registrants andOPP personnel. This particular PR-Notice provides guidance to registrantsconcerning voluntary pesticideresistance management labeling basedon mode/target site of action forpesticide products that are intended forgeneral agricultural use. If adopted on avoluntary basis by registrants, this effortwill help reduce the development ofpesticide resistance based on mode/target site of action and lead to betterenvironmental protection. Thisapproach is the result of a joint effort ofthe U.S. and Canada under the NorthAmerican Free Trade Agreement(NAFTA). The guidance provides anopportunity for consistency inresistance management labeling beingconsidered for approval in any or all ofthe countries involved in NAFTA. ThisPR-Notice includes guidance toregistrants concerning schemes ofclassification of pesticides according totheir mode/target site of action(Appendices I–III), a recommendedstandard presentation and format forshowing group identification symbolson end-use product labels, andexamples of resistance managementlabeling statements.FOR FURTHER INFORMATION CONTACT:Sharlene R. Matten (7511C),Environmental Protection Agency, 1200Pennsylvania Ave., NW., Washington,DC 20460; telephone number: (703)605–0514; fax number: (703) 308–7026;e-mail address:[email protected].


I. General Information

A. Does this Action Apply to Me?This action is directed to the public

in general. Although this action may beof particular interest to those personswho are required to register pesticides.Since other entities may also beinterested, the Agency has notattempted to describe all the specificentities that may be affected by thisaction. If you have any questionsregarding the information in thisnotice,consult the person listed underFOR FURTHER INFORMATIONCONTACT.

B. How Can I Get AdditionalInformation, Including Copies of thisDocument and Other RelatedDocuments?

1. Electronically. You may obtainelectronic copies of this document andthe PR Notice from the Office ofPesticide Programs Home Page at http://www.epa.gov/pesticides/. You can alsogo directly to the listings from the EPAInternet Home Page at http://www.epa.gov/. To access thisdocument, on the Home Page select‘‘Laws and Regulations,’’ ‘‘Regulationsand Proposed Rules,’’ and then look upthe entry for this document under the‘‘Federal Register —EnvironmentalDocuments.’’ You can also go directly tothe Federal Register listings at http://www.epa.gov/fedrgstr/ or go directly tothe Home Page for the Office ofPesticide Programs at http://www.epa.gov/pesticides, and select ‘‘PRNotices’’.

2. Fax-on-demand. You may request afaxed copy of thePesticide Registration(PR) Notice titled ‘‘Pesticide ResistanceManagement Labeling,’’ by using afaxphone to call (202) 401–0527 andselecting item (6138). You may alsofollow the automated menu.

3. In person. The Agency hasestablished an official record for thisaction under docket control numberOPP–00646A. The official recordconsists of the documents specificallyreferenced in this action, any publiccomments received during an applicablecomment period, and other informationrelated to this action, including anyinformation claimed as confidentialbusiness information (CBI). This officialrecord includes thedocuments that arephysically located in the docket, as wellas the documents that are referenced inthose documents. The public version ofthe official record does not include anyinformation claimed as CBI. The publicversion of the official record, whichincludes printed, paper versions of anyelectronic comments submitted duringan applicable comment period, isavailable for inspection in the Public

Information and Records IntegrityBranch (PIRIB), Rm. 119, Crystal Mall#2, 1921 Jefferson Davis Highway,Arlington, VA, from 8:30 a.m. to 4 p.m.,Monday through Friday, excluding legalholidays. The PIRIB telephone numberis (703) 305–5805.

II. Background

A. What Guidance Does this PR NoticeProvide?

The United States EnvironmentalProtection Agency (EPA) andPestManagement Regulatory Agency ofCanada (PMRA) are committed to long-term pest resistance managementthrough pesticide resistancemanagement and alternative pestmanagement strategies. Under theauspices of the North American FreeTrade Agreement (NAFTA), the U.S.and Canada have joined together todevelop and publish guidelines forpurely voluntary pesticide resistancemanagement labeling forimplementation in North America. Thedevelopment of these guidelines is partof the activities of the Risk ReductionSubcommittee of the NAFTA TechnicalWorking Group on Pesticides. A morenearly uniform approach across NorthAmerica can help reduce thedevelopment of pesticide resistance andsupport joint registration decisions byproviding consistency in resistancemanagement labeling being consideredfor approval in any or all of the NAFTAcountries. To implement this NAFTAinitiative, the Office of PesticidePrograms (OPP) of EPA has developed aPesticide Registration (PR) Noticedescribing the voluntary pesticideresistance management labelingguidelines based on mode/target site ofaction for agricultural uses ofherbicides, fungicides, bactericides,insecticides, and acaricides. Mode/target site of action refers to thebiochemical mechanism by which thepesticide acts on the pest and shouldnot be interpreted to imply that thesechemicals share a common mechanismfor purposes of cumulative humanhealth risk assessment under theFederal Food Drug and Cosmetic Act(see EPA’s document ‘‘Guidance foridentifying pesticide chemicals andother substances that have a commonmechanism of toxicity’’ located at http://www.epa.gov/fedrgstr/EPA-PEST/1999/February/Day-05/6055.pdf).

The final PR Notice describesschemes of classification of pesticidesaccording to their mode/target site ofaction (Appendices I–III) provides arecommended standard presentationand format for showing groupidentification symbols on end-use



product labels, and provides examplesof resistance management labeling. EPAbelieves that this approach to resistancemanagement is sound and would behighly beneficial to pesticidemanufacturers and pesticide users. EPAis hopeful that registrants will embracethis approach and work with EPA toimplement it for all relevant products.EPA believes this approach is animportant element of internationalharmonization.

B. PR Notices are Guidance Documents

The PR Notice discussed in thisnotice is intended to provide guidanceto EPA personnel and decision-makersand to pesticide registrants. This noticeis not binding on either EPA orpesticide registrants, and EPA maydepart from the guidance wherecircumstances warrant and withoutprior notice. Likewise, pesticideregistrants may always assert that theguidance is not appropriate generally ornot applicable to a specific pesticide orsituation. For the matters covered bythis particular PR Notice, EPA also doesnot expect to require that any registrantadopt the labeling set forth here as partof any individual licensing decision oraction. However, if any registrant seeksto use the language set forth here in themanner and circumstances describedhere, EPA does generally expect to findsuch language acceptable in anylicensing proceeding.

List of Subjects

Environmental protection,Administrative practice and procedure,Agricultural commodities, Pesticidesand pests.

Dated: June 19, 2001.

Marcia E. Mulkey,Director, Office of Pesticide Programs

[FR Doc. 01–18199 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–S


[FRL–7016–2]

Proposed CERCLA AdministrativeCost Recovery Settlement; BuddBrothers, d/b/a/ Century 21 Paint, Inc.

AGENCY: Environmental ProtectionAgency.ACTION: Notice; request for publiccomment.

SUMMARY: In accordance with Section122(i) of the ComprehensiveEnvironmental Response,Compensation, and Liability Act, as

amended (‘‘CERCLA’’), 42 U.S.C.9622(i), notice is hereby given of aproposed administrative settlement forrecovery of past response costsconcerning the Century 21 Paint, Inc.site in Mahoning County, Austintown,Ohio with the following settling party:Budd Brothers, d/b/a Century 21 Paint,Inc. The settlement requires the settlingparty to pay $120,000 to the HazardousSubstance Superfund. The conditions ofthe Agreement may be summarized asfollows: Within 30 days of the effectivedate of this Agreement, the settlingparty will make an initial downpayment of $50,000. The settling partyagrees to pay the outstanding balance of$70,000 in three (3) equal installments,plus accrued interest on the unpaidbalance, over a period of eighteen (18)months. The interest rate on theoutstanding balance shall be the interestrate established under Subchapter A ofChapter 98 of Title 26 of the U.S. Code,compounded on October 1 of each year,in accordance with 42 U.S.C. 9607(a).The settlement includes a covenant notto sue the settling party pursuant tosection 107(a) of CERCLA, 42 U.S.C.9607(a). For thirty (30) days followingthe date of publication of this notice, theAgency will receive written commentsrelating to the settlement. The Agencywill consider all comments received andmay modify or withdraw its consent tothe settlement if comments receiveddisclose facts or considerations whichindicate that the settlement isinappropriate, improper, or inadequate.The Agency’s response to any commentsreceived will be available for publicinspection at the U.S. EPA RecordsCenter Room 714, 77 West JacksonBoulevard, Chicago, Illinois 60604.

DATES: Comments must be submitted onor before August 20, 2001.

ADDRESSES: The proposed settlement isavailable for public inspection at theU.S. EPA Records Center Room 714, 77West Jackson Boulevard, Chicago,Illinois 60604. A copy of the proposedsettlement may be obtained from theOffice of Regional Counsel, 77 WestJackson Boulevard, Chicago, Illinois60604. Comments should reference theCentury 21 Paint, Inc. site in MahoningCounty, Austintown, Ohio and EPADocket No. V–W–01–C–650 and shouldbe addressed to Ms. Joanna Glowacki,Associate Regional Counsel, U.S. EPAOffice of Regional Counsel, 77 WestJackson Boulevard (C–14J), Chicago,Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Ms.Joanna Glowacki, Associate RegionalCounsel, U.S. EPA Office of RegionalCounsel, 77 West Jackson Boulevard (C–

14J), Chicago, Illinois 60604, at (312)353–3757.

Dated: July 3, 2001.William E. Muno,Director, Superfund Division, Region 5,Environmental Protection Agency.[FR Doc. 01–18192 Filed 7–19–01; 8:45 am]BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONSCOMMISSION

[CC Docket No. 96–45; DA 01–1647]

The Federal-State Joint Board onUniversal Service

AGENCY: Federal CommunicationsCommission.ACTION: Notice; comments requested.

SUMMARY: In this document, theCommission invites interested parties toupdate the record pertaining to petitionsfor reconsideration filed with respect tothe rules the Commission adopted in theUniversal Service First Report andOrder.

DATES: Comments are due on or beforeAugust 20, 2001. Reply comments aredue on or before September 4, 2001.ADDRESSES: See SUPPLEMENTARYINFORMATION section for where and howto file comments.

FOR FURTHER INFORMATION CONTACT:Sheryl Todd, Management Analyst, orRichard Smith, Attorney, CommonCarrier Bureau, Accounting PolicyDivision, (202) 418–7400, TTY: (202)418–0484.SUPPLEMENTARY INFORMATION: On May 8,1997, the Commission released theUniversal Service First Report andOrder, 62 FR 32862, May 8, 1997, asrequired by the 1996Telecommunications Act. Many partiesfiled petitions for reconsideration of thatorder. Since then, there has beensubstantial litigation concerning manyof the rules adopted in the UniversalService First Report and Order. As aresult, many of the issues raised in thepetitions for reconsideration may nolonger remain in dispute.

The Commission has refrained fromconsidering many of the petitions forreconsideration of the rules adopted inthe Universal Service First Report andOrder until most of the litigated issueswere resolved. Now that issues indispute have narrowed, the Commissionwill proceed to address petitions forreconsideration relating to rules that arenot the subject of pending litigation.

Because these petitions were filedseveral years ago, the passage of timeand intervening developments may have



rendered the records developed by thosepetitions stale. For example, in additionto the litigation mentioned, theCommission has issued several orderson reconsideration of the UniversalService First Report and Order.Moreover, some issues raised inpetitions for reconsideration may havebecome moot or irrelevant in light ofintervening events.

For these reasons, the Bureau requeststhat parties that filed petitions forreconsideration of the Universal ServiceFirst Report and Order in 1997 now filea supplemental notice indicating whichof such issues they still wish to bereconsidered. In addition, parties mayrefresh the record with any newinformation or arguments they believeto be relevant to deciding such issues.To the extent parties do not indicate anintent to pursue their respectivepetitions for reconsideration, theCommission will deem such petitionswithdrawn and they will be dismissed.The refreshed record will enable theCommission to undertake appropriatereconsideration of its universal servicerules.

Pursuant to §§ 1.415 an 1.419 of theCommission’s rules, interested partiesmay file comments as follows:Comments are due August 20, 2001, andreply comments are due September 4,2001. Comments may be filed using theCommission’s Electronic CommentFiling System (ECFS) or by filing papercopies. See Electronic filing ofDocuments in Rulemaking Proceedings,63 FR 24121, May 1, 1998. Commentsfiled through the ECFS can be sent as anelectronic file via the Internet tohttp://www.fcc.gov/e-file/ecfs.html.Generally, only one copy of theelectronic submission must be filed. Incompleting the transmittal screen,commenters should include their fullname, Postal Service mailing address,and the applicable docket or rulemakingnumber. Parties may also submitelectronic comments by Internet e-mail.To receive filing instructions for e-mailcomments, commenters should send ane-mail to [email protected], and shouldinclude the following words in the bodyof message, ‘‘get form <your e-mailaddress>.’’ A sample form anddirections will be sent in reply. Partieswho choose to file by paper must file anoriginal and four copies of each filing.All filings must be sent to theCommission’s Secretary, Magalie RomanSalas, Office of the Secretary, FederalCommunications Commission, 445 12Street, SW., Washington, DC 20554.

Parties also must send three papercopies of their filing to Sheryl Todd,Accounting Policy Division, CommonCarrier Bureau, Federal

Communications Commission, 445Twelfth Street SW., Room 5–A422,Washington, DC 20554. In addition,commenters must send diskette copiesto the Commission’s copy contractor,International Transcription Service, Inc.1231 20th Street, NW., Washington, DC20037.

Pursuant to § 1.1206 of theCommission’s Rules, this proceedingwill continue to be conducted as apermit-but-disclose proceeding inwhich ex-parte communications arepermitted subject to disclosure.

Federal Communications Commission.Katherine L. Schroder,Division Chief, Accounting Policy Division.[FR Doc. 01–18159 Filed 7–19–01; 8:45 am]BILLING CODE 6712–01–P

FEDERAL RESERVE SYSTEM

Notice of Proposals to Engage inPermissible Nonbanking Activities orto Acquire Companies that areEngaged in Permissible NonbankingActivities

The companies listed in this noticehave given notice under section 4 of theBank Holding Company Act (12 U.S.C.1843) (BHC Act) and Regulation Y (12CFR part 225) to engage de novo, or toacquire or control voting securities orassets of a company, including thecompanies listed below, that engageseither directly or through a subsidiary orother company, in a nonbanking activitythat is listed in § 225.28 of Regulation Y(12 CFR 225.28) or that the Board hasdetermined by Order to be closelyrelated to banking and permissible forbank holding companies. Unlessotherwise noted, these activities will beconducted throughout the United States.

Each notice is available for inspectionat the Federal Reserve Bank indicated.The notice also will be available forinspection at the offices of the Board ofGovernors. Interested persons mayexpress their views in writing on thequestion whether the proposal complieswith the standards of section 4 of theBHC Act. Additional information on allbank holding companies may beobtained from the National InformationCenter website at www.ffiec.gov/nic/.

Unless otherwise noted, commentsregarding the applications must bereceived at the Reserve Bank indicatedor the offices of the Board of Governorsnot later than August 6, 2001.

A. Federal Reserve Bank of St. Louis(Randall C. Sumner, Vice President) 411Locust Street, St. Louis, Missouri63166–2034:

1. Gideon Bankshares Company,Dexter, Missouri; to engage de novo

through its subsidiary, First CommercialInvestment Center, Dexter, Missouri, inretail securities brokerage activities,pursuant to § 225.28(b)(7)(i) ofRegulation Y.

Board of Governors of the Federal ReserveSystem, July 17, 2001.Jennifer J. Johnson,Secretary of the Board.[FR Doc. 01–18179 Filed 7–19–01; 8:45 am]BILLING CODE 6210–01–S

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Office of the Secretary

Agency Information CollectionActivities: Submission for OMBReview; Comment Request

The Department of Health and HumanServices, Office of the Secretarypublishes a list of informationcollections it has submitted to the Officeof Management and Budget (OMB) forclearance in compliance with thePaperwork Reduction Act of 1995 (44U.S.C. chapter 35) and 5 CFR 1320.5.The following are those informationcollections recently submitted to OMB.

1. HHS Procurement: Solicitationsand Contracts—0990–0115—Extension—This clearance requestcovers the general informationcollection requirements of theprocurement process such as technicalproposals and statements of work.Respondents: State, local or Tribalgovernments, businesses or other for-profit, non-profit institutions, smallbusinesses. Annual Number ofRespondents: 4,269; Frequency ofResponse: one time; Average Burden perResponse: 231.03 hours; Total Burden:986,280.

OMB Desk Officer: Allison HerronEydt.

Copies of the information collectionpackages listed above can be obtainedby calling the OS Reports ClearanceOfficer on (202) 690–6207. Writtencomments and recommendations for theproposed information collection shouldbe sent directly to the OMB desk officerdesigned above at the following address:Human Resources and Housing Branch,Office of Management and Budget, NewExecutive Office Building, Room 10235,725 17th Street NW., Washington, DC20503.

Comments may also be sent toCynthia Agens Bauer, OS ReportsClearance Officer, Room 503H,Humphrey Building, 200 IndependenceAvenue SW., Washington DC 20201.Written comments should be receivedwithin 30 days of this notice.



Dated: June 19, 2001.Kerry Weems,Acting Deputy Assistant Secretary, Budget.[FR Doc. 01–18135 Filed 7–19–01; 8:45 am]BILLING CODE 4150–24–M


Administration on Aging

Announcement of Tribal ConsultationWith American Indian/Alaskan NativeTribal Representatives

The Department of Health and HumanServices policy on consultation withAmerican Indian/Alaska Native (AI/AN)Governments and Organizations callsfor each Operating Division to convenea meeting with AI/AN TribalRepresentatives.

In accordance with Departmentalpolicy on Tribal Consultation with AI/AN Governments and Organizations, theAdministration on Aging will be hostinga one-day session to give AI/AN TribalRepresentatives and their Title VIDirector an opportunity to discussIndian elder issues related to (1)infrastructure; (2) long term care; and (3)the Older Americans Act Regulations.Participants will have an opportunity topresent their recommendations to theAssistant Secretary for Aging.

This Tribal Listening Session will beheld from 9 am to 4 pm on August 15,2001 at: Department of Health andHuman Services; Hubert HumphreyBuilding; 200 Independence Avenue,SW., Washington, DC 20201.

A final agenda will be distributed atthe meeting.

To register and for additionalinformation please contact: M. YvonneJackson, Ph.D., Director, Office forAmerican Indian, Alaskan Native andNative Hawaiian Programs,Administration on Aging, 330Independence Ave., SW., Washington,DC 20201, (202) 619–2713, Email:[email protected].

In accordance with the provisions ofthe Americans with Disabilities Act(ADA), it is requested that any specialassistance requirements be requestedwithin seventy-two (72) hours of thescheduled Tribal Listening Session.

Purpose: In accordance withDepartmental policy on consultationwith (AI/AN) Governments andOrganizations, AoA will host thismeeting to give AI/AN TribalRepresentatives an opportunity todiscuss the above-mentioned areas anddevelop recommendations to present tothe Assistant Secretary for Aging.

Date and Time: August 15, 2001, 9am–4 pm est.

Matters to be Discussed: The agendawill include opening remarks and break-out sessions to discuss Infrastructureand Long Term Care, a general sessionto share results from the breakoutsessions, open mike to discuss the OlderAmericans Act Regulations and closingremarks.

If you are unable to attend but wishto provide comments or TribalResolutions, these may be faxed to M.Yvonne Jackson’s attention at (202) 260–1012.

Dated: July 16, 2001.Norman L. Thompson,Acting Principal Deputy Assistant Secretaryfor Aging.[FR Doc. 01–18136 Filed 7–19–01; 8:45 am]BILLING CODE 4154–01–P


Centers for Disease Control andPrevention

[Program Announcement 01147]

Cooperative Agreement With the WorldHealth Organization/Regional Office forAfrica (WHO/AFRO); Notice of theAvailability of Funds

A. PurposeThe Centers for Disease Control and

Prevention (CDC), National Center forHIV/STD/TB Prevention (NCHSTP),announces the availability of funds forfiscal year (FY) 2001 for a sole sourcecooperative agreement with the WorldHealth Organization/Regional Office forAfrica (WHO/AFRO).

The purpose of this agreement is tohelp support implementation of theLeadership and Investment in Fightingan Epidemic (LIFE) Initiative, a UnitedStates Government program that seeksto reduce the impact of HIV/AIDS inspecific countries within sub-SaharanAfrica, Asia and the Americas. CDC,through the LIFE Initiative, focuses onstrengthening the capacity of nationalAIDS control programs in the areas of(1) HIV primary prevention, (2) HIVcare, support, and treatment, and (3)capacity and infrastructuredevelopment, especially forsurveillance. Countries targetedrepresent those with the most severeepidemic and the highest number ofnew infections. They also representcountries where the potential for impactis greatest and where U.S. governmentagencies are already active. An updatedlist of partner countries for the CDC-LIFE Initiative is available at http://www.cdc.gov/nchstp/od/gap/default.htm.

This agreement supports a frameworkof interventions, grounded in a series ofgoals and objectives consistent withthose established for the internationalcommunity by the Joint United NationsProgramme on AIDS (UNAIDS) insupport of the International PartnershipAgainst AIDS in Africa (IPAA).

According to recent estimates fromUNAIDS and WHO, 36.4 million adultsand children were living with HIV bythe end of 2000. Of the total estimate,approximately 25.3 million (69 percentof the total world-wide) adults andchildren were living with AIDS in sub-Saharan Africa alone. As a key partnerin the U.S. Government’s LIFEInitiative, CDC, through its Global AIDSProgram (GAP), is working in acollaborative manner with nationalgovernments, USAID and other Federalagencies, and other international donoragency partners to develop programs ofassistance to address the HIV/AIDSepidemic in LIFE Initiative countries.CDC is establishing partnership andsupport relationships primarily withnational governments in highly affectedcountries, and with a number of otherpartner organizations to supportcountry-level action.

B. Eligible ApplicantsAssistance will be provided only to

the World Health Organization/RegionalOffice for Africa (WHO/AFRO) insupport of LIFE Initiative activities insub-Saharan Africa. No otherapplications will be solicited.

WHO’s Regional Office for Africa isthe most appropriate and qualifiedagency to conduct a specific set ofactivities supportive of CDC’s LIFEInitiative-related assistance to countriesin sub-Saharan Africa because:

1. WHO/AFRO covers the region ofthe world most heavily impacted by theHIV/AIDS epidemic and is bothchartered and uniquely positioned toassist national AIDS control programsand other partners to strengthennational health sector responses to HIV/AIDS.

2. WHO, through its regional office, isa leading partner within theInternational Partnership Against HIV/AIDS (IPAA) in Africa, an internationalumbrella effort to increase support andvisibility for a multi-lateral emergencyresponse to the AIDS epidemic inAfrica. The LIFE Initiative is a keysupporter of the IPAA.

3. Through decisions and resolutionsof the WHO Regional Committee forAfrica, the WHO Executive Board andthe World Health Assembly, WHO/AFRO’s Regional Programme on AIDS(RPA) has been called upon toaccelerate its support to the regional



response. The Strategic Plan for ScalingUp WHO/AFRO’s Support to Countriesoutlines RPA’s planned approaches toaccelerating support to countries.Planned approaches are all within thecontext of the IPAA and consistent withthe overall spirit of the LIFE Initiative.

4. The focus of action for CDC’srequested support from WHO/AFRO isin regional policy setting, informationsharing and regional-level aggregationand interpretation of health data relatedto surveillance, prevention and care forHIV/AIDS within the region. In thissense, WHO/AFRO is unique in that itis the sole health sector policy-settingorganization that includes all sub-Saharan African countries as membercountries within one organization. WHOalso maintains a network of countryoffices and WHO Coordinating Centresto serve as critical links for ensuringcountry access to available technicalresources, information andcoordination.

C. Availability of Funds

Approximately $1,000,000 is availablein FY 2001 to fund this project. It isanticipated that the award will begin onor about September 30, 2001 and will bemade for a 12-month budget periodwithin a project period of up to fiveyears. Annual funding estimates mayvary and are subject tochange.Continuation awards within theproject period will be made on the basisof satisfactory progress and availabilityof funds.

Use of Funds

General Use

Funds may be used for: (a)Establishing strategies, policies andguidelines for health sector responses tothe HIV/AIDS epidemic in Africa inareas such as surveillance, laboratory,care and prevention. (b) Conductingmeetings and other relevant activitiesthat contribute to the development,dissemination and evaluation ofstrategies, policies and guidelines. (c)Aggregating and disseminatinginformation, strategies, policies,guidelines and training materialspertinent to HIV/AIDS and HIV-relatedconditions, including internet-basedand other tools for efficient cataloguingand disseminating such information,and support for increasing nationalcapacities to retrieve such informationfrom such systems. (d) Buildingcapacity within Ministries of Health,National AIDS Councils, and similar keynational institutions. (e) Supporting keynetworks within the region to leadevidence-based, improved health sectorpractices relevant to HIV/AIDS in Africa

(such as international networks withinAfrica to provide training in HIV qualityof care on a national or subregionalbasis).

General Non-Use

Funds received from thisannouncement will not be used forcapital expenditures such as thepurchase of off-road and multi-passenger vehicles, large volume(greater than 50) purchase of computersand data storage systems, spacerenovations and other significantimprovements to physical environmentswhere activities are carried out.

Specific Non-Use

Funds received from thisannouncement will not be used for thedirect treatment of established HIVinfection, occupational exposures, andnon-occupational exposures and willnot be used for the direct purchase ofequipment and reagents to conducthospital-based laboratory monitoring forpatient care or confirmatory tests. Fundswill not be used for staff positionswithin CDC or WHO country offices.

Antiretroviral Drugs

Funds received from thisannouncement will not be used for thepurchase of antiretroviral drugs fortreatment of established HIV infection(with the exception nevirapine inPMTCT cases and with prior writtenapproval), occupational exposures, andnon-occupational exposures and willnot be used for the purchase ofmachines and reagents to conduct thenecessary laboratory monitoring forpatient care.

Applicants may contract with otherorganizations under these cooperativeagreements, however, applicants mustperform a substantial portion of theactivities (including programmanagement and operations anddelivery of prevention services forwhich funds are requested.

The costs that are generally allowablein grants to domestic organizations arelikewise allowable to foreigninstitutions and internationalorganizations.

All requests for funds, including thebudget contained in the application,shall be stated in U.S. dollars. Once anaward is made, the Department ofHealth and Human Services (DHHS)will not compensate foreign grantees forcurrency exchange fluctuations throughthe issuance of supplemental awards.

Needle Exchange

No funds appropriated under this Actshall be used to carry out any programof distributing sterile needles or

syringes for the hypodermic injection ofany illegal drug.

D. Where To Obtain AdditionalInformation

This and other CDC announcementscan be found on the CDC home pageInternet address (http://www.cdc.gov).Scroll down the page, then click on‘‘Funding’’ then ‘‘Grants andCooperative Agreements.’’

To receive additional writteninformation and to request anapplication kit, call 1–888–GRANTS4(1–888–472–6874). You will be asked toleave your name and address and willbe instructed to identify theAnnouncement number of interest.

If you have questions after reviewingthe contents of all the documents,business management technicalassistance may be obtained from:

Dorimar Rosado, Grants ManagementSpecialist, Centers for Disease Controland Prevention (CDC), Procurement andGrants Office, Room 3000, 2920Brandywine Road, Mailstop E–15,Atlanta, GA 30341–4146, Telephone:770–488–2782, E-mail: [email protected].

For program technical assistance,contact: Michael St. Louis, Global AIDSProgram (GAP), Zimbabwe CountryTeam, National Center for HIV, STD,and TB Prevention, Centers for DiseaseControl and Prevention (CDC), 38Samora Machel Ave., 2nd Floor, Harare,Zimbabwe, Telephone number: 263–11–613–193, Email address:[email protected].

Dated: July 16, 2001.John L. Williams,Director, Procurement and Grants Office,Centers for Disease Control and Prevention(CDC).[FR Doc. 01–18158 Filed 7–19–01; 8:45 am]BILLING CODE 4163–18–P




Human Immunodeficiency Virus (HIV)Prevention Intervention ResearchStudies—Routinely RecommendingHIV and Sexually Transmitted Disease(STD) Counseling and Testing inAmbulatory Care Clinics andEmergency Rooms; Notice ofAvailability of Funds

A. Purpose

The Centers for Disease Control andPrevention (CDC) announces theavailability of fiscal year (FY) 2001



funds for a cooperative agreementprogram to reduce HIV incidencethrough prevention interventionresearch studies that routinelyrecommend HIV and STD counselingand testing in ambulatory care clinicsand emergency rooms. This programaddresses the ‘‘Healthy People 2010’’focus area of HIV.

The purpose of this activity is tostudy the outcome of routinelyrecommending HIV counseling andtesting and STD screening inambulatory care clinics and emergencyrooms.

B. Eligible Applicants

Applications may be submitted bypublic and private nonprofit and for-profit organizations and by governmentsand their agencies; that is, universities,colleges, research institutions, hospitals,other public and private nonprofit andfor-profit organizations, State and localgovernments or their bona fide agents,including the District of Columbia, theCommonwealth of Puerto Rico, theVirgin Islands, the Commonwealth ofNorthern Mariana Islands, AmericanSamoa, Guam, the Federated States ofMicronesia, the Republic of theMarshall Islands, and the Republic ofPalau, and federally recognized Indiantribal governments, Indian tribes, orIndian tribal organizations, small,minority, women-owned businesses.

Note: Title 2 of the United States Code,chapter 26, section 1611 states that anorganization described in section 501(c)(4) ofthe Internal Revenue Code of 1986 thatengages in lobbying activities is not eligibleto receive Federal funds constituting anaward, grant, cooperative agreement,contract, loan, or any other form.


Approximately $600,000 is availablein FY 2001 to fund approximately twoto three awards. It is expected that theaverage award will be $200,000, rangingfrom $150,000 to $250,000. It isexpected that the awards will begin onor about September 30, 2001, and willbe made for a 12-month budget periodwithin a project period of up to twoyears. Funding estimates may change.

Continuation awards within anapproved project period will be madeon the basis of satisfactory progress asevidenced by required reports and theavailability of funds.

Use of Funds

Funds are awarded for a specificallydefined purpose and may not be usedfor any other purpose or program. Fundsmay be used to support personnel andto purchase equipment, supplies, andservices directly related to project

activities. Funds may not be used tosupplant State or local funds availablefor HIV Prevention. Funds may not beused to provide direct medical care orprevention case management.

Funding Preference

Funding preference may be given toachieve geographical diversity.

D. Program Requirements

In conducting activities to achieve thepurpose of this program, the recipientwill be responsible for the activitiesunder 1. (Recipient Activities), and CDCwill be responsible for the activitieslisted under 2. (CDC Activities).

1. Recipient Activities

a. Review existing information,research study protocols, and datacollection forms to build on existingknowledge and to establish the basis forthe application.

b. Develop a research protocol andplans for conducting this research, withappropriate participation of State andlocal health departments, hospitals andother public and private organizations;professional associations, communitygroups and organizations, especiallythose with a racial and ethnic minoritymembership and focus; HIV/AIDSservice organizations; and organizationsthat serve persons with HIV disease,STD, or AIDS.

c. Establish procedures to maintainthe rights and confidentiality of allstudy participants. Prior toimplementation, this study must besubmitted to the local and CDCInstitutional Review Boards (IRBs) forreview and approval or deferral. TheIRB review at each cooperatinginstitution will be done by an Office forHuman Research Protections (OHRP)-approved IRB with either a single,multiple, or federal-wide projectassurance.

d. Identify, recruit, obtain informedconsent (when appropriate), enroll, andfollow an adequate number of studyparticipants as determined by studyprotocol and the program requirements.

e. Perform testing for chlamydia,gonorrhea and HIV.

f. Perform data analysis as determinedin the study protocol.

g. Disseminate the findings.

2. CDC Activities

a. Provide technical assistance, ifrequested, in the design and conduct ofthe research.

b. The CDC IRB will review andapprove each protocol initially and onat least an annual basis until theresearch project is completed.

c. As needed, assist in designing adata management system and dataanalysis.

E. Application ContentUse the information in the Program

Requirements, Other Requirements, andEvaluation Criteria sections to followthem in laying out your program plan.The narrative should be no more than25 pages double-spaced, printed on oneside, with one inch margins, andunreduced font.

The narrative should consist of, at aminimum, a Plan, Objectives, Methods,Evaluation and Budget.

F. Submission and DeadlineSubmit the original and five copies of

PHS–398 (OMB 0925–0001) (adhere tothe instructions on the ErrataInstruction Sheet for PHS 398). Formsare available in the application kit andat the following Internet address:www.cdc.gov/od/pgo/forminfo.htm

On or before August 30, 2001, submitthe application to the GrantsManagement Specialist identified in the‘‘Where to Obtain AdditionalInformation’’ section of thisannouncement.

Deadline: Applications shall beconsidered as meeting the deadline ifthey are either:

1. Received on or before the deadlinedate; or

2. Sent on or before the deadline dateand received in time for submission tothe Special Emphasis Panel. (Applicantsmust request a legibly dated U.S. PostalService postmark or obtain a legiblydated receipt from a commercial carrieror U.S. Postal Service. Private meteredpostmarks shall not be acceptable asproof of timely mailing.)

Late: Applications which do not meetthe criteria in 1. or 2. above will bereturned to the applicant.

G. Evaluation CriteriaEach application will be evaluated

individually against the followingcriteria by an independent review groupappointed by CDC.

1. Background and Objectives (10points):

To the degree to which the applicantincludes: (1) A detailed review of thescientific literature pertinent to testingin ambulatory care clinics andemergency rooms; (2) clearly statedgoals and objectives for the research;and (3) a description of how theintervention would impact HIV andSTD prevention in the community.

2. Site Selection (15 points)The extent to which the application

includes a description of: (1) The



current magnitude and characteristics ofthe HIV epidemic; (2) STD diseaseburden; (3) the number of personsserved by the clinics; and (4) theexpected number of newly-identifiedHIV infections that will be detected.Letters of support from cooperatingorganizations should be included whichclearly describe the nature and extent ofsuch cooperation.

3. Methods (30 points)To the extent the application

describes the potential intervention andhow it might impact on HIV and STDincidence in the study area. It shouldspecify potential barriers toimplementing the intervention and howthey will be overcome. The methods forassessing the increase in number ofpersons tested, as well as the number ofinfected persons identified andsuccessfully referred for treatment,should also be addressed. In addition,applications will be evaluated on thedegree to which the applicant has metthe CDC Policy requirements regardingthe inclusion of women, ethnic, andracial groups in the proposed research.This includes:

a. The proposed plan for the inclusionof both sexes and racial and ethnicminority populations for appropriaterepresentation.

b. The proposed justification whenrepresentation is limited or absent.

c. A statement as to whether thedesign of the study is adequate tomeasure differences when warranted.

d. A statement as to whether the plansfor recruitment and outreach for studyparticipants include the process ofestablishing partnerships withcommunities and recognition of mutualbenefits.

4. Research Capacity (20 points)The extent to which the application

describes the capacity and experience ofthe research team which includescurriculum vitae and positiondescriptions for key staff. Thepercentage-time commitments, duties,and responsibilities of project personneland involvement of state and localhealth department personnel should besufficient to operationalize the proposedmethodology. Letters of support fromkey collaborators, community groups,State and local health departments,should be included. The letters ofsupport must include a brief descriptionof the specific support to be provided,and should be limited to three pageseach. The application should documentthat there is sufficient space available inthe ambulatory care clinic or emergencyroom for the addition of the testingprogram. The application should also

provide evidence that at least 500persons per year visit the ambulatorycare facility or emergency room, manyof whom may be HIV-infected and whodo not know they are HIV-infected. Theapplication should demonstrate theapplicant’s ability to do testing forchlamydia, gonorrhea, and HIV, eitherin house or through contractualservices.

5. Sustainability of the intervention (15points)

Strength of plans, time-lines, andobjectives for how project will besustained.

6. Evaluation Plan (10 points)

Appropriateness andcomprehensiveness of: (a) The schedulefor accomplishing the activities of theresearch; (b) an evaluation plan thatidentifies methods and instruments forevaluating progress in implementing theresearch objectives; and (c) a proposal tocomplete and submit for publication, areport of research findings.

7. Budget (not scored)

The extent to which the budget isreasonable, clearly justified, andconsistent with the intent of theannouncement.

8. Human Subjects (not scored)

Does the application adequatelyaddress the requirements of 45 CFR part46 for the protection of human subjects?(Not scored; however, an applicationcan be disapproved if the research risksare sufficiently serious and protectionagainst risks are so inadequate as tomake the entire applicationunacceptable.)

H. Other Requirements

Technical Reporting Requirements

Provide CDC with the original andtwo copies of:

1. Annual progress reports to besubmitted with subsequent continuationapplications;

2. Financial status report, no morethan 90 days after the end of the budgetperiod;

3. Final financial report andperformance report, no more than 90days after the end of the project period.

Send all reports to the GrantsManagement Specialist identified in the‘‘Where to Obtain AdditionalInformation’’ section of thisannouncement.

Projects that involve the collection ofinformation from 10 or more individualsand funded by cooperative agreementwill be subject to review and approvalby the Office of Management and

Budget (OMB) under the PaperworkReduction Act.

The following additionalrequirements are applicable to thisprogram. For a complete description ofeach, see Attachment I and AttachmentII of the announcement.AR–1 Human Subjects RequirementsAR–2 Requirements for Inclusion of

Women and Racial and EthnicMinorities in Research

AR–4 HIV/AIDS ConfidentialityProvisions

AR–5 HIV Program Review PanelRequirements

AR–7 Executive Order 12372 ReviewAR–9 Paperwork Reduction Act

RequirementsAR–10 Smoke-Free Workplace

RequirementsAR–11 Healthy People 2010AR–12 Lobbying RestrictionsAR–22 Research Integrity

I. Authority and Catalog of FederalDomestic Assistance Number

This program is authorized under thePublic Health Service Act sections 317(42 U.S.C. 241(a) and 247b); 301 (42U.S.C. 241); and 311 (42 U.S.C. 243), asamended. The Catalog of FederalDomestic Assistance number is 93.941.

J. Where To Obtain AdditionalInformation

This and other CDC announcementscan be found on the CDC home pageInternet address http://www.cdc.govClick on ‘‘Funding’’ then ‘‘Grants andCooperative Agreements.’’


If you have questions after reviewingthe contents of all the documentation,business management technicalassistance may be obtained from:Brenda Hayes, Grants ManagementSpecialist, Grants Management Branch,Procurement and Grants Office, Centersfor Disease Control and Prevention(CDC), 2920 Brandywine Road, Room3000, Mailstop E–15, Atlanta, GA30341–4146, Telephone: (770) 488–2741, Email address: [email protected]

For program technical assistance,contact: Cassandra Walker, MPH, ActingDeputy Chief Prevention ServicesResearch Branch, Division of HIV/AIDSPrevention, Surveillance &Epidemiology National Center for HIV,STD, TB Prevention Centers for DiseaseControl and Prevention 1600 CliftonRoad, Mailstop E–46, Atlanta, GA30333, Telephone Number: (404) 639–6191, Email address: [email protected]







Human Immunodeficiency Virus (HIV)Prevention Intervention ResearchStudies—Social and EnvironmentalInterventions to Prevent HIV; Notice ofAvailability of Funds

A. PurposeThe Centers for Disease Control and

Prevention (CDC) announces theavailability of fiscal year (FY) 2001funds for a cooperative agreementprogram for social and environmentalinterventions to prevent HIV. Thisprogram addresses the ‘‘Healthy People2010’’ focus area of HumanImmunodeficiency Virus (HIV).

The purpose of the program is todesign and implement social andenvironmental interventions to reducethe risk of HIV transmission.

B. Eligible ApplicantsApplications may be submitted by

public and private nonprofit and for-profit organizations and by governmentsand their agencies; that is, universities,colleges, research institutions, hospitals,other public and private nonprofit andfor-profit organizations, State and localgovernments or their bona fide agents,including the District of Columbia, theCommonwealth of Puerto Rico, theVirgin Islands, the Commonwealth ofNorthern Mariana Islands, AmericanSamoa, Guam, the Federated States ofMicronesia, the Republic of theMarshall Islands, and the Republic ofPalau, and federally recognized Indiantribal governments, Indian tribes, orIndian tribal organizations, small,minority, women-owned businesses.

Note: Title 2 of the United States Code,chapter 26, section 1611 states that anorganization described in section 501(c)(4) ofthe Internal Revenue Code of 1986 thatengages in lobbying activities is not eligibleto receive Federal funds constituting anaward, grant, cooperative agreement,contract, loan, or any other form.

C. Availability of FundsApproximately $400,000 is available

in FY 2001 to fund approximately two

awards. It is expected that the averageaward will be $200,000, ranging from$150,000 to $250,000.

It is expected that the awards willbegin on or about September 30, 2001,and will be made for a 12-month budgetperiod within a project period of up totwo years. Funding estimates maychange.


Use of Funds

Funds are awarded for a specificallydefined purpose and may not be usedfor any other purpose or program. Fundsmay be used to support personnel andto purchase equipment, supplies, andservices directly related to projectactivities. Funds may not be used tosupplant State or local funds availablefor HIV Prevention. Funds may not beused to provide direct medical care orprevention case management.

D. Program RequirementsIn conducting activities to achieve the

purpose of this program, the recipientwill be responsible for the activitiesunder 1. (Recipient Activities), and CDCwill be responsible for the activitieslisted under 2.(CDC Activities).

1. Recipient Activities

a. Develop a research protocol andplans for conducting this research withappropriate participation of State andlocal health departments; professionalassociations, community groups andorganizations, especially those with aracial and ethnic minority membershipand focus; HIV/AIDS serviceorganizations; and organizations thatserve persons increased risk of HIV/AIDS.

b. Promote the development andevaluation of social and environmentalinterventions for HIV prevention byproviding data and ongoing assistanceto community planning groups; bydisseminating data through publicationsand presentations; by participating inproject planning and implementationmeetings; and by reporting ways inwhich the data have been used topromote public health.

c. Establish procedures to maintainthe rights and confidentiality of allstudy participants. Prior toimplementation, this study must besubmitted to the local and CDCInstitutional Review Boards (IRBs) forreview and approval or deferral.

d. Review existing information,research study protocols, and datacollection forms.

e. In collaboration with thecommunity, identify opportunities andneeds for interventions; assess theacceptability and feasibility of identifiedinterventions; estimate the potentialeffectiveness of the interventions inpreventing infection and disease.

f. Implement the intervention andassess process outcomes.

g. Identify, recruit, obtain informedconsent (when appropriate), enroll, andfollow an adequate number of studyparticipants as determined by studyprotocol and the program requirements.

h. Perform data analysis asdetermined in the study protocol.

2. CDC Activities

a. Provide technical assistance, asneeded, in the design and conduct ofthe research.

b. The CDC IRB will review andapprove the protocol initially and on atleast an annual basis until the researchproject is completed.

c. As needed, assist in designing adata management system.

E. Application Content

Use the information in the ProgramRequirements, Other Requirements, andEvaluation Criteria sections to followthem in laying out your program plan.The narrative should be no more than25 pages double-spaced, printed on oneside, with one inch margins, andunreduced font.

The narrative should consist of, at aminimum, a Plan, Objectives, Methods,Evaluation and Budget.

F. Submission and Deadline

Submit the original and five copies ofPHS–398 (OMB 0925–0001) (adhere tothe instructions on the ErrataInstruction Sheet for PHS 398). Formsare available in the application kit andat the following Internet address:www.cdc.gov/od/pgo/forminfo.htm.



1. Received on or before the deadlinedate;

2. Sent on or before the deadline dateand received in time for submission tothe Special Emphasis Panel. (Applicantsmust request a legibly dated U.S. PostalService postmark or obtain a legiblydated receipt from a commercial carrieror U.S. Postal Service. Private meteredpostmarks shall not be acceptable asproof of timely mailing.)



Late: Applications which do not meetthe criteria in 1. or 2. above will not beconsidered and will be returned to theapplicant.

G. Evaluation Criteria

Each application will be evaluatedindividually against the followingcriteria by an independent review groupappointed by CDC.

1. Background and Objectives (10points)

The extent to which the applicationincludes a detailed review of thescientific literature pertinent to thestudy being proposed, with evidence forthe relationship of social andenvironmental factors to the incidenceof HIV. This literature review and areview of conditions in the studycommunity should suggest specificresearch questions that will guide theresearch. The extent to which the goalsand objectives for the research areclearly stated along with how theintervention would impact one of theunderlying factors determining HIVincidence in the community.

2. Site Selection (15 points)

The extent to which the applicationincludes a description of the size andcharacteristics of the communitiesproposed for study. The extent to whichthe application describes the prevalenceand estimated incidence of HIVinfection in the study community.Includes age, gender, race/ethnicity, andHIV-risks of persons with HIV in thecommunity where the intervention willbe implemented; describes the likelyacceptability of the intervention bypersons in the community. Letters ofsupport from cooperating organizationsshould be included which detail thenature and extent of such cooperation.

3. Methods (45 points)

Appropriateness of methods forimplementing and evaluating the socialand environmental interventions toreduce HIV incidence and assessing thepotential impact of the interventionwithin a community or geographic area.

The extent to which the applicationdescribes the social-environmental issuethat the recipient wants to address, howthe potential intervention will influencethe issue, and how the interventionmight impact on HIV incidence in thestudy area.

The extent to which the applicationspecifies potential barriers toimplementing the intervention and howbarriers will be overcome. The potentialimpact on HIV reduction should beclear. The intervention should be new

and sustainable in the future withoutongoing CDC funding.

In addition, applications will beevaluated on the degree to which theapplicant has met the CDC Policyrequirements regarding the inclusion ofwomen, ethnic, and racial groups in theproposed research. This includes:

a. The proposed plan for the inclusionof both sexes and racial and ethnicminority populations for appropriaterepresentation.

b. The proposed justification whenrepresentation is limited or absent.

c. A statement as to whether thedesign of the study is adequate tomeasure differences when warranted.

d. A statement as to whether the plansfor recruitment and outreach for studyparticipants include the process ofestablishing partnerships withcommunities and recognition of mutualbenefits.

4. Research Capacity (20 points)

The extent to which the applicationdescribes the capacity and experience ofthe research team and includescurriculum vitaes and positiondescriptions for key staff and projectparticipants. The percentage-timecommitments, duties, andresponsibilities of project personnelshould be sufficient to operationalizethe proposed methodology.

5. Evaluation Plan (10 points)

The extent to which the applicationincludes time-phased and measurableobjectives. The proposed report ofresearch findings should document theprocess of identifying and implementingthe intervention and the acceptabilityand estimated impact within thecommunity.

6. Budget (not scored)

The extent to which the budget isreasonable, clearly justified, andconsistent with the intent of theannouncement.

7. Human Subjects (not scored)

The extent to which the applicationadequately addresses the requirementsof 45 CFR part 46 for the protection ofhuman subjects. (Not scored; however,an application can be disapproved if theresearch risks are sufficiently seriousand protection against risks is soinadequate as to make the entireapplication unacceptable.)



Provide CDC with the original andtwo copies of:

1. Annual progress reports to besubmitted with subsequent continuationapplications;

2. Financial status report, no morethan 90 days after the end of the budgetperiod;

3. Final financial report andperformance report, no more than 90days after the end of the project period.


Projects that involve the collection ofinformation from 10 or more individualsand funded by cooperative agreementwill be subject to review and approvalby the Office of Management andBudget (OMB) under the PaperworkReduction Act.

The following additionalrequirements are applicable to thisprogram. For a complete description ofeach, see Attachment I of theannouncement.AR–1 Human Subjects RequirementsAR–2 Requirements for Inclusion of

Women and Racial and EthnicMinorities in Research

AR–4 HIV/AIDS ConfidentialityProvisions

AR–5 HIV Program Review PanelRequirements

AR–7 Executive Order 12372 ReviewAR–9 Paperwork Reduction Act

RequirementsAR–10 Smoke-Free Workplace

RequirementsAR–11 Healthy People 2010AR–12 Lobbying RestrictionsAR–22 Research Integrity


This program is authorized under thePublic Health Service Act sections 317(42 U.S.C. 241(a) and 247b); 301 (42U.S.C. 241); and 311 (42 U.S.C. 243), asamended. The Catalog of FederalDomestic Assistance number is 93.941.


This and other CDC announcementscan be found on the CDC home pageInternet address http://www.cdc.govClick on ‘‘Funding’ then ‘‘Grants andCooperative Agreements.’’


If you have questions after reviewingthe contents of all the documentation,business management technical



assistance may be obtained from:JamesMasone, Grants Management Specialist,Grants Management Branch,Procurement and Grants Office, Centersfor Disease Control and Prevention(CDC), 2920 Brandywine Road, Room3000, Mailstop E–15, Atlanta, GA30341–4146, Telephone: (770) 488–2736, Email address: [email protected]

For program technical assistance,contact: Cassandra Walker, MPH, ActingDeputy Chief, Prevention ServicesResearch Branch, Division of HIV/AIDSPrevention, Surveillance &Epidemiology, National Center for HIV,STD, TB Prevention Centers for DiseaseControl and Prevention, 1600 CliftonRoad, Mailstop E–46 Atlanta, GA 30333Telephone Number: (404) 639–6191Email address: [email protected]





Expansion of HIV/AIDS PreventionActivities in the Republic of Kenya byPromoting the Establishment of ‘‘Free-Standing’’ or ‘‘Stand-Alone’’ SitesWhich Deliver Volunteer Counselingand Testing Services; Notice ofAvailability of Funds

A. Purpose

The Centers for Disease Control andPrevention (CDC) announces theavailability of fiscal year (FY)2001 fundsfor a cooperative agreement program forthe expansion of HIV/AIDS PreventionActivities in the Republic of Kenya.

The purpose of the program is toPromote the establishment of ‘‘free-standing’’ or ‘‘stand-alone’’ sites whichdeliver voluntary counseling and testing(VCT) services to the Kenyan public insupport of the Kenyan CDC CountryPlan for HIV/AIDS prevention.

B. Eligible Applicants

Applications may be submitted bypublic and private nonprofitorganizations and by governments andtheir agencies and internationalorganizations with a minimum of 2years of experience in managing fundsand delivering volunteer counseling and

testing(VCT)service in developingcountries in Africa.

Note: Title 2 of the United States Code,Chapter 26, Section 1611 states that anorganization described in section 501(c)(4) ofthe Internal Revenue Code 1986 that engagesin lobbying activities is not eligible to receiveFederal funds constituting an award, grant,cooperative agreement, contract, loan, or anyother form.


Approximately $1.0 million isavailable in FY 2001, to fund one award.A similar amount will be available eachyear during the period of the project. Itis expected that the award will begin onor about September 30, 2001 and will bemade for a 12-month budget period witha project period of up to five years.Funding estimates may change.


Use of Funds

All services provided under thisannouncement will be free to theindividuals obtaining the service. Thegrantee will not collect any fee(s) inassociation with the services provided.

Antiretroviral Drugs

Funds received from thisannouncement will not be used for thepurchase of antiretroviral drugs fortreatment of established HIV infection(with the exception nevirapine inPMTCT cases and with prior writtenapproval), occupational exposures, andnon-occupational exposures and willnot be used for the purchase ofmachines and reagents to conduct thenecessary laboratory monitoring forpatient care.

Applicants may contract with otherorganizations under these cooperativeagreements, however, applicants mustperform a substantial portion of theactivities (including programmanagement and operations anddelivery of prevention services forwhich funds are requested).

The costs that are generally allowablein grants to domestic organizations arelikewise allowable to foreigninstitutions and internationalorganizations, with the followingexceptions:

Indirect Costs: With the exception ofthe American University, Beirut, theGorgas Memorial Institute, and theWorld Health Organization, indirectcosts will not be paid (either directly orthrough a sub-award) to organizationslocated outside the territorial limits ofthe United States or to international

organizations regardless of theirlocation.

All requests for funds, including thebudget contained in the application,shall be stated in U.S. dollars. Once anaward is made, the Department ofHealth and Human Services (DHHS)will not compensate foreign grantees forcurrency exchange fluctuations throughthe issuance of supplemental awards.

Needle Exchange

No funds appropriated under this Actshall be used to carry out any programof distributing sterile needles orsyringes for the hypodermic injection ofany illegal drug. Funds received fromthis announcement may not be used forthe following: The purchase ofmachines and reagents to conductlaboratory monitoring for patient care

D. Program RequirementsIn conducting activities to achieve the

purpose of this program, the recipientwill be responsible for the activitiesunder ‘‘Recipient Activities’’, and CDCwill be responsible for the activitieslisted under ‘‘CDC Activities’’

Recipient Activities

1. Developing and establishing stand-alone VCT sites in key urban areas ofKenya.

a. Identify key urban locations andsites in Kenya appropriate for stand-alone VCT sites, and develop a phasedplan for establishment of up to twenty(20) sites by the end of three years.

b. Identify and select local partners(such as but not limited to Non-Government Organizations, NGOs) withthe capacity to manage and deliver VCTservices at stand-alone sites. (ForExample: This may involve selectingone national organization or severalregional or local organizations. Ifnecessary, it may involve assisting inthe formation of a Kenyan NGO with thespecific mandate to provide VCTservices, similar to the Ugandan NGO,the AIDS Information Center, which wasset up by a consortium of Ugandan andinternational organizations.)

c. Develop and implement a specificmodel for service delivery to beuniformly implemented at all sites. Thisshould include hours of operationduring evening and weekend hours.Provision of integrated reproductive andHIV related health services at thesesites, such as family planning services,the detection and treatment of othersexually transmitted diseases, and TBeducation and screening is desirable. Inaddition, on-going services for VCTclients, such as ‘‘Post-Test Clubs’’ andreferral networks for care, should beincluded in the proposal.



d. Free services should be consideredfor proposal, however, a minimal feemay be charged with fees generatedbeing utilized to further market VCTservices.

e. Develop and implement a plan forthe recruitment, employment, training,and supervision of staff to provide VCTservices at free-standing sites, includingboth counseling and testing services tobe performed on-site.

f. Ensure that all sites areappropriately advertised

2. Assist other NGOs wishing toprovide VCT as part of their AIDSactivities.

a. Solicit proposals from NGOs whowish to provide VCT services as part oftheir AIDS prevention and/or careefforts, including such groups asKICOSHEP, KAPC, church and faith-based organizations, and others.

b. Provide funding through‘‘contracts’’ to these organizations. Allcontracts over $15,000 will requireapproval by in-country CDC staff.

c. Provide on-going technicalassistance to such groups.

d. Foster a network of VCT sites forcontinuing education, sharing ofresident technical expertise and lessonslearned.

3. Provide HIV test kits and othersupplies needed to conduct on-site,confirmed, rapid HIV testing for VCTpurposes.

a. Procure HIV test kits and othersupplies as needed. Selection of test kitswill be made on the basis of CDCrecommendations and will require testkits approved for use in Kenya.

b. Develop a system for thedistribution and re-stocking of HIV testkits and consumables.

c. Develop a system for additionaltesting of samples with discordantresults, and for quality assurancetesting.

4. Develop mobile VCT services forsites not appropriate for a permanentVCT center.

a. Propose a strategy and specific planfor mobile VCT services in rural areasand other locations which do not justifya full-time VCT center.

b. Implement mobile VCT services inyear two. This activity may require theprocurement of vans or mobile-hometype vehicles which would have roomfor a small laboratory and at least twocounseling rooms.

5. Provide on-going support,monitoring, supervision, and evaluationof these sites

a. Ensure that all VCT sites areoperating in accordance with the KenyaNational VCT guidelines and with allapplicable local and internationalstandards.

b. Ensure that all funds disbursed forVCT activities are properly used andaccounted for, and train staff at VCTsites in proper accounting procedures.

c. Develop systems for routinemonitoring and supervision of VCTservices, including a system forcomputerized record keeping at all sites,and central level analysis and reporting.

d. Propose, develop and implement amethodology for the evaluation of stand-alone VCT sites in Kenya.

CDC Activities

1. CDC will collaborate with therecipient on designing andimplementing the activities listed above,including but not limited to providingtechnical assistance to develop andimplement program activities, qualityassurances, data management, statisticalanalysis and presentations of programmethods and findings.

2. Monitor project and budgetperformance.

3. Approve the selection of keypersonnel to be involved in theactivities preformed under thiscooperative agreement.

4. Rapid HIV Test kits may beprovided in limited amounts for thepurpose of this activity.

E. Application Content

Use the information in the ProgramRequirements, Other Requirements, andEvaluation Criteria sections to developthe application content. Yourapplication will be evaluated on thecriteria listed, so it is important tofollow them in laying out your programplan. The narrative should be no morethan 25 double-spaced pages, printed onone side, with one inch margins, and 12point font. All pages should benumbered and indexed. The narrativeshould consist of, at a minimum, a Plan,Objectives, Methods, Evaluation andBudget.

F. Submission and Deadline

Submit the original and two copies ofPHS 5161–1 (OMB Number 0920–0428).Forms are available in the applicationkit and at the following Internet address:www.cdc.gov/od/pgo/forminfo.htm.



1. Received on or before the deadlinedate; or

2. Sent on or before the deadline dateand received in time for submission to

the independent review group.(Applicants must request a legibly datedpostmark or obtain a legibly datedreceipt from a commercial carrier.Private metered postmarks shall not beacceptable as proof of timely mailing.)

Late: Applications which do not meetthe criteria in 1. or 2. above will bereturned to the applicant.

G. Evaluation Criteria

Application

Each application will be evaluatedindividually against the followingcriteria by an independent review groupappointed by CDC.

1. Understanding of the Problem (15percent)

The extent to which the applicant’sproposal demonstrates a clear andconcise understanding of the AIDSepidemic in Kenya and the role of VCTas a prevention intervention and as anentry point to care.

2. Technical and ProgrammaticApproach (30 percent)

The extent to which the applicant’sproposal demonstrates anunderstanding of how to develop,promote, implement, monitor, andevaluate VCT services offered outside oftraditional medical settings.

3. Ability to Carry Out the Project (20percent)

The extent to which the applicantdocuments demonstrated capability toachieve the purpose of the project.

4. Personnel (20 percent)

The extent to which professionalpersonnel involved in this project arequalified, including evidence ofexperience in working with HIV/AIDSand specifically with VCT in stand-alone settings.

5. Plans for Administration andManagement of the Project (15 percent)

The extent to which the plan,objectives, and methods described meetthe program objectives and theadequacy of described evaluationmethodology meets the plans of theproject.

6. Budget (Not scored, but evaluated)

The extent to which the itemizedbudget for conducting the project isreasonable and well justified. Thepercentage of the budget going for directVCT services will be assessed andconsidered. The applicant shouldinclude an analysis in the budget of thecost per client served.



7. Human Subjects (Not Scored)

The extent to which the applicationadequately addresses the requirementsof 45 CFR 46 for the protection ofhuman subjects. (Not scored; however,an application can be disapproved if theresearch risks are sufficiently seriousand protection against risks is soinadequate as to make the entireapplication unacceptable.)



Provide CDC with original plus twocopies of

1. Semi-annual progress reports;2. Financial status report, no more

than 90 days after the end of each year’sbudget period; and

3. Final financial and performancereports, no more than 90 days after theend of the total five year project period.

4. Awardee is required to obtainannual program specific audit of theseCDC funds by a US-based audit firmwith international branches and currentlicensure/authority in country, and inaccordance with InternationalAccounting Standards or equivalentstandard(s) approved in writing by CDC.

A fiscal Recipient CapabilityAssessment may be required with thepotential awardee, pre or post award, inorder to review their businessmanagement and fiscal capabilitiesregarding their handling of U.S. Federalfunds.


The following additionalrequirements are applicable to thisprogram. For a complete description ofeach, see Attachment I of theannouncement.

AR–1 Human Subjects RequirementsAR–4 HIV/AIDS Confidentiality

ProvisionsAR–6 Patient CareAR–12 Lobbying RestrictionsAR–14 Accounting System

Requirements


This program is authorized undersection 307 of the Public Health ServiceAct, [42 U.S.C. 242I], as amended. TheCatalog of Federal Domestic Assistancenumber is 93.941.


This and other CDC announcementscan be found on the CDC home pageInternet address—http://www.cdc.gov

Click on ‘‘Funding’’ then ‘‘Grants andCooperative Agreements.’’ To receiveadditional written information and torequest an application kit, call 1–888–GRANTS4 (1–888–472–6874). You willbe asked to leave your name andaddress and will be instructed toidentify the Program Announcementnumber of interest.

If you have questions after reviewingthe contents of all the documents,business management technicalassistance may be obtainedfrom:Dorimar Rosado, GrantsManagement Specialist, GrantsManagement Branch, Procurement andGrants Office, Centers for DiseaseControl and Prevention, 2920Brandywine Road, Room 3000, Atlanta,GA 30341–4146, Telephone number:(770) 488–2782, Email address:[email protected].

For program technical assistance,contact: Elizabeth Marum, Ph.D.,Technical Advisor in HIV/AIDS, Centerfor Disease Control and Prevention(CDC), Nairobi, Kenya, Telephone: 254–2–713–008 (office),254–072–727–933(mobile), 254–2–714–745 (fax), Email:[email protected], Localmailing address: P.O. Box 30137,Nairobi, Kenya, U.S. Mailing address:Unit 64112,APO AE 09831–4112.





Division of International Health/GlobalAIDS Program; Strengthening Mastersof Public Health Program in Zimbabwe;Notice of Availability of Funds

A. Purpose

The Centers for Disease Control andPrevention (CDC) announces theavailability of fiscal year (FY) 2001funds for a cooperative agreementprogram with the University ofZimbabwe, Department of CommunityMedicine (UZ/DCM) to strengthen theMasters of Public Health (MPH) Programand to mobilize MPH faculty andstudents to more comprehensivelyaddress the HIV/AIDS (HumanImmunodeficiency Virus/AcquiredImmune Deficiency Syndrome)

epidemic in Zimbabwe. This programaddresses the ‘‘Healthy People 2010’’focus area Public Health Infrastructure.

The objectives of this program are: (1)Development and implementation of aplan to increase capacity to trainapplied epidemiologists in MPH andrelated programs, and (2) to create afocus for monitoring and evaluation ofresponse to the HIV/AIDS epidemicwithin the University, and to increasethe quality and quantity of teaching,program evaluation projects and supportservices to the Ministry of Health andChild Welfare (MOHCW) and theNational AIDS Council (NAC), andrelated HIV/AIDS initiatives within theUniversity. The objectives are intendedto be mutually reinforcing, with theresources allocated for HIV/AIDSmonitoring and evaluation effortsproviding training and relatedprofessional opportunities for studentsand faculty, and the expanded studentand faculty base contributing to theexpanded human resources needed foran effective response to HIV/AIDS inZimbabwe and in the region.

The increased capacity of the MPHtraining program would enhance theZimbabwe-CDC (ZimCDC) AIDSProject’s vision of ‘‘Capacity buildingand technology transfer focused onpublic sector human resources’’ and theDivision of International Health/EPO’smission of ‘‘Working with partners tostrengthen capacity of countries aroundthe world to improve public health’’.This would be accomplished through acollaborative project between theZimCDC, the UZ/DCM, and the Divisionof International Health (DIH),Epidemiology Program Office. The UZMPH Program will be a cornerstone ofthe capacity building vision in theregion. Through a cooperativeagreement, CDC will provide coresupport to the UZ/DCM to increase thesize of the training program in appliedepidemiology and management fornational personnel, and support relatedmeasures to simultaneously traindistrict level personnel. CDC will alsoprovide core support to an UZ/DCM-based Center for Monitoring andEvaluating the Response to HIV/AIDS.

B. Eligible ApplicantsAssistance will be provided only to

the University of Zimbabwe, with theassistance targeted to the University’sSchool of Medicine, Department ofCommunity Medicine. No otherapplications are solicited.

The UZ/DCM MPH program is anapplied epidemiology training programfounded in 1993 through a collaborativeeffort between the MOHCW and the UZ/DCM. Currently, with 10 trainees per



year, the program is supported by theRockefeller Foundation and theMOHCW. In the eight years of itsoperation, the MPH program has trainedapproximately 40 personnel andcurrently has 15 trainees in their two-year course. It has recently been taskedto train up to 300 district health teammembers in health information fordistrict management over 2 yearsleading to a Certificate in HealthInformation for District Management(CHIDM).

The UZ/DCM MPH program is theonly MPH program in the country. Thepurpose of this agreement is to buildupon the success of the program andallow it to expand withoutcompromising the quality of thetraining.

There is urgency to putting this awardin place. Zimbabwe is among thecountries in the world most affected byHIV/AIDS: HIV prevalence is estimatedto be at least 27 percent, there has been10-fold increase in the number of TBcases, and up to 35 percent of thechildren may be orphaned by AIDS atthe end of this decade. At the sametime, the public health response to theepidemic in Zimbabwe is inadequatedue in part to insufficient manpower inthe Zimbabwe public health system.This training program will enableZimbabwe to develop and placeepidemiologists who are betterequipped to address epidemics.


Approximately $500,000 is availablein FY 2001 to fund one award. It isexpected that this level of funding willbe available each year. It is expectedthat the awards will begin on or aboutSeptember 2001 and will be made for a12-month budget period within a projectperiod of up to three years. Fundingestimates may change, based on

performance and the availability offunds.


D. Where To Obtain AdditionalInformation

This and other CDC announcementscan be found on the CDC home pageInternet address http://www.cdc.govClick on ‘‘Funding’’ then ‘‘Grants andCooperative Agreements.’’To obtainadditional business managementinformation, contact:Mattie Jackson,Grants Management Specialist,GrantsManagement Branch,Procurement andGrants Office, 2920 Brandywine Road,Room 3000,Atlanta, GA 30341–4146,Telephone: (770) 488–2696,Email:[email protected].

For program technical assistance,contact:Dr. Peter Nsuguba,

Epidemiologist,EpidemiologyProgram Office,Division ofInternational Health,Centers forDisease Control and Prevention, 2877Brandywine Road, Room4507,Atlanta, GA 30314–4146,Telephone: (770) 488–8334,Email: [email protected]

orMark Fussell,Zimbabwe-CDC AIDS

Project Team, 38 Samora MachelAvenue, 2nd Floor,Harare,Zimbabwe,Office: 263–11–613194,Email:[email protected]: July 16, 2001.

John L. Williams,Director, Procurement and Grants Office,Centers for Disease Control and Prevention(CDC)[FR Doc. 01–18157 Filed 7–19–01; 8:45 am]BILLING CODE 4163–18–P


Administration for Children andFamilies

Proposed Information CollectionActivity; Comment Request

Title: TANF Time LimitsQuestionnaire.

OMB No: New Collection.Description: The imposition of

federally imposed time limits on thereceipt of cash assistance under theTemporary Assistance to NeedyFamilies (TANF) program was a centraland major part of welfare reform. Theearliest that TANF recipients could beaffected by the 60-month federal limitwill be in the last quarter of 2001. Thepurpose of the TANF Time Limitsproject is to document what is knownabout this important element of welfarereform as the period for TANF re-authorization approaches. The proposedsurvey instrument is intended to obtain‘‘real-time’’ information from thosestates in which TANF recipients couldhave reached the 60 month limit onreceipt of federally funded assistance inthe last quarter of calendar year 2001.The instrument is designed to gatherpreliminary information about thenumber of families accumulating 60months of benefits, the outcomes forsuch families (e.g., cases closed, benefitsextended with Federal funds, benefitsextended with State funds), and thepolicies and practices of states to workwith families approaching or reachingthe federal time limit.

Respondents: The primaryrespondents for the questionnaire arethose States that implemented TANFbefore February 1997. States thatimplemented TANF later may also besurveyed.

ANNUAL BURDEN ESTIMATES

Instrument Number ofrespondents

Number ofresponses

Averageburden

hours perresponse

Total bur-den hours

TANF time limits .............................................................................................................. 35 1 8 280Estimated Total Annual Burden Hours ............................................................................ .................... .................... .................... 280

In compliance with the requirementsof section 3506(c)(2)(A) of thePaperwork Reduction Act of 1995, theAdministration for Children andFamilies is soliciting public commenton the specific aspects of theinformation collection described above.Copies of the proposed collection of

information can be obtained andcomments may be forwarded by writingto the Administration for Children andFamilies, Office of Information Services,370 L’Enfant Promenade, SW.,Washington, DC 20447, Attn: ACFReports Clearance Officer. All requests

should be identified by the title of theinformation collection.

The Department specifically requestscomments on: (a) Whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the agency, includingwhether the information shall have



practical utility; (b) the accuracy of theagency’s estimate of the burden of theproposed collection of information; (c)the quality, utility, and clarity of theinformation to be collected; and (d)ways to minimize the burden of thecollection of information onrespondents, including through the useof automated collection techniques orother forms of information technology.Consideration will be given tocomments and suggestions submittedwithin 60 days of this publication.

Dated: July 16, 2001.Bob Sargis,Reports Clearance Officer.[FR Doc. 01–18134 Filed 7–19–01; 8:45 am]BILLING CODE 4184–01–M



Proposed Information CollectionActivity; Comment Request

Proposed Projects:Title: Application Requirements for

the Low Income Home EnergyAssistance Program (LIHEAP) ModelPlan.

OMB No.: 0970–0075.Description: States, including the

District of Columbia, Tribes, tribalorganizations and territories applyingfor LIHEAP block grant funds must

submit an annual application (ModelPlan) that meets the LIHEAP statutoryand regulatory requirements prior toreceiving Federal funds. A detailedapplication must be submitted every 3years. Abbreviated applications may besubmitted in alternate years. There havebeen minor changes in the Model Planfor clarity. There have been nosubstantive changes.

Respondents: State, Local or TribalGovernments.

ANNUAL BURDEN ESTIMATES

Instrument Number ofrespondents

Number ofresponses

per re-spondent

Averageburden

hours perresponse

Total bur-den hours

Detailed Model Plan ........................................................................................................ 65 1 1 65Abbreviated Model Plan .................................................................................................. 115 1 .33 38Estimated Total Annual Burden Hours ............................................................................ .................... .................... .................... 103

In compliance with the requirementsof Section 3506(c)(2)(A) of thePaperwork Reduction Act of 1995, theAdministration for Children andFamilies is soliciting public commenton the specific aspects of theinformation collection described above.Copies of the proposed collection ofinformation can be obtained andcomments may be forwarded by writingto the Administration for Children andFamilies, Office of information Services,370 L’Enfant Promenade, SW.,Washington, DC 20447, Attn: ACFReports Clearance Officer. All requestsshould be identified by the title of theinformation collection.

The Department specifically requestscomments on: (a) Whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the agency, includingwhether the information shall havepractical utility; (b) the accuracy of theagency’s estimate of the burden of theproposed collection of information; (c)the quality, utility, and clarity of theinformation to be collected; and (d)ways to minimize the burden of thecollection of information onrespondents, including through the useof automated collection techniques orother forms of information technology.Consideration will be given tocomments and suggestions submittedwithin 60 days of this publication.

Dated: July 16, 2001.Bob Sargis,Reports Clearance Officer.[FR Doc. 01–18167 Filed 7–19–01; 8:45 am]BILLING CODE 4184–01–M


Food and Drug Administration

[Docket No. 97N–484R]

Agency Information CollectionActivities; Announcement of OMBApproval; Human Cells, Tissues, andCellular and Tissue-Based Products;Establishments Registration andListing

AGENCY: Food and Drug Administration,HHS.ACTION: Notice.

SUMMARY: The Food and DrugAdministration (FDA) is announcingthat a collection of information entitled‘‘Human Cells, Tissues, and Cellularand Tissue-Based Products;Establishments Registration andListing’’ has been approved by theOffice of Management and Budget(OMB) under the Paperwork ReductionAct of 1995.FOR FURTHER INFORMATION CONTACT:JonnaLynn P. Capezzuto, Office ofInformation Resources Management

(HFA–250), Food and DrugAdministration, 5600 Fishers Lane,Rockville, MD 20857, 301–827–4659.

SUPPLEMENTARY INFORMATION: In theFederal Register of January 19, 2001 (66FR 5447), the agency announced thatthe proposed information collection hadbeen submitted to OMB for review andclearance under 44 U.S.C. 3507. Anagency may not conduct or sponsor, anda person is not required to respond to,a collection of information unless itdisplays a currently valid OMB controlnumber. OMB has now approved theinformation collection and has assignedOMB control number 0910–0469. Theapproval expires on July 31, 2004. Acopy of the supporting statement for thisinformation collection is available onthe Internet at http://www.fda.gov/ohrms/dockets.


Margaret M. Dotzel,Associate Commissioner for Policy.[FR Doc. 01–18131 Filed 7–19–01; 8:45 am]






[Docket No. 00N–1567]

Agency Information CollectionActivities; Announcement of OMBApproval; Registration of Producers ofDrugs and Listing of Drugs inCommercial Distribution

AGENCY: Food and Drug Administration,HHS.

ACTION: Notice.

SUMMARY: The Food and DrugAdministration (FDA) is announcingthat a collection of information entitled‘‘Registration of Producers of Drugs andListing of Drugs in CommercialDistribution’’ has been approved by theOffice of Management and Budget(OMB) under the Paperwork ReductionAct of 1995.

FOR FURTHER INFORMATION CONTACT:Karen L. Nelson, Office of InformationResources Management (HFA–250),Food and Drug Administration, 5600Fishers Lane, Rockville, MD 20857,301–827–1482.

SUPPLEMENTARY INFORMATION: In theFederal Register of November 2, 2000(65 FR 65858), the agency announcedthat the proposed information collectionhad been submitted to OMB for reviewand clearance under 44 U.S.C. 3507. Anagency may not conduct or sponsor, anda person is not required to respond to,a collection of information unless itdisplays a currently valid OMB controlnumber. OMB has now approved theinformation collection and has assignedOMB control number 0910–0045. Theapproval expires on July 31, 2004. Acopy of the supporting statement for thisinformation collection is available onthe Internet at http://www.fda.gov/ohrms/dockets.







Agency Information CollectionActivities; Announcement of OMBApproval; Abbreviated New DrugApplication Regulations; Patent andExclusivity Provisions


ACTION: Notice.

SUMMARY: The Food and DrugAdministration (FDA) is announcingthat a collection of information entitled‘‘Abbreviated New Drug ApplicationRegulations; Patent and ExclusivityProvisions’’ has been approved by theOffice of Management and Budget(OMB) under the Paperwork ReductionAct of 1995.

FOR FURTHER INFORMATION CONTACT:Karen L. Nelson, Office of InformationResources Management (HFA–250),Food and Drug Administration, 5600Fishers Lane, Rockville, MD 20857,301–827–1482.

SUPPLEMENTARY INFORMATION: In theFederal Register of January 3, 2001 (66FR 372), the agency announced that theproposed information collection hadbeen submitted to OMB for review andclearance under 44 U.S.C. 3507. Anagency may not conduct or sponsor, anda person is not required to respond to,a collection of information unless itdisplays a currently valid OMB controlnumber. OMB has now approved theinformation collection and has assignedOMB control number 0910–0305. Theapproval expires on July 31, 2004. Acopy of the supporting statement for thisinformation collection is available onthe Internet at http://www.fda.gov/ohrms/dockets.







Agency Information CollectionActivities; Announcement of OMBApproval; Medical Devices; CurrentGood Manufacturing Practice (CGMP),Quality System (QS) Regulation


ACTION: Notice.

SUMMARY: The Food and DrugAdministration (FDA) is announcingthat a collection of information entitled‘‘Medical Devices; Current GoodManufacturing Practice (CGMP), QualitySystem (QS) Regulation’’ has beenapproved by the Office of Managementand Budget (OMB) under the PaperworkReduction Act of 1995.

FOR FURTHER INFORMATION CONTACT:Peggy Schlosburg, Office of InformationResources Management (HFA–250),Food and Drug Administration, 5600Fishers Lane, Rockville, MD 20857,301–827–1223.

SUPPLEMENTARY INFORMATION: IntheFederal Register of May 31, 2001 (66FR 29577), the agency announced thatthe proposed information collection hadbeen submitted to OMB for review andclearance under 44 U.S.C. 3507. Anagency may not conduct or sponsor, anda person is not required to respond to,a collection of information unless itdisplays a currently valid OMB controlnumber. OMB has now approved theinformation collection and has assignedOMB control number 0910–0073. Theapproval expires on July 31, 2004. Acopy of the supporting statement for thisinformation collection is available onthe Internet at http://www.fda.gov/ohrms/dockets.









Agency Information CollectionActivities; Submission for OMBReview; Comment Request; GoodLaboratory Practices (GLP)Regulations for Nonclinical LaboratoryStudies


SUMMARY: The Food and DrugAdministration (FDA) is announcingthat the proposed collection ofinformation listed below has beensubmitted to the Office of Managementand Budget (OMB) for review andclearance under the PaperworkReduction Act of 1995.DATES: Submit written comments on thecollection of information by August 20,2001.ADDRESSES: Submit written commentson the collection of information to theOffice of Information and RegulatoryAffairs, OMB, New Executive OfficeBldg., 725 17th St. NW., rm. 10235,Washington, DC 20503, Attn: WendyTaylor, Desk Officer for FDA.FOR FURTHER INFORMATION CONTACT:JonnaLynn P. Capezzuto, Office ofInformation Resources Management(HFA–250), Food and DrugAdministration, 5600 Fishers Lane,Rockville, MD 20857, 301–827–4659.SUPPLEMENTARY INFORMATION: Incompliance with 44 U.S.C. 3507, FDAhas submitted the following proposedcollection of information to OMB forreview and clearance.

Good Laboratory Practices (GLP)Regulations for Nonclinical LaboratoryStudies—(21 CFR Part 58)—(OMBControl Number 0910–0119)—Extension

Sections 409, 505, 512, and 515 of theFederal Food, Drug, and Cosmetic Act(21 U.S.C. 348, 355, 360b, and 360e) andrelated statutes require manufacturers offood additives, human drugs andbiological products, animal drugs, andmedical devices to demonstrate thesafety and utility of their product bysubmitting applications to FDA forresearch or marketing permits. Suchapplications contain, among otherimportant items, full reports of allstudies done to demonstrate productsafety in man and/or other animals. Inorder to ensure adequate quality controlfor these studies and to provide anadequate degree of consumer protection,the agency issued the GLP regulations.The regulations specify minimumstandards for the proper conduct ofsafety testing and contain sections onfacilities, personnel, equipment,standard operating procedures (SOPs),test and control articles, qualityassurance, protocol and conduct of asafety study, records and reports, andlaboratory disqualification.

The GLP regulations containrequirements for the reporting of theresults of quality assurance unitinspections, test and control articlecharacterization, testing of mixtures oftest and control articles with carriers,and an overall interpretation ofnonclinical laboratory studies. The GLPregulations also contain recordkeepingrequirements relating to the conduct ofsafety studies. Such records include: (1)Personnel job descriptions andsummaries of training and experience;(2) master schedules, protocols andamendments thereto, inspection reports,

and SOPs; (3) equipment inspection,maintenance, calibration, and testingrecords; (4) documentation of feed andwater analyses and animal treatments;(5) test article accountability records;and (6) study documentation and rawdata.

The information collected under GLPregulations is generally gathered bytesting facilities routinely engaged inconducting toxicological studies and isused as part of an application for aresearch or marketing permit that isvoluntarily submitted to FDA bypersons desiring to market newproducts. The facilities that collect thisinformation are typically operated bylarge entities, e.g., contract laboratories,sponsors of FDA-regulated products,universities, or government agencies.Failure to include the information in afiling to FDA would mean that agencyscientific experts could not make a validdetermination of product safety. FDAreceives, reviews, and approveshundreds of new product applicationseach year based on informationreceived. The recordkeepingrequirements are necessary to documentthe proper conduct of a safety study, toassure the quality and integrity of theresulting final report, and to provideadequate proof of the safety of regulatedproducts. FDA conducts onsite audits ofrecords and reports, during itsinspections of testing laboratories, toverify reliability of results submitted inapplications.

In the Federal Register of April 30,2001 (66 FR 21396), FDA published a60-day notice requesting publiccomment on the information collectionprovisions. No comments were received.

FDA estimates the burden of thiscollection of information as follows:

TABLE 1.—ESTIMATED ANNUAL REPORTING BURDEN1

21 CFR Section No. of Responses Annual Frequencyper Response

Total AnnualResponses

Hours perResponse Total Hours

58.35(b)(7) 300 60.25 18,075 1 18,07558.185 300 60.25 18,075 27.65 499,774

Total 517,849

1 There are no capital costs or operating and maintenance costs associated with this collection of information.

TABLE 2.—ESTIMATED ANNUAL RECORDKEEPING BURDEN1

21 CFR Section No. ofRecordkeepers

Annual Frequency perRecordkeeping

Total AnnualRecords

Hours perRecordkeeper Total Hours

58.29(b) 300 20 6,000 .21 1,26058.35(b)(1) through (b)(6) and (c) 300 270.76 81,228 3.36 279,92658.63(b) and (c) 300 60 18,000 .09 1,62058.81(a) through (c) 300 301.8 90,540 .14 12,67658.90(c) and (g) 300 62.7 18,810 .13 2,44558.105(a) and (b) 300 5 1,500 11.8 17,70058.107(d) 300 1 300 4.25 1,275



TABLE 2.—ESTIMATED ANNUAL RECORDKEEPING BURDEN1—Continued

21 CFR Section No. ofRecordkeepers

Annual Frequency perRecordkeeping

Total AnnualRecords

Hours perRecordkeeper Total Hours

58.113(a) 300 15.33 4,599 6.8 31,27358.120 300 15.38 4,614 32.7 150,87858.195 300 251.5 75,450 3.9 294,255

Total 793,308

1 There are no capital costs or operating and maintenance costs associated with this collection of information.

Dated: July 12, 2001.Margaret M. Dotzel,Associate Commissioner for Policy.[FR Doc. 01–18130 Filed 7–19–01; 8:45 am]BILLING CODE 4160–01–S



Request for Nominations for VotingMembers on Public Advisory Panels orCommittees


SUMMARY: The Food and DrugAdministration (FDA) is requestingnominations for voting members toserve on certain device panels of theMedical Devices Advisory Committee,the National Mammography QualityAssurance Advisory Committee, theDevice Good Manufacturing PracticeAdvisory Committee, and the TechnicalElectronic Products Radiation SafetyStandards Committee in the Center forDevices and Radiological Health.Nominations will be accepted forcurrent vacancies and those that will ormay occur through August 31, 2002.

FDA has a special interest in ensuringthat women, minority groups, andindividuals with disabilities areadequately represented on advisorycommittees and, therefore, encouragesnominations of qualified candidatesfrom these groups.DATES: Because scheduled vacanciesoccur on various dates throughout eachyear, no cutoff date is established for thereceipt of nominations. However, whenpossible, nominations should bereceived at least 6 months before thedate of scheduled vacancies for eachyear, as indicated in this notice.ADDRESSES: All nominations andcurricula vitae for the device panelsshould be sent to Nancy J. Pluhowski,Advisory Panel Coordinator, Office ofDevice Evaluation (HFZ–400), Center forDevices and Radiological Health, Foodand Drug Administration, 9200

Corporate Blvd., Rockville, MD 20850,e-mail: [email protected].

All nominations and curricula vitaefor the National Mammography QualityAssurance Advisory Committee,excluding consumer representatives,should be sent to Charles A. Finder,Center for Devices and RadiologicalHealth (HFZ–240), Food and DrugAdministration, 1350 Piccard Dr.,Rockville, MD 20850.

All nominations and curricula vitaefor industry representatives andgovernment representatives for theDevice Good Manufacturing PracticeAdvisory Committee should be sent toSharon Kalokerinos, Center for Devicesand Radiological Health (HFZ–300),Food and Drug Administration, 2094Gaither Rd., Rockville, MD 20850.

All nominations and curricula vitaefor government representatives andindustry representatives for theTechnical Electronic Product RadiationSafety Standards Committee should besent to Orhan Suleiman, Center forDevices and Radiological Health (HFZ–240), Food and Drug Administration,1350 Piccard Dr., Rockville, MD 20850.

All nominations and curricula vitaefor consumer representatives for theNational Mammography QualityAssurance Advisory Committee, andgeneral public representatives for theDevice Good Manufacturing PracticeAdvisory Committee and the TechnicalElectronic Product Radiation SafetyStandards Committee should be sent toMaureen Hess, Office of ConsumerAffairs (HFE–50), Food and DrugAdministration, 5600 Fishers Lane,Rockville, MD 20857, e-mail:[email protected] FURTHER INFORMATION CONTACT:Kathleen L. Walker, Center for Devicesand Radiological Health (HFZ–17), Foodand Drug Administration, 2098 GaitherRd., Rockville, MD 20850, 301–594–1283, ext. 114, e-mail:[email protected] INFORMATION: FDA isrequesting nominations of votingmembers for vacancies listed below.

1. Anesthesiology and RespiratoryTherapy Devices Panel: Two vacanciesoccurring November 30, 2001;

anesthesiologists, pulmonary medicinespecialists, or other experts who havespecialized interests in ventilatorysupport, pharmacology, physiology, orthe effects and complications ofanesthesia.

2. Circulatory System Devices Panel:Two vacancies immediately;interventional cardiologists,electrophysiologists, invasive (vascular)radiologists, vascular and cardiothoracicsurgeons, and cardiologists with specialinterest in congestive heart failure.

3. Dental Products Panel: Twovacancies immediately; dentists whohave expertise in the areas of lasers,temporomandibular joint implants and/or endodontics; or experts in tissueengineering and/or bone physiologyrelative to the oral and maxillofacialarea.

4. Ear, Nose, and Throat DevicesPanel: Three vacancies occurringOctober 31, 2001; otologists,neurotologists, audiologists, hearingscientists, and electrophysiologists.

5. Gastroenterology and UrologyDevices Panel: Three vacanciesoccurring December 31, 2001;urologists, gastroenterologists, andbiostatisticians.

6. General and Plastic Surgery DevicesPanel: Three vacancies immediately,three vacancies occurring August 31,2002; general surgeons, plastic surgeons,biomaterials experts, laser experts,wound healing experts or endoscopicsurgery experts.

7. General Hospital and Personal UseDevices Panel: Four vacanciesimmediately, three vacancies occurringDecember 31, 2001; internists,pediatricians, neonatologists,endocrinologists, gerontologists, nurses,biomedical engineers ormicrobiologists/infection controlpractitioners or experts.

8. Immunology Devices Panel: Onevacancy occurring February 28, 2002;persons with experience in medical,surgical, or clinical oncology, internalmedicine, clinical immunology, allergy,molecular diagnostics, or clinicallaboratory medicine.

9. Medical Devices Dispute ResolutionPanel: One vacancy immediately;



experts with broad, cross-cuttingscientific, clinical, analytical ormediation skills.

10. Microbiology Devices Panel: Twovacancies occurring February 28, 2002;infectious disease clinicians, e.g.,pulmonary disease specialists, sexuallytransmitted disease specialists, pediatricinfectious disease specialists,mycologists; clinical microbiologists;clinical microbiology laboratorydirectors, and clinical virologists withexpertise in clinical diagnosis and invitro diagnostic assays, e.g.,hepatologists; molecular biologists.

11. Neurological Devices Panel: Threevacancies occurring November 30, 2001;neurosurgeons (cerebrovascular andpediatric), neurologists (painmanagement and movement disorders),interventional neuroradiologists, orbiostatisticians.

12. Obstetrics and Gynecology DevicesPanel: Two vacancies occurring January31, 2002; experts in perinatology,embryology, reproductiveendocrinology, operative hysteroscopy,pelviscopy, electrosurgery, lasersurgery, assisted reproductivetechnologies, and contraception;biostatisticians and engineers withexperience in obstetrics/gynecologydevices; urogynecologists; experts inbreast care; and experts in gynecology inthe older patient.

13. Orthopaedic and RehabilitationDevices Panel: Five vacanciesimmediately; doctors of medicine orphilosophy with experience in tissueengineering, calcification orbiomaterials; orthopedic surgeonsexperienced with prosthetic ligamentdevices, joint implants, or spinalinstrumentation; physical therapistsexperienced in spinal cord injuries,neurophysiology, electrotherapy, andjoint biomechanics; rheumatologists; orbiomedical engineers.

14. Radiological Devices Panel: Onevacancy immediately, two vacanciesoccurring January 31, 2002; physiciansand scientists with expertise in nuclearmedicine, diagnostic or therapeuticradiology, radiation physics,mammography, thermography,transillumination, hyperthermia cancertherapy, bone densitometry, magneticresonance imaging, computedtomography, ultrasound imaging,statistical analysis, digital imaging andimage processing, or computer-aideddetection and diagnosis.

15. National Mammography QualityAssurance Advisory Committee: Fourvacancies occurring January 31, 2002;two shall include physicians,practitioners, and other healthprofessionals whose clinical practice,research specialization, or professional

expertise include a significant focus onmammography; and two shall includeconsumer representatives from amongnational breast cancer or consumerhealth organizations with expertise inmammography.

16. Device Good ManufacturingPractice Advisory Committee: Threevacancies occurring May 31, 2002; onegovernment representative, one industryrepresentative, and one general publicrepresentative.

17. Technical Electronic ProductRadiation Safety Standards Committee:Five vacancies occurring December 31,2001, two government representatives,one industry representative, and twogeneral public representatives.

Functions

Medical Devices Advisory Committee

The committee reviews and evaluatesdata on the safety and effectiveness ofmarketed and investigational devicesand makes recommendations for theirregulation. The panels engage in anumber of activities to fulfill thefunctions the Federal Food, Drug, andCosmetic Act (the act) envisions fordevice advisory panels. With theexception of the Medical DevicesDispute Resolution Panel, each panel,according to its specialty area, advisesthe Commissioner of Food and Drugs(the Commissioner) regardingrecommended classification orreclassification of devices into one ofthree regulatory categories; advises onany possible risks to health associatedwith the use of devices; advises onformulation of product developmentprotocols; reviews premarket approvalapplications for medical devices;reviews guidelines and guidancedocuments; recommends exemption ofcertain devices from the application ofportions of the act; advises on thenecessity to ban a device; and respondsto requests from the agency to reviewand make recommendations on specificissues or problems concerning the safetyand effectiveness of devices. With theexception of the Medical DevicesDispute Resolution Panel, each panel,according to its specialty area, may alsomake appropriate recommendations tothe Commissioner on issues relating tothe design of clinical studies regardingthe safety and effectiveness of marketedand investigational devices.

The Dental Products Panel alsofunctions at times as a dental drugpanel. The functions of the dental drugpanel are to evaluate and recommendwhether various prescription drugproducts should be changed to over-the-counter status and to evaluate data andmake recommendations concerning the

approval of new dental drug productsfor human use.

The Medical Devices DisputeResolution Panel provides advice to theCommissioner on complex or contestedscientific issues between the FDA andmedical device sponsors, applicants, ormanufacturers relating to specificproducts, marketing applications,regulatory decisions and actions byFDA, and agency guidance and policies.The panel makes recommendations onissues that are lacking resolution, arehighly complex in nature, or result fromchallenges to regular advisory panelproceedings or agency decisions oractions.

National Mammography QualityAssurance Advisory Committee

The functions of the committee are toadvise FDA on: (1) Developingappropriate quality standards andregulations for mammography facilities;(2) developing appropriate standardsand regulations for bodies accreditingmammography facilities under thisprogram; (3) developing regulationswith respect to sanctions; (4) developingprocedures for monitoring compliancewith standards; (5) establishing amechanism to investigate consumercomplaints; (6) reporting newdevelopments concerning breastimaging which should be considered inthe oversight of mammographyfacilities; (7) determining whether thereexists a shortage of mammographyfacilities in rural and healthprofessional shortage areas anddetermining the effects of personnel onaccess to the services of such facilitiesin such areas; (8) determining whetherthere will exist a sufficient number ofmedical physicists after October 1, 1999;and (9) determining the costs andbenefits of compliance with theserequirements.

Device Good Manufacturing PracticeAdvisory Committee

The functions of the committee are toreview proposed regulations forpromulgation regarding goodmanufacturing practices governing themethods used in, and the facilities andcontrols used for manufacture,packaging, storage, installation, andservicing of devices, and makerecommendations regarding thefeasibility and reasonableness of thoseproposed regulations. The committeealso reviews and makesrecommendations on proposedguidelines developed to assist themedical device industry in meeting thegood manufacturing practicerequirements, and provides advice withregard to any petition submitted by a



manufacturer for an exemption orvariance from good manufacturingpractice regulations.

Section 520 of the act (21 U.S.C.360(j)), as amended, provides that theDevice Good Manufacturing PracticeAdvisory Committee shall be composedof nine members as follows: (1) Three ofthe members shall be appointed frompersons who are officers or employeesof any Federal, State, or localgovernment; (2) two shall berepresentatives of interests of the devicemanufacturing industry; (3) two shall berepresentatives of the interests ofphysicians and other healthprofessionals; and (4) two shall berepresentatives of the interests of thegeneral public.

Technical Electronic Product RadiationSafety Standards Committee

The function of the committee is toprovide advice and consultation on thetechnical feasibility, reasonableness,and practicability of performancestandards for electronic products tocontrol the emission of radiation fromsuch products. The committee mayrecommend electronic product radiationsafety standards for consideration.

Section 534(f) of the act (21 U.S.C.360kk(f)), as amended by the SafeMedical Devices Act of 1990 providesthat the Technical Electronic ProductRadiation Safety Standards Committeeinclude five members fromgovernmental agencies, including Stateor Federal Governments, five membersfrom the affected industries, and fivemembers from the general public, ofwhich at least one shall be arepresentative of organized labor.

Qualifications

Panels of the Medical Devices AdvisoryCommittee

Persons nominated for membershipon the panels shall have adequatelydiversified experience appropriate tothe work of the panel in such fields asclinical and administrative medicine,engineering, biological and physicalsciences, statistics, and other relatedprofessions. The nature of specializedtraining and experience necessary toqualify the nominee as an expertsuitable for appointment may includeexperience in medical practice,teaching, and/or research relevant to thefield of activity of the panel. Theparticular needs at this time for eachpanel are shown above. The term ofoffice is up to 4 years, depending on theappointment date.

National Mammography QualityAssurance Advisory Committee

Persons nominated for membershipshould be physicians, practitioners, andother health professionals, whoseclinical practice, researchspecialization, or professional expertiseinclude a significant focus onmammography and individualsidentified with consumer interests. Priorexperience on Federal public advisorycommittees in the same or similarsubject areas will also be consideredrelevant professional expertise. Theparticular needs are shown above. Theterm of office is up to 4 years,depending on the appointment date.

Device Good Manufacturing PracticeAdvisory Committee

Persons nominated for membership asa government representative or healthprofessional should have knowledge ofor expertise in any one or more of thefollowing areas: Quality assuranceconcerning the design, manufacture,and use of medical devices. To beeligible for selection as a representativeof the general public or industry,nominees should possess appropriatequalifications to understand andcontribute to the committee’s work. Theparticular needs are shown above. Theterm of office is up to 4 years,depending on the appointment date.

Technical Electronic Product RadiationSafety Standards Committee

Persons nominated must betechnically qualified by training andexperience in one or more fields ofscience or engineering applicable toelectronic product radiation safety. Theparticular needs are shown above. Theterm of office is up to 4 years,depending on the appointment date.

Nomination Procedures

Any interested person may nominateone or more qualified persons formembership on one or more of theadvisory panels or advisory committees.Self-nominations are also accepted.Nominations shall include a completecurriculum vitae of each nominee,current business address and telephonenumber, and shall state that thenominee is aware of the nomination, iswilling to serve as a member, andappears to have no conflict of interestthat would preclude membership. FDAwill ask the potential candidates toprovide detailed information concerningsuch matters as financial holdings,employment, and research grants and/orcontracts to permit evaluation ofpossible sources of conflict of interest.

Consumer/General PublicRepresentatives

Any interested person may nominateone or more qualified persons as amember of a particular advisorycommittee or panel to representconsumer interests as identified in thisnotice. To be eligible for selection, theapplicant’s experience and/or educationwill be evaluated against Federal civilservice criteria for the position to whichthe person will be appointed.

Selection of members representingconsumer interests is conductedthrough procedures that include use ofa consortium of consumer organizationsthat has the responsibility forrecommending candidates for theagency’s selection. Candidates shouldpossess appropriate qualifications tounderstand and contribute to thecommittee’s work.

Nominations shall include a completecurriculum vita of each nominee andshall state that the nominee is aware ofthe nomination, is willing to serve as amember, and appears to have no conflictof interest that would precludemembership. FDA will ask the potentialcandidates to provide detailedinformation concerning such matters asfinancial holdings, employment, andresearch grants and/or contracts topermit evaluation of possible sources ofconflict of interest. The nominationshould state whether the nominee isinterested only in a particular advisorycommittee or in any advisorycommittee. The term of office is up to4 years, depending on the appointmentdate.

This notice is issued under theFederal Advisory Committee Act (5U.S.C. app. 2) and 21 CFR part 14relating to advisory committees.

Dated: July 16, 2001.Linda A. Suydam,Senior Associate Commissioner.[FR Doc. 01–18161 Filed 7–19–01; 8:45 am]BILLING CODE 4160–01–S


Health Resources and ServicesAdministration

Children’s Hospitals Graduate MedicalEducation (CHGME) Payment Program:Final Methodology for Determination ofFTE Resident Count, Treatment of NewChildren’s Teaching Hospitals, andCalculation of Indirect MedicalEducation Payment

AGENCY: Health Resources and ServicesAdministration, HHS.



ACTION: Final notice.

SUMMARY: This notice sets forth finalmethodology for determining full timeequivalent (FTE) resident count,treatment of new children’s teachinghospitals, and calculation of indirectmedical education (IME) payments forthe Children’s Hospitals GraduateMedical Education (CHGME) Paymentprogram, authorized by section 340E ofthe Public Health Service Act (42 U.S.C.256e), amended by Pub. L. 106–310, TheChildren’s Health Act, 2000. Incompliance with the PaperworkReduction Act of 1995, the Departmentobtained Office of Management andBudget (OMB) approval of the datacollections required and imposed on thepublic (OMB No. 0915–0247).

FOR FURTHER INFORMATION CONTACT:Ayah E. Johnson, Graduate MedicalEducation Branch, Division of Medicineand Dentistry, Bureau of HealthProfessions, Health Resources andServices Administration, Room 8A–08,Parklawn Building, 5600 Fishers Lane,Rockville, Maryland 20857; telephone(301) 443–1058 or e-mail [email protected].

SUPPLEMENTARY INFORMATION: TheCHGME program, as authorized bysection 340E of the Public HealthService (PHS) Act (the Act) (42 U.S.C.256e), provides funds to children’shospitals to address disparity in thelevel of Federal funding for children’shospitals that results from Medicarefunding for graduate medical education(GME). Pub. L. 106–310 amended theCHGME statute to continue the programuntil Federal Fiscal Year (FFY) 2005.

On March 1, 2001, the Secretarypublished a notice in the FederalRegister (66 FR 12940) establishing finalrules for eligibility, funding criteria,payment methodology and performancemeasures for the CHGME program. Thatnotice also sought public comments onproposals for (1) The criteria fordetermining full time equivalent (FTE)resident count; (2) the treatment of newchildren’s teaching hospitals withrespect to resident count; and (3) themethodology for IME payments. Duringthe comment period, the Departmentreceived comments from seventeeninterested parties, including hospitals,hospital and professional associations,Medicare consulting companies, andlaw firms.

The Secretary thanks the respondentsfor the quality and thoroughness of theircomments. As a result of thesecomments, the Department has maderevisions and clarifications in this finalnotice. The comments and Department’s

responses to the comments, and thefinal rules are set forth below.

General CommentsSeveral respondents recommended

that the CHGME program followMedicare’s rules as closely as possible:(1) Because these rules are well definedand are known to those children’shospitals that file Medicare cost reports(MCR); and (2) to conform to Congress’intent to provide funds to children’shospitals to address disparity in thelevel of Federal funding for children’shospitals that results from Medicarefunding for graduate medical education.The respondents indicated that theDepartment should make exceptions tocompliance with policy followingMedicare principles only in thoseinstances in which the uniquecharacteristics of children’s hospitalsrender the application of Medicareprinciples impossible or undesirable,and it should explain the specificrationale for each exception.

In the implementation of the CHGMEprogram, the Department hasincorporated applicable Medicare rulesand regulations. However, it isimportant to recognize that fundamentaldifferences exist between the Medicareand CHGME programs that make certainMedicare rules and regulationsinapplicable to the CHGME program.For instance:

(1) The CHGME program includeschildren’s hospitals that span thespectrum of pediatric patient care,including acute, rehabilitation,oncology, orthopedics, and long termcare;

(2) The CHGME program includesresident training that occurs in all areasof the hospital complex for both DMEand IME;

(3) The CHGME program is bound tothe FFY in which appropriated fundsmust be distributed without theopportunity to reconcile funding acrossFFYs;

(4) The Medicare GME payments areassociated with treatment of Medicarepatients;

(5) The Medicare patient populationis primarily non-pediatric; and

(6) The Medicare program moniescome from a trust fund.

Determining FTE Resident CountsBeginning in FFY 2001

With the exception of some revisionsfor clarification, the criteria fordetermining FTE resident countsbeginning in FFY 2001 are unchangedfrom those proposed in the MarchFederal Register notice. Beginning inFFY 2001, for hospitals, that reportresidents to Medicare, there will be an

order of priority for acceptance ofresident counts submitted to theCHGME program:

(1) For the most recent cost reportperiods ending on or before December31, 1996, a hospital must report thelatest settled FTE resident count or a‘‘preliminary’’ fiscal intermediary (FI)determined resident count. Allpreliminary FI determined counts mustbe determined according to HCFA andMedicare criteria. Hospitals may not usethe ‘‘preliminary’’ numbers that wereused for the FFY 2000 CHGME programunless those FTE resident counts havesince become finalized or are validatedaccording to HCFA and Medicarestandards.

(2) For settled cost reports in otheryears, the CHGME program will acceptthe latest settled cost report. If a settledcost report has been reopened, theCHGME program will accept the latestsettled count or, if available, the mostrecent ‘‘preliminary’’ FI determined FTEcount.

(3) For unsettled cost reports, theCHGME program will accept in order ofpriority:

(a) The most recent preliminary FIdetermined FTE resident count prior tothe application deadline; if notavailable, then

(b) The amended filed FTE residentcount; if not available then

(c) The as filed FTE resident count.For hospitals that do not report

residents to Medicare (i.e., file low or noutilization cost reports) but have beenoperating a residency training programand participated in the CHGME programin FFY 2000, the calculation of FTEresident counts remains unchangedfrom the FFY 2000 application. Unlikethe FFY 2000 applications, however,beginning in FFY 2001, the CHGMEprogram requires hospitals to report FTEresident counts based on the hospitalcost reporting period rather than on theFFY. In the June 19, 2000, FederalRegister notice the Departmentprovided examples of how thesehospitals could determine FTE residentcounts for the 1996 cap year and the 3-year rolling average. The CHGMEprogram will accept this methodologyfor the 1996, 1998 and 1999 costreporting periods.

If these hospitals wish to revise theirFTE resident counts for these costreporting periods, they must submit adetailed explanation of the revisionwith supporting documentation. Thesupporting documentation must be incompliance with HCFA/Medicarestandards used to determine FTEresident counts (e.g., rotationschedules).



Beginning with the cost report periodending in 2000, these hospitals will berequired to use the methodologydescribed in 42 CFR 413.86(f)(2) todetermine FTE resident counts; that is,to measure the amount of time that aresident works during the cost reportperiod based on the number of days. Inaddition, these hospitals will continueto be required to apply Medicarestandards for documenting the residentsto be counted and calculating their FTEtime for purposes of determining an FTEresident count.

Hospitals which did not reportresidents to Medicare and did notparticipate in the CHGME program inFFY 2000, although they were trainingresidents at that time, are required touse the methodology described in 42CFR 413.86(f)(2) to determine their FTEresident count for their cap year and 3-year rolling average. Like all hospitalswhich do not report residents toMedicare, they will be required to applyMedicare standards for documenting thecalculating of their FTE resident counts.

Some hospitals have filed acombination of full, low utilization, andno utilization cost reports. For thesehospitals, the Department requires thatthey file the actual FTE resident countsreported for those cost report periodswhere an E–3, Part IV worksheet hasbeen filed. For those cost report periodswhere a low or no utilization cost reportperiod was used, the hospitals shouldrecreate their FTE resident count usingthe methodology referenced above.

Several respondents recommendedthat resident counts used fordistribution of funds after FFY 2002 forall hospitals be based on Medicare costreporting data. The respondentsindicated that such a change shouldinclude sufficient time to resolve anytechnical issues that arise for hospitalsthat did not report residents in 1996 fordetermination of their resident cap.They noted that, while in the short term,it is necessary and appropriate toaccommodate those hospitals that didnot report residents to Medicare, it isimportant over the longer term forconsistency and equity in the residentcounting methodology that all eligiblehospitals file resident counts on theirMedicare cost reports.

The Department does not have theoption of requiring resident counts usedfor distribution of funds to be based onMedicare cost reporting data sincesection 340E(e)(1) of the CHGME statuterequires that:* * * interim payments to each individualhospital shall be based on the number ofresidents reported in the hospital’s mostrecently filed Medicare cost report prior tothe application date for the Federal fiscal

year for which the interim payment amountsare established. In the case of a hospital thatdoes not report residents on a Medicare costreport, such interim payments shall be basedon the number of residents trained during thehospital’s most recently completed Medicarecost report filing period.

Several respondents requested thatHRSA clarify or define a ‘‘preliminaryFI determined resident count’’ andindicated that some FIs may not providea ‘‘preliminary FI determined residentcount’’ prior to the formal resettlementof the revised cost report.

To clarify, a ‘‘preliminary FIdetermined resident count’’ with respectto a settled cost report that has beenreopened is any resident count that theFI has determined during the normalcourse of cost report review (e.g., audit)prior to formal resettlement of the costreport. For example, if the FI and thehospital have negotiated the FTEresident count but not yet completed thepaperwork to officially settle thereopened cost report, the hospital cansubmit the negotiated FTE residentcount as a statement written by the FIdescribing the negotiated FTE residentcount as ‘‘preliminary’’ to thecompletion of the resettlementpaperwork. The CHGME program willnot accept any FTE resident counts fromamended reopened cost reports unlessthe FI submits it to the CHGME programas a valid ‘‘preliminary’’ FTE residentcount.

For cost reports that have never beensettled, a ‘‘preliminary’’ FTE residentcount issued by an FI would be anyresident count the FI has generatedduring the normal course of cost reportreview (e.g., desk review) prior tosettlement of the cost report.

In some cases during the FFY 2000CHGME application process, FIs issued‘‘preliminary’’ numbers for FTE residentcounts for some of the children’shospitals. Hospitals may not use these‘‘preliminary’’ numbers for the FFY2001 or future CHGME programapplication unless those FTE residentcounts have since become finalized orare validated according to HCFA andMedicare standards through the normalcourse of business.

Regarding the use of Medicarestandards in issuing ‘‘preliminary’’ FTEresident counts, one respondentindicated it was unaware of Medicarestandards and that individualintermediary standards are notpublished.

HCFA provides numerous manualsfor FIs and hospitals which outline thestandards and definitions used inpreparation and review of Medicare costreports. These manuals are availableelectronically on the Internet at http://

www.hcfa.gov and for purchase throughthe National Technical InformationService (NTIS) Clearinghouse. Ifhospitals have questions or concernsabout their FI’s interpretation/application of these standards, theyshould communicate with their FI orHCFA Regional Offices.

Several respondents raised the issueof applying a written agreement forpurposes of training residents between ahospital and a non-hospital siteretrospectively in order to count FTEresidents rotating through those non-hospital sites.

As stated in the March 1, 2001Federal Register notice, all residenttraining in non-hospital sites may beincluded in the FTE resident count aslong as the hospital and non-hospitalsite are in compliance with 42 CFR413.86(f)(3) and (4).

New Children’s Teaching HospitalsThe Department is making final the

definition of ‘‘new children’s teachinghospitals’’ as proposed in the March 1Federal Register notice. For purpose ofthe CHGME program, a ‘‘new children’steaching hospital’’ is a hospital which:

1. Has its own Medicare providernumber as a children’s hospitaldescribed in Sec. 1886(d)(1)(B)(iii) ofthe Social Security Act but did not trainresidents until it began trainingresidents from an already existingprogram, less than three cost reportperiods prior to the FFY in whichCHGME payments are being made; and

2. Has historically participated in aresidency training program (e.g., apediatric department within a largerteaching hospital) and subsequentlyreceives its own Medicare providernumber as a children’s hospitaldescribed in Sec. 1886(d)(1)(B)(iii) ofthe Social Security Act.

‘‘New children’s teaching hospitals’’are distinct from those teachinghospitals that are participating in a newmedical residency training programdefined under 42 CFR 413.86(g)(12).Medicare regulations at 42 CFR413.86(g)(6)(i) and (7) set forth criteriafor applying the caps and rollingaverages in these teaching hospitalswith new medical residency trainingprograms.

Establishing the Cap for New Children’sTeaching Hospitals

Unlike children’s hospitals that canreceive adjustments to their caps fornew residency training programsaccording to 42 CFR 413.86(g)(6), ‘‘newchildren’s teaching hospitals’’ aretreated like all other hospitals that havetrained residents for 3 years after thefirst program began training residents,



as explained in 42 CFR413.86(g)(6)(i)(C). According to 42 CFR413.86(g)(4), the hospital’s FTE residentcap is based on the unweighted FTEresident count from the most recentlycompleted cost report period ending onor before December 31, 1996. Since‘‘new children’s teaching hospitals’’would not have trained residents duringthe most recent Medicare cost reportingperiod ending on or before December31, 1996, they would have a cap of zero.

To provide an adjustment to the capof zero, the CHGME program will allowthese hospitals to add FTE residents totheir cap based on the following-described Medicare regulations:

1. The formation of a new residencyprogram within the first 3 years after thefirst program begins training residentsas described in 42 CFR 413.86(g)(6); or

2. The execution of an affiliationagreement for an aggregate cap, as setforth in 42 CFR 413.86(g)(4) and 63 FR26338, published in the FederalRegister on May 12, 1998, with thefollowing exceptions:

a. A ‘‘new children’s teachinghospital’’ participating in the CHGMEprogram for the first year must establishan effective date of the agreement for thepurposes of the CHGME program. Forthe first year, unless otherwisespecified, the Department will use asthe effective date of the affiliationagreement for an aggregate cap the datethat the hospital becomes eligible for theCHGME program. This effective datewill only apply to the CHGME program.A hospital must also have an effectivedate of July 1 for the Medicare program.Subsequent to the first year of theaffiliation agreement, the effective datemust comply with the above citedFederal Register final rule whichspecifies an effective date of July 1 forall affiliation agreements. The CHGMEprogram allows this exception becausehospitals must meet eligibility criteriaand have their caps determined prior tothe CHGME application deadline. If theCHGME program application deadlineoccurs before July 1, some hospitalswould have a cap of zero and thus beexcluded from receiving funds. Bydeviating from the prescribed Medicarefinal rule, the CHGME program will notplace some hospitals in this position.

b. Unlike the Medicare program, forthe first year, the CHGME program willnot prorate the cap based on theeffective date of the cap. Instead, the fullvalue of the cap as determined by theaffiliation agreement will be used.

Establishing FTE Resident Counts forNew Children’s Teaching Hospitals

In general, the FTE resident countfrom each hospital reflects the residents

trained during the Medicare cost reportperiod, limited by the cap (theunweighted allopathic and osteopathicFTE resident count from the most recentcost report period ending on or beforeDecember 31, 1996). Payments to eachhospital are based on the average of theFTE resident count for the most recentMedicare cost report and the prior twocost reports (3-year rolling average),subject to funds available for DME andIME, respectively.

For establishing FTE resident counts,‘‘new children’s teaching hospitals’’ aredivided into two categories: (1) Thosetraining residents from an existingresidency program that received andwill continue to receive funds under theCHGME program; and (2) those trainingresidents from an existing residencyprogram that has never received fundsunder the CHGME program (i.e.,residents that have not previously beenclaimed for payment under the CHGMEprogram).

‘‘New Children’s Teaching Hospitals’’Training Residents Previously ClaimedFor Payment Under the CHGMEProgram: FTE Resident Count

The Department requires ‘‘newchildren’s teaching hospitals’’ trainingresidents who were originally trained ina program that received and willcontinue to receive funds under theCHGME program to wait until they havecompleted a medicare cost report periodbefore applying for payments from theCHGME program. The CHGME programwould have provided payment to thehospital originally training theresidents, prior to the completion of aMedicare cost report period by the newchildren’s teaching hospital, and wouldnot want to pay two hospitals fortraining the same residents.

These ‘‘new children’s teachinghospitals’’ must apply the 3-year rollingaverage according to Medicareregulations at 42 CFR 413.86(g)(5). Overa 3-year period, the ‘‘new children’steaching hospital’’ will graduallyincrease its number of FTE residentsthat can be claimed on the CHGMEapplication as the children’s hospitalthat originally trained those FTEresidents gradually decreases itsresident count.

‘‘New Children’s Teaching Hospitals’’Training Residents Not PreviouslyClaimed for Payment Under theCHGME Program

Since payments under the CHGMEprogram are based on FTE residentcounts from a completed cost reportfiling period, ‘‘new children’s teachinghospitals’’ training residents neverpreviously claimed for CHGME payment

that have not completed a cost reportfiling period at the time of the CHGMEprogram application would not have anFTE resident count for a full Medicarecost reporting period to report to theprogram. These ‘‘new children’steaching hospitals’’ must submit apartial-year FTE resident count in theirinitial applications to the CHGMEprogram according to the followingmethodology:

a. Divide the number of FTE residentstrained during the period from the daythe children’s hospital becomes eligiblefor the CHGME program to the CHGMEapplication deadline by the number ofdays during this period to produce theaverage number of FTEs per day.

b. Multiply the average number ofFTEs per day by the number of days thehospital will train residents during theFFY in which payments are being made.

The concept of converting a partialperiod into a full cost report period isfound in the Medicare regulations at 42CFR 413.86(g)(4) and (e)(5)(ii). Since theCHGME program is paying hospitals fortraining residents during the FFY forwhich payments are being made, theDepartment will convert a partialtraining period to reflect the amount oftime the hospital will train residentsduring the FFY for which payments arebeing made. Although this methodologydelineates the method by which partial-year residents are counted, it isimportant to note that all counts aresubjected to the cap set by the affiliationagreement.

After the initial application year,payments to ‘‘new children’s teachinghospitals’’ training residents neverpreviously claimed for CHGME paymentwill be based on the actual FTE residentcount from the most recently completedMedicare cost report period. Once thesehospitals have completed threeMedicare cost report periods, the 3-yearrolling average will apply.

Under Medicare, hospitals trainingresidents that are not in a new residencyprogram, as defined in 42 CFR413.86(g)(12), are subjected to the 3-yearrolling average. For example, underMedicare, in the first year thesehospitals would calculate the 3-yearrolling average as follows: [FTE residentcount for current year + 0 (FTE residentsfor prior cost report period) + 0 (FTEresidents per penultimate cost reportperiod)] divided by three (3).

One purpose of this Medicare policyis to avoid paying two hospitals for thesame residents. Over the course of 3years the hospital which was originallytraining the residents ‘‘rolls down’’ itsFTE resident count and the hospitalwhich is assuming training ‘‘rolls up’’its FTE resident count.



The rationale adopted by the CHGMEprogram in deviating from this Medicarepolicy is that, for the ‘‘new children’steaching hospitals’’ training residentsthat were never previously claimed forCHGME payment, the issue of doublepayment for residents is not relevantsince the program is not currentlypaying for them. Therefore, to treat allhospitals participating in the CHGMEprogram equitably, the Department willnot impose a 3-year rolling average onthe FTE residents counts until these‘‘new children’s teaching hospitals’’have completed three cost reportingperiods.

Determining Indirect MedicalEducation (IME) Payments to Hospitals

The March Federal Register noticeinvited comments on the proposedmethodology for calculating IMEpayments organized by: (1) The purposeand use of payments under the program,(2) case mix, (3) number of FTEresidents, (4) teaching intensity factor,(5) patient volume, (6) outpatientservices, and (7) determination ofpayments. A discussion of thecomments received and theDepartment’s responses follows.

Purpose and Use of IME PaymentsThe CHGME statute requires the

Secretary to make payments tochildren’s hospitals for IME associatedwith operating approved graduatemedical residency training programs foreach of fiscal years 2000 through 2005.Section 340E(b)(1)(B) describes IMEpayments as covering ‘‘expensesassociated with the treatment of moreseverely ill patients and the additionalcosts relating to teaching residents insuch programs.’’ Section 340E(d)(2) ofthe Act requires the Secretary todetermine IME payments byconsidering:

1. Variations in case mix amongchildren’s hospitals; and

2. The hospitals’ number of FTEresidents in approved trainingprograms.

The Department utilized the broadestinterpretation of this legislative mandateto determine that IME paymentsdetermined for purposes of the CHGMEprogram should reflect the indirect costsof GME as defined by statute throughoutthe entire hospital complex, similar tothe allowances for the calculation ofDME payments unlike Medicare whichlimits IME payment adjustments tocertain areas of the hospital.

Determination of Case MixThe determination of case mix is

unchanged from that set forth in theMarch notice. Beginning in FFY 2001,

all applicant hospitals must submit acase mix index (CMI), based on thedischarges from the most recentlycompleted cost reporting period, usingHCFA–DRG Version 17 with theappropriate HCFA Version 17 weightsreported to the ten-thousandth decimalplace. All DRGs must be included in thecalculation of this CMI. In subsequentyears, the version of the HCFA–DRG, tobe used by hospitals, will be updatedannually. To determine which versionof the HCFA–DRG grouper and weightshospitals will use in completing anapplication to the CHGME program, thefollowing methodology will be used:

1. Based on the application deadline,the year end of the most recentlycompleted cost reporting period will bedetermined for the majority of applicanthospitals.

2. The version of the HCFA–DRGgrouper and weights used to calculatethe CMI for the FFY corresponding tothe year end of the most recentlycompleted cost reporting period for themajority of applicant hospitals will beused to calculate the CMI.

If a children’s hospital eligible toparticipate in the CHGME program hasnot completed a Medicare cost reportingperiod prior to submission of anapplication to the CHGME program, itwould base its CMI on discharges fromthe day it became eligible fo the CHGMEprogram until the CHGME applicationdeadline.

Several respondents requested thatDRG 391 be excluded from thecalculation of CMI beginning in FFY2000. These respondents argued that, asonly a few hospitals participating in theCHGME program would actually usethis DRG code, related to treatment ofnormal or healthy newborns, theexclusion of this DRG would assist increating equity among the hospitals inthe program.

The Department will include all DRGsin the calculation of its CMI because theactivity of all areas of the hospitalcomplex and the severity of illnessamong the inpatient population that thehospital serves need to be reflected inthe hospital’s CMI in order to treat allhospitals equitably. The IME payment ismeant to reflect the resources used totreat the more severely ill patients inchildren’s hospitals.

Several respondents suggestedalterntive methodologies for calculatingCMI, including the Resource-BasedRelative Value Scale (RBRVS) or the AllPatient Refined (APR)–DRGs and APR–DRG relative weights. In addition,several respondents supported theDepartment’s exploration of developinga CMI methodology that is more

reflective of the resource intensity ofpediatric care.

The Department continues torecognize that the current CMI may notbe reflective of the relative resourceutilization in children’s hospitals,particularly those providing specializedservices, such as rehabilitation and willcontinue to investigate the feasibility ofdeveloping a CMI that is more reflectiveof the relative resource utilizationexperienced by children’s hospitals. TheDepartment anticipates that this effortwill be multi-year. Any analyses andresulting recommendations would bepublished in subsequent FederalRegister publications.

Determining the Number of FTEResidents for IME Payments

The criteria for determining FTEresidents for IME payments is differentfrom those proposed. In the March 1,2001 Federal Register notice, theSecretary proposed to determine FTEresident counts for IME paymentcalculation using the ‘‘caps and rollingaverages’’ consistent with Medicareregulation 42 CFR 412.105(f) with theexception of 42 CFR 412.105(f)(1)(ii)(A).The Department’s final criteria fordetermining the FTE resident count forIME payments include all areas of thehospital complex as specified in 42 CFR413.86(f)(1), the regulations used todetermine FTE resident counts for DME.Time spent by residents on requiredresearch is also included if it is part ofthe resiency program and the residentcarries out the research in either: (1) Thechildren’s hospital (clinical or benchresearch); or (2) in a nonhospital sitewhere the research involves directpatient care and the salaries of both theresident and supervising faculty arepaid by the children’s hospital. Sincethe FTE resident count used to calculateboth DME and IME payments willreflect residents rotating through allareas of the hospital complex, theunweighted FTE resident count is thesame for the DME and IME (MCRworksheet E–3, Part IV, line 3.05).

The criteria used by the Departmentfor hospitals reporting FTE residentcounts will be the same for IME as theyare for DME (see description in previoussection). ‘‘New children’s teachinghospitals’’ that have not completed acost report period would use a partial-year FTE resident count methodologysimilar to the methodology used todetermine FTE resident counts for DMEpayments (see previous section).

The calculation of FTE residentcounts remains unchanged from theFFY 2000 application for hospitals thatdo not report residents to Medicare,have been operating a residency training



program and participated in the CHGMEprogram in FFY 2000. Unlike the FFY2000 applications, however, beginningin FFY 2001, the CHGME programrequires hospitals to report FTE residentcounts based on hospital cost reportingperiod rather than on FFY. In the June19, 2000 Federal Register notice theDepartment provided examples of howthese hospitals could determine FTEresident counts for the 1996 cap yearand the 3-year rolling average. TheCHGME program will accept thismethodology for the 1996, 1998 and1999 cost reporting periods.

If these hospitals wish to revise theirFTE resident counts for these costreporting periods, they must submit adetailed explanation of the revisionwith supporting documentation that isin compliance with HCFA/Medicarestandards used to determine FTEresident counts (e.g., rotationschedules).

Beginning with the cost report periodending in 2000, these hospitals will berequired to use the methodologydescribed in 42 CFR 413.86(f)(2),without application of the weightingfactors described in 42 CFR 413.86(g)(1),(2), and (3), to determine totalunweighted FTE resident counts.Medicare measures the amount of timebased on the number of days during thecost reporting period that a residentworks. In addition these hospitals willbe required to apply Medicare standardsfor documenting the counting ofresidents and calculation of their FTEtime for purposes of determining an FTEresident count.

Hospitals which did not reportresidents to Medicare and did notparticipate in the CHGME program inFFY 2000 although they were trainingresidents at that time are required to usethe methodology described in 42 CFR413.86(f)(2), without application of theweighting factors described in 42 CFR413.86(g)(1), (2), and (3), to determinetheir FTE resident count for their capand 3-year rolling average. Like allhospitals not reporting residents toMedicare, they will be required to applyMedicare standards for documenting thecalculating of their FTE resident counts.

Some hospitals file a combination offull, low utilization, and no utilizationcost reports. For these hospitals, theDepartment requires that they file theactual FTE resident counts reported forthose cost report periods where an E–3,Part IV worksheet has been filed. Forthose cost report periods where a low orno utilization cost report period wasused, the hospitals should recreate theirFTE resident count using themethodology described above.

Caps and Rolling Average

Beginning with FY 2001, theSecretary will apply the ‘‘caps androlling averages’’, consistent with theMedicare regulatory section 42 CFR412.105(f), with the exception of 42 CFR412.105(f)(1)(ii). In place of thissubsection, the Department will use thecriteria of 42 CFR 413.86(f)(1), whichdefine FTE counts for DME.

The Department received a variety ofcomments on application of the cap androlling averages to calculating IMEpayments. Several respondentsrecommended that the Departmentpostpone the application of the cap androlling averages to the FTE residentcount for calculating IME paymentsuntil after the FFY 2002 applicationdeadline so hospitals which reportedresidents to Medicare for the cap year(most recently completed cost reportingperiod ending on or before December31, 1996) would have adequate time toresolve any outstanding issues withtheir FIs related to this cost reportingperiod. Other respondents suggestedthat the Department not apply the capsand rolling average to the IME at all, asthe CHGME statute does not require it.

The Department will apply the capand rolling average to the calculation ofIME payments beginning with FFY 2001in order to comply as closely as possiblewith Medicare rules and regulations.The Secretary maintains that hospitalswhich report residents on Medicare costreports have been aware of an FTE capas early as their 1998-cost report andassumes that these hospitals arereporting an accurate FTE cap number.

In addition to the above comments,two respondents argued that if theDepartment were to implement the capand rolling averages on the FTE residentcount used in the IME payments, thenthe cap should be based on theunweighted FTE resident count from themost recently completed cost reportingperiod ending on or before December31, 2000, to correspond with the initialyear of the CHGME program, FFY 2000.The basis for their argument was thatpreviously, children’s hospitals did notreceive IME payments and that, in somecases, the hospitals may have addedresidency programs after the cap yearthat could not be counted toward thecap on residents. In addition, there wasa misunderstanding that hospitals thatdid not report residents on Medicarecost reports could base their unweightedFTE resident cap on a year other thanthe most recently completed costreporting period ending on or beforeDecember 31, 1996.

To clarify the policy regarding theyear upon which the unweighted FTE

resident count is based, all hospitalsmust use the most recently completedcost report period ending on or beforeDecember 31, 1996, to determine theunweighted FTE resident count thatwould be used as the cap for calculatingof IME payments. This standarddefinition applies to all hospitalsparticipating in the CHGME programregardless of whether or not they reportresidents on their Medicare cost reports.If a hospital certifies in its applicationthat it has based its cap on the mostrecent cost reporting period ending onor before December 31, 1996, andsubsequent to a CHGME programreview/audit, it is discovered that amore recent cost reporting period wasused to determine the cap, that hospitalwould be subject to prosecution by theFederal Government as it would havecommitted fraud.

Teaching Intensity FactorIn the March notice, the Department

invited comments on:1. The proposed continuation of the

use of the Medicare residents-to-bedratio (IRB)-based teaching intensityfactor in the calculation of IMEpayments. The CHGME program woulduse the most current PPS IRB in itscalculation of IME payments;

2. Application of a cap on the IRBratio, similar to the cap applied by theMedicare program, 42 CFR412.105(a)(1), whereby the ratio may notexceed the ratio for the hospital’s mostrecent prior cost reporting period.Application of this cap will not beinitiated until FFY 2002 due to theproposed change in the definition of bedcount;

3. Suggestions on alternative teachingintensity factors, such as the Medicareresident-to-average daily census(RADC)-based teaching intensity factor(2.8 percent per 0.1 percent increase inRADC ratio) or any other analyticallyjustified teaching intensity factor; and

4. The proposed definition of ‘‘bedcount’’ to be used in calculating theMedicare IRB teaching intensity factor—the sum of all available beds per day inthe most recently completed cost reportfiling period, including beds andbassinets in the healthy newbornnursery, divided by the number of daysin that period. If a children’s hospitaleligible to participate in the CHGMEprogram has not completed a Medicarecost report period prior to submission ofan application to CHGME program, itwould base its ‘‘bed count’’ on the sumof all available beds per day, includingbeds and bassinets in the healthynewborn nursery, in the period from theday it became eligible for the CHGMEprogram until the CHGME application



deadline, divided by the number of daysin that period.

Teaching Intensity FactorBeginning in FFY 2001, the

Department will use the IRB ratio todetermine IME payments. TheDepartment will use the same teachingintensity factor that is used by theMedicare Inpatient PPS in calculatingits operating IME adjustment for theFFY in which payments are being made.

One respondent encouraged the use ofthe resident-to-average daily census(RADC) ratio in factoring in teachingintensity, because the RADC ratiomeasures actual utilization that occursin the inpatient unit and thus providesa more realistic measure of intensity.Three respondents supported using theMedicare methodology of computing thenumber of residents per available bed,as consistency with Medicare isdesirable without a compelling reasonto depart from the Medicare formula.

The Department intends to continueto assess various teaching intensityfactors and formulas designed to capturethe IME costs associated with caring formore severely ill patients in a children’shospital.

A Cap on the IRB RatioTo comply as closely as possible with

Medicare rules and regulations,beginning in FFY 2002, the Departmentwill apply a cap on the IRB ratio, similarto the cap applied by the Medicareprogram pursuant to regulations at 42CFR 412.105(a)(1), whereby the ratiomay not exceed the ratio for thehospital’s most recent prior costreporting period. For those hospitalswhose IRB ratio changes, there will bea one-year delay in the implementationof the revised IRB.

Beds To Be Included in Calculation ofBed Count

Beginning in FFY 2001, a bed isdefined, for the purposes of the CHGMEprogram, as an adult or pediatric bed,including beds or bassinets assigned tohealthy newborns, available for lodginginpatients, including beds in intensivecare units, coronary care units, neonatalintensive care units, short stay units,and other special care inpatient hospitalunits. Beds in the following locationsare excluded from the definition: Laborrooms, post-anesthesia or post-operativerecovery rooms, outpatient areas,emergency rooms, ancillarydepartments, nurses’ and other staffresidences, and other such areas as areregularly maintained and utilized forpurposes other than inpatient lodging.

Beginning in FFY 2001, children’shospitals will calculate bed count to be

used in calculation of the teachingintensity factor used to determine IMEpayments using the followingmethodology: The sum of all availableinpatient beds per day within thehospital complex in the most recentlycompleted cost report filing perioddivided by the number of days in thatperiod. If a children’s hospital, eligibleto participate in the CHGME program,has not completed a Medicare costreporting period prior to submission ofan application to the CHGME program,it calculates its ‘‘bed count’’ using aprorated number. The prorated numberis based on the sum of all availableinpatient beds per day within thehospital complex in the period from theday it became eligible for the CHGMEprogram until the CHGME applicationdeadline, divided by the number of daysduring that period.

To be considered an available bed, abed must be permanently maintainedfor lodging inpatients. It must beavailable for use and housed in patientrooms or wards (i.e., not in corridors ortemporary beds). Thus, beds in acompletely or partially closed wing ofthe facility are considered available onlyif the hospital put the beds into usewhen they are needed. The term‘‘available beds’’ as used for the purposeof counting beds is not intended tocapture the day-to-day fluctuations inpatient rooms and wards being used.Rather, the count is intended to capturechanges in the size of a facility as bedsare added to or taken out of service.

Several respondents recommendedthat the count of available beds used inthe intensity factor exclude beds/bassinets used in the ‘‘well-baby’’nursery as this would be consistent withthe Medicare policy. In addition, otherrespondents indicated that theexclusion or inclusion of short stay orobservation beds should not be eachindividual hospital’s determination—itshould be program-wide policyconsistent with Medicare policy.

The Medicare definition andregulations on counting beds areinapplicable to the CHGME programdue to the fundamental differencesbetween the two programs. Therefore,the Department has defined ‘‘bed’’ tobest carry out the purpose of theCHGME program.

Although, traditionally, Medicare hasexcluded beds and bassinets used in the‘‘well-baby’’ nursery, it is theunderstanding of the CHGME programthat this is primarily due to the fact thatbeds and discharges from the ‘‘well-baby’’ nursery have not been factoredinto the calculation of Medicarepayments because there is no Medicareutilization attributable to this part of the

hospital. As all areas of the hospitalcomplex are included in thedetermination of IME payments for theCHGME program, the Department feelsthat this includes all relevant availableinpatient beds that are utilized withinthe hospital as defined above.

In addition, if the Department were tofollow Medicare policy, as stated inMedicare program manual HCFA Pub.15–1 S. 2405.3.G, on the definition ofbeds to be included in the bed count,beds in hospital-based skilled nursingfacilities or in any inpatient area(s) ofthe facility not certified as an acute carehospital (e.g., long term care beds) orbeds in excluded units (e.g.,rehabilitation, psychiatric) would needto be excluded from the definition ofbeds used by the CHGME program inaddition to the exclusion of beds/bassinets in the ‘‘well-baby’’ nursery.Because the hospitals participating inthe CHGME program are not limited toacute care hospitals and the Medicaredefinition of bed count refers only toacute care beds, the Department believesthat the inclusion of all of these bedswould be an equitable treatment of allhospitals participating in the CHGMEprogram.

The Department has followed theMedicare policy as closely as possible(see definition above) regarding theinclusion or exclusion of short stay orobservation beds. Hospitalsparticipating in the CHGME programmust certify the accuracy of thenumbers reported on their applications.Hospitals reporting bed counts thatinclude other than inpatient beds aresubject to prosecution for fraud by theFederal Government.

Patient VolumeAs set forth in the March notice, the

Department will use inpatientdischarges for the hospital’s mostrecently completed Medicare cost reportfiling period as the measure of patientvolume for IME payments. The hospitalshould include all inpatient dischargesfrom all parts of the hospital complex.

If a children’s hospital eligible toparticipate in the CHGME program hasnot completed a Medicare cost reportperiod prior to submission of anapplication to the CHGME program, itspatient volume will be calculated by thefollowing methodology:

a. Divide the number of inpatientdischarges from the date the hospitalbecame eligible to the CHGMEapplication deadline by the number ofdays during this period to produce theaverage number of discharges per day.

b. Multiply the average number ofdischarges per day by the number ofdays the hospital will provide inpatient



care as a hospital eligible to participatein the CHGME program during the FFYin which payments are being made.

One respondent comment thataccounting for discharges in the IMEpayment formula is unnecessary, sinceit is not a factor for Medicare, and thatvolume would be reflected by thenumber of residents in the interns andresidents to bed (IRB) ratio.

The Department disagrees with thiscomment. Since the Medicare IMEadjustment is an increase in the PPSpayment based on a single discharge,the number of discharges is a criticalfactor in determining how much IMEadjustment a hospital receives fromHCFA upon settlement of the cost reportby Medicare. For the CHGME program,volume, as determined by the number ofdischarges, is one of the measures of

resource utilization in the children’shospitals.

The FTE resident count in the IRBratio reflects teaching intensity, notpatient volume. The Departmentassumes that the respondent believesthat a hospital with more residentswould see a larger volume of inpatients;however, since residents rotatingthrough the outpatient parts of thehospital are included in the FTEresident count, a hospital could havefew discharges and a large number ofresidents.

Outpatient ServicesSeveral respondents were in support

of the Department’s proposeddevelopment of a factor to indicate theresources associated with training inoutpatient settings. They suggested thatthis factor include the development of a

case mix index that is more reflective ofthe relative resource utilizationexperienced by children’s hospitals inboth an inpatient and outpatient setting.Other respondents were not in favor ofthe Department pursuing this avenue ofinvestigation and encouraged theDepartment to rely on the work beingdone by HCFA in this area.

Currently HCFA does not have an IMEadjustment factor for the outpatient PPS;however, it is collecting data todetermine if there is a need for such anadjustment. The CHGME program willconsider HCFA’s research in addition topursuing the issue independently.

Determination of IME Payments

Beginning in FFY 2001, theDepartment will use the followingformula for calculating IME payments:

IME PayNoD

NoDi

i

i

= ∗∗ ∗ ∗ +( )∗

∗ ∗ ∗ +( )∗=∑

ZCMI WI IME

CMI WI IMEime

i i

i ii

m

. .

. .

711 289

711 2891

The following variables will be used in theformula to determine IME payments:NoD = number of discharges for hospitalCMI = average case mix index for hospitalWI = area wage index for hospitalIME = IME adjustment/teaching intensity

factor for hospital. Currently, the teachingintensity factor is: 1.6((1+residentsi-to-bedsi ratio).405

¥1)Zime = total dollars available for CHGME

program IME paymentsIME Pay = total IME payments to hospitali = individual hospitalm = total number of hospitals participating

in the CHGME programresidents = average number of unweighted

FTE residents in the most recentlycompleted cost reporting period and theprior two cost reporting periods withapplication of the cap.

beds = sum of all available beds, includingbeds and bassinets in the healthy newbornnursery, in the most recently completedcost report filing period, divided by thenumber of days in that period.This formula differs from that

published in the March notice in that itomits the adjustment factor for hospitalswith average lengths of stay greater than30 days.

Hospitals With Average Length of StayGreater Than 30 Days

In the March notice, the Departmentproposed to apply an adjustment factorin the calculation of IME payments forchildren’s hospitals with averagelengths of stay greater than or equal to30 days. These hospitals provide avariety of services, includingrehabilitative services, that requires

their patients to remain as inpatients fora prolonged period of time. TheDepartment found that the FFY 2000formula for determining CHGME IMEpayments may have disadvantaged thesehospitals.

Since the length of stay is a majorfactor in determining the relativecostliness of an inpatient stay, theDepartment proposed an adjustmentfactor based on the average length ofstay (ALOS) to more adequately reflectthe relative costliness of patients treatedby the children’s hospitals withsignificantly long lengths of stay. Forhospitals with ALOS greater than orequal to 30 days, the adjustment factorproposed was the ALOS for theindividual hospital divided by theaverage ALOS for all hospitals withALOS less than 30 days.

Several respondents supported theprinciple of adjusting the IME paymentsfor those children’s hospitals withaverage lengths of stay greater than orequal to 30 days as these hospitals aredemonstrably different from all otherchildren’s hospitals. They noted that itis important that hospitals providing thetypes of services that require prolongedinpatient lengths of stay (e.g.,rehabilitation) not be penalized forproviding such services, as length ofstay is a major factor in the relativecostliness of an inpatient stay. However,the respondents indicated that theaggregate impact of an adjustmentwould be minimal, since it would

involve only a very few small hospitals,and among them, they collectively trainonly a very few residents. Theserespondents recommended that HRSAmake available the analysis underlyingthis particular adjustment and seekfurther comment before making theadjustment final and implementing it.

The Department will postpone theimplementation of an adjustment factorbased on ALOS to the IME paymentformula until it conducts additionalanalyses. These analyses andsubsequent proposed recommendationsrelated to the IME payment formula willbe published in a future FederalRegister notice.

Economic and Regulatory Impact

Executive Order 12866 directsagencies to assess all costs and benefitsof available regulatory alternatives and,when rulemaking is necessary, to selectregulatory approaches that provide thegreatest net benefits (including potentialeconomic, environmental, public health,safety distributive and equity effects). Inaddition, under the RegulatoryFlexibility Act (RFA of 1980), if a rulehas a significant economic effect on asubstantial number of small entities, theSecretary must specifically consider theeconomic effect of a rule on smallentities and analyze regulatory optionsthat could lessen the impact of the rule.

Executive Order 12866 requires thatall regulations reflect consideration ofalternatives of costs, of benefits, of



incentives, of equity, and of availableinformation. Regulations must meetcertain standards, such as avoiding anunnecessary burden. Regulations whichare ‘‘significant’’ because of cost,adverse effects on the economy,inconsistency with other agency actions,effects on the budget, or novel legal orpolicy issues, require special analysis.

The Department has determined thatthe only burden this action will imposeon children’s hospitals is the resourcesrequired to submit an application to theCHGME program. Therefore, inaccordance with the RFA and the SmallBusiness Regulatory Enforcement Act of1996, which amended the RFA, theSecretary certifies that this action willhave a significant impact on asubstantial number of small entities inthat this action will provide significantfunding to eligible children’s hospitals.However, since this action will notimpose a significant burden on asubstantial number of small entities, wehave not examined any alternatives forreducing the burden on children’shospitals. The Secretary has alsodetermined that this action does notmeet criteria for a major rule as definedby Executive Order 12866 and wouldhave no major effect on the economy ofFederal expenditures.

We have determined that theproposed rule is not a ‘‘major rule’’

within the meaning of the statuteproviding for Congressional Review ofAgency Rulemaking, 5 U.S.C. 801.Similarly, the proposed rule will nothave effects on State, local and tribalgovernments and on the private sectorsuch as to require consultation underthe Unfunded Mandates Reform Act of1995.

Further, Executive Order 13132establishes certain requirements that anagency must meet when it promulgatesa rule that imposes substantial directcompliance costs on State and localgovernments, preempts State law, orotherwise has Federalism implications.We have reviewed this action under thethreshold criteria of Executive Order13132, Federalism, and, therefore, havedetermined that this action would nothave substantial direct effects on therights, roles, and responsibilities ofStates.

Paperwork Reduction Act of 1995

In accordance with section 3507(a) ofthe Paperwork Reduction Act (PRA) of1995, the Department is required tosolicit public comments, and receivefinal Office of Management and Budget(OMB) approval, on collections ofinformation. As indicated, in order toimplement the Children’s HospitalGraduate Medical Education PaymentProgram (CHGME), certain information

is required as set forth in this notice inorder to determine eligibility forpayment and amount of payment. Inaccordance with the PRA, we havereceived final OMB approval on ourproposed collection of information(OMB No. 0915–0247).

Collection of information: TheChildren’s Hospitals Graduate MedicalEducation Payment Program.

Description: Data is collected on thenumber of full-time equivalent residentsin applicant children’s hospital trainingprograms to determine the amount ofdirect and indirect medical educationpayments to participating children’shospitals. Indirect medical educationpayments will also be derived from aformula that requires the reporting ofcase mix index information fromparticipating children’s hospitals.Hospitals will be requested to submitsuch information in an annualapplication.

Description of Respondents:Children’s hospitals operating approvedgraduate medical residency trainingprograms.

Estimated Annual Reporting: Theestimated average annual reporting forthis data collection is approximately150 hours per hospital. The estimatedannual burden is as follows:

Form name Number ofrespondents

Responsesper re-

spondent

Total re-sponses

Hours perresponse

Total hourburden

HRSA–99–1(Annual) ................................................................................................ 54 1 54 99.9 5,395(Reconciliation) ..................................................................................... 54 1 54 8 432

HRSA–99–2 (IME) ................................................................................... 54 1 54 14 756HRSA–99–4

(Required GPRA tables) ...................................................................... 54 1 54 28 1,512

Total .................................................................................................. 54 1 54 .................... 8,095

National Health Objectives for the Year2000

The Public Health Service iscommitted to achieving the healthpromotion and disease preventionobjectives of Healthy People 2000, andits successor, Healthy People 2010.These are Department-led efforts to setpriorities for national attention. TheCHGME program is related to thepriority area 1 (Access to Quality HealthServices) in Healthy People 2010, whichis available online at http://www.health.gov/healthypeople.

Education and Service Linkage

As part of its long-range planning,HRSA will be targeting its efforts tostrengthening linkages betweenDepartment education programs andprograms which provide comprehensiveprimary care services to theunderserved.

Smoke-Free Workplace

The Depaertment strongly encouragesall award recipients to provide a smoke-free workplace and promote abstinencefrom all tobacco products, and PublicLaw 103–227, the Pro-Children Act of1994, prohibits smoking in certainfacilities that receive Federal funds in

which education, library, day care,health care, and early childhooddevelopment services are provided tochildren.

This program is not subject to thePublic Health Systems ReportingRequirements.

Dated: June 7, 2001.Elizabeth M. Duke,Acting Administrator.

Dated: July 17, 2001.Tommy G. Thompson,Secretary.[FR Doc. 01–18166 Filed 7–19–01; 8:45 am]BILLING CODE 4160–15–M




Health Resources and ServicesAdministration

Rural Health Outreach and RuralHealth Network Development Program

AGENCY: Health Resources and ServicesAdministration (HRSA).ACTION: Notice of availability of funds.

SUMMARY: The Office of Rural HealthPolicy (ORHP) announces that fiscalyear 2002 funds may be available forgrants under the Rural Health Outreachand Network Development Program.

Two kinds of projects will be fundedunder this announcement: (1) RuralHealth Outreach Grants for thedevelopment of networks to expandservice delivery systems in rural areaswhere support is provided for the actualdelivery of new services orenhancement of existing services.

(2) Rural Health NetworkDevelopment Grants for the planningand development of vertically integratednetworks in rural areas where theemphasis is placed not on the actualdelivery of services, but on efforts torestructure the delivery system in ruralcommunities. Funds are appropriatedfor these grants under Public Law 104–208. The grants are authorized bysection 330A of the Public HealthService Act as amended by the HealthCenters Consolidation Act of 1996,Public Law 104–299.

Applicants and Network membersmay not apply for both the Rural HealthOutreach Grant Program and the RuralHealth Network Development GrantProgram. Except for current and formerone-year Network grantees, current andformer grantees cannot reapply foreither grant program for FY 2002funding.

National Health Objectives for theYear 2010: The Health Resources &

Services Administration (HRSA) iscommitted to achieving the healthpromotion and disease preventionobjectives of Healthy People 2010, aPublic Health Service (PHS) nationalactivity for setting priority areas. TheRural Health Outreach program isrelated to the priority areas for healthpromotion, health protection andpreventive services. Potential applicantsmay receive a copy of Healthy People2010 (Stock No. 017–001–00547–9)through the Superintendent ofDocuments, Government PrintingOffice, Washington, DC 20402–9325(Telephone (202) 783–3238). The costfor the full document in hard copy is$70.

The document can also be read onlinein several different formats such as:HTML, Microsoft Word, Adobe AcrobatReader Portal Document File or RichText Format. The document file can befound on the Internet at: http://www.health.gov/healthypeople/Document/tableofcontents.htm.

Amount and Duration of GrantAwards: Grant awards under this noticewill be limited to a total amount of$200,000 (direct and indirect costs) pergrantee, per year.

Applications for smaller amounts areencouraged. Applicants may proposeproject periods for up to three years, butthe duration of projects is contingentupon the availability of funds. It isexpected that the average grant awardwill be approximately $180,000 for thefirst year. Award date for grants will beMay 1, 2002. However, applicants areadvised that continued funding of grantsbeyond the one-year period covered bythis announcement is contingent uponthe appropriation of funds for theprogram and assessment of granteeperformance. No project will besupported for more than three years.

Application Deadlines: Applicationsfor the programs must be received bythe close of business on September 28,

2001 for the Rural Health OutreachProgram and October 5, 2001 for theRural Health Network DevelopmentProgram. Completed applications mustbe sent to The HRSA Grants ApplicationCenter (GAC), 1815 North Fort MyersDrive, Suite 300, Arlington, VA 22209.

Applications shall be considered asmeeting the deadline if they are either(1) received on or before the deadlinedate; or (2) postmarked on or before thedeadline date and received in time fororderly processing. Applicants mustobtain a legibly dated receipt from acommercial carrier or the U.S. PostalService in lieu of a postmark. Privatemetered postmarks are not acceptable asproof of timely mailing. Lateapplications will not be reviewed.

The standard application form andgeneral instructions for completingapplications (Form PHS–5161–1,Revised 7/00) have been approved bythe Office of Management and Budget.To receive an application kit, contactThe HRSA GAC, toll-free at, 1–877/477–2123 or write them at 1815 North FortMyers Drive, and Suite 300, Arlington,VA 22209. To order an application kitfor either program, you must identifythe program citing the followingprogram names and CFDA numbers:Rural Health Outreach Program,93.912A; Rural Health NetworkDevelopment Program, 93.912B. If youare unable to connect to one of thesetoll-free numbers please call LillySmetana, 301/443–6884, in the Office ofRural Health Policy.

FOR FURTHER INFORMATION CONTACT:Information or technical assistanceregarding business, budget, or financialissues should be directed to the Officeof Grants Management, Bureau ofPrimary Health Care, Health Resourcesand Services Administration, 4350 EastWest Highway, 11th Floor, Bethesda,Maryland 20814, 301/594–4260 asfollows:

Staff Phone States

Cheryl Armstead .................................................................................................................. 301–594–4261 AK, ID, NH, OR, WA.Inge Cooper ......................................................................................................................... 301–594–4236 CT, KS, WV.Kathy Cummings .................................................................................................................. 301–594–0823 DE, PA.Mary Douglas ....................................................................................................................... 301–594–4232 FL, KY, NV, NE, Virgin Islands.Donna Marx .......................................................................................................................... 301–594–4245 IA, MN, MO, WI.Joyce Monk .......................................................................................................................... 301–594–4252 NY, Puerto Rico, VT.Cathy Neher ......................................................................................................................... 301–594–4268 MA, ME, NJ.Carol Odum .......................................................................................................................... 301–594–4254 CA.Tonya Randall ...................................................................................................................... 301–594–4259 AZ, DC, OH, TN, RI.Joyce Sagami ....................................................................................................................... 301–594–4253 AR, LA, OK, TX.Angela Stokes ...................................................................................................................... 301–594–4257 MD, NM, VA.Martha Teague ..................................................................................................................... 301–594–4258 AL, NC, SC.Carolyn Testerman ............................................................................................................... 301–594–4244 IL, MI, IN, Pacific Islands.Kim Whitfield ........................................................................................................................ 301–594–4255 CO, MT, ND, SD, UT, WY.Anifa Williams ....................................................................................................................... 301–594–5242 HI, MS.Stephanie Young .................................................................................................................. 301–594–1246 GA.



Requests for technical orprogrammatic information on thisannouncement should be directed toLilly Smetana of the Office of RuralHealth Policy, Room 9A–55, ParklawnBuilding, 5600 Fishers Lane, Rockville,MD 20857, (301) 443–0835.SUPPLEMENTARY INFORMATION: The twocategories of grants offered under thisprogram are the Rural Health OutreachGrants and Rural Health NetworkDevelopment Grants. These programshave the common purposes ‘‘* * *tocoordinate, restrain the cost of, andimprove the quality of essential healthcare services, including preventive andemergency services, through thedevelopment of integrated health caredelivery systems or networks in ruralareas and regions.’’ The two types ofgrants available through thisannouncement are different approachesto achieve the same goals.

Rural Health Outreach Grants

These grants will support thedevelopment of health service deliverysystems in rural areas that lack basicservices. Grants will be awarded tosupport the actual delivery of newservices through networks comprised ofat least three separately ownedorganizations. They may also beawarded to support activities that willexpand access to or increase utilizationof existing services. Programs in healthprevention, health education, qualityimprovement, emergency care and otherservices may be supported through theprogram. Applicants may proposeprojects to address the needs of a widerange of rural population groupsincluding the poor, the elderly,adolescents, rural minority populations,pregnant women and children,populations with special health careneeds, etc. Projects should beresponsive to the special cultural andlinguistic needs of specific populations.The grants may not be used to supportplanning activities.

A central goal of the Rural OutreachGrants is to better coordinate servicesthrough the development of new servicedelivery systems. In furtherance of thisgoal, participation in the programrequires the formation of a servicedelivery network of three or more healthcare organizations, or a combination ofthree or more health care and socialservice organizations. At least one of theentities must be a health care servicedelivery organization. Individualmembers of the Rural Outreach Grantnetwork might include such entities asphysicians, hospitals, public healthagencies, emergency care providers,mental health centers, Faith-based

services, Rural Health Clinics, socialservice agencies, health professionsschools, other educational institutions,community and migrant health centers,civic organizations, dental providers,etc. There must be a memorandum ofagreement or other arrangements toensure effective collaboration amongmembers of the service deliverynetwork. Although applicants for theprogram must be nonprofit or publicentities, other network members may befor-profit organizations.

The roles and responsibilities of eachmember of a Rural Outreach Grantnetwork must be clearly defined andeach must contribute significantly to thegoals of the project. The localcommunity must be involved in theproject and committed to the goals ofthe network.

Applicants are encouraged to developprojects to address specific areas of needin their communities. Need should beestablished through a formal needsassessments, comparison of local dataagainst State and national informationand/or by population specificdemographic data.

The following are examples of projectareas that can be supported through thisprogram:

(1) Projects that bring ambulatory andmental health care to unserved orunderserved rural areas or populations.The HRSA has a special priority toestablish primary care programs alongthe U.S./Mexican border.

(2) Projects that provide, or makepossible the provision, of emergencymedical services within rural areas thatlack these services.

(3) The creation of new integratednetworks of providers to deliverambulatory care when such networksappear likely to improve access tohealth care or its quality.

(4) Projects that provide services thatenable rural populations to better utilizeexisting health services, including thoseinvolving the use of communityoutreach workers.

(5) Projects that provide training forhealth care professionals and workers,including community outreach workers,when such training may bedemonstrated to be likely to lead tohigher quality services or moreaccessible services in rural areas.

(6) Projects that enhance the healthand safety of farmers, farm families, andmigrant and seasonal farm workersthrough direct services.

(7) Projects that address the needs ofrural minority populations.

(8) Projects that train rural people indisease prevention and healthpromotion, when such trainingaddresses critical needs of the area.

(9) Projects on adolescent health andon school-based programs.

(10) Projects from Faith basedorganizations that provide healthservices to members of the community.

The focus areas listed above areexamples only. All projects mustaddress the demonstrated needs of thecommunity.

Review Considerations

Applications for the Rural HealthOutreach Grant Program will beevaluated on the basis of the followingcriteria:

Criterion and Maximum Points

(1) Need for the Project and the Network(25 Points)

A. Description of Need (15 points)1. Unmet Health Needs of the Target

Population2. Access Barriers to Needed Services3. Description and Map of the Service

Area4. Relevant Services Available in or

Near the Service AreaB. Description of Network Capability (10

Points)1. Applicant Management Information2. Management Review Form3. Identification and Credentials of

Network Members4. History of Network Development

and Collaborative Activities5. Letters of Commitment from

Network Members

(2) Description of the Program to Meetthe Needs (25 Points)

A. Description of the Planning Process(10 Points)

1. Role of the Network in Planning2. Role of the Community in Planning3. Models that Work

B. Project Plan (15 Points)1. Goals, Strategies, Activities,

Responsible Agents and CompletionMilestones

(3) Project Management and Networkand Community Involvement (25Points)

A. Responsibilities of the Applicant andNetwork Members(10 Points)

1. Plans for Network Governance2. Plans for Network Communication

and Coordination3. Description and Chart of

Organization and Lines of AuthorityB. Community Support and

Involvement in Project (10 Points)1. Financial (including

documentation)2. In-Kind (including documentation)3. Letters from Community Leaders

(4) Budget (10 Points)

A. Budget Information (5 Points)



1. Instructions for filling out StandardForm 424A

B. Budget Justification Narrative (5Points)

(5) Personnel

A. Biographical Sketches (2 Points)B. Position Descriptions (3 Points)

(6) Evaluation Plan and DisseminationStrategies

A. Strategy for Measuring Progress andResults (8 Points)

1. Measuring and Utilizing Progressand Results.

B. Strategies for DisseminatingInformation About the Project (2Points)

1. Identify strategies to publicize yourproject to the community.

2. Identify strategies to educateappropriate State and nationalorganizations about your project.

3. Potential of Project to be Replicatedin Other Communities

(7) Sustainability Plan

Strategies for Continuing the Programafter Grant Support Ends

Note to current and former Rural HealthOutreach Grantees: Current and former RuralHealth Outreach Grantees may not apply forFY 2002 funds regardless of the type ofproposed project or services to be delivered.

Rural Health Network DevelopmentGrants

These grants will support thedevelopment of integrated health carenetworks in rural areas or regions of thecountry as mechanisms forstrengthening rural health care deliverysystems. The grants will supportnetwork activities that demonstrateintent to move from shared andcollaborative activities to integration offunctions across network members.Networks may be vertically integrated,meaning they consist of different typesof providers (e.g., hospital, healthdepartment, rural health clinic,community health center) orhorizontally integrated networksmeaning they are composed of only onetype of provider (e.g., hospitals only).These integrated networks entail moreformal relationships among themembers than the networks envisionedfor the Rural Outreach Grants. Also, theactivities supported by these grants donot involve the actual delivery ofservices. Instead, it is expected thatthese activities will be aimed at movingthe networks from sharing andcollaborating to integrating functionsacross members. This integration offunctions decreases fragmentation ofservice delivery across members andachieves certain efficiencies and

economies of scale among them.Together, these outcomes helpstrengthen the network members andthe rural health care system as a whole.

Like the outreach networks, ruralhealth networks supported under thesegrants must be composed of three ormore health care providers or otherentities that provide or support thedelivery of health care services. At leastthree of the network members must beseparately owned. While social serviceproviders may be part of a network, thegrants will not support networks for theexclusive provision of social services.The members of a network must have astrong existing commitment to thenetwork’s goals and objectives and somehistory of prior collaboration andaccomplishment before applying for thegrant. Unlike the Rural Outreach Grants,the program will not support projectswhere the members have nevercollaborated in the past.

Although applicants for the programmust be nonprofit or public entities,profit-making organizations may bemembers of a network. The networkmust address how its work benefits thelocal community served by the networkmembers.

Review Considerations

Applications for the Rural NetworkDevelopment Grant Program will beevaluated on the basis of the followingcriteria:

Criterion and Maximum Points

(1) Statement of Need andAppropriateness of Funding (15 Points)

A. The applicant demonstrates theneed for Federal funding to supportnetwork activities by describing theenvironment in which the network hasdeveloped and the appropriateness ofapplying for Federal funding at thispoint. The applicant utilizes appropriatedata sources in their analysis of theenvironment in which the network isfunctioning.

B. The applicant identifies thenetwork members and explains whythese are the appropriate collaboratorsand why other key groups are notincluded.

C. The applicant describes the valueof the network to its members and howthe network will provide value to thecommunity.

(2) Evidence of Prior CollaborativeHistory and Readiness for IntegrationFunding (25 Points)

A. The applicant describes priorcollaborative history andaccomplishments among a majority ofnetwork members.

B. The applicant provides aMemorandum of Agreement, bylaws,letter of incorporation etc. thatdemonstrates commitment on the part ofall network members.

C. The applicant describes the level ofcommitment of network membersincluding allocation of time, personnel,cash, and other in-kind contributions.

D. The applicant provides a map thatshows the location of network members,the geographic area that will be servedby the network and any otherinformation that will help reviewersvisualize and understand the scope ofthe proposed project. The applicantincludes an organizational chart for thenetwork showing each member of thenetwork and the relationships betweenmembers. The applicant fills out andincludes the Management Review Formprovided in the application packet.

E. The applicant has an interimnetwork leader in place and describesany known candidates for thepermanent network leader position. Theapplicant provides a positiondescription for the network leader jobthat outlines desirable skills andqualities. Position descriptions areprovided for other key staff positions tobe filled. Short biographical sketchesthat suggest the qualifications necessaryto perform assigned work are providedfor already hired key network staff.

F. The applicant describes agovernance structure for the networkthat has effective, independentgoverning bodies and leadership.Providers of care and lay consumers ofcare are represented on the Board.

(3) Statement of Project and Budget (35Points)

A. The applicant describes specificgoals, objectives, activities, andexpected outputs and outcomes thatalign with the intent of the NetworkDevelopment Grant Program.

B. The applicant provides a matrixthat carefully integrates goals,objectives, activities, output andoutcome measures, and anticipatedoutputs and outcomes. The matrixoutlines the individual responsible forcarrying out each activity and includesa timeline for all three years of theproject.

C. The applicant provides anaccompanying narrative that describesthe overall project, the marketingstrategy, the management strategy, thefinancial management strategy, andaddresses sustainability.

D. The applicant discusses how thisapplication relates to other communityand State-level grant applications andawards like the Community AccessProgram, the Robert Wood Johnson



Foundation’s Networking for RuralHealth Program, and the Medicare RuralHospital Flexibility Program.

E. The applicant provides requiredbudget forms, a budget worksheet, andbudget narrative that are appropriateand adequate to accomplish the goals,objectives, activities, and expectedoutputs and outcomes as described inthe matrix and project narrative. Thebudget is reasonable and allocatesFederal funds for allowable purposes.All network members contribute to eachyear of the budget and their jointcontributions total at least 20 percent ofthe budget for each grant year.

(4) Evaluation (10 points)

A. The applicant proposesappropriate output and outcomemeasures for the goals, objectives, andactivities described in the project matrixand narrative.

B. The applicant explains anyassumptions made in developing theproject matrix and outlines anticipatedoutputs and outcomes.

C. The applicant describes the processby which data for these measures willbe collected and analyzed.

D. The applicant describes acontinuous self-evaluation plan thatwill measure, monitor, and improve thenetwork’s execution to ensure progresstoward identified goals and objectives.

E. The applicant describes anapproach for evaluating the network’sprogress against its proposed outputsand outcomes following the three-yeargrant period.

(5) Sustainability (15 Points)

A. The authorizing language for thisprogram requires that grants awardedshall be used ‘‘for the* * * development of integrated, self-sustaining health care networks.’’ Inresponse, the applicant includes a planfor sustainability in the business planprovided under the ‘‘Statement ofProject and Budget’’ Section.

B. The applicant’s sustainability planincludes a discussion of methods forfuture income generation like memberdues, maximizing reimbursementopportunities, recruiting new members,producing and marketing new productsto members and others, and pursuingfurther grant opportunities.

Note to current and former Rural HealthNetwork Development Grantees: Other thancurrent or former one-year NetworkDevelopment Grantees, current and formergrantees may not reapply for grant funds.Current and former one-year grantees mayapply for up to two additional years offunding.

Eligibility Requirements

The primary grant recipient, which isan organization that is or represents anetwork of three or more separatelyowned organizations, must be a publicor nonprofit private entity that meetsone of the three requirements statedbelow.

(1) The applicant organization mustbe located in a rural area or in a ruralzip code of an urban county (listincluded in the application materials)and all services must be provided in arural county. If the applicant is ownedby or affiliated with an urban entity orhealth system the rural component maystill apply as long as the rural entity candirectly receive and administer the grantfunds in the rural area. The rural entitymust be in complete control of theplanning, program management andfinancial management of the project.The urban parent organization mustassure the Federal Office of Rural HealthPolicy in writing that, for this project,they will exert no control over ordemand collaboration with the ruralentity. The urban parent may, at therequest of the rural entity, assist withdirect service delivery or provide healthcare personnel who would nototherwise be available. Other networkmembers may be urban entities.

(2) The applicant organization existsexclusively to provide services tomigrant and seasonal farmworkers inrural areas and is supported underSection 330(g) of the Public HealthService Act. These organizations areeligible regardless of the urban or rurallocation of the administrativeheadquarters.

(3) The applicant is a NativeAmerican Tribal or quasi-Tribal entityfor services delivered on reservation orFederally recognized Tribal lands.

Note To Former Applicants: The list ofrural areas by State and county has beenupdated and is included in the applicationpacket.

In addition to the above criteria,applicants must be capable of receivingthe grant funds directly and must havethe capability to manage the project.Project Management means thatapplicants must be able to exerciseadministrative and program directionover the grant project; must beresponsible for hiring and managing theproject staff; must have theadministrative and accountingcapabilities to manage the grant funds;and must have some permanent staff atthe time the application is submitted.Further, applicants must have anEmployer Identification Number fromthe Internal Revenue Service and otherproof of organizational viability that

may be requested by the GrantsManagement Office.

Applicants from the 50 United States,the District of Columbia, theCommonwealth of Puerto Rico, theCommonwealth of the Northern MarianaIslands, the Territories of the VirginIslands, Guam, American Samoa, theCompact of Free AssociationJurisdiction of the Republic of theMarshall Islands, the Republic of Palau,and the Federated States of Micronesiaare eligible to apply.

Applications that do not meet therequirements stated above will not beReviewed.

Preference PointsApproved applications for both

programs that are awarded a fundingpreference will be placed in a morecompetitive position in ranking allapplications that fall within the fundingrange. The funding range is thethreshold score that determines thecutoff point for funding in a given fiscalyear determined by available funds.Applications that do not addressfunding preferences will be given fulland equitable consideration during thereview process but will not be fundeduntil all the applications that do receivethe preference and fall within thefunding line are funded.

To receive a preference, applicantsmust request a preference and identifythe type of preference they are eligiblefor in the application. Approvedapplications that fall within the fundingrange and that are awarded a fundingpreference will be considered forfunding before applications with nofunding preference requested oridentified.

As provided in the law, a preferencewill be awarded to any qualifiedapplicant that demonstrates substantialinclusion of any one of the following inthe proposed project:

(1) A majority of the healthcareproviders serving in the area or regionto be served by the network. Theapplicant must document the number ofhealth care providers in the service areaor region and the percentage of thoseproviders that will be involved in theproject. Data or documents toauthenticate the claim must be includedin the application;

(2) Any federally qualified healthcenters, rural health clinics, and localpublic health departments serving in thearea or region. (The applicant mustdemonstrate the involvement of one ormore of these health care facilitiesoperating in the area or region to beserved by the project. The involvementmust be more than a referralrelationship. The entity must be a full



and active member of the network, andthe letter of commitment mustdemonstrate the organizations’ roles,responsibilities, and contribution ofresources to the project.);

(3) Outpatient mental healthproviders serving in the area or region.(This guideline mirrors the previousguideline and the applicant mustdemonstrate the same level ofparticipation for the mental healthproviders serving in the area or region.);or

(4) Appropriate social serviceproviders, such as agencies on aging,school systems, and providers under thewomen, infants, and children program,to improve access to and coordination ofhealth care services. This guideline alsomirrors the previous guideline. Asabove, the applicant must demonstratethe same level of participation for thesocial service providers and relatedhealth agencies. These organizationsmust be intimately connected to thepurpose of the grant program. Theapplicant must demonstrate how theinclusion of any of these entities willimprove access to and coordination ofhealth care services.)

Geographic ConsiderationsThe HRSA hopes to achieve a

geographic balance in making newawards under this announcement.Therefore, HRSA will considergeographic coverage when decidingwhich approved applications to fund.

Other InformationApplicants for both types of grants

must demonstrate that at least 50percent of the funds awarded will bespent in rural areas or for the benefit ofrural communities. Grant funds may notbe used for purchase, construction orrenovation of real property. The grantswill not support projects that are solelyfor the purchase of equipment orvehicles.

Applicants should demonstrateparticipation in the cost of grantsupported projects. Cost participationmay be in cash or in-kind. In-kindcontributions might include donatedstaff time, donated space or equipment,donated vehicles, or other non-cashresources.

Applicants are advised that the entireapplication may not exceed 70 pages inlength including the project and budgetnarratives, face page, all forms,appendices, attachments and letters ofsupport. Each page of the applicationmust be numbered consecutively. Allapplications must be computergenerated or typewritten in printmeasuring at least 12 characters (inscalable or regular font) per inch and

legible. Margins must be no less than 1inch on the top and 1/2 inch on thebottom and left and right sides.

In order to allow the Office of RuralHealth Policy to plan for the objectivereview process, applicants areencouraged to notify the Office inwriting of their intent to apply and theprogram they are applying for. Thisnotification serves to inform the Officeof anticipated numbers of applications,which may be submitted. The address isLilly Smetana, Office of Rural HealthPolicy, Health Resources and ServicesAdministration, Parklawn Building,Room 9A–55, Rockville, Md., 20857, orFax# 301/443–2803. If notification isoffered, it should be received no laterthat September 21, 2001.

Technical Assistance Workshops

Four (4) Technical Assistancesessions for prospective applicants forthe Rural Health Outreach and RuralHealth Network Development programswill be held in late July and earlyAugust.

The sessions will be held as follows:July 23, 2001—Minneapolis, MNJuly 25, 2001—Las Vegas, NVJuly 31, 2001—Jackson, MSAugust 2, 2001—Pittsburgh, PA

Two technical assistance conferencecalls will also be held in August.Verification for the dates and places ofthe Technical Assistance workshopsand calls will appear in the applicationdocuments and on our web site—www.ruralhealth.hrsa.gov.

Smoke-Free Workplaces

The PHS strongly encourages all grantrecipients to provide a smoke-freeworkplace and promote the non-use ofall tobacco products. In addition, PublicLaw 103–227, the Pro-Children Act of1994, prohibits smoking in certainfacilities (or in some cases, any portionof a facility) in which regular or routineeducation, library, day care, health careor early childhood developmentservices are provided to children.

Public Health System Impact Statement

This program is subject to the PublicHealth System Reporting Requirements.The Office of Management and Budget—# 0937–0195, has approved reportingrequirements. Under theserequirements, the community-basednon-governmental applicant mustprepare and submit a Public HealthSystem Impact Statement (PHSIS). ThePHSIS is intended to provideinformation to State and local healthofficials to keep them apprised ofproposed health services grantapplications submitted by community-

based organizations within theirjurisdictions.

Community-based non-governmentalapplicants are required to submit thefollowing information to the head of theappropriate State and local healthagencies in the area(s) to be impacted nolater than the Federal applicationreceipt due date:

a. A copy of the face page of theapplication (SF 424)

b. An abstract of the project not toexceed one page, which provides:

(1) A description of the population tobe served

(2) A summary of the services to beprovided

(3) A description of the coordinationplanned with the appropriate Stateor local health agencies.


This grant program has beendetermined to be a program which issubject to the provisions of ExecutiveOrder 12372 concerningintergovernmental review of Federalprograms by appropriate State and localofficials as implemented by 45 CFR part100. Executive Order 12372 allowsStates the option of setting up a systemfor reviewing applications from withintheir States for assistance under certainFederal programs. Applicants (otherthan federally-recognized Indian tribalgovernments) should contact their StateSingle Point of Contact (SPOC), a list ofwhich will be included in theapplication kit, as early as possible toalert them to the prospectiveapplications and receive any necessaryinstructions on the State process. Forproposed projects serving more than oneState, the applicant is advised to contactthe SPOC of each affected State. AllSPOC recommendations should besubmitted to Lawrence R. Poole,Director, Office of Grants Management,Bureau of Primary Health Care, 4350East West Highway, 11th Floor,Bethesda, Maryland 20814, (301) 594–4235. The due date for State processrecommendations is 60 days after theapplication deadline of September 28,2001 for competing applications for theOutreach Program and October 5, 2001for the Network Program. The grantingagency does not guarantee to‘‘accommodate or explain’’ State processrecommendations it receives after thatdate. (See Part 148 of the PHS GrantsAdministration Manual,Intergovernmental Review of PHSPrograms under Executive Order 12372,and 45 CFR Part 100 for a descriptionof the review process and requirements.



Paperwork Reduction ActIf the methods proposed for the

project evaluation should fall under thepurview of the Paperwork ReductionAct of 1995, OMB approval will besought for proposed data collectionactivities.

State Offices of Rural HealthApplicants are required to notify their

State Office of Rural Health (or otherappropriate State entity) of their intentto apply for this grant program and toconsult with such agency regarding thecontent of the application. The StateOffice can provide information andtechnical assistance. A list of StateOffices of Rural Health is included withthe application kit.

OMB Catalog of Federal DomesticAssistance Number is: 93.912 A for the RuralHealth Outreach Program; 93.912 B for theRural Health Network Development Program.

Dated: July 17, 2001.Elizabeth M. Duke,Acting Administrator.[FR Doc. 01–18181 Filed 7–19–01; 8:45 am]BILLING CODE 4165–15–U



Refugee Resettlement Program;Availability of Formula AllocationFunding for FY 2001 TargetedAssistance Grants for Services toRefugees in Local Areas of High Need

AGENCY: Office of Refugee Resettlement(ORR), ACF, HHS.ACTION: Final notice of availability offormula allocation funding for FY 2001targeted assistance grants to States forservices to refugees in local areas ofhigh need.

SUMMARY: This notice announces theavailability of funds and awardprocedures for FY 2001 targetedassistance grants for services to refugeesunder the Refugee Resettlement Program(RRP). These grants are for serviceprovision in localities with large refugeepopulations, high refugeeconcentrations, and high use of publicassistance, and where specific needsexist for supplementation of currentlyavailable resources.

This notice continues the eligibility ofthose 50 counties located in 29 Statesthat previously qualified for andreceived targeted assistance program(TAP) grants beginning in FY 1999 as aresult of the three-year qualificationprocess. The FY 2001 TAP formula

allocations are based on the sameformula as in FY 1999, updated toreflect arrivals during the five-yearperiod from FY 1996 through FY 2000.The final notice reflects an adjustmentin final allocations to States as a resultof additional arrival data.DATES: The closing date for submissionof applications is August 20, 2001. SeePart VIII of this notice for moreinformation on submitting applications.Applications postmarked after theclosing date will be classified as late.ANNOUNCEMENT AVAILABILITY: This noticeis published on the ORR website at:www.acf.dhhs.gov/programs/orrFOR FURTHER INFORMATION CONTACT:Gayle Smith, Director, Division ofRefugee Self-Sufficiency, (202) 205–3590; email:[email protected] INFORMATION: A noticeof proposed allocations to States of FY2001 funds for targeted assistance waspublished in the Federal Register onApril 27, 2001 (66 FR 21229).

I. Purpose and ScopeThis notice announces the availability

of funds for grants for targetedassistance for services to refugees incounties where, because of factors suchas unusually large refugee populations,high refugee concentrations, and highuse of public assistance, there exists andcan be demonstrated a specific need forsupplementation of resources forservices to this population.

The Office of Refugee Resettlement(ORR) has available $49,477,000 in FY2001 funds for the targeted assistanceprogram (TAP) as part of the FY 2001appropriation for the Department ofHealth and Human Services(Consolidated Appropriations Act, 2001,as enacted into law by section 1(a)(1) ofPub. L. No. 106–554).

The Director of the Office of RefugeeResettlement (ORR) will use the$49,477,000 in targeted assistance fundsas follows:$44,529,300 will be allocated to States

under the five-year populationformula, as set forth in this notice.

$4,947,700 (10 percent of the total) willbe used to award discretionary grantsto States under separate continuationgrant awards.The purpose of targeted assistance

grants is to provide, through a processof local planning and implementation,direct services intended to result in theeconomic self-sufficiency and reducedwelfare dependency of refugees throughjob placements.

The targeted assistance programreflects the requirements of section412(c)(2)(B) of the Immigration andNationality Act (INA), which provides

that targeted assistance grants shall bemade available ‘‘(i) primarily for thepurpose of facilitating refugeeemployment and achievement of self-sufficiency, (ii) in a manner that doesnot supplant other refugee programfunds and that assures that not less than95 percent of the amount of the grantaward is made available to the countyor other local entity.’’

II. AuthorizationTargeted assistance projects are

funded under the authority of section412(c)(2) of the Immigration andNationality Act (INA), as amended bythe Refugee Assistance Extension Act of1986 (Pub. L. No. 99–605), 8 U.S.C.1522(c); section 501(a) of the RefugeeEducation Assistance Act of 1980 (Pub.L. No. 96–422), 8 U.S.C. 1522 note,insofar as it incorporates by referencewith respect to Cuban and Haitianentrants the authorities pertaining toassistance for refugees established bysection 412(c)(2) of the INA, as citedabove; section 584(c) of the ForeignOperations, Export Financing, andRelated Programs Appropriations Act,1988, as included in the FY 1988Continuing Resolution (Pub. L. No. 100–202), insofar as it incorporates byreference with respect to certainAmerasians from Vietnam theauthorities pertaining to assistance forrefugees established by section 412(c)(2)of the INA, as cited above, includingcertain Amerasians from Vietnam whoare U.S. citizens, as provided under titleII of the Foreign Operations, ExportFinancing, and Related ProgramsAppropriations Acts, 1989 (Pub. L. No.100–461), 1990 (Pub. L. No. 101–167),and 1991 (Pub. L. No. 101–513).

III. Use of FundsTargeted assistance funding must be

used to assist refugee families to achieveeconomic independence in accordancewith regulations at 45 CFR Part 400. Theterm ‘‘refugee’’ includes persons whomeet all requirements of 45 CFR 400.43(as amended by 65 FR 15409 (March 22,2000)) and 45 CFR 401.2 (Cuban andHaitian entrants). In addition to thestatutory requirement that TAP funds beused ‘‘primarily for the purpose offacilitating refugee employment’’(section 412(c)(2)(B)(i)), funds awardedunder this program are intended to helpfulfill the Congressional intent that‘‘employable refugees should be placedon jobs as soon as possible after theirarrival in the United States’’ (section412(a)(1)(B)(i) of the INA). Therefore, inaccordance with 45 CFR 400.313,targeted assistance funds must be usedprimarily for employability servicesdesigned to enable refugees to obtain



jobs with less than one year’sparticipation in the targeted assistanceprogram in order to achieve economicself-sufficiency as soon as possible.Under 45 CFR 400.316, a State mayprovide the same scope of servicesunder targeted assistance as may beprovided to refugees under 45 CFR400.154 and 45 CFR 400.155, with theexception of 45 CFR 400.155(h).Targeted assistance services maycontinue to be provided after a refugeehas entered a job to help the refugeeretain employment or move to a betterjob. Targeted assistance funds may notbe used for long-term training programssuch as vocational training that last formore than a year or educationalprograms that are not intended to leadto employment within a year.

States may not provide servicesfunded under this notice, except forreferral and interpreter services, torefugees who have been in the UnitedStates for more than 60 months (fiveyears). Specifically, States may notprovide citizenship preparation servicesto refugees who have been in the UnitedStates for more than 60 months (fiveyears) using targeted assistance funds.

In accordance with 45 CFR 400.314,States are required to provide targetedassistance services to refugees in thefollowing order of priority, except incertain individual extremecircumstances: (a) Refugees who arecash assistance recipients, particularlylong-term recipients; (b) unemployedrefugees who are not receiving cashassistance; and (c) employed refugees inneed of services to retain employmentor to attain economic independence.

In accordance with 45 CFR 400.317, iftargeted assistance funds are used forthe provision of English languagetraining, such training must be providedin a concurrent, rather than sequential,time period with employment or withother employment-related activities.

Refugees who are participating inTAP-funded or social services-fundedemployment services or have acceptedemployment are eligible for child careservices. For an employed refugee, TAP-funded child care should be limited toone year after the refugee becomesemployed. States and counties,however, are expected to use child carefunding from other publicly fundedmainstream programs as a prior resourceand are encouraged to work with serviceproviders to assure maximum access toother publicly funded resources forchild care.

Reflecting section 412(a)(1)(A)(iv) ofthe INA, States must ‘‘ensure thatwomen have the same opportunities asmen to participate in training andinstruction.’’ In addition, in accordance

with 45 CFR 400.317, targetedassistance services must be provided, tothe maximum extent feasible, in amanner that includes the use ofbilingual/bicultural women on serviceagency staffs to ensure adequate serviceaccess by refugee women.

In accordance with 45 CFR 400.317,targeted assistance services must beprovided in a manner that is culturallyand linguistically compatible with arefugee’s language and culturalbackground, to the maximum extentfeasible. In light of the increasinglydiverse population of refugees who areresettling in this country, refugeeservice agencies will need to developpractical ways of providing culturallyand linguistically appropriate servicesto a changing ethnic population.Services funded under this notice mustbe refugee-specific services that aredesigned specifically to meet refugeeneeds and are in keeping with the rulesand objectives of the refugee program.Vocational or job-skills training, on-the-job training, or English languagetraining, however, need not be refugee-specific.

Finally, in order to provide culturallyand linguistically compatible services inas cost-efficient a manner as possible ina time of limited resources, ORRstrongly encourages States and countiesto promote and give specialconsideration to the provision ofservices through coalitions of refugeeservice organizations, such as coalitionsof Mutual Assistance Associations(MAAs), voluntary resettlementagencies, or a variety of serviceproviders. ORR believes it is essentialfor refugee-serving organizations to formclose partnerships in the provision ofservices to refugees in order to be ableto respond adequately to a changingrefugee picture. Coalition-building andconsolidation of providers isparticularly important in communitieswith multiple service providers in orderto ensure better coordination of servicesand maximum use of funding forservices by minimizing the funds usedfor multiple administrative overheadcosts.

The award of funds to States underthis notice will be contingent upon thecompleteness of a State’s application asdescribed in section VIII below.

IV. Discussion of Comments ReceivedORR did not receive any comments in

response to the notice of proposed FY2001 allocations to States for targetedassistance.

V. Eligible GranteesEligible grantees are those agencies of

State governments that are responsible

for the refugee program under 45 CFR400.5 in States containing counties thatqualify for FY 2001 targeted assistanceawards. Replacement designees mustalso adhere to the regulations at SubpartL of 45 CFR part 400 regarding formulaallocation grants for targeted assistance,if the State authorized the replacementdesignee appointed by the Director toact as its agent in applying for andreceiving targeted assistance funds. If aState withdraws from all or part of theprogram components with the priorapproval of the Director and a Wilson/Fish alternative program (section412(e)(7) of the Immigration andNationality Act) is approved to providethe program components relinquishedby the State, the Wilson/Fish granteemay apply for and receive targetedassistance in lieu of the State.

The Director of ORR determined theeligibility of counties for inclusion inthe FY 2001 targeted assistance programon the basis of the method described insection VI of this notice.

The use of targeted assistance fundsfor services to Cuban and Haitianentrants is limited to States that have anapproved State plan under the Cuban/Haitian Entrant Program (CHEP).

The State agency will submit a singleapplication on behalf of all countygovernments that are qualified countiesin that State. Subsequent to the approvalof the State’s application by ORR, localtargeted assistance plans will bedeveloped by the county government orother designated entity and submitted tothe State.

A State with more than one qualifiedcounty is permitted, but not required, todetermine the allocation amount foreach qualified county within the State.However, if a State chooses to determinecounty allocations differently fromthose set forth in the final notice, inaccordance with 45 CFR 400.319, the FY2001 allocations proposed by the Statemust be based on the State’s populationof refugees who arrived in the U.S.during the most recent five-year period.A State may use welfare data as anadditional factor in the allocation of itstargeted assistance funds if it sochooses; however, a State may notassign a greater weight to welfare datathan it has assigned to population datain its allocation formula. In addition, ifa State chooses to allocate its FY 2001targeted assistance funds in a mannerdifferent from the formula set forth inthis final notice, the FY 2001 allocationsand methodology proposed by the Statemust be included in the State’sapplication for ORR review andapproval.

Applications submitted in response tothis final notice are not subject to



review by State and area-wideclearinghouses under Executive Order12372, ‘‘Intergovernmental Review ofFederal Programs.’’

VI. Qualification and Allocation

A. Qualification

The Director of ORR will determinethe qualification of counties for targetedassistance once every three years, asstated in the FY 1999 notice of proposedavailability of targeted assistanceallocations to States which waspublished in the Federal Register onMarch 10, 1999 (64 FR 11927). SinceORR determined the qualification ofcounties for targeted assistance in FY1999, those qualifying countiesdetermined eligible in FY 1999 andlisted in this notice as qualified to applyfor FY 2001 TAP funding will remainqualified for TAP funding through FY2001 on the basis of the most currentfive-year refugee/entrant arrival data.ORR does not plan to consider theeligibility of additional counties for TAPfunding until FY 2002, when ORR willagain review data on all counties thatcould potentially qualify for TAP funds.

B. Allocation Formula

Of the funds available for FY 2001 fortargeted assistance, $44,529,300 will beallocated by formula to States forqualified counties based on the initialplacements of refugees, Amerasians,entrants (including Havana parolees),and Kurdish asylees in these countiesduring the five-year period from FY1996 through FY 2000 (October 1, 1995–September 30, 2000). These data areavailable in the ORR Refugee DataSystem.

The arrival data used as the basis fortargeted assistance formula allocationsdo not take asylees or secondarymigrants who have received servicesinto account. We are unable to includesecondary migrants in the 5-yearpopulation because secondary migrationis not currently tracked at the countylevel. We are unable to include asylees,except for Kurdish asylees who wereprocessed on Guam, becauseinformation from the Immigration andNaturalization Service (INS) and theExecutive Office of Immigration Review(EOIR) on grants of asylum are availableby zip code of the asylee. Unfortunately,zip code assignments do not correspondto county designations. Many zip codescross county lines and in some cases,State lines. Therefore, based onavailable data, ORR is currently unableto credit numbers of asylees to counties.

ORR plans to remedy this by revisingthe ORR–11 and seeking OMB approvalto capture numbers of asylees and

secondary migrants accessing services atthe county level. This revision to theORR–11 will allow States to report onnumbers of asylees and secondarymigrants receiving services at thecounty level. ORR will adjust thetargeted assistance 5-year populationbased on these data.

States are advised that ORR expectsthat these revisions to the ORR–11, onceimplemented, will require States totrack asylees and secondary migrantswho receive services by name, socialsecurity number, alien registrationnumber, county of initial residence/resettlement, and county of currentresidence in order to transmit thisinformation to ORR in the future.

With regard to Havana parolees, in theabsence of reliable data on the State-by-State resettlement of this population, weare crediting 49,507 Havana paroleeswho arrived in the U.S. during the past5 years according to the Immigrationand Naturalization Service (INS) usingthe following methodology. For FY 1999and FY 2000, we credited the qualifyingcounties with Havana paroleesaccording to arrival numbers suppliedto us by the Parolee Orientation Programfunded by the International AffairsOffice of the INS. For FY 1996 through1998, the Havana parolees for eachqualifying county in Florida are basedon actual arrival data submitted by theState of Florida; Havana paroleescredited to qualifying counties in otherStates were prorated based on thecounties’ proportion of the three-year(FY 1996 through FY 1998) entrantpopulation in the U.S.

VII. AllocationsTable 1 lists the qualifying counties;

the number of refugee (column 3) andentrant (column 4) arrivals in thosecounties during the five-year periodfrom October 1, 1994—September 30,1999; the number of Havana parolees(column 5) credited to each countyduring this period, the total number ofarrivals; and the final amount of eachcounty’s allocation based on its five-year arrival population.

Note 1.: —Table 1. Final TargetedAssistance Allocations By County: FY 2001is attached. Table 2.—State totals for final FY2001 targeted assistance allocations isattached.

VIII. Application and ImplementationProcess

States that are currently operatingunder approved management plans fortheir FY 1999 targeted assistanceprogram and wish to continue to do sofor their FY 2001 grants may provide thefollowing in lieu of resubmitting the fullcurrently approved plan:

The State’s application for FY 2001funding shall provide:

• Assurance that the State’s currentmanagement plan for the administrationof the targeted assistance program, asapproved by ORR in FY 1999, willcontinue to be in full force and effect forthe FY 2001 targeted assistanceprogram, subject to any additionalassurances or revisions required by thisnotice which are not reflected in thecurrent plan. Any proposedmodifications to the approved plan willbe identified in the application and aresubject to ORR review and approval,e.g., if the State assumes localadministration of the program or if theState chooses to determine countyallocations differently. Any proposedchanges must address and reference allappropriate portions of the FY 1999application content requirements toensure complete incorporation in theState’s management plan.

• A line item budget and justificationfor State administrative costs limited toa maximum of five percent of the totalaward to the State. Each total budgetperiod funding amount requested mustbe necessary, reasonable, and allocableto the project.

• Targeted assistance performancegoals as described under Section IX.

IX. Results or Benefits ExpectedThe applicant describes in

quantifiable terms the results andbenefits to be derived. For example, allapplicants must establish targetedassistance proposed performance goalsfor each of the six ORR performanceoutcome measures for each targetedassistance county’s proposed servicecontract(s) or sub-grants for the nextcontracting cycle. Proposedperformance goals must be included inthe application for each performancemeasure. The six ORR performancemeasures are: entered employments,cash assistance reductions due toemployment, cash assistanceterminations due to employment, 90-day employment retentions, averagewage at placement, and job placementswith available health benefits. Targetedassistance program activity and progressachieved toward meeting performanceoutcome goals are to be reportedquarterly on the ORR–6, the ‘‘QuarterlyPerformance Report.’’

X. Reporting RequirementsStates will be required to submit

quarterly reports on the outcomes of thetargeted assistance program, using thesame format that States use for reportingon refugee social services formulagrants: Schedule A and Schedule C,pages 1 and 2 of the ORR–6 Quarterly



Performance Report form (OMB #0970–0036). States are also required to file theFinancial Status Report (SF–269) semi-annually.

XI. The Paperwork Reduction Act of1995 (Pub. L. 104–13)

Public reporting burden for thiscollection of information is estimated toaverage 10 hours per response,including the time for reviewing

instructions, gathering and maintainingthe data needed and reviewing thecollection information. The followinginformation collections are included inthis notice of final allocations: OMBControl No. 0970–0139, ACF UNIFORMPROJECT DESCRIPTION (UPD) whichexpires 12/31/2003, and OMB ControlNo. 0970–0036, ORR QuarterlyPerformance Report (QPR) whichexpires 7/31/02. An agency may not

conduct or sponsor, and a person is notrequired to respond to, a collection ofinformation unless it displays acurrently valid OMB control number.

Catalog of Federal DomesticAssistance (CFDA) Number: 93.584

Dated: July 13, 2001.Carmel Clay-Thompson,Acting Director, Office of RefugeeResettlement.

TABLE 1.—FINAL TARGETED ASSISTANCE ALLOCATIONS BY COUNTY: FY 2001

County State Refugees 1 Entrants Havana pa-rolees 2

Total arriv-als FY

1996—2000

Total FY2001 finalallocation

1 Maricopa County ..................... Arizona .......................................... 9,674 685 401 10,760 $1,407.1402 Fresono County ....................... California ....................................... 968 2 1 971 126,9823 Los Angeles County ................ California ....................................... 13,149 124 380 13,653 1,785,4474 Orange County ........................ California ....................................... 4,713 12 23 4,748 620,8745 Sacramento County ................. California ....................................... 10,652 2 6 10,660 1,394,0326 San Diego County ................... California ....................................... 5,826 141 280 6,247 816,8857 San Francisco ......................... California ....................................... 5,028 13 33 5,074 663,4798 Santa Clara County ................. California ....................................... 6,317 43 31 6,391 835,7769 Yolo County ............................. California ....................................... 1,224 0 3 1,227 160,399

10 Denver County ........................ Colorado ....................................... 2,795 0 5 2,800 366,10011 District of Columbia ................. District of Columbia ...................... 2,941 5 14 2,960 387,10612 Broward County ....................... Florida ........................................... 617 1,285 1,274 3,176 415,33113 Dade County ........................... Florida ........................................... 7,012 14,460 40,333 61,805 8,082,34514 Duval County ........................... Florida ........................................... 4,641 18 59 4,718 616,98115 Hillsborough County ................ Florida ........................................... 1,605 329 1,312 3,246 424,48516 DeKalb County ........................ Georgia ......................................... 8,685 10 8 8,703 1,138,06117 Fulton County .......................... Georgia ......................................... 4,644 84 134 4,862 635,81018 Cook/Kane ............................... Illinois ............................................ 14,730 182 272 15,184 1,985,63719 Polk County ............................. Iowa .............................................. 3,571 1 2 3,574 467,37820 Jefferson County 3 ................... Kentucky ....................................... 3,765 1,576 487 5,828 762,15221 Hampden Coutny .................... Massachusetts .............................. 2,295 9 5 2,309 301,90022 Suffolk County ......................... Massachusetts .............................. 4,154 57 49 4,260 557,12023 Ingham County ........................ Michigan ....................................... 1,911 718 227 2,856 373,51524 Kent County ............................. Michigan ....................................... 3,125 190 29 3,344 437,29925 Hennepin County ..................... Minnesota ..................................... 7,891 5 4 7,900 1,033,03626 Ramsey County ....................... Minnesota ..................................... 1,680 2 5 1,687 220,62727 City of St. Louis ....................... Missouri ........................................ 9,429 1 1 9,431 1,233,24428 Lancaster County .................... Nebraska ...................................... 2,302 34 20 2,356 308,09829 Clark County 4 ......................... Nevada ......................................... 1,761 1,163 698 3,622 473,65530 Hudson County ........................ New Jersey ................................... 787 257 868 1,912 250,03531 Bernalilo County ...................... New Mexico .................................. 880 695 647 2,222 290,57532 Monroe County ........................ New York ...................................... 2,526 643 358 3,527 461,23233 New York ................................. New York ...................................... 32,361 355 481 33,197 4,341,22734 Oneida County ........................ New York ...................................... 4,781 0 0 4,781 625,21935 Guilford County ....................... North Carolina .............................. 2,508 5 15 2,528 330,59136 Cass County ............................ North Dakota ................................ 2,043 0 2 2,045 267,42837 Cuyahoga County .................... Ohio .............................................. 3,335 6 7 3,348 437,83338 Mulnomah ................................ Oregon .......................................... 11,076 734 317 12,127 1,585,84139 Erie County .............................. Pennsylvania ................................ 1,989 0 0 1,989 260,10540 Philadelphia County ................ Pennsylvania ................................ 4,200 26 39 4,265 557,69141 Minnehaha County 5 ................ South Dakota ................................ 1,729 0 0 1,729 226,10442 Davidson County ..................... Tennessee .................................... 3,180 54 45 3,279 428,75443 Dallas/Tarrant .......................... Texas ............................................ 10,636 333 406 11,375 1,487,51644 Harris County .......................... Texas ............................................ 8,039 508 118 8,665 1,133,10445 Davis/Salt Lake ....................... Utah .............................................. 5,569 1 3 5,573 728,72746 Fairfax County ......................... Virginia .......................................... 3,285 4 9 3,298 431,29748 City of Richmond ..................... Virginia .......................................... 2,403 39 59 2,501 327,1008 King/Snohomish ........................ Washington ................................... 12,529 41 34 12,604 1,648,26049 Pierce County .......................... Washington ................................... 1,982 3 5 1,990 260,25150 Spokane County ...................... Washington ................................... 3,207 0 1 3,208 419,516

Total ....................................... ....................................................... 266,150 24,855 49,507 340,512 44,529,300

1 Includes refugees, Amerasian immigrants from Vietnam, and Kurdish asylees from Iraq. Does not include other asylees or secondary mi-grants.

2 For FY 1999 and FY 2000, the Havana parolees for all counties are based on actual data. Fro previous years, the Havana parolees of Flor-ida counties are based on actual data, while parolees from other counties are prorated based on each county’s proportion of the three-year (FY1996–1998) entrant population.



3 The allocation for Jefferson County, Kentucky will be awarded to the Kentucky Wilson/Fish project.4 The allocation for Clark County, Nevada will be awarded to the Nevada Wilson/Fish project.5 The allocation for Minnehaha County, South Dakota will be awarded to the South Dakota Wilson/Fish project.

TABLE 2.—FINAL TARGETED ASSIST-ANCE ALLOCATIONS BY STATE: FY2001

StateTotal FY

2001 alloca-tion

Arizona ...................................... $1,407,140California ................................... 6,403,874Colorado ................................... 366,100District of Columbia .................. 387,106Florida ....................................... 9,539,142Georgia ..................................... 1,773,871Illinois ........................................ 1,985,637Iowa .......................................... 467,378Kentucky ................................... 762,152Massachusetts .......................... 859,020Michigan ................................... 810,814Minnesota ................................. 1,253,663Missouri .................................... 1,233,244Nebraska .................................. 308,098Nevada ..................................... 473,655New Jersey ............................... 250,035New Mexico .............................. 290,575New York .................................. 5,427,678North Carolina .......................... 330,591North Dakota ............................ 267,428Ohio .......................................... 437,833Oregon ...................................... 1,585,841Pennsylvania ............................ 817,796South Dakota ............................ 226,104Tennessee ................................ 428,754Texas ........................................ 2,620,620Utah .......................................... 728,727Virginia ...................................... 758,397Washington ............................... 2,328,027

Total ...................................... 44,529,300


DEPARTMENT OF HOUSING ANDURBAN DEVELOPMENT

[Docket No. FR–4644–N–29]

Federal Property Suitable as FacilitiesTo Assist the Homeless

AGENCY: Office of the AssistantSecretary for Community Planning andDevelopment, HUD.ACTION: Notice.

SUMMARY: This Notice identifiesunutilized, underutilized, excess, andsurplus Federal property reviewed byHUD for suitability for possible use toassist the homeless.FOR FURTHER INFORMATION CONTACT:Clifford Taffet, room 7266, Departmentof Housing and Urban Development,451 Seventh Street, SW., Washington,DC 20410; telephone (202) 708–1234;TTY number for the hearing- andspeech-impaired (202) 708–2565 (thesetelephone numbers are not toll-free), or

call the toll-free Title V information lineat 1–800–927–7588.SUPPLEMENTARY INFORMATION: Inaccordance with 24 CFR part 581 andsection 501 of the Stewart B. McKinneyHomeless Assistance Act (42 U.S.C.11411), as amended, HUD is publishingthis Notice to identify Federal buildingsand other real property that HUD hasreviewed for suitability for use to assistthe homeless. The properties werereviewed using information provided toHUD by Federal landholding agenciesregarding unutilized and underutilizedbuildings and real property controlledby such agencies or by GSA regardingits inventory of excess or surplusFederal property. This Notice is alsopublished in order to comply with theDecember 12, 1988 Court Order inNational Coalition for the Homeless v.Veterans Administration, No. 88–2503–OG (D.D.C.).

Properties reviewed are listed in thisNotice according to the followingcategories: Suitable/available, suitable/unavailable, suitable/to be excess, andunsuitable. The properties listed in thethree suitable categories have beenreviewed by the landholding agencies,and each agency has transmitted toHUD: (1) Its intention to make theproperty available for use to assist thehomeless, (2) its intention to declare theproperty excess to the agency’s needs,or(3) a statement of the reasons that theproperty cannot be declared excess ormade available for use as facilities toassist the homeless.

Properties listed as suitable/availablewill be available exclusively forhomeless use for a period of 60 daysfrom the date of this Notice. Homelessassistance providers interested in anysuch property should send a writtenexpression of interest to HHS, addressedto Brian Rooney, Division of PropertyManagement, Program Support Center,HHS, room 5B–41, 5600 Fishers Lane,Rockville, MD 20857; (301) 443–2265.(This is not a toll-free number.) HHSwill mail to the interested provider anapplication packet, which will includeinstructions for completing theapplication. In order to maximize theopportunity to utilize a suitableproperty, providers should submit theirwritten expressions of interest as soonas possible. For complete detailsconcerning the processing ofapplications, the reader is encouraged torefer to the interim rule governing thisprogram, 24 CFR part 581.

For properties listed as suitable/to beexcess, that property may, if

subsequently accepted as excess byGSA, be made available for use by thehomeless in accordance with applicablelaw, subject to screening for otherFederal use. At the appropriate time,HUD will publish the property in aNotice showing it as either suitable/available or suitable/unavailable.

For properties listed as suitable/unavailable, the landholding agency hasdecided that the property cannot bedeclared excess or made available foruse to assist the homeless, and theproperty will not be available.

Properties listed as unsuitable willnot be made available for any otherpurpose for 20 days from the date of thisNotice. Homeless assistance providersinterested in a review by HUD of thedetermination of unsuitability shouldcall the toll free information line at 1–800–927–7588 for detailed instructionsor write a letter to Clifford Taffet at theaddress listed at the beginning of thisNotice. Included in the request forreview should be the property address(including zip code), the date ofpublication in the Federal Register, thelandholding agency, and the propertynumber.

For more information regardingparticular properties identified in thisNotice (i.e., acreage, floor plan, existingsanitary facilities, exact street address),providers should contact theappropriate landholding agencies at thefollowing addresses: DOT: Mr. RugeneSpruill, Space Management, SVC–140,Transportation Administrative ServiceCenter, Department of Transportation,400 7th Street, SW., Room 2310,Washington, DC 20590; (202) 366–4246;GSA: Mr. Brian K. Polly, AssistantCommissioner, General ServicesAdministration, Office of PropertyDisposal, 18th and F Streets, NW.,Washington, DC 20405; (202) 501–0052;NAVY: Mr. Charles C. Cocks, Director,Department of the Navy, Real EstatePolicy Division, Naval FacilitiesEngineering Command, WashingtonNavy Yard, 1322 Patterson Ave., SE.,Suite 1000, Washington, DC 20374–5065; (202) 685–9200; (These are nottoll-free numbers).

Dated: July 12, 2001.John D. Garrity,Director, Office of Special Needs AssistancePrograms.

Suitable/Available Properties

Land (by State)

Alaska

05.5 acres



Harding Lake Recreation Site, RichardsonHighway

Salcha Co: AK 99714–landholding Agency: GSAProperty Number: 54200130001Status: UnderutilizedComment: No utilities, zoned for outdoor

recreationGSA Number: 9–D–AK–761Summary of Suitable/Available PropertiesTotal number of Properties = 1

Unsuitable Properties

Buildings (by State)

Alabama

Federal Building999 West Main StreetCentre Co: Cherokee AL 35960–Landholding Agency: GSAProperty Number: 54200130003Status: ExcessReason: Within airport runway clear zone

GSA Number: 4–G–AL–770

California

Bldg. 36Marine Corps Logistics BaseBarstow Co: San Bernardino CA 92311–Landholding Agency: NavyProperty Number: 77200130001Status: UnutilizedReason: Extensive deteriorationBldgs. 60, 61, 64, 65Marine Corps Logistics BaseBarstow Co: San Bernardino CA 92311–Landholding Agency: NavyProperty Number: 77200130002Status: UnutilizedReason: Extensive deteriorationBldg. 171Marine Corps Logistics BaseBarstow Co: San Bernardino CA 92311–Landholding Agency: NavyProperty Number: 77200130003Status: UnutilizedReason: Extensive deteriorationBldg. 278Marine Corps Logistics BaseBarstow Co: San Bernardino CA 92311–Landholding Agency: NavyProperty Number: 77200130004Status: UnutilizedReason: Extensive deteriorationBldg. 351Marine Corps Logistics BaseBarstow Co: San Bernardino CA 92311–Landholding Agency: NavyProperty Number: 77200130005Status UnutilizedReason: Extensive deteriorationBldg. 130Naval StationSan Diego Co: CA 92132–Landholding Agency: NavyProperty Number: 77200130006Status: ExcessReason: Extensive deteriorationBldg. 415Naval StationSan Diego Co: CA 92132–Landholding Agency: NavyProperty Number: 77200130007Status: ExcessReason: Extensive deteriorationStructure 20104Naval Air Weapons Station

China Lake Co: CA 93555–6100Landholding Agency: NavyProperty Number: 77200130008Status: ExcessReason: Extensive deteriorationStructure 31424Naval Air Weapons StationChina Lake Co: CA 93555–6100Landholding Agency: NavyProperty Number: 77200130009Status: ExcessReason: Extensive deteriorationStructure 31592Naval Air Weapons StationChina Lake Co: CA 93555–6100Landholding Agency: NavyProperty Number: 77200130010Status: ExcessReason: Extensive deteriorationFacility 26Naval Weapons StationSeal Beach Co: CA 90740–5000Landholding Agency: NavyProperty Number: 77200130011Status: UnutilizedReason: Secured AreaBldg. 114Naval Air FacilityEl Centro Co: Imperial CA 92243–Landholding Agency: NavyProperty Number: 77200130016Status: UnutilizedReason: Extensive deteriorationBldg. 375Naval Air FacilityEl Centro Co: Imperial CA 92243–Landholding Agency: NavyProperty Number: 77200130017Status: UnutilizedReason: Extensive deteriorationBldg. 376Naval Air FacilityEl Centro Co: Imperial CA 92243–Landholding Agency: NavyProperty Number: 77200130018Status: UnutilizedReason: Extensive deterioration

District of Columbia

Bldg. A–065Naval District—AnacostiaWashington Co: DC 20374–Landholding Agency: NavyProperty Number: 77200130019Status: UnutilizedReason: Extensive deterioration

Florida

Bldg. 172Naval Air StationJacksonville Co: Duval FL 32212–Landholding Agency: NavyProperty Number: 77200130012Status: UnutilizedReason: Extensive deterioration

Maryland

Bldg. 105Naval Air StationPatuxent River Co: MD 20670–Landholding Agency: NavyProperty Number: 77200130020Status: ExcessReason: Extensive deteriorationBldg. 117ANaval Air StationPatuxent River Co: MD 20670–

Landholding Agency: NavyProperty Number: 77200130021Status: ExcessReason: Extensive deteriorationBldg. 117Naval Air StationPatuxent River Co: MD 20670–Landholding Agency: NavyProperty Number: 77200130022Status: ExcessReason: Extensive deteriorationBldg. 405Naval Air StationPatuxent River Co: MD 20670–Landholding Agency: NavyProperty Number: 77200130023Status: ExcessReason: Extensive deteriorationBldg. 454Naval Air StationPatuxent River Co: MD 20670–Landholding Agency: NavyProperty Number: 77200130024Status: ExcessReason: Extensive deterioration

Michigan

Station/boathouse BldgUSCG Harbor Beach StationHarbor Beach Co: Huron MI 48441–Landholding Agency: DOTProperty Number: 87200130001Status: UnutilizedReason: Floodway, Extensive deterioration

New Jersey

Nike Battery Site 41/43Lot 17 Williamstown Chews Landing RoadGloucester Co: Camden NJLocation: Village of SicklervilleLandholding Agency: GSAProperty Number: 54200130002Status: ExcessReason: Extensive deteriorationGSA Number: 1–GR–NJ–0537

Land (by State)

Puerto Rico

330 acresNaval Radio Transmitter FacilityAguada Co: PR 00602–Landholding Agency: NavyProperty Number: 77200130013Status: UnderutilizedReasons: FloodwaySecured Area242 acresNaval Radio Transmitter FacilitySalinas Co: PR 00751–Landholding Agency: NavyProperty Number: 77200130014Status: UnderutilizedReasons: FloodwaySecured Area408 acresNaval Radio Transmitter FacilityIsabela Co: PR 00662–Landholding Agency: NavyProperty Number: 77200130015Status: UnderutilizedReasons: Secured Area

[FR Doc. 01–18021 Filed 7–19–01; 8:45 am]BILLING CODE 4210–29–M




[AAG/A Order No. 234–2001]

Privacy Act of 1974; System ofRecords

The Department of Justice proposes tomodify the Controlled Substances ActNonpublic Records System, JUSTICE/JMD–002. The primary purpose forestablishing the system of records wasto retain a nonpublic record as requiredby former section 404(b) of Public Law91–513, the Controlled Substances Act,solely for use by the Federal courts indetermining in subsequent proceedings,whether a person found guilty ofviolating that Act qualified for dismissaland discharge or for an expungementorder under certain of the Act’sprovisions. That provision was removedfrom the Controlled Substances Act bythe Sentencing Reform Act of 1984,Public Law 98–473, Title II, andincorporated in substantially identicalform into a newly enacted provision ofthe criminal code, 18 U.S.C. 3607(b).

The Department now proposes tomodify the system to reflect theappropriate authority for maintenanceof the system. The routine use sectionof the system notice has been modifiedto delete unnecessary routine usedisclosures.

In addition, the Department isrevising the ‘‘System Location’’ and‘‘System Manager and Address’’sections to reflect a move of the system.

Title 5 U.S.C. 552a(e)(4) and (11)provide that the public be given 30 daysin which to comment on the proposedroutine uses. Any comments must besubmitted in writing to Mary Cahill,Management Analyst, Management andPlanning Staff, Justice ManagementDivision, Department of Justice,Washington, DC 20530 by (30 days frompublication of this notice).

As required by 5 U.S.C. 552a(r) andOffice of Management and Budget(OMB) implementing regulations, theDepartment of Justice has provided areport on the proposed changes to OMBand the Congress.

A modified system description is setforth below.

Dated: June 18, 2001.Janis A. Sposato,Acting Assistant Attorney General forAdministration.

JUSTICE/JMD–002

SYSTEM NAME:Controlled Substances Act Nonpubic

Records.

SYSTEM LOCATION:U.S. Department of Justice, Justice

Management Division, Information

Management and Security Staff,Washington, DC 20530.

CATEGORIES OF INDIVIDUALS COVERED BY THESYSTEM:

Persons found guilty for the first timeof violating section 404 of theControlled Substances Act (21 U.S.C.844), i.e., persons who knowingly orintentionally possessed a controlledsubstance, except as authorized by theAct, whose cases have been in subjectof a disposition under 18 U.S.C. 3607(a)or an order of expungement under 18U.S.C. 3607(c).

CATEGORIES OF RECORDS IN THE SYSTEM:Arrest records of law enforcement

agencies, which include personal data,photographs, fingerprints, copies ofcourt orders and Form OBD–140 (18U.S.C. 3607).

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:This system is established and

maintained in accordance with PublicLaw 98–473, Chapter II, the sentencingReform Act of 1984 (18 U.S.C. 3607).

ROUTINE USES OF RECORDS MAINTAINED IN THESYSTEM, INCLUDING CATEGORIES OF USERS ANDTHE PURPOSES OF SUCH USES:

These records are retained by theDepartment of Justice and are availableonly to a Federal court upon that court’sissuance of an order demanding suchrecords solely for the purpose of use bysaid court in determining whether ornot a person found guilty of an offenseunder section 404 of the ControlledSubstances Act (21 U.S.C. 844) qualifiesfor the disposition provided in 18 U.S.C.3607(a) or the expungement provided in18 U.S.C. 3607(c).

RELEASE OF INFORMATION TO THE NATIONALARCHIVES AND RECORDS ADMINISTRATION:

Subject to approval by the AttorneyGeneral or the President under 44 U.S.C.2906, a record from this system ofrecords may be disclosed to the NationalArchives and Records Administration(NARA) as part of a recordsmanagement inspection conductedunder the authority of 44 U.S.C. 2904.

POLICIES AND PRACTICES FOR STORING,RETRIEVING, ACCESSING, RETAINING, ANDDISPOSING OF RECORDS IN THE SYSTEM:

STORAGE: RECORDS ARE STORED IN A LOCKEDROOM.

RETRIEVABILITY: RECORDS ARE INDEXED BY THENAME OF THE OFFENDER.

SAFEGUARDS:Access to these records is restricted to

the Departmental Records Officer andAssistant Director, Information Securityand Records Management, informationManagement and Security Staff, JusticeManagement Division.

RETENTION AND DISPOSAL:Records are retained in accordance

with records retention and disposalschedules approved by the Archivist ofthe United States.

SYSTEM MANAGER(S) AND ADDRESS:Director, Information Management

and Security Staff, Justice ManagementDivision, U.S. Department of Justice,Washington, D.C. 20530.

NOTIFICATION PROCEDURES:Same as the System Manager.

RECORD ACCESS PROCEDURES:Same as the System Manger.

CONTESTING RECORD PROCEDURES:Same as the system manager.

RECORD SOURCE CATEGORIES:Law enforcement agencies and

Federal courts.

EXEMPTIONS CLAIMED FOR THE SYSTEM:The Attorney General has exempted

the system from subsection (d) of thePrivacy Act pursuant to 5 U.S.C.552a(j)(2). Rules have been promulgatedin accordance with the requirements of5 U.S.C. 553(b)(c) and (e) and have beenpublished in the Federal Register. Aproposed rule which update thejustification for the exemption is beingpublished in today’s Federal Register.[FR Doc. 01–16142 Filed 7–19–01; 8:45 am]BILLING CODE 4410–FB–M

DEPARTMENT OF LABOR

Office of the Secretary


July 10, 2001.The Department of Labor (DOL) has

submitted the following publicinformation collection requests (ICRs) tothe Office of Management and Budget(OMB) for review and approval inaccordance with the PaperworkReduction Act of 1995 (Pub. L. 104–13,44 U.S.C. Chapter 35). A copy of thisICR, with applicable supportingdocumentation, may be obtained bycalling the Department of Labor. Toobtain documentation contact DarrinKing at (202) 693–4129 or by [email protected].

Comments should be sent to Office ofInformation and Regulatory Affairs,Attn: Lauren Wittenberg, OMB DeskOfficer VETS, Office of Managementand Budget, Room 10235, Washington,DC 20503 (202) 395–7316), within 30days from the date of this publication inthe Federal Register.



The OMB is particularly interested incomments which:

• Evaluate whether the proposedcollection of information is necessaryfor the proper performance of thefunctions of the agency, includingwhether the information will havepractical utility;

• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collection of information,

including the validity of themethodology and assumptions used;

• Enhance the quality, utility, andclarity of the information to becollected; and

• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,

e.g., permitting electronic submission ofresponses.

Type of Review: Extension of acurrently approved collection.

Agency: Veterans’ Employment andTraining Service (VETS).

Title: VETS–300 Cost AccountingReport and Manager’s Report.

OMB Number: 1293–0NEW.Affected Public: State, Local, or Tribal

Government.Frequency: Quarterly.

ReportNumber ofrespond-

entsFrequency Annual re-

sponses

Averagetime per

responses(hours)

Burdenhours

VETS–300 .................................................... 53 Quarterly (Plus 1 final) ................................. 265 1.00 265Manager’s Report ......................................... 1,200 Quarterly ....................................................... 4,800 4.00 19,200

Total ....................................................... 1,253 ....................................................................... 5,065 5.00 19,465

Total Annualized Capital/StartupCosts: $0.

Total Annual Costs (operating/maintaining systems or purchasingservices): $0.

Description: The VETS–300 CostAccounting Report provides data onState public employment programexpenditures. VETS uses this data forprogram budgeting and administrationpurposes and to meet mandatedreporting requirements to the Presidentand Congress. Title 38 U.S.C. requiresthat local employment services providereport not less than quarterly to theDirector for Veterans’ Employment andTraining for the State regardingcompliance with Federal law andregulations with respect to specialservices and priorities for eligibleveterans and eligible persons.

Currently, this information iscollected by the Employment andTraining Administration under OMBcontrol number 1205–0240 whichexpires September 30, 2001. Theinformation in the VETS–300 ANDManager’s Report will no longer becollected under the currently assignedOMB control number. VETS isrequesting that OMB approve thecontinued collection of this informationunder a new OMB control number.

Ira L. Mills,Departmental Clearance Officer.[FR Doc. 01–18150 Filed 7–19–01; 8:45 am]

BILLING CODE 4510–30–M

DEPARTMENT OF LABOR

Solicitation for Grant Application (SGA01–06); Customized EmploymentGrants

AGENCY: Office of DisabilityEmployment Policy (ODEP), Departmentof Labor.

ACTION: Notice of applicability of fundsand Solicitation for Grant Applications(SGA).

SUMMARY: The U.S. Department of Labor(DOL or the Department), Office ofDisability Employment Policy (ODEP)announces the availability of $3.5million to award up to sevencompetitive grants for strategic planningand implementation activities designedto improve the employment and careeradvancement of people with disabilitiesthrough enhanced availability andprovision of customized employmentservices through the new One-Stopdelivery system established under theWorkforce Investment Act of 1998(WIA) (Public Law 105–220, 29 U.S.C.2801 et seq.).

This Customized Employment Grantprogram will provide funds to selectedLocal Workforce Investment Boards(Local Boards), which will be the leadentity in a consortium/partnership ofpublic and private entities, to build thecapacity in local One-Stop Centers toprovide customized employmentservices to those persons withdisabilities who may not now beregularly targeted for services by theOne-Stop Center system. Grants fundedunder this program will also provide avehicle for Local Boards to systemicallyreview their policy and practices interms of service to persons with

disabilities, and to incorporate new andinnovative practices, as appropriate.

Grants are for a one-year period andmay be renewed for a period of up tofour additional years at varying fundinglevels (see Section V) depending uponthe availability of funds and the efficacyof the project activities. All formsnecessary to prepare an application areincluded in this SGA.

DATES: One (1) ink-signed original,complete grant application plus three(3) copies of the Technical Proposal andthree (3) copies of the Cost Proposalmust be submitted to the U.S.Department of Labor, ProcurementServices Center, Attention Grant Officer,Reference SGA 01–06, Room N–5416,200 Constitution Avenue, NW.,Washington, DC 20210, not later than4:45 p.m. EST, August 20, 2001. Hand-delivered applications must be receivedby the Procurement Services Center bythat time.

ADDRESSES: Grant applications must behand delivered or mailed to U.S.Department of Labor, ProcurementServices Center, Attention: GrantOfficer, Reference SGA 01–06, Room N–5416, 200 Constitution Avenue, NW.,Washington, DC 20210. Applicants mustverify delivery to this office directlythrough their delivery service and assoon as possible.

FOR FURTHER INFORMATION, CONTACT:Applications will not be mailed. TheFederal Register may be obtained fromyour nearest government office orlibrary. Questions about this solicitationmay be sent to Cassandra Willis, at thefollowing Internet address: [email protected].



1 Some of the required partners are adulteducation and literacy activities under Title II ofWIA; post-secondary vocational education activitiesunder the Carl Perkins Act (20 U.S.C. 2301 et seq.);vocational rehabilitation programs authorizedunder title V of the Workforce Investment Act;welfare-to-work programs; veterans employmentand training activities, community services blockgrant employment and training activities; U.S.Department of Housing and Urban Developmentemployment and training activities, and activitiesauthorized under Title V of the Older AmericansAct (WIA sec. 121(b), 29 USCA 2841(b), 20 CFR662.200).

Late Proposals

The grant application package mustbe received at the designated place bythe date and time specified or it will notbe considered. Any application receivedat the Procurement Services Center after4:45 p.m. EST, August 20, 2001, will notbe considered unless it is receivedbefore the award is made and:

1. It was sent by registered or certifiedmail not later than the fifth calendar daybefore August 20, 2001;

2. It is determined by the Governmentthat the late receipt was due solely tomishandling by the Government afterreceipt at the U.S. Department of Laborat the address indicated; or

3. It was sent by U.S. Postal ServiceExpress Mail Next Day Service-PostOffice to Addressee, not later than 5p.m. at the place of mailing two (2)working days, excluding weekends andFederal holidays, before August 20,2001.

The only acceptable evidence toestablish the date of mailing of a lateapplication sent by registered orcertified mail is the U.S. Postal Servicepostmark on the envelope or wrapperand on the original receipt from the U.S.Postal Service. If the postmark is notlegible, an application received after theabove closing time and date shall beprocessed as if mailed late. ‘‘Postmark’’means a printed, stamped or otherwiseplace impression (not a postage metermachine impression) that is readilyidentifiable without further action ashaving been applied and affixed by anemployee of the U.S. Postal Service onthe date of mailing. Therefore,applicants should request the postalclerk place a legible hand cancellation‘‘bull’s-eye’’ postmark on both thereceipt and the envelope or wrapper.

The only acceptable evidence toestablish the date of mailing of a lateapplication sent by U.S. Postal ServiceExpress Mail Next Day Service—PostOffice to Addressee is the date enteredby the Post Office receiving clerk on the‘‘Express Mail Next Day Service—PostOffice to Addressee’’ label and thepostmark on the envelope or wrapperand on the original receipt from the U.S.Postal Service. ‘‘Postmark’’ has the samemeaning as defined above. Therefore,applicants should request that the postalclerk place a legible hand cancellation‘‘bull’s-eye’’ postmark on both thereceipt and the envelope or wrapper.

The only acceptable evidence toestablish the time of receipt at the U.S.Department of Labor is the date/timestamp of the Procurement ServicesCenter on the application wrapper orother documentary evidence or receiptmaintained by that office. Applications

sent by telegram or facsimile (FAX) willnot be accepted.SUPPLEMENTARY INFORMATION:

I. Authority

Consolidated Appropriations Act,2001, Public Law 106–554, 114 STAT2763A–10, 29 U.S.C. 557(b).

II. Background

The President’s New FreedomInitiative is designed to increase thenumber of people with disabilities whoenter, reenter, and remain in theworkforce. It is dedicated to increasinginvestment in and access to assistivetechnologies, a quality education, andincreasing the integration of Americanswith disabilities into the workforce andcommunity life.

The Workforce Investment Act of1998 (WIA) provides the infrastructurefor streamlining services and securingemployment through the One-Stopdelivery system. WIA requires multipleprograms and agencies (including stateVocational Rehabilitation agencies) to:(a) Form partnerships in this effort; (b)share expertise and coordinateresources; and, provide services to assistpeople in gaining and retainingemployment. The One-Stop CareerCenters which comprise this system arein a position to expand employmentopportunities for people withdisabilities, thus ensuring that the intentof the New Freedom Initiative isaccomplished.

Under WIA, collaboration withmultiple required partners 1 is intendedto create a coordinated and streamlinedsystem for the customer seekingemployment. It is essential to involveadditional states or local programs aspartners with the One-Stop Center toenable many people with disabilities tohave an increased opportunity for andchoice in employment. These additionalprograms include, but are not limited to,state programs for Mental Retardation,Medicaid, Mental Health andTransportation; State Councils forDevelopmental Disabilities; stateassistive technology programs, SmallBusiness Development Centers andsecondary education programs. While

not required partners under WIA, theseprograms have expertise and/orresources that can contribute toexpanding the employment andbusiness opportunities for people withdisabilities. In addition, communitycolleges, University Centers forExcellence in DevelopmentalDisabilities, business incubators,lending institutions, foundations, faith-based organizations, and other state orlocal programs may also be criticalpartners. These agencies and programsmay not be informed about the potentialfor coordinating resources and expertisewith Local Boards and One-Stop Centersin order to increase employment, choiceand wages for people with disabilities.

In addition, One-Stop Centers mayelect to become employment networksunder the Ticket-to-Work Program (42U.S.C. 1320b–19), thus making it morelikely that they will require expertise incustomized employment strategies inorder to successfully facilitateemployment for people with disabilitieswho are recipients of SupplementalSecurity Income (SSI) or Social SecurityDisability Insurance (SSDI). Ticket-to-Work is providing increasedemployment opportunities for peoplewith disabilities who receive SSI and/orSSDI benefits by addressing some of themajor barriers encountered by theseindividuals as they attempt to gain orregain employment. Approximatelyeight million people with disabilitiesreceive SSI and/or SSDI benefits.According to the U.S. GeneralAccounting Office, less than one percentof these individuals leave the rolls eachyear as a result of paid employment. Ofthose who do leave, about one-thirdreturn within three years. The Ticket-to-Work program provides a variety ofwork incentives, including, greaterchoices of needed employment services,the continuation of Medicare eligibilityfor SSDI recipients and, at state option,health coverage under the Medicaidprogram to certain workers withdisabilities, either by permitting them topurchase Medicaid coverage or byextending Medicaid eligibility to themwithout charge. As a result, there isunprecedented opportunity for theseindividuals to enter, or return to theworkforce. Increasing numbers ofindividuals with disabilities will beapproaching their local One-StopCenters for assistance.

Many strategies exist for securingintegrated, competitive employment forpeople with disabilities, includingpeople who previously might have beenconsidered ‘‘nonfeasible’’ foremployment, and people who have beensegregated in institutions, nursinghomes, and day activity programs. Many



exemplary practices and promisingstrategies have emerged throughdecades of research and demonstrationprojects, and through other public andprivate activities promoting increasedchoice and self-determination for peoplewith disabilities. These includeapproaches such as supportedemployment; supportedentrepreneurship; individualized jobdevelopment; job carving andrestructuring; use of personal agents(including individuals with disabilitiesand family members); development ofmicro-boards, micro-enterprises,cooperatives and small businesses; anduse of personal budgets and other formsof individualized funding that providechoice and control to the person andpromote self-determination. These andother innovations hold the promise ofdramatically increasing bothemployment and wages for people withdisabilities, in part by increasing theirchoices for integrated, competitiveemployment, business ownership,micro-enterprise development,entrepreneurship, and otheremployment options that werepreviously seldom available.

The Presidential Task Force onEmployment of Adults with Disabilities,which includes membership fromeighteen Federal agencies, hasconducted multiple activities relating toincreasing employment for people withdisabilities, including people who areSSI and/or SSDI beneficiaries, peoplewho are in nursing homes, institutions,facility-based employment, day activityprograms and other segregated settingswhere they are either not working or areearning less than minimum wage. Amajor result of these activities was theidentification of the need for a sustainedand coordinated initiative to buildprofessional competency within One-Stop Centers and their partners,including providers and employers,about the use of customizedemployment strategies. Other findingsinclude the need to: (1) Effectivelyexpand the availability of personalagents, job development expertise, andother strategies for achievingcustomized employment for people withdisabilities; (2) increase the number ofeligible training providers who canprovide customized employmentassistance; (3) provide information,technical assistance, training andstrategic planning that focuses onintegrating customized employmentstrategies into the workforce investmentsystem; (4) coordinate all necessaryemployment and related supports fromWIA partners and other essentialprograms that are not required partners

under WIA; and, (5) research anddemonstrate alternative methods ofdetermining effective performance bythe workforce investment system interms of service to people withdisabilities.

In response to these findings ODEPwill pursue a two-pronged approach:

1. Awarding these strategic planningand implementation grants forcustomized employment to developand/or expand the capacity of localworkforce systems to providemeaningful and effective opportunitythrough One-Stops for all persons withdisabilities; and

2. Establishing a national technicalassistance and training initiative to helpincrease the capacity of the workforceinvestment system to serve people withdisabilities.

The combination of these activitieswill substantially contribute toachieving the goals of the President’sNew Freedom Initiative.

This SGA is designed to address thefirst of these activities. Establishing thesupporting national technical assistanceinitiative is being implemented under aseparate solicitation, and is expected tobe in operation in time to assist theplanning and implementation activitiesof grants funded under this solicitation.

The U.S. Department of Labor alsooffers Work Incentive Grants designedto enhance service delivery throughoutthe National One-Stop delivery systemfor people with disabilities. Recognizingthat the One-Stop system generally haslimited capacity to serve people withdisabilities in the comprehensive natureenvisioned under the WIA, the WorkIncentive Grant program has multiplegoals which include but are not limitedto:

1. Establishing the capacity forcoordinated, seamless service deliveryto this client group for the manyprograms and services which typicallyimpact their entry or retention in theworkforce;

2. Increasing the availability ofassistive technology in One-Stop

Centers;3. Ensuring the availability of trained

One-Stop staff to serve people withdisabilities;

4. Assuring outreach and marketing ofOne-Stop services to the disabilitycommunity; and

5. Establishing or expanding linkageswith public and private providers of thisclient group.

Twenty-three Work Incentive Grantswere awarded in FY 2000 and anotherSolicitation for Grant Applications willbe announced in the summer of 2001 asa continuing and on-going process ofbuilding the One-Stop infrastructure to

most effectively meet the needs ofcustomers with disabilities. The WorkIncentive Grants are complementary yetdistinct from the CustomizedEmployment demonstration grantsoffered in this SGA. The Work IncentiveGrants support systemic change throughcapacity building of the One-Stopinfrastructure, whereas theseCustomized Employment Grants willserve as models of comprehensiveservice delivery which extends beyondWIA programs and services forindividuals with disabilities who are themost disenfranchised under currentservice delivery systems.

This SGA is designed to developcomprehensive models of direct servicedelivery in the context of a One-Stopsetting for individuals with disabilitieswith the greatest barriers toemployment, many of whom have neverbeen employed, are limited tosubsidized employment, or may beconsidered unable to be employed. TheCustomizedEmployment grants willinvolve cutting edge approaches such asuse of customized employmentstrategies and active involvement ofessential programs of both mandatedand non-mandated partners of theworkforce system.

III. PurposeThe purpose of this initiative is to

maximize the capacity of, and outcomesfrom, One-Stop Centers and theirpartners to effectively serve people withdisabilities through customizedemployment strategies, and to integratethose strategies into the policy andpractice of the One-Stop and its partnersin order to increase employment, choiceand wages for people with disabilities.

For purposes of this solicitation theDepartment has chosen to specificallytarget the development and provision ofcustomized employment to those peoplewith disabilities identified in thissection. However, the Departmentexpects that once capacity for usingcustomized employment strategies isdeveloped or enhanced, the One-StopCenters and their partners can expanduse of these strategies to other groups ofpeople with (and without) disabilities.

For purposes of this solicitation, thetarget groups are people withdisabilities who are either unemployedor under-employed and are:

1. Receiving Supplementary SecurityIncome (SSI) and/or Social SecurityDisability Insurance (SSDI); or

2. Participating in day programs (suchas day habilitation, day activity or dayhealth programs) or participating infacility-based or communityemployment and earning less thanminimum wage; or



2 These partners may become a subgroup or anadvisory group of the Local Board. They may bespecifically charged with coordinating funding,resources and expertise in order to increasecustomized employment for people with disabilitiesin the community.

3. Participating in segregatedemployment and choosing to move tointegrated, competitive employment; or

4. Awaiting employment services andsupports following a move from aresidential facility, or as part of a planto move into a community under theSupreme Court decision in Olmstead v.L.C. by Zimring, 527 U.S. 581(1999); or

5. Transitioning from, or preparing totransition from, secondary school undera transition plan under part B of theIndividuals with DisabilitiesEducationAct, as amended (20 U.S.C.1400 et seq.), and who, without accessto customized employment strategies,would likely be referred to one of theenvironments identified in (2), (3)or (4)above, but who prefers integrated,competitive employment or self-employment.

For purposes of this solicitation,customized employment meansindividualizing the employmentrelationship between employees andemployers in ways that meet the needsof both. It is based on an individualizeddetermination of the strengths, needs,and interests of the person with adisability, and is also designed to meetthe specific needs of the employer. Itmay include employment developedthrough job carving, self-employment orentrepreneurial initiatives, or other jobdevelopment or restructuring strategiesthat result in job responsibilities beingcustomized and individually negotiatedto fit the needs of individuals with adisability. Customized employmentassumes the provision of reasonableaccommodations and supportsnecessary for the individual to performthe functions of a job that isindividually negotiated and developed.

IV. Statement of WorkEligible applicants for these grants are

Local Workforce Investment Boards(LocalBoards) under the WorkforceInvestment Act. The Local Board mayenter into numerous partnerships withother public and private entities,consistent with the proposed activitiesof the grant.

Grantees must implement trainingand staff development activities anddemonstration projects designed todevelop organizational capacity to servepeople with disabilities in One-StopCenters. These projects must developprofessional competency in customizedemployment strategies and servetargeted people with disabilities.Workforce investment system partnersand other non-required but essentialprograms must be included in thiseffort. Grantees must integratecustomized employment strategies withthe existing services available through

the One-Stop Center and its partners,including through demonstratingalternative methods of measuringperformance within the Once-Stopenvironment. The result of these effortswill be an increase in employment,choice and wages for people withdisabilities through the use ofcustomized employment, and thesystemic evaluation and modification,as appropriate, of policies and practicesto ensure that customized employmentstrategies are systemically included inthe services available through the One-Stop Center.

Grantees must demonstratecollaborative activities across relevantstakeholder groups, including bothrequired and non-required One-Stoppartners, persons with disabilities, theirparents and other family members,advocates, employers, communityrehabilitation agencies, and others asappropriate.2 Grantees must:

1. Develop professional competencyand capacity for implementing a varietyof innovative and promising practicesthrough customized employment;

2. Mobilize needed services andsupports;

3. Implement systems changedemonstrations; and,

4. Implement other initiatives toensure that these innovations andpromising practices become part of themenu of services available through theworkforce investment system.

Grantees must develop employmentopportunities in a variety of jobs orindustries and at a variety of levels,including self-employment andentrepreneurship, based on thestrengths, needs and desires of theindividual with a disability. They mustorganize services and supports in waysthat provide informed choice andpromote self-determination. In addition,grantees must establish employerinvolvement; track and respond tocustomer service and satisfaction forboth persons with disabilities andemployers; and provide services,including follow-up services to ensurejob retention and career development.

It is expected that each grantee willbecome a ‘‘model’’ for both the state andthe Nation in terms of demonstratingeffective linkages and strategies throughthe One-StopCenter system. Thesemodels will demonstrate successfulstrategies for customized employmentfor people with disabilities which resultin increased employment and wages.

Each grantee must also review policyand practice as it relates to people withdisabilities, including researchingalternative methods for performanceaccountability that are relevant to thecharacteristics of this population.

Grantees must pursue the followingobjectives:

1. Develop and implement strategicplanning and implementation activitiesacross the One-Stop required partnerprograms as identified in the WorkforceInvestment Act, (WIA sec. 121(b), 29USCA, 2841(b)(such as VocationalRehabilitation and others asappropriate) as well as other essentialprograms (such as Medicaid, Medicare,Mental Health,Transportation, SmallBusiness Development Centers, StateCouncils on Developmental Disabilities,community colleges, benefits counselingand assistance programs, lending andfinancial institutions), whose expertise,services, and/or funds could contributeto employment services and supportsneeded by people with disabilities inorder to secure customizedemployment.

2. Develop local and statewide policyinitiatives to ensure that customizedemployment and multiple innovativestrategies and promising practicesbecome part of the menu of servicesavailable to people with disabilitiesincluding investigating alternativemethods for performance accountabilitythat consider the characteristics of thepopulation.

3. Develop and document theincreased capacity of the One-Stopsystem, including WIA requiredpartners, community providers ofemployment services, and otheressential programs, to providecustomized employment for personswith disabilities. Such capacity includesenhancing collaboration betweenrequired WIA partners and buildingnew collaborative initiatives with otheressential programs.

4. Develop and document the capacityof the One-Stop system to increase thewages of people with disabilities whoare currently working at less thanminimum wage through the use ofcustomized employment strategies.

5. Develop an increasedunderstanding by One-Stop Centers’staff about health care, work incentives,benefits planning, ‘‘tickets’’ and otherprovisions under the Ticket-to-Workand Work Incentives ImprovementActof 1999 (42 USC 1320b–19 et seq.); anddocument increased use of theseprograms by the One-Stop Center and itspartner programs to secure customizedemployment for recipients of SSI and/orSSDI who are entering the workforce orreturning to work.



6. Demonstrate and document theincreasing use of resources from anumber of system partners and otheressential programs, including providingindividual budgets (e.g., individualtraining accounts/contractual services;tickets; vouchers; and other sources ofindividualized funding or personalfunding accounts) for persons withdisabilities to obtain customizedemployment.

7. Develop and leverage linkages withother state and local initiatives thatprovide services and supports forpeople with disabilities (including, butnot limited to, state systems changeefforts which promote systemsimprovement and comprehensivecoordination; initiatives involvinghealth care; benefits planning andassistance; housing; transportation;education; supported employment;small business development;technology-related assistance; initiativesof private foundations; and faith-basedprograms and others as appropriate).

8. Educate relevant stakeholders,including state and local policymakersand systems personnel, about neededchanges in policy and practice in orderto increase customized employment andwages for people with disabilities.Organize education activities to enablecustomized employment andpersonalized supports to becomeavailable and used in localcommunities, including (as appropriate)activities necessary to secure adoptionof the Medicaid buy-in in the state.

9. Collaborate with the nationaltechnical assistance cooperativeagreement funded by the ODEP toprovide assistance and training onincreasing employment for adults withdisabilities.

10. Identify and pursue otheractivities, as appropriate, to achievingthe goals of these grants.

Funds must be used in a flexiblemanner, as determined appropriate byinput from stakeholders and identifiedneeds, so long as requirements foroutcome and evaluation data and otherrequirements of Federal statutes,regulations, administrative requirementsand OMB circulars and therequirements delineated in this SGA aremet. Activities may include, thefollowing possibilities:

1. Necessary staffing across agenciesto implement grantee activities andotherwise demonstrate effectivepartnerships and interactions necessaryto effectively leverage resources andexpertise from partnering systems andprograms.

2. Outreach to relevant stakeholders.3. Strategic planning.

4. Demonstration activities whichprovide methods to increase theemployment of people with disabilitiesthat are designed for systemic inclusion(including but not limited todemonstrating the use of individualtraining accounts or contractualservices, tickets, and individualbudgeting initiatives; economicstimulus activities including low-interest loans for person-centered micro-boards focused on increasing economicprosperity for specific individuals withdisabilities; entrepreneurialemployment initiatives that areconsumer-owned or operated;demonstrations of innovation andcutting-edge strategies providingpersonal control, choice and customizedassistance resulting in employment,including business ownership, micro-enterprise development or developmentof cooperatives for persons withdisabilities; and other supports neededby specific individuals with disabilitiesto increase choice and wages inemployment).

5. Other activities necessary toaddress needs and achieve goalsidentified through strategic planningand implementation, includingcollection of necessary data andevaluation.

6. Collaboration with the educationsystem, parents and families to ensuretransition of young people withdisabilities from school to customizedemployment or training, anddocumentation of the outcomes of suchefforts.

7. Training and education activities(including training regarding Medicaidbuy-in provisions and other policyimplications for increasing employmentthrough state activities) designed tofurther the goal of increasingcustomized employment for personswith disabilities. These trainingactivities include the education of One-Stop and partner personnel; statesystems personnel and policymakers;developing and disseminatingeducational information and materials;and otherwise promoting policy andpractice to increase the wide spreadcommunity-based use of customizedemployment strategies and personalizedsupports.

8. Researching and demonstratingalternative methods of measuring WIAperformance outcomes that consider thevarious characteristics of people withdisabilities and developingdemonstrations of performancemeasures that document new methodsfor measuring program effectiveness;and coordinating the availability of andaccess to assistive technology

9. Establishing connections to andcollaborating with other entities,including employers, lending andfinancial institutions, foundations, faith-based organizations, institutions ofhigher education, consumer and familyorganizations, small businessdevelopment centers and others, asappropriate, to further customizedemployment opportunities for personswith disabilities in local communities.

10. Educating the media and thegeneral public about successfulstrategies for and the benefits ofsecuring employment for people withdisabilities. This will assist in obtaininglong-term support for continuation ofgrantee activities following completionof funding.

11. Increasing the availability ofpersonal agents and job developmentpersonnel offering customized servicesthrough customer-controlled approachesthat result in customized employment(including demonstrating effectivenessof paying family members and/or otherindividuals with disabilities to serve aspersonal agents when selected by theindividual with a disability to assist innegotiating and implementingemployment plans and services.)

12. Assisting community providers ofsegregated employment services todevelop integrated, competitive optionsfor individuals with disabilities,including implementation of conversionand other organizational changeinitiatives conducted with segregatedprovider programs that wish to changetheir services to integrated employment.

Upon the award of a grant, granteesmust begin a strategic planning andimplementation process that willaddress multiple components of neededchange. Planning, implementation andongoing evaluation for continuousimprovement are expected to beimplemented from year one inrecognition that dynamic planning willoccur and evolve over time. By the endof year five, it is expected that a morelong-term strategic plan will be in placefor expanding the availability andprovision of customized employment,and for systemically revising policy andpractices consistent with this goal. Allgrantees must provide a detailedmanagement plan for project goals,objectives and activities.

All grantees must collect and provideto the DOL information on theindividuals with disabilities servedunder this grant and who secureemployment through use of customizedstrategies (including information ontypes of jobs, wages and benefitssecured by specific individuals withdisabilities, and other areas addressed



through the linkages and networksfacilitated by grant activities).

All grantees must agree to cooperatewith an independent evaluation to beconducted by the Department of Labor.DOL will arrange for and conduct thisindependent evaluation of theoutcomes, impacts, andaccomplishments of each funded grant.Grantees must agree to make availablerecords on all parts of grant activity,including participant employment andwage data, and to provide access topersonnel, as specified by theevaluator(s), under the direction of theDepartment. This independentevaluation is separate from the ongoingevaluation for continuous improvementrequired of the grantee for grantimplementation.

V. Funding AvailabilityThe Department of Labor anticipates

awarding up to seven grants with arange of between $400,000 and $750,000each. These awards will be for a one-year period and may be renewedannually for up to four additional yearsfor a total of five years depending uponthe availability of funds and the efficacyof the grant activities, establishedthrough independent reviews conductedby the Department of Labor or itsdesignee. Proposals must includebudgetary information for a five-yearperiod. The funding for Years Four andFive will be at successively lower levels,with funding during Year Four at 80percent of third-year funds and duringYear Five at 60 percent. Grantees areexpected to use this grant as seed moneyto develop other public and privateresources in order to ensuresustainability of grant activitiesfollowing completion of the fundingperiod.

Funds must not be used for modifyingbuildings or equipment for physical orcommunication accessibility, althoughthe strategic planning should addresshow resources will be leveraged forsuch purposes from other sources, asappropriate.

VI. Eligible ApplicantsEligible applicants for these grants are

restricted to Local WorkforceInvestmentBoards (Local Boards) asestablished under the WorkforceInvestment Act (WIA sec.117,29 USCA2832.) The Local Board may coordinatenumerous partnerships with otherpublic and private entities, consistentwith proposed activities of the grant andapplicable administrative requirements.

The U.S. Department of Laborencourages Local Boards to join withotherState/local entities and public/private non-profit organizations. Such

entities and organizations could includestate programs for VocationalRehabilitation, Mental Health,Medicaid,Mental Retardation, Housing and/orTransportation; State Councils onDevelopmental Disabilities; Protectionand Advocacy Programs; UniversityCenters for Excellence in DevelopmentalDisabilities; institutions of highereducation; Centers for IndependentLiving (CIL’s); disability advocacy andprovider organizations; organizations ofparents; federally-funded disabilitygrant entities; Small BusinessDevelopment Centers; cooperatives andmicro-enterprises; lending and financialinstitutions; training programs; mediaand marketing agencies; employers;foundations; community and faith-basedprograms; and other organizations orprograms which provide or supportservices and/or advocacy for peoplewith disabilities. Letters of support andcommitment from these programs mustbe included in the Appendix of theproposal.

Indian and Native American Tribalentities, or consortia of Tribes, mayapply for these grants. These grantscould involve coordination of servicesand enhancement to a One-Stop systemapproach for people with disabilities ina specific Indian community or coveringmultiple Tribal entities which may cutacross multiple States and/or workforceinvestment areas. Grants to Indian andNative American tribal grantees aretreated differently because ofsovereignty and self-governanceestablished under the Indian Self-Determination and EducationAssistance Act allowing for thegovernment to government relationshipbetween the Federal and TribalGovernments.

Please Note That Eligible ApplicantsMust Not be Classified Under theInternal Revenue Code as 501 (c)(4)Entity. See 26 U.S.C.506(c)(4).According to Section 18 of the LobbyingDisclosure Act of 1995, an organization,as described in Section 501(c)(4) of theInternal Revenue Code of 1986, thatengages in lobbying activities will notbe eligible for the receipt of federalfunds constituting an award, grant, orloan.

VII. Application Contents

There are three required Parts and anAppendix of the application.Requirements for each Part are providedin this application package, as are allrequired forms.

Part I—Project Financial Plan(Budget).

Part II—Executive Summary.Part III—Project Narrative.

Appendices—Letters of Commitment/Support, Resumes, etc.

General Requirements—Three copiesand an original of the proposal must besubmitted, one of which must containan original signature. Proposals must besubmitted by the applicant only. Pagelimits do not apply to the ProjectFinancial Plan or the Appendices(assurances, resumes, bibliography orreferences as appropriate, and letters ofsupport.) A font size of at least twelve(12) point is required throughout.

Part I—Project Financial Plan (Budget)

To be considered, applications mustinclude a detailed financial plan whichidentifies by line item the budget plandesigned to achieve the goals of thisgrant. TheProject Financial Plan mustcontain the SF–424, Application forFederal Assistance,(Appendix A) and anSF–424A Budget Information Sheet(Appendix B).

The Project Financial Plan (Budget)must include on a separate page adetailed cost analysis of each line item.Justification for administrative costsmust be provided.Approval of a budgetby DOL is not the same as the approvalof actual costs. The individual signingthe SF–424 on behalf of the applicantmust represent and be able to bind theresponsible financial and administrativeentity for a grant should that applicationresult in an award.

Part II—Executive Summary

The application must contain anExecutive Summary limited to no morethan two (2) single-spaced, single-sidedpages. Each application must provide agrant synopsis which identifies thefollowing:

1. The applicant;2. The consortium partners; the

organizations or systems they represent;and their role in grant implementation;

3 . Data on people with disabilities inthe area, including, to the extent it isavailable, information about the targetgroup for this solicitation and other datarelevant to the proposed grant;

4. The geographic service area of theLocal Board;

5. The planned period of performance(projected annually through a five yearcycle, assuming grant renewals awards);

6. The actions already taken by theOne-Stop system in the local area toaddress the needs of people withdisabilities, including activities relatedto increasing availability of customizedemployment and leveraging resourcesand expertise across non-requiredpartners of the One-Stop Centers;

7. A brief statement of the goals of theproposal and how they will be achieved;and,



8. Assurances of commitment insupport of this proposal from the fiscalagent and all partner agencies.

Part III—Project Narrative

The Grant Narrative should providecomplete information on how theapplicant will address the requirementsof this SGA and is limited to no morethan 75 double-spaced, single-sided,numbered pages (not includingAppendices).

Each application must provide, inresponse to the objectives of this SGA,a comprehensive strategy andimplementation plan for developingcapacity and providing customizedemployment through the One Stopsystem.

Appendix—Letters of Support and/orCommitment, Resumes

VIII. Evaluation Criteria/Selection

A. Evaluation Criteria

The Project Narrative should addressthe following evaluation element:

1. Statement of Need (10 Points)

Applicants must include in theirproposed plan the following items.

a. The current employmentcircumstances facing people withdisabilities in the area to be served,including barriers, facilitators, andresources, systems and activities thatcould be leveraged to address neededchanges.

b. The number of persons withdisabilities in the area who fit the otherrequirements of the defined target groupof persons with disabilities who may beserved under this grant.

c. Related issues that need to beaddressed in order to develop and/orenhance capacity of the One-Stopsystem to use customized employmentstrategies to increase employment,choice and wages for persons withdisabilities, including the contributionthe proposed grant will make toinfluence systemic changes in the localworkforce system.

2. Comprehensive Strategy for StrategicPlanning and Implementation to BuildCapacity for Customized Employment(25 points)

Applicants must include in theirproposed plan the following items:

a. The technical plan to implementthe purpose and objectives of thisSGAto enhance the capacity of the workforceinvestment system to increaseemployment, choice and wages forpersons with disabilities through theuse of customized employmentstrategies and to ensure that suchstrategies are systemically included in

the policy and practice of the One-StopCenter(s);

b. The provision of necessaryprogrammatic and physical access,including assistive technology, andcompliance with section 508 of theRehabilitation Act, 29 U.S.C. 794(d), [asamended by the FY 2001 appropriationfor military construction, Pub. L. No.106–246(July 13, 2000)] in order toensure access to persons withdisabilities;

c. The plan for developing,implementing and expanding theavailability and use of customizedemployment strategies throughout theWIA system of required partners andnon-required programs;

d. The plan for how the expertise ofthe State Vocational Rehabilitationprogram will be used;

e. The plan to involve appropriateprivate entities, including but notlimited to community-basedorganizations and faith-basedorganizations, as appropriate;

f. The plan for reaching people withdisabilities and their families, includingtheir involvement in grant design andimplementation;

g. The plan for gaining support andassistance of area employers;

h. The plan for meeting the needs ofindividuals with disabilities fromdiverse cultures and/or ethnic groups;

i. The plan for expanding the use ofcustomized employment strategies overtime to:

1. All groups of persons withdisabilities targeted under thissolicitation; and

2. Other groups of individuals withdisabilities (such as individuals who arereceiving TANF benefits) followingcompletion of the grant;

j. The plan for leveraging resourcesover time in order to ensure grantsustainability upon completion offunding, including the plan forimplementing grant activities duringyears four and five at 80% and 60%funding, respectively; and

k. The plan for responding to themeasures by which program successwill be evaluated.

3. Collaboration and Coordination (15Points)


a. Demonstrations of support andcommitment from key organizations andindividuals who advocate through or onbehalf of persons with disabilities toparticipate in this effort;

b. Demonstrations of support andcommitment from One-Stop partnersand non-required but essentialprograms;

c. Demonstrations of support fromarea employers and employerorganizations and evidence of theirinterest in participating in this effort.

d. Demonstrations of support frompersons with disabilities and theirfamilies for implementation of theproposed activities; and,

e. A commitment to cooperate withODEP’s planned technical assistanceinitiative in a joint effort to developcapacity and disseminate promisingpractices so that the national workforcesystem can profit from this experience.

4. Quality of Grant Personnel (15 Points)


a. The names and qualifications ofstaff and related technical experts andconsultants to support the objectives ofthis project for grantee and key sub-contractors and consultants. A resumeof key staff and consultants must beincluded in the Appendix and mustclearly indicate qualifications of eachindividual for designated role in projectimplementation.

b. The extent to which the applicantencourages applications for employmentfrom persons who are members ofgroups that have traditionally beenunder-represented based on race, color,national origin, gender, age or disability.

5. Management Plan (10 Points)


a. The adequacy of the managementplan to achieve the objectives of theproposed grant on time and withinbudget, including clearly definedresponsibilities, time lines, andmilestones for accomplishing grantactivities;

b. The adequacy of procedures forensuring feedback and continuousimprovement in the operation of theproposed grant;

c. The extent to which the timecommitments of key grant personnel areappropriate and adequate to meet theobjectives of the proposed grant;

d. How the applicant will insure thatcustomized employment strategiesbecome a part of the menu of servicesavailable in the local community.

6. Evaluation and ContinuousImprovement (15 Points)


a. All grantees must agree toparticipate in the independentevaluation outlined in Section IV of thisSGA.

b. In addition, all grantees mustimplement ongoing evaluation of grantactivities in order to determine



effectiveness of implementation effortsfor continuous improvement of thegrant. In determining the quality of theevaluation for continuous improvement,the Department considers the following:

1. The extent to which the methods ofevaluation are thorough, feasible, andappropriate to the goals, objectives andoutcomes of the proposed grant;

2. The extent to which the methods ofevaluation and continuousimprovement are appropriate to thecontext within which the grant operates;

3. The extent to which the methods ofevaluation include the use of objectiveperformance measures that are clearlyrelated to the intended outcomes of thegrant and will produce quantitative andqualitative data to the extent possible(including data on wages, wage changes,benefits, types of jobs, customersatisfaction, resources leveraged frompartner programs, systemic changesimplemented to sustain grant over time);and

4. The extent to which the evaluationwill provide guidance about effectivestrategies suitable for replication inother settings.

7. Adequacy of Resources and Budget(10 Points)


a. The adequacy of support for grantimplementation, including facilities,equipment, supplies, and otherresources;

b. The extent to which the budget isadequate to support the proposed grant.

B. Selection Criteria

Acceptance of a proposal and anaward of federal funds to sponsor anyprogram(s) does not provide a waiver ofany grant requirement and/orprocedures. Grantees must comply withall applicable Federal statutes,regulations, administrative requirementsandOMB Circulars. For example, theOMB circulars require, and an entity’sprocurement procedures must requirethat all procurement transactions mustbe conducted, as practical, to provideopen and free competition. If a proposalidentifies a specific entity to provide theservices, the DOL/ODEP’s award doesnot provide the justification or basis tosole-source the procurement, i.e., avoidcompetition.

A panel will objectively rate eachcomplete application against the criteriadescribed in this SGA. The panelrecommendations to the Grant Officerare advisory in nature. The Grant Officermay elect to award grants either with orwithout discussion with the applicant.In situations where no discussionoccurs, an award will be based on the

signed SF 424 form (see Appendix A),which constitutes a binding offer. TheGrantOfficer may consider theavailability of funds and anyinformation that is available and willmake final award decisions based onwhat is most advantageous to theGovernment, considering factors suchas:

1. Findings of the grant technicalevaluation panel;

2. Geographic distribution of thecompetitive applications; and,

3. The Project’s Financial Plan.

IX. Reporting

The Department of Labor isresponsible for ensuring the effectiveimplementation of each competitivegrant project in accordance with theprovisions of this announcement, thegrant agreement and other applicableadministrative requirements. Applicantsshould assume that Department staff ortheir designees will conduct at least oneon-site project review. In addition, allgrantees will be expected to provideinformation on individuals withdisabilities securing employmentthrough use of customized strategies(including information on types of jobs,wages and benefits secured by specificindividuals with disabilities, and otherareas addressed through the linkagesand networks facilitated by projectactivities).

Grantees will be required to submitperiodic financial and participationreports under the CustomizedEmployment grant program. Specificallythe following reports will be required:

1. Monthly progress reports, duringinitial start-up and implementation ofthe project (approximately six months),and quarterly reports thereafter. It isestimated that the monthly report willtake five hours to prepare during thefirst six months of the grant. Thequarterly report is estimated to take tenhours during the remainder of the grant.The final report is estimated to take 20hours. The Department will work withthe grantee to identify the requirementsof the various reports, which will,among other things, include measures ofongoing analysis for continuousimprovement and customer satisfaction.

2. Standard Form 269, FinancialStatus Report Form, on a quarterly basis;

3. Final Project Report, including anassessment of project performance andoutcomes achieved. This report will besubmitted in hard copy and onelectronic disk using a format andinstructions which will be provided bythe Department. A draft of the finalreport is due to the Department 45 daysbefore the termination of the grant.

DOL will arrange for and conduct anindependent evaluation of theoutcomes, impacts, andaccomplishments of each fundedproject. Grantees must agree to makeavailable records on all parts of projectactivity, including participantemployment and wage data, and toprovide access to personnel, as specifiedby the evaluator(s), under the directionof the Department. This independentevaluation is separate from the ongoingevaluation for continuous improvementrequired of the grantee for projectimplementation.

X. Administration Provisions

A. Administrative Standards andProvisions

The grant awarded under this SGAshall be subject to the following:29 CFR Part 95—Uniform

Administrative Requirements forGrants and Cooperative Agreementswith Institutions of Higher Education,etc.

29 CFR Part 96—Federal Standards forAudit of Federally Funded Grants,Contracts, and Agreements

29 CFR Part 97—UniformAdministrative Requirement forGrants and Cooperative Agreements toState and Local Governments

B. Allowable CostDeterminations of allowable costs

shall be made in accordance with thefollowing applicable Federal costprinciples:State and Local Government—OMB

Circular A–87Nonprofit Organizations—OMB Circular

A–122Profit-making Commercial Firms—48

CFR Part 31Profit will not be considered an

allowable cost in any case.Signed at Washington, DC this 17th day of

July, 2001.Daniel P. Murphy,Grant Officer.Appendix A. Application for Federal

Assistance, Form SF 424Appendix B. Budget Information Sheet, Form

SF 424AAppendix C. Assurances and Certifications

Signature Page

Instructions for the SF–424

Public reporting burden for this collectionof information is estimated to average 45minutes per response, including time forreviewing instructions, searching existingdata sources, gathering and maintaining thedata needed, and completing and reviewingthe collection of information. Sendcomments regarding the burden estimate orany other aspect of this collection ofinformation, including suggestions for



reducing this burden, to the Office ofManagement and Budget, PaperworkReduction Project (0348–0043), Washington,DC 20503.

Please do not return your completed formto the Office of Management and Budget.Send it to the address provided by thesponsoring agency.

This is a standard form used by applicantsas a required facesheet for preapplicationsand applications submitted for Federalassistance. It will be used by Federal agenciesto obtain applicant certification that Stateswhich have established a review andcomment procedure in response to ExecutiveOrder 12372 and have selected the programto be included in their process, have beengiven an opportunity to review theapplicant’s submission.

Item and entry:1. Self-explanatory.2. Date application submitted to Federal

agency (or State if applicable) and applicant’scontrol number (if applicable).

3. State use only (if applicable).4. If this application is to continue or

revise an existing award, enter presentFederal identifier number. If for a newproject, leave blank.

5. Legal name of applicant, name ofprimary organizational unit which willundertake the assistance activity, completeaddress of the applicant, and name andtelephone number of the person to contact onmatters related to this application.

6. Enter Employer Identification Number(EIN) as assigned by the Internal RevenueService.

7. Enter the appropriate letter in the spaceprovided.

8. Check appropriate box and enterappropriate letter(s) in the space(s) provided:—‘‘New’’ means a new assistance award.—‘‘Continuation’’ means an extension for an

additional funding/budget period for aproject with a projected completion date.

—‘‘Revision’’ means any change in theFederal Government’s financial obligationor contingent liability from an existingobligation.9. Name of Federal agency from which

assistance is being requested with thisapplication.

10. Use the Catalog of Federal DomesticAssistance number and title of the programunder which assistance is requested.

11. Enter a brief descriptive title of theproject. If more than one program isinvolved, you should append an explanationon a separate sheet. If appropriate (e.g.,construction or real property projects), attacha map showing project location. Forpreapplications, use a separate sheet toprovide a summary description of thisproject.

12. List only the largest political entitiesaffected (e.g., State, counties, cities).

13. Self-explanatory.14. List the applicant’s Congressional

District and any District(s) affected by theprogram or project.

15. Amount requested or to be contributedduring the first funding/budget period byeach contributor. Value of in-kindcontributions should be included onappropriate lines as applicable. If the actionwill result in a dollar change to an existingaward, indicate only the amount of thechange. For decreases, enclose the amountsin parentheses. If both basic andsupplemental amounts are included, showbreakdown on an attached sheet. Formultiple program funding, use totals andshow breakdown using same categories asitem 15.

16. Applicants should contact the StateSingle Point of Contact (SPOC) for FederalExecutive Order 12372 to determine whetherthe application is subject to the Stateintergovernmental review process.

17. This question applies to the applicantorganization, not the person who signs as theauthorized representative. Categories of debtinclude delinquent audit disallowances,loans and taxes.

18. To be signed by the authorizedrepresentative of the applicant. A copy of thegoverning body’s authorization for you tosign this application as official representativemust be on file in the applicant’s office.(Certain Federal agencies may require thatthis authorization be submitted as part of theapplication.)BILLING CODE 4510–23–P



BILLING CODE 4510–23–C



INSTRUCTIONS FOR THE SF–424APublic reporting burden for this collection

of information is estimated to average 180minutes per response, including time forreviewing instructions, searching existingdata sources, gathering and maintaining thedata needed, and completing and reviewingthe collection of information. Sendcomments regarding the burden estimate orany other aspect of this collection ofinformation, including suggestions forreducing this burden, to the Office ofManagement and Budget, PaperworkReduction Project (0348–0044), Washington,DC 20503.

Please do not return your completed formto the Office of Management and Budget.Send it to the address provided by thesponsoring agency.

General InstructionsThis form is designed so that application

can be made for funds from one or more grantprograms. In preparing the budget, adhere toany existing Federal grantor agencyguidelines which prescribe how and weatherbudgeted amounts should be separatelyshown for different functions or activitieswithin the program. For some programs,grantor agencies may require budgets to beseparately shown by function or activity. Forother programs, grantor agencies may requirea breakdown by function or activity. SectionsA, B, C, and D should include budgetestimates for the whole project except whenapplying for assistance which requiresFederal authorization in annual or otherfunding period increments. In the latter case,Sections A, B, C, and D should provide thebudget for the first budget period (usually ayear) and Section E should present the needfor Federal assistance in the subsequentbudget periods. All applications shouldcontain a breakdown by the object classcategories shown in Lines a–k of Section B.

Section A. Budget Summary Lines 1–4Columns (a) and (b)

For applications pertaining to a singleFederal grant program (Federal DomesticAssistance Catalog number) and not requiringa functional or activity breakdown, enter onLine 1 under Column (a) the Catalog programtitle and the Catalog number in Column (b).

For applications pertaining to a singleprogram requiring budget amounts bymultiple functions or activities, enter thename of each activity or function on eachline in Column (a), and enter the Catalognumber in Column (b). For applicationspertaining to multiple programs where noneof the programs require a breakdown byfunction or activity, enter the Catalogprogram title on each line in Column (a) andthe respective Catalog number on each linein Column (b).

For applications pertaining to multipleprograms where one or more programsrequire a breakdown by function or activity,prepare a separate sheet for each programrequiring the breakdown. Additional sheetsshould be used when one form does notprovide adequate space for all breakdown ofdata required. However, when more than onesheet is used, the first page should providethe summary totals by programs.

Lines 1–4, Columns (c) through (g)For new applications, leave Column (c)

and (d) blank. For each line entry in Columns(a) and (b), enter in Columns (e), (f), and (g)the appropriate amounts of funds needed tosupport the project for the first fundingperiod (usually a year).

For continuing grant program applications,submit these forms before the end of eachfunding period as required by the grantoragency. Enter in Columns (c) and (d) theestimated amounts of funds which willremain unobligated at the end of the grantfunding period only if the Federal grantoragency instructions provide for this.Otherwise, leave these columns blank. Enterin Columns (e) and (f) the amounts of fundsneeded for the upcoming period. Theamount(s) in Column (g) should be the sumof amounts in Columns (e) and (f).

For supplemental grants and changes toexisting grants, do not use Columns (c) and(d). Enter in Column (e) the amount of theincrease or decrease of Federal funds andenter in Column (f) the amount of theincrease or decrease of non-Federal funds. InColumn (g) enter the new total budgetedamount (Federal and non-Federal) whichincludes the total previous authorizedbudgeted amounts plus or minus, asappropriate, the amounts shown in Columns(e) and (f). The amount(s) in Column (g)should not equal the sum of amounts inColumns (e) and (f).

Line 5—Show the totals for all columnsused.

Section B. Budget CategoriesIn the column headings (1) through (4),

enter the titles of the same programs,functions, and activities shown on Lines 1–4, Column (a), Section A. When additionalsheets are prepared for Section A, providesimilar column headings on each sheet. Foreach program, function or activity, fill in thetotal requirements for funds (both Federaland non-Federal) by object class categories.

Line 6a–i—Show the totals of Lines 6a to6h in each column.

Line 6j—Show the amount of indirect cost.Line 6k—Enter the total of amounts on

Lines 6i and 6j. For all applications for newgrants and continuation grants the totalamount in column (5), Line 6k, should be thesame as the total amount shown in SectionA, Column (g), Line 5. For supplementalgrants and changes to grants, the totalamount of the increase or decrease as shownin Columns (1)–(4), Line 6k should be thesame as the sum of the amounts in SectionA, Columns (e) and (f) on Line 5.

Line 7—Enter the estimated amount ofincome, if any, expected to be generated fromthis project. Do not add or subtract thisamount from the total project amount. Showunder the program narrative statement thenature and source of income. The estimatedamount of program income may beconsidered by the Federal grantor agency indetermining the total amount of the grant.

Section C. Non-Federal ResourcesLines 8–11—Enter amounts of non-Federal

resources that will be used on the grant. Ifin-kind contributions are included, provide abrief explanation on a separate sheet.

Column (a)—Enter the program titlesidentical to Column (a), Section A. Abreakdown by function or activity is notnecessary.

Column (b)—Enter the contribution to bemade by the applicant.

Column (c)—Enter the amount of theState’s cash and in-kind contribution if theapplicant is not a State or State agency.Applicants which are a State or Stateagencies should leave this column blank.

Column (d)—Enter the amount of cash andin-kind contributions to be made from allother sources.

Column (e)—Enter totals of Columns (b),(c), and (d).

Line 12—Enter the total for each ofColumns (b)–(e). The amount in Column (e)should be equal to the amount on Line 5,Column (f), Section A.

Section D. Forecasted Cash Needs

Line 13—Enter the amount of cash neededby quarter from the grantor agency during thefirst year.

Line 14—Enter the amount of cash from allother sources needed by quarter during thefirst year.

Line 15—Enter the totals of amounts onLines 13 and 14.

Section E. Budget Estimates of Federal FundsNeeded for Balance of the Project

Lines 16–19—Enter in Column (a) the samegrant program titles shown in Column (a),Section A. A breakdown by function oractivity is not necessary. For newapplications and continuation grantapplications, enter in the proper columnsamounts of Federal funds which will beneeded to complete the program or projectover the succeeding funding periods (usuallyin years). This section need not be completedfor revisions (amendments, changes, orsupplements) to funds for the current year ofexisting grants.

If more than four lines are needed to listthe program titles, submit additionalschedules as necessary.

Line 20—Enter the total for each of theColumns (b)–(e). When additional schedulesare prepared for this Section, annotateaccordingly and show the overall totals onthis line.

Section F. Other Budget Information

Line 21—Use this space to explainamounts for individual direct object classcost categories that may appear to be out ofthe ordinary or to explain the details asrequired by the Federal grantor agency.

Line 22—Enter the type of indirect rate(provisional, predetermined, final or fixed)that will be in effect during the fundingperiod, the estimated amount of the base towhich the rate is applied, and the totalindirect expense.

Line 23—Provide any other explanations orcomments deemed necessary.BILLING CODE 4510–23–P



[FR Doc. 01–18209 Filed 7–19–01; 8:45 am]


DEPARTMENT OF LABOR

Solicitation for Grant Application (SGA01–08); High School/High Tech Start-up Grants

AGENCY: Office on DisabilityEmployment Policy, Department ofLabor.

ACTION: Notice of applicability of fundsand solicitation for grant applications(SGA).

SUMMARY: The U.S. Department of Labor(DOL), Office of Disability EmploymentPolicy (ODEP) announces theavailability of $400,000 to award eightcompetitive grants in the amount of$50,000 each. This Solicitation for GrantApplication (SGA) invites proposalsfrom eligible candidates which include:not-for-profit organizations establishedunder section 501(c)(3) of the Internal

Revenue Code; public secondaryeducational institutions; Job Corpscenters (no fee/profit allowed); localgovernment entities; or Local WorkforceInvestment Boards. Grants will beawarded for a one-year period and maybe renewed with an additional optionalgrant for a second year at $25,000. Afterthese two years of support, it isanticipated that High School/High Tech(HS/HT) programs will sustainthemselves with the support of otherresources.



The purpose of these grants is to fundthe start-up of new demonstration HighSchool/High Tech program sites. ODEPwas recently established to providedisability policy guidance to theDepartment of Labor and its agencies.This new office absorbed the formerPresident’s Committee on Employmentof People with Disabilities (PCEPD) andits existing demonstration projects,including HS/HT. Under this SGA,these new HS/HT sites must bedeveloped by, or in partnership with,any program that has receivedWorkforce Investment Act of 1998(WIA) funds to serve youth. The goal ofthese grants is to begin and to operatea HS/HT site for youths with disabilitieseither in partnership with, or led by, aWIA youth program.

HS/HT is a series of nationallyestablished model programs designed toprovide young people with disabilitieswith an opportunity to explore theirinterest in pursuing further educationleading to technology-related careers.These locally directed and supportedprograms serve either in-school or out-of-school youth with disabilities in ayear long program of corporate sitevisits, mentoring, job shadowing, guestspeakers, after school activities and paidsummer internships. This SGA isdesigned to demonstrate both the meritsand techniques of bringing the HighSchool/High Tech program into analignment and full partnership withWIA’s youth-related programs.DATES: One (1) ink-signed original,complete grant application plus three(3) copies of the Technical Proposal andthree (3) copies of the Cost Proposalshall be submitted to the U.S.Department of Labor, ProcurementServices Center, Attention Grant Officer,Reference SGA 01–08, Room N–5416,200 Constitution Avenue, NW.,Washington, DC 20210, not later than4:45 p.m. est, August 20, 2001. Hand-delivered applications must be receivedby the Procurement Services Center bythat time.ADDRESSES: Grant applications must behand delivered or mailed to U.S.Department of Labor, ProcurementServices Center, Attention: GrantOfficer, Reference SGA 01–08, Room N–5416, 200 Constitution Avenue, NW.,Washington, DC 20210. Applicants mustverify delivery to this office directlythrough their delivery service and assoon as possible.FOR FURTHER INFORMATION, CONTACT:Applications will not be mailed. TheFederal Register may be obtained fromyour nearest government office orlibrary. Questions concerning thissolicitation may be sent to Cassandra

Willis at the following Internet address:[email protected].

Late ProposalsThe grant application package must

be received at the designated place bythe date and time specified or it will notbe considered. Any application receivedat the Procurement Services Center after4:45 p.m. EST, August 20, 2001, will notbe considered unless it is receivedbefore the award is made and:

1. It was sent by registered or certifiedmail not later than the fifth calendar daybefore August 20, 2001;

2. It is determined by the Governmentthat the late receipt was due solely tomishandling by the Government afterreceipt at the U.S. Department of Laborat the address indicated; or

3. It was sent by U.S. Postal ServiceExpress Mail Next Day Service-PostOffice to Addressee, not later than 5:00p.m. at the place of mailing two (2)working days, excluding weekends andFederal holidays, prior to August 20,2001.

The only acceptable evidence toestablish the date of mailing of a lateapplication sent by registered orcertified mail is the U.S. Postal Servicepostmark on the envelope or wrapperand on the original receipt from the U.S.Postal Service. If the postmark is notlegible, an application received after theabove closing time and date shall beprocessed as if mailed late. ‘‘Postmark’’means a printed, stamped or otherwiseplace impression(not a postage metermachine impression) that is readilyidentifiable without further action ashaving been applied and affixed by anemployee of the U.S. Postal Service onthe date of mailing. Therefore,applicants should request the postalclerk place a legible hand cancellation‘‘bull’s-eye’’ postmark on both thereceipt and the envelope or wrapper.

The only acceptable evidence toestablish the date of mailing of a lateapplication sent by U.S. Postal ServiceExpress Mail Next Day Service-PostOffice to Addressee is the date enteredby the Post Office receiving clerk on the‘‘Express Mail Next Day Service-PostOffice to Addressee’’ label and thepostmark on the envelope or wrapperand on the original receipt from the U.S.Postal Service. ‘‘Postmark’’ has the samemeaning as defined above. Therefore,applicants should request that the postalclerk place a legible hand cancellation‘‘bull’s-eye’’ postmark on both thereceipt and the envelope or wrapper.

The only acceptable evidence toestablish the time of receipt at the U.S.Department of Labor is the date/timestamp of the Procurement ServicesCenter on the application wrapper or

other documentary evidence or receiptmaintained by that office. Applicationssent by telegram or facsimile (FAX) willnot be accepted.SUPPLEMENTARY INFORMATION:

I. AuthorityConsolidated Appropriations Act,

2001, Public Law 106–554, 114 STAT2763A–10, 29 USC 557(b).

II. BackgroundThe U.S. Department of Labor’s new

Office of Disability Employment Policy(ODEP), the sponsoring agency of thisSGA, was formed under the authority ofthe DOL’s fiscal year 2001appropriations, and by a supportingExecutive Order transferring the assetsof the former President’s Committee onEmployment of People with Disabilities(PCEPD) to this new DOL office. ODEPoperates a number of programs whichare designed to assist with theemployment and training of personswith disabilities, including youths withdisabilities.

The current expectations of bothpublic education and workforcedevelopment systems, as well asemployers, parents and young peoplewith disabilities often fail to over lookthe potential that young people withdisabilities have for jobs and careers intechnology-related occupations. As aresult, youths with disabilities areseldom afforded post-secondarypreparation and educationalopportunities leading to internships andplacements in technology-relatedcareers. This is significant of potentialwhen we realize that: (1) People withdisabilities have already demonstratedthat they can be successful in theseoccupations; (2) technology jobsrepresent an ever increasing segment ofthe workforce; and, (3) many currentschool-to-careers initiatives do notalways meaningfully include studentswith disabilities.

The Workforce Investment Act (WIA)youth-focused programs and activitieshold tremendous potential to supportcareer development activities for youngpeople with disabilities. High School/High Tech (HS/HT) is an existingprogram that has proven effective atgetting high school aged youth withdisabilities interested in technologycareers. By linking these two existingprograms, students with disabilities willhave the opportunity to participate inmeaningful school-to-career initiatives.

HS/HT programs currently operate in60 communities, across the nation. AsHS/HT is a community-basedpartnership, different entities run thelocal HS/HT operations across thecountry. Current HS/HT operators



include non-profits (GoodwillIndustries, Centers for IndependentLiving, United Cerebral Palsy Affiliates,National Urban League, NAACP, andothers) and school districts. Funding forthe sites is managed locally. Therefore,funding comes from a variety of local,state, and national resources.

HS/HT graduates with disabilitiesdemonstrate at least a doubling ofpostsecondary education achievements.In some HS/HT programs, as many as70% of their HS/HT graduates move onto postsecondary education. HS/HTclearly enhances expectations,educational achievements and eventualemployment outcomes for a populationwho, without this intervention, is farmore likely to move onto theSupplemental Security Income (SSI) orSocial Security Disability Insurance(SSDI) rolls than to find competitiveemployment in technology relatedoccupations. As a community-basedprogram, the HS/HT program workswithin community systems to helpcoordinate the delivery of education andtransition services to students withdisabilities. Locally based HS/HTprograms represent community-basedpartnerships of stakeholders thatinclude employers, educators,consumers, family members, workforcesystem agencies, and rehabilitationprofessionals. The HS/HT programoffers local WIA programs proventechniques for developing improvedsystems and employment outcomes foryoung people with disabilities.

The goals of HS/HT match WIA’syouth programming themes ofemployment preparation, educationalachievement, support, and leadership.The HS/HT model includes eight of theten WIA required youth programmingelements:

1. Summer employmentopportunities;

2. Work experience;3. Occupational skills training;4. Tutoring;5. Support services;6. Adult mentoring;7. Comprehensive guidance; and8. Leadership development, as

described in WIA, sec. 129 (c).Nonetheless, WIA and HS/HT

programs have different areas ofexpertise. By linking these twoprograms, youth who are often underserved and misunderstood will receiveeffective and appropriate services.

Under a separate SGA, applicationsare being sought for a proposed WIADisability Technical AssistanceConsortium for Youth. Among itsresponsibilities will be to providetechnical assistance support to the newHS/HT demonstrations, proposed to be

initially funded under this SGA, as wellas to support the broader HS/HTnetwork of programs, helping tointegrate them into existing WIA youthprograms. Ultimately, it is envisionedthat the HS/HT Program will becomeone more model program helpingnational WIA youth initiatives betterserve youth with disabilities.

III. Purpose

The purpose of this SGA is to createnew HS/HT programs that willcoordinate their operations with WIAyouth programs that will demonstratehow they can be mutually supportiveand reach a common goal.

ODEP operates a number of programsthat are designed to assist with theemployment and training of personswith disabilities, including youth withdisabilities. One of ODEP’s key youthprograms is the High School/High Tech(HS/HT) program.

The High School/High Tech programswork with community systems tocoordinate the delivery of educationaland transitional services to youths withdisabilities. Local High School/HighTech programs represent partnerships oflocal, state and national stakeholdersthat include employers, educators,rehabilitation professionals, consumers,and parents. The High School/HighTech Program works to provideuniversities and community collegeswith future students and to provide hightech businesses with qualified potentialcandidates with disabilities.

As a community-based, work-based,and school-based program, High School/High Tech is designed to provideopportunities for students withdisabilities to explore careers intechnology related occupations. HS/HTstudents across the nation learn first-hand what it’s like to work in high techenvironments. Site visits, mentoring,job/career shadowing, and paid summerinternships all provide students withthe opportunities to learn more aboutcareers in science, engineering andtechnology-related fields. HS/HTstudents also work on developing careergoals. In localities where a HS/HTprogram is in place, 20 percent to 70percent of the program participants goon to post-secondary education. Thenational average for the population,without this intervention, is six percentto nine percent (American Council onEducation, 1999).

To learn about the structure andoperations of the High School/HighTech Program, consult the High School/High Tech Program Guide at: http://www.dol.gov/dol/odep/public/pubs/hsht00/toc.htm.

IV. Statement of WorkThe Project Narrative, of the grant

application must provide completeinformation on how the applicant willaddress the requirements of this SGAoutlined here. All grantees must:

1. Establish either leadership from, ora strong working relationship with aWIA youth-related entity or program(area Youth Councils, Job Corps Centers,Youth Opportunity Grantees, WIAFormula-Funded Youth Programs, WIANative American programs or WIAMigrant Worker programs), inpartnership with other communitypartners (e.g., area disabilityorganizations, state or local committeeson employment of people withdisabilities, centers for independentliving, special education, vocationalrehabilitation, interested employers) inthe establishment and operation of aHS/HT program for their locality;

2. Identify how the HS/HT model canprovide WIA youth-related programswith a program model designed toimprove the continuing (post-secondary) education and employmentoutcomes for high school age youngpeople with disabilities;

3. Identify how the HS/HT model candeliver WIA’s youth program themesand required elements to young peoplewith disabilities;

4. Describe a plan to serve 10–30young people with disabilities annually,by providing the core elements of a HS/HT program (corporate site visits,mentioning, job shadowing, relevantguest speakers, after school activitiesand paid summer internships);

5. Document their willingness tocooperate with ODEP and its technicalassistance efforts to provide informationand advice to other WIA youthprograms on the how the HS/HT modelcan be replicated;

6. Describe plans to reportdemographic characteristics of programparticipants, types of programmingactivities and program outcomes (post-secondary education and employment)of youth with disabilities servedthrough HS/HT;

7. Describe the strategy for gaining thesupport of area employers, people withdisabilities and their family members;

8. Identify the potential andconfirmed sources of funds or in-kind/goods and services and estimated dollarvalues; and,

9. Describe how the needs ofindividuals with disabilities fromdiverse cultures and/or ethnic groupswill be addressed.

V. Funding AvailabilityThe period of performance will be 12

months from the date of execution by



the Government. The grant may berenewed with an additional optionalgrant for a second 12 months at $25,000.After these two years of support, it isanticipated that HS/HT programs willsustain themselves with the support ofother resources.

VI. Eligible ApplicantsAll non-profit organizations and

agencies, including faith-basedorganizations, capable of starting andsuccessfully operating a High School/High Tech program, in alignment witha WIA youth program, are eligible. Thisincludes not-for-profit organizations,established under Section 501(c)(3) ofthe Internal Revenue Code, secondaryand post-secondary educationalinstitutions, a Job Corps center (no fee/profit allowed), an entity of localgovernment, or a local WorkforceInvestment Board.

Please Note That Eligible GrantApplicants Must Not be ClassifiedUnder the Internal Revenue Code as a501(c)(4) Entity. See 26 U.S.C. 506(c)(4).According to Section 18 of the LobbyingDisclosure Act of 1995, an organization,as described in Section 501(c)(4) of theInternal Revenue Code of 1986, thatengages in lobbying activities will notbe eligible for the receipt of federalfunds constituting an award, grant, orloan.

VII. Application ContentsThere are three required sections of

the application. Requirements for eachare provided in this applicationpackage.Section I—Executive SummarySection II—Project NarrativeSection III—Budget Information

General Requirements—Three copiesand an original of the proposal must besubmitted, one of which must containan original signature. Proposals must besubmitted by the applicant only.

Application—Section I; ExecutiveSummary

Limited to no more than two singlespaced, single sided pages, eachapplication must provide an executivesummary, which identifies thefollowing:

1. The type of organization theapplicant represents;

2. WIA-related leadership/partnershiparrangement;

3. Any additional consortium partnersand the type of organization theyrepresent;

4. The geographic service area;5. The service area, whether an area

within or a whole local workforceinvestment area, or, more than oneworkforce investment area; and

6. The planned period of performance(projected annually through a two yearcycle, assuming grant renewal award).

Application—Section II; ProjectNarrative

The Project Narrative format shall beno more than 20 double spaced, singlesided, numbered pages. Each ProjectNarrative should meet the statement ofwork outlined in section IV above.

Application—Section III; BudgetInformation

Applications must also include adetailed financial plan which identifiesby line item the budget plan designed toachieve the goals of this grant. TheFinancial Proposal must contain the SF–424, Application for Federal Assistance,(Appendix A) and Budget InformationSheet SF–424A (Appendix B).

In addition, the budget must includeon a separate page a detailed costanalysis of each line item. Justificationfor administrative costs must beprovided. Approval of a budget by DOLis not the same as the approval of actualcosts. The individual signing the SF–424 on behalf of the applicant mustrepresent the responsible financial andadministrative entity for a grant shouldthat application result in an award. Theapplicant must also include theAssurances and Certifications SignaturePage (Appendix C).

VIII. Evaluation Criteria/Selection

A. Evaluation Criteria

The application must includeappropriate information of the typedescribed below.

1. Significance of the Proposed Project(15 Points)

In evaluating the significance of theproposed project, the Department willconsider the following factors:

a. The current employment issues/circumstances facing young people withdisabilities in the area to be served.

b. The numbers of young persons withdisabilities in the area to be served whoare in special education, generaleducation or out of school who areexpected to be served by under thisgrant.

c. The related issues that need to beaddressed in order to better serve youthwith disabilities in selected WIA youthentities and programs (area YouthCouncils, Job Corps Centers, YouthOpportunity Grantees, WIA Formula-Funded Youth Programs, WIA NativeAmerican or WIA Migrant Workerprograms) and how this proposed HS/HT program can help impact theseissues.

2. Quality of the Proposed Project (30Points)

In evaluating the quality of theproposed project, the Department willconsider the following factors:

a. The plan for cooperation with WIAyouth programs (Local Boards,including their Youth Councils, JobCorps Centers, Youth OpportunityGrantees, WIA Youth Formula-FundedPrograms, WIA Native American or WIAMigrant Worker programs) inpartnership with other communitypartners (e.g., area disabilityorganizations, state or local committeeon employment of people withdisabilities, centers for independentliving, special education, vocationalrehabilitation, interested employers, andfamily groups) in the establishment andoperation of a HS/HT program for theirlocality.

b. How the HS/HT program willprovide selected WIA youth-relatedprograms with a program modelresponding to WIA’s youth themes andelements, to improve the continuing(post-secondary) education andemployment outcomes for high schoolage young people with disabilities.

c. The plan for recruiting and serving10–30 young people with disabilities,for each of the possible two years offunding, with the core elements of a HS/HT program (corporate site visits,mentioning, job shadowing, relevantguest speakers, after school activitiesand paid summer internships).

d. The plan for tracking thedemographic characteristics of programparticipants, types of programmingactivities conducted as well as HS/HTparticipant outcomes. These include:

1. Numbers of youths with disabilitiesplaced in competitive employment,including paid internships;

2. Numbers of youths with disabilitieswho continue with post secondaryeducation; and,

3. Comparative data on local youthswith disabilities not served in the HS/HT program.

e. The plan for tracking progress indeveloping WIA partnerships; usingrelated resources (WIA YouthPrograms); regional and nationalleadership activities to help WIA Youthprograms consider the HS/HT model intheir area; and, assessing the overallimpact of the model HS/HT program ona broader community response to theemployment and training needs ofyouths with disabilities in thecommunity.

3. Collaboration and Coordination (20Points)

In evaluating the collaboration andcoordination of the proposed project,



the Department will consider thefollowing factors:

a. Statement(s) of support andleadership from one or more of yourarea’s Youth Council, Job Corps Centers,Youth Opportunity Grant Programs,WIA Formula Funded Youth Programs,WIA Native American or WIA MigrantWorker program.

b. Support from key communityorganizations, especially specialeducation (Individualized EducationPlan—IEP coordination, whereapplicable) and vocational rehabilitationorganizations.

c. Support from area employers,people with disabilities and familymembers.

d. Demonstrated financialcommitment from community or statepartners.

4. Innovations and Model Services (20Points)

In evaluating the innovations andmodel services of the proposed project,the Department will consider thefollowing factors:

a. Strategies to cooperate in ODEP’stechnical assistance efforts providinginformation and advice to other WIAyouth programs on the how the HS/HTmodel can be replicated by them in theircommunities.

b. The plan for sustaining the HS/HTprogram beyond the one or two yearstart-up grant by connecting it with anarea WIA youth program.

c. The strategy for meeting the needsof youth with disabilities from diversecultures and/or ethic groups. (Note: theNAACP, National Urban League, and LaRaza all operate at least one model HS/HT program dedicated to servingminority youth with disabilities, hencea potential exists to connect with yourarea’s affiliate of these organizations).

5. Demonstrated Capability of theOrganizations (15 Points)

In evaluating the demonstratedcapability of the organization(s)involved in proposed project, theDepartment will consider the followingfactors.

a. The names and qualifications ofstaff and related technical experts tosupport the objectives of this SGA.

b. Examples of prior successes inserving youths with disabilities.

B. Selection Criteria

Acceptance of a proposal and anaward of federal funds to sponsor anyprogram(s) is not a waiver of any grantrequirement and/or procedures.Grantees must comply with allapplicable Federal statutes, regulations,administrative requirements and OMB

Circulars. For example, the OMBcirculars require, and an entity’sprocurement procedures must requirethat all procurement transaction shall beconducted, as practical, to provide openand free competition. If a proposalidentifies a specific entity to provide theservices, the award does not provide thejustification or basis to sole-source theprocurement, i.e., avoid competition.

A panel will objectively rate eachcomplete application against the criteriadescribed in this SGA. The panelrecommendations to the Grant Officerare advisory in nature. The Grant Officermay elect to award grants either with orwithout discussion with the applicant.In situations where no discussionoccurs, an award will be based on thesigned SF 424 form (see Appendix A),which constitutes a binding offer. TheGrant Officer may consider theavailability of funds and anyinformation that is available and willmake final award decisions based onwhat is most advantageous to thegovernment, considering factors such as:

A. Findings of the grant technicalevaluation panel; and,

B. Geographic distribution of thecompetitive applications.

IX. ReportingGrantees are required to provide

typed reports to DOL/ODEP or itsdesignee on the status of their programon a quarterly basis by March 30, June30, September 30, and December 31, fora one year period. It is estimated thatthe quarterly report will take five hoursto complete.

The grantee must also furnish aseparate financial report to ODEP on thequarterly basis mentioned above.

X. Administration Provisions

A. Administrative Standards andProvisions

Grantees are strongly encouraged toread these regulations before submittinga proposal. The grant awarded underthis SGA shall be subject to thefollowing, as applicable:29 CFR part 95—Uniform Administrative

Requirements for Grants and CooperativeAgreements with Institutions of HigherEducation, etc.

29 CFR part 96—Federal Standards for Auditof Federally Funded Grants, Contracts, andAgreements.

29 CFR part 97—Uniform AdministrativeRequirement for Grants and CooperativeAgreements to State and LocalGovernments.

B. Allowable CostDeterminations of allowable costs

shall be made in accordance with thefollowing applicable Federal costprinciples:

State and Local Government—OMB CircularA–87

Nonprofit Organizations—OMB Circular A–122

Profit-making Commercial Firms—48 CFRPart 31Profit will not be considered an

allowable cost in any case.Signed at Washington, DC this 17th day of

July, 2001.Daniel P. Murphy,Grant Officer.Appendix A. Application for Federal

Assistance, Form SF 424Appendix B. Budget Information Sheet, Form

SF 424AAppendix C. Assurances and Certifications

Signature Page

INSTRUCTIONS FOR THE SF–424

Public reporting burden for thiscollection of information is estimated toaverage 45 minutes per response,including time for reviewinginstructions, searching existing datasources, gathering and maintaining thedata needed, and completing andreviewing the collection of information.Send comments regarding the burdenestimate or any other aspect of thiscollection of information, includingsuggestions for reducing this burden, tothe Office of Management and Budget,Paperwork Reduction Project (0348–0043), Washington, DC 20503.

Please do not return your completedform to the Office of Management andBudget. Send it to the address providedby the sponsoring agency.

This is a standard form used byapplicants as a required face sheet forpreapplication submitted for federalassistance. It will be used by Federalagencies to obtain applicant certificationthat States which have established areview and comment procedure inresponse to Executive Order 12372 andhave selected the program to beincluded in their process, have beengiven an opportunity to review theapplicant’s submission.

Item and entry:1. Self-explanatory.2. Date application submitted to

federal agency (or State if applicable)and applicant’s control number (ifapplicable).

3. State use only (if applicable),If this application is to continue or

revise an existing award, enter presentFederal identifier number. If for a newproject, leave blank.

5. Legal name of applicant, name ofprimary organizational unit which willundertake the assistance activity,complete address of the applicant, andname and telephone number of theperson to contact on matters related tothis application.



6. Enter Employer IdentificationNumber (EIN) as assigned by theInternal Revenue Service.

7. Enter the appropriate letter in thespace provided.

8. Check appropriate box and enterappropriate letter(s) in the space(s)provided:—‘‘New’’ means a new assistance award.—‘‘Continuation’’ means an extension for an

additional funding/budget period for aproject with a projected completion date.

—‘‘Revision’’ means any change in theFederal Government’s financial obligationor contingent liability from an existingobligation.

9. Name of Federal agency fromwhich assistance is being requestedwith this application.

10. Use the Catalog of FederalDomestic Assistance number and title ofthe program under which assistance isrequested.

11. Enter a brief descriptive title of theproject. If more than one program isinvolved, you should append an

explanation on a separate sheet. Ifappropriate (e.g., construction or realproperty projects), attach a mapshowing project location. Forpreapplications, use a separate sheet toprovide a summary description of thisproject.

12. List only the largest politicalentities affected (e.g., State, countries,cities).

13. Self-explanatory.14. List the applicant’s Congressional

District and any District(s) affected bythe program or project.

15. Amount requested or to becontributed during the first funding/budget period by each contributor.Value of in kind contributions should beincluded on appropriate lines asapplicable. If the action will result in adollar change to an existing award,indicate only the amount of the change.For decreases, enclose the amounts inparentheses. If both basic andsupplemental amounts are included,show breakdown on an attached sheet.

For multiple program funding, use totalsand show breakdown using samecategories as item 15.

16. Applicants should contact theState Single Point of Contact (SPOC) forFederal Executive Order 12372 todetermine whether the application issubject to the State intergovernmentalreview process.

17. The question applies to theapplicant organization, not the personwho signs as the authorizedrepresentative. Categories of debtincludes delinquent auditdisallowances, loans and taxes.

18. To be signed by the authorizedrepresentative of the applicant. A copyof the governing body’s authorizationfor you to sign this application asofficial representative must be on file inthe applicant’s office. (Certain Federalagencies may require that thisauthorization be submitted as part of theapplication).BILLING CODE 4510–23–P



Instructions for the SF–424a

Public reporting burden for thiscollection of information is estimated toaverage 180 minutes per response,including time for reviewinginstructions, searching existing datasources, gathering and maintaining thedata needed, and completing andreviewing the collection of information.Send comments regarding the burdenestimate or any other aspect of thiscollection of information, includingsuggestions for reducing this burden, tothe Office of Management and Budget,Paperwork Reduction Project (0348–0044), Washington, DC 20503.

Please do not return your completedform to the Office of Management andBudget. Send it to the address providedby the sponsoring agency.

General Instructions

This form is designed so thatapplication can be made for funds fromone or more grant programs. Inpreparing the budget, adhere to anyexisting Federal grantor agencyguidelines which prescribe how andwhether budgeted amounts should beseparately shown for different functionsor activities within the program. Forsome programs, grantor agencies mayrequire budgets to be separately shownby function or activity. For otherprograms, grantor agencies may requirea breakdown by function or activity.Sections A, B, C, and D should includebudget estimates for the whole projectexcept when applying for assistancewhich requires Federal authorization inannual or other funding periodincrements. In the latter case, SectionsA, B, C, and D should provide thebudget for the first budget period(usually a year) and Section E shouldpresent the need for Federal assistancein the subsequent budget periods. Allapplications should contain abreakdown by the object class categoriesshown in Lines a–k of Section B.

Section A. Budget Summary Lines 1-4Columns (a) and (b)

For applications pertaining to a singleFederal grant program (FederalDomestic Assistance Catalog number)and not requiring a functional oractivity breakdown, enter on Line 1under Column (a) the Catalog programtitle and the Column number in Column(b).

For applications pertaining to a singleprogram requiring budget amounts bymultiple functions or activities, enterthe name of each activity or function oneach line in Column (a), and enter theCatalog number in Column (b). Forapplications pertaining to multiple

programs where none of the programsrequire a breakdown by function oractivity, enter the Catalog program titleon each line in Column (a) and therespective Catalog number on each linein Column (b).

For applications pertaining tomultiple programs where one or moreprograms require a breakdown byfunction or activity, prepare a separatesheet for each program requiring thebreakdown. Additional sheets should beused when one form does not provideadequate space for all breakdown ofdata required. However, when morethan one sheet is used, the first pageshould provide the summary totals byprograms.

Lines 1–4, Columns (c) through (g)For new applications, leave Column

(c) and (d) blank. For each line entry inColumns (a) and (b), enter in Columns(e), (f), and (g) the appropriate amountsof funds needed to support the projectfor the first funding period (usually ayear).

For continuing grant programapplications, submit these forms beforethe end of each funding period asrequired by the grantor agency. Enter inColumns (c) and (d) the estimatedamounts of funds which will remainunobligated at the end of the grantfunding period only if the Federalgrantor agency instructions provide forthis. Otherwise, leave these columnsblank. Enter in columns (e) and (f)amounts of funds needed for theupcoming period. The amount(s) inColumn (g) should be the sum ofamounts in Columns (e) and (f).

For supplemental grants and changesto existing grants, do not use Columns(c) and (d). Enter in Column (e) theamount of the increase or decrease ofFederal funds and enter in Column (f)the amount of the increase or decreaseof non-Federal funds. In Column (g)enter the new total budgeted amount(Federal and non-Federal) whichincludes the total previous authorizedbudgeted amounts plus or minus, asappropriate, the amounts shown inColumns (e) and (f). The amount(s) inColumn (g) should not equal the sum ofamounts in Columns (e) and (f).

Line 5—Show the totals for allcolumns used.

Section B Budget CategoriesIn the column headings (1) through

(4), enter the titles of the sameprograms, functions, and activitiesshown on Lines 1-4, Column (a), SectionA. When additional sheets are preparedfor Section A, provide similar columnheadings on each sheet. For eachprogram, function or activity, fill in the

total requirements for funds (bothFederal and non-Federal) by object classcategories.

Line 6a–i—Show the totals of Lines 6ato 6h in each column.

Line 6j—Show the amount of indirectcost.

Line 6k—Enter the total of amountson Lines 6i and 6j. For all applicationsfor new grants and continuation grantsthe total amount in column (5), Line 6k,should be the same as the total amountshown in Section A, Column (g), Line 5.For supplemental grants and changes togrants, the total amount of the increaseor decrease as shown in Columns(1)–(4), Line 6k should be the same asthe sum of the amounts in Section A,Columns (e) and (f) on Line 5.

Line 7—Enter the estimated amountof income, if any, expected to begenerated from this project. Do not addor substract this amount from the totalproject amount, Show under theprogram narrative statement the natureand source of income. The estimatedamount of program income may beconsidered by the Federal grantoragency in determining the total amountof the grant.

Section C. Non-Federal Resources

Lines 8–11 Enter amounts of non-Federal resources that will be used onthe grant. If in-kind contributions areincluded, provide a brief explanation ofa separate sheet.

Column (a)—Enter the program titlesidentical to Column (a), Section A. Abreakdown by function or activity is notnecessary.

Column (b)—Enter the contribution tobe made by the applicant.

Column (c)—Enter the amount of theState’s cash and in-kind contribution ifthe applicant is not a State or Stateagency. Applicants which are a State orState agencies should leave this columnblank.

Column (d)—Enter the amount of cashand in-kind contributions to be madefrom all other sources.

Column (e)—Enter the totals ofColumns (b), (c), and (d).

Line 12—Enter the total for each ofColumns (b)—(e). The amount inColumn (e) should be equal to theamount on Line 5, Column (f), SectionA.

Section D. Forecasted Cash Needs

Line 13—Enter the amount of cashneeded by quarter from the grantoragency during the first year.

Line 14—Enter the amount of cashfrom all sources needed by quarterduring the first year.

Line 15—Enter the totals of amountson lines 13 and 14.



Section E. Budget Estimates of FederalFunds Needed for Balance of the Project

Lines 16—19—Enter in Column (a)the same grant program titles shown inColumn (a), Section A. A breakdown byfunction or activity is not necessary. Fornew applications and continuation grantapplications, enter in the propercolumns amounts of Federal fundswhich will be needed to complete theprogram or project over the succeedingfunding periods (usually in years). Thissection need not be completed forrevisions (amendments, changes, or

supplements) to funds for the currentyear of existing grants.

If more than four lines are needed tolist the program titles, submit additionalschedules as necessary.

Line 20—Enter the total for each ofthe Columns (b)—(e). When additionalschedules are prepared for this Section,annotate accordingly and show theoverall totals on this line.

Section F. Other Budget Information

Line 21—Use this space to explainamounts for individual direct object

class cost categories that may appear tobe out of the ordinary or to explain thedetails as required by the Federalgrantor agency.

Line 22—Enter the type of indirectrate (provisional, predetermined, finalor fixed) that will be in effect during thefunding period, the estimated amount ofthe base to which the rate is applied,and the total indirect expense.

Line 23—Provide any otherexplanations or comments deemednecessary.BILLING CODE 4510—23—P



[FR Doc. 01–18208 Filed 7–19–01; 8:45 am]BILLING CODE 4510–23–C



DEPARTMENT OF LABOR

Employment and TrainingAdministration

Notice of Determinations RegardingEligibility to Apply for WorkerAdjustment Assistance and NAFTATransitional Adjustment Assistance

In accordance with section 223 of theTrade Act of 1974, as amended, theDepartment of Labor herein presentssummaries of determinations regardingeligibility to apply for trade adjustmentassistance for workers (TA–W) issuedduring the period of June and July,2001.

In order for an affirmativedetermination to be made and acertification of eligibility to apply forworker adjustment assistance to beissued, each of the group eligibilityrequirements of section 222 of the Actmust be met.

(1) That a significant number ofproportion of the workers in theworkers’ firm, or an appropriatesubdivision thereof, have become totallyor partially separated;

(2) That sales or production, or both,of the firm or subdivision havedecreased absolutely, and

(3) That increases of imports ofarticles like or directly competitive witharticles produced by the firm orappropriate subdivision havecontributed importantly to theseparations, or threat thereof, and to theabsolute decline in sales or production.

Negative Determinations for WorkerAdjustment Assistance

In each of the following cases theinvestigation revealed that criterion (3)has not been met. A survey of customersindicated that increased imports did notcontribute importantly to workerseparations at the firm.TA–W–39,000; American Nickeloid Co.,

Walnutport, PATA–W–39,008; Camrose Technologies,

LLC, Ada, OKTA–W–38,832; Decatur Casting,

Decatur, INTA–W–39,989; Trico Steel Co., Decatur,

ALTA–W–39,094; Antec Corp., Network

Powering and Enclosures, El Paso,TX

In the following cases, theinvestigation revealed that the criteriafor eligibility have not been met for thereasons specified.

Increased imports did not contributeimportantly to worker separations at thefirm.TA–W–39,456; Huck Fasteners, Altoona,

PA

TA–W–39,145; Marathon Oil Co.,Regional Office, Tyler, TX

TA–W–38,645; Texel USA. Inc.,Henderson, NC

TA–W–38,954; Omicron Industries, Inc.,El Paso, TX

TA–W–39,159; & Al; AndersonElectrical Products, AluminumCasting Dept., Elkton, TN andAnderson Electrical Products,Aluminum Finishing & InspectionDept, Elkton, TN

TA–W–39,426; Donna Lynn Fashions,Inc., Bronx, NY

TA–W–39,427; Lori Lynn Fashions, Inc.,Bronx, NY

TA–W–39,428; Giordano Fashions,Limited, Woodside, NY

The workers firm does not produce anarticle as required for certification underSection 222 of the Trade Act of 1974TA–W–39,490; Sagebrush Corp.,

Caledonia, MNTA–W–39,468; Veco Alaska,Inc.,

Anchorage, AKThe investigation revealed that

criteria (1) has not been met. Asignificant number of proportion of theworkers did not become totally orpartially separated from employment asrequired for certification.TA–W–39,119; Wire Maid

Manufacturing Limited, Schofield,WI

The investigation revealed thatcriteria (2) has not been met. Sales orproduction did not decline during therelevant period as required forTA–W–39,464; Corning Frequency

Control, Mt Holy Springs, PA

Affirmative Determination for WorkerAdjustment Assistance

The following certification have beenissued; the date following the companyname and location of eachdetermination references the impactdate for all workers of suchdetermination.TA–W–39,250; Pilkington Libbey-

Owens-Ford,North America OEAutomotive, Sherman, TX: June 24,2001.

TA–W–38,938 & A, B; Fruit of TheLoom, Winfield Cotton Mill,Winfield, AL, Aliceville Cotton Mill,Aliceville, Al and Martin Mills, Inc.,St. Martinville, LA: March 5, 2000.

TA–W–39,289; Shieldalloy MetallurgicalCorp., Newfield, NJ: April 23, 2000.

TA–W–39,124; United Foundries,Youngstown, OH: April 16, 2000.

TA–W–39,421; Dunbrooke Industries,Inc., Canton, SD: May 17, 2000.

TA–W–39,496; Master ProductsManufacturing Co., Martin YaleIndustries, Inc., Los Angeles, CA:June 1, 2000.

TA–W–39,300 & A; Nokia, Inc., NokiaMobile Phones, Alliance Gatewayand Temporary Workers of RemedyIntelligent Staffing, Forth Worth TXand Nokia, Inc., Nokia MobilePhones, Trinity Bouldvand andTemporary Workers of RemedyIntelligent Staffing, Forth Worth,TX: May 7, 2000.

TA–W–39,239; D’Clase Cutting ServicesL.C., Medley, FL: April 26, 2000.

TA–W–38,957; Nu-Kote International,Franklin, TN: March 20, 2000.

TA–W–39,196; J.C. Viramontes, Inc.,d/b/a/ International GarmentProcessors, El Paso, TX: May 30,2000.

TA–W–38,754; Westpoint Stevens, Inc.,Rosemary Plants, Roanoke Rapids,NC: February 15, 2000.

TA–W–39,170; Standard Corp.,Manufacturing Group, Lugoff, SC:April 10, 2000.

TA–W–39,912; Co-Steel, Perth Amboy,NJ: February 20, 2001.

TA–W–39,195; Tyco Electronics,Harrisonburg, VA: May 7, 2000.

TA–W–39,369; Hager Hinge Co.,Greenville, MS: May 16, 2000.

TA–W–39,018; Alamac Knit Fabrics,Inc., Lumberton, NC: May 26, 2001.

TA–W–39,018A & B; Alamac KnitFabrics, Inc., New York, NY and LosAngeles, CA: March 30, 2000.

TA–W–39,402 & A; Phelps Dodge Corp.,Chino Mines Co., Hurley, NM: June4, 2000 and Santa Rita, NM: May12, 2001.

TA–W–38,840; Globe ManufacturingCorp., Spandex Operations, FallRiver, MA: February 12, 2000.

TA–W–38,994; Irwin ManufacturingCorp., Ocilla, GA: March 26, 2000.

TA–W–39,270; Bemis Co., Inc.,Vancouver, WA: May 3, 2000.

TA–W–39,204; A–1 Manufacturing, Inc.,Brilliant, AL: April 16, 2000.

TA–W–39,353; Double Springs Corp.,Double Springs, AL: May 14, 2000.

TA–W–38,927; Cascade Steel,McMinnville, OR: March 19, 2000.

TA–W–38,936; Fruit of The Loom,Greenville Manufacturing,Greenville, MS: March 5, 2000.

TA–W–39,231; Saturn Electronics andEngineering, Inc., Marks, MS: April17, 2000.

TA–W–39,293; Innovo, Inc., InnovoGroup, Inc., Knoxville, TN: May 2,2000.

TA–W–39,562; ADC Mersum US, Inc.,South Hackensack, NJ: June 13,2000.

Also, pursuant to Title V of the NorthAmerican Free Trade AgreementImplementation Act (Pub L. 103–182)concerning transitional adjustmentassistance hereinafter called (NAFTA–TAA) and in accordance with Section



250(a), Subchapter D, Chapter 2, Title II,of the Trade Act as amended, theDepartment of Labor presentssummaries of determinations regardingeligibility to apply for NAFTA–TAAissued during the month of June andJuly, 2001.

In order for an affirmativedetermination to be made and acertification of eligibility to apply forNAFTA–TAA the following groupeligibility requirements of Section 250of the Trade Act must be met:

(1) That a significant number orproportion of the workers in theworkers’ firm, or an appropriatesubdivision thereof, (including workersin any agricultural firm or appropriatesubdivision thereof) have become totallyor partially separated from employmentand either—

(2) That sales or production, or both,of such firm or subdivision havedecreased absolutely,

That imports from Mexico or Canadaof articles like or directly competitivewith articles produced by such firm orsubdivision have increased, and that theincreases imports contributedimportantly to such workers’separations or threat of separation andto the decline in sales or production ofsuch firm or subdivision; or

(4) That there has been a shift inproduction by such workers’ firm orsubdivision to Mexico or Canada ofarticles like or directly competitive witharticles which are produced by the firmor subdivision.

Negative Determination NAFTA–TAAIn each of the following cases the

investigation revealed that criteria (3)and (4) were not met. Imports fromCanada or Mexico did not contributeimportantly to workers’ separations.There was no shift in production fromthe subject firm to Canada or Mexicoduring the relevant period.NAFTA–TAA–04717; Omicron

Industries, Inc., El Paso, TXNAFTA–TAA–04949; Z Z Logging, Inc.,

Mt. Hood, ORNAFTA–TAA–04947; Huck Fasteners,

Altoona, PANAFTA–TAA–04910; Shieldalloy

Metallurgical Corp., Newfield, NJNAFTA–TAA–04582; Pangborn Corp.,

Hagerstown, MDThe investigation revealed that the

criteria for eligibility have not been metfor the reasons specified.

The workers firm does not produce anarticle as required for certification underSection 222 of the Trade Act of 1974.NAFTA–TAA–05016; Sagebrush Corp.,

Caledonia, MNThe investigation revealed that

criteria (2) and (4) have not been met.

Sales or production, or both, did notdecline during the relevant period asrequired for certification. There was noshift in production from the subject firmto Canada or Mexico.NAFTA–TAA–04923; Corning

Frequency Control, Mt. HolySprings, PA

Affirmative Determinations NAFTA–TAA

NAFTA–TAA–04791; Southwire Co.,Arkansas Plant, Osceola, AR: April12, 2000.

NAFTA–TAA–04798; Tyco Electronics,Shewsbury Molding Plant,Shrewsbury, PA: April 20, 2000.

NAFTA–TAA–04905 & A; AndersonElectrical Products, AluminumCasting Department Elkton, TN andAluminum Finishing andInspection Department, Elkton, TN:April 6, 2000.

NAFTA–TAA–04864; Bemis Co., Inc.,Vancouver, WA: May 3, 2000.

NAFTA–TAA–05020; D’Clase CuttingServices L.C., Medley, FL: May 22,2000.

NAFTA–TAA–04998; BASF Corp., NLDDiv., Rensselaer, NY: May 21, 2000.

NAFTA–TAA–04950; Pilkington Libbey-Owens-Ford, North American OEAutomotive, Sherman, TX: June 24,2001.

NAFTA–TAA–04748; Antec Corp.,Network Powering and Enclosures,El Paso, TX: March 28, 2000.

NAFTA–TAA–04989; Master ProductsManufacturing Company, MartinYale Industries, Inc., Los Angeles,CA: June 1, 2000.

NAFTA–TAA–05010; ADC Mersum US,Inc., South Hackensack, NJ: June13, 2000.

NAFTA–TAA–04839; Emerson ElectricCompany, White-Rodgers Div.,Affton, MO: April 11, 2000.

NAFTA–TAA–04971; Martin Mills, Inc.,A Div. of Fruit of The Loom, St.Martinville, LA: May 8, 2000.

NAFTA–TAA–04695; J.C. Viramontes,Inc., d/b/a International GarmentProcessors, El Paso, TX: May 30,2000.

I hereby certify that theaforementioned determinations wereissued during the month of June andJuly, 2001. Copies of thesedeterminations are available forinspection in Room C–5311, U.S.Department of Labor, 200 ConstitutionAvenue, NW., Washington, DC 20210during normal business hours or will be

mailed to persons who write to theabove address.

Edward A. Tomchick,Director, Division of Trade AdjustmentAssistance.[FR Doc. 01–18151 Filed 7–19–01; 8:45 am]BILLING CODE 4510–30–M

DEPARTMENT OF LABOR


[TA–W–39,052]

Bechtel Jacobs LLC, Piketon, Ohio;Notice of Termination of Investigation

Pursuant to section 221 of the TradeAct of 1974, an investigation wasinitiated on April 16, 2001, in responseto a worker petition which was filed byPACE Union Local 5–689 on behalf ofworkers at Bechtel Jacobs LLC, Piketon,Ohio. The workers are involved inactivities related to fabricating uraniumenriched nuclear fuel.

The petitioner has requested that thepetition be withdrawn. Consequentlyfurther investigation in this case wouldserve no purpose, and the investigationhas been terminated.

Signed at Washington, DC, this 10th day ofJuly, 2001.Linda G. Poole,Certifying Officer, Division of TradeAdjustment Assistance.[FR Doc. 01–18152 Filed 7–19–01; 8:45 am]BILLING CODE 4510–30–M

DEPARTMENT OF LABOR


Investigations Regarding Certificationsof Eligibility To Apply for NAFTATransitional Adjustment Assistance

Petitions for transitional adjustmentassistance under the North AmericanFree Trade Agreement-TransitionalAdjustment Assistance ImplementationAct (Pub. L. 103–182), hereinafter called(NAFTA–TAA), have been filed withState Governors under section 250(b)(1)of subchapter D, chapter 2, title II, of theTrade Act of 1974, as amended, areidentified in the Appendix to thisNotice. Upon notice from a Governorthat a NAFTA–TAA petition has beenreceived, the Director of the Division ofTrade Adjustment Assistance (DTAA),Employment and TrainingAdministration (ETA), Department ofLabor (DOL), announces the filing of thepetition and takes action pursuant to



paragraphs (c) and (e) of section 250 ofthe Trade Act.

The purpose of the Governor’s actionsand the Labor Department’sinvestigations are to determine whetherthe workers separated from employmenton or after December 8, 1993 (date ofenactment of Pub. L. 103–182) areeligible to apply for NAFTA–TAA undersubchapter D of the Trade Act becauseof increased imports from or the shift inproduction to Mexico or Canada.

The petitioners or any other personsshowing a substantial interest in thesubject matter of the investigations mayrequest a public hearing with theDirector of DTAA at the U.S.Department of Labor (DOL) inWashington, DC provided such requestif filed in writing with the Director ofDTAA not later than July 30, 2001.

Also, interested persons are invited tosubmit written comments regarding thesubject matter of the petitions to the

Director of DTAA at the address shownbelow not later than July 30, 2001.

Petitions filed with the Governors areavailable for inspection at the Office ofthe Director, DTAA, ETA, DOL, RoomC–5311, 200 Constitution Avenue, NW.,Washington, DC 20210.

Signed at Washington, DC this 10th day ofJuly 2001.Edward A. Tomchick,Director, Division of Trade AdjustmentAssistance.

APPENDIX

Subject firm Location

Date re-ceived at

governor’s of-fice

Petition No. Articles produced

Lucent Technologeis—Agere Systems(IBEW).

Reading, PA .............. 06/05/2001 NAFTA–4,954 Opteolectronic devices.

Agere Systems (IBEW) ............................. Allentown, PA ............ 06/06/2001 NAFTA–4,955 Opteolectronic devices.Tyco Kendall Healthcare (Wkrs) ............... Chatsworth, CA ......... 05/30/2001 NAFTA–4,956 Medical equipment and supplies.Nortel Networks (Wkrs) ............................. Simi Valley, CA ......... 05/22/2001 NAFTA–4,957 Research, development and engineer-

ing.Philips Display Components (Wkrs) ......... Ottawa, OH ............... 06/07/2001 NAFTA–4,958 TV tubes.Coastcast Corporation (Co.) ..................... Rancho Dominguea,

CA.06/05/2001 NAFTA–4,959 Steel golf club heads.

Durr Robotics—Behr Systems (Wkrs) ...... Auburn Hills, MI ......... 05/14/2001 NAFTA–4,960 Booths, feather dusters & feather rolls.Steiger Lumber (Co.) ................................ Bessemer, MI ............ 05/23/2001 NAFTA–4,961 Hardwood boards.Ogemaw Firge (UAW) ............................... West Branch, MI ....... 05/15/2001 NAFTA–4,962 Forged components for auto.Monticello Manufacturing (Co.) ................. Monticello, KY ........... 06/05/2001 NAFTA–4,963 Men’s and ladies shirts and blouses.Rockwell Collins (Co.) ............................... Pomona, CA .............. 06/05/2001 NAFTA–4,964 In flight entertainment systems.Hibbing Taconite (Wkrs) ........................... Hibbing, MN .............. 06/06/2001 NAFTA–4,965 Taconite ore pellets.Penn companies (The) (Co.) .................... St. Peters, MO ........... 06/05/2001 NAFTA–4,966 Emboridered emblems.Mrs. Alison’s Cookies (Wkrs) .................... St. Louis, MO ............ 06/04/2001 NAFTA–4,967 Baked goods (sweets).Thomson Multimedia (Co.) ....................... Dunmore, PA ............. 06/05/2001 NAFTA–4,968 Color tv picture tubes.Symbol Technologies ................................ Holtsville, NY ............. 06/04/2001 NAFTA–4,969 Radio product.Erie County Technical School (AFT) ........ Erie, PA ..................... 06/06/2001 NAFTA–4,970 Teachers.Martin Mills (Co.) ....................................... St. Martinville, LA ...... 06/07/2001 NAFTA–4,971 Wearing apparel.Besser (IBB) .............................................. Alpena, MI ................. 06/07/2001 NAFTA–4,972 Concrete requipment & machinery.Imperial Home Decor (Wkrs) .................... Knox, TN ................... 06/13/2001 NAFTA–4,973 Wallpaper.Winky Textiles (Co.) .................................. New York, NY ............ 06/04/2001 NAFTA–4,974 Textiles.ABB Power T and D Company (Wkrs) ..... Jefferson City, MO .... 06/05/2001 NAFTA–4,975 Transformers.Eaton Corporation (Wkrs) ......................... Shenandoah, IA ........ 05/24/2001 NAFTA–4,976 Heavy duty truck transmissions.Perlos of Texas (Wkrs) ............................. Ft. Worth, TX ............. 06/11/2001 NAFTA–4,977 Mobile phones.Industrial Seaming (Co.) ........................... Granite Falls, NC ....... 06/11/2001 NAFTA–4,978 Sewing crib sheets.Johnson Controls (Co.) ............................. Taylor, MI .................. 06/12/2001 NAFTA–4,979 Automobile seats.Lomac (ICWUC) ........................................ Muskegon, MI ............ 06/12/2001 NAFTA–4,980 Chemicals mixing and blending.Oneal Steel Weldment (Wkrs) .................. Roanoke, VA ............. 06/11/2001 NAFTA–4,981 Steel parts.Future Knits (Co.) ..................................... Pineville, NC .............. 06/12/2001 NAFTA–4,982 T-shirts.Flextronics Enclosures (Co.) ..................... Chambersburg, PA .... 06/12/2001 NAFTA–4,983 Outdoor enclosures.Domco—Tarkett (Wkrs) ............................ Whitehall, PA ............. 06/06/2001 NAFTA–4,984 Sheet vinyl flooring.Winona ( ) ................................................. Nashville, IN .............. 06/06/2001 NAFTA–4,985Thos. Iseri Produce (Co.) ......................... Ontario, OR ............... 06/13/2001 NAFTA–4,986 Produce.Tennessee Machine and Hosiery (Co.) .... Danridge, TN ............. 06/15/2001 NAFTA–4,987 Men’s and boy’s athletic socks.California Cedar Products (Co.) ................ Roseburg, OR ........... 06/11/2001 NAFTA–4,988 Commerical lumber.Master Products Mfg. (Wkrs) .................... Los Angeles, CA ....... 06/13/2001 NAFTA–4,989 Paper punches.Mayflower Manufacturing (UNITE) ............ Old Forge, PA ........... 06/14/2001 NAFTA–4,990 Men’s, boy’s dress & casual slacks.Triple A Trouser (UNITE) .......................... Scranton, PA ............. 06/14/2001 NAFTA–4,991 Men’s and boy’s dress & casual slacks.Teledyne Electronics Technologies (Co.) Hawthorne, CA .......... 06/13/2001 NAFTA–4,992 Electro mechanical relays.Allegheny Ludlum Steel (Co.) ................... Pittsburgh, PA ........... 06/19/2001 NAFTA–4,993 Cold rolled grain oriented electrical.Invensys Systems (Co.) ............................ Foxboro, MA .............. 06/15/2001 NAFTA–4,994 Printed circuit board.Elder Manufacturing (UNITE) .................... Dexter, MO ................ 06/19/2001 NAFTA–4,995 Parochial school uniforms.Honeywell (Wkrs) ...................................... St. Louis Park, MN .... 05/02/2001 NAFTA–4,996 Circuits.American Apparel (Wkrs) .......................... Lena, MS ................... 06/12/2001 NAFTA–4,997 Garments.BASF Corporation (Co.) ............................ Rensselaer, NY ......... 06/11/2001 NAFTA–4,998 Organic chemical dyes.Pete’s Cutting Services 807 (Wkrs) .......... Hialeal, FL ................. 06/12/2001 NAFTA–4,999 Clothing.Weyerhaeuser (AWPPW) ......................... Springfield, OR .......... 06/12/2001 NAFTA–5,000 Paper.Louisiana Pacific (Wkrs) ........................... Rogue River, OR ....... 06/18/2001 NAFTA–5,001 Veneer.Redwing Shoes (Wkrs) ............................. Danville, KY ............... 06/18/2001 NAFTA–5,002 Leather shoes.FCI Electronics (Wkrs) .............................. Mt. Union, PA ............ 06/18/2001 NAFTA–5,003 Components for computers.DeLong Sportwear (Wkrs) ........................ Jefferson, OR ............ 06/19/2001 NAFTA–5,004 Textiles—wool cloth.California Manufacturing (UNITE) ............. St. Louis, MO ............ 06/19/2001 NAFTA–5,005 Light winter jackets.



APPENDIX—Continued

Subject firm Location

Date re-ceived at

governor’s of-fice

Petition No. Articles produced

Weyerhaeuser (WPPW) ............................ Longview, WA ........... 06/19/2001 NAFTA–5,006 Uncoated free sheet paper rolls.Sola Optical (Co.) ..................................... Petaluma, CA ............ 06/18/2001 NAFTA–5,007 Optical lens for prescription eyewear.Tyco Electronics (Wkrs) ............................ Menlo Park, CA ......... 06/15/2001 NAFTA–5,008 Passive fiber optic.Quaker Oats Company (The) (RWDSU) .. St. Joseph, MO ......... 06/19/2001 NAFTA–5,009 Oatmeal, instant grits, pancake mix.ADC Mersum US (Co.) ............................. South Hackensack,

NJ.06/19/2001 NAFTA–5,0010 Remote access for telecom.

Plystar (Wkrs) ........................................... Columbia, GA ............ 06/19/2001 NAFTA–5,011 Vacuum seal bags.Trans Apparel Group (UNITE) .................. Michigan City, IN ....... 06/18/2001 NAFTA–5,012 Men’s slacks.Outboard Marine (Wkrs) ........................... Delawan, WI .............. 06/20/2001 NAFTA–5,013 Electronic circuit boards.Thomaston Mills (Co.) ............................... Thomaston, GA ......... 06/20/2001 NAFTA–5,014 Sheets, pillowcases and comforters.Phantom—Glendale (Wkrs) ...................... Wilkesboro, NC ......... 06/25/2001 NAFTA–5,015 Ladies intimate apparel.Sagebrush (Wkrs) ..................................... Caledonia, MN .......... 06/18/2001 NAFTA–5,016 Technical support of software.TRW Automotive (UAW) ........................... Milford, MI ................. 06/21/2001 NAFTA–5,017 ABS proportionine valve.Michigan Rivet (Wkrs) ............................... Petoskey, MI ............. 06/25/2001 NAFTA–5,018 Internally threaded fasteners.Rivers West Apparel (Wkrs) ..................... Manti, UT ................... 06/25/2001 NAFTA–5,019 Apparel.D’Clase Cutting Service (Wkrs) ................ Medley, FL ................ 06/19/2001 NAFTA–5,020 Fabrics & pieces of pants.Rich Products (Wkrs) ................................ Winchester, VA .......... 06/25/2001 NAFTA–5,021 Breads and rolls.3M, Inc. (Wkrs) ......................................... Columbia, MO ........... 06/25/2001 NAFTA–5,022 Flexable printers.Magnolia International (Wkrs) ................... Harlingen, TX ............ 06/26/2001 NAFTA–5,023 Cutting industrial wearVisteon Systems (IUE/C) .......................... Connersville, IN ......... 06/22/2001 NAFTA–5,024 Radiators, compressors etc.Coleman Cable (Wkrs) .............................. McAllen, TX ............... 06/25/2001 NAFTA–5,025 Power supply cords.Textron Fastening Systems—Townsend

(Co.).Spencer, TN .............. 06/25/2001 NAFTA–5,026 Metal fasteners.

Lear Corporation (Co.) .............................. Romulus, MI .............. 07/03/2001 NAFTA–5,027 Automobile seats.Parker Hannifin (USWA) ........................... Gashen, IN ................ 07/02/2001 NAFTA–5,028 Rubber.Winona, Inc. (Wkrs) .................................. Winona, MN .............. 06/06/2001 NAFTA–5,029 Sweaters.Ross Allen Design (Wkrs) ......................... Bean Station, TN ....... 06/28/2001 NAFTA–5,030 Designs.Cordis (Co.) ............................................... Miami Lakes, FL ........ 06/29/2001 NAFTA–5,031National Textiles (Co.). ............................. Gaffney, SC ............... 06/27/2001 NAFTA–5,032 Active wear apparel products.Blue Ridge Textiles Printers (Co.) ............ Statesville, NC ........... 06/26/2001 NAFTA–5,033 Textile printing sheeting.General Electric (IUE–C) .......................... Fort Wayne, IN .......... 06/25/2001 NAFTA–5,034 Permanent magnetic and AC motors.Excel Group (Co.) ..................................... Murray, KY ................ 06/27/2001 NAFTA–5,035 Mattel toys.Andrew Corp.—RF Subsystems Group

(Co.).Orland Park, IL .......... 06/27/2001 NAFTA–5,036 Coax cable assemblies.

Percision Mold (Co.) ................................. Kent, WA ................... 06/27/2001 NAFTA–5,037 Plastic injection.MuRata Electronics North America (Wkrs) State College, PA ...... 06/27/2001 NAFTA–5,038 Microwave filters.Louisiana Pacific (Wkrs) ........................... Roeue River, OR ....... 06/22/2001 NAFTA–5,039 Veneer.Sheldahl (Wkrs) ........................................ Britton, SD ................. 06/27/2001 NAFTA–5,040 Flexible circuit assembly.Seagate Technology (Co.) ........................ Oklahoma City, OK ... 06/28/2001 NAFTA–5,041 Refurbishment operations.Exide Technologies (UAW) ....................... Burlington, IA ............. 06/28/2001 NAFTA–5,042 Automotive batteries.Cooper Wiring Devices (USWA) ............... Georgetown, SC ........ 06/29/2001 NAFTA–5,043 Wall plugs, light switches etc.

[FR Doc. 01–18153 Filed 7–19–01; 8:45 am]BILLING CODE 4510–30–M

DEPARTMENT OF LABOR

Employment Standards Administration

Proposed Collection; CommentRequest

ACTION: Notice.

SUMMARY: The Department of Labor, aspart of its continuing effort to reducepaperwork and respondent burden,conducts a preclearance consultationprogram to provide the general publicand Federal agencies with anopportunity to comment on proposedand/or continuing collections ofinformation in accordance with thePaperwork Reduction Act of 1995(PRA95) [44 U.S.C. 3506(c)(2)(A)]. This

program helps to ensure that requesteddata can be provided in the desiredformat, reporting burden (time andfinancial resources) is minimized,collection instruments are clearlyunderstood, and the impact of collectionrequirements on respondents can beproperly assessed. Currently, theEmployment Standards Administrationis soliciting comments concerning theproposed extension of the Applicationfor Continuation of Death Benefits forStudent (LS–266).

DATES: Written comments must besubmitted to the office listed in theADDRESSES section below on or beforeSeptember 18, 2001.

ADDRESSES: Ms. Patricia A. Forkel, U. S.Department of Labor, 200 ConstitutionAve., NW., Room S–3201, Washington,DC 20210, telephone (202) 693–0339

(this is not a toll-free number), fax (202)693–1451.SUPPLEMENTARY INFORMATION:

I. BackgroundThe Office of Workers’ Compensation

Programs (OWCP) administers theLongshore and Harbor Workers’Compensation Act. The Act provides forcontinuation of death benefits for achild or certain other survivingdependents after the age of 18 (to age23) if the dependent qualifies as astudent as defined in Section 2 (18) ofthe Act. Regulation 20 CFR 702.121addresses the use of forms for thereporting of required information. TheLS–266 is to be submitted by the parentor guardian of the dependent for whomcontinuation of benefits is sought. Thestatements contained on the form mustbe verified by an official of theeducational institution. The information



is used by the Department of Labor todetermine whether a continuation of thebenefits is justified.

II. Review Focus

The Department of Labor isparticularly interested in commentswhich:


• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collection of information,including the validity of themethodology and assumptions used;

• Enhance the quality, utility andclarity of the information to becollected; and

• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,e.g., permitting electronic submissionsof responses.

III. Current Actions

The Department of Labor seeks theapproval of the extension of thisinformation collection in order toensure that eligible dependents maycontinue to receive benefits to whichthey are entitled.

Type of Review: Extension.Agency: Employment Standards

Administration.Title: Application for Continuation of

Death Benefits for Student.OMB Number: 1215–0073.Agency Number: LS–266.Affected Public: Individuals or

households; Businesses or other for-profit.

Frequency: On occasion.Total Respondents: 43.Time per Response: 30 minutes.Estimated Total Burden Hours: 22.Total Burden Cost (capital/startup):

$0.Total Burden Cost (operating/

maintenance): $15.91.Comments submitted in response to

this notice will be summarized and/orincluded in the request for Office ofManagement andBudget approval of theinformation collection request; they willalso become a matter of public record.

Dated: July 11, 2001.Margaret J. Sherrill,Chief, Branch of Management Review andInternal Control, Division of FinancialManagement, Office of Management,Administration and PlanningEmploymentStandards Administration.[FR Doc. 01–18149 Filed 7–19–01; 8:45 am]BILLING CODE 4510–CF–P

DEPARTMENT OF LABOR

Employment StandardsAdministration, Wage and HourDivision

Minimum Wages for Federal andFederally Assisted Construction;General Wage Determination Decisions

General wage determination decisionsof the Secretary of Labor are issued inaccordance with applicable law and arebased on the information obtained bythe Department of Labor from its studyof local wage conditions and data madeavailable from other sources. Theyspecify the basic hourly wage rates andfringe benefits which are determined tobe prevailing for the described classes oflaborers and mechanics employed onconstruction projects of a similarcharacter and in the localities specifiedtherein.

The determinations in these decisionsof prevailing rates and fringe benefitshave been made in accordance with 29CFR Part 1, by authority of the Secretaryof Labor pursuant to the provisions ofthe Davis-Bacon Act of March 3, 1931,as amended (46 Stat. 1494, as amended,40 U.S.C. 276a) and of other Federalstatutes referred to in 29 CFR Part1,Appendix, as well as such additionalstatutes as may from time to time beenacted containing provisions for thepayment of wages determined to beprevailing by the Secretary of Labor inaccordance with the Davis-Bacon Act.The prevailing rates and fringe benefitsdetermined in these decisions shall, inaccordance with the provisions of theforegoing statutes, constitute theminimum wages payable on Federal andfederally assisted construction projectsto laborers and mechanics of thespecified classes engaged on contractwork of the character and in thelocalities described therein.

Good cause is hereby found for notutilizing notice and public commentprocedure thereon prior to the issuanceof these determinations as prescribed in5 U.S.C. 553 and not providing for delayin the effective date as prescribed in thatsection, because the necessity to issuecurrent construction industry wagedeterminations frequently and in largevolume causes procedures to be

impractical and contrary to the publicinterest.

General wage determinationdecisions, and modifications andsupersede as decisions thereto, containno expiration dates and are effectivefrom their date of notice in the FederalRegister, or on the date written noticeis received by the agency, whichever isearlier. These decisions are to be usedin accordance with the provisions of 29CFR Parts 1 and 5. Accordingly, theapplicable decision, together with anymodifications issued, must be made apart of every contract for performance ofthe described work within thegeographic area indicated as required byan applicable Federal prevailing wagelaw and 29 CFR Part 5. The wage ratesand fringe benefits, notice of which ispublished herein, and which arecontained in the Government PrintingOffice (GPO) document entitled‘‘General Wage Determinations IssuedUnder The Davis-Bacon And RelatedAct,’’ shall be the minimum paid byconstructors and subcontractors tolaborers and mechanics.

Any person, organization, orgovernmental agency having an interestin the rates determined as prevailing isencouraged to submit wage rate andfringe benefit information forconsideration by the Department.

Further information and self-explanatory forms for the purpose ofsubmitting this data may be obtained bywriting to the U.S. Department of Labor,Employment Standards Administration,Wage and Hour Division, Division ofWage Determinations, 200 ConstitutionAvenue, NW., Room S–3014,Washington, DC 20210.

Modification to General WageDetermination Decisions

The number of decisions listed to theGovernment Printing Office documententitled ‘‘General Wage determinationsIssued Under the Davis-Bacon andrelated Acts’’ being modified are listedby Volume and State. Dates ofpublication in the Federal Register arein parentheses following the decisionsbeing modified.

Volume IConnecticut

CT010001 (Mar. 02, 2001)CT010003 (Mar. 02, 2001)CT10004 (Mar. 02, 2001)

New YorkNY010013 (Mar. 02, 2001)

Volume IINone

Volume IIIGeorgia

GA010004 (Mar. 02, 2001)GA010006 (Mar. 02, 2001)



GA010022 (Mar. 02, 2001)GA010033 (Mar. 02, 2001)GA010073 (Mar. 02, 2001)GA010086 (Mar. 02, 2001)GA010087 (Mar. 02, 2001)GA010088 (Mar. 02, 2001)

Volume IVMichigan

MI010001 (Mar. 02, 2001)MI010002 (Mar. 02, 2001)MI010003 (Mar. 02, 2001)MI010004 (Mar. 02, 2001)MI010005 (Mar. 02, 2001)MI010007 (Mar. 02, 2001)MI010008 (Mar. 02, 2001)MI010011 (Mar. 02, 2001)MI010012 (Mar. 02, 2001)MI010013 (Mar. 02, 2001)MI010015 (Mar. 02, 2001)MI010016 (Mar. 02, 2001)MI010017 (Mar. 02, 2001)MI010019 (Mar. 02, 2001)MI010020 (Mar. 02, 2001)

MinnesotaMN010001 (Mar. 02, 2001)MN010003 (Mar. 02, 2001)MN010004 (Mar. 02, 2001)MN010005 (Mar. 02, 2001)MN010013 (Mar. 02, 2001)MN010015 (Mar. 02, 2001)MN010017 (Mar. 02, 2001)MN010043 (Mar. 02, 2001)MN010048 (Mar. 02, 2001)MN010049 (Mar. 02, 2001)MN010051 (Mar. 02, 2001)MN010053 (Mar. 02, 2001)MN010054 (Mar. 02, 2001)MN010055 (Mar. 02, 2001)MN010056 (Mar. 02, 2001)MN010057 (Mar. 02, 2001)MN010059 (Mar. 02, 2001)MN010060 (Mar. 02, 2001)MN010061 (Mar. 02, 2001)MN010062 (Mar. 02, 2001)

OhioOH010002 (Mar. 02, 2001)

Volume V

MissouriMO010001 (Mar. 02, 2001)MO010004 (Mar. 02, 2001)MO010005 (Mar. 02, 2001)MO010008 (Mar. 02, 2001)MO010015 (Mar. 02, 2001)MO010039 (Mar. 02, 2001)MO010042 (Mar. 02, 2001)MO010045 (Mar. 02, 2001)MO010054 (Mar. 02, 2001)MO010058 (Mar. 02, 2001)

NebraskaNE010001 (Mar. 02, 2001)NE010003 (Mar. 02, 2001)NE010007 (Mar. 02, 2001)NE010009 (Mar. 02, 2001)NE010010 (Mar. 02, 2001)NE010011 (Mar. 02, 2001)NE010019 (Mar. 02, 2001)

Volume VI

ColoradoCO010001 (Mar. 02, 2001)CO010005 (Mar. 02, 2001)CO010006 (Mar. 02, 2001)CO010007 (Mar. 02, 2001)CO010008 (Mar. 02, 2001)CO010009 (Mar. 02, 2001)

CO010016 (Mar. 02, 2001)CO010021 (Mar. 02, 2001)CO010022 (Mar. 02, 2001)CO010023 (Mar. 02, 2001)CO010024 (Mar. 02, 2001)CO010025 (Mar. 02, 2001)

Volume VII

None

General Wage DeterminationPublication

General wage determinations issuedunder the Davis-Bacon and related Acts,including those noted above, may befound in the Government Printing Office(GPO) document entitled ‘‘General WageDeterminations Issued Under The Davis-Bacon And Related Acts.’’ Thispublication is available at each of the 50Regional Government DepositoryLibraries and many of the 1,400Government Depository Libraries acrossthe country.

General wage determinations issuedunder the Davis-Bacon and Related Actsare available electronically at no cost onthe Government Printing Office site atwww.access.gpo.gov/davisbacon. Theyare also available electronically bysubscription to the FedWorld BulletinBoard System of the National TechnicalInformation Service (NTIS) of the U.S.Department of Commerce at 1–800–363–2068.

Hard-copy subscriptions may bepurchased from: Superintendent ofDocuments, U.S. Government PrintingOffice, Washington, DC 20402, (202)512–1800.

When ordering hard-copysubscription(s), be sure to specify theState(s) of interest, since subscriptionsmay be ordered for any or all of the sixseparate volumes, arranged by State.Subscriptions include an annual edition(issued in January or February) whichincludes all current general wagedeterminations for the States covered byeach volume. Throughout the remainderof the year, regular weekly updates willbe distributed to subscribers.

Signed at Washington, DC, this 12th day ofJuly, 2001.

Carl J. Poleskey,Chief, Branch of Construction WageDeterminations.[FR Doc. 01–17903 Filed 7–19–01; 8:45 am]

BILLING CODE 4510–27–M

DEPARTMENT OF LABOR

Mine Safety and Health Administration

Proposed Information CollectionRequest Submitted for PublicComment and Recommendations;Safety Standards for UndergroundCoal Mine Ventilation

ACTION: Notice.

SUMMARY: The Department of Labor, aspart of its continuing effort to reducepaperowrk and respondent burden,conducts a preclearance consultationprogram to provide the general publicand Federal agencies with anopportunity to comment on proposedand/or continuing collections ofinformation in accordance with thePaperwork Reduction Act of 1995(PRA95) (44 U.S.C. 3506(c)(2)(A)). Thisprogram helps to ensure that requesteddata can be provided in the desiredformat, reporting burden (time andfinancial resources) is minimized,collection instruments are clearlyunderstood, and the impact of collectionrequirements on respondents can beproperly assessed.DATES: Submit comments on or beforeSeptember 18, 2001.ADDRESSES: Send comments to LynnetteM. Haywood, Deputy Director,Administration and Management 4015Wilson Boulevard, Room 611, 4015,Arlington, VA 22203–1984. Commentersare encouraged to send their commentson a computer disk, or via Internet E-mail to [email protected], along withan original printed copy. Ms. Haywoodcan be reached at (703) 235–1383(voice), or (703) 235–1563 (facsimile).FOR FURTHER INFORMATION CONTACT:Lynette M. Haywood, Deputy Director,Administration and Management, U.S.Department of Labor, Mine Safety andHealth Administration, Room 611, 4015Wilson Boulevard, Arlington, VA22203–1984. Ms. Haywood can bereached at [email protected](Internet E-mail), (703) 235–1383(voice), or (703) 235–1563 (facsimile).SUPPLEMENTARY INFORMATION:

I. BackgroundThe preshift examination is the mine

operator’s fundamental tool forassessing the overall safety condition ofthe mine. During the examination, theexaminer focuses on discovering bothexisting and developing hazards, suchas methane accumulation, bad roof andwater accumulation, and determiningthe effectiveness of the mine ventilationsystem. The examination has proven tobe particularly effective in the discoveryand correction of hazardous conditions



and practices before they lead to injuriesor fatalities. Because conditions in theunderground mining environment canchange rapidly, recurring examinationsare necessary to assure safety of theminers underground. A timely preshiftexamination assures the safety of theenvironment on a routine basis.

II. Desired Focus of CommentsCurrently, the Mine Safety and Health

Administration (MSHA) is solicitingcomments concerning the extension ofthe information collection related to theSafety Standards for Underground CoalMine Ventilation. MSHA is particularlyinterested in comments which:


• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collection of information,including the validity of themethodology and assumptions used;

• Enhance the quality, utility, andclarity of the information to becollected; and

• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated,electronic, mechanical, or othertechnological collection techniques orother forms of information technology,e.g., permitting electronic submissionsof responses.

A copy of the information collectionrequest may be viewed on he Internet byaccessing the MSHA Home Page(http://www.msha.gov) and selecting‘‘Statutory and Regulatory Informationthen ‘‘Paperwork Reduction ActSubmissions’’ (http://www.msha.gov/regspwork.htm)’’, or by contacting theemployee listed above in the ForFurther Information Contact section ofthis notice for a hard copy.

III. Current ActionsAn underground mine is a maze of

tunnels that must be adequatelyventilated with fresh air to provide asafe environment for miners. Methane isliberated from the strata, and anxiousgases and dusts from blasting and othermining activities may be present. Theexplosive and noxious gases and dustsmust be diluted, rendered harmless, andcarried to the surface by the ventilatingcurrents. Sufficient air quality must beprovided to maintain the level ofrespirable dust in accordance withMSHA standards.

Type of Review: Extension.Agency: Mine Safety and Health

Administration.

Title: Safety Standard forUnderground Coal Mine Ventilation.

OMB Number: 1219–0125.Affected Public: Business or other for-

profit.Frequency: On occasion.Cite/Reference/Form/etc: 30 CFR

75.360(a)(1), and 75.360(f).Total Respondents: 127.Total Responses: 102,000.Average Time per Response: 46

minutes*.Estimated Total Burden Hours:

78,001. *Discrepancies due to rounding.Total Annualized Capital/Startup

Costs: $0.Total Operating and Maintenance

Costs: $0.Comments submitted in response to

this notice will be summarized and/orincluded in the request for Office ofManagement and Budget approval of theinformation collection request; they willalso become a matter of public record.

Dated: July 16, 2001.Lynnette M. Haywood,Deputy Director, Administration andManagement.[FR Doc. 01–18154 Filed 7–19–01; 8:45 am]BILLING CODE 4510–43–M

DEPARTMENT OF LABOR

Occupational Safety and HealthAdministration

[Docket No. NRTL1–2001]

TUV Product Services GmbH,Recognition as an NRTL

AGENCY: Occupational Safety and HealthAdministration (OSHA); Labor.

ACTION: Notice.

SUMMARY: This notice announces theAgency’s final decision on theapplication of TUV Product ServicesGmbH for recognition as a NationallyRecognized Testing Laboratory (NRTL)under 29 CFR 1910.7.

EFFECTIVE DATE: This recognitionbecomes effective on July 20, 2001, andwill be valid until July 20, 2006, unlessterminated or modified prior to thatdate, in accordance with 29 CFR 1910.7.

FOR FURTHER INFORMATION CONTACT:Bernard Pasquet, Office of TechnicalPrograms and Coordination Activities,NRTL Program, Occupational Safety andHealth Administration, U.S. Departmentof Labor, 200 Constitution Avenue,NW., Room N3653, Washington, DC20210, or phone (202) 693–2110.


Notice of Final DecisionThe Occupational Safety and Health

Administration (OSHA) hereby givesnotice of its recognition of TUV ProductServices GmbH (TUVPSG) as aNationally Recognized TestingLaboratory (NRTL). The scope of thisrecognition includes testing andcertification of the equipment ormaterials, and the site, listed below. Therecognition also includes TUVPSG’s useof the supplemental programs describedbelow. OSHA will detail TUVPSG’sscope of recognition in an informationalweb page for the NRTL, which we willestablish at (http://www.osha-slc.gov/dts/otpca/nrtl/index.html). We maintainsuch a web page for each NRTL.

OSHA recognition of an NRTLsignifies that the organization has metthe legal requirements in Section 1910.7of Title 29, Code of Federal Regulations(29 CFR 1910.7). Recognition is anacknowledgment that the organizationcan perform independent safety testingand certification of the specific productscovered within its scope of recognitionand is not a delegation or grant ofgovernment authority. As a result ofrecognition, employers may useproducts ‘‘properly certified’’ by theNRTL to meet OSHA standards thatrequire testing and certification.

The Agency processes applications byan NRTL for initial recognition or forexpansions or renewal of thisrecognition following requirements inAppendix A to 29 CFR 1910.7. Thisappendix requires that the Agencypublish two notices in the FederalRegister in processing an application. Inthe first notice, OSHA announces theapplication and provides its preliminaryfinding and, in the second notice, theAgency provides its final decision onthe application. These notices set forththe NRTL’s scope of recognition ormodifications of that scope.

TUVPSG applied for recognition as anNRTL, pursuant to 29 CFR 1910.7, andOSHA published the required notice inthe Federal Register on March 16, 2001(66 FR 15291) to announce theapplication. The notice included apreliminary finding that TUVPSG couldmeet the requirements for recognitiondetailed in 29 CFR 1910.7, and invitedpublic comment on the application byApril 16, 2001. OSHA received onecomment in response to the notice (seeExhibit 4–1).

The commenter did not support oroppose the application but requestedcertain documentation that theapplicant has designated as confidentialand requested an extension of the timeto comment in order to review thisdocumentation. Due to the designation



by the applicant, OSHA did not makethese documents available for publicreview. The commenter said it sought toobtain these documents ‘‘to providemeaningful comment as to whether theNRTL meets the requirements of 29 CFR1910.7.’’ The commenter believes someof the documents withheld are‘‘industry common procedures.’’

We follow provisions of 29 CFR Part70 in determining whether we can ormust disclose application information.This part generally deals withprocedures to process a request fordisclosure under the Freedom ofInformation Act (FOIA). Under SubpartB of this Part 70, information designatedas confidential by a business submittermay be afforded protection underExemption 4 of the FOIA. Thisexemption protects commercial orfinancial information, the disclosure ofwhich would cause substantialcompetitive harm to the submitter. Aspart of our normal process for handlingapplications, OSHA requested that theapplicant provide reasons fordesignating certain applicationdocuments as confidential, andspecifically whether disclosure wouldcause it substantial competitive harm. Inits original submission (see Exhibit 2–2),the applicant had marked virtually all ofits documents ‘‘Confidential.’’ Theapplicant provided the necessaryjustification (see Exhibit 2–3), andOSHA reviewed it and the applicabledocuments and determined that theirdisclosure could reasonably be expectedto cause the applicant substantialcompetitive harm. Therefore, we did notmake certain documents available forpublic review. These documents aredetailed internal procedures thatexplain more specifically how theapplicant will operate and couldpotentially give to prospective orcurrent competitors knowledge thatcould cause the applicant substantialcompetitive harm. OSHA has previouslywithheld from disclosure similar suchdocuments in response to FOIA requestsreceived concerning documentssubmitted by other NRTLs.

Based on TUVPSG’s justification, wealso are unable to disclose thedocuments to the commenter. Since wecannot disclose this information and thecommenter bases its request forextension to comment upon a review ofthis information, we denied the requestfor extension. The applicationinformation that we have made public,the on-site review report, both availablein our docket office, and the informationwe provided in the preliminary notice,and repeat in this current notice,adequately demonstrate that theapplicant meets the requirements for

recognition, subject to the conditionsincluded in that notice. OSHA hasresponded to the commenter to explainthe denial of the extension and toaddress the remainder of its comment.

You may obtain or review copies ofall public documents pertaining to theapplication by contacting the DocketOffice, Occupational Safety and HealthAdministration, U.S. Department ofLabor, 200 Constitution Avenue, NW,Room N2625, Washington, D.C. 20210.You should refer to Docket No. NRTL1–2001, the permanent record of publicinformation on the TUVPSGrecognition. Please note that in thepreliminary notice we incorrectlyreferred to the docket number as NRTL–1–01.

The current address of the facility(site) that OSHA recognizes for TUVPSGis: TUV Product Services GmbH,Ridlerstrasse 65, D–80339, Munich,Germany.

Background on the Applicant and theApplication

According to the application, TUVProduct Services GmbH (TUVPSG) is alimited liability company foundedunder German law in 1988. TUVPSGstates that it is an ‘‘internationalorganization for testing, evaluation, andcertification of products andmanagement systems.’’ Also, theapplicant states that it traces its originsto German steam boiler inspectionassociations formed as early as 1866 ‘‘toprotect workers against injury and toprevent damage to industrialinstallations.’’ TUVPSG owns andoperates a number of laboratories inGermany and in many other countries,including the U.S. However, therecognition applies only to the onelocation listed above.

The regulations for the NRTL Programin 29 CFR 1910.7 allow any testingorganization, whether or not it is US-based, to apply to OSHA for recognitionas an NRTL. However, in determiningeligibility for a foreign-based testingorganization, such as TUVPSG, theregulations require OSHA to take intoconsideration reciprocal treatment bythe foreign government of certain US-based testing agencies. Germany is partof the European Union (EU), and the USand the EU have signed a MutualRecognition Agreement (MRA) onconformity assessment, which went intoeffect in May 1999. The MRA includesprovisions for the reciprocal treatmentof US-based testing agencies bygovernments of countries that are part ofthe EU. As a result of the MRA,reciprocity is assumed for all countriesin the EU, and OSHA does not have togo through a country-by-country

determination. The MRA does notchange any of the requirements orprocesses that OSHA follows under itsNRTL Program. For more informationon the MRA, refer to the U.S.Department of Commerce web site(http://www.doc.gov)

In the application, TUVPSG statesthat it is owned by TUVSuddeutschland and TUV Nord, bothbased in Germany. However, recentlyTUV Suddeutschland (TUVS) becamesole owner of TUVPSG.Organizationally, the applicant fallswithin the ‘‘Product Division’’ of TUVS,one of its three main divisions. TUVS ingeneral provides testing and othertechnical services in a number of areasthroughout the world.

TUVPSG submitted an application forrecognition, dated August 21, 1998 (seeExhibit 2–1). OSHA received thisapplication from the EuropeanCommission (EC) on March 1, 1999,along with applications from otherorganizations located in the EU. The ECsubmitted the applications under theprovisions of the Electrical SafetyAnnex of the MRA. However, none ofthese applications contained sufficientinformation for processing, and OSHAreturned them to the Commission inApril 1999 to obtain the additionalinformation.

The Commission resubmitted theapplication for TUVPSG to OSHA,which the Agency received on March 3,2000 (see Exhibit 2–2). This applicationincludes the substantive portionoriginally submitted and is thereforedated August 21, 1998. In theapplication, TUVPSG requestedrecognition for four test standards,originally specifying international teststandards but, to meet OSHArequirements, later specifying theequivalent US test standards. Some ofthe documents in the applicationneeded translations, which werereceived on June 5, 2000 (see Exhibit 2–6). In response to requests from OSHAfor clarification and additionalinformation, TUVPSG supplemented itsapplication in submissions datedAugust 11 and August 28, 2000 (seeExhibits 2–3 and 2–4). It alsosupplemented its application in asubmission dated November 8, 2000(see Exhibit 2–5), which included arequest for recognition of 34 additionaltest standards, bringing the totalstandards requested for recognition to38.

As explained above and in thepreliminary notice, some documents inthe submissions, and parts of theoriginal application, have beendesignated as ‘‘confidential’’ by theapplicant. Generally, the applicant



maintains the 4 levels of operationaldocumentation mentioned ininternational quality standards. Itgenerally considers its level 3 and 4documents to be confidential orprivileged.

Staff of the NRTL Program performedan on-site review (assessment) of theMunich, Germany, facility onSeptember 18–22, 2000. In the on-sitereview report (see Exhibit 3), theprogram staff recommended a ‘‘positivefinding.’’

The applicant has presented detaileddocumentation that describes how itcurrently performs its testing andcertification activities. Many of thepolicies, procedures, work instructions,methods, and other practices describedin this documentation would be used inits operations as an NRTL. Whereappropriate, it has supplemented ormodified the policies and procedures toconform to OSHA’s requirements for anNRTL under 29 CFR 1910.7.

TUVPSG currently performs a largerange of product testing andcertification activities, primarily testingto European based testing standards,such as EN and IEC standards. Forexample, it currently performs testingrequired under EN 60950, and hasprovisions for addressing nationaldeviations adopted by various countries,including those for the US. One of thetest standards for which it requestsrecognition is UL 1950, which isequivalent to EN60950 but includes theUS deviations. TUVPSG performs itstesting and certification activitiesprimarily to assure compliance ofproducts to requirements underdirectives issued within the EuropeanUnion. However, it has also performedtesting to US based test standards, suchas UL 1950. As part of its currentcertification activities, it conductsinitial and follow-up inspections atmanufacturers’ facilities, one facet of theactivities that NRTLs recognized byOSHA must perform. It also authorizesthe use of certification marks, anotheraspect of the work that NRTLs mustperform. However, the marks itauthorizes are primarily necessary forthe European marketplace. For purposesof its certification under OSHA’s NRTLProgram, TUVPSG will utilize a USregistered certification mark that isowned by its subsidiary in the US.

The four recognition requirements of29 CFR 1910.7 are presented below,along with an explanation illustratinghow TUVPSG has met or plans to meeteach of these requirements.

CapabilitySection 1910.7(b)(1) states that for

each specified item of equipment or

material to be listed, labeled oraccepted, the laboratory must have thecapability (including proper testingequipment and facilities, trained staff,written testing procedures, andcalibration and quality controlprograms) to perform appropriatetesting.

The application and on-site reviewreport indicate that TUVPSG hasadequate testing equipment and anadequate facility to perform the testsrequired under the test standards forwhich it seeks recognition. Securitymeasures are in place to restrict orcontrol access to their facility, andprocedures exist for handling testsamples. The report also indicates thattesting and processing procedures are inplace, and the application describes theprogram for the development of newtesting procedures. The applicantsubmitted 24 specific test methods thatit currently uses and would utilize forits proposed NRTL testing activities. Forsome of the test standards, it willdevelop testing report formats prior toperforming testing and certification ofproducts under the specific standard.

TUVPSG utilizes outside calibrationsources and also has procedures for andperforms internal calibrations of certainequipment. The application indicatesthat TUVPSG maintains records ontesting equipment, which includeinformation on repair, routinemaintenance, and calibrations. Theapplication and on-site review reportaddress personnel qualifications andtraining, and identify the applicant’sstaff involved with product testing,along with a summary of their educationand experience. Also, the reportindicates that TUVPSG personnel haveadequate technical knowledge for thework they perform. Moreover, thereview report describes the applicant’squality assurance program, which isexplained in more detail in TUVPSG’sQuality Manual. Finally, the applicantperforms internal system and internaltechnical audits of its operations on aregular basis.

Control Procedures

Section 1910.7(b)(2) requires that theNRTL provide certain controls andservices, to the extent necessary, for theparticular equipment or material to belisted, labeled, or accepted. Theyinclude control procedures foridentifying the listed or labeledequipment or materials, inspections ofproduction runs at factories to assureconformance with test standards, andfield inspections to monitor and assurethe proper use of identifying marks orlabels.

The applicant has procedures andrelated documentation for initiallyqualifying a manufacturer and forperforming the required follow-upinspections at a manufacturer’s facility.In its procedures, it identifies criteria itwill use to determine the frequencywith which it will perform these follow-up factory inspections. It has adoptedthe criteria detailed in OSHA policiesfor NRTLs, which specify that NRTLsperform no fewer than four (4)inspections per year at certain facilitiesand no fewer than two (2) inspectionsper year under certain conditions. Thefactory inspections are one part of theactivities that the applicant will utilizein controlling its certification mark. Inits application, TUVPSG includedevidence of the application by itsAmerican subsidiary for registration of aTUV certification mark with the U.S.Patent and Trademark Office (USPTO).

The applicant currently performsproduct certifications, as previouslymentioned, and has procedures forcontrol and issuance of thesecertifications. According to the reviewreport, it has issued in excess of 25,000certifications under these procedures.The applicant maintains a detaileddatabase of the product certifications,which would serve as its listing record.The report also states that the applicanthas experience in authorizing andcontrolling the use of a certificationmark, following many of the proceduresand methods it uses for control of itscertification certificates. For purposes ofOSHA’s NRTL Program, control by theNRTL of its certification mark isuppermost in importance. TUVPSG’scontrol of a US registered certificationmark under the NRTL Program will bea new activity for the applicant, andOSHA includes a condition related tothis control.

IndependenceSection 1910.7(b)(3) requires that the

NRTL be completely independent ofemployers subject to the testedequipment requirements, and of anymanufacturers or vendors of equipmentor materials being tested for thesepurposes.

As previously stated, TUVSuddeutschland (TUVS) is currently thesole owner of TUVPSG. In addition, theinformation reviewed by OSHA has notindicated that TUVPSG has the kinds ofrelationships described in OSHA policythat would cause the applicant to fail tomeet the independence requirement.This information shows that TUVPSGdoes not own or control and is notowned or controlled by the kind ofentities of concern to OSHA. Inaddition, OSHA’s review of information



on business activities and subsidiariesof the TUVPSG’s parent company hasnot revealed any apparent conflicts ofinterest that could adversely influencethe applicant’s testing and certificationactivities. TUVPSG has policies toprotect against conflicts of interest by itsemployees.

Credible Reports/Complaint Handling

Section 1910.7(b)(4) provides that anNRTL must maintain effectiveprocedures for producing crediblefindings and reports that are objectiveand without bias, as well as for handlingcomplaints and disputes under a fairand reasonable system.

The applicant utilizes standardizedformats for recording and reportingtesting data and inspection data. It hasprocedures for evaluating and reportingthe findings for testing and inspectionactivities to check conformance to allrequirements of a test standard. Theapplicant has included examples ofcompleted inspection forms.

Regarding the handling of complaintsand disputes, the applicant’s complaintmanagement procedure provides theframework to handle complaints itreceives from its clients or from thepublic or other interested parties.According to the review report, underone certification system operated by theapplicant, it must respond to an initialcomplaint within 24 hours. OSHA hasno such requirements for NRTLs, butthe review report indicates that theapplicant will utilize its current form ofsystem controls and documentation tohandle complaints stemming from itsNRTL certification activities.

Programs and Procedures

OSHA is granting the request byTUVPSG to use the supplementalprograms listed below, based upon thecriteria detailed in the March 9, 1995Federal Register notice (60 FR 12980, 3/9/95). This notice lists nine (9) programsand procedures (collectively, programs),eight of which (called supplementalprograms) an NRTL may use to controland audit, but not actually to generate,the data relied upon for productcertification. An NRTL’s initialrecognition always includes the first orbasic program, which requires that allproduct testing and evaluation beperformed in-house by the NRTL thatwill certify the product. The on-sitereview report indicates that TUVPSGappears to meet the criteria for use ofthe following supplemental programsfor which it has applied:Program 2: Acceptance of testing data

from independent organizations, otherthan NRTLs

Program 3: Acceptance of productevaluations from independentorganizations, other than NRTLs

Program 4: Acceptance of witnessedtesting data

Program 8: Acceptance of productevaluations from organizations thatfunction as part of the InternationalElectrotechnical CommissionCertification Body (IEC–CB) Scheme

Program 9: Acceptance of services otherthan testing or evaluation performedby subcontractors or agentsOSHA developed these programs to

limit how an NRTL may perform certainaspects of its work and to permit theactivities covered under a program onlywhen the NRTL meets certain criteria.In this sense, they are special conditionsthat the Agency places on an NRTL’srecognition. OSHA does not considerthese programs in determining whetheran NRTL meets the requirements forrecognition under 29 CFR 1910.7.However, these programs help to definethe scope of that recognition.

TUVPSG also sought recognition forthe three remaining supplementalprograms, but OSHA is not grantingrecognition for these programs at thistime. Under these programs, an NRTLmay use manufacturers’ data inperforming the testing and evaluationactivities required for a test standard.However, as noted in the review report,the manufacturers for which TUVPSGperforms testing could lack sufficientfamiliarity with testing to the USdeviations. As stated in the report,TUVPSG may reapply for the 3programs ‘‘in a few years when [the]manufacturers have participated’’ in thewitnessed testing program, and it isfamiliar with their ‘‘testing capabilityand confidence in their ability to test USdeviations, with respect to productsdestined for the US marketplace.’’

Additional ConditionsAs already indicated, TUVPSG plans

to utilize the proprietary US-registeredmark of its US subsidiary in certifyingproducts as an NRTL. This is a newundertaking for the applicant andalthough it has procedures forcontrolling a certification mark, it stillneeds to further develop and refine thedetailed procedures it will use tocontrol this particular mark. As a result,OSHA conditionally recognizesTUVPSG subject to an assessment of thedetailed procedures and practices forcontrolling this mark once they are inplace.

TUVPSG may use only the USregistered mark for its NRTLcertification activities. At the time ofpreparation of this current notice, theU.S. Patent and Trademark Office

(USPTO) had not yet issued the Noticeof Allowance for the mark. This noticemust be issued before OSHA will placethe mark on its web page that shows themarks used by NRTLs (http://www.osha-slc.gov/dts/otpca/nrtl/nrtlmrk.html). Inaddition, only the site listed in thisnotice may authorize use of this mark.Since this mark is specific to the NRTLProgram, the US subsidiary may notauthorize use of the mark unless it isrecognized as an NRTL. Similarly, noneof the other TUVPSG laboratories orlocations may authorize the use of thismark. To ensure the applicant and thepublic understand this fact, OSHAimposes a condition to this effect.

As also noted, the applicant has justadopted procedures concerning thecriteria for determining its frequency forconducting factory follow-upinspections. Here, too, it needs moredetailed procedures to effectively andproperly implement the criteria. OSHAwould have to review TUVPSG’sapproach in implementing the criteriafor twice per year inspections before itbegins to conduct inspections at thisfrequency. As a result, OSHAconditionally recognizes TUVPSGsubject to an assessment of the detailsof this approach once it is in place.

Imposing the conditions is consistentwith OSHA’s past recognition of certainorganizations as NRTLs, which met thebasic requirements but needed to furtherdevelop or refine their procedures (forexample, see 63 FR 68306 12/10/1998;and 65 FR 26637, 05/08/2000). Giventhe applicant’s current breadth ofactivities in testing and certification,OSHA is confident that TUVPSG willdevelop and implement procedures andpractices to appropriately perform theactivities in the areas noted above.

Therefore, OSHA includesappropriate conditions below thatTUVPSG must meet for recognition asan NRTL. These conditions apply solelyto the TUVPSG operations as an NRTLand solely to those products that itcertifies for purposes of enablingemployers to meet OSHA productapproval requirements. Theseconditions, listed first under Conditionsbelow, apply in addition to the otherconditions below that OSHA normallyimposes in its recognition of anorganization as an NRTL. The NRTLProgram staff includes these type ofadditional conditions on OSHA’sinformational web page for the NRTL,which we will establish under our website at http://www.osha-slc.gov/dts/otpca/nrtl/index.html. When the staffdetermine that a particular conditionhas been satisfied, not only for TUVPSGbut for any NRTL, they will remove thecondition from the web page and notify



the NRTL accordingly. OSHA is notrequired to publish a public notice toremove conditions it imposes as part ofits NRTL recognition activities.

Final Decision and Order

The NRTL Program staff hasexamined the application, theadditional submissions, the on-sitereview report, and other pertinentdocuments. Based upon thisexamination and the program staffrecommendation, OSHA finds that TUVProduct Services GmbH has met therequirements of 29 CFR 1910.7 forrecognition as a Nationally RecognizedTesting Laboratory. The recognitionapplies to the site listed above. Inaddition, it covers the test standards,listed below, and it is subject to thelimitations and conditions, also listedbelow.

Limitations

OSHA hereby limits the recognition ofTUVPSG to testing and certification ofproducts for demonstration ofconformance to the test standards listedbelow (see Listing of Test Standards).OSHA has determined that each teststandard meets the requirements for anappropriate test standard, within themeaning of 29 CFR 1910.7(c).

The Agency’s recognition of TUVPSG,or any other NRTL, for a particular teststandard is always limited to equipmentor materials (products) for which OSHAstandards require third party testing andcertification before use in theworkplace. Conversely, OSHA’srecognition of an NRTL for a teststandard excludes the testing of anyproduct(s), falling within the scope ofthe test standard, for which OSHA hasno such requirements.

Listing of Test Standards

UL 82 Electric Gardening AppliancesUL 122 Photographic EquipmentUL 507 Electric FansUL 508 Industrial Control EquipmentUL 561 Floor Finishing MachinesUL 745–1 Portable Electric ToolsUL 745–2–1 Particular Requirements

of DrillsUL 745–2–2 Particular Requirements

for Screwdrivers and ImpactWrenches

UL 745–2–3 Particular Requirementsfor Grinders, Polishers, and Disk-TypeSanders

UL 745–2–4 Particular Requirementsfor Sanders

UL 745–2–5 Particular Requirementsfor Circular Saws and Circular Knives

UL 745–2–6 Particular Requirementsfor Hammers

UL 745–2–8 Particular Requirementsfor Shears and Nibblers

UL 745–2–9 Particular Requirementsfor Tappers

UL 745–2–11 Particular Requirementsfor Reciprocating Saws

UL 745–2–12 Particular Requirementsfor Concrete Vibrators

UL 745–2–14 Particular Requirementsfor Planers

UL 745–2–17 Particular Requirementsfor Routers and Trimmers

UL 745–2–30 Particular Requirementsfor Staplers

UL 745–2–31 Particular Requirementsfor Diamond Core Drills

UL 745–2–32 Particular Requirementsfor Magnetic Drill Presses

UL 745–2–33 Particular Requirementsfor Portable Bandsaws

UL 745–2–34 Particular Requirementsfor Strapping Tools

UL 745–2–35 Particular Requirementsfor Drain Cleaners

UL 745–2–36 Particular Requirementsfor Hand Motor Tools

UL 745–2–37 Particular Requirementsfor Plate Jointers

UL 775 Graphic Arts EquipmentUL 778 Motor-Operated Water PumpsUL 987 Stationary and Fixed Electric

ToolsUL 1017 Vacuum Cleaners, Blower

Cleaners, and Household FloorFinishing Machines

UL 1419 Professional Video and AudioEquipment

UL 1459 Telephone EquipmentUL 1585 Class 2 and Class 3

TransformersUL 1776 High-Pressure Cleaning

MachinesUL 1950 Technology Equipment

Including Electrical BusinessEquipment

UL 3101–1 Electrical Equipment forLaboratory Use; Part 1: GeneralRequirements

UL 3111–1 Electrical Measuring andTest Equipment, Part 1: GeneralRequirements

UL 6500 Audio/Video and MusicalInstrument Apparatus for Household,Commercial, and Similar General UseThe designations and titles of the

above test standards were current at thetime of the preparation of thepreliminary notice.

Many of the test standards listedabove are also approved as AmericanNational Standards by the AmericanNational Standards Institute (ANSI).However, for convenience in compilingthe list, we show the designation of thestandards developing organization (e.g.,UL 1950) for the standard, as opposedto the ANSI designation (e.g., ANSI/UL1950). Under our procedures, an NRTLrecognized for an ANSI-approved teststandard may use either the latest

proprietary version of the test standardor the latest ANSI version of thatstandard, regardless of whether it iscurrently recognized for the proprietaryor ANSI version. Contact ANSI or theANSI web site (http://www.ansi.org)and click ‘‘NSSN’’ to find out whetheror not a test standard is currently ANSI-approved.

ConditionsTUV Product Services GmbH must

also abide by the following conditionsof the recognition, in addition to thosealready required by 29 CFR 1910.7:

Within 30 days of certifying its firstproducts under the NRTL Program,TUVPSG will notify the OSHA NRTLProgram Director so that OSHA mayreview TUVPSG’s implementation of itsprocedures for controlling the USregistered certification mark of its USsubsidiary, TUV Product Services, Inc.,based in Danvers, Massachusetts;

Only TUV Product Services GmbH(TUVPSG) may authorize the USregistered certification mark currentlyowned by its US subsidiary, TUVProduct Services, Inc., based in Danvers,Massachusetts. TUVPSG may authorizethe use of this mark only at the facilityrecognized by OSHA;

Prior to conducting inspections ofmanufacturing facilities based on afrequency of twice per year, OSHA mustreview and accept the detailedprocedures that TUVPSG will utilize todetermine when to use this frequencyfor such inspections;

OSHA must be allowed access toTUVPSG’s facility and records forpurposes of ascertaining continuingcompliance with the terms of itsrecognition and to investigate as OSHAdeems necessary;

If TUVPSG has reason to doubt theefficacy of any test standard it is usingunder this program, it must promptlyinform the test standard developingorganization of this fact and providethat organization with appropriaterelevant information upon which itsconcerns are based;

TUVPSG must not engage in or permitothers to engage in anymisrepresentation of the scope orconditions of its recognition. As part ofthis condition, TUVPSG agrees that itwill allow no representation that it iseither a recognized or an accreditedNationally Recognized TestingLaboratory (NRTL) without clearlyindicating the specific equipment ormaterial to which this recognition istied, or that its recognition is limited tocertain products;

TUVPSG must inform OSHA as soonas possible, in writing, of any change ofownership, facilities, or key personnel,



and of any major changes in itsoperations as an NRTL, includingdetails;

TUVPSG will meet all the terms of itsrecognition and will always complywith all OSHA policies pertaining tothis recognition; and

TUVPSG will continue to meet therequirements for recognition in all areaswhere it has been recognized.

Signed at Washington, DC this 10th day ofJuly, 2001.R. Davis Layne,Acting Assistant Secretary.[FR Doc. 01–18148 Filed 7–19–01; 8:45 am]BILLING CODE 4510–26–P

MERIT SYSTEMS PROTECTIONBOARD

Membership of the Merit SystemsProtection Board’s Senior ExecutiveService Performance Review Board

AGENCY: Merit Systems ProtectionBoard.ACTION: Notice.

SUMMARY: Notice is hereby given of themembers of the Performance ReviewBoard.

DATES: July 20, 2001.FOR FURTHER INFORMATION CONTACT:Linda Nicholson, Personnel Officer,Merit Systems Protection Board, 1615 MStreet, NW., Washington, DC 20419.SUPPLEMENTARY INFORMATION: The MeritSystems Protection Board is publishingthe names of the new and currentmembers of the Performance ReviewBoard (PRB) as required by 5 U.S.C.4314(c)(4). Clyde B. Blandford, Jr. hasbeen appointed as a new member.Lonnie L. Crawford will continue toserve as Chairman. John Palguta, RobertLawshe, and John Seal will continue toserve as members of the PRB.

Dated: July 17, 2001.Robert E. Taylor,Clerk of the Board.[FR Doc. 01–18210 Filed 7–19–01; 8:45 am]BILLING CODE 7400–01–M

THE NATIONAL FOUNDATION FORTHE ARTS AND THE HUMANITIES

Proposed Collection, CommentRequest, Study of User NeedsAssessment in Digitization

AGENCY: Institute of Museum andLibrary Services.ACTION: Notice.

SUMMARY: The Institute of Museum andLibrary Services as part of its continuing

effort to reduce paperwork andrespondent burdens, conducts apreclearance consultation program toprovide the general public and federalagencies with an opportunity tocomment on proposed and/orcontinuing collections of information inaccordance with the PaperworkReduction Act of 1995 (PRA95) [44U.S.C. 3508(2)(A)] This program helpsto ensure that requested data can beprovided in the desired format,reporting burden (time and financialresources) is minimized, collectioninstruments are clearly understood, andthe impact of collection requirements onrespondents can be properly assessed.Currently the Institute of Museum andLibrary Services is soliciting commentsconcerning the proposed study of theneeds assessment of end-users in libraryand museum digitization projectsfunded through the Institute of Museumand Library Services.

A copy of the proposed informationcollection request can be obtained bycontacting the individual listed belowin the ADDRESSES section of this notice.DATES: Written comments must besubmitted to the office listed in theADDRESSES section below on or beforeSeptember 18, 2001.

IMLS is particularly interested incomments that help the agency to:


• Evaluate the accuracy of theagency’s estimate of the burden of theproposed collocation of informationincluding the validity of themethodology and assumptions used;

• Enhance the quality, utility andclarity of the information to becollected; and

• Minimize the burden of thecollection of information on those whoare to respond, including through theuse of appropriate automated electronic,mechanical, or other technologicalcollection techniques or other forms ofinformation technology, e.g. permittingelectronic submissions of responses.ADDRESSES: Send comments to: BarbaraSmith, Technology Officer, Institute ofMuseum and Library Services, 1100Pennsylvania Ave., NW., Room 802,Washington, DC 20506. Ms. Smith canbe reached on Telephone: 202–606–5254, Fax: 202–606–1077 or by e-mail [email protected] INFORMATION:

I. BackgroundThe Institute of Museum and Library

Services is an independent Federal

grant-making agency authorized by theMuseum and Library Services act,Public Law 104–208. The IMLSprovides a variety of grant programs toassist the nation’s museums andlibraries in improving their operationsand enhancing their services to thepublic. Museums and libraries of allsizes and types may receive supportfrom IMLS programs.

Agency: Institute of Museum andLibrary Services.

Title: Study of User NeedsAssessment in Digitization.

OMB Number n/a.Agency Number: 3137.Frequency: One time.Affected Public: Museums and

libraries.Number of Respondents: 250.Estimated Time Per Respondent: 45

minutes.Total Burden Hours: 187.5 hours.Total Annualized capital/startup

costs: Zero.Total Annual costs: $3,138.75.Contact: Mamie Bittner, Director

office of Public and Legislative Affairs,Institute of Museum and LibraryServices, 1100 Pennsylvania Avenue,NW Washington, DC 20506, telephone(202) 606–4648.

Dated: July 16, 2001.Mamie Bittner,Director of Public and Legislative Affairs.[FR Doc. 01–18143 Filed 7–19–01; 8:45 am]BILLING CODE 7036–01–M

NUCLEAR REGULATORYCOMMISSION

[Docket No. 50–271]

Vermont Yankee Nuclear PowerCorporation; Correction

On April 23, 2001, exemptions to 10CFR part 50, Appendix G werepublished related to the VermontYankee Nuclear Power Station (66 FR20486). The words ‘‘material heat76492’’ on page 20487, column 1 on line3 should be corrected to read ‘‘materialheat C–3017–2’’

Dated at Rockville, Maryland, this 2nd dayof July 2001.

For the Nuclear Regulatory Commission.Victor Nerses,Acting Chief, Section 2, Project DirectorateI, Division of Licensing Project Management,Office of Nuclear Reactor Regulation.[FR Doc. 01–18173 Filed 7–19–01; 8:45 am]BILLING CODE 7590–01–M



1 64 FR 15831 2 46 FR 52061.



Environmental Assessment andFinding of No Significant ImpactRelated to Amendment No. 13 toMaterial License No. SNM–1999Release of Portion of Site forUnrestricted Use Kerr-McGeeCorporation Cushing Refinery Site

1. Introduction

1.1 Background

The U.S. Nuclear RegulatoryCommission (NRC) is considering theKerr-McGee Corporation’s (Kerr-McGeeor the licensee) request to have a portionof the property released, for unrestricteduse, from the Cushing Refinery Site(Cushing) License, SNM–1999. Thisaction is taken in response to Kerr-McGee’s license amendment request,dated November 10, 2000, andsupplemented by letter dated January19, 2001, to release the portions of siteblocks 116, 117, 124, and 125 that aresouth of Skull Creek for unrestricted useand to remove the areas from thelicense. The proposed boundary of thelicensed area is shown in Figure 1,‘‘Cushing, Oklahoma Refinery Site,Proposed Licensed Site,’’ of the January19, 2001, letter.

On April 6, 1993, NRC issuedMaterials License SNM–1999authorizing possession of contaminatedsoil, sludge, sediment, trash, buildingrubble, and any other contaminatedmaterial, at the licensee’s Cushing site.On March 26, 1999, NRC by licenseamendment released for unrestricteduse and removed from the Cushinglicense Unaffected Area 1, portions ofUnaffected Areas 2—4 that are south ofSkull Creek, and a portion of the haulroad corridor area partially surroundedby Unaffected Areas 2—4. These areaswere used for oil refining and storageduring the years that nuclear processingand disposal took place and were not tobe affected by the nuclear processing ordisposal. On August 23, 1999, NRCapproved Kerr-McGee’s CushingRefinery Site Decommissioning Plan bylicense amendment. As part of thatapproval NRC performed anenvironmental assessment of theactivities necessary to remediate theCushing site to meet NRC’s unrestricteduse criteria. As noted in thatenvironmental assessment, NRCconcluded that those activities wouldnot adversely affect the environment.That Environmental Assessment,including a Finding of No Significant

Impact, was published in the FederalRegister on April 1, 1999.1

The licensee now requests that otherportions of the Cushing site be releasedfor unrestricted use and removed fromthe Cushing license as those areas canbe demonstrated to meet NRC’s criteriafor release for unrestricted release. Kerr-McGee, in its letter dated November 10,2000, and supplemented by letter datedJanuary 19, 2001, has requested thatportions of site blocks 116, 117, 124,and 125 that are south of Skull Creek bereleased for unrestricted use and toremove this area from its license. Thearea that is being considered for releasefrom the license encompasses asediment pond located in UnaffectedArea 2 (UA–2). This sediment pond isnormally used as a collection area forsediments generated during treatment ofwater removed from Pit 5. A routinedischarge of treated wastewater to SkullCreek in June 1998 resulted in theinadvertent release of some of the pondsediment not releasable under thelicensee’s discharge permit. AlthoughSkull Creek was radiologicallydecontaminated in 1991, it is locatedwithin a radiologically affected area.Therefore, sediments removed fromSkull Creek and placed into UA–2Sediment Pond had a potential ofcontaining licensed material.

1.2 Proposed ActionThe proposed action is the release for

unrestricted use, and the removal fromLicense SNM–1999, the portions of siteblocks 116, 117, 124, and 125 that aresouth of Skull Creek for unrestricted useand to remove the areas from thelicense. The proposed boundary of thelicensed area is shown in Figure 1,‘‘Cushing, Oklahoma Refinery Site,Proposed Licensed Site,’’ of the January19, 2001, letter.

1.3 Need for Proposed ActionThe licensee seeks to release property

that is currently under license forunrestricted use. This action wasrequested to remove the currentlimitations on the future use of thisportion of the Cushing Refinery Siteproperty.

2. Description of Cushing Refinery Site

2.1 Site DescriptionThe Cushing Refinery site is

comprised of 1.78 square kilometers(km2) (440 acres) in Payne County,Oklahoma. The site is located 3.22kilometers (km) (2 miles) north of theCity of Cushing. The City of Cushing islocated about midway between Tulsaand Oklahoma City on Highway 33.

Neighboring communities include Yale(11.27 km (7 miles north-northeast)),Ripley (12.88 km (8 miles west-northwest)), Agra (16.1 km (10 milessouthwest)), Oilton (17.71 km (11 mileseast-northeast)), Quay (16.1 km (10miles north-northeast)), Jennings (22.54km (14 miles northeast)), and Drumright(12.88 km (8 miles east)). The Cushingsite terrain is rolling pasture land. Theelevation of the site ranges from 250meters (m) (820 feet) to 280 m (920 feet)above mean sea level (MSL). Skull Creekruns through the Cushing site beforejoining the Cimarron River 6.44 km (4miles) east-northeast of the site at anelevation of 232 m (760 feet) MSL.

2.2 Site Operating HistoryThe Cushing site was operated as a

refinery from approximately 1915 to1972, when the refinery was closed anddismantled. The licensee operated therefinery site from 1956 to 1972. Thelicensee also processed nuclear fuelmaterial at the Cushing site from 1963to 1966, under two AEC licenses. AECSource Material License SMB–664authorized Kerr-McGee to possessunlimited quantities of natural uranium,depleted uranium, and thorium. AECSpecial Nuclear Material License SNM–695 authorized Kerr-McGee to possessany enrichment of uranium, but limitedit to 1,000 kilograms (2,205 pounds) ofuranium-235. Kerr-McGee received,possessed, and processed thesematerials for the AEC. Both AEClicenses were terminated in 1966.

3. Environmental Impact of ProposedAction

An unaffected area, as defined inNUREG/CR–5849, ‘‘Manual forConducting Radiological Surveys inSupport of License Termination,’’ is anarea not expected to contain residualradioactivity from licensed operations.The unrestricted use criteria forenriched uranium and natural thoriumare the Option 1 values in the 1981Branch Technical Position on ‘‘Disposalor Onsite Storage of Thorium orUranium Wastes From PastOperations.’’ 2 The Option 1 criteria are30 picoCuries per gram (pCi/g) fornatural, depleted, and enriched uraniumand 10 pCi/g for natural thorium.

The licensee performed final statussurveys in the four unaffected areas andsubmitted the results to NRC in the‘‘Final Radiation Survey of FourUnaffected Areas of the CushingRefinery Site,’’ dated April 17, 1995.Gamma radiation scans, gammaexposure rate measurements, soilradioactivity concentration



3 Letter to Jeff Lux, Kerr McGee Corporation, fromDarrell Shults, DEQ, dated September 19, 1997.

4 ‘‘Guidelines for Ground-Water ClassificationUnder the EPA Ground-Water Protection Strategy’’,Final Draft, dated November 1986, Office of Water,EPA.

5 Figure 2.5, ‘‘Potentiometeric Surface Map of theUpper Zone,’’ Kerr-McGee Corporation’s SiteDecommissioning Plan Cushing, Oklahoma, datedAugust 1998.

measurements, and surface radioactivitysurvey were performed in each of thefour unaffected areas. As a result of thesurveys and soil sample analysis, onearea of about one meter in diameter onthe surface of the ground was found tobe contaminated with Th–232. This spotwas designated as a radioactivematerials area and was removed fromthe areas that the licensee consideredpart of the four unaffected areas. Thelicensee’s survey report provided datathat indicated that the four unaffectedareas meet NRC’s criteria forunrestricted use.

The portions of site blocks 116, 117,124, and 125 that are south of SkullCreek that are being considered forrelease for unrestricted use weresurveyed as part of the four unaffectedsite areas. The results of the earlier fourunaffected areas survey found thatconcentrations of radionuclides in thesoil samples from survey units are asfollows: less than 0.1 to 0.5 pCi/g for U–235; 0.3 to 3.0 pCi/g for U–238; 0.6 to9.0 pCi/g for Th–228; and less than 0.8to 10.0 pCi/g for Th–232. One small areaof thorium, in excess of the criteria (9.0pCi/g of Th–228 and 10.0 pCi/g of Th–232), is in unaffected area number 2.This area of elevated thorium levels,surveyed by Oak Ridge Institute forScience and Education (ORISE), anindependent NRC contractor, is thesame area that the licensee designatedas a radioactive materials area (about400 m2) after it performed its finalradiation survey. Thus, this smallradioactive material area is not part ofthe licensee’s request for unrestrictedrelease. Of the areas that ORISEsurveyed that were part of the licensee’srequest for unrestricted release, theconcentrations of radionuclides in soilsamples are as follows: 0.6 to 3.8 pCi/g for Th–228; and less than 0.8 to 3.0pCi/g for Th–232. The soil samples arewithin the Option 1 soil criteria foruranium (natural, enriched anddepleted) and natural thorium.

The licensee performed a final statussurvey of the sediment pond andsubmitted the results to NRC in the‘‘Final Status Survey Report for CushingRefinery Site UA–2 Sediment Pond,’’dated May 2, 2000, and supplementedby letters dated November 10, 2000, andJanuary 19, 2001. The results of theexposure rate surveys of the sedimentpond indicated that no location wasmore than 10 micoRoentgen per hour(µR/hr) above background. The soilsamples yielded results indicating onlybackground or slightly abovebackground concentrations of uraniumand thorium. The maximumconcentration of each of the tworadionuclides in the soil samples from

the sediment pond survey were 10.84pCi/g for total uranium and 2.72 pCi/gfor total thorium. Soil sampleconcentration results are within theOption 1 criteria for both uranium andthorium. This licensee survey reportprovided data that indicated that thesediment pond area meets NRC’s criteriafor unrestricted use.

Groundwater under the Cushing sitecan be found in one of three water-bearing zones. The water-bearing zonesare the shallow water-bearing zone(unconsolidated soil and the upperportion of the Vanoss Group), the lowerportion of the Vanoss Group, andVamoosa-Ada aquifer. The Vamoosa-Ada aquifer is the regional groundwateraquifer. The licensee notes that itappears that there is not a significantgroundwater flow between the shallowwater-bearing zone and the lowerportion of the Vanoss Group. Furtherthe licensee notes that the Vamoosa-Adaaquifer is isolated from the uppermostwater-bearing zone by low-permeabilitystrata within the Vanoss. Thus, theVamoosa-Ada aquifer is unaffected bysurface activities. The licensee basedthis finding on an evaluation of thedispersion of environmental tritium inthe aquifer. The State of Oklahoma,Department of Environmental Quality(DEQ) 3 found the following: (1) Theshallow groundwater unit yields lowquantities of poor quality water; (2) it ishighly unlikely that future residential orcommercial drinking water wells will beestablished from the shallowgroundwater at this site; and (3) noknown drinking water wells arescreened in the Vanoss within a one-mile radius of the site. Further, DEQstated that the Vanoss should not beconsidered a viable drinking watersource for the area and that DEQ wouldconsider water quality standards otherthan maximum contamination levels asset by the U.S. EnvironmentalProtection Agency (EPA) as appropriatefor the shallow groundwater at this site.Further, based on EPA’s guidance 4 theVanoss groundwater would be classifiedas a Class III—Groundwater Not aPotential Source of Drinking Water andof Limited Beneficial Use.

The staff has reviewed the sitepotentiometeric surface map of theupper zone.5 Based on this review the

staff determined that: (1) The portions ofsite grid blocks 116, 117, 124, and 125are up-gradient of any known sources ofcontamination; (2) the sediment ponddoes not contain any radioactivematerial that exceeds NRC’s unrestrictedrelease criteria; and (3) there are noknown sources of radioactivecontamination up-gradient of this area.Consequently, it is very unlikely thatthe groundwater in these areas couldhave been contaminated.

The Other Industrial Waste (OIW)disposal cell is located up-gradient ofthis area. Material from the remediationof Waste Acid Sludge Pit 4 (Pit 4) thatmeets NRC’s Option 1 criteria forunrestricted release will be disposed ofin the OIW. NRC reviewed this disposalactivity as part of its review of the Pit4 remediation plan. On September 3,1998, NRC approved the Pit 4remediation plan, License AmendmentNo. 8.

Based on the above NRC staff findsthat because the NRC’s unrestrictedrelease criteria have been met for theseareas, there is no significant impact onthe environment, and this portion of theproperty can be released for unrestricteduse.

4. Alternatives to Proposed ActionThe only alternative to the proposed

action is to not release this area forunrestricted use and keep the areaunder license until all site radiologicalremediation is completed and theCushing license is terminated. Theenvironmental benefit of maintaining anNRC license for this portion of theCushing Refinery Site is negligible, butwould reduce options for future use ofthe property.

5. Other Agencies or Persons ConsultedThis environmental assessment was

prepared entirely by NRC staff. No othersources were used beyond thosereferenced in this environmentalassessment. NRC staff provided a draftof this environmental assessment toDEQ for review. DEQ had no commentsor suggestions on this environmentalassessment.

6. ConclusionsThe NRC finds that because the

Commission’s unrestricted releasecriteria have been met, there is nosignificant impact on the environment,and the property can be released forunrestricted use.

Finding of No Significant ImpactThe Commission has prepared an

Environmental Assessment related tothe proposed unrestricted release, andremoval from License SNM–1999, of



6 66 FR 24167

portions of site blocks 116, 117, 124,and 125 that are south of Skull Creek onthe Cushing Refinery Site, in Cushing,Oklahoma. On May 11, 2001, theCommission provided notice of thisproposed action and offered anopportunity for a hearing.6 There wereno requests for a hearing received. Onthe basis of the EnvironmentalAssessment, the Commission hasconcluded that this licensing actionwould not significantly effect thequality of human environment and hasdetermined not to prepare anenvironmental impact statement for thisproposed action.

The above documents related to thisproposed action are available forinspection on the Commission’s PublicElectronic Reading Room at http://www.nrc.gov/NRC/ADAMS/index.html.

Dated at Rockville, Maryland, this 13th dayof July 2001.

For the U.S. Nuclear RegulatoryCommission.Larry W. Camper,Chief, Decommissioning Branch, Division ofWaste Management, Office of NuclearMaterial Safety and Safeguards.[FR Doc. 01–18174 Filed 7–19–01; 8:45 am]BILLING CODE 7590–01–P



Yankee Atomic Electric CompanyIssuance of EnvironmentalAssessment and Finding of NoSignificant Impact

The U.S. Nuclear RegulatoryCommission (NRC or Commission) isconsidering issuance of an exemption,pursuant to 10 CFR 72.7, from theprovisions of 10 CFR 72.212(a)(2),72.212(b)(2)(i)(A), and 72.214 to YankeeAtomic Electric Company (YAEC). Therequested exemption would allowYAEC to deviate from the requirementsof Certificate of Compliance 1025 (theCertificate), Appendix A, TechnicalSpecifications (TS), Items 3.1.5, CanisterMaximum Time in Vacuum Drying, and3.1.6, Maximum Time in Transfer Cask.The exemption would allow YAEC touse extended operating times inLimiting Condition for Operation (LCO)3.1.5 and 3.1.6 for the fuel loadingcampaign at Yankee Nuclear PowerStation (YNPS) in Rowe, Massachusetts.

Environmental Assessment (EA)Identification of Proposed: By letter

dated April 3, 2001, as supplemented onJune 6, 2001, YAEC requested an

exemption from the requirements of 10CFR 72.212(a)(2), 72.212(b)(2)(i)(A), and72.214 to deviate from the requirementsof Certificate of Compliance 1025,Appendix A, Items LCO 3.1.5 and 3.1.6.YAEC is a general licensee, authorizedby NRC to use spent fuel storage casksapproved under 10 CFR Part 72, SubpartK.

YAEC plans to use the NAC-MPC casksystem to store spent nuclear fuel,generated at YNPS, at an independentspent fuel storage installation (ISFSI)located in Rowe, Massachusetts, on theYNPS site. The YNPS ISFSI has beenconstructed for interim dry storage ofspent nuclear fuel.

By exempting YAEC from 10 CFR72.212(a)(2), 72.212(b)(2)(i)(A), and72.214, YAEC will be authorized toextend loaded canister vacuum dryingand the time spent fuel is in the transfercask for canister heat loads that arelower than the design basis heat load.

The time duration from completion ofdraining the CANISTER throughcompletion of vacuum dryness testingand the introduction of helium backfillshall not exceed the time shown for thespecified heat loads:

Total heat loads (L)(kW) Time limit(hours)

10.5 < L ≤ 12.5 ........................... 388.5 < L ≤ 10.5 ............................. 486.5 < L ≤ 8.5 ............................... 584.5 < L ≤ 6.5 ............................... 83L ≤ 4.5 ........................................ Not

Limited

The time duration from end ofexternal forced air or in-pool cooling ofthe CANISTER through completion ofvacuum dryness testing and theintroduction of helium backfill shall notexceed the time shown for the specifiedheat loads:

Total heat loads(L)(kW)

Time limit (hours)

Forcedair In-pool

10.5 < L ≤ 12.5 ......... 10 108.5 < L ≤ 10.5 ........... 12 126.5 < L ≤ 8.5 ............. 16 164.5 < L ≤ 6.5 ............. 40 40

The time duration from theintroduction of helium backfill of theCANISTER through completion of theCANISTER transfer operation from theTRANSFER CASK to the CONCRETECASK is not limited.

The specifications above would be inlieu of those in the current Certificate ofCompliance No. 1025, Rev. 0, AppendixA, LCO 3.1.5 and 3.1.6. The proposedaction before the Commission is

whether to grant this exemption under10 CFR 72.7.

On September 9, 2000, the caskdesigner, NAC International (NAC),submitted to NRC an application toamend Certificate of Compliance 1025.The requested amendment includes thesame revisions to LCO 3.1.5 and 3.1.6 inAppendix A to the Certificate asrequested in this exemption. The NRCstaff has reviewed the application anddetermined that extending operatingtimes in TS LCO 3.1.5 and 3.1.6 wouldhave minimal impact on the designbasis and would not pose a threat topublic health and safety.

Need for the Proposed Action: Therevised LCO 3.1.5 and 3.1.6 increase TStimes, which are likely to reduce thefrequency of entering LCO actionstatements, thus, reducing radiationdoses to workers. The current TS LCO3.1.5 and 3.1.6 time limits are based oncanisters with maximum heat load andthe probability for entering LCO actionstatements will significantly increase forcanisters that are lower than the designbasis heat load. If action statements areentered as a result of TS requirementswithout a safety significance, workerswill be exposed to low radiation fieldsfor longer periods of time. This wouldnot be consistent with As Low AsReasonably Achievable (ALARA)practices. Workers should be able toconduct loading operations withoutfacing unnecessary time/schedulepressure with sufficient operationalflexibility. Unless the exemption isgranted or the Certificate is amended,the TS LCO 3.1.5 and 3.1.6 actionstatements will likely be unnecessarilyentered, resulting in additionalradiation doses to workers. Because the10 CFR Part 72 rulemaking to amend theCertificate will not be completed priorto the date that YNPS plans to beginloading fuel into the NAC-MPC casksystems, the NRC is proposing to grantthis exemption based on the staff’stechnical review of informationsubmitted by YAEC and NAC.

Environmental Impacts of theProposed Action: It has already beendetermined by the Commission thatspent fuel can be stored safely andwithout significant environmentalimpact at an onsite ISFSI in the NAC-MPC cask system (65 FR 12444, datedMarch 9, 2000). Extending the TS timeswill not increase the probability orconsequences of accidents. No changeshave been requested to the types orquantities of any radiological effluentsthat may be released offsite, and thereis no significant increase inoccupational or public radiationexposure. Occupational radiationexposure will be decreased by the



avoidance of unnecessarily entering theaction statements in LCO 3.1.5 and3.1.6. There are no significantradiological environmental impactsassociated with the proposed action.

Alternative to the Proposed Action:Since there is no significantenvironmental impact associated withthe proposed action, alternatives withequal or greater environmental impactare not evaluated. The alternative to theproposed action would be to denyapproval of the exemption and use theTS times in the current Certificate.Denial of the exemption couldpotentially lead into unnecessarilyentering the TS LCO action statements3.1.5 and 3.1.6 resulting in increasedradiation doses to workers.

Agencies and Persons Consulted: OnJune 22, 2001, Mr. Jim Muckerhide,Nuclear Engineer, Nuclear Safety, ofMassachusetts Emergency ManagementAgency was contacted about theEnvironmental Assessment for theproposed action and had no comments.

Finding of No Significant Impact

The environmental impacts of theproposed action have been reviewed inaccordance with the requirements setforth in 10 CFR part 51. Based upon theforegoing EA, the Commission finds thatthe proposed action of granting anexemption from 10 CFR 72.212(a)(2),72.212(b)(2)(i)(A), and 72.214 so thatYAEC may use revised TS time at YNPSISFSI will not significantly impact thequality of the human environment.Accordingly, the Commission hasdetermined not to prepare anenvironmental impact statement for theproposed exemption.

The NRC maintains an AgencywideDocuments Access and ManagementSystem (ADAMS), which provides textand image files of NRC’s publicdocuments. These documents may beaccessed through the NRC’s PublicElectronic Reading Room on the Internetat http://www.nrc.gov/NRC/ADAMS/index.html. If you do not have access toADAMS or if there are problems inaccessing the documents located inADAMS, contact the NRC PublicDocument Room (PDR) Reference staffat 1–800–397–4209, 301–415–4737 orby e-mail to [email protected].

Dated at Rockville, Maryland this 12th dayof July 2001.For the Nuclear Regulatory CommissionE. William Brach,Director Spent Fuel Project Office, Office ofNuclear Material Safety and Safeguards.[FR Doc. 01–18176 Filed 7–19–01; 8:45 am]BILLING CODE 7590–01–P


Working Group on Integrated MaterialsPerformance Evaluation Program(IMPEP) Lessons Learned

AGENCY: Nuclear RegulatoryCommission.ACTION: Notice of formation of workinggroup and public meeting.

SUMMARY: The Nuclear Regulatory(NRC) is announcing a meeting and theformation of a working group onIntegrated Materials PerformanceEvaluation Program (IMPEP) LessonsLearned. The working group willprovide recommendations to the NRCon enhancements and lessons learned tostrengthen the IMPEP process. Theworking group is composed ofrepresentatives from the NRC andAgreement States.DATES: The first meeting will be held onJuly 31–August 2, 2001, from 8 am to 5pm.ADDRESSES: NRC Headquarters, 11555Rockville Pike, Room O–3–B–6,Rockville, Maryland, 20852. Thesemeetings will be open to the public.Future meetings will be announced onthe NRC public meeting web site,http://www.nrc.gov/NRC/PUBLIC/meet.html.

FOR FURTHER INFORMATION CONTACT:Kathleen Schneider, Senior HealthPhysicist, Office of State and TribalPrograms, U.S. Nuclear RegulatoryCommission, Washington, DC, 20555–0001. Telephone: 301–415–2320; e-mail:[email protected] INFORMATION: In FY1996, NRC began implementation ofIMPEP in the evaluation of AgreementState and Regional materials programsto assure that public health and safetyare adequately protected from thehazards associated with the use ofradioactive materials and thatAgreement State programs arecompatible with NRC’s programs. TheIMPEP process employs a team of NRCand Agreement State staff to assess bothAgreement State and NRC RegionalOffice radioactive materials licensingand inspection programs. All reviewsuse common criteria in the assessmentand place primary emphasis onperformance. Additional areas havebeen identified as non-commonperformance indicators and are alsoaddressed in the assessment. The finaldetermination of adequacy of each NRCRegional Office and both adequacy andcompatibility of each Agreement Stateprogram, based on the review team’sreport, is made by a Management

Review Board (MRB) composed of NRCmanagers and an Agreement Stateprogram manager who serves as theAgreement State liaison to the MRB.

At the end of FY1999, NRC completedits first round of IMPEP reviews for allAgreement States. Regional reviewsoriginally were performed every 2 yearsand are now performed every 4 years.Agreement State reviews occur atfrequencies of 2–4 years. From itsinception, IMPEP has been an iterativeprocess. As the program progressedfrom the pilot, through interimimplementation to finalimplementation, NRC staff has factoredin experience, comments andsuggestions to enhance IMPEP. At thecompletion of this first cycle of reviews,NRC believes that an independentexamination by a working group of theIMPEP experiences to date could furtherenhance this program. The workinggroup will evaluate IMPEP experiencesfor additional enhancements andlessons learned to strengthen the IMPEPprocess.

A copy of the working group charteris available through the NRC’sAgencywide Document Access andManagement System (ADAMS) athttp://www.nrc.gov/NRC/ADAMS/index.html, where the accession numberis ML011930478. Copies may also beobtained by contacting the NRC’s PublicDocument Room (PDR) by calling (800)397–4209, faxing a request to (301) 415–3548, or sending a request by electronicmail to [email protected].

Dated at Rockville, Maryland, this 16th dayof July 2001.

For the Nuclear Regulatory Commission.Paul H. Lohaus,Director, Office of State and Tribal Programs.[FR Doc. 01–18175 Filed 7–19–01; 8:45 am]BILLING CODE 7590–01–P

SECURITIES AND EXCHANGECOMMISSION

[File No. 1–11344]

Issuer Delisting; Notice of ApplicationTo Withdraw From Listing andRegistration on the American StockExchange LLC (Intermagnetics GeneralCorporation, Common Stock, $.10 ParValue)

July 16, 2001.Intermagentics General Corporation, a

New York corporation (‘‘Issuer’’), hasfiled an application with the Securitiesand Exchange Commission(‘‘Commission’’), pursuant to section12(d) of the Securities Exchange Act of



1 15 U.S.C. 781(d).2 15 CFR 240.12d2–2(d).3 15 U.S.C. 78l(b).4 15 U.S.C. 78l(g). 5 17 CFR 200.30–3(a)(1).

1 AER is the holding company for substantially allof Alliant Energy’s nonutility investments andsubsidiaries.

2 Alliant Energy’s current financing authority iscontained in three separate orders: WPL Holdings,Inc., et al., HCAR No. 26856 (April 14, 1998)(‘‘Merger Order’’); Alliant Energy, et al., HCAR No.26956 (December 18, 1998), as modified by AlliantEnergy, et al., HCAR No. 27304 (December 15, 2000)(collectively, ‘‘Current Money Pool Order’’), andAlliant Energy, et al., HCAR No. 27069 (August 26,1999), as modified by Alliant Energy, et al., HCARNo. 27130 (February 4, 2000) and Alliant Energy,et al., HCAR No. 27344 (February 12, 2001)(collectively, ‘‘Current Financing Order’’).Applicants request that authorization granted inthis proceeding replace the authorizations underthe Merger Order (as it relates to the issuance ofCommon Stock under shareholder and employeeplans) and the Current Financing Order. Applicantsstate that the Money Pool Order is unaffected bythis application-declaration, except that AlliantEnergy’s utilization of proceeds of short-term debtto make investments in EWGs and FUCOs wouldbe subject to the EWG/FUCO investment limitationproposed in this proceeding.

1934 (‘‘Act’’) 1 and Rule 12d2–2(d)thereunder,2 to withdraw its CommonStock, $.10 par value (‘‘Security’’), fromlisting and registration on the AmericanStock Exchange LLC (‘‘Amex’’).

The Issuer states in its applicationthat it has met the requirements ofAmex Rule 18 by complying with allapplicable laws in effect in the state ofNew York, in which it wasincorporated, and with the Amex’s rulesgoverning an issuer’s voluntarywithdrawal of a security from listingand registration.

On May 30, 2001, the Board ofDirectors of the Issuer unanimouslyadopted resolutions to withdraw theIssuer’s Security from listing on theAmex and, instead, list it on the NasdaqStock Market. In its application, theIssuer states that trading in the Securityon the Amex will cease on July 10, 2001and trading in the Security is expectedto begin on the Nasdaq at the openingof business on July 11, 2001.

In making the decision to withdrawthe Security from listing on theExchange, the Issuer represents that (i)listing on the Nasdaq will be morebeneficial to the Issuer’s shareholdersthan the present listing on the Amexbecause of the Issuer’s emergence andgrowing recognition as a technology-driven company; (ii) the Issuer’s peersand similar companies are listed onNasdaq; and (iii) the move to Nasdaqwill further enhance the liquidity of theIssuer’s stock, making it more attractiveto institutional investors.

The Issuer’s application relates solelyto the Security withdrawal from listingon the Amex and from registrationunder section 12(b) of the Act 3 andshall affect neither its approval fortrading on the Nasdaq, nor its obligationto be registered under section 12(g) ofthe Act.4

Any interested person may, on orbefore July 30, 2001 submit by letter tothe Secretary of the Securities andExchange Commission, 450 Fifth Street,NW., Washington, DC 20549–0609, factsbearing upon whether the applicationhas been made in accordance with therules of protection of investors. TheCommission, based on the informationsubmitted to it, will issue an ordergranting the application after the datementioned above, unless theCommission determines to order ahearing on the matter.

For the Commission, by the Divisionof Market Regulation, pursuant todelegated authority.5

Jonathan G. Katz,Secretary.[FR Doc. 01–18168 Filed 7–19–01; 8:45 am]BILLING CODE 8010–01–M


[Release No. 35–27426]

Filings Under the Public Utility HoldingCompany Act of 1935, as Amended(‘‘Act’’)

July 13, 2001.Notice is hereby given that the

following filing(s) has/have been madewith the Commission pursuant toprovisions of the Act and rulespromulgated under the Act. Allinterested persons are referred to theapplication(s) and/or declaration(s) forcomplete statements of the proposedtransaction(s) summarized below. Theapplication(s) and/or declaration(s) andany amendment(s) is/are available forpublic inspection through theCommission’s Branch of PublicReference.

Interested persons wishing tocomment or request a hearing on theapplication(s) and/or declaration(s)should submit their views in writing byAugust 7, 2001, to the Secretary,Securities and Exchange Commission,Washington, DC 20549–0609, and servea copy on the relevant applicant(s) and/or declarant(s) at the address(es)specified below. Proof of service (byaffidavit or, in the case of an attorney atlaw, by certificate) should be filed withthe request. Any request for hearingshould identify specifically the issues offacts or law that are disputed. A personwho so requests will be notified of anyhearing, if ordered, and will receive acopy of my notice or order issued in thematter. After August 7, 2001, theapplication(s) and/or declaration(s), asfiled or as amended, may be grantedand/or permitted to become effective.

Alliant Energy Corporation, et al. (70–9891)

Alliant Energy Corporation (‘‘AlliantEnergy’’), a registered holding company,and Alliant Energy’s direct nonutilitysubsidiary, Alliant Energy Resources,Inc. (‘‘AER’’), and AER’s directnonutility subsidiaries, Alliant EnergyIntegrated Services Company, AlliantEnergy Investments, Inc., Alliant EnergyTransportation, Inc., and Whiting

Petroleum Corporation (collectively,‘‘Applicants’’),1 on behalf of itself andits direct and indirect nonexemptnonutility subsidiary companies, bothlocated at 222 West WashingtonAvenue, Madison, Wisconsin 53703,have filed an application-declarationunder sections 6(a), 7, 9(a), 10, 12(b),13(b), 32, 33, and 34 of the Act and rules43, 45(a), 46(a), 53, 54, 58, and 80–92under the Act.

Applicants request authority toengage in a variety of financingtransactions, credit supportarrangements, and other relatedproposals, as more fully discussedbelow, commencing on the effectivedate of an order issued under this filingand ending December 31, 2004(‘‘Authorization Period’’). In addition,Alliant Energy seeks authority tofinance exempt wholesale generator(‘‘EWG’’) and foreign utility company(‘‘FUCO’’) investments in an aggregateoutstanding amount of up to $1.75billion. This new proposal wouldreplace certain authorizations that theCommission has previously granted toAlliant Energy.2 Applicants state thatthe proceeds from the financings will beused for general corporate purposes,including: (1) Financing, in part,investments by and capital expendituresof Alliant Energy, AER and AER’scurrent and future direct and indirectnonutility subsidiaries (‘‘NonutilitySubsidiaries’’), including, withoutlimitation, the funding of futureinvestments in EWGs, FUCOs, andcompanies engaged or formed to engagein energy-related activities; (2)acquiring, retiring or redeeming byAlliant Energy or any NonutilitySubsidiary of any of its own securities;and (3) financing working capitalrequirements of Alliant Energy as wellas Alliant Energy’s utility subsidiaries,



3 Alliant Energy is authorized by the MergerOrder to issue from time to time through December31, 2001, up to 11 million shares of common stock.

4 Common Stock is being sold in an underwrittenoffering, Alliant Energy may grant the underwritersa ‘‘green shoe’’ option, permitting the purchasefrom Alliant Energy at the same price of additionalshares then being offered solely for the purpose ofcovering over-allotments.

5 If dealers are utilized in the sale of CommonStock, Alliant Energy will see such securities to thedealers, as principals. Any dealer may then resellsuch Common Stock to the public at varying pricesto be determined by such dealer at the time ofresale.

6 Alliant Energy states that these acquisitionswould be either expressly authorized in a separateproceeding or exempt under the Act or the rulesunder the Act.

7 Dividends or distributions on Preferred Stock orother preferred or equity-linked securities will bemade periodically and to the extent funds arelegally available for such purpose, but may be madesubject to terms which allow the issuer to deferdividend payments or distributions for specifiedperiods. Preferred Stock or other preferred orequity-linked securities may be convertible orexchangeable into shares of Common Stock.

Wisconsin Power and Light Company,South Beloit Water, Gas and ElectricCompany, Interstate Power Company,and IES Utilities, Inc.; Alliant Energy’ssubsidiary service company, AlliantEnergy Corporate Services, Inc.; and theNonutility Subsidiaries(‘‘Subsidiaries’’).

Specifically, Applicants seekauthority for the following:

I. Alliant Energy External Financing

Alliant Energy requests authority toissue and sell from time to time equityand debt securities in an aggregateamount not to exceed $1.5 billion at anyone time outstanding during theAuthorization Period. These securitiesinclude common stock (‘‘CommonStock’’),3 preferred stock (‘‘PreferredStock’’), unsecured long-term debt(‘‘Long-Term Debt’’) and other preferredor equity linked securities. Thesesecurities, further described below,would be sold at rates or prices andunder conditions negotiated or basedupon, or otherwise determined by,competitive capital markets.

A. Common Stock

Alliant Energy requests authority toissue and sell from time to timecommon stock through underwriters,4dealers,5 agents, or a limited number ofpurchasers directly. Alliant Energy mayalso issue Common Stock or options,warrants or others stock purchase rightsexercisable for Common Stock in publicor privately negotiated transactions inexchange for the equity securities orassets of other companies.6

Alliant Energy also proposes to issueand/or purchase shares of its CommonStock (either currently or under forwardcontracts) in the open market forpurposes of reissuing shares at a laterdate under plans that are maintained forstockholders, officers and employees,and nonemployee directors. Currently,Alliant Energy maintains three plansunder which it may directly issue orpurchase in the open market shares of

Common Stock: Alliant EnergyCorporation Long Term Equity IncentivePlan; Alliant Energy Corporation 401(k)Savings Plan; and Alliant EnergyCorporation Shareowner Direct Plant(collectively, ‘‘Stock Plans’’). AlliantEnergy also proposes to issue and/orpurchase shares of Common Stock inaccordance with the Stock Plans, as theyare amended or extended, and similarplan(s) funding arrangements adoptedin the future without any additionalCommission approval.

B. Preferred Stock, Long-term Debt andother Preferred or Equity-LinkedSecurities

Alliant Energy proposes to issuePreferred Stock or other types ofpreferred or equity-linked securitiesissued in one or more series with suchrights, preferences, and priorities as maybe designated in the instrument creatingeach such series, as determined byAlliant Energy’s board of directors.These securities will be redeemed nolater than 50 days after issuance. Thedividend rate on any series of PreferredStock or other preferred or equity-linkedsecurities will not exceed at the time ofissuance 500 basis points over the yieldto maturity of a U.S. Treasury securityhaving a remaining term equal to theterm of such securities.7

Long-term Debt of a particular series(1) may be convertible into any othersecurities of Alliant Energy, (2) willhave a maturity ranging from one to 50years, (3) will bear interest at a rate notto exceed at the time of issuance 500basis points over the yield to maturityof a U.S. Treasury security having aremaining term equal to the term ofsuch Long-term Debt, (4) may be subjectto optional and/or mandatoryredemption, in whole or in part, at paror at various premiums above theprincipal amount, (5) may be entitled tomandatory or optional sinking fundprovisions, (6) may provide for reset ofthe coupon pursuant to a remarketingarrangement, and (7) may be called fromexisting investors by a third party. Thematurity dates, interest rates,redemption and sinking fund provisionsand conversion features, if any, withrespect to the Long-term Debt of aparticular series, as well as anyassociated placement, underwriting orselling agent fees, commissions and

discounts, if any, will be established bynegotiation or competitive bidding.

C. Nonutility Subsidiary FinancingAlliant Energy states that, in almost

all cases, financings by AER and otherNonutility Subsidiaries will be exemptfrom Commission authorizationpursuant to rule 52(b). However, in thelimited circumstances where theNonutility Subsidiary making theborrowing is not wholly owned byAlliant Energy, directly or indirectly,authority is requested under the Act forAlliant Energy through AER or anyother Nonutility Subsidiaries, to makeloans to these subsidiaries at interestrates and maturities designed to providea return to the lending company of notless than its effective cost of capital. Ifloans are made to a NonutilitySubsidiary, that subsidiary will not sellany services to any associate NonutilitySubsidiary unless that subsidiary fallswithin one of the categories ofcompanies to which goods and servicesmay be sold on a basis of other than ‘‘atcost.’’

II. GuarantiesAlliant Energy requests authorization

to enter into guaranties, obtain letters ofcredit, enter into expense agreements orotherwise provide credit support(‘‘Guaranties’’) with respect to theobligations of any subsidiary as may beappropriate to enable these companiesto carry on their ordinary course ofbusiness in an aggregate principal ornominal amount not to exceed $3billion outstanding at any one time(‘‘Guaranty Limit’’). Alliant Energyproposes that these Guaranties will bein addition to Guaranties by AlliantEnergy authorized in the Money PoolOrder. Alliant Energy requests authorityto charge each Subsidiary a fee forproviding credit support that isdetermined by multiplying the amountof the Guaranty Limit by the cost ofobtaining the liquidity necessary toperform the Guaranty (for example,bank line commitment fees or letter ofcredit fees, plus other transactionalexpenses) for the period of time theGuaranty remains outstanding.

In addition, AER and other NonutilitySubsidiaries request authority toprovide to other Nonutility Subsidiariesguaranties and other forms of creditsupport (‘‘Nonutility SubsidiaryGuaranties’’) in an aggregate principalamount not to exceed $600 millionoutstanding at any one time, exclusiveof any guaranties and other forms ofcredit support that are exempt underrule 45(b) and rule 52(b), provided thatthe amount of any Nonutility SubsidiaryGuaranties in respect of obligations of



8 Development Activities will be limited to duediligence and design review; market studies;preliminary engineering; site inspection;preparation of bid proposals, including, inconnection therewith, posting of bid bonds;application for required permits and/or regulatoryapprovals; acquisition of site options and optionson other necessary rights; negotiation and executionof contractual commitments with owners of existingfacilities, equipment vendors, construction firms,power purchasers, thermal ‘‘hosts,’’ fuel suppliersand other project contractors; negotiation offinancing commitments with lenders and other

energy-related companies as defined inrule 58 under the Act (‘‘Rule 58Companies’’) shall also be subject to thelimitations of rule 58(a)(1). AnyNonutility Subsidiary providing anysuch credit support may charge isassociate company a fee for eachGuaranty provided on its behalfdetermined in the same manner asspecified above.

III. Hedging TransactionsAlliant Energy and the Nonutility

Subsidiaries request authority to enterinto interest rate hedging transactionswith respect to existing indebtedness(‘‘Interest Rate Hedges’’), subject tocertain limitations and restrictions, inorder to reduce or manage interestatecost using financial instrumentscommonly used in today’s capitalmarkets, such as interest rate swaps,caps, collars, floors, and structurednotes (i.e., a debt instrument in whichthe principal and/or interest paymentsare indirectly linked to the value of anunderlying asset or index), ortransactions involving the purchase orsale, including short sales, of U.S.Treasury Securities. Interest RateHedges would only be entered into withcounterparties (‘‘ApprovedCounterparties’’) whose seniorunsecured debt ratings, or the seniorunsecured debt ratings of the parentcompanies of the counterparties, aspublished by Standard and Poor’sRatings Group, are equal to or greaterthan BBB, or an equivalent rating fromMoody’s Investors Service, FitchInvestor Service or Duff and Phelps.These transactions would be for fixedperiods and stated notional amounts.Fees, commissions and other amountspayable to the counterparty or exchange(excluding, however, the swap or optionpayments) in connection with anInterest Rate Hedge will not exceedthose generally obtainable incompetitive markets for parties ofcomparable credit quality.

Alliant Energy and the NonutilitySubsidiaries also request authority toenter into interest rate hedgingtransactions with respect to anticipateddebt offers (‘‘Anticipatory Hedges’’),subject to certain limitations andrestrictions. These Anticipatory Hedgeswould only be entered into withApproved Counterparties, and would beused to fix and/or limit the interest raterisk associated with any new issuancethrough (1) a forward sale of exchange-traded U.S. Treasury futures contracts,U.S. Treasury Securities and/or forwardswap (‘‘Forward Sale’’), (2) the purchaseof put options on U.S. TreasurySecurities (‘‘Put Options Purchase’’), (3)a Put Options Purchase in combination

with the sale of call options on U.S.Treasury Securities (‘‘Zero Cost Collar’’),(4) transactions involving the purchaseor sale, including short sales, of U.S.Treasury Securities, or (5) somecombination of a Forward Sale, PutOptions Purchase, Zero Cost Collar and/or other derivative or cash transactions,including, but not limited to, structurednotes, caps and collars, appropriate forthe Anticipatory Hedges. Applicantsrepresent that each Interest Rate Hedgeand Anticipatory Hedge will qualify forhedge accounting treatment undergenerallyacceptable accountingpractices. Applicants would complywith the financial disclosurerequirements of the FinancialAccounting Standards Board associatedwith hedging transactions.

IV. Changes in Capital Stock ofSubsidiaries

Applicants represent that the portionof an individual Subsidiary’s aggregatefinancing to be effected through the saleof stock to Alliant Energy or otherimmediate parent company during theAuthorization Period under rule 52 and/or under an order issued in thisproceeding cannot be ascertained at thistime. The proposed sale of capitalsecurities may in some cases exceed thethen authorized capital stock of thatSubsidiary. In addition, a Subsidiarymay choose to use capital stock with nopar value. Also, a Subsidiary may wishto engage in a reverse stock split toreduce franchise taxes or for othercorporate purposes. As needed toaccommodate these proposedtransactions and to provide for furtherissuances of securities, the Applicantsrequest authority to change the terms ofany Subsidiary’s authorized capitalstock capitalization by an amountdeemed appropriate by Alliant Energyor other intermediate parent company,provided that if a Subsidiary is notwholly owned, the consent of all othershareholders has been obtained for thischange. A Subsidiary would be able tochange the par value, or change betweenpar value and no-par value stock,without additional Commissionapproval. Any such action by a utilitysubsidiary of Alliant Energy would besubject to and would only be takenupon the receipt of any necessaryapprovals by the state commission inthe state or states where the utilitysubsidiary is incorporated and doingbusiness.

V. Financing SubsidiariesAlliant Energy and the Nonutility

Subsidiaries request authority toacquire, directly or indirectly, the equitysecurities of one or more subsidiaries to

facilitate financing ( ‘‘FinancingSubsidiaries’’ ). These FinancingSubsidiaries would be organizedspecifically for the purpose offacilitating the financings of theauthorized and exempt activities(including exempt and authorizedacquisitions) of Alliant Energy and theNonutility Subsidiaries through theissuance of long-term debt or equitysecurities, including but not limited tomonthly income preferred securities, tothird parties, and to transfer theproceeds of such financings to or asdirected by the Financing Subsidiary’sparent. Alliant Energy may, if required,guarantee or enter into expenseagreements in respect of the obligationsof any Financing Subsidiary that itorganizes. The amount of any securitiesissued by a Financing Subsidiary ofAlliant Energy would be countedagainst the limitation on the amounts ofsimilar types of securities that AlliantEnergy is authorized to issue directly, asset forth in this application-declarationor in an order or orders issued in anyother proceeding. To avoid doublecounting, however, any credit supportprovided by Alliant Energy FinancingSubsidiaries would not also be countedagainst the Guaranty Limit.

VI. Intermediate Subsidaries andSubsequent Reorganizations.

Alliant Energy and AER propose toacquire, directly or indirectly, thesecurities of one or more intermediatesubsidaries ( ‘‘Intermediatesubsidaries’’ ), which would beorganized exclusively for the purpose ofacquiring, holding and/or financing theacquisition of the securities of or otherinterest in one or more EWGs, FUCOs,Rule 58 Companies, exempttelecommunication companies( ‘‘ETCs’’ ) as defined in section 34 of theAct, or other nonexempt NonutilitySubsidiaries authorized by order of theCommission. To the extent thesetransactions are not exempt from theAct or otherwise authorized orpermitted by rule, regulation or order ofthe Commission, Alliant Energyrequests authority for intermediateSubsidiaries to engage in developmentactivities ( ‘‘Development Activities’’ ) 8



third-party investors; and such other preliminaryactivities as may be required in connection with thepurchase, acquisition, financing or construction offacilities or the acquisition of securities of orinterests in new businesses.

9 Administrative Activities will include providingongoing personnel, accounting, engineering, legal,financial, operating, technical and other supportservices necessary to manage Alliant Energy’sinvestments in Nonutility Subsidiaries.

10 ‘‘Aggregate Investment’’ is defined in rule53(a)(1)(i) to mean all amounts invested, orcommitted to be invested, in EWGs and FUCOs, forwhich there is recourse, directly or indirectly, to theholding company.

11 Companies whose physical properties consistof Energy Assets may also be currently engaged inenergy (gas or electric or both) marketing activities.To the extent necessary, Applicants requestauthorization to continue such activities in theevent they acquire such companies.

and administrative activities( ‘‘Administrative Activities’’) 9 relatingto these entities.

An Intermediate Subsidiary may beorganized, among other things, (1) inorder to facilitate the making of bids orproposals to develop or acquire aninterest in any EWG or FUCO, Rule 58Company, ETC or other nonexemptNonutility Subsidiary; (2) after theaward of a bid proposal, in order tofacilitate closing on the purchase orfinancing of any acquired companies;(3) at any time subsequent to theconsummation of an acquisition of aninterest in any such company in order,among other things, to effect anadjustment in the respective ownershipinterests in such business held byAlliant Energy or AER and nonaffilatedinvestors; (4) to facilitate the sale ofownership interests in one or moreacquired nonutility companyies (5) tocomply with applicable laws of foreignjurisdictions limiting or otherwiserelating to the ownership of domesticcompanies by foreign nationals; (6) as apart of tax planning in order to limitAlliant Energy’s exposure to U.S. andforeign taxes; (7) to insulate AlliantEnergy and the Utility Subsidiaries fromoperational or other business risks thatmay be associated with investments innonutility companies; or (8) for otherlawful business purposes.

Investments in IntermediateSubsidiaries may take the form of anycombination of the following: (1)Purchases of capital shares, partnershipinterests, member interests in limitedliability companies, trust certificates orother forms of equity interests; (2)capital contributions; (3) open accountadvances with or without interest; (4)loans and (5) guaranties issued,provided or arranged in respect of thesecurities or other obligations of anyIntermediate Subsidiaries. Funds forany direct or indirect investment in anyIntermediate Subsidiary will be derivedfrom: (1) Financings authorized in thisproceeding; (2) any appropriate futuredebt or equity securities issuanceauthorization obtained by AlliantEnergy from the Commission; and (3)other available cash resources,including proceeds of securities sales byAER or other Nonutility Subsidiaryunder rule 52. To the extent that Alliant

Energy provides funds or Guarantiesdirectly or indirectly to an IntermediateSubsidiary which are used for thepurpose of making an investment in anyEWG or FUCO or a Rule 58 Company,the amount of these funds or guarantieswill be included in Alliant Energy’s‘‘aggregate investment’’ in these entities,as calculated in accordance with rule 53or rule 58 under the Act,10 asapplicable.

Alliant Energy also requests authorityto consolidate or otherwise reorganizeall or any part of its direct and indirectownership interests in NonutilitySubsidiaries, and the activities andfunctions related to these investments.To effect these consolidations or otherreorganizations, Alliant Energy or AERmay either contribute the equitysecurities of one Nonutility Subsidiaryto another Nonutility Subsidiary(including a newly formed IntermediateSubsidiary) or sell (or cause a NonutilitySubsidiary to sell) the equity securitiesor all or part of the assets of oneNonutility Subsidiary to another one.These transactions may take the form ofa Nonutility Subsidiary selling ortransferring the equity securities of aSubsidiary or all or part of thatSubsidiary’s assets as a dividend to anIntermediate Subsidiary or to anotherNonutility Subsidiary, and theacquisition, directly or indirectly, of theequity securities or assets of thatSubsidiary, either by purchase or byreceipt of a dividend. The purchasingNonutility Subsidiary in any transactionstructured as an intrasystem sale ofequity securities or assets may executeand deliver its promissory noteevidencing all or a portion of theconsideration given. Each transactionwould be carried out in compliancewith all applicable U.S. or foreign lawsand accounting requirements, and anytransaction structured as a sale wouldbe carried out for a consideration equalto the book value of the equity securitiesbeing sold.

VII. Additional Investments in EnergyAssets

AER and the other NonutilitySubsidiaries request authority to makeadditional investments in nonutilityenergy assets in the United States andCanada, specifically including naturalgas production, gathering, processing,storage and transportation facilities andequipment, liquid oil reserves andstorage facilities, and associatedfacilities (collectively, ‘‘Energy Assets’’),

that are incidental to the ongoing oiland gas exploration and production andenergy marketing, brokering and tradingoperations of AER’s subsidiaries. AERrequests authorization to invest up to$800 million (‘‘Investment Limitation’’)at any one time outstanding during theAuthorization Period in these EnergyAssets or in the equity securities ofexisting or new companies substantiallyall of whose physical properties consistor will consist of these Energy Assets.11

These Energy Assets (or equitysecurities of companies owning EnergyAssets) may be acquired for cash or inexchange for Common Stock or othersecurities of Alliant Energy, AER, orother Nonutility Subsidiary of AER, orany combination of the foregoing. IfCommon Stock of Alliant Energy is usedas consideration in connection withthese acquisitions, the market value ofthat Common Stock on the date ofissuance will be counted against theInvestment Limitation. The statedamount or principal amount of anyother securities issued as considerationin these transactions will also becounted against the InvestmentLimitation. Under no circumstances willAER or any oil or gas production orenergy marketing subsidiary acquire,directly or indirectly, any assets orproperties the ownership or operation ofwhich would cause any of thesecompanies to be considered an ‘‘electricutility company’’ or ‘‘gas utilitycompany’’ as defined under the Act.

VIII. Sales of Goods and ServicesAER and other Nonutility

Subsidiaries propose to provide servicesand sell goods to each other at fairmarket prices determined and withoutregard to cost, and request an exemption(to the extent that rule 90(d) does notapply) under section 13(b) from the coststandards of rules 90 and 91 asapplicable to each transaction, in certaininstances.

IX. Energy-Related Activities Outsidethe United States

Applicants request authority for theNonutility Subsidiaries to engage inenergy-related activities both within andoutside the United States. Theseactivities include energy marketing,energy management and energyconsulting services. Specifically,Applicants request authority to engagein energy marketing activities in Canadaand request the Commission to reserve



12 The Commission has previously authorizedsubstantial similar proposals. See CurrentFinancing Order; also see NiSource Inc., HoldingCo. Act Release No. 27265 (Nov. 1, 2000).

13 The largest concentration of Alliant Energy’sforeign investments is in Brazil, followed by NewZealand and Australia. Alliant Energy has alsomade relatively small investments in China andMexico.

14 ‘‘Consolidated retained earnings’’ is defined inrule 53(a)(1)(ii) to mean the average of theconsolidated retained earnings of the registeredsystem as reported for the four most recentquarterly periods in the holding company’s AnnualReport on Form 10–K or Quarterly Report on Form10–Q filed under the Securities Exchange Act of1934.

1 15 U.S.C. 78s(b)(1).2 17 CFR 240.19b–4.3 17 CFR 240.19b–4(f)(6)4 On January 22, 1999, the Commission approved

a two-year Pilot Program that eliminated positionand exercise limits for options on the S&P 500Index (‘‘SPX’’), OEX, and Dow Jones IndustrialAverage (‘‘DJX’’) as well as for FLEX optionsoverlying those indexes. See Securities ExchangeAct Release No. 40969 (January 22, 1999), 64 FR49111 (Feb. 1, 1999) (approving SR–CBOE–98–23)(‘‘Approval Order’’). By order dated January 30,2001, the Commission extended the Pilot Program

jurisdiction over energy marketingactivities outside the United States andCanada pending the completion of therecord in this proceeding. Applicantsalso request authority for the NonutilitySubsidiaries to provide energymanagement services and consultingservices anywhere outside the UnitedStates. Applicants request that theCommission reserve jurisdiction overother energy-related activities outsidethe United States, pending completionof this record.

X. Payment of Dividends Out of Capitalor Unearned Surplus

AER proposes, on behalf of itself andeach of its nonexempt NonutilitySubsidiaries, that these companies bepermitted to pay dividends out ofcapital and unearned surplus and toacquire, retire, or redeem securities thatAER or any Nonutility Subsidiary hasissued to any associate company, to theextent permitted under applicablecorporate law and the terms of anyapplicable credit or security agreements.AER anticipates that there will besituations in which it or one or moreNonutility Subsidiaries will haveunrestricted cash available fordistribution in excess of any suchcompany’s current and retainedearnings. In these situations, thedeclaration and payment of a dividendwould be charged, in whole or in part,to capital or unearned surplus.

AER, on behalf of itself and eachnonexempt Nonutility Subsidiaryrepresents that it will not declare or payany dividend or acquire, retire orredeem any securities of which any ofthese Nonutility Subsidiaries is theissuer that are held by an associatecompany, out of capital or unearnedsurplus in contravention of any lawrestricting the payment of dividends orthe terms of any credit or securityagreements.12

XI. Investments in EWGs and FUCOsAlliant Energy requests authority to

use the proceeds of authorized financingand Alliant Energy Guaranties to makeinvestments in EWGs and FUCOs in anamount which, when added to AlliantEnergy’s existing aggregate investment,would not exceed $1.75 billion. Basedon Alliant Energy’s aggregateinvestments as of March 31, 2001(approximately $355.9 million), thiswould enable Alliant Energy to makeincremental investments in EWGs andFUCOs of about $1.39 billion. AlliantEnergy, through subsidiaries of AER,

currently holds interests in variousforeign electric generation anddistribution utility companies that havebeen certified as FUCOs. Alliant Energydoes not hold an interest in any EWG atthis time, but is investigating severalpotential investments.13 As of March 31,2001, Alliant Energy’s aggregateinvestment in all of these entities wasapproximately $355.9 million. Anaggregate investment in EWGs andFUCOs in an amount equal to $1.75billion would be equal to about 160% ofAlliant Energy’s average consolidatedretained earnings 14 as of March 31,2001 ($1.093 billion).

Alliant Energy further represents thatit will maintain common equity as apercentage of its consolidatedcapitalization (inclusive of short-termdebt) at 30% or above during theAuthorization Period, and will alsomaintain common equity as apercentage of capitalization of each ofAlliant Energy’s utility subsidiaries at30% or above during the AuthorizationPeriod.

For the Commission by the Division ofInvestment Management, pursuant todelegated authority.Margaret H. McFarland,Deputy Secretary.[FR Doc. 01–18169 Filed 7–19–01; 8:45 am]BILLING CODE 8010–01–M


Sunshine Act Meeting

FEDERAL REGISTER CITATION OF PREVIOUSANNOUNCEMENT: [66 FR 36811].STATUS: Closed Meeting.PLACE: 450 Fifth Street, NW.,Washington, DC.DATE PREVIOUSLY ANNOUNCED: July 13,2001.CHANGE IN THE MEETING: Time Change.

The closed meeting scheduled forThursday, July 19, 2001 at 11:00 a.m.time has been changed to Thursday, July19, 2001 at 9:00 a.m.

At times, changes in Commissionpriorities require alterations in thescheduling of meeting items. For further

information and to ascertain what, ifany, matters have been added, deletedor postponed, please contact:

The Office of the Secretary (202) 945–7070.

Dated: July 17, 2001.Jonathan G. Katz,Secretary.[FR Doc. 01–18297 Filed 7–18–01; 11:17 am]BILLING CODE 8010–01–M


[Release No. 34–44556; File No. SR–CBOE–2001–39]

Self-Regulatory Oganizations; Noticeof Filing and Immediate Effectivenessof Proposed Rule Change by theChicago Board Options Exchange, Inc.Relating to the Addition of European-Style Exercise Option Series on theOEX

July 16, 2001.Pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934(‘‘Act’’),1 and Rule 19b–4 thereunder,2notice is hereby given that on July 10,2001, the Chicago Board OptionsExchange, Inc. (‘‘CBOE’’ or ‘‘Exchange’’)filed with the Securities and ExchangeCommission (‘‘Commission’’) theproposed rule change as described inItems I, II, and III below, which Itemshave been prepared by the CBOE. Theproposed rule changes has been filed bythe CBOE as a ‘‘non-controversial’’ rulechange under Rule 19b–4(f)(6) under theAct.3 The Commission is publishing thisnotice to solicit comments on theproposed rule change from interestedpersons.

I. Self-Regulatory Organization’sStatement of the Terms of Substance ofthe Proposed Rule Change

The CBOE proposes to: (1) Introducefor trading new series of European-styleexercise options on the Standard &Poor’s 100 Stock Index (‘‘OEX’’); and (2)include the new European-style optionsin a pilot program (‘‘Pilot Program’’) thateliminates position and exercise limitsfor OEX and other index options.4



until May 22, 2001. See Securities Exchange ActRelease No. 43867 (Jan. 22, 2001), 66 FR 8250 (Jan.30, 2001) (approving SR–CBOE–01–01). By orderdated May 22, 2001, the Commission extended thePilot Program until September 22, 2001. SeeSecurities Exchange Act Release No. 44335 (May22, 2001), 66 FR 29369 (May 30, 2001) (approvingSR–CBOE–2001–26). The Exchange has a requestedpermanent approval of the Pilot Progrram. See FileNo. SR–CBOE–2001–22. The Commission has notacted on File No. SR–CBOE–2001–22.

5 The OEX is a broad-based, capitaliztion-weighted index taht is cash-settled.

6 The amount of cash received upon exercisedepends on the closing value of the index incomparison to the strike price of the option.

7 European-style option can be exercised onlyduring a specified time period prior to expiration.

8 The existing American-style series will continueto trade under the existing OEX symbols.

9 See Exchange Act Release 30944 (July 21, 1992),57 FR 33376 (July 28, 1992) (order approving SR–CBOE–92–09) (‘‘1992 Order’’).

10 See supra note 4.11 The Approval Order required the Exchange to

submit a report to the Commission on the status ofthe Pilot Program to allow the Commission toevaluate any consequences of the program and todetermine whether to approve the elimination ofposition and exercise limits for these products ona permanent basis. The CBOE submitted therequired report to the Commission on December 21,

2000. The report indicated that during the reviewperiod, the CBOE did not discover any instanceswhere an account maintained an unusually largeunhedged position. In fact, the data from the reportfound that only 12 accounts established positionsin excess of 10% of the standard limit applicableto each index at the time the Pilot Program wasapproved. These positions were all in SPX and mostwere established by firms and market makers. Allof the accounts were hedged. The CBOE’s analysisdid not discover any aberrations caused by largeunhedged positions during the life of the PilotProgram.

12 Reporting thresholds are the contract levels atwhich members are required to report informationregarding customer positions to the Exchange.

13 This information circular will clarify that theAmerican-style OEX series will retain the existingOEX symbols while the European-style series willtrade under the XEO symbol.

The text of the proposed rule changeis available at the CBOE and at theCommission.

II. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

In its filing with the Commission, theExchange included statementsconcerning the purpose of and basis forthe proposed rule change and discussedany comments it received on theproposed rule change. The text of thesestatements may be examined at theplaces specified in Item IV below. TheExchange has prepared summaries, setforth in sections A, B, and C below, ofthe most significant parts of suchstatements.

A. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

1. Purpose

The Exchange currently lists fortrading American-style options on theOEX.5 ‘‘American-style’’ exercuseallows investors to exercise theirpositions on any given business dayprior to expiration.6 This creates what isknown as early exercise or assignmentrisk. Specifically, when an OEX optionis exercised prior to expiration, thatoption is‘‘assigned’’ to an option writer.Thus, writers of OEX options are subjectto the risk each day that same or all oftheir option may be exiercised. A writerthat receives an assignment can have histrading strategy affected in a negativemanner.

The Exchange believes that the risk ofearly exercise and assignment could bedriving current users away from theOEX as well as deterring potential newusers, both of which could have anegative effect on liquidity. Memberfirms have indicated to the Exchangethe desire to trade OEX option seriesthat do not subject them to earlyexercise and assignment risk.Accordingly, the Exchange proposes to

introduce series of OEX options withEuropean-style exercise.7

The same index will underlie both the‘‘new’’ and existing series of OEXoptions. Contract specifications for the‘‘new’’ series will be identical to theexisting series with the exception of theexercise style. Thus, the ‘‘new’’ seriesalso will be cash-settled and featureP.M.-settlement. The Exchangepresently intends to trade the ‘‘new’’European-style series of OEX options inthe existing OEX pit under a separatesymbol, XEO.8 The Exchange notes thatthis is identical to the way that optionson the SPX traded when the Exchangelisted both A.M. and P.M.-settled SPXoption series.9

As Noted above the American-styleOEX series currently are not subject toposition limits.10 The Exchange herebyproposes to include European-style OEXseries within the scope of that PilotProgram. Accordingly, both theAmerican- and European-style series ofthe OEX will not be subject to positionlimits.

The CBOE believes it is reasonable toallow the European-style OEX seriesalso to trade without position limitsbecause they represent additional seriesof an existing product that theCommission has approved previouslyfor non-position limit trading. TheCBOE believes that waiving positionlimits for all OEX series, American- andEuropean-style alike, will help to ensurethat investors can continue to hedgeSPX positions with OEX positions (andvice versa). The CBOE notes that, giventhe high correlation between the twoindexes, many traders hedge positionsin one index with positions in the other.The CBOE believes that subjectingEuropean-style OEX series to positionlimits while allowing SPX to tradewithout position limits could limitseverely the utility of this tradingstrategy.

The Exchange notes that it currentlyhas the surveillance capabilities todetect any trading aberrations involvinglarge positions in SPX and American-style OEX.11 The Exchange states that

upon introduction of European-styleOEX series, these surveillanceprocedures will be expanded to monitortrading activity in the European-styleseries. Finally, the Exchanges notes thatall of the representations it made in theApproval Order with respect to OEXoptions will apply to European-styleOEX series as well.

The Exchange notes the Pilot Programaltered the reporting thresholdsapplicable to OEX, DJX, and SPXoptions.12 Specifically, the PilotProgram increased to 100,000 contractsthe reporting threshold for positions inOEX options. The Exchange intends torequire European-style OEX series besubject to the same reportingrequirement. Moreover, the Exchangeproposes that positions in theAmerican- and European-style OEXseries be aggregated for purposes ofcomplying with this requirement.Accordingly, any combination of100,000 contracts involving OEXAmerican-style and OEX European-styleseries must be reported to the Exchangepursuant to CBOE Rule 24.4.03. TheExchange also notes that CBOE Rule24.4.04, which authorizes theimposition of additional margin in OEXpositions, will apply to all OEX series,whether European- or American-style.

Prior to commencement of trading ofthe ‘‘new’’ series, the Exchange willdistribute to members an informationalcircular apprising them of the additionof the European-style OEX series. Thiscircular will highlight the difference inexercise methodology between theseries, identify the new symbols for theEuropean-style series, and identify theinitial expiration months and strikeprices available for trading.13 Thiscircular also will indicate that, forpurposes of the reporting requirement ofCBOE Rule 24.4.03, positions in bothseries of OEX will be aggregated. TheExchange’s public relations departmentwill issue press releases to the media asa means to inform investors of the



14 See 1992 Order, supra note 9.15 15 U.S.C. 78f.16 16 U.S.C. 78f(b)(5).

17 15 U.S.C. 78s(b)(3)(A).18 See 17 CFR 240.19b–4(f)(6)(iii).19 Id.20 For the purposes only of accelerating the

operative date of this proposal, the Commission hasconsidered the proposal’s impact on efficiency,competition, and capital formation. 15 U.S.C. 78c(f).

additional investment choices nowavailable with the addition of theEuropean-style OEX series. Finally, theExchange will publicize on its websitethe introduction of the new European-style OEX series. The Exchange notesthat these procedures, with theexception of the website publication, aresimilar to the procedures used when theExchange listed both A.M.- and P.M.-settled SPX Index options in 1992.14

2. Statutory Basis

The addition of European-style OEXseries will create an investment optionthat eliminates the risk of early exerciseand assignment, which the CBOEbelieves will appeal to manyinstitutions, professional traders, andinvestors. The Exchange believes thatthe introduction of new European-styleexercise series will attract order flowback to the index floor. Moreover, theretention, and simultaneous trading, ofAmerican-style OEX options will allowinvestors to determine which product ismost appropriate for them, thusenabling them to tailor more preciselytheir investment strategy. For thesereasons, the Exchange believes that theproposed rule change is consistent withsection 6 of the Act 15 in general, andfurthers the objectives of section 6(b)(5)of the Act 16 in particular, because it isdesigned to promote just and equitableprinciples of trade as well as to protectinvestors and the public interest.

B. Self-Regulatory Organization’sStatement on Burden on Competition

CBOE does not believe that theproposed rule change will impose anyburden on competition not necessary orappropriate in furtherance of thepurposes of the Exchange Act.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants or Others

No written comments were solicitedor received with respect to the proposedrule change.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

Because the foregoing proposed rulechange: (1) Does not significantly affectthe protection of investors or the publicinterest; (2) does not impose anysignificant burden on competition; and(3) the CBOE provided the Commissionwith written notice of its intent to filethe proposed rule change at least five

business days prior to the filing date,the proposed rule change has becomeeffective pursuant to section 19(b)(3)(A)of the Act 17 and Rule 19b–4(f)(6)thereunder.

A proposed rule change filed underRule 19b–4(f)(6) normally does notbecome operative prior to 30 days afterthe date of filing.18 However, Rule 19b–4(f)(6)(iii) permits the Commission todesignate a shorter time if such actionis consistent with the protection ofinvestors and the public interest.19 TheCBOE has requested that theCommission designate such shorter timeperiod and accelerate the operative dateof the proposal to July 20, 2001, so thatthe Exchange may begin trading the newEuropean-style series of OEX optionsafter the July expiration.

The CBOE states that introducing thenew series of European-style OEXoptions on the first day after expirationFriday will allow investors to establishpostions on the first day of the monthlycycle. The CBOE also believes that theproposal does not raise new, novel, orcomplex regulatory issues. In addition,the CBOE notes that the Commissionpreviously approved OEX options fortrading and European-style indexoptions for trading, and that theproposal permits the trading of newEuropean-style options series on theOEX.

The Commission, consistent with theprotection of investors and the publicinterest, has determined to make theproposed rule change operative on July20, 2001, to allow investors to establishpositions in the new series ofEuroopean-style OEX options on thefirst day of the monthly cycle.20 TheCommission believes that the new seriesof European-style OEX options willprovide investors with an additionalinvestment choice and may help toincrease liquidity in OEX options.

The Commission believes that theproposal to include European-style OEXoptions in the position and exerciselimit Pilot Program will provideconsistent treatment of American-styleand European-style OEX options forposition and exercise limit purposes. Inaddition, the Commission believes thatthe aggregation of positions inAmerican-style and European-style OEXoptions for purposes of the 100,000-contract reporting threshold isconsistent with the purpose of thereporting threshold and will help to

ensure the continued effectiveness ofthe reporting threshold.

The Commission notes that prior tothe commencement of trading of thenew European-style OEX series, theCBOE will distribute to members aninformation circular advising them ofthe addition of the new series. Theinformation circular will note thedifference in exercise style, identify thenew symbols for the European-styleOEX series, identify the initialexpiration months and strike pricesavailable for trading, and indicate thatpositions in American-style OEXoptions will be aggregated for purposesof the 100,000-contract OEX reportingthreshold provided in the Pilot Program.

For all of the reasons set forth above,the Commission finds that it isconsistent with the protection ofinvestors and the public interest for theproposal to become operative on July20, 2001. At any time within 60 day ofthe filing of such proposed rule change,the Commission may summarilyabrogate such rule change if it appearsto the Commission that such action isnecessary or appropriate in the publicinterest, for the protection of investors,or otherwise in furtherance of thepurposes of the Act.

IV. Solicitation of Comments

Interested persons are invited tosubmit written data, views andarguments concerning the foregoing,including whether the proposed rulechange is consistent with the Act.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, NW.,Washington, DC 20549–0609. Copies ofthe submission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to theproposed rule change between theCommission and any person, other thanthose that may be withheld from thepublic in accordance with theprovisions of 5 U.S.C. 552, will beavailable for inspection and copying inthe Commission’s Public Referenceroom. Copies of such filing will also beavailable for inspection and copying atthe principal office of the CBOE. Allsubmissions should refer to File no. SR–CBOE–2001–39 and should besubmitted by August 10, 2001.



21 17 CFR 200.30–3(a)(12).1 15 U.S.C. 78s(b)(1).2 17 CFR 240.19b–4.3 On February 18, 1999, Nasdaq submitted its

initial proposal to provide only T+1 daily sharevolume reports in each Nasdaq security to marketdata vendors, NASD members, and non-NASDmember Qualified Institutional Buyers (‘‘QIBs’’) asdefined in Rule 144A under the Securities Act of1933. 17 CFR 230.114A. After discussions with atleast one market data vendor, and internaldiscussions at Nasdaq, Nasdaq filed an amendmenton March 24, 1999 (‘‘Amendment No. 1’’).Amendment No. 1 completely replaced andsuperseded the original proposal.

4 Securities Exchange Act Release No. 41244(April 1, 1999), 64 FR 17429.

5 See May 29, 2001 letter from Edward S. Knight,Executive Vice President and General Counsel,Nasdaq, to Katherine A. England, AssistantDirector, Division of Market Regulation(‘‘Division’’), SEC and attachments (‘‘AmendmentNo. 2’’). Amendment No. 2 completely replaced andsuperseded Amendment No. 1. In Amendment No.2, Nasdaq proposed new fees.

6 See July 9, 2001 letter from Edward S. Knight,Executive Vice President and General Counsel,Nasdaq, to Belinda Blaine, Associate Director,Division, SEC (‘‘Amendment No. 3’’). InAmendment No. 3, Nasdaq: (1) Clarified thatAmendment No. 2, as further amended byAmendment No. 3, should replace and supersedeentirely the original proposal and Amendment No.1; (2) clarified that the proposal is filed by theAssociation through its subsidiary, Nasdaq; (3)clarified that the asterisked footnote at the bottomof pages three and nine of Amendment No. 2 thatdefines ‘‘Qualified Institutional Buyer’’ should beincluded in the proposed rule language of Section7010(p); (4) clarified that modifications to NasdaqPost Data during the pilot period will be limited tominor enhancements to the content of the packagemade in accordance with Section 19(b) of the Actand Rule 19b–4 thereunder; and (5) provided anexplanation of the rationale underlying the choiceof the fees for Nasdaq Post Data.

7 For purposes of this service, Nasdaq will rely onthe definition of ‘‘Qualified Institutional Buyer’’found in Rule 144A of the Securities Act of 1933.17 CFR 230.144A.

For the Commission, by the Division ofMarket Regulation, pursuant to delegatedauthority.21

Margaret H. McFarland,Deputy Secretary.[FR Doc. 01–18170 Filed 7–19–01; 8:45 am]BILLING CODE 8010–01–M


[Release No. 34–44558; File No. SR–NASD–99–12]

Self-Regulatory Organizations; Noticeof Filing of Proposed Rule Change andAmendment Nos. 1, 2 and 3 by theNational Association of SecuritiesDealers, Inc. To Establish a PilotProgram To Provide Daily ShareVolume Reports via NasdaqTrader.com

July 16, 2001.Pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934(‘‘Act’’),1 and Rule 19b–4 thereunder,2notice is hereby given that on February18, 1999, the National Association ofSecurities Dealers, Inc. (‘‘NASD’’ or‘‘Association’’), through its subsidiary,The Nasdaq Stock Market, Inc.(‘‘Nasdaq’’), filed with the Securitiesand Exchange Commission(‘‘Commission’’ or ‘‘SEC’’) the proposedrule change as described in Items I, II,and III below, which Items have beenprepared by Nasdaq. On March 24,1999, Nasdaq amended the proposal.3The original proposal and AmendmentNo. 1 were published in the FederalRegister on April 9, 1999 for notice andcomment.4 On May 30, 2001, the NASDagain amended the proposal, whichamendment completely replaces andsupersedes the original filing andAmendment No. 1.5 On July 10, 2001,

Nasdaq again amended the proposal.6The Commission is publishing thisnotice to solicit comments on theproposed rule change, as amended, frominterested persons.

I. Self-Regulatory Organization’sStatement of the Terms of Substance ofthe Proposed Rule Change

Nasdaq proposes to amend NASDRule 7010, Systems Services, toestablish a fee for the Volume and IssueData Package provided through theNasdaqTrader.com web site. The text ofthe proposed rule change is below.Proposed new language is in italics.Rule 7010 System Services

(a)–(o) No changes.(p) NasdaqTrader.com Volume and Issue

Data Package Fee. The charge to be paid bythe subscriber for each entitled user receivingthe Nasdaq Volume and Issue Data Packagevia NasdaqTrader.com shall be $70 permonth. The charge to be paid by market datavendors for this information shall be $35 permonth for each end user receiving theinformation through the data vendor. Theavailability of this service throughNasdaqTrader.com shall be limited to NASDmembers, Qualified Institutional Buyers *and data vendors. The Volume and IssueData package includes:

(1) Daily Share Volume reports(2) Daily Issue Data(3) Monthly Volume Summaries* For purposes of this service, see

definition of ‘‘Qualified Institutional Buyer’’found in Rule 144A of the Securities Act of1933.

* * * * *

II. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

In is filing with the Commission,Nasdaq included statements concerningthe purpose of and basis for theproposed rule change and discussed anycomments it received on he proposedrule change. The text of these statementsmay be examined at the places specified

in Item IV below. Nasdaq has preparedsummaries, set forth in sections A, B,and C below, of the most significantaspects of such statements.

A. Self-Regulatory Organization’sStatement of the Purpose of, andStatutory Basis for, the Proposed RuleChange

1. PurposeNasdaq proposes to establish a fee for

a voluntary trading data distributionfacility, accessible to NASD members,buy-side institutions (QualifiedInstitutional Buyers (‘‘QIBs’’) 7) andmarket data vendors through itsNasdaqTrader.com web site. Under theproposal, subscribers to this service, aswell as retail customers of participatingmarket data vendors, will be able toobtain the Volume and Issue DataPackage, proposed to be name ‘‘NasdaqPost Data’’ (‘‘Post Data’’).

Post Data will consist of threeseparate reports that will be provided asa single package. The first item will bethe Daily Share Volume Report, to benamed ‘‘Nasdaq Volume Post,’’ whichwill provide subscribes with access toT+1 daily share volume in each Nasdaqsecurity, listing the volume by eachNASD member firm that reports volumein the security and has voluntarilychosen to permit the dissemination ofthis information. The daily sharevolume will be verified for accuracy byNasdaq’s Automated ConfirmationTransaction Service (‘‘ACT’’). Thesecond item, the ‘‘Daily Issue Data’’report, will contain a summary of theprevious day’s activity for every Nadaqissue. The third item, ‘‘MonthlySummaries,’’ will provide monthlytrading volume statistics for the top 50market participants, broken down byindustry sector, security, or type oftrading (e.g., block or total).

Post Data will be made available intwo ways through theNasdaqTrader.com web site. Theinformation will be provided to marketdata vendors to be redistributed to theirretail customers for which the datavendor will pay a $35 per month fee toNasdaq for each end user obtaining thisinformation. The information will alsobe provided directly to subscribers,limited to NASD members and non-NASD member QIBs, for a fee of $70 permonth.

Nasdaq filed this proposal in directresponse to requests form professionalNasdaq market participants to increasethe availability of Nasdaq-verified



8 15 U.S.C. 78s.9 17 CFR 240.19b–4. 10 15 U.S.C. 78o–3(b)(5) and (6).

trading data through NasdaqTrader.com.Sell-side traders use share volume todisplay their trading activity in specificNasdaq issues, while buy-siderepresentatives use similar data todetermine which sell-side firm to selectfor execution of their orders. Post Datawill provide a secure, controlledmechanism to allow these parties toview such data and make informedchoices regarding their trading partners.

Modifications to Post Data during thepilot period will be limited to minorenhancements to the content of thepackage, and will be made inaccordance with section 19(b) of theAct 8 and Rule 19b–4 thereunder.9 Anysuch modifications will be provided atno additional cost to the subscribers andwould be available to data vendors forredistribution.

Nasdaq recognizes the proprietary andconfidential nature of the datacontained in Post Data. As such, Nasdaqhas established a secure informationdisplay and retrieval environmentthrough the combined use of User Ids,passwords and digital certificates. Tofurther protect NASD member firms’proprietary data, the service is designedso that the information will only bemade available to the member firmitself, unless that member determinesvoluntarily to submit the information tobe included in the Nasdaq Volume Postreport for dissemination to othersubscribers or vendors.

Concerns for data protection, and thesystem security requirements needed toencourage greater disclosure ofproprietary trading statistics, alsoshaped Nasdaq’s determination to makePost Data available only to NASDmember firms, market data vendors, andQIBs. It is Nasdaq’s belief that thesegroups represent the largest number ofmarket participants who may benefitfrom the availability of the voluntarilydisclosed, Nasdaq-verified, tradingvolumes. At the same time, theseparticipants are also the most likely topossess the requisite staff and resourcesto comply with the system securitymandates. Moreover, the QIBs definedin Rule 144A consist of entitiesregistered with various regulatorybodies, which registration Nasdaqbelieves provides an additional layer ofprotection against the improper use ofits members’ proprietary trading data.Finally, the Rule 144A QIB definitionupon which Nasdaq seeks to rely hasalready been adopted by theCommission as a standard delineatingthe characteristics of institutionalmarket participants.

Given the commercial uncertaintiesassociated with the launching of anynew data product, Nasdaq will establishthis service as a 12-month pilotprogram, beginning from the date ofCommission approval, to evaluate userinterest. At the end of the 12-monthpilot, Nasdaq will evaluate the programand make a determination to terminatethe program, continue the program foran additional 12-month pilot, orcontinue the program as a permanentfeature of NasdaqTrader.com.

2. Statutory BasisNasdaq believes that the proposed

rule change is consistent with theprovisions of sections 15A9(b)(5) and (6)of the Act.10 Section 15A(b)(5) requiresthe equitable allocation of reasonablefees and charges among members andother users of facilities operated orcontrolled by a national securitiesassociation. Section 15A(b)(6) requiresrules that foster cooperation andcoordination with persons engaged infacilitating transactions in securities andthat are not designed to permit unfairdiscrimination between customers,issuers, brokers or dealers. Nasdaqbelieves that the proposed fees representan equitable allocation of reasonablefees among members and other users ofthe Nasdaq facilities associated with theoffering of the Post Data product.Nasdaq established the fees in questionbased upon its consideration ofnumerous factors, including but notlimited to: (1) The costs associated withthe development, ongoing enhancement,maintenance, operation, and marketingof the Post Data product; (2) the costassociated with the ongoingmaintenance and administration of theNasdaq web security infrastructure thatwill be used to grant and validate accessto the Post Data product; (3) reasonableoverhead costs allocable to the Post Dataproduct; and (4) projected subscriptions,usage, and revenues associated with thePost Data product during its initialperiod of availability. Nasdaq employedstandard formulae to perform theseprojections, although such projectionsare inherently speculative.

In addition, Nasdaq believes that theproposed fees foster cooperation andcoordination with persons engaged infacilitating transactions in securities andare not designed to permit unfairdiscrimination between customers,issuers, brokers or dealers. Nasdaq willmake the Post Data product available tovendors on a wholesale basis for $35 perend user, and will charge $70 per directuser, who will access the productthrough the Nasdaq Trader web site.

This fee differential reflects theprojected cost of the incremental websecurity that is required to entitle directusers of the Post Data product. This feestructure also permits wholesale buyersto re-sell the Nasdaq product for up toa 100% premium before adding anyvalue of any kind to the product. Inother words, a vendor could purchasePost Data from Nasdaq for $35, and thenre-sell it to end users withoutmodification for $65 and still under-price Nasdaq vis a vis those end users.Nasdaq believes that this pricingstructure, which Nasdaq will makeavailable to all customers on a non-discriminatory basis, will stimulate,rather than stifle, competition.

B. Self-Regulatory Organization’sStatement on Burden on Competition

Nasdaq does not believe that theproposed rule change will result in anyburden on competition that is notnecessary or appropriate in furtheranceof the purposes of the Act, as amended.

C. Self-Regulatory Organization’sStatement on Comments on theProposed Rule Change Received FromMembers, Participants or Others

Written comments were neithersolicited or nor received.

III. Date of Effectiveness of theProposed Rule Change and Timing forCommission Action

Within 35 days of the date ofpublication of this notice in the FederalRegister within such longer period (i) asthe Commission may designate up to 90days of such date if it finds such longerperiod to be appropriate and publishesits reasons for so finding or (ii) as towhich the NASD consents, theCommission will:

A. By order approve proposed rulechange, or

B. Institute proceedings to determinewhether the proposed rule changeshould be disapproved.

IV. Solicitation of CommentsInterested persons are invited to

submit written date, views andarguments concerning the foregoing,including whether the proposed rulechange is constituent with the Act.Persons making written submissionsshould file six copies thereof with theSecretary, Securities and ExchangeCommission, 450 Fifth Street, NW.,Washington, DC 20549–0609. Copies ofthe submission, all subsequentamendments, all written statementswith respect to the proposed rulechange that are filed with theCommission, and all writtencommunications relating to the



11 17 CFR 200.30–3(a)(12).

proposed rule change between theCommunication and any person, otherthan those that may be withheld fromthe public in accordance with theprovisions of 5 U.S.C. 552, will beavailable for inspection and copying inthe Commission’s Public ReferenceRoom. Copies of such filing will also beavailable for inspection and copying atthe principal office of Nasdaq. Allsubmissions should refer to file numberSR–NASD–99–12 and should besubmitted by August 10, 2001.

For the Commission by the Division ofMarket Regulation, pursuant to delegatedauthority: 11

Margaret H. McFarland,Deputy Secretary.[FR Doc. 01–18171 Filed 7–19–01; 8:45 am]BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[Declaration of Disaster #3354]

State of Virginia

As a result of the President’s majordisaster declaration on July 12, 2001, Ifind that Tazewell County in the Stateof Virginia constitutes a disaster areadue to damages caused by SevereStorms and Flooding occurring on July8 through 10, 2001. Applications forloans for physical damage as a result ofthis disaster may be filed until the closeof business on September 10, 2001 andfor economic injury until the close ofbusiness on April 12, 2002 at theaddress listed below or other locallyannounced locations: U.S. SmallBusiness Administration, Disaster Area1 Office, 360 Rainbow Blvd., South 3rdFl., Niagara Falls, NY 14303–1192.

In addition, applications for economicinjury loans from small businesseslocated in the following contiguouscounties in Virginia may be filed untilthe specified date at the above location:Bland, Buchanan, Russell and Smyth;and McDowell and Mercer counties inthe State of West Virginia.

The interest rates are:

In percent

For physicial damageHomeowners with credit

available elsewhere ........... 6.625Homeowners without credit

available elsewhere ........... 3.312Businesses with credit avail-

able elsewhere .................. 8.000Businesses and non-profit or-

ganizations without creditavailable elsewhere ........... 4.000

In percent

Others (including non-profitorganizations) with creditavailable elsewhere ........... 7.125

For economic injuryBusinesses and small agri-

cultural cooperatives with-out credit available else-where ................................. 4.000

The number assigned to this disasterfor physical damage is 335406. Foreconomic injury the number is 9M1700for Virginia and 9M1800 for WestVirginia.(Catalog of Federal Domestic AssistanceProgram Nos. 59002 and 59008)

Dated: July 13, 2001.James E. Rivera,Acting Associate Administrator for DisasterAssistance.[FR Doc. 01–18180 Filed 7–19–01; 8:45 am]BILLING CODE 8025–01–P


Surface Transportation Board

[Finance Docket No. 33877]

Illinois Central Railroad Company—Construction and Operation—In EastBaton Rouge Parish, LA

AGENCY: Surface Transportation Board,Transportation.ACTION: Notice of availability ofenvironmental assessment and requestfor comments.

SUMMARY: The Illinois Central RailroadCompany (IC) has petitioned the SurfaceTransportation Board (Board) forauthority to construct and operate a railline approximately 3.2 miles in lengthin East Baton Rouge Parish, Louisiana,to serve ExxonMobil ChemicalCompany’s Baton Rouge Polyolefinsplant. The Board’s Section ofEnvironmental Analysis (SEA) hasprepared an environmental assessment(EA) for this project. Based on theinformation provided and theenvironmental analysis conducted todate, the EA preliminarily concludesthat this proposal should notsignificantly affect the quality of thehuman environment if therecommended mitigation measures setforth in the EA are implemented.Accordingly, SEA recommends that, ifthe Board approves this project, IC berequired to implement the mitigation setforth in the EA. Copies of the EA havebeen served on all interested parties andwill be made available to additionalparties upon request. SEA will considerall comments received when making its

final environmental recommendationsto the Board. The Board will thenconsider SEA’s final recommendationsand the complete environmental recordin making its final decision in thisproceeding.DATES: The EA is available for publicreview and comment. Comments aredue by August 20, 2001.ADDRESSES: Comments (an original and10 copies) regarding this EA should besubmitted in writing to: Section ofEnvironmental Analysis, SurfaceTransportation Board, 1925 K Street,NW., Washington, DC 20423, to theattention of Dana White.FOR FURTHER INFORMATION CONTACT:Dana White, (202) 565–1552 (TDD forthe hearing impaired 1–800–877–8339).To obtain a copy of the EA, contact Da-To-Da Office Solutions, Room 405, 1925K Street, NW., Washington, DC 20006,phone (202) 293–7776 or visit theBoard’s website at www.stb.dot.gov.

By the Board, Victoria J. Rutson, ActingChief, Section of Environmental Analysis.Vernon A. Williams,Secretary.[FR Doc. 01–18182 Filed 7–19–01; 8:45 am]BILLING CODE 4915–00–P



[STB Finance Docket No. 34063]

Dallas Area Rapid Transit—AcquisitionExemption—Lines of Union PacificRailroad Company

Dallas Area Rapid Transit (DART), apolitical subdivision of the State ofTexas, a Class III rail carrier, has fileda notice of exemption under 49 CFR1150.41 to acquire (by purchase)pursuant to an agreement entered intowith Union Pacific Railroad Company(UP), as indicated in its notice,approximately 60.78 miles of rail line inCollin, Dallas, Denton, Grayson andRockwall Counties, TX, as follows: (1)The segment of the Denton Subdivisionbetween approximately milepost K–741.3 (Frankford Road) in Carrolltonand approximately milepost K–729.5 inLake Dallas (approximately 11.8 miles);(2) the segment of the ShermanSubdivision between approximatelymilepost 285.1 (Spring Creek Parkway)in Plano and approximately milepost324.7 at South Sherman Junction(approximately 39.6 miles); (3) theRowlett Extension betweenapproximately milepost 745.5 (nearKirby Road) in Rowlett andapproximately milepost 741.3 inRockwall (approximately 4.2 miles); (4)



1 DART will also acquire from UP: (1) All spurand lead tracks connecting with the BrookhollowBranch Line; (2) the approximately 0.5-mile leadtrack from the Denton Subdivision to the Coca ColaBottling Plant; (3) the SSW bridge across I–30 atDallas Convention Center and South SideDevelopment, and (4) the H&TC bridge across I–30between Dallas Farmer’s Market and DART right-of-way north of the LRT Yard Lead. The acquisitionof these spur tracks, lead tracks and other propertyinterests do not require Surface TransportationBoard approval. See 49 U.S.C. 10906.

DGNO’s leasehold interest in the ShermanSubdivision, the Rowlett Extension, and theBrookhollow branch line will be the subject of aforthcoming petition for exemption, wherein DGNOwill seek exemption from the Board for approval toconvert most of its leasehold interests into trackagerights with DART. There is no freight traffic overthe portion of the Sherman Subdivision beingacquired by DART between approximately milepost285.1 (Spring Creek Parkway) and approximately

milepost 290.5 (Stacy Road). DART states thatshortly after consummation of the acquisition of theabove segment DART will seek Board authority toabandon that segment and DGNO will seek Boardauthority to discontinue its lease on that segment.

The Burlington Northern Santa Fe RailwayCompany, DGNO and possibly other freightrailroads have trackage rights over the White Rock/Fair Park Connector. There is no current localfreight service on the White Rock/Fair ParkConnector segment, and any local or overheadfreight railroad operations on the White Rock/FairPark Connector in the future will be conducted byentities other than DART pursuant to such trackagerights.

the White Rock/Fair Park Connectorbetween approximately milepost 6.93(the GC&SF Overpass) at Tenison Parkand approximately milepost 5.06 nearMissouri Pacific Junction(approximately 1.87 miles); and (5) theBrookhollow Branch Line between theDFW Main at approximately milepost0.0 and the Denton Subdivision atapproximately milepost 3.31(approximately 3.31 miles).

DART will acquire UP’s interest in therail right-of-way on the DentonSubdivision between approximatelymilepost K–729.5 in Lake Dallas andapproximately milepost K–721.53 inDenton (City of Denton Line) that ispresently subject to a trail useagreement between UP and the City ofDenton. See Missouri Pacific RailroadCompany—Abandonment Exemption—In Denton County, TX, Docket No. AB–3 (Sub-No. 99X) (ICC served May 28,1993). Among other things, DART willacquire UP’s right to restart freightservice on the City of Denton Line.DART states that it has no intention ofexercising that right at the present time,but that the right to restart freightservice is a residual common carrierinterest and the acquisition of that rightrequires Board approval. See Norfolk &Western Railway Company—Abandonment Between St. Marys andMinster in Auglaize County, OH, DocketNo. AB–290 (Sub-No. 68) (ICC servedOct. 25, 1993).

DART will also acquire the above-referenced segment of the DentonSubdivision, the above-referencedsegment of the Sherman Subdivision,the Rowlett Extension and theBrookhollow Branch Line, subject to theDallas, Garland and NortheasternRailroad, Inc.’s (DGNO) leaseholdinterest in those lines for the operationof freight service and will acquire theWhite Rock/Fair Park Connector subjectto the trackage rights of certain freightrailroads in that segment.1 DART

certifies that its annual revenues willnot exceed those that would qualify itas a Class III rail carrier and that itsannual freight revenues are notprojected to exceed $5 million.

The transaction was scheduled to beconsummated on or before June 28,2001, the effective date of theexemption.

If the notice contains false ormisleading information, the exemptionis void ab initio. Petitions to reopen theproceeding to revoke the exemptionunder 49 U.S.C. 10502(d) may be filedat any time. The filing of a petition torevoke will not automatically stay thetransaction.

An original and 10 copies of allpleadings, referring to STB FinanceDocket No. 34063, must be filed withthe Surface Transportation Board, Officeof the Secretary, Case Control Unit, 1925K Street, NW., Washington, DC 20423–0001. In addition, a copy of eachpleading must be served on Kevin M.Sheys, Kirkpatrick & Lockhart LLP, 1800Massachusetts Avenue, 2nd Floor,Washington, DC 20036.

Board decisions and notices areavailable on our website at‘‘WWW.STB.DOT.GOV.’’

Decided: July 13, 2001.By the Board, David M. Konschnik,

Director, Office of Proceedings.Vernon A. Williams,Secretary.[FR Doc. 01–18116 Filed 7–19–01; 8:45 am]BILLING CODE 4915–00–P



[STB Docket No. AB–33 (Sub–No. 182X)]

Union Pacific Railroad Company-Discontinuance Exemption-In Weldand Boulder Counties, CO

On July 2, 2001, the Union PacificRailroad Company (UP) filed with theSurface Transportation Board (Board) apetition under 49 U.S.C. 10502 forexemption from the provisions of 49U.S.C. 10903 to discontinue service over

a segment of its Boulder Industrial Lead,extending from milepost 18.79 nearEagle Mine to milepost 31.0 nearValmont, a distance of 12.21 miles, inWeld and Boulder Counties, CO. Theline traverses U.S. Postal Service ZipCodes 80026, 80303 and 80516 andincludes the station at Eagle Mine.

The line does not contain federallygranted rights-of-way. Anydocumentation in the railroad’spossession will be made availablepromptly to those requesting it.

The interests of railroad employeeswill be protected by the conditions setforth in Oregon Short Line R. Co.—Abandonment—Goshen, 360 I.C.C. 91(1979).

By issuance of this notice, the Boardis instituting an exemption proceedingpursuant to 49 U.S.C. 10502(b). A finaldecision will be issued by October 19,2001.

Any offer of financial assistance(OFA) under 49 CFR 1152.27(b)(2) willbe due no later than 10 days afterservice of a decision granting thepetition for exemption. Each offer mustbe accompanied by a $1,000 filing fee.See 49 CFR 1002.2(f)(25).

All filings in response to this noticemust refer to STB Docket No. AB–33(Sub-No. 182X) and must be sent to: (1)Surface Transportation Board, Office ofthe Secretary, Case Control Unit, 1925 KStreet, NW, Washington, DC 20423–0001, and (2) Mack H. Shumate, Jr., 101North Wacker Drive, Room 1920,Chicago, IL 60606. Replies to theexemption petition are due August 10,2001.

Persons seeking further informationconcerning abandonment anddiscontinuance procedures may contactthe Board’s Office of Public Services at(202) 565–1592 or refer to the fullabandonment or discontinuanceregulations at 49 CFR part 1152.Questions concerning environmentalissues may be directed to the Board’sSection of Environmental Analysis(SEA) at (202) 565–1545. [TDD for thehearing impaired is available at 1–800–877–8339.]

An environmental assessment (EA) (orenvironmental impact statement (EIS), ifnecessary) prepared by SEA will beserved upon all parties of record andupon any agencies or other persons whocommented during its preparation. Anyother persons who would like to obtaina copy of the EA (or EIS) may contactSEA. EAs in these abandonmentproceedings normally will be madeavailable within 60 days of the filing ofthe petition. The deadline forsubmission of comments on the EA willgenerally be within 30 days of itsservice.



Board decisions and notices areavailable on our website at‘‘WWW.STB.DOT.GOV.’’

Decided: July 12, 2001.By the Board, David M. Konschnik,

Director, Office of Proceedings.Vernon A. Williams,Secretary.[FR Doc. 01–18115 Filed 7–19–01; 8:45 am]BILLING CODE 4915–00–P



July 13, 2001The Department of Treasury has

submitted the following publicinformation collection requirement(s) toOMB for review and clearance under thePaperwork Reduction Act of 1995,Public Law 104–13. Copies of thesubmission(s) may be obtained bycalling the Treasury Bureau ClearanceOfficer listed. Comments regarding thisinformation collection should beaddressed to the OMB reviewer listedand to the Treasury DepartmentClearance Officer, Department of theTreasury, Room 2110, 1425 New YorkAvenue, NW., Washington, DC 20220.DATES: Written comments should bereceived on or before August 20, 2001to be assured of consideration.

Internal Revenue Service (IRS)OMB Number: 1545–0192.Form Number: IRS Form 4562.Type of Review: Revision.Title: Depreciation and Amortization

(Including Information on ListedProperty).

Description: Taxpayers use Form 4562to: (1) claim for depreciation and/oramortization; (2) make a section 179election to expense depreciable assets;and (3) answer questions regarding theuse of automobiles and other listedproperty to substantiate the business useunder section 274(d).

Respondents: Individuals orhouseholds, Business or other for-profit,Farms.

Estimated Number of Respondents/Recordkeepers: 6,500,000.

Estimated Burden Hours PerRespondent/Recordkeeper:Recordkeeping—37 hr., 19 min.Learning about the law or the form—5

hr., 10 min.Preparing and sending the form to the

IRS—5 hr., 59 min.Frequency of Response: Annually.Estimated Total Reporting/

Recordkeeping Burden: 298,367,500hours.

Clearance Officer: Garrick Shear,Internal Revenue Service, Room 5244,1111 Constitution Avenue, NW.,Washington, DC 20224.

OMB Reviewer: Alexander T. Hunt,(202) 395–7860, Office of Management

and Budget, Room 10202, NewExecutive Office Building, Washington,DC 20503.

Lois K. Holland,Departmental Reports Management Officer.[FR Doc. 01–18144 Filed 7–19–01; 8:45 am]BILLING CODE 4830–01–P


Customs Service

[T.D. 01–53]

Cancellation of Customs BrokerLicenses

AGENCY: U.S. Customs Service,Department of the Treasury.

ACTION: Customs broker licensecancellations.

SUMMARY: Pursuant to section 641 of theTariff Act of 1930 as amended (19 USC1641) and the Customs Regulations (19CFR 111), the following Customs brokerlicenses are cancelled. Some of theseentities continue to provide brokerservices under another of their multiplelicense numbers. Because previouspublication of some records cannot bereadily verified, the records are nowbeing published to ensure Customscompliance with administrativerequirements.

Name License Port name

A.J. Murray Co., Inc. ................................................................................................................................................. 03571 New York.A.W. Fenton Co., Inc. ............................................................................................................................................... 06697 New York.AA Customs Brokers Trueba Saldivar ...................................................................................................................... 14365 El Paso.ABC Int’l .................................................................................................................................................................... 03154 New York.Abramo, Frank C. ..................................................................................................................................................... 02026 New York.Accelerated Customs Brokers .................................................................................................................................. 07411 San Francisco.Accelerated Shipping Co. ......................................................................................................................................... 10412 New York.Aeolian Shipping Co., Inc. ........................................................................................................................................ 02527 New York.Aero Space Cargo, Inc. ............................................................................................................................................ 06172 New York.AF Int’l ....................................................................................................................................................................... 09568 New York.Air Marine Brokers Ltd. ............................................................................................................................................. 05596 New York.Air-Barr Shipping Corporation ................................................................................................................................... 03514 New York.Airport Clearance Service, Inc. ................................................................................................................................. 04446 New York.Allen Forwarding (NY), Inc. ...................................................................................................................................... 05344 New York.Altenberg, Hans ........................................................................................................................................................ 04126 New York.Alternative Brokers Int’l, Inc. ..................................................................................................................................... 09634 New York.Am-Can Freight Forwarders ..................................................................................................................................... 04784 New York.Ambrosio, Dominc J. ................................................................................................................................................. 02657 New York.Amerford Int’l Corporation ......................................................................................................................................... 03424 New York.American Safe System, Inc. ..................................................................................................................................... 04612 New York.Amshico Corp. .......................................................................................................................................................... 05835 New York.Anderson, Robert L. .................................................................................................................................................. 04951 Seattle.Arnold, Alfred H. ....................................................................................................................................................... 02209 New York.Arthur J. Fritz Co., Inc. ............................................................................................................................................. 02876 Seattle.Ascione, Pasquale .................................................................................................................................................... 00901 New York.Augerot, William ........................................................................................................................................................ 03454 New York.AUT Import Services, Inc. ......................................................................................................................................... 07460 New York.Avery, Dwain O. ........................................................................................................................................................ 04486 Tampa.B & L Customs Brokers, Inc. .................................................................................................................................... 05837 New York.Baker, Irons & Dockstader, Inc. ................................................................................................................................ 01445 New York.Baldassano, Vincent ................................................................................................................................................. 01807 New York.Barbieri, Philip A. ...................................................................................................................................................... 02092 New York.




Barbieri, Stephen ...................................................................................................................................................... 02222 New York.Barnett, Lawrence ..................................................................................................................................................... 02587 New York.Barnett/Novo Int’l Corp. ............................................................................................................................................ 04364 New York.BDP Int’l, Inc. ............................................................................................................................................................ 09097 New York.Beacon Shipping Co., Inc. ........................................................................................................................................ 03729 New York.Becker, Stewart ......................................................................................................................................................... 09145 New York.Bee Int’l, Inc. ............................................................................................................................................................. 05828 Tampa.Behring Int’l, Inc. ....................................................................................................................................................... 05171 New York.Benkart, F.J. .............................................................................................................................................................. 01148 New York.BJG Int’l, Inc. ............................................................................................................................................................ 04407 New York.Blankley, Joseph R. .................................................................................................................................................. 01547 New York.Bonvissuto, Michael .................................................................................................................................................. 02249 New York.Bowen, Albert E. ....................................................................................................................................................... 03721 New York.Brian R. Glynn CHB, Inc. .......................................................................................................................................... 07303 New York.Bridgetts, Donald P. .................................................................................................................................................. 02512 New York.Bridgetts, William F. .................................................................................................................................................. 01909 New York.Bridgetts & Co., Inc. .................................................................................................................................................. 01479 New York.Briggs, Samuel Augustus, Jr. ................................................................................................................................... 03007 New York.Bruce Duncan Company, Inc. ................................................................................................................................... 04321 New York.Burlington Air Imports ............................................................................................................................................... 07294 New York.Burlington Air Imports, Inc. ....................................................................................................................................... 06963 Los Angeles.C.A. Haynes & Co., Inc. ........................................................................................................................................... 03699 New York.C.F. Liebert, Inc. ....................................................................................................................................................... 04297 Seattle.C.H. Powell Co., Inc. ................................................................................................................................................ 02501 New York.C.H. Timm & Son, Inc. .............................................................................................................................................. 02758 New York.Cal-Asia Int’l, Inc. ...................................................................................................................................................... 05360 San Francisco.California Capitol Exports ......................................................................................................................................... 09769 San Francisco.Cargo Clearance Corp. ............................................................................................................................................. 04253 New York.Cargo Express Custom Brokers, Inc. ....................................................................................................................... 05599 New York.Cargo Network, Inc. .................................................................................................................................................. 07081 New York.Carney, John M. ....................................................................................................................................................... 03483 New York.Centanni, Julius S. .................................................................................................................................................... 04606 New Orleans.Cerillo, Salvatore J. ................................................................................................................................................... 01997 New York.Chiarini, Joseph ........................................................................................................................................................ 02573 New York.Christie, Roy G. W. ................................................................................................................................................... 05843 Tampa.Circle Int’l, Inc. .......................................................................................................................................................... 04460 New York.Cizzon Corporation ................................................................................................................................................... 04572 Chicago.Coates, John ............................................................................................................................................................. 02437 New York.Compagnie d’Affretement/Transport ......................................................................................................................... 07182 New York.Conigliaro, Andrew S. ............................................................................................................................................... 02571 New York.Coniglio, Salvatore .................................................................................................................................................... 02773 New York.Connors, James ........................................................................................................................................................ 02589 San Francisco.Consolidated Freightways Export Import .................................................................................................................. 07874 New York.Conway Customs Brokerage, Inc. ............................................................................................................................ 10063 New York.Copeland Importing Services, Inc. ............................................................................................................................ 03697 New York.Corff, Frank ............................................................................................................................................................... 02467 New York.Coronet Brokers Int’l, Ltd. ......................................................................................................................................... 04260 New York.Courtney Int’l Forwarding, Inc. .................................................................................................................................. 12399 New York.Cronin, Denis ............................................................................................................................................................ 01907 New York.Cugus, Edward ......................................................................................................................................................... 02775 New York.Culhane, Thomas F. ................................................................................................................................................. 09003 New York.Cunningham, Martin H. ............................................................................................................................................. 07865 Tampa.Cutroneo, Salvatore .................................................................................................................................................. 02871 New York.Danamar Associates, Ltd. ......................................................................................................................................... 09359 Chicago.Danheuser, Edwin J. ................................................................................................................................................. 03695 New York.Davis, A.D. ................................................................................................................................................................ 01080 New York.DCI Int’l ..................................................................................................................................................................... 05227 New York.DCI Int’l ..................................................................................................................................................................... 05007 San Francisco.Dean Int’l, Ltd. ........................................................................................................................................................... 04002 New York.DeMarco, Rosalie J. ................................................................................................................................................. 09228 New York.Dennis O’Donnell, Ltd. .............................................................................................................................................. 06330 New York.Desmond, Benjamin F. ............................................................................................................................................. 02638 New York.Dietrich, Peter J. ....................................................................................................................................................... 00844 New York.Dingelstedt & Co. ...................................................................................................................................................... 05126 New York.Distribution Services Int’l, Inc. .................................................................................................................................. 06184 San Francisco.Division M, Inc. ......................................................................................................................................................... 04729 Chicago.DNT Customs Services, Inc. .................................................................................................................................... 11516 Los Angeles.Dorf Int’l, Inc. ............................................................................................................................................................. 01687 New York.Dubienny, Theodore H. ............................................................................................................................................. 02360 New York.DUE Int’l, Inc. ............................................................................................................................................................ 10932 Los Angeles.Dunlap, Alpers & Mott, Inc. ....................................................................................................................................... 02343 New York.Dunnington, Guy A. .................................................................................................................................................. 01774 New York.Dunnington & Arnold Int’l Inc. ................................................................................................................................... 06277 New York.Dunnington & Arnold, Inc. ......................................................................................................................................... 02654 New York.




Dyson Shipping Co., Inc. .......................................................................................................................................... 00219A New York.E.D.S. Int’l Shipping .................................................................................................................................................. 07761 New York.Eads, Larry W. .......................................................................................................................................................... 04561 San Francisco.Echavarria, Rodlopho S. ........................................................................................................................................... 16679 Laredo.Edwards, Joseph ...................................................................................................................................................... 01749 New York.Eilenberg, Carl .......................................................................................................................................................... 01897 New York.Eisemann, Everett H. ................................................................................................................................................ 02375 New York.Emery Air Freight ...................................................................................................................................................... 06341 Dallas/Ft Worth.Emery Distribution Systems, Inc. .............................................................................................................................. 04576 New York.Encarnacion, Aurelio ................................................................................................................................................. 06230 Los Angeles.English, Edward J. .................................................................................................................................................... 01627 New York.Enterprise Shipping Corp. ......................................................................................................................................... 09328 New York.Enterprise Shipping Corp. ......................................................................................................................................... 04021 San Francisco.Ernst & Young ........................................................................................................................................................... 10913 San Francisco.Eugene T. Gillen, Inc. ............................................................................................................................................... 03748 New York.Euramex Custom House Brokers, Inc. ..................................................................................................................... 06402 New York.Express Forwarding and Storage Co., Inc. .............................................................................................................. 02686 New York.F.L. Kraemer & Co. ................................................................................................................................................... 00040A New York.F.L. Kraemer & Co., Inc. ........................................................................................................................................... 07349 New York.F.W. Myers & Co., Inc. ............................................................................................................................................. 04642 New York.F.W. Myers & Co., Inc. ............................................................................................................................................. 00729 Champlain.F.W. Myers Co., Inc. ................................................................................................................................................. 07612 Seattle.Falkenmayer, Charles W. ......................................................................................................................................... 02338 New York.Fast Flowers, Inc. ..................................................................................................................................................... 09872 New York.Feigelson, Alan ......................................................................................................................................................... 06594 New York.Fenderson, Frank H. ................................................................................................................................................. 02747 Portland, ME.Forlenza, Nunzi A. .................................................................................................................................................... 03629 New York.Francesco Paris Forwarding Corp. ........................................................................................................................... 02846 New York.Francis, Louis ............................................................................................................................................................ 01962 New York.Frank P. Dow Co., Inc. ............................................................................................................................................. 06996 San Francisco.Freedman, Jerome .................................................................................................................................................... 03041 New York.Freedman & Slater Air Cargo Corp. ......................................................................................................................... 06138 New York.Freedman & Slater Air Cargo Corp. ......................................................................................................................... 04348 New York.Freedman & Slater Inc. ............................................................................................................................................. 06137 New York.Freight Base Customs Brokers, Inc. ......................................................................................................................... 06740 New York.Freight Expediters, Inc. ............................................................................................................................................. 05955 New York.Freight Wings (Partnership) ...................................................................................................................................... 09362 New York.Friemel, Arnold L. ..................................................................................................................................................... 00043A New York.Frieson, Brenda Lyles ............................................................................................................................................... 05727 St. Louis.Fritz Companies, Inc. ................................................................................................................................................ 07408 Tampa.Fuschetto, Anthony ................................................................................................................................................... 02755 New York.G. Amador Corporation ............................................................................................................................................. 05478 San Francisco.G.A. Lopez Forwarding/Shipping Co. ....................................................................................................................... 03683 New York.Gale, David ............................................................................................................................................................... 04474 New York.Garcia, Michael, Jr. ................................................................................................................................................... 02529 New York.Gedenk of Panatlantic, Inc. ...................................................................................................................................... 06205 New York.Gehrig, John ............................................................................................................................................................. 02116 New York.General Shipping/Trading Co., Inc. .......................................................................................................................... 04050 New York.George S. Bush Co., Inc. ......................................................................................................................................... 00096 Seattle.Gerhard & Hey Co., Inc. ........................................................................................................................................... 00731 New York.GFI Customs Brokers, Inc. ....................................................................................................................................... 07949 San Francisco.Ginsberg, Lawrence .................................................................................................................................................. 02470 New York.Gladish & Associates ................................................................................................................................................ 09384 San Francisco.Glogower, Jack ......................................................................................................................................................... 04217 New York.Glory Int’l Forwarders, Inc. ....................................................................................................................................... 05760 New York.Gommi, Julius W. ...................................................................................................................................................... 00900 New York.Grealy, Eileen T. ....................................................................................................................................................... 04702 New York.Gremillion, Ben L. ..................................................................................................................................................... 05046 New OrleansGuglielmo, A. ............................................................................................................................................................ 10030 New York.Gutman, Gertrude E. ................................................................................................................................................ 05542 New York.H.A. Gogarty ............................................................................................................................................................. 01514 New YorkH.P. Lambert Company, Inc. .................................................................................................................................... 06579 Portland, ME.H.W. Robinson Air Freight Corp. .............................................................................................................................. 02645 New York.Halperin Shipping Co., Inc. ....................................................................................................................................... 03059 New York.Haniel-Phoenix Transport, Inc. ................................................................................................................................. 10042 New York.Hannon, Timothy Otto ............................................................................................................................................... 07277 San Francisco.Hanrahan-Evans, Inc. ............................................................................................................................................... 04084 New York.Harder, Joseph E. ..................................................................................................................................................... 02348 New York.Harlo-Air Cargo Brokers, Inc. ................................................................................................................................... 03142 New York.Harper Robinson Company ...................................................................................................................................... 03147 Seattle.Harper, Robinson & Company .................................................................................................................................. 06529 Tampa.Harris Brown, Inc. ..................................................................................................................................................... 07875 New York.Harry F. Long, Inc. .................................................................................................................................................... 04884 San Francisco.Hauser Air Corp. ....................................................................................................................................................... 04504 New York.




HAV Int’l Freight Corp. .............................................................................................................................................. 09507 New York.Hayes & Cupitt .......................................................................................................................................................... 03072 New York.Heer, Alfons .............................................................................................................................................................. 03927 New York.Heldl’s Incorporated .................................................................................................................................................. 02293 New York.Helstrom, Friedman, DiGiacoma, Inc. ...................................................................................................................... 03917 New York.Henkell, Robert Edward ............................................................................................................................................ 02258 New York.Hermann Ludwig, Inc. ............................................................................................................................................... 04479 New York.Hirshbach & Smith, Inc. ............................................................................................................................................ 00114A New York.Hocherman, Joseph .................................................................................................................................................. 02365 New York.Humphrey McGreggor, Inc. ...................................................................................................................................... 02585 Tampa.Hundt, Frederick W. .................................................................................................................................................. 01657 New York.Hyams, Jack P. ......................................................................................................................................................... 02660 New York.Hyams Expedition Corp. ........................................................................................................................................... 04714 New York.I.T.C. Compu-Customs Corp. ................................................................................................................................... 04366 New York.Imperial Brokerage Corp. .......................................................................................................................................... 06663 New York.Import Specialist Assoc., Ltd. ................................................................................................................................... 09618 New York.INB Int’l, Inc. ............................................................................................................................................................. 04465 New York.Inter-Maritime Forwarding Co. .................................................................................................................................. 07369 Los Angeles.Inter-Maritime Forwarding Co. .................................................................................................................................. 07201 Chicago.Intercontinental Customs Brokers, Inc. ..................................................................................................................... 04823 Los Angeles.Intercontinental Forwarders, Inc. .............................................................................................................................. 06084 New York.Int’l Consumer Sales Inc. .......................................................................................................................................... 11865 New York.Int’l Customs & Shipping .......................................................................................................................................... 09378 New York.Int’l Customs Services, Inc. ...................................................................................................................................... 03431 San Francisco.Int’l Expediters, Inc. .................................................................................................................................................. 02565 New York.Int’l Freight Consultants, Inc. .................................................................................................................................... 06691 New York.Int’l Trade Services Inc. ............................................................................................................................................ 09532 Chicago.Intertrans Corporation ............................................................................................................................................... 06729 New Orleans.Ira Furman & Co., Inc. .............................................................................................................................................. 04977 New York.J.B. Wood Shipping Co., Inc. ................................................................................................................................... 01204 New York.J.D. Smith Inter-Ocean, Inc. ..................................................................................................................................... 04306 New York.JFMNY. Inc. .............................................................................................................................................................. 09096 New York.J.J. Boll, Inc. ............................................................................................................................................................. 03701 New York.J.J. Gavin & Co. ........................................................................................................................................................ 00252A New York.J.M. Cargo, Inc. ........................................................................................................................................................ 11725 New York.James, Thomas C. .................................................................................................................................................... 05677 Tampa.James A. Bronson, Inc. ............................................................................................................................................ 04989 Seattle.James E. Fox & Co., Inc. ......................................................................................................................................... 01348 New York.James G. Wiley Co. .................................................................................................................................................. 03425 San Francisco.James J. Boyle & Company ..................................................................................................................................... 03728 San Francisco.James Loudon & Co. ................................................................................................................................................ 02992 San Francisco.John H. Faunce, Inc. ................................................................................................................................................ 03649 New York.John J. Coates, Inc. .................................................................................................................................................. 03698 New York.John M. Carney, Inc. ................................................................................................................................................ 06871 New York.John V. Carr & Son, Corp. (NY) ............................................................................................................................... 06889 New York.JTS AirFreight Corporation ....................................................................................................................................... 06650 New York.Judson Sheldon Int’l ................................................................................................................................................. 03192 New York.’’K‘‘ Air Brokerage, Inc. ............................................................................................................................................. 09610 New York.K&M Customs Brokers Int’l, Inc. ............................................................................................................................... 04664 New York.K&M Customs Brokers, Inc. ..................................................................................................................................... 04261 New York.Kamen, Howard ........................................................................................................................................................ 01007 New York.Karl Roessner Cargo Service, Inc. ........................................................................................................................... 10164 New York.Karl Schroff Associates, Inc. ..................................................................................................................................... 04793 Seattle.Karl Schroff Int’l, Inc. ................................................................................................................................................ 14408 San Francisco.Kelley, Lawrence W. ................................................................................................................................................. 02617 Portland, ME.Kelly, Thomas P. ....................................................................................................................................................... 07308 New Orleans.Kennedy World Wide, Inc. ........................................................................................................................................ 09601 New York.Kimoto, Paul T. ......................................................................................................................................................... 05712 San Francisco.Kimoto, Paul .............................................................................................................................................................. 06065 Los Angeles.King Shipping Co., Inc. ............................................................................................................................................. 04709 New York.King Shipping Company ........................................................................................................................................... 02867 New York.Kirk, John .................................................................................................................................................................. 04980 San Francisco.Knoring, Abraham J. ................................................................................................................................................. 01333 New York.Korbul, Joseph .......................................................................................................................................................... 03214 New York.Kormin Shipping Co., Inc. ......................................................................................................................................... 03419 New York.Kraemer, John Frederick .......................................................................................................................................... 02538 New York.Kraemer, Albert E.C. ................................................................................................................................................. 00030 New York.L.A. Ferm Company, Inc. .......................................................................................................................................... 02957 New York.Landau, Sylvia J. ...................................................................................................................................................... 01062 New York.Lang & Marshall Company, Inc. ............................................................................................................................... 02664 New York.Lansen, John P. ........................................................................................................................................................ 01083 New York.Lansen-Naeve Corporation ....................................................................................................................................... 01504 New York.LaRosa, John ............................................................................................................................................................ 00869 New York.Latherow, Charles A. ................................................................................................................................................ 10256 Tampa.




Lauderdale, Melvin L. ............................................................................................................................................... 07960 New York.Leemar Import, Inc. ................................................................................................................................................... 09641 New York.Lefkowits, David ........................................................................................................................................................ 02574 New York.Lehart-Schwartz Shipping Corp. ............................................................................................................................... 03061 New York.Lehat-Schwartz & Associates, Inc. ........................................................................................................................... 03080 New York.Lehder, Wilfred E. ..................................................................................................................................................... 06224 New Orleans.Leiner, Melvin ............................................................................................................................................................ 03839 New York.Leo Int’l ..................................................................................................................................................................... 05903 New York.LEP Transport, Inc. ................................................................................................................................................... 05223 San Francisco.Leyden Customs Expediters, Inc .............................................................................................................................. 03149 New York.Liberty Int’l NY, Inc ................................................................................................................................................... 11293 New York.Linsenmeyer, Richard J ............................................................................................................................................ 01802 New York.Livingston Int’l Inc ..................................................................................................................................................... 04639 New York.Locurto & Funk, Inc .................................................................................................................................................. 02711 New York.Losekamp, Bernard Mark ......................................................................................................................................... 13475 Cleveland .Lund Pullara, Inc ....................................................................................................................................................... 04438 Tampa.M.J. Corbett & Co., Inc ............................................................................................................................................. 00081A New York.M.J. Corbett Air Division Corp .................................................................................................................................. 02964 New York.Mack, Isabelle E ....................................................................................................................................................... 02471 New York.Mallon, Vincent J ...................................................................................................................................................... 04976 New York.Marin, Juan E ............................................................................................................................................................ 12513 San Juan.Marion Shipping Co., Inc .......................................................................................................................................... 02728 New York.Markwalter, Frank J .................................................................................................................................................. 00591 New York.Mazzola, Joseph J .................................................................................................................................................... 09171 New York.McCarthy, Michael Joseph ....................................................................................................................................... 03429 New York.McFarland, C.J .......................................................................................................................................................... 01470 New York.McGarry, William J .................................................................................................................................................... 02185 New York.McGregor Sea & Air Services .................................................................................................................................. 04927 San Francisco.McGuinness, James ................................................................................................................................................. 05608 New York.McLean Cargo Specialists, Inc ................................................................................................................................. 07629 New York.Medina, Manuel H ..................................................................................................................................................... 03069 New York.Meyers Group (USA), Inc ......................................................................................................................................... 11970 New York.Modern Intermodal Traffic Co ................................................................................................................................... 04009 New York.Mohegan Int’l Corp ................................................................................................................................................... 02485 New York.Monahan, Joanne M ................................................................................................................................................. 09724 Buffalo.Monarch Customs Brokers/Forwarders .................................................................................................................... 10770 New York.Monroe, Carl G ......................................................................................................................................................... 04571 Chicago.Movers Port Service, Inc .......................................................................................................................................... 09382 New York.MRH Int’l, Ltd ............................................................................................................................................................ 08012 New York.Muklfelder, Ronald .................................................................................................................................................... 05970 New York.N.J. Defonte Co., Inc ................................................................................................................................................ 03916 New York.N.M. Albert Co., Inc .................................................................................................................................................. 02405 New York.Naeve, H.N ............................................................................................................................................................... 01118 New York.Nardella, Michael ...................................................................................................................................................... 02718 New York.New York Customs Brokers, Inc .............................................................................................................................. 03559 New York.New York Forwarding, Inc ........................................................................................................................................ 13351 New York.New York Int’l Customs Service ............................................................................................................................... 04098 New York.Newbalt Associates, Inc ............................................................................................................................................ 03307 New York.Newman, Nathan ...................................................................................................................................................... 01552 New York.Nicol, Frank ............................................................................................................................................................... 02946 Los AngelesNordisk Transport, Inc .............................................................................................................................................. 02885 New York.Norman G. Jensen, Inc ............................................................................................................................................. 02095 Duluth.Norman G. Jensen, Inc ............................................................................................................................................. 05373 San Francisco.O’Connell, Joseph P ................................................................................................................................................. 01632 New York.Oishi, Karla ............................................................................................................................................................... 10604 Los Angeles.Opera Shipping Corp ................................................................................................................................................ 04683 New York.Oujevolk, George B .................................................................................................................................................. 02350 New York.Overton & Co. CHB, Inc ........................................................................................................................................... 05187 New York.Pad Import, Inc ......................................................................................................................................................... 05628 San Francisco.Panalpina Airfreight, Inc ............................................................................................................................................ 04616 Dallas.Panalpina, Inc ........................................................................................................................................................... 07577 Washington, DC.Passman, Edward M ................................................................................................................................................. 01611 New York.Paulssen & Guice, Ltd .............................................................................................................................................. 04387 New York.Pederson, Walter L ................................................................................................................................................... 00749 New York.Penson & Company .................................................................................................................................................. 04182 San Francisco.Perel, Maurice ........................................................................................................................................................... 04259 New York.Person & Weidhorn, Inc ............................................................................................................................................ 03661 New York.Plichta, Felix A .......................................................................................................................................................... 02374 New York.Polese, John ............................................................................................................................................................. 02616 New York.Porter Expediters, Inc ............................................................................................................................................... 09599 New York.Pratt, Ian C ................................................................................................................................................................ 17487 New York.Preferred LSI, Inc ...................................................................................................................................................... 13840 Los Angeles.Premier Shipping Company, Inc ............................................................................................................................... 04448 New York.Prime Customs Brokers Inc ...................................................................................................................................... 10798 New York.




PS Clearance Associates, Inc .................................................................................................................................. 06177 New York.Pui Ching Company, Inc ........................................................................................................................................... 16232 Los Angeles.Quigley, Laurence J .................................................................................................................................................. 02483 New York.R&Y Int’l Customs Brokers ....................................................................................................................................... 09600 New York.R.A. Leslie & Company ............................................................................................................................................ 08093 New York.R.G. Hobelman & Company, Inc .............................................................................................................................. 05009 San Francisco.Radix Group Int’l, Inc ................................................................................................................................................ 07175 San Francisco.Radix Group Int’l, Inc ................................................................................................................................................ 07492 Dallas.Ray-Mar Expedition Corp ......................................................................................................................................... 04737 New York.Redondo, Leticia S ................................................................................................................................................... 05788 San Francisco.Reiss, Josiah ............................................................................................................................................................. 00720 New York.Republic Interocean Corp ......................................................................................................................................... 03110 New York.Richard Castillo CHB ................................................................................................................................................ 10014 New York.Rijabatainer, Inc ........................................................................................................................................................ 06199 New York.Robbins, Allen J ........................................................................................................................................................ 04451 New York.Robbins, Stuart ......................................................................................................................................................... 05041 New York.Robbins, Fleisig & Phelps, Inc .................................................................................................................................. 04662 New York.Roberts, Chester G ................................................................................................................................................... 06151 New York.Rodgers, John Martin ............................................................................................................................................... 01776 New York.Roth, Charles S ........................................................................................................................................................ 02461 New York.Royal Freight Brokers, Inc ........................................................................................................................................ 06893 New York.Rubino, Joseph A ..................................................................................................................................................... 01564 New York.Ryan, Joseph F ......................................................................................................................................................... 02858 New York.S. Jackson & Sons ................................................................................................................................................... 00028 New Orleans.S. Stern & Company ................................................................................................................................................. 02075 New York.Salehzadeh, Judith Ann ............................................................................................................................................ 09637 Chicago.Santarelli, Joseph C .................................................................................................................................................. 02960 New York.Sasson, Samuel H .................................................................................................................................................... 05730 New York.Scansped Flight, Inc ................................................................................................................................................. 05297 New York.Schaaf, Walter .......................................................................................................................................................... 01077 New York.Schenkers Int’l Forwarders, Inc ................................................................................................................................ 04673 Norfolk.Schmid, Baldwin R .................................................................................................................................................... 03374 New York.Schmid’s Forwarding (NJ), Inc ................................................................................................................................. 05869 New York.Schmitt, Albert C. ...................................................................................................................................................... 02521 New York.Schraub, Jerome ....................................................................................................................................................... 03958 New York.Schreter, Otto C. ....................................................................................................................................................... 00766 New York.Schroff, Karl W., Jr. .................................................................................................................................................. 13544 San Francisco.Schwartz, Gerald ...................................................................................................................................................... 03494 New York.Schwartz, Norman C. ................................................................................................................................................ 04539 New York.Scibelli, Eugene ........................................................................................................................................................ 07224 New York.Sea Lanes Shipping Co., Inc. ................................................................................................................................... 03212 New York.Sea-Lanes Freighting Corp. ...................................................................................................................................... 04022 New York.Seamodal Transport Corporation ............................................................................................................................. 06015 Chicago.Seaport Shipping Co., Inc. ........................................................................................................................................ 04677 San Francisco.Seller, Charles W. ..................................................................................................................................................... 00536 New York.Seven Seas Brokers, Inc. ......................................................................................................................................... 05734 Miami.Shigoto Customs Brokers, Inc. ................................................................................................................................. 03402 New York.Shipco, Inc. ............................................................................................................................................................... 06630 New York.Sichel, Edwin ............................................................................................................................................................ 01896 New York.Sirota, Barney ........................................................................................................................................................... 02631 New York.Skyline Cargo Services, Inc. ..................................................................................................................................... 04850 New York.Slater, Jerome ........................................................................................................................................................... 02259 New York.Smith, Elaine A. ........................................................................................................................................................ 02414 New York.Smith, Theodore B., Jr. ............................................................................................................................................. 01755 New York.Sobel Shipping Company ......................................................................................................................................... 02749 New York.SOL Int’l, Inc. ............................................................................................................................................................ 11675 New York.Sopac Transport Corp. ............................................................................................................................................. 02723 New York.Southwest Customs Service Corp. ........................................................................................................................... 13271 Los Angeles.Stair Cargo Brokers, Inc. .......................................................................................................................................... 09442 New York.Sterling Cargo Int’l, Inc. ............................................................................................................................................ 13809 Dallas.Strategic Transportation Company ........................................................................................................................... 05916 San Francisco.Stringfield, William M. ............................................................................................................................................... 06503 Los Angeles.Suber, Julia Thomas ................................................................................................................................................. 10975 Savannah.Sullivan, Garrett X. .................................................................................................................................................... 02332 New York.Super Sonic Transport .............................................................................................................................................. 04368 New York.Superior Customs Brokers, Inc. ................................................................................................................................ 05019 New York.Surface Air Int’l, Inc. ................................................................................................................................................. 04941 New York.Synodis, John ........................................................................................................................................................... 02136 New York.T.J. Cavanagh Associates, Inc. ................................................................................................................................ 09225 New York.Tarus, Charles J. ...................................................................................................................................................... 02204 New York.Tassa, Nicholas ........................................................................................................................................................ 05511 New York.Theodore B. Smith Company, Inc. ........................................................................................................................... 02077 New York.Thomas, Charles M. ................................................................................................................................................. 01418 New York.Thornley & Pitt .......................................................................................................................................................... 02822 San Francisco.




Three Way CHB ........................................................................................................................................................ 06274 New York.Timke, Robert ........................................................................................................................................................... 02572 New York.Tomas Shipping Company, Inc. ............................................................................................................................... 03088 New York.Traffic Int’l Corp. (LAX) ............................................................................................................................................. 13916 Los Angeles.Trans Air Import, Inc. ................................................................................................................................................ 03509 New York.Trans-Orient Int’l Freight ........................................................................................................................................... 06112 New York.Transatlas Int’l, Inc. ................................................................................................................................................... 04727 New York.Turnpike Express Corp. ............................................................................................................................................ 11903 New York.Twis Int’l, Inc. ............................................................................................................................................................ 03984 New York.Tyson, Donald B. ...................................................................................................................................................... 02622 New York.Unit Int’l of Miami ...................................................................................................................................................... 13168 Miami.United Customs Inc. ................................................................................................................................................. 05423 New York.United Import Services, Inc. ..................................................................................................................................... 09847 New York.Vanguard Import Services, Inc. ................................................................................................................................ 04865 New York.VanWie, Joseph P. ................................................................................................................................................... 02786 New York.Venslovaitis, Virginia H. ............................................................................................................................................ 11779 Champlain.Vinson, Benjamin ...................................................................................................................................................... 01779 New York.W.A. Phelps & Co., Inc. ............................................................................................................................................ 04644 New York.W.C. Auger & Company ........................................................................................................................................... 03011 San Francisco.W.J. Byrnes-Air Division, Inc. ................................................................................................................................... 00060 San Francisco.W.J. Byrnes-Air Division, Inc. ................................................................................................................................... 02285 San Francisco.W.R. Keating & Co., Inc. .......................................................................................................................................... 01566 New York.Waldron Bowers, Inc. ................................................................................................................................................ 04201 Honolulu.Wilcox, Sherri ............................................................................................................................................................ 11719 Los Angeles.William L. Bane & Co. .............................................................................................................................................. 02295 New York.Winslow Manly, Inc. .................................................................................................................................................. 03772 New York.Wolf & Gerber ........................................................................................................................................................... 06313 New York.World Express Group ............................................................................................................................................... 13122 San Francisco.World Freight Forwarders, Inc. ................................................................................................................................. 13055 New York.World Trade Customs Brokers, Inc. ......................................................................................................................... 04122 New York.WTC Import Services, Inc. ........................................................................................................................................ 09997 New York.WTC Int’l, Inc. ........................................................................................................................................................... 04501 San Francisco.WTC Int’l, Inc. ........................................................................................................................................................... 04067 New York.WTT Customs House Brokerage, Inc. ...................................................................................................................... 07181 Washington, DC.XL Brokers Int’l, Inc. ................................................................................................................................................. 10385 Seattle.York Marine, Ltd. ...................................................................................................................................................... 07348 New York.Young, James ........................................................................................................................................................... 02605 New York.

Dated: July 5, 2001.John H. Heinrich,Acting Assistant Commissioner, Office ofField Operations.[FR Doc. 01–18163 Filed 7–19–01; 8:45 am]BILLING CODE 4820–02–P


Customs Service

Application for Recordation of TradeName: ‘‘French DermatologicalLaboratory’’

ACTION: Notice of Application forRecordation of Trade Name.

SUMMARY: Application has been filedpursuant to section 133.12, CustomsRegulations (19 CFR 133.12), for therecordation under section 42 of the Actof July 5, 1946, as amended (15U.S.C.1124), of the trade name ‘‘FrenchDermatological Laboratory,’’ used byContinental/Laboratories Medica, SARL,(‘‘CLM’’), located at Centre Nepture, Ruedes Maraichers, 33260 La Teste, France.

The application states that the tradename is used in connection with soap.

The particular cosmetics sold under theTrade Name include:Lait ‘‘FAIR & WHITE’’ (Lightening milk)Gel-creme ‘‘FAIR & WHITE’’ (Cream gel)Gel actif plus ‘‘FAIR & WHITE’’ (Active

lightening gel)Creme ‘‘FAIR & WHITE’’ (Lightening

cream)Serum Eclaircissant ‘‘FAIR & WHITE’’

(Lightening Serum)Soap ‘‘FAIR & WHITE’’

Before final action is taken on theapplication, consideration will be givento any relevant data, views, orarguments submitted in writing by anyperson in opposition to the recordationof this trade name. Notice of the actiontaken on the application for recordationof this trade name will be published inthe Federal Register.DATES: Comments must be received onor before September 18, 2001.ADDRESSES: Written comments shouldbe addressed to U.S. Customs Service,Attention: Intellectual Property RightsBranch, 1300 Pennsylvania Avenue,NW., Washington, DC 20229.FOR FURTHER INFORMATION CONTACT:Delois P. Johnson, Intellectual PropertyRights Branch, 1300 Pennsylvania

Avenue, NW., Washington DC 20229(202–927–2330).

Dated: July 17, 2001.George F. McCray,Acting Chief, Intellectual Property RightsBranch.[FR Doc. 01–18162 Filed 7–19–01; 8:45 am]BILLING CODE 4820–02–P


Customs Service

Application for Recordation of TradeName: ‘‘Labo. Derma’’

ACTION: Notice of application forrecordation of trade name.

SUMMARY: Application has been filedpursuant to section 133.12, CustomsRegulations (19 CFR 133.12), for therecordation under section 42 of the Actof July 5, 1946, as amended (15U.S.C.1124), of the trade name ‘‘Labo.Derma,’’ used by Continental/Laboratories Medica, SARL, (‘‘CLM’’),located at Centre Nepture, Rue desMaraichers, 33260 La Teste, France.



The application states that the tradename is used in connection with soap.The particular cosmetics sold under theTrade Name include:

Lait ‘‘FAIR & WHITE’’ (Lightening milk)Gel-creme ‘‘FAIR & WHITE’’ (Cream gel)Gel actif plus ‘‘FAIR & WHITE’’ (Active

lightening gel)Creme ‘‘FAIR & WHITE’’ (Lightening

cream)Serum Eclaircissant ‘‘FAIR & WHITE’’

(Lightening Serum)Soap ‘‘FAIR & WHITE’’

Before final action is taken on theapplication, consideration will be givento any relevant data, views, orarguments submitted in writing by anyperson in opposition to the recordationof this trade name. Notice of the actiontaken on the application for recordationof this trade name will be published inthe Federal Register.DATES: Comments must be received onor before September 18, 2001.ADDRESSES: Written comments shouldbe addressed to U.S. Customs Service,Attention: Intellectual Property Rights

Branch, 1300 Pennsylvania Avenue,NW., Washington, DC 20229.

FOR FURTHER INFORMATION CONTACT:Delois P. Johnson, Intellectual PropertyRights Branch, 1300 PennsylvaniaAvenue, NW., Washington DC 20229(202–927–2330).

Dated: July 17, 2001.George F. McCray,Acting Chief, Intellectual Property RightsBranch.[FR Doc. 01–18164 Filed 7–19–01; 8:45 am]BILLING CODE 4820–02–P


This section of the FEDERAL REGISTERcontains editorial corrections of previouslypublished Presidential, Rule, Proposed Rule,and Notice documents. These corrections areprepared by the Office of the FederalRegister. Agency prepared corrections areissued as signed documents and appear inthe appropriate document categorieselsewhere in the issue.

Corrections Federal Register

38061

Vol. 66, No. 140



International Trade Administration

[A–560–802]

Certain Preserved Mushrooms FromIndonesia: Final Results ofAntidumping Duty AdministrativeReview

Correction

In notice document 01–17626beginning on page 36754 in the issue of

Friday, July 13, 2001, make thefollowing correction:

On page 36754, in the second column,the EFFECTVE DATE: ‘‘August 13,2001’’ is corrected to read ‘‘July 13,2001’’.

[FR Doc. C1–17626 Filed 7–19–01; 8:45 am]BILLING CODE 1505–01–D

VerDate 11<MAY>2000 12:53 Jul 19, 2001 Jkt 194001 PO 00000 Frm 00001 Fmt 4734 Sfmt 4734 E:\FR\FM\20JYCX.SGM pfrm09 PsN: 20JYCX

Friday,

July 20, 2001

Part II

EnvironmentalProtection Agency40 CFR Part 82Protection of Stratospheric Ozone;Allowance System for Controlling HCFCProduction, Import and Export; ProposedRule




40 CFR Part 82

[FRL–6929–9]

RIN 2060–AH67

Protection of Stratospheric Ozone:Allowance System for ControllingHCFC Production, Import and Export


SUMMARY: EPA is seeking comment on aproposed allowance system to controlthe United States (U.S.) production andconsumption of class II controlledsubstances, thehydrochlorofluorocarbons (HCFCs), inaccordance with U.S. obligations underthe Montreal Protocol on Substancesthat Deplete the Ozone Layer (Protocol).Under the Protocol, the U.S. is obligatedto limit HCFC consumption (defined bythe Protocol and this document asproduction plus imports, minus exports)under a specific cap, which will bereduced in a step-wise fashion overtime. The U.S. is also a signatory toamendments to freeze HCFC productionon January 1, 2004. EPA published anAdvance Notice of ProposedRulemaking (ANPRM) on April 5, 1999,laying out a variety of options fordeveloping an allowance system.Having fully considered comments onthe ANPRM, EPA is today proposing an

HCFC allowance system, similar inmany respects to the class I allowancesystem in place before January 1, 1996.Instituting such a system for HCFCswould allow EPA to ensure that the U.S.maintains compliance with the Protocolcaps, while providing certainty andpredictability to allowance holders. Inaddition, the Clean Air Act (CAA)requires EPA to establish an allowancesystem for HCFCs.

A slightly different version of thisdocument was signed on December 28,2000, by then Administrator CarolBrowner. It was sent forward to theFederal Register and made available onthe EPA Web site. It was not publishedin the Federal Register, but rather wasrecalled to EPA for review by theincoming Administration. In theinterim, EPA was alerted to somepotential discrepancies in baselineallocations; this led to the discovery thatthe tracking databases manifested somecorrelation errors. EPA reviewed allpaper records to determine accuratebaseline numbers, and the correctednumbers are included in this document.DATES: Comments on this proposed rulemust be received on or beforeSeptember 4, 2001, unless a publichearing is requested. Comments mustthen be received on or before 45 daysfollowing the public hearing. Any partyrequesting a public hearing must notifythe Stratospheric Ozone ProtectionHotline listed below by 5 p.m. EasternStandard Time on July 30, 2001.Following the period for requesting a

hearing, you may call the StratosphericOzone Protection Hotline to find outwhether a hearing will be held, and ifa hearing is held, the date and locationit will take place.ADDRESSES: Comments on this proposedrule should be submitted in duplicateto: The Air and Radiation Docket (6102),Air Docket No. A–98–33, U.S.Environmental Protection Agency, 401M Street, SW., Washington, DC, 20460.Inquiries regarding a public hearingshould be directed to the StratosphericOzone Protection Hotline at 1–800–269–1996.

Materials relevant to this rulemakingare contained in Docket No. A–98–33.The Docket is located in Room M–1500,First Floor, Waterside Mall at theaddress above. The materials may beinspected from 8 am until 4 p.m.Monday through Friday. A reasonablefee may be charged by EPA for copyingdocket materials.FOR FURTHER INFORMATION CONTACT: VeraAu, EPA, Global Programs Division,Office of Atmospheric Programs, Officeof Air and Radiation (6205-J), Ariel RiosBuilding, 1200 Pennsylvania Avenue,NW., Washington, DC, 20460, (202)564–2216 or the StratosphericProtection Hotline at (800) 296–1996.SUPPLEMENTARY INFORMATION:

Regulated Entities

The HCFC allowance allocationsystem would affect the followingcategories:

Category NAICS code SIC code Examples of regulated entities

Chlorofluorocarbon gas manufac-turing.

325120 2869 Chlorodifluoromethane manufacturers; Dichlorofluoroethane manufacturers;Chlorodifluoroethane manufacturers.

Chlorofluorocarbon gas importers ...... .................... .................... Chlorodifluoromethane importers; Dichlorofluoroethane importers;Chlorodifluoroethane importers.

Chlorofluorocarbon gas importers ...... .................... .................... Chlorodifluoromethane exporters; Dichlorofluoroethane exporters;Chlorodifluoroethane exporters.

Urethane and Other Foam Product(Except Polystyrene) Manufacturing.

326150 3086 Insulation and cushioning, foam plastics (except polystyrene) manufac-turing.

This table is not intended to beexhaustive, but rather provides a guidefor readers regarding entities likely to beregulated by this action. This table liststhe types of entities that EPA is nowaware could potentially be regulated bythis action. Other types of entities notlisted in this table could also beaffected. To determine whether yourfacility, company, businessorganization, etc., is regulated by thisaction, you should carefully examinethese proposed regulations. If you havequestions regarding the applicability ofthis action to a particular entity, consultthe person listed in the FOR FURTHERINFORMATION CONTACT section.

Abbreviations and Acronyms Used inThis Document

Act—Clean Air ActANPRM—Advance Notice of Proposed

RulemakingArticle 2 countries—industrialized

countriesArticle 5 countries—developing

countriesCAA—Clean Air ActCap—limitation in level of production

or consumptionCFC—chlorofluorocarbonCFR—Code of Federal RegulationsEPA—Environmental Protection AgencyFDA—Food and Drug AdministrationHCFC—hydrochlorofluorocarbon

NASA—National Aeronautics andSpace Administration

ODP—ozone depletion potential (CFR40, Part 82)

ODS—ozone-depleting substanceParty—Signatory country to the

Montreal Protocol on Substances thatDeplete the Ozone Layer

Protocol—Montreal Protocol onSubstances that Deplete the OzoneLayer

SBREFA—Small Business RegulatoryEnforcement Fairness Act

SNAP—Significant New AlternativesPolicy

UNEP—United Nations EnvironmentProgram



U.S.—United States

Table of Contents

I. BackgroundA. How Does the Montreal Protocol Phase

Out HCFCs?B. How Does Title VI of the CAA

Amendments of 1990 Phase Out HCFCs?C. How Is Today’s Document Arranged?

II. Response to Comments on the April 5,1999 ANPRM

A. When Would the Allowance System GoInto Effect?

B. What Types of Allowances Would beAvailable?

C. What Would be the Unit of Measure forAllowances?

D. How Would Allowances Be DistributedEach Year?

E. What Percentage of the Cap and WhatPercentage of the Baseline Would BeDistributed?

1. Consumption Allowances2. Production AllowancesF. How Would EPA Establish an Equitable

Baseline?G. Would Production for Export be

Allowed After Each Phaseout?1. Exports to Parties2. Exports to Article 5 CountriesH. Would There Be Any Critical Needs

Allowances?I. Would I Be Able to Transfer Allowances?1. Transfers Within Groups of HCFCs2. Inter-Pollutant Transfers3. Inter-Company Transfers4. Inter-pollutant Transfers Combined with

Inter-Company Transfers5. International Trades of Current-Year

Allowances6. Transfers of Current-Year Allowances7. Permanent Transfers of Baseline

Allowances8. Offset for a Transfer of AllowancesJ. Would Other Regulatory Options Be

Used to Control HCFCs?1. Labeling2. SNAP Approval and Restrictions3. Non-Essential Products Ban

III. Additional Proposed ProvisionsA. Would There Be Changes in Definitions?1. Modifications2. AdditionsB. What Type of Allowances Would be

Available for Space Vehicles andDefense Needs?

C. Would There Be a Petition System forImporting Used HCFCs?

1. Petition for Each Individual Shipment2. Threshold Quantity Requiring a Petition3. Information Requirements4. Timing for Review of a Petition5. Reasons for Issuing an Objection Notice6. Petition and Non-Objection Letter to

Accompany the ShipmentD. Would There be New Restrictions on

Imports to and Exports from SpecificParties?

E. Should There Be ConsumptionAllowance Credits for Reductions ofHCFC Production By-products Regulatedby Title VI?

IV. Summary of Today’s ProposalA. How Would Allowances be Calculated

and Allocated?B. Would There be Additional Import or

Export Restrictions?

C. How Would Transfers Function?D. What Would the Reporting and

Recordkeeping Requirements Change?V. Administrative Requirements

A. Executive Order 12866B. Regulatory Flexibility ActC. Executive Order 13045: Children’s

Health ProtectionD. National Technology Transfer and

Advancement ActE. Executive Order 13132: FederalismF. Executive Order 13175: Consultation

and Coordination with Indian TribalGovernments

G. Unfunded Mandates Reform ActH. Paperwork Reduction ActI. Executive Order 13211: Energy Effects

I. Background

A. How Does the Montreal ProtocolPhase Out HCFCs?

Signatory countries that are Parties tothe international agreement called theMontreal Protocol on Substances thatDeplete the Ozone Layer (Protocol)identified HCFCs as transitionalsubstitutes for CFCs and other moredestructive ODSs during their secondmeeting in London in 1990. At theParties’ fourth meeting in Copenhagenin 1992, a detailed phaseout schedulefor HCFCs (listed in Annex C, Group Iof the Protocol) was created. The Partiesestablished a cap on the consumption ofHCFCs for developed countries, or whatthe Protocol refers to as Article 2countries, at the same meeting. Notethat consumption is defined by theProtocol as production plus importsminus exports. The cap on HCFCconsumption for Article 2 countrieswent into effect on January 1, 1996, andwas derived from the formula of 3.1percent (reduced to 2.8 percent at theseventh meeting of the Parties) of aParty’s CFC consumption in 1989, plusthe Party’s consumption of HCFCs in1989. This formula puts the current U.S.cap for HCFC consumption at 15,240ODP-weighted metric tons. The Partiesto the Protocol then created a schedulefor the gradual reduction and eventualphaseout of the consumption of HCFCsby 2030. The Copenhagen Amendmentsto the Protocol call for a 35 percentreduction of the cap in 2004, followedby a 65 percent reduction in 2010, a 90percent reduction in 2015, a 99.5percent reduction in 2020, and a totalphaseout in 2030. The U.S. must, at aminimum, comply with this phaseoutschedule under the Protocol.

A freeze on HCFC production forArticle 2 countries was agreed to at theeleventh Meeting of the Parties in 1999.This level of production is derived fromthe average of the Party’s consumptioncap (2.8 percent of a Party’s CFCconsumption in 1989, plus the Party’sHCFC consumption in 1989) and the

result of the same formula forproduction (2.8 percent of the Party’sCFC production in 1989, plus theParty’s HCFC production in 1989). Thecap for the U.S. for the HCFCproduction freeze is 15,537 metric tonswith each different HCFC chemicalbeing weighted according to its ODP.The ODP of a chemical is determinedaccording to its ability to destroy ozonemolecules in the stratosphere. Thehigher the ODP, the more destructivethe chemical is to stratospheric ozone.

EPA was petitioned by environmentalorganizations and industry groups in1993 to phase out the most ozone-depleting HCFCs first (58 FR 65018,December 10, 1993; 58 FR 15014, March18, 1993). Based on the available data atthe time, EPA determined that the U.S.could meet, if not exceed, the requiredProtocol reductions by the specifieddates through a chemical-by-chemicalphaseout. Therefore, the U.S., asauthorized under the CAA,implemented a phaseout schedulecarried out on a chemical-by-chemicalbasis for HCFCs (58 FR 65018), whichwas intended to meet or exceed theProtocol reductions required. U.S.implementation of the HCFC phaseoutis described below in section I.B of thisdocument.

B. How Does Title VI of the CAAAmendments of 1990 Phase Out HCFCs?

Section 605(c) of the CAAAmendments of 1990 requires theAdministrator to promulgate, byDecember 31, 1999, regulations phasingout the production, and restricting theuse of, class II substances, in accordancewith the schedule in that section andsubject to any acceleration of thephaseout of production under section606. Section 605(c) further states thatthe Administrator shall promulgateregulations to ensure that theconsumption of class II substances isphased out and terminated inaccordance with the same schedule. Theoriginal phaseout schedule establishedin the Act has since been accelerated asauthorized under section 606 and isoutlined below.

Section 605 of the Act established theoriginal U.S. phaseout schedule for classII substances. Section 605(a) states that,‘‘Effective January 1, 2015, it shall beunlawful for any person to introduceinto interstate commerce or use anyclass II substance unless such substance:(1) Has been used, recovered andrecycled; (2) is used and entirelyconsumed (except for trace quantities)in the production of other chemicals; or(3) is used as a refrigerant in appliancesmanufactured prior to January 1, 2020.’’Section 605(b) states that, ‘‘Effective



January 1, 2015, it shall be unlawful forany person to produce any class IIsubstance in an annual quantity greaterthan the quantity of such substanceproduced by such person during thebaseline year. Effective January 1, 2030,it shall be unlawful for any person toproduce any class II substance.’’ Thisphaseout schedule has since beenaccelerated under authority of Section606.

Section 606(a) specifically requiresthe Administrator to promulgateregulations accelerating the phaseout ofproduction and consumption of ozone-depleting substances, ‘‘if (1) based on anassessment of credible current scientificinformation (including any assessmentunder the Montreal Protocol) regardingharmful effects on the stratosphericozone layer associated with a class I orclass II substance, the Administratordetermines that such more stringentschedule may be necessary to protecthuman health and the environmentagainst such effects, (2) based on theavailability of substitutes for listedsubstances, the Administratordetermines that such more stringentschedule is practicable * * *, or (3) theMontreal Protocol is modified toinclude a schedule to control or reduceproduction, consumption, or use of anysubstance more rapidly than theapplicable schedule under this title.’’

Thus, section 606(a)(3) requires EPAto accelerate the phaseout to conform toany acceleration under the Protocol. Inaddition, section 614(b) provides that inthe case of a conflict between Title VIof the Act and the Protocol, the morestringent provision shall govern. Basedon scientific evidence that losses ofstratospheric ozone were occurringmore rapidly than anticipated, theParties accelerated the phaseout of classI substances and established thephaseout schedule for class IIsubstances at the fourth Meeting of theParties in Copenhagen in 1992.

Pursuant to authorities provided byTitle VI, EPA amended its regulationson December 10, 1993 (58 FR 65018) toprovide for these accelerations.Targeting the phaseout set by theProtocol, EPA chose to phase outproduction and consumption of HCFCson a chemical-by-chemical basis,beginning with those with the highestODP. EPA accelerated the phaseout ofproduction and import of HCFC–22,HCFC–141b and HCFC–142b, the threeHCFCs with the highest ODPs.Specifically, EPA’s rule bans theproduction and import of HCFC–141b asof January 1, 2003. HCFC–141b has anODP of 0.11. The production and importof HCFC–142b, with an ODP of 0.065,and HCFC–22, with an ODP of 0.055,

are prohibited effective January 1, 2010,except for use in equipmentmanufactured prior to January 1, 2010.Beginning January 1, 2020, theproduction and import of HCFC–142band HCFC–22 are banned. Productionand import of the remaining HCFCs willbe prohibited beginning January 1, 2015,except as a refrigerant in equipmentmanufactured before January 1, 2020.All HCFCs will be completely phasedout by January 1, 2030. Because HCFCconsumption did not approach theProtocol cap for the U.S. during mid-1990, EPA did not at that time establishan allocation system for class IIsubstances, as it did for class Isubstances.

Section 605(d) of the Act speaks toexceptions to the original phaseoutschedule for HCFCs. Beginning in 2030,EPA can authorize up to 10 percent ofthe baseline per year for production ofclass II substances for medical productsconsidered essential by the U.S. FDAand for which no safe and effectivealternative has been developed andapproved. In addition, EPA canauthorize use of these quantitiesbeginning in 2015 as an exception to theuse restrictions contained in 605(a).EPA can authorize this limited amountof production and use, to the extentconsistent with the Protocol, if FDA, inconsultation with EPA, determines thatit is necessary. In addition, beginning in2015, and continuing up until 2030,EPA may authorize production of up to110 percent of the baseline per yearsolely for export to and use indeveloping countries, referred to asArticle 5 countries in the Protocol. Thisproduction is intended to be solely forthe purpose of satisfying basic domesticneeds of the importing developingcountry. Between 2030 and 2040, nomore than 15 percent of the baseline canbe produced annually for export toArticle 5 countries. Section 605(d) doesnot permit any production for export toand use in Article 5 countries afterJanuary 1, 2040.

Per section 602(b) of the Act, EPApublished a list of class II substances in40 CFR part 82, subpart A, appendix B.All HCFCs fall into one grouping underclass II controlled substances, and, sincepublication of the initial list, no newclass II substances have been added tothe list.

Section 602(e) requires EPA to assignnumerical values representing the ODPof all class II substances; Section 602(e)further states that, ‘‘Where the ozonedepletion potential of a substance isspecified in the Montreal Protocol, theozone depletion potential specified forthat substance under this section shallbe consistent with the Montreal

Protocol.’’ Appendix B to part 82,subpart A in the regulatory text of thisdocument lists the ODPs for all class IIsubstances as currently specified by theProtocol. Note that some of the ODPslisted under Appendix B to Part 82,Subpart A of this document varyslightly from those listed under thecurrent Appendix B to 40 CFR part 82,subpart A, due to revisions of thoseODPs under the Protocol since May 10,1995. Today’s document proposes toamend the list of ODPs currentlypresented in 40 CFR Part 82, byreflecting the current Protocol list.Unless there are future revisions of theODPs for class II substances under theProtocol, entities involved in the HCFCmarket can expect to use the ODPslisted in appendix B to part 82 subpartA of this document for any ODP-weighted calculations that may benecessary as part of an HCFC allowancesystem.

Section 607(b) of the Act requires EPAto permit the transfer of any class I orclass II allowances, within each groupor class, on an ozone depletion potential(ODP)-weighted basis. In allowingtransfers, under section 607(a) of theAct, EPA must ensure that ‘‘thetransactions under the authority of thissection will result in greater totalreductions in the production in eachyear of class I and class II substancesthan would occur in that year in theabsence of such transactions.’’ In otherwords, transfers cannot be made at a 1:1ratio. Under the class I allowancesystem, EPA required an offset of onepercent in any U.S. transfer to achievethe environmental benefit required bysection 607. Those transfer requirementsare set forth in 40 CFR part 82, subpartA, § 82.12 (60 FR 24970, May 10, 1995).Transfers of class II allowances betweenentities and inter-pollutant transfers onan ODP-weighted basis, along with anappropriate offset, are addressed underSection II.I.8 of today’s document.

Section 616 of the Act states that theU.S. may transfer allowances to anotherParty, under certain conditions. Fewcountries currently have a system inplace for allocating, trading andexpending HCFC consumptionallowances. As discussed in today’sdocument, differences exist between themanners in which the Protocol and theU.S. have structured their respectiveHCFC phaseout systems. In addition,the Protocol language in paragraph 5 bisof Article 2 restricts the U.S. fromtrading away HCFC consumption toanother Party because the U.S. percapita consumption of CFCs in 1989was well above the per capita limit setby the Protocol for transferring HCFCconsumption. A trading regime similar



to that implemented by EPA fortransferring class I productionallowances (40 CFR 82.9) (60 FR 24970,May 10, 1995), however, is possible,since the Parties established a cap onHCFC production for Article 2 countriesduring the eleventh meeting of theParties in 1999. A proposed system forinternational trades of productionallowances of class II substances isdiscussed in Section II.I.5 of thisdocument.

Reporting requirements mandated insection 603 relative to HCFCs arecurrently in place in 40 CFR 82.13(n)and (o).

C. How Is Today’s Document Arranged?Because this proposed rulemaking

follows an ANPRM on which we havereceived comments, we both respond tothose comments and outline theprovisions EPA is proposing today. Thedocument is divided by issues. For eachissue, we outline options presented inthe ANPRM, discuss any relevantcomments we received, then presentand request comment on the relatedprovision proposed by EPA. Next wepropose several provisions that havearisen since the ANPRM was publishedand request comment on theseprovisions. Following these sections, wesummarize the complete proposal.Proposed regulatory text follows thispreamble.

It should be noted that the regulatorytext of the class II allowance allocationsystem is found in the definitions of§ 82.3, as well as the new sections beingproposed today, §§ 82.15 through 82.24.

In this proposed rulemaking, the word‘‘you’’ may be interpreted as‘‘producer’’, ‘‘importer’’, or ‘‘exporter’’,depending on the situation underdiscussion.

II. Response to Comments on the April5, 1999 ANPRM

Section 607 of the Act requires EPAto issue allowances for the productionand consumption of class II substances.With this document, EPA is proposingan allowance system, similar in manyrespects to that of the class I system,with an allocation of baselineallowances, transfer capability,appropriate exemptions, andrecordkeeping and reportingrequirements. The proposed allowancesystem would ensure that U.S.consumption of class II substances doesnot exceed the consumption cap(currently at 15,240 ODP-weightedmetric tons to be reduced over time)agreed to under the Protocol, and thatU.S. production of class II substancesdoes not exceed the production cap of15,537 ODP-weighted metric tons

agreed to at the eleventh Meeting of theParties in 1999. It is important toremember when reading this proposalthat consumption in the context of theProtocol, the CAA, and EPA regulationsimplementing Title VI of the CAA, doesnot mean use, but instead, represents aformula: Production + Imports ¥Exports=Consumption. When we speakof consumption allowances, then, weare referring to allowances for thecalculated amount of production plusimports, minus exports.

For the class I substances, EPAconsidered many methods for achievingthe required reductions that were agreedto under the Protocol (53 FR 30566,August 12, 1988). The approachesdistinguished between economicincentives and engineering controls orbans. EPA concluded that the mosteconomically efficient, market-based,and relatively simple to administersystem for achieving the Protocol’srequired reductions for class I ODSs wasa marketable allowance system. EPAestablished such a system for the classI ODSs, which proved highly successful.By January 1, 1996, the production andimport of class I substances (other thanmethyl bromide, slated for phaseout in2005) were completely phased out,except for narrow exemptions grantedby the Parties to the Protocol. Anecdotalevidence from producers and importersindicated that the reduction steps andphaseout of class I ODSs through theallowance system was smooth and hadminimal economic impact.

A. When Would the Allowance SystemGo Into Effect?

In the ANPRM, EPA considered anapproach whereby an allowance systemfor class II substances would onlybecome effective if a certain threshold(i.e., a certain percentage of the totalU.S. cap set by the Protocol for class IIsubstances) were reached or exceeded.However, the U.S. HCFC consumptionin 1998 jumped to 92 percent. Thispercentage had been discussed in theANPRM as a possible threshold thatwould allow for implementation of theallowance system. Because the averageconsumption was up to 95.5 percent ofthe cap by mid-1999, EPA believes wereached and could surpass thatthreshold unexpectedly. Therefore weare not proposing a threshold point.

Since publication of a final rule isexpected during the last quarter of 2001,the requirements of the HCFC allowancesystem would likely take effect thequarter beginning January 1, 2002. EPArequests comment on any impact ofallocating HCFC allowances for lessthan four quarters of 2002, if necessary,to ensure that EPA remains below the

U.S. annual consumption cap. In thisevent, EPA would propose to allocatethe remaining quarters of each entity’sallowance allocation for 2002, unlessthat entity has exceeded past quarters ofits allocation during 2002. In the case ofan entity having exceeded the relevantquarter(s) of its allocation for 2002, theexceedance would be subtracted fromthe remaining quarters on a pro ratabasis. EPA requests comment on thisproposed HCFC allocation for theremaining quarters of 2002, if necessary.EPA also requests comment on the timeneeded to implement the newrecordkeeping and reportingrequirements, given their similarity tothe class I recordkeeping and reporting.

B. What Types of Allowances Would BeAvailable?

Under the control system for class Isubstances, EPA created a unit ofmeasure called an allowance. Anallowance, for a class I substance,represented the marketable rights andprivileges granted to a company toproduce or import a specific quantity ofthat class I substance. Under the class Iallowance program, there were twotypes of allowances: productionallowances and consumptionallowances. One allowance in theregulatory program for class I substanceswas equal to one kilogram of an ODS.

Under the class I phaseoutregulations, a company was required toexpend both production andconsumption allowances to be able toproduce. To be able to import a class Icontrolled substance, a company wasrequired to expend consumptionallowances (see 40 CFR 82.4). Afterproper documentation was presented toEPA reflecting an export of a class Icontrolled substance, consumptionallowances were refunded or returned tothe exporting company for future use(see 40 CFR 82.10).

In the ANPRM, EPA discussed twooptions: Allocating both production andconsumption allowances, to beexpended in the same manner as thosein the class I system, as discussedabove; and allocating only aconsumption allowance, whereby oneconsumption allowance would be usedto produce or to import one kilogram.One consumption allowance would bereturned per kilogram exported.

Twelve commenters addressed thisissue, with ten of the twelve favoringconsumption allowances only. Theproponents cited simplicity, and thusdecreased regulatory burden. Onecommenter had no preference; however,the commenter stated that whichevertype of allowance is used should beflexible enough to accommodate any



changes arising from ongoinginternational negotiations. Anothercommenter expressed a preference forproduction and consumptionallowances, since this system workedwell for class I substances; thecommenter also felt thatimplementation of a proven and familiarsystem would promote simplification.

One commenter claimed that the useof two types of allowances couldartificially alter the marketplace ifcapacity in the United States wasunderutilized but companies were notallowed to use other allowance holders’unused production rights for import ofthe class II substances domestically.This same commenter claimed that itwould be equally a problem if importrights could not be used to obtain classII substances from a domestic supplierif the production capacity wereavailable. EPA believes that thecontinued use of both allowances willnot result in marketplace disruption.Under the class I system, companiesthat produced and imported weregranted production and consumptionallowances to continue producing andimporting in response to marketfluctuations; rather than disrupting themarketplace, the allowance systemallowed market forces to prevail. EPAbelieves that import rights would not benecessary to obtain class II substancesfrom a domestic supplier; a U.S.importer could purchase class IIsubstances from any domestic supplierwithout using allowances. The Agencytried to assign baseline allowances asclosely representative of eachcompany’s production and consumptionas possible.

EPA considered the benefits of usingone kind of allowance, the consumptionallowance, and found that, on its face,such a system would beadministratively easier. However, at the1999 Beijing meeting of the Parties tothe Protocol, the Parties agreed to a capon production, in addition to thecurrent cap on consumption of class IIsubstances. This will require that EPAallocate both production andconsumption allowances.

Additionally, because the majority ofcompanies to whom allowances will beallocated in this action are familiar withexpending, trading, reviewing, andreporting allowances according to theclass I system, staying with the knownand proven method is in many wayssimpler for the companies. For example,reporting forms would not changesignificantly, negating the need to re-learn calculation and reporting ofallowances.

For these reasons, EPA proposes touse both production and consumption

allowances in its class II allocationsystem. EPA seeks comment onincluding both production andconsumption allowances in a class IIallowance allocation system. EPA alsoseeks input from commenters on thepotential value of an allowance, takinginto account the differing values of eachHCFC and the proximity in time to thatHCFC’s phaseout.

C. What Would Be the Unit of Measurefor Allowances?

In the class I allowance system, EPAassigned each allowance a value of onekilogram of a class I substance. Toproduce or import, allowances wereexpended by kilograms. Because ODSshave different potentials to cause ozonedepletion, numbers are assigned to eachchemical according to the ODP assignedby the Parties, calculated on the basis ofCFC–11 having a potential of one (1.0).Since each chemical has its own ODP,any trades that took place between classI chemicals took into account thedifference in ODPs, weighting theresulting allowances accordingly.

In the ANPRM, EPA discussed twooptions for the unit of measure to beused in allocating allowances andimplementing the class II allowancesystem. One option is to retain the classI allocation and tracking on an absolutechemical-by-chemical basis, whichrelies on ODP-weighting for any inter-pollutant transfers that may occur.Expending, reporting and tracking ofallowances would also be on achemical-specific basis, with any tradesbetween chemicals reflecting thedifferences in ODPs.

The second option for an allowanceunit of measure discussed in theANPRM was an ODP-weighted unit, tiedto no specific chemical. To expendallowances, you would determine thechemical to be produced or imported,multiply it by its ODP and subtract theresult from the total allowance units.

EPA received fourteen comments onthe unit of measure to be used inallocating and tracking allowances. Tenof the commenters favored an ODP-weighted system, primarily due to theflexibility they believed it would allow.They argued that such a system wouldsimplify transfers, respond to the needsof the marketplace without addedburden, and provide for more trading.Three commenters stated theirpreference for an absolute chemical-by-chemical basis for allocation andtransferring. One of those commentersbelieved that the class I system workedwell on a chemical-by-chemical basisand that extending it to the class IIsystem would likely succeed. One of thethree commenters claimed that an entity

should not be able to trade HCFC–141bfor HCFC–22, because they serve twodistinct and non-interchangeablemarkets. The same commenter statedthat EPA could allow for revisions afterthe 2003 phaseout of HCFC–141b.Another of the three stated that bothmethods are flexible with no realdifference, but expressed a preferencefor chemical-specific allocation. Onecommenter indicated no preference foreither unit of measure but emphasizedthe importance of a flexible inter-company trading scheme.

One of the commenters who favoredthe ODP-weighted system elaboratedthat reporting would still need tohappen on a chemical-by-chemical basisand that, should the 2003 phaseout ofHCFC–141b result in a reduction greaterthan 35 percent, EPA should ensure thattotal allowances available in 2004 be atthe 65 percent level.

After reviewing the comments andanalyzing the potential outcomes inusing each unit of measure forallowances, EPA is proposing toinstitute a chemical-by-chemicalabsolute kilogram system for allocatingand transferring allowances. Thebaseline allocation for each companywould be the total or a percentage of thenumber of kilograms of each chemicalproduced and consumed during thebaseline year. To ensure compliancewith the requirements of trading and tobe able to report accurately to theParties to the Protocol on productionand importation of each of the class IIsubstances, EPA would need allowanceholder reports that included thekilograms of specific chemicals forwhich allowances are traded andexpended. Tracking the associatedchemicals, along with its associatedODP weighting, is imperative forreasons described below.

As noted in the Background section oftoday’s document, the U.S. is slated tophase out HCFC–141b in 2003, HCFC–22 and HCFC–142b in 2010 (with someexceptions), and the remaining HCFCsin 2015 (with some exceptions). Acomplete phaseout is required in 2030.Because the U.S. is making reductionsin class II substances by phasing outchemicals, EPA will need to have in itsdatabase the baseline allocation ofkilograms of each of the chemicals asthey are being phased out. On the firstHCFC phaseout date of 2003, thosecompanies that received baselineconsumption allocations (or received apermanent baseline transfer) (seesection II.I.7 of this document) ofHCFC–141b would subtract that portionfrom their total consumption allocation.If permanent inter-pollutant trades hadbeen made, an amount equal to the



ODP-weighted kilograms of baselineHCFC–141b allowances that had beenreceived in the transfer would bededucted from the baseline allocation.Similarly, the person who transferredHCFC–141b permanent baselineallowances to someone else would nolonger be responsible for deductingthem from their allocation. That shouldhave happened when the trade wasmade.

The same would occur in 2010 and2015 for the relevant chemicals beingphased out. Without chemicalsassociated with the various ODPs, EPAwould be unable to enforce theregulation adequately. Furthermore, theU.S. would be unable to fulfill itsobligation to report under the Protocolthe volume of each chemical produced,imported and exported.

Under a chemical-by-chemicalapproach, allowances representingkilograms of the specific chemicalexpended would be the onlyinformation required, unless an inter-pollutant trade is made, as referencedabove. The more rigorous reportingrequired under an ODP-weighted systemwould mean deciding which chemicalswould be associated with which ODPunits. This could both increase theregulatory and recordkeeping burden oncompanies and EPA and likely lead toinaccuracies. Blends could presentfurther complication by requiring acalculation of the percentage of eachHCFC in a substance (e.g., R–401A), thatwould need to be multiplied by itsapplicable ODP, then included in thetotal reported ODP and chemicalproduced or imported for a quarter.Reporting properly under the ODP-weighted system brings the reporter full-circle to a chemical-by-chemicalanalysis.

Proponents of an ODP-weightedsystem extol the ease of tracking andexpending generic ODPs, as well as theadvantages of avoiding anenvironmental offset for intra-companytransfers, because an ODP-weightedsystem allows you to expend allowancesfor any chemical without actuallytrading internally. However, for thelesser ozone-depleting ODSs, such asHCFCs, EPA is proposing to impose anoffset much lower than the one percentrequired in the class I system. (Seediscussion on proposed offset in sectionII.I.8 of today’s action.) Therefore, theoffset should not be a burden intransferring chemical-specificallowances.

Today’s action thus proposes achemical-by-chemical, absolutekilogram allocation system, whereby theamount of each HCFC produced andeach HCFC consumed (production +

imports ¥ exports) would require theexpending of one (1) allowance for one(1) kilogram of a specific substance.Inter-pollutant trades would involvecalculating the ODP of each chemicaland translating accordingly. EPA seekscomments on using an absolutechemical-by-chemical approach aspresented above for implementing aclass II allowance system, as well as onalternatives, including the ODP-weighting scheme described above.

D. How Would Allowances BeDistributed Each Year?

In the ANPRM, EPA discussed threemethods for allocating allowances: aone-time allocation, a changingallocation on a periodic rolling basis,and a changing allocation on a year-by-year basis. The first method allocatesbaseline allowances on a one-time basis;these allowances continue until the timeeach associated chemical is phased out,unless adjustments are necessary tomeet required Protocol reductions. Anydistribution system must take intoaccount: the approach of U.S.accelerated phaseouts for individualchemicals (e.g., those for HCFC–141b,HCFC–22 and HCFC–142b); the step-wise reduction of the consumption capas mandated under the Protocol; and thenew production cap agreed upon by theProtocol Parties. For example, in 2003,all production and consumptionallowances associated with the HCFC–141b baseline allocation would besubtracted from holders’ allowances.The same would happen as otherchemicals are phased out in thespecified years. At each phaseout, EPAmust determine whether the aggregatechemical-specific phaseouts to that dateare equal or greater than the reductionsrequired by the Protocol in those years.If chemical-specific reductions are lessthan the Protocol requirement, EPAwould then need to reduce thepercentage of baselines to be allocatedaccordingly.

The one-time allocation of allowanceswas the method followed in theregulatory program for class Isubstances. For class I substances, aspecified historical quantity ofallowances was allocated to listedcompanies as a baseline in the FederalRegister. Allocating allowances for thefull time period until a phaseout datefor a particular chemical providescertainty and stability for the market.Assuming the regulatory programincludes smooth procedures for tradingallowances, the full-term allocation ofallowances establishes the basis for a‘‘marketable permit’’ system.

The second option considered was asystem for re-calculating and re-

allocating allowances on a ‘‘rollingbasis.’’ This would essentially move thebaseline forward in time so that thebaseline would presumably be the mostaccurate reflection of the current HCFCmarket. Under this option, EPA wouldreview data on the production, importand export of HCFCs on some periodicbasis, establish a new baseline for eachentity, and re-allocate the allowancesaccordingly. A re-allocation ofallowances could require an amendmentto the original list in the regulation ofentities with their respective baselineallowances. Alternatively, anadministrative mechanism could beestablished to re-allocate allowancesautomatically at regular intervals.

A final option discussed wouldinvolve re-allocating allowances on ayear-by-year basis. Under the year-by-year approach, actual recalculation ofbaselines and re-allocations based onpast year activity would take place priorto January 1 of each control period.

EPA received fifteen comments on themethod of allowance distribution. All ofthe commenters favored allocating onetime, such that allocations areconsistent from control period to controlperiod (except for reductions associatedwith phaseouts). One commenter statedthat anything other than the one-timeallocation would result in marketuncertainty and complicate productionplanning processes. Another stated adislike for using a rolling basis, becauseit encourages speculation, whereas aone-time allocation for the class Isystem was perceived as fair andunchanging.

EPA agrees with commenters on thedisadvantages of using a rolling average.EPA believes that any rolling averageallocation system would createadministrative complications for bothEPA and the regulated community, aswell as introduce uncertainty into themarket between periods when theallocation would roll over, and thus,change. The ability of producers,importers and exporters to plan for thelonger term would also be hampered,and markets could be disrupted. EPAbelieves that if the regulatory systemincludes smooth procedures for tradingallowances, shifts in demand andchanges in market share will beaddressed by individual companies,thus avoiding a need to re-allocateallowances. EPA chose not to propose arolling average allocation system forthese reasons.

EPA believes that re-allocatingallowances on a year-by-year basiswould create administrativecomplications for EPA and for theregulated community, similar to thereasons cited above regarding the rolling



basis allocation system. Consequently,EPA also chose not to proposeallocations on a year-by-year basis.

EPA is proposing a baseline on a one-time basis, whereby the allowanceallocations would remain consistent (orbe moved through permanent trades)from control period to control period(one calendar year to the next), untileach chemical is phased out viasubtraction of its commensurateallowances, or until the percentage ofbaseline allocated is changed to ensurecompliance with the Protocol cap. As inthe class I allocation system, a baselineis based on one year of a company’sproduction and consumption (asdiscussed in section II.F below). At thebeginning of each year, EPA wouldnotify each allowance holder in writingof the number and type of allowances ithad for that control period. If theallowance holder believed there was adiscrepancy in the number ofallowances it should have for thatcontrol period, EPA would work withthat entity to resolve the discrepancy.As under the class I system, theallowances for any control period canonly be used during that control periodand cannot be carried over into thefollowing calendar year.

Because of uncertainties associatedwith current projections of actualreductions that will be realized throughthe 2010 phaseout of HCFC–142b andHCFC–22, EPA will likely need to re-evaluate allowance allocations prior to2010, to ensure that the U.S. can meetthe 65 percent reduction of theconsumption cap required by theProtocol beginning in 2010. The leastcertain factor is the demand for thesetwo chemicals after 2010 to be used inequipment manufactured before 2010.Neither the core regulations nor thebaseline year would likely change, butthe amount of allocations themselvescould be adjusted on a pro rata or someother basis to account for any shortfallin reduction that might becomeimminent. Consequently, throughoutthe rule, we refer to specific allocationprovisions as in effect until 2010. If EPAdetermines that the U.S. will meet its 65percent reduction obligation in 2010with the current allocation, then theremay be no reason to adjust thepercentage of baseline to be allocated,until it is necessary to re-evaluate themfor the 2015 phaseout.

EPA is seeking comment on itsproposal to distribute HCFC allowanceson a one-time basis, to be adjustedaccordingly as individual chemicals arephased out.

E. What Percentage of the Cap and WhatPercentage of the Baseline Would BeDistributed?

1. Consumption AllowancesAs discussed in section I.A of this

document, the current U.S. cap forHCFC consumption is 15,240 ODP-weighted metric tons. In the ANPRM,EPA considered a number of options forthe percentage of baseline allowances tobe allocated under the U.S. HCFCconsumption cap. These optionsincluded 100 percent allocation underthe consumption cap, 100 percentallocation of the baseline productionand import, or any percentage under100 percent. In the latter option, theremaining percentage could be allocatedpro rata to those with production orimportation activity in the baseline year,allowed to lapse by EPA to ensure acushion if violations threatened to pushthe U.S. over its cap, or be set aside forsome special situation allocation.

Because the sum of the individualcompanies’ consumption baselineactivity could fall under the 15,240-metric-ton consumption cap, the issuearises as to whether and how to allocateany remaining class II consumptionallowances falling between the U.S.consumption cap and the sum ofbaseline consumption allowances(discussed in section II.F of thisdocument). For example, if the year1996 were chosen as the baseline forconsumption allowances, this allocationwould represent about 82 percent of theU.S. consumption cap, thus leavingopen the question of how to allocate theremaining 18 percent, and also whetherthe remaining 18 percent should beallocated in its entirety. This remainingpercentage, or a lower percentage thatwould provide for a margin of error,could be auctioned. Alternatively, itcould be added pro rata to the allocatedbaseline consumption allowances ofthose companies that participated in theHCFC market in the baseline year. Itcould alternatively be set aside to offsetany potential overruns, or it could beused as a set-aside for a specificallocation purpose.

EPA received fifteen comments fromproducers, importers, and tradeassociations on how much of the capshould be allocated. Thirteencommenters supported a 100 percentallocation. They stated that the 100percent allocation under the class Isystem was successful; therefore, weshould anticipate the same allocationfor a class II system being successful.Two commenters claimed thatcompanies keep their own allowancebuffers, so EPA did not also need toretain a buffer. One commenter believed

that EPA’s penalties are enough of anincentive to remain within one’sallocation. Another commenter said thatany amount less than 100 percent wouldcreate artificial shortages. Onecommenter believed no allowancesshould be held back for new entrantsinto the market, because there is nocertainty these entities will emerge inthe future.

EPA agrees with the commenters thata 100 percent allocation of baselineconsumption is likely to maintaincompliance with the cap. A 100 percentbaseline allocation worked well for theclass I allocation system, the penaltiesdiscouraged people from exceedingtheir individual allocations, and manyallowance holders consciouslymaintained individual allowancebuffers to ensure compliance.

The current aggregate of individualbaseline consumption allowancesanticipated to be allocated is below thecap of 15,240 ODP-weighted metrictons. EPA believes that it would beprudent to allow the remainingpercentage below the cap to be set asidefor allocations specifically for narrowsituational exemptions from thebaseline. As described in Section Fbelow, EPA is proposing a narrowexception for certain new entrants intothe HCFC imports market: thosebusinesses newly importing after theend of 1997 and before April 5, 1999,when the publication of the ANPRM putall potential stakeholders on notice ofthis rulemaking. The necessary portionsof the remaining percentage below thecap could be available for allocations tothose new entrants according tohistorical data. See the detaileddiscussion of this proposed exemptionand allocation in the section addressingbaseline in Section F.

Given the good faith evidenced bycompliance throughout the class Isystem, EPA believes that allocating thefull amount of baseline allowances, aspermitted under the Protocol HCFC capfor the U.S. is prudent and equitable toboth the allowance holders and theircustomers. By this action, EPA isproposing to allocate 100 percent of thelisted individual companies’consumption baselines under the classII cap established under the Protocol. In2010, the date at which the CopenhagenAmendments to the Protocol call for a65 percent reduction in HCFCconsumption, as stated earlier in thisproposal, it may be necessary to reduceeach allowance holder’s allocationsaccordingly, in order to maintain U.S.consumption of HCFCs within limitsand avoid possible violation of the cap.

EPA is not proposing to allocate thedifference between the Protocol



consumption cap and the aggregate ofthe baseline consumption allowances ona pro rata basis, for the followingreasons. The remaining amount abovethe aggregate baseline and below theconsumption cap is small, and EPAbelieves it can best be used to allocateallowances to companies described insection F as eligible late entrants, andpossibly as credits for reductions ofsubstitutes regulated under Title VI thatare created as by-product(s) in themanufacture of an HCFC, as discussedin section IV.E. Because EPA isproposing to individually assign abaseline to each company based on itshighest ODP-weighted consumptionyear among 1989, 1994, 1995, 1996, and1997 (see section II.F), EPA emphasizesthat companies should receive theirhighest recorded consumption fromamong those years.

EPA is seeking comments on itsproposal to allocate 100 percent ofbaseline consumption activity. EPA alsoseeks comment on its proposal toallocate portions of the remainingamount above the aggregate baselineand below the consumption cap tocompanies described in section F aseligible recent entrants.

2. Production AllowancesThe Parties to the Protocol at the

recent meeting in late 1999 in Beijingadopted a production cap, in addition tothe existing consumption cap. Using theformula agreed to by the Parties forcalculating the cap, the U.S. productionis frozen at 15,537 metric tons beginningJanuary 1, 2004.

The recent Protocol amendmentmaintains the production cap at thislevel through the various phaseoutyears. Some anticipate that the Partiesmay make changes in future meetings,which would likely reduce productionin a step-wise fashion. If such a changeoccurs, EPA will amend its regulation toreflect the Protocol requirements.

In the case of production allowances,100 percent of production activity in theaggregate of all baseline consumptionyears, as discussed in section II.F.below, is below the production capallowed by the Protocol. EPA canallocate 100 percent of the productionin the baseline year and remain incompliance with the Protocol. Theaggregate allocation will equal less than100 percent of the production capallowed by the Protocol.

Because production is currentlyfrozen at a constant level that willcontinue over time, EPA is proposingthat entities with baseline productionallowances could produce the phased-out HCFC following the respectivephaseouts, using export production

allowances, for export only to Partieslisted in Appendix C as having ratifiedthe Copenhagen Amendments. Theseentities would be allocated their fullproduction baseline for that chemical inexport production allowances, forexport only. Following individual HCFCphaseouts, 15 percent of productionbaseline for that chemical is reserved forexport to Article 5 countries to be usedfor their domestic needs. The manner inwhich these post-phaseout productionallowances for export would beallocated and expended is discussedbelow in Section II.G.

EPA did not discuss a detailedprocess for allocating productionallowances in the April 1999 ANPRM,because the production freeze had notyet been adopted by the Parties.Therefore, there are no comments inresponse to the ANPRM on this issue.

F. How Would EPA Establish anEquitable Baseline?

In developing the regulatory programfor class I controlled substances, EPAcollected information on the amounts ofeach class I substance produced,imported, and exported during a givencalendar year that was established as abaseline in accordance with the CAA.EPA collected the data by publishingtwo notices in the Federal Registerunder authority of section 114 of the Act(52 FR 47489 (December 14, 1987) and55 FR 49116 (November 26, 1990)). Thedata requested from U.S. companiesincluded reports on production runs,quantities of feedstock chemicals usedin production, bills of lading, invoices,and other documents for a specificcalendar year. The data submitted toEPA was used to assign company-specific class I production andconsumption rights (allowances) tocompanies.

The CAA does not prescribe onespecific year to serve as the baseline forallowance allocations for class IIsubstances. For class II substances, thedefinition of ‘‘baseline year’’ in the CAAis ‘‘* * * a representative calendaryear selected by the Administrator.’’EPA explored a variety of options forestablishing a baseline for HCFCallowances, analyzing availablehistorical data for each company’sproduction and consumption activities(reported to EPA) to identify arepresentative proposed class IIbaseline. EPA has been collectingquarterly reports on all HCFCsproduced, imported and exported from1994 on. Reliable data is thus availablefor years between 1994 and the present.Accurate data also exists for 1989 dueto information gathering EPA conducted

for class I baseline determinations, asdiscussed above.

In the ANPRM, EPA discussed someof the multiple options for establishingbaseline allowances for class IIcontrolled substances. The familiar useof historical information from one year,using an average of multiple years, orusing some type of formula forcombining multiple years were allcovered in the ANPRM. EPA stated itsbelief that the process of establishingthe baseline should take into account,inter alia, the agreements by the Partiesto the Protocol to control and phase outclass II substances, the 1990 CAAAmendments, the regulations underTitle VI of the Act governing thephaseout of class II substances, and thedevelopment of the current HCFCmarket in the U.S. In arriving at theproposed baseline years for HCFCallowances, we believe we have takeninto account each of the legal and policyguides considered above.

It is important to review the recenthistory of public notification andparticipation related to development ofa class II allowance allocation rule.During the two stakeholder meetings inJanuary and February, 1998, EPA statedthat it would not consider the year 1998or later years in baseline calculationsand allocations. A primary reason wasthat once public discussion on apotential allowance system began,companies had much to gain bysignificantly increasing 1998 and 1999activity—or entering the HCFC importmarket during those years to haveactivity on record—and subsequentlyadvocating the use of those years asbaseline years. EPA’s opening theprocess to the public should not giveunfair advantage to some and allowartificial market changes and baselineincreases based on anticipated profitpotentials. Consequently, EPAannounced its intention not to include1998 or later years in baselinecalculations at both stakeholdermeetings, in its subsequent ANPRMpublication of April 1999, and inindividual discussions withstakeholders.

All seventeen commenters stated theirpreferences for establishing a baseline.One company preferred 1989 as thebaseline year. Five commenters believethat 1998 is most representative of theHCFC market. Two companies statedthat 1997 reflects the current situation.Two commenters preferred 1996, one ofthem leaving open the option of 1996 or1997 or an average of both. The secondof the two commenters preferred 1996,because they stated that 1997, 1998, and1999 include uncharacteristically highproduction and import for many



companies. Another commenter citedthe growing HCFC market as wetransition away from CFCs, and claimedthat using an earlier year than 1998,which was a year of particularly highconsumption, would not accuratelyreflect the continuing transition awayfrom CFCs.

One commenter suggested recentyears on a weighted basis, giving as anexample, 100 percent of 1997consumption plus 50 percent of 1996consumption. This commenter alsosuggested that in 1998, industry mayhave artificially increased consumptionin response to early EPA stakeholdermeetings exploring the possibility of anANPRM on this topic. Therefore, thiscommenter believed only 50 percent of1998 numbers should be used. Twocommenters believed that a single yearbaseline is necessary, one to avoidexcessive record compilation andprocessing and the other because anaveraged allocation would notadequately reflect the continuingtransition away from CFCs. Fourcommenters preferred the average of1996–1998 if the averaging option wereselected; one commenter selected aneven weighting of the years 1989, 1992,and 1995.

EPA did receive one general commenton allocations, however. Threecommenters believed that producersexiting the HCFC market early should berequired to return the unusedallowances to EPA for distributionamong the remaining allowance-holderson a pro rata basis. EPA believesotherwise. Under today’s proposal, theallowances granted to the variouscompanies would be the companies’ todo with what they will.

If a company decides to decreaseproduction, or importation, from itsbaseline, EPA believes the marketshould drive the outcome, in that thecompany can choose to transfer itsexcess allowances for the year or letthose allowances lapse, and therebybenefit the environment. One advantageof the one-time allocation favored bycommenters is that it provides certaintyto all the players. Having EPA takingallowances from those who decreaseproduction or import from their baselineand re-distributing allowances to otherallowance holders would disrupt themarket forces. It would also defeat theenvironmental purpose of encouragingcompanies to move toward substitutes.Consequently, EPA is proposing not tore-distribute unexpended allowancesresulting from a company’s decision todecrease or stop its production orimportation of HCFCs.

EPA believes that because it isallocating to entities who have had very

different production and importhistories, there is no one year that isrepresentative for all companies.Picking only one year, regardless of theyear, could disadvantage many. EPA’sintent is to find the most representativebaseline possible within the constraintsof the consumption cap and productionfreeze. EPA disagrees with thecomments opposing an averaging orformula of multiple years. Once a multi-year allocation is made, using a one-time, or permanent allocation wouldrequire no additional data compilationover a single-year system. Once abaseline is determined for eachcompany, EPA is proposing that thebaseline remain unchanged through theduration of the program, with allocationreductions made according to thephaseout schedule and necessaryincreases in reductions to ensure theU.S. meets the 65 percent and laterProtocol step-wise reductions.

In reviewing the consumption figuresfor the years before 1994, EPA believesthat only one year can reasonably beconsidered. With the Protocol signedand the CAA close to passage andenactment in 1989, EPA has accuratedata for that year. Additionally, the year1989 was designated as the baselineyear used for the allocations of severalof the class I substances (Groups III, IV,and V), thus providing a completedatabase of ODS production, import,and export (when combined, equalingconsumption) activity during that year.

Reviewing the production andconsumption data on HCFCs from themost reliable reporting years, EPA founda wide spectrum of years that benefitteddifferent companies. Looking at theavailable information from 1989, 1994,1995, 1996, and 1997, EPA calculatedthat if it allocated allowances to everycompany based on their individualhighest ODP-weighted consumptionyear among those five years, the U.S.would be able to remain just under theProtocol consumption cap. Anyproducers or importers entering theHCFC market for the first time in 1998or 1999 would not be eligible to receivean allocation, except for a situationoutlined later in this section. However,under the proposed transfer provisions,such a company could purchaseallowances from another company thatheld allowances.

As discussed earlier in today’s action,EPA is proposing to allocate and trackon a chemical-by-chemical basis.However, for purposes of arriving at thebaseline, EPA examined total ODP-weighted consumption in determiningthe highest year for each company. Thatway, the highest number of ODP-weighted kilograms, rather than highest

number of absolute kilograms, coulddetermine the most beneficial allocationfor each entity. Actual allocations willbe distributed and tracked on anabsolute kilogram, chemical-by-chemical basis for production and forconsumption.

Using the individual baselineapproach based on the highest ODP-weighted consumption year brings totalU.S. consumption to a small percentagebelow the cap of 15,240 metric tons.Total ODP-weighted production,aggregated from production in eachrelevant individual baseline year asproposed, brings the U.S. to below theU.S. production cap of 15,537 metrictons. Because the consumption baselineyears include the highest production foreach producer, EPA believes that usingthe same baseline year for productionfor each company is still the mostequitable. EPA’s proposed productionbaseline and allocations would be incompliance with the new Protocolproduction cap.

In exploring baseline years after 1997,EPA believes it is possible that, as twoother commenters have noted, recentyears’ consumption is inflated, due tostockpiling in anticipation of animpending rulemaking. EPA does notbelieve, as discussed above, that 1998,when we began publicly discussing anallocation system, can serve as a trulyrepresentative baseline year or as anequitable factor in a multi-year baseline.Instead, the escalating 1998 figures mayreflect an effort by some to dramaticallyincrease consumption not only tostockpile, but also to ensure a highHCFC allowance allocation for thosecompanies in the hopes that 1998 or1999 would be selected. Such anaggregate number would likely place theU.S. in violation of the Protocol cap.

EPA recognizes that, in assigning ayear or years prior to 1998, those withtheir highest consumption falling in1998 or 1999 would receive fewerallowances from EPA than their mostrecent consumption would reflect.However, with transfers of allowancesand the ability to import used HCFCs,the transition could likely be madewithout significantly disruptingconsumption trends. Additionally, dataon increased 1998 and 1999consumption, as compared to earlieryears, seems to indicate significantstockpiling, which should allowcustomer demand to be met.

For these reasons and the fact thatusing the most recent years could skewthe market and disadvantage those whodid not significantly increaseconsumption in those years, EPA is notproposing to use 1998 production orconsumption in the HCFC baseline



calculation. For similar reasons, andbecause complete data for the year 1999will not be available during the draftingof this rule, EPA also does not proposeto use 1999 as part of the calculation forbaseline.

EPA is, however, proposing oneexception to its policy to not use 1998or later years as part of a person’sbaseline. EPA proposes to grantavailable HCFC consumptionallowances to late entrants into theHCFC import market that meet thefollowing qualifications: the HCFCimport market is their primary source ofbusiness income; they began importingHCFCs after the end of 1997 but beforethe publication of the ANPRM on April5, 1999; and they have accuratelyreported all relevant required quarterlyimport information to EPA prior topublication of today’s proposal.Businesses meeting these qualificationswould be eligible to receiveconsumption allowances based on a fullyear’s data, if available. If a full year’sdata is not available because the entityhas not been in business for a completeyear by April 5, 1999, EPA proposes toextrapolate based on the availablereports for one, two, or three quarters.

EPA believes that such new entrantsinto the market during that time wouldlikely be small businesses whoseowners and operators were unfamiliarwith EPA’s plans to begin work on anallowance allocation system for HCFCsuntil the ANPRM appeared in theFederal Register on April 5, 1999. Thesebusinesses that began importing HCFCsafter 1997 and before the ANPRMpublication date might have had lessaccess to information from standardindustry sources and might not haveheard the announcements at thestakeholders’ meetings; they might nothave had reason to know of animminent rulemaking allocatingallowances based on historicalproduction and importation. In a casewhere a person, acting in good faith andprior to the publication of the ANPRM,established a business whose primaryincome was derived from importingHCFCs, EPA believes that it isappropriate to make an exception. Oncepublic notice was given via thepublished ANPRM, businesses thatdesired an allocation of HCFCallowances would have known the risksof jumping into the business at thisjuncture. Prior to April 5, 1999,imperfect information left the door openfor small new companies to observe thepotential market in HCFCs and beginimporting HCFCs as a new business.Therefore, EPA is today proposing togrant available allowances to anybusiness who can successfully

demonstrate that it meets these criteria.However, EPA will not allocateallowances in excess of theconsumption cap. Although EPA doesnot anticipate an outpouring of newentrants who fit this description, toforestall the possibility of exceeding thecap as a result of allocations to newentrants, we will consider submissionson a pro rata basis, if necessary.

Through today’s proposal, EPArequests notification from any businessthat fits the outlined criteria and wishesto request allowances by submitting ademonstration of eligibility during the45-day comment period followingpublication of this proposal. This willallow EPA to process the submissionsand include allocations for eligible newentrants in the final rulemaking. Nosubmissions for eligibility will beaccepted after September 4, 2001. Toadequately demonstrate the eligibility ofsuch a business, EPA requests thefollowing information: records showingthe date the first HCFC imports tookplace; business records showing thatimported HCFCs are the primary sourceof the business’s income; quantities (inkilograms) of each chemical imported;exporting country of each shipment; andport of entry of imported HCFCshipments, accompanied by bills oflading, invoices and Customs entryforms.

The Administrator will review onlythe complete submissions that meet thecriteria outlined above. Incompletesubmissions will not be considered.EPA will conduct a thorough review ofthe details of those submissions. Thefinal rule will contain allowanceallocations for new entrants that EPAhas determined to be eligible.

EPA also considered the possibility ofnew entrants that entered or wish toenter the market following publicationof the ANPRM in April of 1999. EPAbelieves that once the ANPRM waspublished, the public possessedadequate notice that an allocationsystem for HCFC allowances was in thedevelopment phase and that EPA wasseriously discussing a period ofhistorical data that would be used in thebaseline designations. It was evident atthat time that new entrants wereunlikely to receive an allocation ofallowances. Simultaneously, EPAemphasized its intention to phase outHCFCs in order to meet U.S. obligationsunder the Protocol and the CAA.Encouraging new companies to join thebusiness after the ANPRM wouldcounter the efforts of moving people outof HCFCs into more environmentallysound substitutes.

EPA believes that any new entrantsfollowing the ANPRM publicationwould not be precluded from entering

the market, because they could purchaseallowances from existing allowanceholders who may not intend to use theirfull amount of allowances. They alsohave the opportunity to import usedHCFCs through EPA’s petition system ordeal in substitutes to HCFCs, whichwould benefit the ozone layer andprovide longer-term business security.Accordingly, EPA believes that themarket will sufficiently allow for anynew entrants after April 5, 1999, asappropriate.

It is important to note that, under anyscenario, when the phaseout date forHCFC–141b is reached in 2003, allHCFC–141b import and production fordomestic purposes will cease. Thosewho were not allocated HCFC–141bconsumption allowances will not beaffected in 2003, unless they had gainedbaseline allowances for HCFC–141bthrough a permanent trade (SectionII.I.6-II.I.7). However, those who wereallocated consumption allowances toproduce or import HCFC–141b wouldno longer have annual consumptionallowances associated with theirbaseline HCFC–141b activity, and thushave no authorization to produce orimport HCFC–141b for domesticpurposes (where both production andconsumption allowances are necessary).EPA is proposing to allow productionfor export following phaseout, however,up to 115 percent of producers’ HCFC–141b production baseline, as discussedbelow in Section II.G.

Any company that, through a baseline(or permanent) trade, received HCFC–141b consumption allowancesassociated with historic HCFC–141bconsumption, would no longer have theconsumption allowances associatedwith the baseline trade in 2003.However, that company’s total baseline,for purposes of determining the amountof export production allowances andArticle 5 allowances for which it wouldbe eligible following the phaseout,would reflect the baseline trade.

In 2004, when the Protocol requiresthat the HCFC consumption cap bereduced from its current level by 35percent, it is possible that holders ofallowances for HCFCs other than HCFC–141b would be affected if the 35 percentreduction cannot be met. EPA does notintend to subtract both baseline HCFC–141b consumption allowances in 2003and an additional 35 percent of theremaining consumption allowances in2004. Instead, it intends, as laid out inits accelerated phaseout rule publishedDecember 10, 1993, to subtract thebaseline HCFC–141b consumptionallowances to fulfill the required 35percent reduction. If a 35 percentreduction could not be achieved



through subtraction of baseline HCFC–141b consumption allowances, thenEPA would need to reduce theremaining HCFC consumptionallowances by the requisite percentageto achieve the full 35 percent reduction.

EPA wishes to clarify that allowancescan only be allocated for which we weresupplied verifying documentation, suchas invoices, bills of lading, Customsdocuments, and/or canceled checks.Many companies supplied suchinformation along with each quarterlyreport, and thus EPA had theinformation on record. We requestedthat companies without the informationon file with EPA supply thisinformation to us by mid-January of2000, so that EPA could determineaccurate production and consumptionfigures for purposes of allocatingallowances. Allowance allocations,then, are based on verified productionand consumption in each company’srespective baseline year.

Additionally, allocations are listed inthe proposal only for those companiesthat gave EPA permission to publishproduction and consumption figures foreach HCFC in their baseline year.Because EPA considers individualcompany’s production and consumptiondata to be Confidential BusinessInformation, permission to publishthese numbers is necessary.

EPA expects to receive additionalverification from a small number ofcompanies, permission from companiesthat have not yet permitted EPA topublish their potential allocation data,and new entrants as described above,before the final rule is completed andpublished. Consequently, additionalcompanies and their allocations not inthis proposal may be added to the finalrulemaking and that potential allocationinformation would be reflected in therulemaking docket.

EPA requests comment on itsproposal to assign individual baselineyears by company, using one of theyears 1989, 1994, 1995, 1996, or 1997,in which the highest ODP-weightedconsumption was accurately reported.EPA also seeks comment on its proposalto use data from the same year forproduction. EPA requests comment onallowing certain new HCFC importersestablished after 1997 and before April5, 1999 to be eligible for allowances asdiscussed above.

G. Would Production for Export BeAllowed After Each Phaseout?

Because the U.S. adopted a differentapproach from the Protocol in phasingout HCFCs, i.e., chemical-specificphaseouts rather than by percentage, thecontinued ability to export to other

countries after each HCFC is phased outbecomes of interest. One factor drivingforeign demand for HCFC–141b is thenumber of HCFC–141b projects beingfunded by the Multilateral Fund (MLF)that are intended to move Article 5countries out of class I substances. TheMLF was established by the 1992London Amendment to the Protocol toenable developing countries to meet therequirements of the Protocol. The MLFhelps pay for the incremental cost ofprojects that replace use of ODSs withozone-friendly substances. BecauseHCFC–141b (ODP of 0.11) is intended toreplace CFC–11 (ODP of 1.0) in most ofthese projects, the environmentalbenefit of these substitutions comes to areduction of 0.89 in ODP weight perkilogram.

Another factor is the approach bywhich other developed countries arechoosing to meet their Protocolreductions, i.e., by percentage (asoutlined by the Protocol) rather thanchemical-by-chemical (as in the U.S.).Consequently, there will likely be acontinuing demand for HCFC–141b byArticle 2 countries after the U.S. 2003phaseout date for that chemical.

The decision by the Parties in Beijingin late 1999 to freeze productionprovides a vehicle for a suitableresolution to the export concern. In2003, while production and import fordomestic use of HCFC–141b iseliminated, production for exports andnarrow domestic exceptions cancontinue at baseline levels. Becauseconsumption allowances, necessary forproduction and importation, would nolonger be available, production afterJanuary 1, 2003 of HCFC–141b fordomestic sale or use would no longertake place. However, becauseproduction for export continues to beallowed under the Protocol productioncap, EPA is proposing to allowproduction for export only to Partieslisted in Appendix C (those who alsohave ratified the CopenhagenAmendments) after the phaseout ofHCFC–141b on January 1, 2003.

Under the Montreal Protocol, 15percent of production baseline would beavailable for export to Article 5countries (listed in Appendix E) only fortheir domestic needs, while 100 percentof baseline of the phased-out chemicalwould be allowed for export to Article2 or Article 5 countries, or anycombination of the two. After all theexport production allowances have beenallocated, some of the productionremaining between the aggregate exportproduction allowances and the HCFCproduction cap could be allocated forproduction or import of HCFC–141b forspace vehicle or defense needs, as

discussed in Section III.B. Allowing anadditional 15 percent of HCFC–141bproduction baseline for Article 5countries ensures that developingcountries will have adequate access tosupplies to transition to class II ODSsbefore turning to non-ODP substances.The 15 percent of HCFC–141bproduction baseline for Article 5countries is discussed in detail below.

1. Exports to PartiesPrior to each phaseout, EPA’s

allowance system would require thatboth production and consumptionallowances be used for any production,with consumption allowances beingreturned when a chemical is exported.As with the class I allowance system,one kilogram of production allowanceand one kilogram of consumptionallowance would be expended toproduce one kilogram of an HCFC.Under today’s proposal, post-phaseoutproduction could occur beginningJanuary 1, 2003 up to 100 percent ofHCFC–141b production baseline forexport only to Parties listed in the thirdcolumn of Appendix C (those who haveratified the Copenhagen Amendments).To distinguish between these post-phaseout production allowances andpre-phaseout allowances, EPA proposescalling the former ‘‘export productionallowances.’’

Reporting provisions associated withproduction for export only after therelevant HCFC phaseout would requiresimilar information and documentationas export reporting prior to a relevantphaseout. This requirement is outlinedin the Recordkeeping and ReportingSection of today’s proposal.

EPA requests comment on theproposed allocation of exportproduction allowances equal to 100percent of HCFC–141b productionbaseline, allowing production ofphased-out HCFCs with theseallowances for export only to Partieswho have ratified the CopenhagenAmendments (Appendix C to SubpartA). EPA also requests comment onallocating some of the productionremaining between the aggregate ofexport production allowances and theHCFC production cap for production orimport of space vehicle/defense uses ofHCFC–141b, as discussed in SectionIII.B.

2. Exports to Article 5 CountriesIn the class I phaseout and allowance

system, EPA allowed 15 percent ofbaseline to be produced after phaseoutfor export to Article 5 countries tosatisfy their basic domestic needs. Withthe recent decision of the Protocol tofreeze the production of HCFCs, the



Parties also decided to provide anadditional 15 percent of baselineproduction for export to Article 5countries. The 15 percent that EPA isproposing today would only beavailable for those HCFCs that havebeen phased out, would be over andabove the production cap, and woulddiffer from export productionallowances in that exports could go onlyto Article 5 countries for their domesticneed.

As in the class I system, Article 5allowances would be expended, withoutaccompanying consumption allowances,for production specifically for Article 5countries. Because they are to be usedspecifically for the importing countries’basic domestic needs, these exports arenot expected to compete with U.S.markets using substitutes.

EPA believes it is appropriate,following chemical-specific phaseouts,to permit production specifically forexport only to Article 5 countries thatmay require the chemical to facilitatetheir transition to less ozone-depletingchemicals. In deciding to propose thisapproach, we have considered thecurrent volume of U.S. exports to otherParties, the projected increased demandby Article 5 countries, the Protocolrequirement that exports to Article 5countries be used only for theirdomestic needs, and the precedent ofallowing 15 percent of baselineproduction for export only in the classI system. EPA is proposing that 15percent of each company’s productionbaseline of phased-out HCFCs can beused for production for export only toany Article 5 country for their domesticneeds, following the phaseout of eachchemical, until 2030. For example, in2003, when production andconsumption allowances associatedwith HCFC–141b are eliminated, fifteenpercent of HCFC–141b productionbaseline would be available afterphaseout to enable HCFC–141bproduction for export to Article 5countries for their domestic needs. As inthe class I system, these post-phaseoutproduction allowances would be called‘‘Article 5 allowances.’’

EPA seeks comment on its proposal toallocate Article 5 allowances equal to 15percent of a phased-out HCFC’s baselineproduction after phaseout for export toArticle 5 countries.

H. Would There Be Any Critical NeedsAllowances?

EPA is proposing a narrow exceptionin Section III of today’s action regardingcontinued production of HCFC–141bwhere necessary, for critical spacevehicle and defense uses. A variety ofcriteria would need to be met for this

exemption to be granted, e.g., a lack ofavailability of viable alternatives orsubstitutes. See Section III.B below fora detailed discussion.

I. Would I Be Able To TransferAllowances?

In establishing the allowance programfor class I controlled substances, EPAincluded provisions that permit thetransfer of allowances. The provisionsfor trades and transfers of class Iallowances are 40 CFR 82.9, 82.10,82.11 and 82.12 as promulgated in thefinal rule published on May 10, 1995(60 FR 24970). Today’s documentdescribes the many different types oftransfers permitted for class IIallowances, as well as other variationsdiscussed in the ANPRM.

Under the current class I regulatoryprogram, EPA is required to process alltransfers of allowances within threeworking days from when EPA receivesthe request for an inter-pollutant orinter-company trade. Companies fax orsend the request for a trade to EPA andwithin three working days EPA faxes areply showing the new balance ofunexpended allowances (See 40 CFR82.12(a)(1), (b)(4)). EPA proposes toretain the above process schedule forclass II trades and requests comment onthe proposed process for requesting EPAapproval of trades of class II substancesand the three-day turnaround time forsuch requests.

1. Transfers Within Groups of HCFCsTo facilitate transfers among class II

substances, EPA is permitted, underSection 607(b)(3) of the Act, to establishgroups of HCFCs. Under such aframework, inter-pollutant transfers ofallowances would be limited tochemicals within an assigned group.Class I controlled substances are listedin the Act in groups, and inter-pollutanttransfers of class I allowances arerestricted to transfers within each group.While class I substances are listed ingroups in the Act, no such groupingexists for class II substances. One optiondiscussed in the ANPRM was toestablish HCFC groups based on eachchemical’s ODP. Another option wasestablishment of HCFC groups based onthe U.S. phaseout dates. A third optionwould be not to group HCFCs at all.

Two of the eleven who commented ontransfers indicated a preference for nogrouping of HCFCs at all or forincluding all HCFCs in one singlegroup. They both felt that groupingwould reduce the flexibility necessaryin inter-pollutant transfers. Theremaining nine commenters did notaddress the grouping issues. Sincetransfers were limited to CFCs of the

same group in the class I allowancesystem, allowance holders experiencedsome restrictions in their trading. EPAagrees that imposing a grouping systemfor HCFCs would unnecessarily restrictflexibility in inter-pollutant transfers.

EPA is not proposing to group theHCFCs. This will provide the greatestflexibility for allowance holders totransfer among chemicals.

2. Inter-Pollutant TransfersSection 607(b) of the Act states that

inter-pollutant transfers of ozone-depleting substance allowances shall bepermitted. An inter-pollutant transfer isthe transfer of an allowance of onesubstance to an allowance of anothersubstance on an ODP-weighted basis. Asan example, under the class I system, acompany would transfer allowances forCFC–12 to allowances for CFC–115,taking into account ODP differencesbetween the two chemicals. If acompany wanted to transfer 1000kilograms of their CFC–12 productionallowances to CFC–115 productionallowances, paperwork would besubmitted with the followingcalculation: the 1000 kilograms of CFC–12 allowances are multiplied by theODP of CFC–12 (1.0) and then dividedby the lower ODP of CFC–115 (0.6),yielding 1667 kilograms of new CFC–115 production allowances minus therequired offset. Section 607 of the CAArequires that any trade of ozone-depleting substance allowances result ina benefit to the environment. The offsetis intended to fulfill this mandate.

Inter-pollutant transfers aresometimes called intra-companytransfers or trades because a companymight shift allowances internally fromone substance to another to react toshifts in demand. Inter-pollutanttransfers of allowances were fairlycommon for class I substances. Therewere an average of 95 inter-pollutanttransfers for class I substances each yearfrom 1992 through 1995.

For class II substances in thechemical-by-chemical allocation systemproposed in section II.C, an example ofan inter-pollutant transfer would be atransfer of 10,000 kilograms of HCFC–142b allowances for HCFC–141ballowances, which would result in 5,909kilograms of HCFC–141b allowancesbecause of the adjustment for the ODPsof the two chemicals. This calculationdoes not take into account the requiredoffset for transfers as proposed anddiscussed in section II.I.8 of thisdocument.

All eleven commenters advocatedmaximum flexibility in transfers. Twocommenters were in favor of transferswith as little regulatory oversight as



possible. One felt no need for EPApermission prior to the trade, providedthe actual amounts of individual HCFCsare shown in the quarterly reports.

EPA proposes to allow inter-pollutanttransfers (or intra-company trades) intandem with the proposed chemical-by-chemical system in section II.C above,similar to the program for the class Isubstances. As in the class I system,companies would fax or send therequest for a trade to EPA and withinthree working days of receipt, EPAwould fax a reply showing the newbalance of unexpended allowances.EPA’s oversight should ensure that thecompany making the transfer has therequisite number of unexpendedallowances. EPA requests comment onthe proposed inter-pollutant transfers(also referred to as intra-companytrades) in tandem with the proposedchemical-by-chemical system, and thethree-day turnaround time associatedwith such trades.

A major difference in the class IIproposed system should be noted.Because the allowances for productionand consumption fall away as of thephaseout date of an individual HCFC,inter-pollutant and inter-companytrades among production andconsumption allowances for that HCFCcan no longer be made. For example,after HCFC–141b is phased out in 2003,a person cannot trade ODP-weightedHCFC–22 production allowances forHCFC–141b production allowances. Noproduction or consumption allowancesfor HCFC–141b should exist (except fornarrowly stated exemptions).

However, two new and separate setsof allowances—export productionallowances and Article 5 allowances—would be available to that allowanceholder once HCFC–141b is phased out.Export production allowances couldonly be used for production for exportto countries that are Party to theCopenhagen Amendments. Article 5allowances could only be used forproduction to export to Article 5countries. Because HCFC–141b will bethe only chemical with exportproduction allowances and Article 5allowances between 2003 and 2010,inter-pollutant trading of HCFC–141bwould not be possible. Inter-companytrades of each type of allowance couldtake place, to be used in the mannerspecified under that allowance.

3. Inter-Company TransfersAnother example of trades of class II

allowances that EPA permits are inter-company transfers under Section 607(c)of the Act. Inter-company transfers aretrades of allowances, for the samesubstance under a chemical-by-chemical

system, from one company to anothercompany. Under such a system,Company A would simply transfer itsallowances for production of a class IIsubstance to Company B who wished tohave more allowances for production ofthat particular class II substance. Therequisite offset would be deducted byEPA when processing the trade. Itwould be necessary for both companiesto record and report the chemical(s)associated with that trade. The proposedchemical-by-chemical system (SectionII.C) would eliminate any need forconversion in reporting the trade.

Of the eleven commenters in favor ofmaximum flexibility in transfers, twospecifically recommended free inter-company trades.

EPA proposes to allow inter-companytrades, with an environmental offset asdescribed in Section II.I.8. EPA alsoproposes to process all transfer requestswithin three working days from whenEPA receives the request, similar to theprocess used for the class I system.Companies fax or send the request for atrade to EPA and within three workingdays EPA faxes a reply showing the newbalance of unexpended allowances.

4. Inter-Pollutant Transfers CombinedWith Inter-Company Transfers

Both inter-company and inter-pollutant transfers could be combinedin the same transaction for class Isubstances, and EPA is planning toallow the same possibility for class IIsubstances. Section 607(c) of the CAAstates that EPA’s transfer regulations forclass I and class II substances shallpermit combined inter-company andinter-pollutant transfers, subject tocertain requirements. As an example ofhow this worked under the class Isystem, Company A would trade 35,000kilograms of CFC–11 allowances toCompany B who needed allowances toproduce CFC–115. In the informationsubmitted to EPA, the two companieswould agree that Company A woulddeduct 35,000 allowances for CFC–11from its balance and Company B wouldreceive 58,333 kilograms of CFC–115,due to the ODP difference between thetwo chemicals. An additional 0.1percent offset would be required in thiscalculation as discussed in SectionII.I.8.

Under this combined system for classII substances in a chemical-by-chemicalallocation system, a company thatwishes, for example, to increase itsproduction of HCFC–141b before the2003 phaseout could: (1) Re-distributeits own allowances that have beenallocated for another class II substanceto HCFC–141b (inter-pollutant transfer);(2) purchase more HCFC–141b

allowances from another company (aninter-company transfer); or (3) purchasemore allowances from another companyof a substance other than HCFC–141band conduct a simultaneous inter-pollutant transfer for HCFC–141bproduction, making the related ODPadjustments (an inter-company/inter-pollutant transfer). After the 2003phaseout of HCFC–141b, a companyreceiving export production allowancesand Article 5 allowances for HCFC–141b could engage in inter-companytransfers of those allowances, but couldnot engage in inter-pollutant transfersuntil 2010, when export productionallowances and Article 5 allowances forHCFC–22 and HCFC–142b becomeavailable and thus, tradeable with theones for HCFC–141b (Section II.I.2).

Only one commenter out of the elevencommenters discussing transfers singledout inter-pollutant transfers with inter-company transfers for special favorablemention. The remaining tencommenters generally advocatedmaximum flexibility in transferswithout emphasizing inter-pollutanttransfers with inter-company transfers.

EPA proposes to allow inter-pollutanttransfers combined with inter-companytransfers for class II substances, similarto what it allows in the system used forclass I substances. EPA requestscomment on its proposal to allow inter-pollutant transfers combined with inter-company transfers.

5. International Trades of Current-YearAllowances

Under the Protocol, internationaltrades are recognized as a part of aprocess called ‘‘industrialrationalization.’’ In Article 1 of theProtocol, industrial rationalization isdefined as ‘‘the transfer of all or aportion of the calculated level ofproduction of one Party to another, forthe purpose of achieving economicefficiencies or responding to anticipatedshortfalls in supply as a result of plantclosures.’’ International trades ofproduction and consumption arepermitted under the Protocol so Partiescan consolidate the manufacturing of achemical in order to be able to achieveeconomies of scale as demand shrinks.International trades of production andconsumption allowances are permittedunder EPA’s current regulations forclass I controlled substances (40 CFR82.9(c)). The procedures forinternational trades involve morereview than the procedures for inter-pollutant and inter-company trades.

The Protocol includes the followinglanguage in Article 2, paragraph 5 bis:‘‘Any Party not operating underparagraph 1 of Article 5 [an



industrialized country] may, for one ormore control periods, transfer to anothersuch Party any portion of its calculatedlevel of consumption set out in Article2F [pertaining to HCFCs], provided thatthe calculated level of consumption ofcontrolled substances in Group I ofAnnex A [CFCs] of the Party transferringthe portion of its calculated level ofconsumption did not exceed 0.25kilograms per capita in 1989 and thatthe total combined calculated levels ofconsumption of the Parties concerneddo not exceed the consumption limitsset out in Article 2F. Such transfer ofconsumption shall be notified to theSecretariat by each of the Partiesconcerned, stating the terms of suchtransfer and the period for which it isto apply.’’

The Protocol language in paragraph 5bis of Article 2 discussed above clearlyrestricts the U.S. from trading awayHCFC consumption to another Party.The U.S. per capita consumption ofCFCs in 1989 was 1.28 kilograms, wellabove the 0.25 kilogram per capita limitfor transferring HCFC consumption.However, the Protocol language allowsthe U.S. to potentially receive a transferof HCFC consumption from anotherParty. Only two Article 2 countries,Norway and Poland, had a per capitaconsumption of CFCs in 1989 less than0.25 kilograms. Thus, these are the onlyParties from which the U.S. couldpotentially receive a transfer of HCFCconsumption. EPA considered thelikelihood of such international trades,and whether or not the establishment ofprovisions for class II internationalconsumption trades is warranted.

During the eleventh Meeting of theParties in 1999, with the adoption of aproduction cap, came the potential fortransfers of production between Parties.The restrictions that exist forinternational consumption trades do notexist for production. Thus internationalproduction allowance trades may be ofgreater interest to U.S. entities.

Of the eleven commenters ontransfers, only two addressed the issueof international trades. One commenteracknowledged that industrialrationalization is important and is amechanism that tends to reduce overallconsumption but stated that the absenceof production allowances (commentsubmitted prior to Protocol adoption ofproduction cap in late 1999) wouldmean that international trades must takeplace on a different basis than thatestablished for class I substances. Thiscommenter suggested that the materialfor U.S. consumption be produced‘‘under license’’ in another country butwas unsure how this would fit withinternational and foreign country

regulations. The commenter’s concernregarding the lack of productionallowances would be answered bytoday’s proposal to establish productionallowances in addition to consumptionallowances (Section II.B). The secondcommenter stated that although theProtocol supports such internationaltrades, the limitations are severe andclearly discriminatory to multinationalsoperating in developed countries. EPAbelieves that this comment gives anindication of the possibility ofinternational trades of consumptionallowances occurring in view of thelimitations imposed by the Protocol.

In light of the constraints oninternational trade of HCFCconsumption described above, EPA isnot proposing any provisions forinternational trades of consumptionallowances. If the U.S. cannot transferits consumption allowances to any otherParty, and the only nations from whichit could receive consumption rights toimport are Norway and Poland, EPAbelieves that it appears unlikely that anysuch consumption trade would bedesired or beneficial. Consequently,EPA has not included any suchprovisions in this proposal. EPArequests comment on its decision not toinclude provisions for internationaltrades of consumption allowances. EPAalso requests comment on provisions fortransfer of consumption rights fromNorway or Poland should the situationarise.

The Parties have placed a cap onproduction, in addition to the currentcap on consumption of class IIsubstances. This would allow for thepossibility of transfers of productionallowances. Because of the minimalrestrictions placed on the trade of HCFCproduction between certain Parties, EPAproposes to allow such productiontransfers, using a process very similar tothe class I process for internationaltrades (see 40 CFR 82.9(c)).

Such transfers are authorized undersection 616 of the CAA. The proposedregulations in today’s document thatwould implement this authority arearranged consistent with internationaltrades under the class I allowancesystem. For trades from a Party, EPAproposes that the person must obtainfrom the principal diplomaticrepresentative in that nation’s embassyin the U.S. a signed document statingthat the appropriate authority withinthat nation has revised productionlimits for that nation equal to the lesserof: The maximum production that thenation is allowed under the Protocolminus the amount transferred; themaximum production that is allowedunder the nation’s applicable domestic

law minus the amount transferred; orthe average of the nation’s actualnational production level for the threeyears prior to the transfer minus theproduction allowances allowed. Theperson would need to submit to EPAinformation on the contact person andParty authorizing the transfer; thechemical being transferred; the controlperiod for that transfer; and a signedstatement that the increased productionis intended as an export to the relevantParty.

For trades to a Party, the person mustsubmit to EPA the same informationoutlined, except for the signedstatement. For these trades, theallowance revisions would be reflectedat the individual trader level, asdiscussed below. In reviewingsubmissions for trades to a Party, theAdministrator would have thediscretion to take factors into accountrelating to possible economic hardshipscreated by a trade, potential effects ontrade, potential environmentalimplications, and the total amount ofunexpended allowances held by entitiesin the U.S.

For both trades from and to Parties,the Administrator, following review,would issue a notice either granting ordeducting the appropriate productionallowances and specifying the affectedcontrol period(s), provided shedetermines it meets the proposedrequired conditions.

In approving an international trade,the Administrator would also need toensure that the individual person orentity involved in the trade has madethe appropriate revisions to his/herallowance balance. For trades from aParty, the Administrator would issue anotice revising the allowances of thatentity to equal the unexpendedproduction allowances held by theentity plus the level of allowableproduction transferred from the Party.

For a trade to a Party, section 616 ofthe CAA does not limit the quantity ofproduction allowances that may betransferred but the Administrator isgiven the option to disapprove theproposed transfer if she/he believes thetransfer is not consistent with domesticpolicy or if the transferor did notpossess sufficient allowances to permitthe reduction in aggregate domesticproduction to be reflected in thetransferor’s revised production limits. IfEPA approves the proposed transfer, theAdministrator is required to establishrevised production limits for thetransferor so that the aggregate domesticproduction permitted after the transferreflects the effect of the transfer ofproduction allowances because suchtrades cannot result in an increase in



production over what would haveoccurred in the absence of the trade. Incertain circumstances, following atransfer of allowances to another Party,Section 616 requires that the aggregatenational U.S. production of HCFCs bereduced by an additional amountbeyond a simple deduction of thenumber of allowances transferred toanother Party. Specifically, if theaverage U.S. production during theprevious three years for the controlledsubstance transferred is less than thetotal allowable U.S. production under§ 82.18(h) and (i), then following atransfer, U.S. production would need tobe revised downward to equal the three-year average minus the amounttransferred. This additional reductionwould also need to be reflected in therevised production limits for U.S.production allowance holders. EPAbelieves that in these circumstances, itis appropriate for the required reductionin U.S. production to be allocatedamong all the transferors in the samecontrol period in proportion to thenumber of allowances transferred byeach entity. EPA would notify eachtransferor of the revised productionlimit after approving the transfer ofproduction allowances to a Party ratherthan waiting to the end of the controlperiod; the transferor would then beable to make timely market decisionswith the remaining productionallowances. Although there are perhapsother methods of revising productionlimits, EPA is proposing the followingmethod to determine the transferor’sbalance of production allowances after atrade to a Party. Under today’s proposal,the Administrator would issue a noticerevising the transferor’s balance ofproduction allowances to equal thelesser of: (a) The unexpendedproduction allowances held by thetransferor minus the quantity ofproduction allowances transferred; or(b) the quantity derived from (a) minusthe quantity derived from the followingcalculation: the total U.S. allowableproduction for the HCFC being tradedminus the U.S. average annualproduction of the HCFC for the threeyears prior to the transfer.

For those more comfortable withformulas, the proposed method could beexpressed in this manner:

f = (a¥d)¥(c¥b), if c > ba¥d, if c ≤ b

Where a = the person’s unexpendedproduction allowances, b = the U.S. 3-year average production for that HCFC,c = the total allowable U.S. productionfor that HCFC, and d = the actualquantity being transferred, and f = theperson’s revised production allowancelevel.

EPA requests comment on theproposed method used to calculaterevised production limits for thosewishing to trade production allowancesinternationally; EPA requests commenton possible alternative methods tocalculate revised production limits.

If more than one transfer ofproduction allowances occurs in thesame control period, the Administratorwill need to issue revised productionlimits for all the transferors after eachtransfer. Each transferor’s balance ofproduction allowances previous to thecurrent transfer would be adjustedupwards retroactively after each transferand each transferor would be notifiedafter the approved transfer rather thantowards the end of the control period.Under EPA’s proposal, if more than onecompany trades production of an HCFCto another Party or Parties in one controlperiod, they would all equitably sharethe burden of absorbing any shortfall innational production. Although there areperhaps other methods of revisingproduction limits, EPA is proposing thefollowing method to determine therevised production limits for alltransferors in the same control periodsince EPA believes that the potentialallowance decrease, (c-b), would beallocated among all transferors. EPA isproposing that the formula for revisingallocations after a transfer would be:

a¥[(c¥b) × (d/D)]¥d,where D = the total amount of allowances

transferred by all domestic producers inthat control period.

EPA requests comment on theproposed method used to calculaterevised production limits for alltransferors transferring productionallowances in the same control period;EPA requests comment on possiblealternative methods to calculate theserevised production limits.

6. Transfers of Current-Year Allowances

In the ANPRM, EPA consideredapproaches for permitting transfers ofcurrent-year allowances for class IIcontrolled substances. A transfer ofcurrent-year allowances means theallowances being traded can only beexpended for production or import inthat specific control period, or calendaryear. Transfers of current-yearallowances do not change the quantityof baseline allowances assigned to acompany. A trade of current-yearallowances is a temporary trade, onlyreflected in a company’s balance ofallowances for that control period(calendar year) in which the tradeoccurs. Trades of current-yearallowances were permitted in the classI regulatory program. From 1992 to

1995, many companies took advantageof the opportunity to trade current-yearallowances for class I controlledsubstances.

Six of the eleven commenters ontransfers were in favor of the free tradeof current-year allowances. Onecommenter generally supported transferof current-year allowances because itwas consistent with the class Iregulatory program. A commenter feltthat it should be allowed while anothercommenter noted that the bureaucraticburden on companies and on EPAwould not be too large and that suchflexibility would be as complete as itcould be within a system of controls.The remaining five commenters weresilent on the issue. EPA agrees thattrades of current-year allowances wouldallow companies the flexibility torespond to market forces and achieveeconomies of scale in production andimport.

EPA proposes to allow trades ofcurrent year allowances similar to thosepermitted in the class I regulatorysystem and seeks comment on allowingcurrent-year trades.

7. Permanent Transfers of BaselineAllowances

EPA also considered the merits ofpermitting permanent transfers ofbaseline allowances for class IIsubstances in the ANPRM. A transfer ofbaseline allowances is a permanent shiftof some quantity of a company’sbaseline allowances to anothercompany. The permanent nature of thetransfer of baseline allowances makesthe trade different from the transfer ofcurrent-year allowances. For example, ifCompany A produced 1,000 kilogramsof HCFC–22 in the baseline year, itwould receive 1,000 baselineallowances of HCFC–22. Company Acould in turn permanently trade awaythese baseline allowances to CompanyB. In all relevant subsequent years,Company A’s quantity of baselineallowances would be permanentlyreduced, while Company B’s quantity ofbaseline allowances would bepermanently increased. At the 2010phaseout of HCFC–22 and HCFC–142b,Company B would be responsible fordeducting the HCFC–22 that itpermanently received from Company Afrom its baseline allocation.

Under a chemical-by-chemicalallocation approach, the historicconsumption baseline amount for agiven chemical would be deducted fromthe current holder of the permanentallowances in the relevant phaseoutyear for that chemical (e.g. 2003 forHCFC–141b). If a person purchasespermanent baseline allowances, of



HCFC–141b, for example, then conductsan inter-pollutant trade within thecompany, that person would deduct theODP-weighted equivalent consumptionof the HCFC–141b that was traded tothem on a permanent basis. In ourexample, in 2003, the purchaser ofallowances associated with HCFC–141bwould have that number of ODP-weighted allowances associated withHCFC–141b deducted, even if it hadconducted an inter-pollutant tradewithin the company for another HCFC.

Six of the eleven commentersdiscussing transfers favored allowingpermanent transfers of baselineallowances. Five of the elevencommenters did not discuss permanenttransfers.

EPA proposes to allow permanenttrades of allowances for class IIsubstances. EPA requests comment onits proposal to allow these permanenttrades.

8. Offset for a Transfer of AllowancesThe final aspect of trades of class II

allowances discussed in the ANPRMand considered in today’s document isthe manner of achieving greater totalreductions than would occur in theabsence of a trade, as required bysection 607(a) of the Act. EPA believesthat the offset required by section 607 ofthe Act is intended for inter-pollutantand inter-company transfers. Therefore,in the allowance program for class Isubstances, an offset was not includedfor international trades. Internationaltrades are governed by section 616 ofthe Act, rather than section 607.

Section 607(a) states that,‘‘transactions under the authority of thissection will result in greater totalreductions in the production in eachyear of class I and class II substancesthan would occur in that year in theabsence of such transactions.’’ For theclass I allowance program, EPA adopteda one percent offset, deducted from thetransferor’s allowance balance, for allinter-pollutant trades and all inter-company trades (40 CFR82.12(a)(1)(i)(H), 82.12(b)(4)(i)(F)).However, for inter-pollutant tradescombined with inter-company trades,only one offset was applied to thetransfer of allowances.

Nine commenters on possible offsetoptions preferred a lower offset than theone for the class I system, because CFCsare more ozone-depleting than HCFCs.There were two suggestions for an offsetof 0.1 percent and there were two for anoffset of 0.05 percent. Because the classII substances are less ozone-depletingthan class I substances, EPA considereda smaller offset for trades of HCFCallowances. Yet, EPA recognizes that the

offset must provide an environmentalbenefit, as called for by Congress. Forclass II controlled substances, EPA istherefore proposing a 0.1 percent offsetfor inter-company transfers. This 0.1percent offset would simplifycalculations for the affected companiesand reflect the lower ODP of HCFCscompared to CFCs. This offset wouldstill provide the environmental benefitintended by Congress withouthampering market forces. If allocationsare made and implemented on achemical-by-chemical basis, both inter-pollutant trades and inter-companydomestic trades would be affected.

EPA requests comment on itsproposal to impose a 0.1 percent offsetto afford an environmental benefitassociated with domestic trades, incompliance with section 607 of theCAA.

J. Would Other Regulatory Options BeUsed To Control HCFCs?

In the ANPRM, EPA also discussedother authorities under Title VI that areavailable to ensure that the U.S. adheresto its phaseout schedule for class IIsubstances. The discussion outlinedrelevant provisions of EPA’s currentlabeling program for products madewith ODSs, its SNAP program and thenonessential products ban. Theseprovisions would affect the sale and/oruse of HCFCs rather than theirproduction, import and export, whichan allowance system would controldirectly. The purpose of including theseregulatory tools in the ANPRMdiscussion of controlling HCFCemissions was to make readers aware ofthe variety of paths EPA could take insustaining compliance with theProtocol.

Because EPA is proposing anallowance allocation system in today’saction that it believes would be effectivein maintaining compliance with theProtocol, it is not proposing today toinclude any amendments to theseprovisions to further control HCFCs.The approaches discussed briefly belowhowever, could provide further optionsfor HCFC control, if needed to ensureU.S. compliance.

Thirteen commenters were generallyopposed to the imposition of any of thefollowing regulatory tools.

1. Labeling

Under section 611 of the Act, EPAcould require labels on productscontaining or made with specified classII substances. These labels would readas follows:

Warning: Contains/manufactured with[insert name of substance], a substance which

harms public health and environment bydestroying ozone in the upper atmosphere.

As a prerequisite to imposing such alabeling requirement, the Administratorwould have to determine, ‘‘after noticeand opportunity for public comment,that there are substitute products ormanufacturing processes (A) that do notrely on the use of such class IIsubstance, (B) that reduce the overallrisk to human health and theenvironment, and (C) that are currentlyor potentially available. ‘‘BeginningJanuary 1, 2015, all products containingor manufactured with a class IIsubstance must bear the specified labelregardless of whether the Administratorhas made a determination regarding theavailability of substitutes (Section611(c)(2) and 611(e)(5)). Therefore, theissue upon which EPA is requestingcomment is whether EPA should, priorto January 1, 2015, require labels oncertain products containing ormanufactured with class II substances.

Eleven commenters felt that imposinglabeling requirements before 2015would be undesirable and unnecessary.A couple of commenters stated thatsuch labeling requirements mightprecipitate what they characterized asconfusing labeling that occurred withCFCs, requiring the intervention of theFederal Trade Commission. Thisstatement represents the commenters’characterization only, and not that ofEPA. The commenter has apparentlyconfused the Title VI labelingregulations with a different labeling ruleissued by another federal agency. EPAwas consulted on several cases wherepotentially deceptive ‘‘positivelabeling’’ appeared on a product.Typically, such a label would read,‘‘ozone-friendly’’ or ‘‘environmentallysafe,’’ while the product contained anozone-depleting substance that mayhave had a lower ODP than found inother products in its category. Thesespecific labels were not associated withthe Section 611 labeling requirements ofthe CAA, and were subsequentlyreferred to the Federal TradeCommission, because consumers werebeing sold products under potentiallyinaccurate labeling.

EPA does not currently see a need touse labeling to ensure compliance withthe Protocol and is therefore notproposing in today’s action to use thisregulatory tool to control HCFCemissions.

2. SNAP Approval and RestrictionsSection 612 of the Act requires EPA

to promulgate rules making it unlawfulto replace any class I or class IIsubstance with any substitute substancethat may present adverse effects to



human health or the environment,where EPA has identified an alternativeto such replacement that ‘‘(1) reducesthe overall risk to human health and theenvironment; and (2) is currently orpotentially available.’’ In accordancewith Section 612 of the Act, and underthe SNAP program, EPA publishes listsof acceptable and unacceptablesubstitutes for class I and class IIsubstances. In some SNAP sector end-uses, class II substances have been listedas acceptable substitutes. Class IIsubstances are viewed by the Agency astransition chemicals that facilitate thetransition out of more harmful class Ichemicals. Since 1994, availability ofzero-ODP alternatives has increased in anumber of end-uses. It is thereforepossible that SNAP determinationsregarding existing HCFC acceptable usescould be revised. This could happenthrough three mechanisms.

First, EPA could receive a petitionfrom a company to add a substance toor delete a substance from the SNAP listof acceptable and unacceptablealternatives (See section 612(d)).Second, EPA could receive notificationfrom a company before introduction ofa substitute into interstate commerce forsignificant new use as an alternative toan ODS (See section 612(e)). Finally,EPA can initiate changes to the SNAPdeterminations independent of anypetitions or notifications received. Suchchanges could be based on new dataeither on additional substitutes or oncharacteristics of substitutes previouslyreviewed.

Thirteen commenters opposed the useof SNAP to control the use of HCFCs tosustain compliance with the Protocol.Four commenters supported delistingonly if the alternative significantlyreduced risk to human health and theenvironment. Seven commenters wereconcerned about the possibility ofcreating an unfair competitiveadvantage for the new alternative andimpacting small businesses adversely.

Under this rulemaking, EPA believesthat the tracking of consumption ofHCFCs will allow the U.S. to remainunder the cap. Therefore, in this rule,we are not including any SNAP-relatedprovisions. It is possible, that on theirown, SNAP approvals and restrictionsmight affect HCFC production andconsumption sometime in the future.

3. Non-Essential Products BanSection 610(d) of the Act prohibits the

sale, distribution, or offer for sale ordistribution in interstate commerce, ofcertain nonessential products thatcontain or are made with class IIsubstances. EPA is authorized to grantexceptions to the ban under certain

conditions. Since the issuance of thefinal rule providing exemptions fromthe statutory class II nonessentialproducts ban (58 FR 69638, December30, 1993), EPA has receivedinformation, including information onnew substitutes for making certainproducts, indicating that it may benecessary to reconsider the continuedappropriateness of those exemptions.The Agency also is aware that since theissuance of that initial final rulemaking,there has been further substitution awayfrom ozone-depleting substances inaerosols and pressurized dispensers.EPA is currently reviewing informationconcerning the aerosol products andpressurized dispensers that were givenexemptions in the December 30, 1993rulemaking, independent of the goals ofthis rulemaking. In particular, theAgency is evaluating whether there aretechnologically available substitutes forthe HCFCs used in these products.

Two of the four commenters wereopposed to the use of the ban to controluse of HCFCs and thus sustaincompliance with the Protocol. Onecommenter supported use of the ban toensure the U.S. does not exceed itsconsumption and production caps forclass II substances.

EPA does not currently see a need touse the nonessential products ban toensure compliance with the Protocoland is therefore not proposing to usethis regulatory tool to control HCFC use.It is possible, that on its own, thenonessential products ban might affectHCFC production and consumptionsometime in the future.

III. Additional Proposed ProvisionsEPA is proposing several provisions

that were not discussed in the ANPRM.Some are definitions, necessary toimplement portions of the class IIallowance system discussed in theANPRM. Others are additional issuesthat have arisen since publication of theANPRM. EPA seeks comment on each ofthe proposed provisions below.

A. Would There Be Changes inDefinitions?

To effectively establish an allowanceallocation system for HCFCs, EPA isproposing to change and add severaldefinitions to § 82.3 of the existingphaseout regulation. We are proposingmodifications that will clarifythroughout this proposal where aprovision would apply only to a class Isubstance or to both class I and class IIsubstances.

1. ModificationsEPA is proposing to modify the

definitions for ‘‘baseline consumption

allowances’’ and ‘‘baseline productionallowances’’ to include class II ODSs, inaddition to currently covered class IODSs. EPA is also proposing to modifythe definitions of ‘‘consumptionallowances,’’ ‘‘production allowances,’’and ‘‘Article 5 allowances’’ to includeclass II ODSs.

The definitions for ‘‘destructioncredit’’ and ‘‘transformation credit’’would not apply to the class IIallowance system. To date, no oneunder the class I system has requesteddestruction or transformation creditsafter production allowances have beenexpended for a chemical that was laterfound to be destroyed or transformed inthe manufacture of another chemical orproduct. EPA believes that, with lessHCFCs being used in manufacturingsystems that ultimately transform ordestroy them than the earlier class IODSs, the likelihood that any companywould need or want to use these creditsis minuscule. Normally, destruction ortransformation is anticipated prior toproduction. Companies need notexpend production allowances whenproducing ODSs specifically fordestruction or transformation. EPArequests comment on its decision tofollow suit with the acceleratedphaseout program for class I substances(60 FR 24970, May 10, 1995) and notinclude the definitions for ‘‘destructioncredit’’ and ‘‘transformation credit.’’

At this time, the definitions for‘‘essential use allowances’’ and‘‘unexpended essential use allowances’’would not apply to the class IIallowance system and EPA is proposingto modify them to make them explicitlyapply to class I substances only. If theParties approve any essential useexemptions for class II substances, EPAwould consider such exemptions inlight of the domestic phaseout andrevisit these definitions as necessary.

2. AdditionsEPA is proposing to add a definition

of ‘‘export production allowances.’’Companies could use these allowances,calculated at 100 percent of theirphased-out HCFC’s production baseline,to produce certain HCFCs after therelevant phaseout date, for export onlyto any Party that has ratified theCopenhagen Amendments (such Partieswould be listed in Appendix C). Theseexport production allowances wouldbecome available to HCFC–141bproducers on January 1, 2003 (thephaseout date for that chemical), andremain available at least until December31, 2009. EPA expects to re-evaluate thepossibility of export productionallowances in 2009 in view of the 65percent reduction in consumption in



2010. An export production allowancecould be used for production forpurposes of export only, where netconsumption equals zero. A definitionof ‘‘unexpended export productionallowances’’ is also being proposed. It isnot clear at this time the amount ofexport production allowances thatwould be available for HCFC–141b, aswell as HCFC–22 and HCFC–142b, afterJanuary 1, 2010, when a 65 percentreduction in consumption of HCFCs ismandated by the Protocol. Followingnotice and comment, EPA plans to issuea rule prior to 2010, which wouldallocate relevant allowances, beginningin 2010, taking into account thedeclining consumption cap, therefrigerant servicing exemptions after2010, and any relevant modifications tothe Protocol or the CAA.

In proposing a class II petition systemfor used ODSs imports, EPA isproposing adding three definitions thatwill allow EPA to closely track usedimports and make accuratedeterminations on the eligibility toimport the used HCFCs. Three newdefinitions are proposed to helpfacilitate a rigorous petition system:‘‘individual shipment,’’ to distinguishone separate shipment from another;‘‘non-objection notice,’’ to indicatewhen a person is granted privileges toimport an individual shipment of usedHCFCs; and ‘‘source facility,’’ to explainexactly what information the petitionermust provide regarding the equipmentand place from which the used HCFCwas recovered.

Definitions of ‘‘space vehicle/defenseallowances’’ and of ‘‘unexpended spacevehicle/defense allowances’’ are addedto permit U.S. Federal governmententities and certain other entities toimport or order the production ofHCFC–141b for critical uses related tospace vehicle or narrow defense needs,where no substitute for HCFC–141b isviable. These allowances would not betradeable.

B. What Type of Allowances Would BeAvailable for Space Vehicles andDefense Needs?

EPA is proposing to provide spacevehicle/defense allowances to a U.S.agency, department or instrumentality,or related entities involved in spacevehicle endeavors, for extremely narrowneeds after demonstrating by petition toEPA that no viable alternative exists forHCFC–141b and that space vehicle ornational security viability is at issue ifHCFC–141b cannot be used for thespecified purpose. NASA first broughtthis need to EPA’s attention becausespace launch vehicles currently useHCFC–141b-blown foam as the only

workable thermal protection system forseveral different areas of the spacevehicle system. EPA is also proposing toprovide allowances to U.S. militarydepartments for extremely narrow needsafter demonstrating by petition to EPAthat no viable alternative exists forHCFC–141b in narrow defense usessuch as cleaning of oxygen equipmentand aircraft parts.

EPA believes U.S. government spacevehicle entities, other space vehicleservice entities and militarydepartments have vital needs for smallquantities of HCFC–141b for veryspecific needs beyond the phaseout datecontained in § 82.15(a)(4) of today’srulemaking. These uses would includeunique thermal protection system needsof space vehicles designed to travelbeyond the limit of the earth’satmosphere (e.g., satellites, spacestations, space transportation systemssuch as the Space Shuttle system), andthe cleaning of oxygen equipment andaircraft parts. EPA believes that the new§§ 82.15(a)(1) and 82.18(e) will notadversely affect compliance with theprovisions of the CAA Amendments of1990 or the U.S. obligations under theProtocol as amended.

EPA considered other approaches toan exemption for the production andimport of HCFCs critically needed forspace vehicles intended to traveloutside the earth’s atmosphere or fornarrow defense needs. EPA consideredwhether the exemption should bespecific for one, or two, or all of theHCFCs (e.g., specific exemptions onlyfor HCFC–141b, HCFC–22, or HCFC–142b for national security purposes.) Todate, EPA has received only specificrequests for space vehicle and defenseexemptions for HCFC–141b. Therefore,EPA believes there is no need for abroader exemption and accordingly isproposing to limit the exemption toHCFC–141b. EPA requests comment onits proposal to limit a space vehicle/defense exemption to HCFC–141b.

A person seeking an exemption forthe production and import of HCFC–141b for space vehicle purposes and fornarrow defense needs under§ 82.15(a)(1)would need to apply for theexemption under § 82.18. Today’s actionproposes a streamlined application andreview process under § 82.18(e) forspace vehicle/defense allowances. Theapplication process would require aU.S. government or other entityinvolved in space vehicle endeavors ornarrow defense uses to submit thefollowing information to EPA prior toJuly 1, 2002: (a) Name and address ofthe entity; name of contact person andphone and fax numbers and e-mailaddress; (b) quantity (in kilograms) of

HCFC–141b needed for each relevantcontrol period for the space vehicle ordefense interest; (c) a detaileddescription of the space vehicle ordefense need met by the use of HCFC–141b; (d) a technical description of theprocesses in which HCFC–141b is beingused; (e) a technical description of thearea where the product will be applied;(f) a technical description of whyalternatives and substitutes are notsufficient to eliminate the space vehicleor defense use of HCFC–141b; (g) adetailed analysis showing whystockpiled, recovered or recycledquantities are deemed to be technicallyinfeasible for use; (h) an estimate of thenumber of control periods over whichsuch an exemption would be necessary;and (i) a detailed description ofcontinuing investigations into andprogress on possible alternatives andsubstitutes.

EPA would review the application inorder to determine whether to grantspace vehicle/defense allowances forthe specific quantity of HCFC–141b forthe specified control period. If moreinformation is needed, EPA wouldcontact the applicant and specify thenecessary information. EPA wouldretain the right to disallow the spacevehicle/defense allowances based oninformation received regarding, interalia, fraud, misrepresentation,inconsistency with Articles andDecisions under the Montreal Protocol,inconsistency with the CAAAmendments of 1990, or other reasonsrelated to human health and theenvironment.

EPA is proposing a specificapplication period ending July 1, 2002.By limiting the time frame for acceptingapplications, EPA is providing a strongincentive for U.S. government and otherspace vehicle entities to periodicallyreview their HCFC–141b needs for long-term planning. By limiting the timeframe for the review of applications,EPA would also be reducing theAgency’s long-term burden tocontinually review claims of spacevehicle or defense interest.

EPA considered conducting a one-time period of review of petitions forspace vehicle/defense allowances to befinalized by publication of a notice witha list of acceptable and unacceptablespace vehicle/defense exemptions to theclass II phaseout dates. EPA is notproposing this approach because theAgency expects very few applicationsfor space vehicle/defense allowances forHCFC–141b, and EPA believes it isimportant for petitioners to periodicallyreassess the critical nature of continuedHCFC–141b need. EPA expects that nomore than one percent of the total



HCFC–141b allocations would beneeded for this exemption. EPA is alsoproposing that the allocation be updatedevery three years, via submission of anupdate report which indicates thefollowing: whether the entity has foundno viable substitute and will need toextend their exemption for the nextthree years; why the entity believes noalternatives are viable for theirapplication; and the efforts undertakenby that entity to find alternatives. Thefirst period would provide allocationsfor January 1, 2003 through December31, 2005. Updates would be due to EPAby March 1, of 2005 for the three-yearperiod of 2006 through 2008, and so onuntil 2010. EPA would make adetermination on the update within 90days of receipt and notify the submittingentity accordingly.

Another option in the implementationof an exemption for the production andimport of HCFCs beyond the acceleratedphaseout would be a limit on the totalquantity of HCFC–141b that one U.S.government entity or other spacevehicle entity could request and obtainin a control period. Finally, EPA couldlimit the number of control periods forwhich a U.S. government or other spacevehicle entity with these interests mayapply for an HCFC–141b exemption.EPA is not proposing these options tolimit the quantity of material or thecontrol periods because the Agencyexpects the numbers of requests and thequantities to be very small. However,EPA is proposing to limit the totalquantity of HCFC–141b produced orimported for space vehicle or narrowdefense needs to one (1) percent of theaggregate of HCFC–141b baselines peryear. This would reflect the expectedsmall number of requests for smallquantities while still allowing for exportto Parties and Article 5 countries.

EPA is today proposing to create anexemption process for the continuedproduction or import of HCFC–141b upto January 1, 2010, for applicationsrelated to critical space vehicle needs ornarrow defense needs in cases wherealternatives and stockpiled, recovered orrecycled quantities are deemed to betechnically infeasible for use. Uponrequest by the appropriate Agency orentity, the Administrator may grantauthorization for production or importof a specified quantity, for a three yearperiod, beginning on January 1, 2003. Ifneed for HCFC–141b remains criticalpast 2005, exempted entities may renewtheir submission for an additional threeyears by updating the informationsubmitted in the original application toEPA. Approval for production or importdoes not imply or mandate production;each user must locate a willing supplier

and negotiate supply. It should be notedthat the Parties at the 1999 Meeting ofthe Parties in Beijing adopted aproduction freeze, which requires thatall production, which would includespace vehicle/defense exemptions,remain below the cap. The 65 percentreduction in consumption in 2010 maypreclude continued availability of thisexemption; the more currentconsumption figures in the yearsleading up to 2010 may provide EPAwith a more realistic picture of thepossibility of granting the exemption forthe years after 2010. The availability ofthis exemption will be revisited in therulemaking implementing the January 1,2010 phaseout. Consequently, today’saction proposes that the exemption beavailable until January 1, 2010. EPArequests comment on its proposal tomake the space vehicle/defenseexemption available until January 1,2010.

The Agency believes technicallyfeasible alternatives will likely beavailable for commercial and the vastmajority of non-commercial uses ofHCFCs prior to their phaseout dates.However, there may be specialized useswhere stockpiled, recovered, or recycledquantities are technically inadequate. Atthis time, the only foreseeable use ofthis authorization is for the thermalprotection system used for spaceexploration and satellite launches andfor cleaning applications in certaindefense equipment.

Section 605 of the CAA containscertain constraints on use, production,and consumption of HCFCs. Thisexemption is limited by theseconstraints. For example, under CAASection 605(a), effective January 1, 2015,no person may introduce into interstatecommerce or use any virgin class IIsubstance unless the substance is eitherused and entirely consumed (except fortrace quantities) in the production ofother chemicals, or the substance isused as a refrigerant in appliancesmanufactured prior to January 1, 2020.In addition, CAA section 605(b)(2)prohibits production of class IIsubstances on or after January 1, 2030.Finally, EPA will not authorizequantities of HCFCs under the spacevehicle/defense exemption that wouldcause the U.S. to exceed the HCFCconsumption cap as agreed under theMontreal Protocol.

To facilitate accurate tracking ofexempted HCFC–141b production anduse, EPA proposes requiring themanufacturer of the applicable foam (orthe formulation for spray foam) or thecleaning product to submit informationquarterly to EPA delineating thequantity of HCFC–141b received; the

quantity of HCFC–141b used orcontained in the product; the identity ofthe producer or importer supplying theHCFC–141b; the identity of the recipientof the product made with or containingHCFC–141b; and the quantity of HCFC–141b used or contained in the productsent to the recipient. Additionally, theentity requesting allowances of theexempted material in space vehicles ordefense purposes would report quarterlyto EPA on: the type of product madewith or containing HCFC–141b; thespecific application of the product; thequantity of HCFC–141b used orcontained in the product; and theidentity of the manufacturer of theproduct.

C. Would There Be a Petition System forImporting Used HCFCs?

With today’s action, EPA is proposinga petition system for use in importingused HCFCs. The Protocol allows usedODSs to be imported outside of theprocess required under the cap. Becausethe potential for abusing this exceptionwas high in imports of class I substances(for example, by claiming that a CFCwas used when in fact it was virgin,thus requiring allowances), EPAinstituted a petition process in 1995 thatrequires those wanting to import usedclass I ODSs into the U.S. to petitionEPA for approval before making theimport. To ensure that relevant class IIimports are legitimately used previousto import, EPA proposes a petitionsystem for the import of used HCFCs.EPA will make a definitivedetermination that a shipment containsused HCFCs before granting a non-objection notice allowing the import. Adescription of the petition system thatEPA is proposing is discussed below.

The original reason the Parties to theProtocol agreed to permit internationaltrade in previously used ozone-depleting substances was to ease thetransition to alternatives. In addition,the Parties believed that allowing tradein quantities of already existing usedmaterial would offset the need for newglobal production.

Evidence has increasingly indicatedthat new production overseas of class Imaterial has been clandestinely divertedto the U.S. and other non-Article 5countries as imports of ‘‘used’’ material.EPA anticipates that a similar situationwill evolve as HCFCs are phased outand supply diminishes in the face ofcontinued demands.

EPA is proposing today’s petitionsystem in the hopes that the provisionsof the process can guard against abusesand guarantee that imported material istruly previously used, thus setting thestage for an effective class II petition



system for used imports. EPA requestscomment on all aspects of the proposedpetition system for the import of usedHCFCs.

1. Petition for Each Individual ShipmentEPA is proposing that a petition to

import used HCFCs may only besubmitted on a shipment-by-shipmentbasis. The information in a petition andthe quantity a person wishes to importinto the U.S. must be limited to aspecific shipment and a single U.S.Customs entry. If an importer cannotarrange for the entire quantity to beshipped as one entry through U.S.Customs, the importer would berequired to submit more than onepetition for the quantity in eachindividual Customs entry.

2. Threshold Quantity Requiring aPetition

EPA is proposing a threshold quantityof used HCFCs for an individualshipment for which a person is requiredto submit a petition to import. EPA isproposing that individual shipments offive (5) pounds or more requiresubmitting a petition to import. Athreshold quantity of five pounds allowsa company to take three samples froma large ISO-tank for laboratory analysisand send those samples to a testingfacility in the U.S. without being subjectto the petition requirements. Indeveloping today’s proposal, EPA alsoconsidered requiring that a person whowishes to import any quantity of usedHCFCs, regardless of the size, berequired to submit a petition, therebyeliminating the threshold levelaltogether. EPA is not proposing toeliminate the threshold level altogetherin order to minimize burden on theregulated community and conserveAgency resources.

3. Information RequirementsEPA is proposing that petitions to

import used HCFCs include acomprehensive and detailed list ofinformation. This reflects the type ofinformation that EPA needs toindependently verify the previous use ofthe HCFC. Today’s action proposesunder § 82.24 (c)(3) that contactinformation for the entire chain ofcustody of the used HCFC be providedin the petition. For example, a petitionmust include complete contactinformation for: every source equipmentfrom which the used controlledsubstance was originally recovered;every company that collected thematerial from the equipment; everyprevious owner of the material; andevery company that will be exportingthe used controlled substance. EPA

seeks comment on the effectiveness andpotential burden associated withrequiring such contact information.

Today’s proposal calls for providing acopy of a contract for the purchase ofthe used HCFC in addition to theintended use. In light of efforts byParties to the Protocol to implement alicensing system for exports as well asimports, EPA is proposing that thepetitioner provide an export licensefrom the appropriate government agencyin the country of export. EPA requestscomment on its proposal for detailedinformation to accompany each petitionto import used HCFCs.

EPA also considered proposing thatthe petition to import used HCFCsinclude the name, make and modelnumber of the equipment from whichthe HCFC was as a means to verify thatthe shipment of HCFC had been trulyused to operate equipment. EPArequests comment on the likely utilityand burden of requiring this informationabout the equipment from which thematerial was removed.

4. Timing for Review of a PetitionEPA considered many time frames for

the review of petitions to import usedHCFCs, including a completeelimination of any time limit for EPA’sreview of a petition. EPA alsoconsidered whether to include anautomatic approval provision with anyof these time limits. Through experienceand the unexpected volume of petitionsin the class I petition system to importused CFCs, EPA learned that the 15working-day time limit for petitions wastoo short for a thorough review. Giventhe large number of petitions used beingsubmitted (192 in 1997, 160 in 1998,and 120 in 1999), combined with thefact that EPA will likely require moretime to independently verify theinformation required with today’sdocument, EPA is proposing a timelimit for the review of a petition by EPAof forty (40) working days. EPA believesthat 40 working days allows it the timeto thoroughly verify the information inthe petition and decide whether toallow or disallow the petition. EPArequests comment on whether the 40working-day time limit is practicableand appropriate or whether anothertime limit would be more appropriate.

EPA is specifying that the time forreview begins on the working day afterEPA’s Global Programs Division actuallyreceives the petition. EPA is proposingthat a 40-day time frame with noautomatic approval would allow theAgency to balance the goals ofresponsiveness to legitimate requestsand thoroughness in identifying abusesof the petition process. EPA additionally

proposes, that while EPA will makeevery effort to respond to the petitionerwithin the 40 working-day period, alack of response does not constitute agrant of authority to import. EPArequests comment on the need for adefinitive response from EPA before aperson may import the used HCFCs.

5. Reasons for Issuing an ObjectionNotice

Under the class I petition process,EPA attempts to independently verifythe information contained in a petitionto import used HCFCs, with specialattention given to confirming the prioruse of the material. EPA’s effort toconfirm the information in a petition isconducted with support from othergovernment agencies that are membersof the inter-agency task force combatingillegal imports of ozone-depletingsubstances. Since 1994, EPA has workedwith the inter-agency task forcemembers who include the Departmentof Justice, the Internal Revenue Service,the Customs Service, the StateDepartment, and the Department ofDefense. In the six years ofimplementing the petition process toimport used class I controlledsubstances, EPA has received a varietyof petitions. Many of the petitionsprovided insufficient information orprovided information that EPA hadreason to doubt was sufficient toconfirm that the material was, in fact,previously used.

To adequately process class IIpetitions, EPA is proposing a list ofreasons for which the Agency mightissue an objection notice to a petition toimport used HCFCs.

The first reason for disallowing apetition is a lack of sufficientinformation. If the importer of usedHCFCs fails to supply the requiredinformation in § 82.24(c)(3), this wouldbe a basis for disallowing a petition.

The second reason for disallowing apetition is if the Agency determines thatthe petition contains, or is believed tocontain, false or misleading information.

EPA may issue objection notices forpetitions to import used HCFCs if thetransaction appears to be contrary toprovisions of the Vienna Convention onSubstances that Deplete the OzoneLayer, the Montreal Protocol andDecisions by the Parties, or the non-compliance procedures outlined andinstituted by the ImplementationCommittee of the Montreal Protocol.Section 614(b) of the CAA states that inthe case of conflict between the CAAand the Montreal Protocol, the morestringent provision shall govern. Thus,EPA proposes that if a petition containsinformation about a transaction that



indicates the transaction is contrary tothe provisions of the Convention or theProtocol, including Decisions by theParties to the Protocol or the Protocol’snon-compliance procedures, that shallbe grounds for issuing an objectionnotice.

If a country states that it is no longerallowing exports or if it reports that ithas not granted any export licenses,EPA will treat this as grounds forissuing an objection notice for a petitionto import from that country. EPAproposes to disallow a petition if theappropriate government agency in theexporting country has not agreed toissue any required export license for theindividual shipment of used HCFCs thatis cited in the petition.

Today’s action also proposes that EPAmay issue an objection notice for apetition when the Agency receivesinformation indicating that a personlisted in the petition has produced falseor misleading information regardingtransactions in ozone-depletingsubstances. In the past, EPA hasreceived information from other U.S.government agencies, from otherpetitioners, from non-governmentalorganizations and from foreigngovernments that have implicatedcompanies or individuals in activitiesdesigned to mislead governmentauthorities about activities related toozone-depleting substances.

Another proposed reason fordisallowing a petition is the receipt bythe Administrator of informationregarding activities contrary to EPAregulations by any individual orcompany listed in a petition. Activitiescontrary to EPA regulations that havebeen reported to EPA or discovered byEPA personnel and that are related toozone-depleting substances include, butare not limited to, un-certified recovery;un-certified reclamation; reclamationthat does not meet the requiredspecifications; improper labeling;diverted transhipment; mis-identification during import; forgery ofEPA documents; and fraudulent claimsregarding these activities. This actionproposes that EPA may disallow apetition if the Agency receivesinformation that any person or companylisted in the petition is involved in anactivity that is a potential violation any40 CFR part 82 regulation or anyevidence of false statements.

EPA also believes that conditionsestablished for disbursing monies tospecific country projects by theExecutive Committee of the MontrealProtocol’s Multilateral Fund mayprovide a basis for objecting to petitions.EPA believes as a general rule that noused HCFCs should be imported from

Article 5 countries where reclamationcapacity, for that specific controlledsubstance, has been or is being installedthrough assistance of the MultilateralFund. The U.S. contributesapproximately one fourth of all fundsgoing to the Multilateral Fund, thegeneral purpose of which is to assistcountries operating under Article 5(1) ofthe Protocol to make the transition awayfrom ozone-depleting substances; and atransition policy includes thedevelopment of reclamation facilities inorder to optimize the use of existingozone-depleting substances so as toavoid unnecessary production of virginmaterials. Thus, EPA views theimportation of used HCFCs fromcountries where reclamation capacityhas been supported by the MultilateralFund to run counter to U.S. interest, andcounter to the aims of a global phaseoutstrategy. EPA requests comment on itsproposal that importation of usedHCFCs from Article 5 countries wherereclamation facilities have been fundedby the Multilateral Fund for reclaimingODSs to be used for that country’s basicdomestic needs may provide a basis forobjection to a petition.

EPA is proposing an appeals processthrough re-petitioning within 10working days after the date of anobjection notice from the Administrator,if the basis for the objection notice is‘‘insufficient information.’’ EPAproposes to allow only one re-petitionfor any original petition received byEPA. EPA requests comment on theappropriateness of the aspects proposedabove for an appeals process.

6. Petition and Non-Objection Letter toAccompany the Shipment

EPA is proposing a requirement in§ 82.24(c)(3) that the petition and thenon-objection notice from EPA,approving the import of a used class IIcontrolled substance, accompany eachshipment through U.S. Customs. EPAbelieves that presenting the petition andEPA-approval letter with a shipmentwill facilitate the clearance through U.S.Customs.

D. Would There Be New Restrictions onImports to and Exports From SpecificParties?

EPA is proposing a restriction onParties to whom you (as defined inSection II.C) can export HCFCs and fromwhom you can import HCFCs,beginning in 2004, to comply with anamendment to the Protocol that theParties agreed to at the eleventh meetingin late 1999. This amendment states thatas of January 1, 2004, each Party shallban imports from and exports tocountries that have not ratified the 1992

Copenhagen Amendments, in additionto the original Montreal Protocol (1987)and London Amendments (1990). Thesebans on imports from and exports tonon-Parties reflect an agreed strategy byParties for encouraging ratification ofthe Protocol and each successivepackage of amendments.

Appendix C of this rulemaking willinclude all Parties to the CopenhagenAmendments as of the promulgationdate of the final rule. The UNEP website maintains a real-time list of currentParties to the Protocol and all itsamendments, for those wishing toensure they are viewing the mostcurrent list. The Internet address is:http://www.unep.org/ozone/ratif.htm.

E. Should There Be ConsumptionAllowance Credits for Reductions ofHCFC Production By-productsRegulated by Title VI?

In addressing emissions reductionswith a view toward also avoidingincreases in, and encouragingreductions of, other regulated emissions,EPA realizes that there is at least onecase where the production of an HCFCcreates a by-product that is alsoregulated under Title VI of the CAA. Inan effort to encourage emissionsreductions of other chemicals regulatedunder the CAA, EPA has in the pastexplored the ideas of reduction creditsor offsets. Such an approach may beappropriately used in ensuring that aby-product (regulated under Title VI),created in the production process of anHCFC regulated under Title VI, isvoluntarily controlled to the greatestextent possible. One option to consideris granting one available consumptionallowance (one kilogram) and oneavailable production allowance of theHCFC whose production creates theTitle VI regulated by-product, for eachkilogram of the by-product that isreduced as of a certain date from anestablished baseline. EPA believes thatportions of the consumption allowancesremaining below the U.S. cap, afterallocations are made to eligible newentrants, could be available for such aprogram. Allowances could be grantedonly to the extent available under thecap.

EPA seeks comments on an incentiveapproach of providing allowance creditsto producers of an HCFC who reduceemissions of that HCFC production’s by-product that is also regulated underTitle VI. EPA specifically requestscomments on the advantages anddisadvantages of this type of programand how such a program might work, ifinstituted.



EPA requests comments on any or allof the above additional provisions notdiscussed in the ANPRM.

IV. Summary of Today’s Proposal

A. How Would Allowances BeCalculated and Allocated?

Both production and consumptionallowances would be allocated to thosewith production and/or import activityin their individual baseline year(highest ODP-consumption year among1989, 1994, 1995, 1996, and 1997). Therecent decision by the Parties to freezeproduction of HCFCs requires two kindsof allowances: production andconsumption. As in the class I system,a person would expend productionallowances and consumptionallowances to produce prior to therelevant HCFC phaseout. A personwould need only to expendconsumption allowances to import, andwould receive consumption allowancesin return following proof of export.

New entrants to the HCFC importingmarket, who began importing HCFCsafter the end of 1997 and before April5, 1999, when the ANPRM waspublished, may request allowances fromEPA for historical HCFC importationduring that time. These new entrantswould be eligible for allowances if theysubmitted appropriate requiredquarterly reports to EPA prior topublication of this proposal; sent properdocumentation of HCFC imports to EPA;and if the HCFC import market is theirprimary source of business income. EPAwill issue available allowances to thosecompanies determined eligible by EPAafter review of the documentation.

EPA proposes to allocate and trackallowances on a chemical-by-chemicalbasis, as done in the class I allowancesystem. Although EPA would analyzetotal baseline ODP-weightedconsumption units to determineindividual baseline years, the actualdetailed allocations would be listedchemical-by-chemical. Consumptionallowances would be allocated in thetotal amount of consumption in thebaseline year. Production allowanceswould be allocated using totalproduction for that same year. Trackingwould work in the same way as underthe class I system—any trades betweenchemicals would be ODP-weighted.Although many commenters prefer anODP-weighted unit for allocation,trading and expenditure, EPA hasstudied its reporting obligations to theProtocol and its ability to ensureadequate compliance. To ensurecompany and U.S. compliance, EPAwould need to know specific chemicalsproduced and consumed in order to

maintain a chemical-by-chemicaltracking system. EPA’s required offset of0.1 percent for inter-pollutant and inter-company trades would be significantlylower than the 1 percent used for classI substances. Therefore, the offsetshould not create an undue burden ontrades.

EPA would annually allocate, basedon the relevant baseline(s), for the entireperiod of time prior to each chemical’sphaseout, unless the U.S. is unable tomeet its 35 percent reduction by 2004.In that case, EPA would need to adjustallowances accordingly, on a pro ratabasis. Before 2010, EPA would re-evaluate the percentage allocated fromthe baseline to determine whethermodifications are necessary to meet the65 percent consumption reductionrequired in 2010 by the Protocol. Ifreductions of HCFC–22 and HCFC–142bare not sufficient to reach the Protocol-required 65 percent reduction for 2010,EPA would allocate a lesser percentageof baseline. Any post-phaseoutexceptions would be re-evaluatedsimilarly.

At the beginning of each controlperiod, EPA would officially notify eachallowance holder of the amountavailable for that year, based on therelevant baseline. Between now and2003, each allowance holder wouldreceive 100 percent of their baselineconsumption, and 100 percent of theirhistoric production in the same baselineyear as consumption, unless permanenttrades occur that would transfer thetraded portion of the allowance to thepurchasing entity, or unless the U.S.would be unable to meet its 2004 35percent reduction, as explained above.In 2003, HCFC–141b consumptionallowances would be subtracted fromthe holders’ allocations (other than anypotential exceptions).

Because the Protocol freezesproduction at baseline but does notcurrently require further reductions,EPA is proposing to allow productionafter relevant phaseouts only for verynarrow space vehicle or defense uses ofHCFC–141b, and for export to any Partylisted in Appendix C to Subpart A(Parties that have ratified theCopenhagen Amendments) after January1, 2003. At that same time, an additional15 percent of production baselineallocation of the phased out HCFC, overand above the Protocol production cap,would be allocated for production forexport only to Article 5 countries fortheir basic domestic needs. This post-phaseout production (100 percent ofproduction baseline to Parties that haveratified the Copenhagen Amendmentsplus 15 percent of baseline for Article 5countries) would not require

accompanying consumption allowances,only ‘‘export production allowances’’ or‘‘Article 5 allowances,’’ respectively.When EPA re-evaluates baselineallocations before the HCFC–22 andHCFC–142b phaseout to determine 2010compliance with Protocol reductions, itwould also evaluate the continuedpossibility of offering export productionallowances and Article 5 allowances forHCFC–22 and HCFC–142b.

EPA is proposing to allocate 100percent of the consumption baseline,which is below the U.S. consumptioncap of 15,240 ODP-weighted metrictons. The total baseline figure forconsumption represents the aggregate ofcompanies’ baselines, as describedbelow. The baseline EPA is proposing intoday’s action would be as follows: eachcompany with baseline production and/or consumption in 1989, 1994, 1995,1996, and/or 1997 would take theirhighest ODP-weighted consumptionyear as their baseline. Both productionand consumption allowances would bederived from the relevant individualbaselines in the applicable year. Theallowances remaining between theaggregate baseline and the consumptioncap could be used for allocations forthose eligible entrants new to the HCFCmarket between January 1, 1998 andApril 5, 1999.

EPA is proposing to use 100 percentof the baseline years’ production, whichwould keep the U.S. in line with itsproduction cap.

We propose to include 1989 as apotential baseline year because we havevery good numbers from our earlierrequests for baseline data, and class IIsubstances began to increase theirpresence in the market during that time.In 1990–1993, our data on consumptionwas poor, because reporting was not yetrequired on a regular basis. To obtainaccurate numbers from those years, wewould need to request the data fromeach participating company, along withinvoices, bills of lading, and otherdocuments that could help verify theaccuracy of the production andconsumption numbers submitted. Thetime entailed and the uncertainty ofreceiving complete and accurateinformation rules out attempting toobtain figures from 1990 to 1993.Detailed reporting, for which we havesupporting documentation and/orwhich we have verified with individualcompanies, began in 1994. Additionally,activity in class II ODSs grewsignificantly from 1994 to 1997.Therefore, including those yearsbeginning with 1994 is reasonable. Theyears 1998 and later would not beincluded, except for certain eligible newentrants as discussed above, because



they would likely be artificially high,reflecting companies’ anticipation ofEPA’s allocation system and the desireto stockpile.

B. Would There Be Additional Import orExport Restrictions?

We are proposing a restriction onimporting and exporting HCFCs tocomply with the Beijing Amendments tothe Montreal Protocol. The proposedrestriction would ban imports from andexports to countries that have notratified the Copenhagen Amendments,in addition to the original Protocol andthe London Amendments. These bansare further discussed in Section III.D. oftoday’s proposal.

We are also proposing a petitionsystem—similar to the one provided forused class I ODSs, with strengtheningmodifications—for the import of usedHCFCs. A person wishing to import aused HCFC into the U.S. would need topetition EPA by providing detailedinformation on the import, including:specific name and amounts of theHCFC; source from which it wasrecovered; contact information for thatsource; intended shipper; intended port;date of import; intended reclamationand use in the U.S., and more. EPAwould thoroughly verify information inthe petition, and either issue a ‘‘non-objection notice’’ allowing the person toimport the shipment, or an ‘‘objectionnotice’’ disallowing the import. SeeSection III.C. of this action for furtherdiscussion.

C. How Would Transfers Function?The proposal would allow intra-

company, inter-pollutant transfers,using ODP-weighting to account fordiffering ODPs between chemicals. Theproposal would also allow inter-company trading (both same pollutantand inter-pollutant trading) with ODP-weighting required if two or moredifferent chemicals are involved.International transfer of productionallowances only would be permitted.An environmental offset, required bythe CAA, is proposed at 0.1 percent forinter-pollutant and inter-companytrades. At one-tenth of one percent, EPAbelieves the burden on inter-pollutantand inter-company trades would beminimal.

Transfers could be made on atemporary basis, to be applied withinthe control period (1/1 through 12/31)in which the trade is made. EPA alsoproposes to allow permanent baselinetrades, which would transfer theallowances for the remaining periodprior to phaseout. The recipient of theallowances would add those to itsbaseline, while the transferor would

subtract them from his/her baseline. Forexample, if a company was allocated150 allowances of HCFC–141b as part ofits baseline, and that company thenreceived 100 HCFC–141b permanentbaseline allowances from a transferringcompany, the receiving company couldexpend 250 HCFC–141b allowanceseach year until 2003, at which time thatcompany would subtract the entire 250HCFC–141b (or commensurate ODP-weighted equivalent) allowances fromits baseline allowances. The companythat transferred the 100 allowances tothe receiving company would notsubtract those 100 HCFC–141ballowances from its baseline in 2003,because it already subtracted thoseallowances when it transferred them ona permanent basis to the receivingcompany.

EPA is not proposing to supplementan allocation system with furtherregulation under sections 610, 611, or612 of the CAA at this time. EPAbelieves that compliance with theconsumption and production caps canbe assured through the proposedallocation system of class II allowances.

D. How Would the Reporting andRecordkeeping Requirements Change?

Recordkeeping and reporting wouldbe similar to that used for class I. EPAwould require quarterly reports,outlining each chemical and theamounts produced, imported,transformed, destroyed, and exported.These forms would be intended for usebetween the effective date of the finalrule and the next reporting changesmade to the phaseout regulations byEPA, or modifications made to addressthe incremental phaseouts past 2010,whichever is earlier.

EPA is proposing that failure byproducers to keep records on theirproduction or to submit reportsregarding their production would leadthe Administrator to assume that theproducer has produced at full capacityduring the period for which recordswere not kept, for purposes ofdetermining possible violations. EPArequests comment on this proposal toaccount for missing records or reports inorder to determine possible violations.

EPA is proposing that reporting forexports be conducted quarterly, as isreporting for all other activities. Underthe class I system, reporting on exportswas required annually. However, due tothe recent adjustment to the Protocolbanning trade with non-Parties to theCopenhagen Amendments, EPA needsdata that is more current for review.Forms for recording exports made usingexport production allowances after aphaseout would require information on

the chemical and the volume, withaccompanying copies of the bills oflading and invoices. Trades of class IIsubstances would be reported in thesame manner as class I trades. ODP-weighting and calculation of theenvironmental offset would need to beaccounted for in the transfercalculations, as they were for class Isubstances.

Entities granted space vehicle/defenseallowances would report quarterly onthe quantity of exempted HCFC–141bthat was received and used, and how itwas used. The foam formulator/supplierwould also report quarterly on theproducer from whom the exemptedHCFC–141b was received, the amountreceived, the amount used in fulfillingspace vehicle or defense needs, and theamount sold to whom in whichproducts. The same entities granted theallowances would certify to EPA beforethe beginning of each year that a viablealternative to HCFC–141b, or stockpiled,recovered, or recycled HCFC–141b wasnot adequate or not commerciallyavailable.

EPA is currently exploring thepossibility of having reports filled outand submitted to the Agency over asecure Web site. If and when electronicreporting would occur, EPA wouldchange its guidance document and itsInformation Collection Request toindicate a change in burden hours.

EPA requests comment on any and allportions of today’s proposal.

V. Administrative Requirements

A. Executive Order 12866

Under Executive Order 12866 (58 FR51735, October 4, 1993), the Agencymust determine whether this regulatoryaction is ‘‘significant’’ and thereforesubject to Office of Management andBudget (OMB) review and therequirements of the Executive Order.The Executive Order defines‘‘significant regulatory action’’ as anyregulatory action (including an advancenotice of proposed rulemaking) that islikely to result in a rule that may:

(1) Have an annual effect on theeconomy of $100 million or more oradversely affect in a material way theeconomy, a sector of the economy,productivity, competition, jobs, theenvironment, public health or safety, orState, local, or tribal governments orcommunities;

(2) Create a serious inconsistency orotherwise interfere with an action takenor planned by another agency;

(3) Materially alter the budgetaryimpact of entitlements, grants, user fees,or loan programs or the rights andobligations of recipients thereof; or,



(4) Raise novel legal or policy issuesarising out of legal mandates, thePresident’s priorities, or the principlesset forth in the Executive Order.

It has been determined by OMB andEPA that this action is a ‘‘significantregulatory action’’ under the terms ofExecutive Order 12866 and is thereforesubject to OMB review under theExecutive Order even though the annualeffect on the economy is expected to beless than $100 million. This documentwas reviewed by OMB and changesrecommended by OMB have been madeand documented for the public record.

B. Regulatory Flexibility Act (RFA), asAmended by the Small BusinessRegulatory Enforcement Fairness Act of1996 (SBREFA), 5 U.S.C. 601 et seq.

The Regulatory Flexibility Act (RFA)generally requires an agency to preparea regulatory flexibility analysis of anyrule subject to notice and commentrulemaking requirements under theAdministrative Procedure Act or anyother statute unless the agency certifiesthat the rule will not have a significanteconomic impact on a substantialnumber of small entities. Small entitiesinclude small businesses, smallorganizations, and small governmentaljurisdictions.

For purposes of assessing the impactsof today’s rule on small entities, smallentity is defined as: (1) A small businessthat employs 1000 employees or less; (2)a small governmental jurisdiction that isa government of a city, county, town,school district or special district with apopulation of less than 50,000; and (3)a small organization that is any not-for-profit enterprise which is independentlyowned and operated and is notdominant in its field.

After considering the economicimpacts of today’s proposed rule onsmall entities, I certify that this actionwill not have a significant economicimpact on a substantial number of smallentities.

We have determined that 13 smallbusinesses, or 50 percent of the totalbusinesses addressed, would receiveallowances, for which recordkeepingand reporting to EPA is required. Theadministrative recordkeeping andreporting these small businesses willexperience will amount to an impact ofbetween 0.01 and 0.02 percent of theirHCFC revenues alone. Whenconsidering that the vast majority dealin numerous chemicals and/or alsoobtain revenues from services provided,this percentage for the majority wouldbe significantly lower.

Although this proposed rule wouldnot have a significant economic impacton a substantial number of small

entities, EPA nonetheless has tried toreduce the impact of this rule on smallentities. Although small entitiesreceiving allowance allocations wouldbe subject to the same recordkeepingand reporting requirements as the largerentities, for purposes of trackingallowance trades and expenditures, thesmall entities would be on the samefooting as the larger entities; they wouldbe receiving their best year of activity inthe range of years discussed above as abaseline year for determining allowanceallocations, and would be able toconduct their business with a degree ofcertainty in a competitive market. Likethe large entities, the small entitieswould receive allowances for the entirephaseout period, with the necessaryadjustments each calendar year toaccommodate the required reductions inconsumption agreed to by the Parties tothe Protocol and the phaseouts ofHCFC–141b, HCFC–22, and HCFC–142b.

EPA believes that the ability totransfer allowances among HCFCsprovides the greatest flexibility for smallentities to manage their allocation.Unlike the class I system for transfers,there is no restriction to limit inter-pollutant transfers to groups ofsubstances. Inter-pollutant transfers,also known as intra-company transfersor trades, would allow a company toshift allowances internally from oneHCFC to another to respond to marketforces, e.g. HCFC–142b allowances forHCFC–22 allowances. Inter-companytransfers of allowances would also bepossible, either on a current-year basisor on a permanent basis. Current-yeartrades are temporary trades and arereflected in a company’s balance ofallowances in the control period inwhich the trade occurs.

By using the phaseout schedules andthe option for current-year or permanenttrades, a small entity could opt forshort-term decisions or long-termdecisions concerning the allowances itholds after evaluating its place in themarket. In addition, the offset requiredby the CAA is proposed at 0.1 percent,0.9 percent less than that required underthe class I allowance trading system;such an offset would still provide theenvironmental benefit required byCongress without penalizing smallentities should they wish to availthemselves of transfers. EPA estimatesthat the burden would be negligible onsmall businesses, while those samesmall businesses would gain amarketable asset in their allocatedallowances. The actual burden wouldconsist of quarterly reports onproduction, imports, exports, andallowance trades, as well as paperwork

describing any trades in which thebusiness decides to engage. Theestimated recordkeeping and quarterlyreporting burden on the affected smallbusinesses would be about 40 hours peryear per business, at an estimated costof $3,070. Each trade made at thediscretion of the small business wouldadd a burden of 4 hours at a cost of$307, basing the calculation on a cost of$76.88 per hour.

EPA has also carefully reviewed thequarterly reports submitted by smallentities for the baseline years underconsideration to ensure that the correctquantities have been ascribed to eachentity for each year. EPA consulted withthe small entities in order to reconcileany disparities encountered during therecord review.

We continue to be interested in thepotential impacts of the proposed ruleon small entities and welcomecomments on issues related to suchimpacts.

C. Executive Order 13045: Children’sHealth Protection

Executive Order 13045: ‘‘Protection ofChildren from Environmental HealthRisks and Safety Risks’’ (62 FR 19885,April 23, 1997) applies to any rule that:(1) is determined to be ‘‘economicallysignificant’’ as defined under ExecutiveOrder 12866, and (2) concerns anenvironmental health or safety risk thatEPA has reason to believe may have adisproportionate effect on children. Ifthe regulatory action meets both criteria,the Agency must evaluate theenvironmental health or safety effects ofthe planned rule on children, andexplain why the planned regulation ispreferable to other potentially effectiveand reasonably feasible alternativesconsidered by the Agency.

EPA interprets Executive Order 13045as applying only to those regulatoryactions that are based on health or safetyrisks, such that the analysis requiredunder Section 5–501 of the Order hasthe potential to influence the regulation.This proposed rule is not subject toExecutive Order 13045 because itimplements specific phaseout schedulesestablished under the CAA and theMontreal Protocol.

D. National Technology Transfer andAdvancement Act

The National Technology Transferand Advancement Act of 1995(NTTAA), Section 12(d), Public Law104–113, requires federal agencies anddepartments to use technical standardsthat are developed or adopted byvoluntary consensus standards bodies,using such technical standards as ameans to carry out policy objectives or



activities determined by the agenciesand departments. If use of suchtechnical standards is inconsistent withapplicable law or otherwise impractical,a federal agency or department mayelect to use technical standards that arenot developed or adopted by voluntaryconsensus standards bodies if the headof the agency or department transmits tothe Office of Management and Budgetan explanation of the reasons for usingsuch standards.

This proposed rule does not mandatethe use of any technical standards;accordingly, the NTTAA does not applyto this action.

E. Executive Order 13132: FederalismExecutive Order 13132, entitled

‘‘Federalism’’ (64 FR 43255, August 10,1999), requires EPA to develop anaccountable process to ensure‘‘meaningful and timely input by Stateand local officials in the development ofregulatory policies that have federalismimplications.’’ ‘‘Policies that havefederalism implications’’ is defined inthe Executive Order to includeregulations that have ‘‘substantial directeffects on the States, on the relationshipbetween the national government andthe States, or on the distribution ofpower and responsibilities among thevarious levels of government.’’

Under section 6 of Executive Order13132, EPA may not issue a regulationthat has federalism implications, thatimposes substantial direct compliancecosts, and that is not required by statute,unless the Federal government providesthe funds necessary to pay the directcompliance costs incurred by State andlocal governments, or EPA consults withState and local officials early in theprocess of developing the proposedregulation. EPA also may not issue aregulation that has federalismimplications and that preempts Statelaw unless the Agency consults withState and local officials early in theprocess of developing the proposedregulation.

This proposed rule does not haveFederalism implications. It will nothave substantial direct effects on theStates, on the relationship between thenational government and the States, oron the distribution of power andresponsibilities among the variouslevels of government, as specified inExecutive Order 13132. The proposalsdiscussed in this document are directedto economic entities that either produce,import, export, transform, or destroyclass II controlled substances, and not toState or local governments. Thus, therequirements of Section 6 of theExecutive Order do not apply to thisrule.

F. Executive Order 13175: Consultationand Coordination With Indian TribalGovernments

Executive Order 13175, entitled‘‘Consultation and Coordination withIndian Tribal Governments’’ (65 FR67249, November 6, 2000), requires EPAto develop an accountable process toensure ‘‘meaningful and timely input bytribal officials in the development ofregulatory policies that have tribalimplications.’’ ‘‘Policies that have tribalimplications’’ is defined in theExecutive Order to include regulationsthat have ‘‘substantial direct effects onone or more Indian tribes, on therelationship between the Federalgovernment and the Indian tribes, or onthe distribution of power andresponsibilities between the Federalgovernment and Indian tribes.’’

This proposed rule does not havetribal implications. It will not havesubstantial direct effects on tribalgovernments, on the relationshipbetween the Federal government andIndian tribes, or on the distribution ofpower and responsibilities between theFederal government and Indian tribes,as specified in Executive Order 13175.

Today’s rule does not significantly oruniquely affect the communities ofIndian tribal governments. The optionsdiscussed are directed to entities thateither produce, import, export,transform, or destroy HCFCs, and not toIndian tribal governments or theircommunities. Thus, Executive Order13175 does not apply to this rule.

In the spirit of Executive Order 13175,and consistent with EPA policy topromote communications between EPAand tribal governments, EPAspecifically solicits additional commenton this proposed rule from tribalofficials.

G. Unfunded Mandates Reform Act

Title II of the Unfunded MandatesReform Act of 1995 (UMRA), PublicLaw 104–4, establishes requirements forFederal agencies to assess the effects oftheir regulatory actions on State, local,and tribal governments and the privatesector. Under Section 202 of the UMRA,EPA generally must prepare a writtenstatement, including a cost-benefitanalysis, for proposed and final ruleswith ‘‘Federal mandates’’ that mayresult in expenditures to State, local,and tribal governments, in the aggregate,or to the private sector, of $100 millionor more in any one year. Beforepromulgating an EPA rule for which awritten statement is needed, Section 205of the UMRA generally requires EPA toidentify and consider a reasonablenumber of regulatory alternatives and

adopt the least costly, most cost-effective or least burdensome alternativethat achieves the objectives of the rule.The provisions of Section 205 do notapply when they are inconsistent withapplicable law. Moreover, Section 205allows EPA to adopt an alternative otherthan the least costly, most cost-effectiveor least burdensome alternative if theAdministrator publishes with the finalrule an explanation why that alternativewas not adopted. Before EPA establishesany regulatory requirements that maysignificantly or uniquely affect smallgovernments, including tribalgovernments, it must have developedunder Section 203 of the UMRA a smallgovernment agency plan. The plan mustprovide for notifying potentiallyaffected small governments, enablingofficials of affected small governmentsto have meaningful and timely input inthe development of EPA regulatoryproposals with significant Federalintergovernmental mandates,development of EPA regulatoryproposals with significant Federalintergovernmental mandates, andinforming, educating, and advisingsmall governments on compliance withthe regulatory requirements.

EPA has determined that this ruledoes not contain a Federal mandate thatmay result in expenditures of $100million or more for State, local, andtribal governments, in the aggregate, orthe private sector in any one year.Entities in the private sector that eitherproduce, import, export, transform, ordestroy HCFCs will be operating underan allowance allocation system verysimilar to the system selected for CFCs(53 FR 30566, August 12, 1988), whichwas determined to be the mosteconomically efficient, market-based,and simple to administer in meeting therequirements of the Protocol.Recordkeeping would be somewhatsimplified due to the absence ofessential use allowances anddestruction credits. The experiencegained by those entities familiar withthe class I allowance allocation systemwould carry over in the class IIallowance allocation system. Thus,today’s rule is not subject to therequirements of Section s 202 and 205of the UMRA.

H. Paperwork Reduction ActThe information collection

requirements in this proposed rule havebeen submitted for approval to theOffice of Management and Budget(OMB) under the Paperwork ReductionAct, 44 U.S.C. 3501 et seq. AnInformation Collection Request (ICR)document has been prepared by EPA(ICR No. 2014) and a copy may be



obtained from Sandy Farmer by mail atCollection Strategies Division; U.S.Environmental Protection Agency(2822); 1200 Pennsylvania Avenue, NW,Washington, DC 20460, by email [email protected], or bycalling (202) 260–2740. A copy may alsobe downloaded off the Internet at http://www/epa.gov/icr.

The recordkeeping and reportingrequirements proposed in this rule aresimilar to those used in the class Iallowance system that has been in placefor several years. The informationcollected will be utilized to monitorbusiness compliance with the proposedclass II allowance system. Theinformation will also be used to complywith the reporting requirements agreedto by the Parties to the MontrealProtocol on Substances that Deplete theOzone Layer. The information isintended to ensure that the U.S. meetsits obligations to control and administerthe phaseouts of class II substancesunder the Protocol and the CAAAmendments of 1990.

Reporting requirements mandated inSection 603 of the CAA relative to classII substances are currently in place in 40CFR 82.13(n) and (o). Newrecordkeeping requirements andexpanded reporting requirements toensure accurate expenditures ofallowances and trades of allowances areproposed. Responses to the collection ofinformation are mandatory pursuant toSection 114 of the CAA.

Information collected from businessesmay be claimed as confidential byclearly identifying the material asconfidential. Such information will betreated in accordance with EPA’sprocedures for handling informationclaimed as confidential under 40 CFRPart 2, Subpart B and will only bedisclosed by the means set forth in thatsubpart.

It is estimated that the annualreporting burden for producers is 1,132hours and for importers it is 1,800hours. This includes maintainingrecords, preparing and submittingquarterly reports on production, import,exports, and claims for transfers ofallowances and offsets. The averageburden hours per response is estimatedto be between 283 and 450 hours. Theproposed frequency of response is fourtimes per year and the likely number ofrespondents will be 7 producers and 14importers, although some of theproducers and some of the importersalso function as exporters. The onlyindustry requirements for the start-upphase are an evaluation of the impact ofthe allowance system and thedevelopment of a plan of action. Thestart-up burden is estimated to be 910

hours for producers and 1,820 hours forimporters.

Start-up costs are estimated to amountto $209,882, after which annualindustry cost is estimated to be$225,412 to maintain records ofproduction, import, and export; submitquarterly reports to EPA on production,import and export; provide additionalinformation requested by EPA; preparetransfer claims; and submit petitions toimport used HCFCs. The latter twofunctions are not periodical tasks butare initiated by the person based onbusiness decisions.

U.S. agencies, departments orinstrumentalities, or related entitiesinvolved in space vehicle endeavors, arebeing asked in the initial application foran exemption to produce or importHCFC–141b for space vehicle or narrowdefense needs to identify the quantity ofHCFC–141b needed for each controlperiod, an estimate of the number ofcontrol periods over which such anexemption would be necessary, and adetailed description of the need met byHCFC–141b in this proposal. EPA isproposing that the entities supplytechnical descriptions of the processesin which HCFC–141b is being used, theareas where the product will be applied,and why alternatives and substitutes arenot sufficient to eliminate the use ofHCFC–141b. EPA is also proposing thatentities supply a detailed analysisshowing why stockpiled, recovered, orrecycled quantities are not technicallyfeasible for use and a detaileddescription of continuing investigationsinto and progress on possiblealternatives and substitutes by theapplicants.

Entities granted space vehicle/defenseallowances for the production of HCFC–141b products would be required toreport quarterly to EPA on the type andapplication of the products receivedfrom the manufacturer and the quantityof HCFC–141b contained in theproducts. The manufacturer wouldreport quarterly to EPA the quantity andsupplier of HCFC–141b receivedbecause of space vehicle/defenseallowances; the identity of the recipientof the products; and the quantity ofHCFC–141b used or contained in theproducts. It is estimated that the annualreporting burden for the recipient of theallowances is about 20 hours at a costof about $864 and the burden for themanufacturer is about 20 hours at a costof about $1,538.

Burden means the total time, effort, orfinancial resources expended by personsto generate, maintain, retain, or discloseor provide information to or for aFederal agency. This includes the timeneeded to review instructions; develop,

acquire, install, and utilize technologyand systems for the purposes ofcollecting, validating, and verifyinginformation, processing andmaintaining information, and disclosingand providing information; adjust theexisting ways to comply with anypreviously applicable instructions andrequirements; train personnel to be ableto respond to a collection ofinformation; search data sources;complete and review the collection ofinformation; and transmit or otherwisedisclose the information.

An Agency may not conduct orsponsor, and a person is not required torespond to a collection of informationunless it displays a currently valid OMBcontrol number. The OMB controlnumbers for EPA’s regulations are listedin 40 CFR part 9 and 48 CFR Chapter15.

Comments are requested on theAgency’s need for this information, theaccuracy of the provided burdenestimates, and any suggested methodsfor minimizing respondent burden,including through the use of automatedcollection techniques. Send commentson the ICR to the Director; CollectionStrategies Division; U.S. EnvironmentalProtection Agency (2822); 1200Pennsylvania Ave., NW; Washington,DC 20460; and to the Office ofInformation and Regulatory Affairs;Office of Management and Budget; 72517th St., NW; Washington, DC 20503,marked ‘‘Attention: Desk Officer forEPA.’’ Include the ICR number in anycorrespondence. Since OMB is requiredto make a decision concerning the ICRbetween 30 and 60 days after July 20,2001, a comment to OMB is best assuredof having its full effect if OMB receivesit by August 20, 2001. The final rulewill respond to any OMB or publiccomments on the information collectionrequirements contained in this proposal.

I. Executive Order 13211: Energy Effects

This rule is not subject to ExecutiveOrder 13211, ‘‘Actions ConcerningRegulations That Significantly AffectEnergy Supply, Distribution, or Use’’ (66FR 28355, May 22, 2001) because it isnot a significant regulatory action underExecutive Order 12866.


Environmental protection,Administrative practice and procedure,Air pollution control, Chemicals,Chlorofluorocarbons, Exports,Hydrochlorofluorocarbons, Imports,Reporting and recordkeepingrequirements.



Dated: July 2, 2001.Christine Todd Whitman,Administrator.

For the reasons stated in thepreamble, 40 CFR part 82 is proposed tobe amended as follows:

PART 82—PROTECTION OFSTRATOSPHERIC OZONE

1. The authority citation for Part 82continues to read as follows:

Authority: 42 U.S.C. 7414, 7601, 7671–7671q.

Subpart A—Production andConsumption Controls

2. Amend § 82.3 as follows:a. Revise the section heading;b. Revise the following definitions:

‘‘Article 5 allowances’’, ‘‘Baselineconsumption allowances’’, ‘‘Baselineproduction allowances’’, ‘‘Consumptionallowances’’, ‘‘Destruction credits’’,‘‘Party’’, ‘‘Production allowances’’, and‘‘Transformation credits’;

c. Add new definitions in alphabeticalorder for the terms ‘‘Export productionallowances’’, ‘‘Individual shipment’’,‘‘Non-objection notice’’, ‘‘Sourcefacility’’, ‘‘Space vehicle/defenseallowances’’, ‘‘Unexpended spacevehicle/defense allowances’’, and‘‘Unexpended export productionallowances’’.

The revisions and additions read asfollows:

§ 82.3 Definitions for class I and class IIcontrolled substances.* * * * *

Article 5 allowances means theallowances apportioned under § 82.9(a)and § 82.18(a).

Baseline consumption allowancesmeans the consumption allowancesapportioned under § 82.6 and § 82.19.

Baseline production allowancesmeans the production allowancesapportioned under § 82.5 and § 82.17.* * * * *

Consumption allowances means theprivileges granted by this subpart toproduce and import controlledsubstances; however, consumptionallowances may be used to producecontrolled substances only inconjunction with productionallowances. A person’s consumptionallowances for class I substances are thetotal of the allowances obtained under§§ 82.6 and 82.7 and 82.10, as may bemodified under § 82.12 (transfer ofallowances). A person’s consumptionallowances for class II substances arethe total of the allowances obtainedunder §§ 82.19 and 82.20, as may bemodified under § 82.23.* * * * *

Destruction credits means thoseprivileges that may be obtained under§ 82.9 to produce class I controlledsubstances.* * * * *

Export production allowances meansthe privileges granted by § 82.18 toproduce HCFC–141b for exportfollowing the phaseout of HCFC–141bon January 1, 2003.* * * * *

Individual Shipment means thekilograms of a used controlled substancefor which a person may make one (1)U.S. Customs entry, not to be dis-aggregated, as identified in the non-objection letter from the Administratorunder § 82.13(g) and § 82.24(c)(4).* * * * *

Non-Objection Notice means theprivilege granted by the Administratorto import a specific individual shipmentof used controlled substance inaccordance with § 82.13(g) and§ 82.24(c) (3) and (4).* * * * *

Party means any foreign state that islisted in Appendix C to this subpart(pursuant to instruments of ratification,acceptance, or approval deposited withthe Depositary of the United NationsSecretariat), as having ratified thespecified control measure in effectunder the Montreal Protocol. Thus, forpurposes of the trade bans specified in§ 82.4(l)(2) pursuant to the LondonAmendments, only those foreign statesthat are listed in Appendix C to thissubpart as having ratified both the 1987Montreal Protocol and the LondonAmendments shall be deemed to beParties. For purposes of the trade bansspecified in §§ 82.15(e)(1) pursuant tothe 1999 Beijing Amendment, onlythose foreign states that are listed in thethird column of Appendix C to thissubpart as having ratified theCopenhagen Amendments shall bedeemed to be Parties.* * * * *

Production allowances means theprivileges granted by this subpart toproduce controlled substances;however, production allowances may beused to produce controlled substancesonly in conjunction with consumptionallowances. A person’s productionallowances for class I substances are thetotal of the allowances obtained under§§ 82.7, 82.5 and 82.9, and as may bemodified under § 82.12 (transfer ofallowances). A person’s productionallowances for class II substances arethe total of the allowances obtainedunder § 82.17 and as may be modifiedunder §§ 82.18 and 82.23.* * * * *

Source Facility means the exactlocation at which a used controlledsubstance was recovered from a piece ofequipment, including the name of thecompany responsible for, or owning thelocation, a contact person at thelocation, the mailing address for thatspecific location, and a phone numberand a fax number for the contact personat the location.

Space vehicle/defense allowancesmeans the privileges granted to spacevehicle program or a defense entity bythis subpart to order production of or toimport HCFC–141b, deemed critical bythe Administrator for use on spacevehicles intended for travel beyond theearth’s atmosphere or for narrowdefense needs, as determined by theAdministrator in accordance with§ 82.18(j).* * * * *

Transformation Credits means thoseprivileges that may be obtained under§ 82.9 to produce class I controlledsubstances.* * * * *

Unexpended export productionallowances means export productionallowances that have not been used. Aperson’s unexpended export productionallowances are the total of the quantityof the export production allowances theperson has authorization under§ 82.18(b) to hold for that controlperiod, minus the quantity of class IIsubstances that the person has producedat that time during the same controlperiod.* * * * *

Unexpended space vehicle/defenseallowances means space vehicle/defenseallowances that have not been used. Aperson’s unexpended space vehicle/defense allowances are the total of thequantity of the space vehicle/defenseallowances the person has authorizationunder § 82.18(j) to hold for that controlperiod, minus the quantity of HCFC–141b that the person has had producedor has had imported at that time duringthe same control period.* * * * *

3. Amend § 82.4 as follows:a. Revise the section heading;b. Remove paragraphs (n) through (s)

and paragraph (u).c. Redesignate paragraph (t) as (n).

§ 82.4 Prohibitions for class I controlledsubstances.

* * * * *4. Amend § 82.5 as follows:a. Revise the section heading;b. Remove paragraph (h).



§ 82.5 Apportionment of baselineproduction allowances for class I controlledsubstances.

* * * * *5. Amend § 82.6 as follows:a. Revise the section heading;b. Remove paragraph (h).

§ 82.6 Apportionment of baselineconsumption allowances for class Icontrolled substances.

§ 82.8 [Removed]6. Section 82.8 is removed.7. Section 82.9 is amended by revising

the section heading as follows:

§ 82.9 Availability of productionallowances in addition to baselineproduction allowances for class I controlledsubstances.

8. Section 82.10 is amended byrevising the section heading as follows:

§ 82.10 Availability of consumptionallowances in addition to baselineconsumption allowances for class Icontrolled substances.


§ 82.11 Exports of class I controlledsubstances to Article 5 Parties.


§ 82.12 Transfers of allowances for class Icontrolled substances.

11. Amend § 82.13 as follows:a. Revise the section heading;b. Remove paragraphs (n) and (o).c. Redesignate paragraphs (p) through

(z) as (n) through (x)

§ 82.13 Recordkeeping and reportingrequirements for class I controlledsubstances.

12. Add §§ 82.15 through 82.24 tosubpart A to read as follows:

§ 82.15 Prohibitions for class II controlledsubstances.

(a) Production. (1) Effective January 1,2002, no person may produce class IIsubstances in excess of the quantity ofunexpended production allowances,unexpended Article 5 allowances,unexpended export productionallowances, or unexpended spacevehicle/defense allowances held by thatperson for that substance under theauthority of this subpart at any time inany control period, unless thesubstances are transformed or destroyeddomestically or by a person of anotherParty. Every kilogram of excessproduction constitutes a separateviolation of this subpart.

(2) Effective January 1, 2002, noperson may produce class II substancesin excess of the quantity of unexpendedconsumption allowances, unexpended

Article 5 allowances, unexpendedexport production allowances, orunexpended space vehicle/defenseallowances held by that person underthe authority of this subpart at any timein any control period, unless thesubstances are transformed or destroyeddomestically or by a person of anotherParty, or unless they are produced usingan exception granted in paragraph (f) ofthis section. Every kilogram of excessproduction constitutes a separateviolation of this subpart.

(3) Effective January 1, 2002, noperson may use production allowancesto produce a quantity of class IIsubstance unless that person holdsunder the authority of this subpart at thesame time consumption allowancessufficient to cover that quantity of classII substances. No person may useconsumption allowances to produce aquantity of class II substances unless theperson holds under authority of thissubpart at the same time productionallowances sufficient to cover thatquantity of class II substances.

(4) Effective January 1, 2003, noperson may produce HCFC–141b exceptfor use in a process resulting in itstransformation or its destruction, forexport under § 82.18(a) usingunexpended Article 5 allowances, forexport under § 82.18(b) usingunexpended export productionallowances, for space vehicle/defenseneeds using unexpended space vehicle/defense allowances, or for exceptionspermitted in paragraph (f) of thissection.

(5) Effective January 1, 2010, noperson may produce HCFC–22 orHCFC–142b for any purpose other thanfor use in a process resulting in theirtransformation or their destruction, foruse in equipment manufactured beforeJanuary 1, 2010, for export under§ 82.18(a) using unexpended Article 5allowances, or for exceptions permittedin paragraph (f) of this section.

(6) Effective January 1, 2015, noperson may produce class II substancesnot previously controlled, for anypurpose other than for use in a processresulting in their transformation or theirdestruction, for use as a refrigerant inequipment manufactured before January1, 2020, for export under § 82.18(a)using unexpended Article 5 allowances,or for exceptions permitted in paragraph(f) of this section.

(7) Effective January 1, 2020, noperson may produce HCFC–22 orHCFC–142b for any purpose other thanfor use in a process resulting in theirtransformation or their destruction, forexport under § 82.18(a) usingunexpended Article 5 allowances, or for

exceptions permitted in paragraph (f) ofthis section.

(8) Effective January 1, 2030, noperson may produce class II substances,for any purpose other than for use in aprocess resulting in their transformationor their destruction, for export under§ 82.18(a) using unexpended Article 5allowances, or for exceptions permittedin paragraph (f) of this section.

(9) Effective January 1, 2040, noperson may produce class II substancesfor any purpose other than for use in aprocess resulting in their transformationor their destruction, or for exceptionspermitted in paragraph (f) of thissection.

(b) Import. (1) Effective January 1,2002, no person may import class IIsubstances (other than transhipments,heels or used class II substances), exceptfor use in a process resulting in theirtransformation or their destruction, inexcess of the quantity of unexpendedconsumption allowances held by thatperson under the authority of thissubpart, at any time in any controlperiod. Every kilogram of excessimportation constitutes a separateviolation of this subpart.

(2) Effective January 1, 2002, noperson may import, at any time in anycontrol period, a used class II substance,without having submitted a petition tothe Administrator and received a non-objection notice from the Administratorin accordance with § 82.24(c)(3) and (4).A person issued a non-objection noticefor the import of an individual shipmentof used class II substances may nottransfer or confer the right to import,and may not import any more than theexact quantity (in kilograms) of the usedclass II substance stated in the non-objection notice. Every kilogram ofimportation of used class II substance inexcess of the quantity stated in the non-objection notice issued by theAdministrator in accordance with§ 82.24(c)(3) and (4) constitutes aseparate violation.

(3) Effective January 1, 2003, noperson may import HCFC–141b (otherthan transhipments, heels or used classII substances) in excess of the quantityof unexpended space vehicle/defenseallowances held by that person exceptfor use in a process resulting in itstransformation or its destruction, or forexceptions permitted in paragraph (f) ofthis section.

(4) Effective January 1, 2010, noperson may import HCFC–22 or HCFC–142b (other than transhipments, heels orused class II substances) for any purposeother than for use in a process resultingin their transformation or theirdestruction, for exceptions permitted inparagraph (f) of this section, or for use



in equipment manufactured prior toJanuary 1, 2010.

(5) Effective January 1, 2015, noperson may import class II substancesnot subject to the requirements ofparagraph (b)(3) or (4) of this section(other than transhipments, heels or usedclass II substances) for any purposeother than for use in a process resultingin their transformation or theirdestruction, for exceptions permitted inparagraph (f) of this section, or for useas a refrigerant in equipmentmanufactured prior to January 1, 2020.

(6) Effective January 1, 2020, noperson may import HCFC–22 or HCFC–142b for any purpose other than for usein a process resulting in theirtransformation or their destruction, orfor exceptions permitted in paragraph (f)of this section.

(7) Effective January 1, 2030, noperson may import class II substancesnot subject to the requirements ofparagraph (b)(3) or (4) of this section forany purpose other than for use in aprocess resulting in their transformationor their destruction, or for exceptionspermitted in paragraph (f) of thissection.

(c) Post-phaseout limits to Article 5countries. Effective January 1, 2003 forHCFC–141b; January 1, 2010 for HCFC–22 and HCFC–142b; and January 1, 2015for all other HCFCs, no person mayproduce class II substances for export to

Article 5 countries in excess ofunexpended Article 5 allowances, asallocated under § 82.18(a), andunexpended export allowances, asallocated under § 82.18(b). No personmay introduce into interstate commercein the U.S. any class II substanceproduced explicitly for export to anArticle 5 country.

(d) Post-phaseout limits to non-Article5 countries. Effective January 1, 2003,no person may produce HCFC–141b forexport to non-Article 5 countries inexcess of unexpended exportproduction allowances, as allocatedunder § 82.18(b). No person mayintroduce into interstate commerce inthe U.S. any HCFC–141b producedusing export production allowances.

(e) Violations. Every kilogram of aclass II substance, and every class IIproduct, imported or exported incontravention of this subpart constitutesa separate violation of this subpart. Noperson may:

(1) Import or export any quantity of acontrolled substance listed as class II, inAppendix A to this subpart, from or toany foreign state not Party to theCopenhagen Amendments (as noted inAppendix C, Annex l, to this subpart),unless that foreign state is complyingwith the Copenhagen Amendments.

(2) [Reserved](f) Exemptions.(1) Medical devices.

(2) [Reserved]

§ 82.16 Phaseout schedule of class IIcontrolled substances.

(a) Effective January 1, 2002, eachperson is granted the specifiedpercentage of the baseline productionand consumption allowances allocatedunder §§ 82.17 and 82.19 in eachcontrol period as indicated in the tableat the end of this section.

(b) On January 1 of the phaseout yeardesignated for each class II substance,EPA will deduct from each company allbaseline consumption and productionallowances granted in 2002 for thatsubstance. EPA will also deductbaseline consumption and productionallowances received in a permanenttrade after January 1, 2002 for thatsubstance. Deductions do not include:

(1) Article 5 allowances granted under§ 82.18(a).

(2) Export production allowancesgranted under § 82.18(b).

(3) Space vehicle/defense allowancesgranted under § 82.18(j).

(4) Baseline consumption andproduction allowances traded awaypermanently after January 1, 2002.

(5) Any other allowances associatedwith exceptions to production andimport bans for class II substances.

(c) The following table lists the phaseout schedule of class II controlledsubstances:

Control period

Percent ofHCFCs (ex-

cept for 141b,22, and 142b)

Percent ofHCFC–141b

Percent ofHCFC–22 &HCFC–142b

2002 ............................................................................................................................................. 100 100 1002003 ............................................................................................................................................. 100 d 0 1002004 ............................................................................................................................................. 100a d 0 1002005 ............................................................................................................................................. a 100 d 0 1002006 ............................................................................................................................................. a 100 d 0 1002007 ............................................................................................................................................. a 100 d 0 1002008 ............................................................................................................................................. a 100 d 0 1002009 ............................................................................................................................................. a 100 d 0 1002010 ............................................................................................................................................. a 100 d 0 b d 02011 ............................................................................................................................................. a 100 d 0 d 02012 ............................................................................................................................................. a 100 d 0 d 02013 ............................................................................................................................................. a 100 d 0 d 02014 ............................................................................................................................................. a 100 d 0 d 02015 ............................................................................................................................................. c 0 d 0 d 0

a Allocations may be reduced pro rata for these years if EPA determines that Montreal Protocol consumption reduction requirements cannot bemet through this schedule.

b On and after January 1, 2010, HCFC–22 and HCFC–142b may still be produced for use in equipment manufactured before January 1, 2010,providing the producer has adequate production and consumption allowances.

c On and after January 1, 2015, all other HCFCs, not previously phased out, may still be produced as a refrigerant for use in refrigerationequipment manufactured before January 1, 2020, providing the producer has adequate production and consumption allowances.

d Export production allowances may be available after the phaseout under § 82.18.

§ 82.17 Apportionment of baselineproduction allowances for class IIcontrolled substances.

Effective January 1, 2002, a personwho produced class II substances in anyof the years 1989, 1994, 1995, 1996, and

1997, and who accurately reported suchactivity as required by EPA, isapportioned baseline productionallowances based on the person’s year ofhighest total ODP-weightedconsumption as set forth in the

following table. Companies whosenames have been changed are listedunder their official name in effectduring the baseline year. Additionalcompanies for whom EPA does not havecomplete information as of this



proposal, or who EPA determines areeligible for a late entrant exemption,may be listed with allocations in the

final rule, pending receipt of suchinformation or EPA determination:

Person Controlledsubstance

Allowances(kg.)

Allied (Honeywell) .................................................................................................................................................... HCFC–22 36,094,556HCFC–124 3,227,086HCFC–141b 27,719,366HCFC–142b 2,334,508

Ausimont .................................................................................................................................................................. HCFC–142b 4,418,767DuPont ..................................................................................................................................................................... HCFC–22 52,072,484

HCFC–123 10,410HCFC–124 6,390HCFC–141b 10,464HCFC–142b 53,978

Elf Atochem (ATOFINA Chemicals) ........................................................................................................................ HCFC–22 22,230,306HCFC–141b 23,801,431HCFC–142b 15,577,099

MDA ......................................................................................................................................................................... HCFC–22 2,301,966

§ 82.18 Availability of productionallowances in addition to baselineproduction allowances for class IIcontrolled substances.

(a) Effective January 1, 2003 forHCFC–141b; January 1, 2010 for HCFC–22 and HCFC–142b; and 2015 for allother HCFCs, a person apportionedbaseline production allowances under§ 82.17 is also apportioned Article 5allowances, equal to 15 percent of theirbaseline production allowances for thespecified HCFC or HCFCs for eachcontrol period up until January 1, 2030,to be used for the production of thespecified HCFC or HCFCs for exportonly to foreign states listed in AppendixE to this subpart. The quantity producedfor export under this paragraph mustnot exceed the quantity of Article 5allowances held by that person. Inter-pollutant trades of Article 5 allowancesmay only be made for other Article 5allowances.

(1) Each person who exports a class IIsubstance that was produced with anArticle 5 allowance to an Article 5country must submit a notice to theAdministrator of such exports (exceptexports of used class II substances) atthe end of the quarter, as set forth in§ 82.24(d)(1) and (d)(3).

(2) [Reserved](b) Effective January 1, 2003, a person

apportioned baseline productionallowances for HCFC–141b under§ 82.17 is also apportioned exportproduction allowances equal to 100percent of their baseline productionallowances for HCFC–141b for eachcontrol period up until December 31,2009, to be used for the production ofHCFC–141b for export only, to foreignstates listed in the third column ofAppendix C to this subpart (Parties tothe Copenhagen Amendments). Thequantity produced for export under this

paragraph must not exceed the quantityof unexpended export productionallowances held by that person at thattime for that control period. Inter-pollutant trades of export productionallowances may only be made for otherexport production allowances.

(1) Each person who exports HCFC–141b that was produced with exportproduction allowances must submit anotice to the Administrator of suchexports at the end of the quarter, as setforth in § 82.24(d)(2).

(2) [Reserved](c) Effective January 1, 2002, a person

may increase or decrease productionallowances through trading allowedunder § 82.23(a), (b), (c) and (d). Tradescannot be made for production of anysubstance after that class II substance’sphaseout date, except as provided underparagraphs (a) and (b) of this section.

(d) Effective January 1, 2002, a personmay increase its production allowances,its export production allowances, or itsArticle 5 allowances, through tradeswith another Party to the Protocol as setforth in this paragraph (d), and asallowed under § 82.23(d). Trades cannotbe made for production of any substanceafter that class II substance’s phaseoutdate, except as provided underparagraph (a) of this section (regardingArticle 5 allowances) and paragraph (b)of this section (regarding exportproduction allowances). A nation listedin the third column of Appendix C tothis subpart (Parties to the CopenhagenAmendments) must agree either totransfer to the person for the currentcontrol period some quantity ofproduction that the nation is permittedunder the Montreal Protocol or toreceive from the person for the currentcontrol period some quantity ofproduction that the person is permittedunder this subpart. If the class II

substance is to be sold to the Party fromwhom the allowances are received, theperson need not expend itsconsumption allowances allocatedunder § 82.19 in order to produce withthe additional production allowances. Ifthe class II substance is to be sold in theU.S. or to another Party (not the Partytransferring the allowances), the personneed not expend its consumptionallowances allocated under § 82.19 inorder to produce with the additionalproduction allowances.

(e) Trade from a Party—InformationRequirements. A person must submitthe following information to theAdministrator:

(1) A signed document from theprincipal diplomatic representative inthat nation’s embassy in the U.S. statingthat the appropriate authority withinthat nation has established or revisedproduction limits for the nation. Theproduction limit must be equal to thelowest of the following three productionquantities:

(i) The maximum production that thenation is allowed under the Protocolminus the quantity (in kilograms)transferred;

(ii) The maximum production that isallowed under the nation’s applicabledomestic law minus the quantity (inkilograms) transferred; or

(iii) The average of the nation’s actualnational production level for the threeyears prior to the transfer minus theproduction transferred.

(2) A transfer request that includes atrue copy of this document and that setsforth the following:

(i) The identity and address of theperson;

(ii) The identity of the Party;(iii) The names and telephone

numbers of contact persons for theperson and for the Party;



(iv) The chemical type and quantity(in kilograms) of production beingtransferred;

(v) Documentation that the Partypossesses the necessary quantity ofunexpended production rights;

(vi) The control period(s) to which thetransfer applies; and

(vii) For increased productionintended for export to the Party fromwhom the allowances would bereceived, a signed statement of intent toexport to the Party.

(f) Trade to a Party—InformationRequirements. A person must submitthe following information to theAdministrator:

(1) A transfer request that sets forththe following:

(i) The identity and address of theperson;

(ii) The identity of the Party;(iii) The names and telephone

numbers of contact persons for theperson and for the Party;

(iv) The chemical type and quantity(in kilograms) of allowable productionbeing transferred; and

(v) The control period(s) to which thetransfer applies.

(g) Review of transfer request to aParty. After receiving a transfer requestthat meets the requirements ofparagraph (f) of this section, theAdministrator may, at his/herdiscretion, consider the followingfactors in deciding whether to approvesuch a transfer:

(1) Possible creation of domesticeconomic hardship;

(2) Possible effects on trade;(3) Potential environmental

implications; and(4) The total quantity of unexpended

production allowances held by U.S.entities.

(h) Notice of trade. If the requestmeets the requirement of paragraph (e)of this section for trades from Partiesand paragraphs (f) and (g) of this sectionfor trades to Parties, the Administratorwill issue the person a notice. Thenotice will either grant or deductproduction allowances or exportproduction allowances or Article 5allowances and specify the controlperiod to which the transfer applies.The Administrator may disapprove thetransfer request contingent on theconsideration of factors listed inparagraph (d)(3) of this section fortrades to Parties.

(1) Trade from a Party. TheAdministrator will issue a noticerevising the allowances held by thetransferee to equal the unexpendedproduction allowances or unexpendedArticle 5 allowances held by thetransferee under this subpart plus the

quantity of allowable productiontransferred from the Party.

(2) Trade to a Party. TheAdministrator will issue a noticerevising the production limit for thetransferor to equal the lesser of:

(i) The unexpended productionallowances, unexpended exportproduction allowances or unexpendedArticle 5 allowances held by thetransferor minus the quantitytransferred; or

(ii) The quantity derived in paragraph(i) of this section, minus the amountderived from the following calculation:

(A) The total U.S. allowableproduction of the class II substancebeing traded minus the three-yearaverage of the actual annual U.S.production of the class II substanceprior to the control period of thetransfer.

(B) [Reserved](i) Revised notices of production

limits. If after one person obtainsapproval of a trade of allowableproduction of a class II substance to aParty and other persons obtain approvalfor trades of the same class II substanceduring the same control period, theAdministrator will issue revised notices.

(1) Production limit for subsequenttransferors. The notices will revise theproduction limits for each of the otherpersons trading to equal the lesser of:

(i) The unexpended productionallowances, unexpended exportproduction allowances or unexpendedArticle 5 allowances held by thetransferor under this subpart minus thequantity transferred; or

(ii) The result of the following set ofcalculations:

(A) The total U.S. allowableproduction of the class II substanceminus the three-year average of theactual annual U.S. production of theclass II substance prior to the controlperiod of the transfer;

(B) The quantity transferred dividedby the total quantity transferred by allthe other persons trading the same classII substance in the same control period;

(C) The result of paragraph (i)(1)(ii)(A)of this section multiplied by the resultof paragraph (i)(1)(ii)(B) of this section;

(D) The quantity derived in paragraph(i) of this section, minus the result ofparagraph (i)(1)(ii)(C) of this section;

(2) Production limit for previoustransferors. The Administrator will alsoissue a notice revising the productionlimit for each transferor who previouslyobtained approval of a trade of the classII substance in the same control periodto equal the result of the following setof calculations:

(i) The total U.S. allowableproduction of the class II substance

minus the three-year average of theactual annual U.S. production of theclass II substance prior to the controlperiod of the transfer;

(ii) The quantity transferred by theperson divided by the quantitytransferred by all the persons who havetraded that class II substance in thatcontrol period;

(iii) The result of paragraph (i)(2)(i) ofthis section multiplied by the result ofparagraph (i)(2)(ii) of this section.

(iv) The unexpended productionallowances, unexpended exportproduction allowances or unexpendedArticle 5 allowances held by the personplus the result of paragraph (i)(2)(iii) ofthis section;

(3) Effective date of revisedproduction limits. The change inproduction allowances, exportproduction allowances or Article 5allowances will be effective on the datethat the notice is issued.

(j) Petition for space vehicle/defenseallowances. Effective January 1, 2002,an agency, department, orinstrumentality of the U.S., or a non-governmental space vehicle entity, maypetition the Director of the Office ofAtmospheric Programs for spacevehicle/defense allowances for HCFC–141b in accordance with this paragraph(j) and with § 82.15(a)(4).

(1) The agency, department, orinstrumentality of the U.S., or a non-governmental space vehicle entity mustsubmit the following information to theEPA HCFC Manager prior to July 1,2002:

(i) Name and address of U.S.government entity or non-governmentalspace vehicle entity; name of contactperson, phone number, fax number ande-mail address;

(ii) Quantity (in kilograms) of HCFC–141b needed for the control periodbeginning January 1, 2003 untilDecember 31, 2005;

(iii) A description of the spacevehicle/defense need met by the use ofHCFC–141b;

(iv) A technical description of theprocesses in which HCFC–141b is beingused;

(v) A technical description of the areawhere the product will be applied;

(vi) A technical description of whyalternatives and substitutes are notsufficient to eliminate the space vehicle/defense use of HCFC–141b;

(vii) A detailed analysis showing whystockpiled, recovered or recycledquantities are deemed to be technicallyinfeasible for use;

(viii) An estimate of the number ofcontrol periods over which such anexemption would be necessary; and



(ix) A detailed description ofcontinuing investigations into possiblealternatives and substitutes.

(2) Within 90 days of receipt of thepetition, the Director of the Office ofAtmospheric Programs will issue to anagency, department, or instrumentalityof the U.S., or non-governmental spacevehicle entity that has petitioned forspace vehicle/defense allowances forHCFC–141b, based on informationreceived in accordance with paragraph(j)(1) of this section, a notice indicatingone of the following:

(i) The Director of the Office ofAtmospheric Programs may decide togrant space vehicle/defense allowancesif he/she determines that the spacevehicle/defense allowances arenecessary to maintain either safety oroperational viability:

(A) The notice will indicate thequantity (in kilograms) that he/she willgrant for the specified 3-year controlperiod; and

(B) The grant of space vehicle/defenseallowances will be effective on the datethat the notice specified in paragraph(j)(2) of this section is issued, and shallnot be applicable after December 31,2009, unless otherwise authorized byEPA.

(ii) The Director of the Office ofAtmospheric Programs may requestadditional information if he/shedetermines:

(A) The information received inaccordance with paragraph (j)(1) of thissection is not sufficient to make adetermination.

(B) [Reserved](iii) The Director of the Office of

Atmospheric Programs may decide notto grant space vehicle/defenseallowances if he/she determines:

(A) The space vehicle/defense interestcan be met by the use of a substanceother than HCFC–141b;

(B) The space vehicle/defense interestcan be met by the use of existingsupplies of HCFC–141b;

(C) There is evidence of fraud ormisrepresentation;

(D) Approval of the allowances wouldbe inconsistent with the MontrealProtocol or Decisions of the Parties;

(E) Approval of the allowances wouldbe inconsistent with the Clean Air ActAmendments of 1990; or

(F) Approval of the allowances mayreasonably be expected to endangerhuman health or the environment.

(3) If the Director of the Office ofAtmospheric Programs decides not togrant the request for space vehicle/defense allowances for any of thereasons stated in paragraph (j)(2)(iii) ofthis section, the Director of the Office ofAtmospheric Programs will issue anobjection letter disallowing the requestfor space vehicle/defense allowances.Within ten working days after receipt ofthe objection letter, the requestor mayfile a one-time appeal, with supportingreasons, with the Director of the Officeof Atmospheric Programs. The Directorof the Office of Atmospheric Programsmay affirm the disallowance or grant anallowance, as she/he finds appropriatein light of the available evidence. If noappeal is taken by the tenth day afterreceipt of the objection letter, thedisallowance will be final on that day.

(4) The total quantity of HCFC–141bproduced or imported for space vehicleor narrow defense needs during eachyear is not to exceed 1 percent of theaggregate of HCFC–141b baselines forone year.

(5) The space vehicle/defenseallowance allocation may be renewedevery three years after the originalpetition and the petition for renewalmust contain the following information:

(i) Name and address of U.S.government entity or non-governmentalspace vehicle/defense entity; name ofcontact person and phone and faxnumbers and e-mail address;

(ii) Quantity (in kilograms) of HCFC–141b needed for the control period;

(iii) A description of the spacevehicle/defense need met by the use ofHCFC–141b;

(iv) A technical description of theprocess in which HCFC–141b is stillbeing used;

(v) A technical description of the areawhere the product is still being applied;

(vi) A technical description of whyalternatives and substitutes are still notsufficient to eliminate the space vehicle/defense use of HCFC–141b;

(vii) A detailed analysis showing whystockpiled, recovered or recycledquantities are still deemed to betechnically and economically infeasiblefor use; and

(viii) A detailed description ofcontinuing investigations into possiblealternatives and substitutes.

(6) For the control period fromJanuary 1, 2006 through December 31,2008, the agency, department, orinstrumentality of the U.S., or a non-governmental space vehicle entity mustsubmit the petition for renewal byMarch 1, 2005.

§ 82.19 Apportionment of baselineconsumption allowances for class IIcontrolled substances.

(a) Effective January 1, 2002, a personwho produced, imported, or producedand imported class II substances, andaccurately reported such activity to EPAas required, in any of the years 1989,1994, 1995, 1996, and 1997, isapportioned baseline consumptionallowances based on the year of theperson’s highest total ODP-weightedconsumption as set forth in paragraphs(1) through (28) of this section.Companies whose names have beenchanged are listed under their officialname in effect during the baseline year.Additional companies for whom EPAdoes not have complete information asof July 20, 2001, or who EPA determinesare eligible for a late entrant exemption,may be listed with allocations in thefinal rule, pending receipt of suchinformation or EPA determination:


Allowances(kg)

ABCO ...................................................................................................................................................................... HCFC–22 253,032AGA ......................................................................................................................................................................... HCFC–225ca 109,653

HCFC–225cb 134,024Air Systems ............................................................................................................................................................. HCFC–22 12,240Allied (Honeywell) .................................................................................................................................................... HCFC–22 32,056,219

HCFC–124 2,958,382HCFC–141b 18,793,538HCFC–142b 1,191,783

Altair ........................................................................................................................................................................ HCFC–22 241,367Ausimont .................................................................................................................................................................. HCFC–142b 4,418,767Automatic Equipment .............................................................................................................................................. HCFC–22 48,989Condor ..................................................................................................................................................................... HCFC–22 603,374Continental .............................................................................................................................................................. HCFC–141b 18,400DuPont ..................................................................................................................................................................... HCFC–22 46,599,488




Allowances(kg)

HCFC–123 71,063HCFC–124 6,302HCFC–141b 8,196HCFC–142b 47,820

Elf Atochem ............................................................................................................................................................. HCFC–22 26,741,356(ATOFINA Chemicals) ............................................................................................................................................. HCFC–141b 23,010,714

HCFC–142b 15,101,025HG Refrigeration ..................................................................................................................................................... HCFC–22 36,291ICC .......................................................................................................................................................................... HCFC–141b 73,568ICI ............................................................................................................................................................................ HCFC–22 2,306,278Kivlan (Dynatemp) ................................................................................................................................................... HCFC–22 1,837,718Klomar ..................................................................................................................................................................... HCFC–22 7,776MDA ......................................................................................................................................................................... HCFC–22 2,301,966Mondy-Global .......................................................................................................................................................... HCFC–22 255,258National Refrigerants ............................................................................................................................................... HCFC–22 4,963,713

HCFC–123 76,520HCFC–124 204,980

Refricenter ............................................................................................................................................................... HCFC–22 345,350Refricentro ............................................................................................................................................................... HCFC–22 41,645Rhone-Poulenc ........................................................................................................................................................ HCFC–22 47,180R-Lines .................................................................................................................................................................... HCFC–22 57,217Saez ........................................................................................................................................................................ HCFC–22 34,360Solvay ...................................................................................................................................................................... HCFC–22 284,370

HCFC–124 274,990HCFC–141b 3,568,700

Tesco ....................................................................................................................................................................... HCFC–22 43,520Tulstar ...................................................................................................................................................................... HCFC–141b 78,720

(b) [Reserved]

§ 82.20 Availability of consumptionallowances in addition to baselineconsumption allowances for class IIcontrolled substances.

(a) Effective January 1, 2002, a personmay obtain at any time during thecontrol period, in accordance with theprovisions of this subsection,consumption allowances equivalent tothe quantity of class II substances (otherthan used class II substances ortranshipments) that the person hasexported from the U.S. and its territoriesto a foreign state listed in the thirdcolumn of Appendix C to this subpart(Parties to the CopenhagenAmendments).

(1) The exporter must submit to theAdministrator a request forconsumption allowances setting forththe following:

(i) The identities and addresses of theexporter and the recipient of theexports;

(ii) The exporter’s EmployerIdentification Number;

(iii) The names and telephonenumbers of contact persons for theexporter and the recipient;

(iv) The quantity (in kilograms) andtype of class II substances reported;

(v) The source of the class IIsubstances and the date purchased;

(vi) The date on which, and the portfrom which, the class II substances wereexported from the U.S. or its territories;

(vii) The country to which the class IIsubstances were exported;

(viii) A copy of the bill of lading andthe invoice indicating the net quantity(in kilograms) of class II substancesshipped and documenting the sale ofthe class II substances to the purchaser;

(ix) The commodity code of the classII substances reported; and

(x) A written statement from theproducer that the class II substanceswere produced with expendedallowances.

(2) The Administrator will review theinformation and documentationsubmitted under paragraph (a)(1) of thissection and will issue a notice.

(i) The Administrator will determinethe quantity of class II substances thatthe documentation verifies wasexported and issue consumptionallowances equivalent to the quantity ofclass II substances that were exported.

(A) The grant of the consumptionallowances will be effective on the datethe notice is issued.

(B) The consumption allowances willbe granted to the person the exporterindicates, whether it is the producer orthe exporter.

(ii) The Administrator will issue anotice that the consumption allowancesare not granted if the Administratordetermines that the information anddocumentation do not satisfactorilysubstantiate the exporter’s claims.

(b) Effective January 1, 2002, a personmay increase consumption allowancesthrough trading allowed under§ 82.23(a), (b), and (c).

§ 82.21 [Reserved]

§ 82.22 [Reserved]

§ 82.23 Transfers of allowances of class IIcontrolled substances.

(a) Inter-company transfers. (1)Effective January 1, 2002, a person(‘‘transferor’’) may transfer to any otherperson (‘‘transferee’’) any quantity of thetransferor’s class II consumptionallowances, production allowances,export production allowances, or Article5 allowances, as follows:

(i) The transferor must submit to theAdministrator a transfer claim settingforth the following:

(A) The identities and addresses ofthe transferor and the transferee;

(B) The name and telephone numbersof contact persons for the transferor andthe transferee;

(C) The type of allowances beingtransferred, including the names of theclass II substances for which allowancesare to be transferred;

(D) The quantity (in kilograms) ofallowances being transferred;

(E) The control period(s) for whichthe allowances are being transferred;

(F) The quantity of unexpendedallowances of the type and for thecontrol period being transferred that thetransferor holds under authority of thissubpart on the date the claim issubmitted to EPA; and

(G) For trades of consumptionallowances, production allowances,export production allowances, or Article5 allowances, the quantity of the 0.1



percent offset applied to the unweightedquantity traded that will be deductedfrom the transferor’s allowance balance.

(ii) The Administrator will determinewhether the records maintained by EPAindicate that the transferor possessesunexpended allowances sufficient tocover the transfer claim on the date thetransfer claim is processed. The transferclaim is the quantity (in kilograms) to betransferred plus, in the case of transfersof production or consumptionallowances, 0.1 percent of that quantity.The Administrator will take intoaccount any previous transfers, anyproduction, and allowable imports andexports of class II substances reportedby the transferor. Within three workingdays of receiving a complete transferclaim, the Administrator will takeaction to notify the transferor andtransferee as follows:

(A) The Administrator will issue anotice indicating that EPA does notobject to the transfer if EPA’s recordsshow that the transferor has sufficientunexpended allowances to cover thetransfer claim. In the case of transfers ofproduction or consumption allowances,EPA will reduce the transferor’s balanceof unexpended allowances by thequantity to be transferred plus 0.1percent of that quantity. In the case oftransfers of export production or Article5 allowances, EPA will reduce thetransferor’s balance of unexpendedallowances, respectively, by thequantity to be transferred. The transferorand the transferee may proceed with thetransfer when EPA issues a no objectionnotice. However, if EPA ultimately findsthat the transferor did not havesufficient unexpended allowances tocover the claim, the transferor andtransferee, where applicable, will beheld liable for any knowing violations ofthe regulations of this subpart that occuras a result of, or in conjunction with, theimproper transfer.

(B) The Administrator will issue anotice disallowing the transfer if EPA’srecords show that the transferor hasinsufficient unexpended allowances tocover the transfer claim, or that thetransferor has failed to respond to oneor more Agency requests to supplyinformation needed to make adetermination. Either party may file anotice of appeal, with supportingreasons, with the Administrator within10 working days after receipt ofnotification. The Administrator mayaffirm or vacate the disallowance. If noappeal is taken by the tenth working dayafter notification, the disallowance shallbe final on that day.

(iii) The transferor and transferee mayproceed with the transfer if theAdministrator does not respond to a

transfer claim within the three workingdays specified in paragraph (a)(1)(ii) ofthis section. In the case of transfers ofproduction or consumption allowances,EPA will reduce the transferor’s balanceof unexpended allowances by thequantity to be transferred plus 0.1percent of that quantity. In the case oftransfers of export productionallowances or Article 5 allowances, EPAwill reduce the transferor’s balance ofunexpended allowances by the quantityto be transferred plus 0.1 percent of thatquantity. If EPA ultimately finds thatthe transferor did not have sufficientunexpended allowances to cover theclaim, the transferor and/or thetransferee, where applicable, will beheld liable for any knowing violations ofthe regulations of this subpart that occuras a result of, or in conjunction with, theimproper transfer.

(b) Inter-pollutant transfers. (1)Effective January 1, 2002, a person(transferor) may convert consumptionallowances or production allowances forone class II substance to the same typeof allowance for another class IIsubstance listed in Appendix B of thissubpart, following the proceduresdescribed in paragraph (b)(3) of thissection.

(2) Inter-pollutant transfers will bepermitted at any time during the controlperiod and during the 45 days after theend of a control period.

(3) The transferor must submit to theAdministrator a transfer claim thatincludes the following:

(i) The identity and address of thetransferor;

(ii) The name and telephone numberof a contact person for the transferor;

(iii) The type of allowances beingconverted, including the names of theclass II substances for which allowancesare to be converted;

(iv) The quantity (in kilograms) andtype of allowances to be converted;

(v) The quantity (in kilograms) ofallowances to be subtracted from thetransferor’s unexpended allowances forthe first class II substance, to be equalto 100.1 percent of the quantity ofallowances converted;

(vi) The quantity (in kilograms) ofallowances to be added to thetransferor’s unexpended allowances forthe second class II substance, to beequal to the quantity (in kilograms) ofallowances for the first class IIsubstance being converted multiplied bythe quotient of the ozone depletionpotential of the first class II substancedivided by the ozone depletionpotential of the second class IIsubstance, as listed in Appendix B tothis subpart;

(vii) The control period(s) for whichthe allowances are being converted; and

(viii) The quantity (in kilograms) ofunexpended allowances of the type andfor the control period being convertedthat the transferor holds under authorityof this subpart as of the date the claimis submitted to EPA.

(4) The Administrator will determinewhether the records maintained by EPAindicate that the convertor possessesunexpended allowances sufficient tocover the transfer claim on the date thetransfer claim is processed (i.e., thequantity (in kilograms) to be convertedplus 0.1 percent of that quantity (inkilograms)). EPA will take into accountany previous transfers, any transfers,and any production, imports (notincluding transshipments or used classII substances), or exports (not includingtranshipments or used class IIsubstances) of class II substancesreported by the convertor. Within threeworking days of receiving a completetransfer claim, the Administrator willtake action to notify the convertor asfollows:

(i) The Administrator will issue anotice indicating that EPA does notobject to the transfer if EPA’s recordsshow that the convertor has sufficientunexpended allowances to cover thetransfer claim. EPA will reduce thetransferor’s balance of unexpendedallowances by the quantity to beconverted plus 0.1 percent of thatquantity (in kilograms). When EPAissues a no objection notice, thetransferor may proceed with thetransfer. However, if EPA ultimatelyfinds that the transferor did not havesufficient unexpended allowances tocover the claim, the transferor will beheld liable for any violations of theregulations of this subpart that occur asa result of, or in conjunction with, theimproper transfer.

(ii) The Administrator will issue anotice disallowing the transfer if EPA’srecords show that the transferor hasinsufficient unexpended allowances tocover the transfer claim, or that thetransferor has failed to respond to oneor more Agency requests to supplyinformation needed to make adetermination. The transferor may file anotice of appeal, with supportingreasons, with the Administrator within10 working days after receipt ofnotification. The Administrator mayaffirm or vacate the disallowance. If noappeal is taken by the tenth working dayafter notification, the disallowance shallbe final on that day.

(iii) The transferor may proceed withthe transfer if the Administrator doesnot respond to a transfer claim withinthe three working days specified in



paragraph (b)(4) of this section. EPAwill reduce the transferor’s balance ofunexpended allowances by the quantity(in kilograms) to be converted plus 0.1percent of that quantity (in kilograms).The transferor will be held liable for anyviolations of the regulations of thissubpart that occur as a result of, or inconjunction with, the improper transferif EPA ultimately finds that thetransferor did not have sufficientunexpended allowances or credits tocover the claim.

(c) Inter-company transfers and Inter-pollutant transfers. (1) If a personrequests an inter-company transfer andan inter-pollutant transfersimultaneously, the quantity (inkilograms) subtracted from thetransferor’s unexpended production orconsumption allowances for the firstclass II substance will be equal to 100.1percent of the quantity (in kilograms) ofallowances that are being converted andtransferred.

(2) [Reserved](d) Transfers of class II production

between Parties. (1) A person mayincrease or decrease its productionallowances, export productionallowances, or Article 5 allowances bytrading such allowances with anotherParty to the Protocol, in accordancewith the provisions in § 82.18(d).

(2) [Reserved]

§ 82.24 Recordkeeping and reportingrequirements for class II controlledsubstances.

(a) Recordkeeping and reporting. Anyperson who produces, imports, exports,transforms, or destroys class IIsubstances must comply with thefollowing recordkeeping and reportingrequirements:

(1) Reports required by this sectionmust be mailed to the Administratorwithin 15 days of the end of theapplicable reporting period, unlessotherwise specified.

(2) Records and copies of reportsrequired by this section must beretained for three years.

(3) Quantities of class II substancesmust be stated in terms of kilograms inreports required by this section.

(4) Reports and records required bythis section may be used for purposes ofcompliance determinations. Theserequirements are not intended as alimitation on the use of other evidenceadmissible under the Federal Rules ofEvidence. Failure to provide the reports,petitions and records required by thissection and to certify the accuracy of theinformation in the reports, petitions andrecords required by this section, will beconsidered a violation of this subpart.False statements made in reports,

petitions and records will be consideredviolations of Section 113 of the CleanAir Act and under 18 U.S. Code Section1001.

(b) Producers. Persons (‘‘producers’’)who produce class II substances duringa control period must comply with thefollowing recordkeeping and reportingrequirements:

(1) Reporting—Producers. For eachquarter, each producer of a class IIsubstance must provide theAdministrator with a report containingthe following information:

(i) The quantity (in kilograms) ofproduction of each class II substanceused in processes resulting in theirtransformation by the producer and thequantity (in kilograms) intended fortransformation by a second party;

(ii) The quantity (in kilograms) ofproduction of each class II substanceused in processes resulting in theirdestruction by the producer and thequantity (in kilograms) intended fordestruction by a second party;

(iii) The expended allowances foreach class II substance;

(iv) The producer’s total of expendedand unexpended productionallowances, consumption allowances,export production allowances, andArticle 5 allowances at the end of thatquarter;

(v) The quantity (in kilograms) ofclass II substances sold or transferredduring the quarter to a person other thanthe producer for use in processesresulting in their transformation oreventual destruction;

(vi) A list of the quantities and namesof class II substances exported, by theproducer or by other U.S. persons, to aParty to the Protocol that will betransformed or destroyed and thereforewere not produced expendingproduction or consumption allowances;

(vii) For transformation in the U.S. orby a person of another Party, one copyof a transformation verification from thetransformer for a specific class IIsubstance and a list of additionalquantities shipped to that sametransformer for the quarter;

(viii) For destruction in the U.S. or bya person of another Party, one copy ofa destruction verification paragraph (e)of this section for a particular destroyer,destroying the same class II substance,and a list of additional quantitiesshipped to that same destroyer for thequarter;

(ix) In cases where the producerproduced class II substances usingexport production allowances, a list ofU.S. entities that purchased those classII substances and exported them to aParty to the Protocol;

(x) In cases where the producerproduced class II substances usingArticle 5 allowances, a list of U.S.entities that purchased those class IIsubstances and exported them to Article5 countries; and

(xi) A list of the space vehicle/defenseallowance holders from whom orderswere placed and the quantity (inkilograms) of HCFC–141b requested andproduced.

(2) Recordkeeping—Producers. Everyproducer of a class II substance duringa control period must maintain thefollowing records:

(i) Dated records of the quantity (inkilograms) of each class II substanceproduced at each facility;

(ii) Dated records of the quantity (inkilograms) of class II substancesproduced for use in processes that resultin their transformation or for use inprocesses that result in theirdestruction;

(iii) Dated records of the quantity (inkilograms) of class II substances sold foruse in processes that result in theirtransformation or for use in processesthat result in their destruction;

(iv) Dated records of the quantity (inkilograms) of class II substancesproduced with export productionallowances or Article 5 allowances;

(v) Copies of invoices or receiptsdocumenting sale of class II substancesfor use in processes that result in theirtransformation or for use in processesthat result in their destruction;

(vi) Dated records of the quantity (inkilograms) of each class II substanceused at each facility as feedstocks ordestroyed in the manufacture of a classII substance or in the manufacture ofany other substance, and any class IIsubstance introduced into theproduction process of the same class IIsubstance at each facility;

(vii) Dated records of the quantity (inkilograms) of raw materials andfeedstock chemicals used at each facilityfor the production of class II substances;

(ix) Dated records of the shipments ofeach class II substance produced at eachplant;

(x) The quantity (in kilograms) ofclass II substances, the date received,and names and addresses of the sourceof used materials containing class IIsubstances which are recycled orreclaimed at each plant;

(xi) Records of the date, the class IIsubstance, and the estimated quantity ofany spill or release of a class IIsubstance that equals or exceeds 100pounds;

(xii) Transformation verification inthe case of transformation, or thedestruction verification in the case ofdestruction paragraph (e) of this section



showing that the purchaser or recipientof a class II substance, in the U.S. or inanother country that is a Party, certifiesthe intent to either transform or destroythe class II substance, or sell the classII substance for transformation ordestruction in cases when allowanceswere not expended;

(xiii) Written verifications from a U.S.purchaser that the class II substance wasexported to a Party to the CopenhagenAmendments, in cases where exportproduction allowances were expendedto produce the class II substance;

(xiv) Written verifications from a U.S.purchaser that the class II substance wasexported to an Article 5 country in caseswhere Article 5 allowances wereexpended to produce the class IIsubstance;

(xv) Written verifications from a U.S.purchaser that HCFC–141b wasmanufactured for the express purpose ofmeeting critical space vehicle/defenseneeds in accordance with informationsubmitted under § 82.18(j), in caseswhere space vehicle/defense allowanceswere expended to produce the HCFC–141b.

(3) For any person who fails tomaintain the records required by thisparagraph, or to submit the reportrequired by this paragraph, theAdministrator may assume that theperson has produced at full capacityduring the period for which recordswere not kept, for purposes ofdetermining whether the person hasviolated the prohibitions at § 82.15.

(c) Importers. Persons (‘‘importers’’)who import class II substances during acontrol period must comply with thefollowing recordkeeping and reportingrequirements:

(1) Reporting—Importers. For eachquarter, an importer of a class IIsubstance (including importers of usedclass II substances) must submit to theAdministrator a report containing thefollowing information:

(i) Summaries of the record requiredin paragraphs (c)(2)(i) through (xiv) ofthis section for the previous quarter;

(ii) The total quantity (in kilograms)imported of each class II substance forthat quarter;

(iii) The commodity code for the classII substances imported, which must beone of those listed in Appendix K to thissubpart;

(iv) The quantity (in kilograms) ofthose class II substances imported thatare used class II substances.

(v) The quantity (in kilograms) ofclass II substances imported for thatquarter and totaled by chemical for thecontrol period to date;

(vi) The importer’s total sum ofexpended and unexpended

consumption allowances by chemical asof the end of that quarter;

(vii) The quantity (in kilograms) ofclass II substances imported for use inprocesses resulting in theirtransformation or destruction;

(viii) The quantity (in kilograms) ofclass II substances sold or transferredduring that quarter to each person foruse in processes resulting in theirtransformation or eventual destruction;and

(ix) Transformation verificationsshowing that the purchaser or recipientof imported class II substances intendsto transform those substances ordestruction verifications showing thatthe purchaser or recipient intends todestroy the class II substances (asprovided in paragraph (e) of thissection).

(2) Recordkeeping—Importers. Animporter of a class II substance(including used class II substances)must maintain the following records:

(i) The quantity (in kilograms) of eachclass II substance imported, either aloneor in mixtures, including the percentageof each mixture which consists of aclass II substance;

(ii) The quantity (in kilograms) ofthose class II substances imported thatare used and the information providedwith the petition as required underparagraph (c)(3) of this section;

(iii) The quantity (in kilograms) ofclass II substances other thantranshipments or used substancesimported for use in processes resultingin their transformation or destruction;

(iv) The quantity (in kilograms) ofclass II substances other thantranshipments or used substancesimported and sold for use in processesthat result in their destruction ortransformation;

(v) The date on which the class IIsubstances were imported;

(vi) The port of entry through whichthe class II substances passed;

(vii) The country from which theimported class II substances wereimported;

(viii) The commodity code for theclass II substances shipped, which mustbe one of those listed in Appendix K tothis subpart;

(ix) The importer number for theshipment;

(x) A copy of the bill of lading for theimport;

(xi) The invoice for the import;(xii) The quantity (in kilograms) of

imports of used class II substances;(xiii) The U.S. Customs entry form;(iv) Dated records documenting the

sale or transfer of class II substances foruse in processes resulting in theirtransformation or destruction;

(xiv) Copies of transformationverifications or destruction verificationsindicating that the class II substanceswill be transformed or destroyed (asprovided in paragraph (e) of thissection.

(3) Petition to Import Used Class IIControlled Substances andTranshipments—Importers. For eachindividual shipment (not to beaggregated) over 5 pounds of a usedclass II substance as defined in § 82.3,an importer must submit directly to theAdministrator, at least 40 working daysbefore the shipment is to leave theforeign port of export, the followinginformation in a petition:

(i) The name and quantity (inkilograms) of the used class II substanceto be imported;

(ii) The name and address of theimporter, the importer ID number, thecontact person, and the phone and faxnumbers;

(iii) Name, address, contact person,phone number and fax number of allprevious source equipment from whichthe used class II substance wasrecovered;

(iv) A detailed description of theprevious use of the class II substance ateach source facility and dateddocuments indicating the date thematerial was put into the equipment ateach source facility (material must haveremained in the equipment at least 24months prior to recovery to beconsidered previously used);

(v) Name, address, contact person,phone number and fax number of theexporter and of all persons to whom thematerial was transferred or sold after itwas recovered from the source facility;

(vi) The U.S. port of entry for theimport, the expected date of shipmentand the vessel transporting thechemical. If at the time of submitting apetition the importer does not know theU.S. port of entry, the expected date ofshipment and the vessel transportingthe chemical, and the importer receivesa non-objection notice for the individualshipment in the petition, the importer isrequired to notify the Administrator ofthis information prior to the actual U.S.Customs entry of the individualshipment;

(vii) A description of the intended useof the used class II substance, and acopy of the contract for the purchase ofthe class II substance that includes thename, address, contact person, phonenumber and fax number of thepurchaser;

(viii) The name, address, contactperson, phone number and fax numberof the U.S. reclamation facility, whereapplicable;



(ix) If someone at the source facilityrecovered the class II substance from theequipment, the name and phone and faxnumbers of that person;

(x) If the imported class II substancewas reclaimed in a foreign Party, thename, address, contact person, phonenumber and fax number of any or allforeign reclamation facility(ies)responsible for reclaiming the citedshipment;

(xi) An export license from theappropriate government agency in thecountry of export and, if recovered inanother country, the export license fromthe appropriate government agency inthat country;

(xii) If the imported used class IIsubstance is intended to be sold as arefrigerant in the U.S., the name andaddress of the U.S. reclaimer who willbring the material to the standardrequired under Subpart F of this Part, ifnot already reclaimed to thosespecifications; and

(xiii) A certification of accuracy of theinformation submitted in the petition.

(4) Review of Petition to Import UsedClass II Controlled Substances andTranshipments—Importers. Starting onthe first working day following receiptby the Administrator of a petition toimport a used class II substance, theAdministrator will initiate a review ofthe information submitted underparagraph (c)(3) of this section and takeaction within 40 working days to issueeither an objection-notice or a non-objection notice for the individualshipment to the person who submittedthe petition to import the used class IIsubstance.

(i) For the reasons listed below, theAdministrator may issue an objectionnotice to a petition:

(A) If the Administrator determinesthat the information is insufficient, thatis, if the petition lacks or appears to lackany of the information required underparagraph (c)(3) of this section;

(B) If the Administrator determinesthat any portion of the petition containsfalse or misleading information or hasreason to believe that the petitioncontains false or misleadinginformation;

(C) If the transaction appears to becontrary to provisions of the ViennaConvention on Substances that Depletethe Ozone Layer, the Montreal Protocoland Decisions by the Parties, or the non-compliance procedures outlined andinstituted by the ImplementationCommittee of the Montreal Protocol;

(D) If the appropriate governmentagency in the exporting country has notagreed to issue an export license for thecited individual shipment of used classII substance;

(E) If the exporting country states thatit is no longer allowing exports or if itreports that it has not granted anyexport licenses;

(F) If the Administrator has receivedinformation indicating that a personlisted in the petition has produced atany time false information regardingtrade in class II substances as defined inthis subpart, including informationrequired by EPA or required by theappropriate government agency in theexporting country;

(G) If the Administrator has receivedinformation indicating that a personlisted in the petition is in violation ofa requirement in any regulation underTitle VI of the Clean Air Act;

(H) If reclamation capacity is installedor is being installed for that specificclass II substance in the country ofrecovery or country of export and thecapacity is funded in full or in partthrough the Multilateral Fund.

(ii) Within ten (10) working days afterreceipt of the objection notice, theimporter may re-petition theAdministrator, only if the Administratorindicated ‘‘insufficient information’’ asthe basis for the objection notice. If noappeal is taken by the tenth working dayafter the date on the objection notice,the objection shall become final. Onlyone re-petition will be accepted for anyoriginal petition received by EPA.

(iii) Any information contained in there-petition which is inconsistent withthe original petition must be identifiedand a description of the reason for theinconsistency must accompany the re-petition.

(iv) In cases where the Administratorhas no reason to object to the petitionbased on the criteria listed in paragraph(c)(4)(i) of this section, theAdministrator will issue a non-objectionnotice.

(v) To pass the approved used class IIsubstances through U.S. Customs, thepetition and the non-objection noticeissued by EPA must accompany theshipment through U.S. Customs.

(vi) If for some reason, followingEPA’s issuance of a non-objectionnotice, new information is brought toEPA’s attention which shows that thenon-objection notice was issued basedon false information, then EPA has theright to:

(A) Revoke the non-objection notice;(B) Pursue all means to ensure that

the class II substance is not importedinto the U.S.; and

(C) Take appropriate enforcementactions.

(vii) Once the Administrator issues anon-objection notice, the personreceiving the non-objection notice ispermitted to import the individual

shipment of used class II substance onlywithin the same control period as thedate stamped on the non-objectionnotice.

(viii) A person receiving a non-objection notice from the Administratorfor a petition to import used class IIsubstances must maintain the followingrecords:

(A) A copy of the petition;(B) The EPA non-objection notice;(C) The bill of lading for the import;

and(D) U.S. Customs entry documents for

the import that must include one of thecommodity codes from Appendix K tothis subpart.

(5) Recordkeeping forTranshipments—Importers. Any personwho tranships a class II substance mustmaintain records that indicate:

(i) That the class II substanceshipment originated in a foreigncountry;

(ii) That the class II substanceshipment is destined for another foreigncountry; and

(iii) That the class II substanceshipment will not enter interstatecommerce within the U.S.

(d) Exporters. Persons (‘‘exporters’’)who export class II substances during acontrol period must comply with thefollowing reporting requirements:

(1) Reporting—Exporters. For anyexports of class II substances notreported under § 82.20 (additionalconsumption allowances), or underparagraph (b)(2) of this section(reporting for producers of class IIsubstances), each exporter who exporteda class II substance must submit to theAdministrator the following informationwithin 15 days after the end of eachquarter in which the unreported exportsleft the U.S.:

(i) The names and addresses of theexporter and the recipient of theexports;

(ii) The exporter’s EmployerIdentification Number;

(iii) The type and quantity (inkilograms) of each class II substanceexported and what percentage, if any ofthe class II substance is used;

(iv) The date on which, and the portfrom which, the class II substances wereexported from the U.S. or its territories;

(v) The country to which the class IIsubstances were exported;

(vi) The quantity (in kilograms)exported to each Article 5 country;

(vii) The commodity code for the classII substances shipped, which must beone of those listed in Appendix K to thissubpart;

(viii) For persons reportingtransformation or destruction, theinvoice or sales agreement containing



language similar to the transformationverifications that the purchaser orrecipient of imported class II substancesintends to transform those substances,or destruction verifications showing thatthe purchaser or recipient intends todestroy the class II substances (asprovided in paragraph (e) of thissection).

(2) Reporting Export ProductionAllowances—Exporters. In addition tothe information required in paragraph(d)(1) of this section, any exporter usingexport production allowances must alsoprovide the following to theAdministrator:

(i) The Employer IdentificationNumber on the Shipper’s ExportDeclaration Form or EmployerIdentification Number of the shippingagent shown on the U.S. Customs Form7525;

(ii) The exporting vessel on which theclass II substances were shipped; and

(iii) The quantity (in kilograms)exported to each Party.

(3) Reporting Article 5 Allowances—Exporters. In addition to the informationrequired in paragraph (d)(1) of thissection, any exporter using Article 5allowances must also provide thefollowing to the Administrator:

(i) The Employer IdentificationNumber on the Shipper’s ExportDeclaration Form or EmployerIdentification Number of the shippingagent shown on the U.S. Customs Form7525; and

(ii) The exporting vessel on which theclass II substances were shipped.

(4) Reporting Used Class II ControlledSubstances—Exporters. Any exporter ofused class II substances must indicateon the bill of lading or invoice that theclass II substance is used, as defined in§ 82.3.

(e) Transformation and Destruction.Any person who transforms or destroysclass II substances must comply withthe following recordkeeping andreporting requirements:

(1) Recordkeeping—Transformationand Destruction. Any person whotransforms or destroys class IIsubstances produced or imported byanother person must maintain thefollowing:

(i) Copies of the invoices or receiptsdocumenting the sale or transfer of theclass II substances to the person;

(ii) Records identifying the produceror importer of the class II substancesreceived by the person;

(iii) Dated records of inventories ofclass II substances at each plant on thefirst day of each quarter;

(iv) Dated records of the quantity (inkilograms) of each class II substancetransformed or destroyed;

(v) In the case where class IIsubstances were purchased ortransferred for transformation purposes,a copy of the person’s transformationverification as provided underparagraph (e)(3)of this section.

(vi) Dated records of the names,commercial use, and quantities (inkilograms) of the resulting chemical(s)when the class II substances aretransformed; and

(vii) Dated records of shipments topurchasers of the resulting chemical(s)when the class II substances aretransformed.

(viii) In the case where class IIsubstances were purchased ortransferred for destruction purposes, acopy of the person’s destructionverification, as provided underparagraph (e)(5) of this section.

(2) Reporting—Transformation andDestruction. Any person who transformsor destroys class II substances and whohas submitted a transformationverification in paragraph (e)(3) of thissection or a destruction verification inparagraph (e)(5) of this section to theproducer or importer of the class IIsubstances, must report the following:

(i) the names and quantities (inkilograms) of the class II substancestransformed for each control periodwithin 45 days of the end of suchcontrol period; and

(ii) the names and quantities (inkilograms) of the class II substancesdestroyed for each control period within45 days of the end of such controlperiod.

(3) Reporting—Transformation. Anyperson who purchases class IIsubstances for purposes oftransformation must provide theproducer or importer with a verificationthat the class II substances are to beused in processes that result in theirtransformation.

(i) The transformation verificationshall include the following:

(A) Identity and address of the personintending to transform the class IIsubstances;

(B) The quantity (in kilograms) ofclass II substances intended fortransformation;

(C) Identity of shipments by purchaseorder number(s), purchaser accountnumber(s), by location(s), or othermeans of identification;

(D) Period of time over which theperson intends to transform the class IIsubstances; and

(E) Signature of the verifying person.(ii) If any aspects of this verification

change at any time, the person mustsubmit a revised verification reflectingsuch changes to the producer from

whom that person purchased class IIsubstances intended for transformation.

(4) Reporting—Destruction. Anyperson who destroys class II substancesshall provide EPA with a one-timereport containing the followinginformation:

(i) The destruction unit’s destructionefficiency;

(ii) The methods used to record thevolume destroyed;

(iii) The methods used to determinedestruction efficiency;

(iv) The name of other relevant federalor state regulations that may apply tothe destruction process;

(v) Any changes to the information inparagraphs (e)(4)(i), (ii), and (iii) of thissection must be reflected in a revisionto be submitted to EPA within 60 daysof the change(s).

(5) Reporting—Destruction. Anyperson who purchases or receives andsubsequently destroys class IIsubstances that were originallyproduced without expendingallowances shall provide the produceror importer from whom it purchased orreceived the class II substances with averification that the class II substanceswill be used in processes that result intheir destruction.

(i) The destruction verification shallinclude the following:

(A) Identity and address of the personintending to destroy class II substances;

(B) Indication of whether those classII substances will be completelydestroyed, as defined in § 82.3, or lessthan completely destroyed, in whichcase the destruction efficiency at whichsuch substances will be destroyed mustbe included;

(C) Period of time over which theperson intends to destroy class IIsubstances; and

(D) Signature of the verifying person.(ii) If any aspects of this verification

change at any time, the person mustsubmit a revised verification reflectingsuch changes to the producer fromwhom that person purchased class IIsubstances intended for destruction.

(f) Heels—Recordkeeping andReporting. Any person who brings intothe U.S. a container with a heel, asdefined in § 82.3, of class II substances,must comply with the followingrequirements:

(1) Any person who brings a containerwith a heel must indicate on its bill oflading or invoice that the class IIsubstance in the container is a heel.

(2) Any person who brings a containerwith a heel must report quarterly thequantity (in kilograms) brought into theU.S. and certify:

(i) That the residual quantity (inkilograms) in each shipment is no more



than 10 percent of the volume of thecontainer;

(ii) That the residual quantity (inkilograms) in each shipment will either:

(A) Remain in the container and beincluded in a future shipment;

(B) Be recovered and transformed;(C) Be recovered and destroyed; or(D) Be recovered for a non-emissive

use.(3) Any person who brings a container

with a heel into the U.S. must report onthe final disposition of each shipmentwithin 45 days of the end of the controlperiod.

(g) Space vehicle/defenseallowances—Reporting.

(1) Any person allocated spacevehicle/defense allowances whosubmits an order to a producer or

importer for a product made with orcontaining HCFC–141b must alsosubmit quarterly reports to theAdministrator containing the followinginformation:

(i) The type of product made with orcontaining HCFC–141b;

(ii) The specific application of theproduct made with or containingHCFC–141b; and

(iii) The quantity (in kilograms) ofHCFC–141b used or contained in theproduct received from the manufacturer;and

(iv) The identity of the manufacturerof the product made with or containingHCFC–141b.

(2) Any manufacturer of a productmade with or containing HCFC–141bproduced or imported as a result of

space vehicle/defense allowances mustsubmit quarterly reports to theAdministrator containing the followinginformation:

(i) The quantity (in kilograms) ofHCFC–141b received;

(ii) The identity of the producer orimporter supplying the HCFC–141bused or contained in the product;

(iii) The identity of the recipient ofthe product made with or containingHCFC–141b; and

(iv) The quantity (in kilograms) ofHCFC–141b used or contained in theproduct sent to the recipient.

13. Revise Appendix B to Subpart Ato read as follows:

APPENDIX B TO PART 82 SUBPART A—CLASS II CONTROLLED SUBSTANCES a

Dichlorofluoromethane (HCFC–21) ....................................................................................................................................................... 0.04Monochlorodifluoromethane (HCFC–22) ............................................................................................................................................... 0.055Monochlorofluoromethane (HCFC–31) .................................................................................................................................................. 0.02Tetrachlorofluoroethane (HCFC–121) ................................................................................................................................................... 0.01–0.04Trichlorodifluoroethane (HCFC–122) ..................................................................................................................................................... 0.02–0.08Dichlorotrifluoroethane (HCFC–123) ..................................................................................................................................................... 0.02Monochlorotetrafluoroethane (HCFC–124) ........................................................................................................................................... 0.022Trichlorofluoroethane (HCFC–131) ....................................................................................................................................................... 0.007–0.05Dichlorodifluoroethane (HCFC–132) ..................................................................................................................................................... 0.008–0.05Monochlorotrifluoroethane (HCFC–133) ................................................................................................................................................ 0.02–0.06Dichlorofluoroethane (HCFC–141b) ...................................................................................................................................................... 0.11Monochlorodifluoroethane (HCFC–142b) .............................................................................................................................................. 0.065Hexachlorofluoropropane (HCFC–221) ................................................................................................................................................. 0.015–0.07Pentachlorodifluoropropane (HCFC–222) ............................................................................................................................................. 0.01–0.09Tetrachlorotrifluoropropane (HCFC–223) .............................................................................................................................................. 0.01–0.08Trichlorotetrafluoropropane (HCFC–224) .............................................................................................................................................. 0.01–0.09Dichloropentafluoropropane (HCFC–225ca) ......................................................................................................................................... 0.025Dichloropentafluoropropane (HCFC–225cb) ......................................................................................................................................... 0.033Monochlorohexafluoropropane (HCFC–226) ......................................................................................................................................... 0.02–0.10Pentachlorofluoropropane (HCFC–231) ................................................................................................................................................ 0.05–0.09Tetrachlorodifluoropropane (HCFC–232) .............................................................................................................................................. 0.008–0.10Trichlorotrifluoropropane (HCFC–233) .................................................................................................................................................. 0.007–0.23Dichlorotetrafluoropropane (HCFC–234) ............................................................................................................................................... 0.01–0.28Monochloropentafluoropropane (HCFC–235) ....................................................................................................................................... 0.03–0.52Tetrachlorofluoropropane (HCFC–241) ................................................................................................................................................. 0.004–0.09Trichlorodifluoropropane (HCFC–242) .................................................................................................................................................. 0.005–0.13Dichlorotrifluoropropane (HCFC–243) ................................................................................................................................................... 0.007–0.12Monochlorotetrafluoropropane (HCFC–244) ......................................................................................................................................... 0.009–0.14Trichlorofluoropropane (HCFC–251) ..................................................................................................................................................... 0.001–0.01Dichlorodifluoropropane (HCFC–252) ................................................................................................................................................... 0.005–0.04Monochlorotrifluoropropane (HCFC–253) ............................................................................................................................................. 0.003–0.03Dichlorofluoropropane (HCFC–261) ...................................................................................................................................................... 0.002–0.02Monochlorodifluoropropane (HCFC–262) .............................................................................................................................................. 0.002–0.02Monochlorofluoropropane (HCFC–271) ................................................................................................................................................ 0.001–0.03

a According to Annex C of the Protocol, ‘‘Where a range of ODPs is indicated, the highest value in that range shall be used for the purposes ofthe Protocol. The ODPs listed as a single value have been determined from calculations based on laboratory measurements. Those listed as arange are based on estimates and are less certain. The range pertains to an isomeric group. The upper value is the estimate of the ODP of theisomer with the highest ODP, and the lower value is the estimate of the ODP of the isomer with the lowest ODP.’’

14. Appendix C to Subpart A is revised to read as follows:

Appendix C to Part 82 Subpart A—Parties to the Montreal Protocol (as of May 1, 2001)

Updated lists of Parties to the Protocoland the Amendments can be located at:

www.unep.org/ozone/ratif.htm. A check mark indicates ratification/accession/acceptance/approval of the agreement.



Foreign state Montreal pro-tocol

Londonamendments

Copenhagenamendments

Montrealamendments

Beijing amend-ments

Albania ................................................................................. ✔Algeria .................................................................................. ✔ ✔ ✔Angola .................................................................................. ✔Antigua and .......................................................................... ✔ ✔ ✔ ✔Barbuda.Argentina .............................................................................. ✔ ✔ ✔ ✔Armenia ................................................................................ ✔Australia ............................................................................... ✔ ✔ ✔ ✔Austria .................................................................................. ✔ ✔ ✔ ✔Azerbaijan ............................................................................ ✔ ✔ ✔Bahamas .............................................................................. ✔ ✔ ✔Bahrain ................................................................................. ✔ ✔ ✔ ✔Bangladesh .......................................................................... ✔ ✔ ✔Barbados .............................................................................. ✔ ✔ ✔Belarus ................................................................................. ✔ ✔Belgium ................................................................................ ✔ ✔ ✔Belize ................................................................................... ✔ ✔ ✔Benin .................................................................................... ✔ ✔ ✔Bolivia ................................................................................... ✔ ✔ ✔ ✔Bosnia & ............................................................................... ✔Herzegovina.Botswana ............................................................................. ✔ ✔ ✔Brazil .................................................................................... ✔ ✔ ✔Brunei Darussalam .............................................................. ✔Bulgaria ................................................................................ ✔ ✔ ✔ ✔Burkina Faso ........................................................................ ✔ ✔ ✔Burundi ................................................................................. ✔Cameroon ............................................................................ ✔ ✔ ✔Canada ................................................................................. ✔ ✔ ✔ ✔ ✔Central African ..................................................................... ✔Republic.Chad ..................................................................................... ✔Chile ..................................................................................... ✔ ✔ ✔ ✔ ✔China .................................................................................... ✔ ✔Colombia .............................................................................. ✔ ✔ ✔Comoros ............................................................................... ✔ ✔Congo ................................................................................... ✔ ✔Congo, Democratic .............................................................. ✔ ✔ ✔Republic of.Costa Rica ........................................................................... ✔ ✔ ✔Cote d’Ivoire ......................................................................... ✔ ✔Croatia .................................................................................. ✔ ✔ ✔ ✔Cuba ..................................................................................... ✔ ✔ ✔Cyprus .................................................................................. ✔ ✔Czech Republic .................................................................... ✔ ✔ ✔ ✔Denmark ............................................................................... ✔ ✔ ✔Djibouti ................................................................................. ✔ ✔ ✔ ✔Dominica .............................................................................. ✔ ✔Dominican ............................................................................ ✔Republic.Ecuador ................................................................................ ✔ ✔ ✔Egypt .................................................................................... ✔ ✔ ✔ ✔El Salvador ........................................................................... ✔ ✔ ✔ ✔Estonia ................................................................................. ✔ ✔ ✔Ethiopia ................................................................................ ✔European .............................................................................. ✔ ✔ ✔ ✔Community.Federated States of Micronesia ........................................... ✔Fiji ......................................................................................... ✔ ✔ ✔Finland ................................................................................. ✔ ✔ ✔France .................................................................................. ✔ ✔ ✔Gabon .................................................................................. ✔ ✔ ✔ ✔ ✔Gambia ................................................................................. ✔ ✔Georgia ................................................................................ ✔ ✔ ✔ ✔Germany .............................................................................. ✔ ✔ ✔ ✔Ghana .................................................................................. ✔ ✔ ✔Greece ................................................................................. ✔ ✔ ✔Grenada ............................................................................... ✔ ✔ ✔ ✔Guatemala ............................................................................ ✔Guinea .................................................................................. ✔ ✔Guyana ................................................................................. ✔ ✔ ✔ ✔Haiti ...................................................................................... ✔ ✔ ✔ ✔Honduras .............................................................................. ✔




Londonamendments


Montrealamendments

Beijing amend-ments

Hungary ................................................................................ ✔ ✔ ✔ ✔Iceland .................................................................................. ✔ ✔ ✔ ✔India ..................................................................................... ✔ ✔Indonesia .............................................................................. ✔ ✔ ✔Iran, Islamic Republic of ...................................................... ✔ ✔ ✔Ireland .................................................................................. ✔ ✔ ✔Israel .................................................................................... ✔ ✔ ✔Italy ....................................................................................... ✔ ✔ ✔ ✔Jamaica ................................................................................ ✔ ✔ ✔Japan ................................................................................... ✔ ✔ ✔Jordan .................................................................................. ✔ ✔ ✔ ✔ ✔Kazakhstan .......................................................................... ✔Kenya ................................................................................... ✔ ✔ ✔ ✔Kiribati .................................................................................. ✔Korea, Democratic People’s Republic of ............................. ✔ ✔ ✔Korea, Republic of ............................................................... ✔ ✔ ✔ ✔Kuwait .................................................................................. ✔ ✔ ✔Kyrgyzstan ........................................................................... ✔Lao, People’s Democratic Republic ..................................... ✔Latvia .................................................................................... ✔ ✔ ✔Lebanon ............................................................................... ✔ ✔ ✔ ✔Lesotho ................................................................................ ✔Liberia .................................................................................. ✔ ✔ ✔Libyan Arab Jamahiriya ....................................................... ✔Liechtenstein ........................................................................ ✔ ✔ ✔Lithuania ............................................................................... ✔ ✔ ✔Luxembourg ......................................................................... ✔ ✔ ✔ ✔ ✔Madagascar ......................................................................... ✔Malawi .................................................................................. ✔ ✔ ✔Malaysia ............................................................................... ✔ ✔ ✔Maldives ............................................................................... ✔ ✔Mali ....................................................................................... ✔ ✔Malta .................................................................................... ✔ ✔Marshall Islands ................................................................... ✔ ✔ ✔Mauritania ............................................................................ ✔Mauritius ............................................................................... ✔ ✔ ✔Mexico .................................................................................. ✔ ✔ ✔Moldova ................................................................................ ✔Monaco ................................................................................ ✔ ✔ ✔Mongolia ............................................................................... ✔ ✔ ✔Morocco ............................................................................... ✔ ✔ ✔Mozambique ......................................................................... ✔ ✔ ✔Myanmar .............................................................................. ✔ ✔Namibia ................................................................................ ✔ ✔Nepal .................................................................................... ✔ ✔Netherlands .......................................................................... ✔ ✔ ✔ ✔New Zealand ........................................................................ ✔ ✔ ✔ ✔Nicaragua ............................................................................. ✔ ✔ ✔Niger ..................................................................................... ✔ ✔ ✔ ✔Nigeria .................................................................................. ✔Norway ................................................................................. ✔ ✔ ✔ ✔Oman ................................................................................... ✔ ✔ ✔Pakistan ............................................................................... ✔ ✔ ✔Panama ................................................................................ ✔ ✔ ✔ ✔Papua New Guinea .............................................................. ✔ ✔Paraguay .............................................................................. ✔ ✔ ✔ ✔Peru ...................................................................................... ✔ ✔ ✔Philippines ............................................................................ ✔ ✔Poland .................................................................................. ✔ ✔ ✔ ✔Portugal ................................................................................ ✔ ✔ ✔Qatar .................................................................................... ✔ ✔ ✔Romania ............................................................................... ✔ ✔ ✔Russian Federation .............................................................. ✔ ✔Saint Kitts & Nevis ............................................................... ✔ ✔ ✔ ✔Saint Lucia ........................................................................... ✔ ✔ ✔ ✔Saint Vincent and the Grenadines ....................................... ✔ ✔ ✔Samoa .................................................................................. ✔Saudi Arabia ........................................................................ ✔ ✔ ✔Senegal ................................................................................ ✔ ✔ ✔ ✔Seychelles ............................................................................ ✔ ✔ ✔Singapore ............................................................................. ✔ ✔ ✔ ✔Slovakia ................................................................................ ✔ ✔ ✔ ✔Slovenia ............................................................................... ✔ ✔ ✔ ✔




Londonamendments


Montrealamendments

Beijing amend-ments

Solomon Islands .................................................................. ✔ ✔ ✔ ✔South Africa ......................................................................... ✔ ✔ ✔Spain .................................................................................... ✔ ✔ ✔ ✔Sri Lanka .............................................................................. ✔ ✔ ✔ ✔Sudan ................................................................................... ✔Suriname .............................................................................. ✔Swaziland ............................................................................. ✔Sweden ................................................................................ ✔ ✔ ✔ ✔Switzerland ........................................................................... ✔ ✔ ✔Syrian Arab Republic ........................................................... ✔ ✔ ✔ ✔Tajikistan .............................................................................. ✔ ✔Tanzania, United Republic of .............................................. ✔ ✔Thailand ............................................................................... ✔ ✔ ✔The Former Yugoslav Republic of Macedonia .................... ✔ ✔ ✔ ✔Togo ..................................................................................... ✔ ✔ ✔Tonga ................................................................................... ✔Trinidad and Tobago ............................................................ ✔ ✔ ✔ ✔Tunisia .................................................................................. ✔ ✔ ✔ ✔Turkey .................................................................................. ✔ ✔ ✔Turkmenistan ....................................................................... ✔ ✔Tuvalu .................................................................................. ✔ ✔ ✔ ✔Uganda ................................................................................. ✔ ✔ ✔ ✔Ukraine ................................................................................. ✔ ✔United Arab Emirates ........................................................... ✔United Kingdom ................................................................... ✔ ✔ ✔United States of America ..................................................... ✔ ✔ ✔Uruguay ................................................................................ ✔ ✔ ✔ ✔Uzbekistan ........................................................................... ✔ ✔ ✔Vanuatu ................................................................................ ✔ ✔ ✔Venezuela ............................................................................ ✔ ✔ ✔Viet Nam .............................................................................. ✔ ✔ ✔Yemen .................................................................................. ✔ ✔ ✔ ✔Yugoslavia ............................................................................ ✔Zambia ................................................................................. ✔ ✔Zimbabwe ............................................................................. ✔ ✔ ✔



Friday,

July 20, 2001

Part III

EnvironmentalProtection Agency40 CFR Part 51Proposed Guidelines for Best AvailableRetrofit Technology (BART)Determinations Under the Regional HazeRegulations; Proposed Rule




40 CFR Part 51

[FRL–6934–4]

Proposed Guidelines for BestAvailable Retrofit Technology (BART)Determinations Under the RegionalHaze Regulations


SUMMARY: The purpose of this proposalis to request comment on EPA’sproposed guidelines for implementationof the best available retrofit technology(BART) requirements under the regionalhaze rule which was published on July1, 1999 (64 FR 35714). We propose toadd the guidelines as appendix Y to 40CFR part 51. We propose to addregulatory text requiring that theseguidelines be used for addressing BARTdeterminations under the regional hazerule. In addition, we are proposing onerevision to guidelines issued in 1980 forfacilities contributing to ‘‘reasonablyattributable’’ visibility impairment.DATES: We are requesting writtencomments by September 18, 2001. TheEPA has scheduled two public hearingson this proposed rule. The first publichearing will be held on August 21 inArlington, Virginia. The second publichearing will be held on August 27 inChicago, Illinois. (See following sectionfor times and addresses.)ADDRESSES: Docket. Information relatedto the BART guidelines is available forinspection at the Air and RadiationDocket and Information Center, docketnumber A–2000–28. The docket islocated at the U.S. EnvironmentalProtection Agency, 401 M Street, SW,Room M–1500, Washington, DC 20460,telephone (202) 260–7548. The docket isavailable for public inspection andcopying between 8:00 a.m. and 5:30p.m., Monday through Friday, excludinglegal holidays. A reasonable fee may becharged for copying.

You should submit comments ontoday’s proposal and the materialsreferenced herein (in duplicate ifpossible) to the Air and RadiationDocket and Information Center (6102),Attention: Docket No. A–2000–28, U.S.Environmental Protection Agency, 1200Pennsylvania Avenue, NW, Washington,DC 20460. You may also submitcomments to EPA by electronic mail atthe following address: [email protected]. Electroniccomments must be submitted as anASCII file avoiding the use of special

characters and any form of encryption.All comments and data in electronicform must be identified by the docketnumber [A–2000–28]. Electroniccomments on this proposed rule alsomay be filed online at many FederalDepository Libraries.

Public Hearings. The first publichearing on this proposed rule will beheld on August 21 at 10:00 am at theCrowne Plaza Hotel, 1489 JeffersonDavis Highway, Arlington, VA 22202.The hotel is located near the CrystalCity metro stop. The second publichearing will be held on August 27 at10:00 am at the Metcalfe FederalBuilding, Room 331, 77 West JacksonBoulevard, Chicago, IL 60604.

If you wish to attend either publichearing or wish to present oraltestimony, please send notification nolater than one week prior to the date ofthe public hearing to Ms. Nancy Perry,Office of Air Quality Planning andStandards, Air Quality Strategies andStandards Division, MD–15, ResearchTriangle Park, NC 27711, telephone(919) 541–5628, [email protected].

Oral testimony will be limited to 5minutes each. The hearing will bestrictly limited to the subject matter ofthe proposal, the scope of which isdiscussed below. Any member of thepublic may file a written statement bythe close of the comment period.Written statements (duplicate copiespreferred) should be submitted toDocket No. A–2000–28 at the addresslisted above for submitting comments.The hearing schedule, including lists ofspeakers, will be posted on EPA’swebpage at http://www.epa.gov/air/visibility/whatsnew.html. A verbatimtranscript of the hearings and writtenstatements will be made available forcopying during normal working hours atthe Air and Radiation Docket andInformation Center at the address listedabove.FOR FURTHER INFORMATION CONTACT: TimSmith (telephone 919–541–4718), MailDrop 15, EPA, Air Quality Strategiesand Standards Division, ResearchTriangle Park, North Carolina, 27711.Internet address: [email protected] INFORMATION: We areproviding the public with theopportunity to comment on EPA’sProposed BART Guidelines and theaccompanying regulatory text.

Table of Contents

I. Background on BART GuidelinesA. Commitment in the Preamble to the

Regional Haze RuleB. Statutory Requirement for BART

GuidelinesII. Proposed Amendments to Part 51

III. Revision to 1980 BART Guidelines for‘‘Reasonably Attributable’’ VisibilityImpairment

IV. Administrative RequirementsA. Regulatory Planning and Review by the

Office of Management and Budget (OMB)(Executive Order 12866)

B. Regulatory Flexibility ActC. Paperwork Reduction Act—Impact on

Reporting RequirementsD. Unfunded Mandates Reform ActE. Environmental Justice—Executive Order

12898F. Protection of Children from

Environmental Health Risks and SafetyRisks—Executive Order 13045

G. Executive Order 13132: FederalismH. Executive Order 13084: Consultation

and Coordination with Indian TribalGovernments

I. National Technology Transfer andAdvancement Act

J. Executive Order 13211. ActionsConcerning Regulations ThatSignificantly Affect Energy Supply,Distribution, or Use.

K. Guidelines for BART DeterminationsUnder the Regional Haze Rule

I. Background on BART Guidelines

A. Commitment in the Preamble to theRegional Haze Rule

The EPA included in the finalregional haze rule a requirement forBART for certain large stationarysources put in place between 1962 and1977. We discuss these requirements indetail in the preamble to the final rule(see 64 FR 35737–35743). Theregulatory requirements for BART arecodified in 40 CFR 51.308(e). In thepreamble, we committed to issuingfurther guidelines to clarify therequirements of the BART provision.The purpose of this notice is to providethe public with an opportunity tocomment on the draft guidelines and theaccompanying regulatory text.

B. Statutory Requirement for BARTGuidelines

Section 169A(b)(1) of the Clean AirAct (CAA) requires EPA to provideguidelines to States on theimplementation of the visibilityprogram. Moreover, the last sentence ofsection 169A(b) states:

In the case of a fossil-fuel fired generatingpowerplant having a capacity in excess of750 megawatts, the emission limitationsrequired under this paragraph shall bedetermined pursuant to guidelines,promulgated by the Administrator underparagraph (1)

We interpret this statutory requirementas clearly requiring EPA to publishBART guidelines and to require thatStates follow the guidelines inestablishing BART emission limitationsfor power plants with a total capacityexceeding the 750 megawatt cutoff. The



1 U.S. Environmental Protection Agency,Guidelines for Determining Best Available RetrofitTechnology for Coal-fired Power Plants and OtherExisting Stationary Facilities, EPA–450/3–80–009b,Office of Air Quality Planning and Standards,Research Triangle Park, N.C., November 1980 (1980BART Guidelines).

statute is less clear regarding whetherthe guidelines must be used for sourcesother than 750 megawatt power plants;however, today’s proposed rule wouldrequire States to use the guidelines forall of the 26 categories. We believe it isreasonable that consistent, rigorousapproaches be used for all BART sourcecategories. In addition, we believe it isimportant to provide for consistentapproaches to identifying the sources inthe remaining categories which areBART-eligible. We request comment onwhether the regional haze rule should:(1) Require use of the guidelines onlyfor 750 megawatt utilities, with theguidelines applying as guidance for theremaining categories, or (2)require useof the guidelines for all of the affectedsource categories.

II. Proposed Amendments to Part 51We propose:(1) BART guidelines, to be added as

appendix Y to 40 CFR part 51,(2) regulatory text, to be added as sub-

paragraph 51.308(e)(1)(C), requiring theuse of the guidelines.

Overview of Proposed Appendix YWe discuss the following general

topics in appendix Y, which areorganized into the following sections:—Introduction. Section I provides an

overview of the BART requirement inthe regional haze rule and in the CAA,and an overview of the guidelines.

—Identification of BART-eligiblesources. Section II is a step-by-stepprocess for identifying BART-eligiblesources.

—Identification of sources subject toBART. Sources ‘‘subject to BART’’ arethose BART-eligible sources which‘‘emit a pollutant which mayreasonably be anticipated to cause orcontribute to any impairment ofvisibility in any Class I area.’’ Wediscuss considerations for identifyingsources subject to BART in section IIIof the proposed appendix Y.

—Engineering analysis. For each sourcesubject to BART, the next step is toconduct an engineering analysis ofemissions control alternatives. Thisstep requires the identification ofavailable, technically feasible, retrofittechnologies, and for each technologyidentified, analysis of the cost ofcompliance, and the energy and non-air quality environmental impacts,taking into account the remaininguseful life and existing controltechnology present at the source. Foreach source, a ‘‘best system ofcontinuous emission reduction’’ isselected based upon this engineeringanalysis. Guidelines for theengineering analysis are described in

section IV of the proposed appendixY.

—Cumulative air quality analysis. Therule requires a cumulative analysis ofthe degree of visibility improvementthat would be achieved in each ClassI area as a result of the emissionsreductions achievable from all sourcessubject to BART. The establishment ofBART emission limits must take intoaccount the cumulative impact overallfrom the emissions reductions fromall of the source-specific ‘‘besttechnologies’’ identified in theengineering analysis. Considerationsfor this cumulative air qualityanalysis are discussed in section V.

—Emission limits. Considering theengineering analysis and thecumulative air quality analysis, Statesmust establish enforceable limits,including a deadline for compliance,for each source subject to BART.Considerations related to these limitsand deadlines are discussed in sectionVI.

—Trading program alternative. Generalguidance on how to develop anemissions trading program alternativeto BART is contained in section VII ofthe guidance. (Note that morecomprehensive guidance for emissiontrading programs generally isdescribed in Section VII).

Regulatory Text

The proposed regulatory text wouldrequire that States follow the guidelinesfor all BART determinations requiredunder the regional haze rule. We requestpublic comment on all provisions of theguidelines and on the accompanyingregulatory text.

III. Revision to 1980 BART Guidelinesfor ‘‘Reasonably Attributable’’ VisibilityImpairment

As noted above, the primary purposeof today’s proposed rule is to provideBART guidelines for the regional hazeprogram. In addition, however, we aremaking limited revisions tolongstanding guidelines for BART underthe 1980 visibility regulations forlocalized visibility impairment that is‘‘reasonably attributable’’ to one or a fewsources.1 The visibility regulationsrequire that States must use a 1980guidelines document when conductingBART analyses for certain power plantsfor reasonably attributable visibilityimpairment. The regulatory text for this

requirement is found in 40 CFR51.302(c)(4)(iii), as follows:

(iii) BART must be determined for fossil-fuel fired generating plants having a totalgenerating capacity in excess of 750megawatts pursuant to ‘‘Guidelines forDetermining Best Available RetrofitTechnology for Coal-fired Power Plants andOther Existing Stationary Facilities’’ (1980),which is incorporated by reference, exclusiveof appendix E, which was published in theFederal Register on February 6, 1980 (45 FR8210). It is EPA publication No. 450/3–80–009b and is for sale from the U.S. Departmentof Commerce, National TechnicalInformation Service, 5285 Port Royal Road,Springfield, Virginia 22161. It is alsoavailable for inspection at the Office of theFederal Register Information Center, 800North Capitol NW., suite 700, Washington,DC.

While the analytical process set forthin these guidelines is still generallyacceptable for conducting BARTanalyses for ‘‘reasonably attributable’’visibility impairment, there arestatements in the 1980 BART Guidelinesthat could be read to indicate that thenew source performance standards(NSPS) may be considered to representthe maximum achievable control forexisting sources. While this may havebeen the case in 1980 (e.g., the NSPS forsulfur dioxide (SO2) from boilers hadbeen recently issued in June 1979), themaximum achievable control levels forrecent plant retrofits have exceededNSPS levels. Thus, in order to ensurethat there is no confusion regarding howthe 1980 guidelines should beinterpreted, EPA has included thefollowing discussion in today’s actionand proposes limited clarifying changesto the visibility regulations.

In various sections of the 1980guideline, the discussion indicates thatthe NSPS in 1980 was considered togenerally represent the most stringentoption these sources could install asBART (i.e., maximum achievable levelof control). See, e.g., 1980 BARTGuidelines at pp. 8, 11 and 21. Forexample, a flowchart in the 1980guidelines indicates that if Statesestablish a BART emission limitationequivalent to NSPS for the source, thenthe State would not need to conduct afull-blown analysis of controlalternatives. See, 1980 BART Guidelinesat p. 8. Similarly, the visibility analysisdescribed in the guideline assumes as astarting point the level of controlscurrently achieved by the NSPS. See,1980 Guideline at p. 11. In the 20-yearperiod since these guidelines weredeveloped, there have been advances inSO2 control technologies that havesignificantly increased the level ofcontrol that is feasible, while costs perton of SO2 controlled have declined.



2 U.S. Environmental Protection Agency,Controlling SO2 Emissions: A Review ofTechnologies, EPA–600/R–00–093, Office ofResearch and Development, National RiskManagement Research Laboratory, ResearchTriangle Park, NC, October 2000, pp 32–34.

3 Note also that part II of the 1980 BARTguidelines includes an analysis of 90 percentcontrol for three power plants burning low-sulfurcoal.

This is demonstrated by a number ofrecent retrofits or binding agreements toretrofit coal-fired power plants in thewestern United States. These plantsinclude: Hayden (CO), Navajo (AZ),Centralia (WA), and Mohave (NV).These cases have shown that controloptions exist which can achieve asignificantly greater degree of controlthan the 70 percent minimum requiredby the NSPS for power plants emittingSO2 at less than 0.60 lb/million Btu heatinput. These retrofits have achieved, orare expected to achieve, annual SO2

reductions in the 85 to 90 percent range.Additionally, an EPA report 2 publishedin October 2000 shows that the SO2

removal for flue gas desulfurizationsystems installed in the 1990s iscommonly 90 percent or more for bothwet and dry scrubbers, well above theminimum 70 percent control requiredby the 1979 NSPS.3

Given the advances in controltechnology that have occurred over thepast 20 years, we believe that it shouldbe made clear that the BART analysesfor reasonably attributable visibilityimpairment should not be based on anassumption that the NSPS level ofcontrol represents the maximumachievable level of control. While it ispossible that a detailed analysis of theBART factors could result in theselection of a NSPS level of control, webelieve that States should only reachthis conclusion based upon an analysisof the full range of control options,including those more stringent than aNSPS level of control. In sum, all‘‘reasonably attributable’’ BARTanalyses should consider control levelsmore stringent than NSPS, includingmaximum achievable levels, andevaluate them in light of the statutoryfactors.

IV. Administrative Requirements

In preparing any proposed rule, EPAmust meet the administrativerequirements contained in a number ofstatutes and executive orders. In thissection of the preamble, we discuss howtoday’s regulatory proposal for BARTguidelines addresses theseadministrative requirements.

A. Regulatory Planning and Review bythe Office of Management and Budget(OMB) (Executive Order 12866)

Under Executive Order 12866 (58 FR51735, October 4, 1993) the Agencymust determine whether the regulatoryaction is ‘‘significant’’ and, therefore,subject to OMB review and therequirements of the Executive Order.The Order defines ‘‘significantregulatory action’’ as one that is likelyto result in a rule that may:

(1) Have an annual effect on theeconomy of $100 million or more oradversely affect in a material way theeconomy, a sector of the economy,productivity, competition, jobs, theenvironment, public health or safety, orState, local, or tribal governments orcommunities;

(2) Create a serious inconsistency orotherwise interfere with an action takenor planned by another agency;

(3) Materially alter the budgetaryimpacts of entitlements, grants, userfees, or loan programs or the rights andobligations of recipients thereof; or

(4) Raise novel legal or policy issuesarising out of legal mandates, thePresident’s priorities, or the principlesset forth in the Executive Order.

Pursuant to the terms of ExecutiveOrder 12866, it has been determinedthat this rule is a ‘‘significant regulatoryaction’’ and EPA has submitted it toOMB for review. The drafts of rulessubmitted to OMB, the documentsaccompanying such drafts, writtencomments thereon, written responses byEPA, and identification of the changesmade in response to OMB suggestions orrecommendations are available forpublic inspection at EPA’s Air andRadiation Docket and InformationCenter (Docket Number A–2000–28).

Because today’s guidelines clarify,and do not change, the existing rulerequirements of the regional haze rule,the guidelines do not have any effect onthe Regulatory Impact Analysis (RIA)that was previously prepared for theregional haze rule. This RIA is availablein the docket for the regional haze rule(A–95–38). As part of the analysesincluded in this RIA, we provided anestimate of the potential cost of controlto BART sources that is an average ofthe costs associated with the leaststringent illustrative progress goal (1.0deciview reduction over a 15-yearperiod) and the most stringentillustrative progress goal (10 percentdeciview reduction over a 10-yearperiod). The annual cost of control toBART sources associated with the finalRegional Haze rulemaking in 2015, theyear for which impacts are projected, is$72 million (1990 dollars).

This estimate of the control costs forBART sources for the year 2015 wascalculated after taking into account aregulatory baseline projection for theyear 2015. The baseline for thesecalculations included control measuresestimated to be needed for partialattainment of the PM and ozone NAAQSissued in 1997. These baseline estimateswere contained in an analysis preparedfor the RIA for the PM and ozoneNAAQS, and are summarized in the RIAfor the regional haze rulemaking. As aresult, in this RIA, we calculatedrelatively small impacts for BART, inpart because the baseline for theanalysis assumed a substantial degree ofemissions control for BART-eligiblesources in response to the nationalambient air quality standards (NAAQS)for PM2.5.

The EPA provided a benefits analysisof the emissions reductions associatedwith the four illustrative progress goalsin the RIA for the final rulemaking. Thisbenefits analysis is also incremental topartial attainment of the PM and ozoneNAAQS issued in 1997. We did not,however, include a benefits analysis forthe reductions from controls specific tothe potentially affected BART sources.For more information on the benefitanalysis for the final Regional Hazerulemaking, please refer to the RIA inthe public docket for the regional hazerule (Docket A–95–38).

B. Regulatory Flexibility ActThe EPA has determined that it is not

necessary to prepare a regulatoryflexibility analysis in connection withthis proposed rule. The EPA has alsodetermined that this proposed rulewould not have a significant impact ona substantial number of small entitiesbecause the rule would not establishrequirements applicable to smallentities.

The Regulatory Flexibility Act (5U.S.C. 601 et seq.) (RFA), as amendedby the Small Business RegulatoryEnforcement Fairness Act (Pub. L.No.104–121) (SBREFA), provides thatwhenever an agency is required topublish a general notice of proposedrulemaking, it must prepare and makeavailable an initial regulatory flexibilityanalysis, unless it certifies that theproposed rule, if promulgated, will nothave ‘‘a significant economic impact ona substantial number of small entities.’’5 U.S.C. 605(b). Courts have interpretedthe RFA to require a regulatoryflexibility analysis only when smallentities will be subject to therequirements of the rule. See Motor andEquip. Mfrs. Ass’n v. Nichols, 142 F.3d449 (D.C. Cir. 1998); United DistributionCos. v. FERC, 88 F.3d 1105, 1170 (D.C.



Cir. 1996); Mid-Tex Elec. Co-op, Inc. v.FERC, 773 F.2d 327, 342 (D.C. Cir. 1985)(agency’s certification need onlyconsider the rule’s impact on entitiessubject to the rule).

Similar to the discussion in theproposed and final regional haze rules,the proposed BART guidelines wouldnot establish requirements applicable tosmall entities. The proposed rule wouldapply to States, not to small entities.The BART requirements in the regionalhaze rule require BART determinationsfor a select list of major stationarysources defined by section 169A(g)(7) ofthe CAA. However, as noted in theproposed and final regional haze rules,the State’s determination of BART forregional haze involves some Statediscretion in considering a number offactors set forth in section 169A(g)(2),including the costs of compliance.Further, the final regional haze ruleallows States to adopt alternativemeasures in lieu of requiring theinstallation and operation of BART atthese major stationary sources. As aresult, the potential consequences of theBART provisions of the regional hazerule (as clarified in today’s proposedguidelines) at specific sources arespeculative. Any requirements for BARTwill be established by Staterulemakings. The States wouldaccordingly exercise substantialintervening discretion in implementingthe BART requirements of the regionalhaze rule and today’s proposedguidelines. In addition, we note thatmost sources potentially affected by theBART requirements in section 169A ofthe CAA are large industrial plants. Ofthese, we would expect few, if any, tobe considered small entities. We requestcomment on issues regarding smallentities that States might encounterwhen implementing the BARTprovision.

For today’s proposed BARTguidelines, EPA certifies that theguidelines and accompanying regulatorytext would not have a significant impacton a substantial number of smallentities.

C. Paperwork Reduction Act—Impact onReporting Requirements

The information collectionrequirements in today’s proposal clarify,but do not modify, the informationcollection requirements for BART.Reporting requirements related to BARTrequirements were included in anInformation Collection Requestdocument that was prepared by EPA(ICR No. 1813.02) and a copy may beobtained from Sandy Farmer, by mail atCollection Strategies Division; U.S. EPA(2822) 1200 Pennsylvania Avenue, NW.,

Washington, DC 20460, by email [email protected], or by calling(202) 260–2740. A copy may also bedownloaded off the Internet at http://www.epa.gov/icr. The informationrequirements are not effective untilOMB approves them.

Burden means the total time, effort, orfinancial resources expended by personsto generate, maintain, retain, or discloseor provide information to or for aFederal agency. This includes the timeneeded to review instructions; develop,acquire, install, and utilize technologyand systems for the purposes ofcollecting, validating, and verifyinginformation, processing andmaintaining information, and disclosingand providing information; adjust theexisting ways to comply with anypreviously applicable instructions andrequirements; train personnel to be ableto respond to a collection ofinformation; search data sources;complete and review the collection ofinformation; and transmit or otherwisedisclose the information.

An agency may not conduct orsponsor, and a person is not required torespond to a collection of informationunless it displays a currently valid OMBcontrol number. The OMB controlnumbers for EPA’s regulations are listedin 40 CFR part 9 and 48 CFR chapter 15.

Comments are requested on theAgency’s need for this information, theaccuracy of the provided burdenestimates, and any suggested methodsfor minimizing respondent burden,including through the use of automatedcollection techniques. Send commentson the ICR to the Director, CollectionStrategies Division; U.S. EnvironmentalProtection Agency (2822); 1200Pennsylvania Ave., NW., Washington,DC 20460; and to the Office ofInformation and Regulatory Affairs,Office of Management and Budget, 72517th St., NW., Washington, DC 20503,marked ‘‘Attention: Desk Officer forEPA.’’ Include the ICR number in anycorrespondence.

D. Unfunded Mandates Reform ActTitle II of the Unfunded Mandates

Reform Act of 1995 (Pub. L. 104–4)(UMRA), establishes requirements forFederal agencies to assess the effects oftheir regulatory actions on State, local,and tribal governments and the privatesector. Under section 202 of the UMRA,2 U.S.C. 1532, EPA generally mustprepare a written statement, including acost-benefit analysis, for any proposedor final rule that ‘‘includes any Federalmandate that may result in theexpenditure by State, local, and tribalgovernments, in the aggregate, or by theprivate sector, of $100,000,000 or more

* * * in any one year.’’ A ‘‘Federalmandate’’ is defined under section421(6), 2 U.S.C. 658(6), to include a‘‘Federal intergovernmental mandate’’and a ‘‘Federal private sector mandate.’’A ‘‘Federal intergovernmentalmandate,’’ in turn, is defined to includea regulation that ‘‘would impose anenforceable duty upon State, local, ortribal governments,’’ section421(5)(A)(i), 2 U.S.C. 658 (5)(A)(i),except for, among other things, a dutythat is ‘‘a condition of Federalassistance,’’ section 421(5)(A)(i)(I). A‘‘Federal private sector mandate’’includes a regulation that ‘‘wouldimpose an enforceable duty upon theprivate sector,’’ with certain exceptions,section 421(7)(A), 2 U.S.C. 658(7)(A).

Before promulgating an EPA rule forwhich a written statement is neededunder section 202 of the UMRA, section205, 2 U.S.C. 1535, of the UMRAgenerally requires EPA to identify andconsider a reasonable number ofregulatory alternatives and adopt theleast costly, most cost-effective, or leastburdensome alternative that achievesthe objectives of the rule.

By proposing to release BARTguidelines and to require their use, EPAis not directly establishing anyregulatory requirements that maysignificantly or uniquely affect smallgovernments, including tribalgovernments. Thus, EPA is not obligatedto develop under section 203 of theUMRA a small government agency plan.

Further, EPA carried outconsultations with the governmentalentities affected by this rule in a mannerconsistent with the intergovernmentalconsultation provisions of section 204 ofthe UMRA.

The EPA also believes that becausetoday’s proposal provides States withsubstantial flexibility, the proposed rulemeets the UMRA requirement in section205 to select the least costly andburdensome alternative in light of thestatutory mandate for BART. Theproposed rule provides States with theflexibility to establish BART based oncertain criteria, one of which is the costsof compliance. The proposed rule alsoprovides States with the flexibility toadopt alternatives, such as an emissionstrading program, in lieu of requiringBART. The BART guidelines therefore,inherently provides for adoption of theleast costly, most cost-effective, or least-burdensome alternative that achievesthe objective of the rule.

The EPA is not reaching a finalconclusion as to the applicability of therequirements of UMRA to thisrulemaking action. It is questionablewhether a requirement to submit a StateImplementation Plan (SIP) revision



constitutes a Federal mandate. Theobligation for a State to revise its SIPthat arises out of sections 110(a), 169Aand 169B of the CAA is not legallyenforceable by a court of law and, atmost, is a condition for continuedreceipt of highway funds. Therefore, itis possible to view an action requiringsuch a submittal as not creating anyenforceable duty within the meaning ofsection 421(5)(A)(i) of UMRA (2 U.S.C.658 (5)(A)(i)). Even if it did, the dutycould be viewed as falling within theexception for a condition of Federalassistance under section 421(5)(A)(i)(I)of UMRA (2 U.S.C. 658(5)(A)(i)(I)). Asnoted earlier, however, notwithstandingthese issues, the discussion in section 2and the analysis in chapter 8 of the RIAconstitutes the UMRA statement thatwould be required by UMRA if itsstatutory provisions applied, and EPAhas consulted with governmentalentities as would be required by UMRA.Consequently, it is not necessary forEPA to reach a conclusion as to theapplicability of the UMRArequirements.

E. Environmental Justice—ExecutiveOrder 12898

Executive Order 12898 requires thateach Federal agency make achievingenvironmental justice part of its missionby identifying and addressing, asappropriate, disproportionately highand adverse human health orenvironmental effects of its programs,policies, and activities on minoritiesand low-income populations. Therequirements of Executive Order 12898have been previously addressed to theextent practicable in the RIA citedabove, particularly in chapters 2 and 9of the RIA.

F. Protection of Children FromEnvironmental Health Risks and SafetyRisks—Executive Order 13045

Executive Order 13045: ‘‘Protection ofChildren from Environmental HealthRisks and Safety Risks’’ (62 FR 19885,April 23, 1997) applies to any rule that:(1) is determined to be ‘‘economicallysignificant’’ as defined under ExecutiveOrder 12866, and (2) concerns anenvironmental health or safety risk thatEPA has reason to believe may have adisproportionate effect on children. Ifthe regulatory action meets both criteria,the Agency must evaluate theenvironmental health or safety effects ofthe planned rule on children, andexplain why the planned regulation ispreferable to other potentially effectiveand reasonably feasible alternativesconsidered by the Agency. The EPAinterprets Executive Order 13045 asapplying only to those regulatory

actions that are based on health or safetyrisks, such that the analysis requiredunder section 5–501 of the Order hasthe potential to influence the regulation.The BART guidelines are not subject toExecutive Order 13045 because they donot establish an environmental standardintended to mitigate health or safetyrisks.

G. Executive Order 13132: FederalismExecutive Order 13132, entitled

Federalism (64 FR 43255, August 10,1999), requires EPA to develop anaccountable process to ensure‘‘meaningful and timely input by Stateand local officials in the development ofregulatory policies that have federalismimplications.’’ ‘‘Policies that havefederalism implications’’ are defined inthe Executive Order to includeregulations that have ‘‘substantial directeffects on the States, on the relationshipbetween the national government andthe States, or on the distribution ofpower and responsibilities among thevarious levels of government.’’ UnderSection 6 of Executive Order 13132,EPA may not issue a regulation that hasfederalism implications, that imposessubstantial direct compliance costs, andthat is not required by statute, unlessthe Federal government provides thefunds necessary to pay the directcompliance costs incurred by State andlocal governments, or EPA consults withState and local officials early in theprocess of developing the proposedregulation. The EPA also may not issuea regulation that has federalismimplications and that preempts Statelaw unless the Agency consults withState and local officials early in theprocess of developing the proposedregulation.

The EPA concludes that this rule willnot have substantial federalismimplications, as specified in section 6 ofExecutive Order 13132 (64 FR 43255,August 10, 1999), because it will notdirectly impose significant newrequirements on State and localgovernments, nor substantially alter therelationship or the distribution of powerand responsibilities between States andthe Federal government.

Although EPA has determined thatsection 6 of Executive Order 13132 doesnot apply, EPA nonetheless consultedwith a broad range of State and localofficials during the course of developingthis proposed rule. These includedcontacts with the National GovernorsAssociation, National League of Cities,National Conference of StateLegislatures, U. S. Conference ofMayors, National Association ofCounties, Council of State Governments,International City/County Management

Association, and National Associationof Towns and Townships.

H. Executive Order 13084: Consultationand Coordination With Indian TribalGovernments

On November 6, 2000, the Presidentissued Executive Order 13175 (65 FR67249) entitled ‘‘Consultation andCoordination with Indian TribalGovernments.’’ Executive Order 13175took effect on January 6, 2001, andrevokes Executive Order 13084 (TribalConsultation) as of that date. The EPAdeveloped this proposed rule, however,during the period when EO 13084 wasin effect; thus, EPA addressed tribalconsiderations under EO 13084. TheEPA will analyze and fully comply withthe requirements of EO 13175 beforepromulgating the final rule.

Under Executive Order 13084, EPAmay not issue a regulation that is notrequired by statute that significantly oruniquely affects the communities ofIndian tribal governments, and thatimposes substantial direct compliancecosts on those communities, unless theFederal government provides the fundsnecessary to pay the direct compliancecosts incurred by the tribalgovernments, or EPA consults withthose governments. If EPA complies byconsulting, Executive Order 13084requires EPA to provide to OMB, in aseparately identified section of thepreamble to the rule, a description ofthe extent of EPA’s prior consultationwith representatives of affected tribalgovernments, a summary of the natureof their concerns, and a statementsupporting the need to issue theregulation. In addition, Executive Order13084 requires EPA to develop aneffective process permitting electedofficials and other representatives ofIndian tribal governments ‘‘to providemeaningful and timely input in thedevelopment of regulatory policies onmatters that significantly or uniquelyaffect their communities.’’

Today’s proposed rule does notsignificantly or uniquely affect thecommunities of Indian tribalgovernments. This proposed action doesnot involve or impose any requirementsthat directly affect Indian tribes. UnderEPA’s tribal authority rule, tribes are notrequired to implement CAA programsbut, instead, have the opportunity to doso. Accordingly, the requirements ofsection 3(b) of Executive Order 13084do not apply to this rule.

I. National Technology Transfer andAdvancement Act

Section 12(d) of the NationalTechnology Transfer and AdvancementAct of 1995 (‘‘NTTAA’’), Pub. L. No.



4 Regulatory Impact Analysis for the RegionalHaze Rule. U.S. EPA, Office of Air Quality Planningand Standards. April 22, 1999. Unit 6.6.3, pp. 6–40 through 6–42.

5 U.S. Environmental Protection Agency,Controlling SO2 Emissions: A Review ofTechnologies, EPA–600/R–00–093, Office ofResearch and Development, National RiskManagement Research Laboratory, ResearchTriangle Park, NC, October 2000, pp 32–34.

6 Based on wholesale energy prices for the year2000.

104–113, § 12(d) (15 U.S.C. 272 note)directs EPA to use voluntary consensusstandards in its regulatory activitiesunless to do so would be inconsistentwith applicable law or otherwiseimpractical. Voluntary consensusstandards are technical standards (e.g.,materials specifications, test methods,sampling procedures, and businesspractices) that are developed or adoptedby voluntary consensus standardsbodies. The NTTAA directs EPA toprovide Congress, through OMB,explanations when the Agency decidesnot to use available and applicablevoluntary consensus standards.

This action does not involve technicalstandards. Therefore, EPA did notconsider the use of any voluntaryconsensus standards.

J. Executive Order 13211. ActionsConcerning Regulations ThatSignificantly Affect Energy Supply,Distribution, or Use

Executive Order 13211, ‘‘ActionsConcerning Regulations ThatSignificantly Affect Energy Supply,Distribution, or Use’’ (66 FR 28355 (May22, 2001)), provides that agencies shallprepare and submit to the Administratorof the Office of Information andRegulatory Affairs, Office ofManagement and Budget, a Statement ofEnergy Effects for certain actionsidentified as ‘‘significant energyactions.’’ Section 4(b) of ExecutiveOrder 13211 defines ‘‘significant energyactions’’ as ‘‘any action by an agency(normally published in the FederalRegister) that promulgates or isexpected to lead to the promulgation ofa final rule or regulation, includingnotices of inquiry, advance notices ofproposed rulemaking, and notices ofproposed rulemaking: (1)(i) that is asignificant regulatory action underExecutive Order 12866 or any successororder, and (ii) is likely to have asignificant adverse effect on the supply,distribution, or use of energy; or (2) thatis designated by the Administrator ofthe Office of Information and RegulatoryAffairs as a significant energy action.’’Under Executive Order 13211, aStatement of Energy Effects is a detailedstatement by the agency responsible forthe significant energy action relating to:(i) any adverse effects on energy supply,distribution, or use including a shortfallin supply, price increases, andincreased use of foreign supplies)should the proposal be implemented,and (ii) reasonable alternatives to theaction with adverse energy effects andthe expected effects of such alternativeson energy supply, distribution, and use.While this rulemaking is a ‘‘significantregulatory action’’ under Executive

Order 12866, EPA has determined thatthis rulemaking is not a significantenergy action because it is not likely tohave a significant adverse effect on thesupply, distribution, or use of energy.

As discussed above in Unit IV.A, EPAprovided an estimate of the potentialcost of control to BART sources in theRIA for the regional haze rule for theyear 2015. As specified in the CAA,these BART sources include certainutility steam electric plants and sourcesin 25 additional industrial sourcecategories. In 1999, EPA estimated thatBART would impose additional costs of$72 million per year (in 1990 dollars) in2015 on affected utility and industrialsources.4 It is expected that theseannual costs will be lower in 2015 thancurrently projected due to continuedimprovements in scrubber operationand design. Included in the total cost isan estimate that roughly 35 utility unitsbuilt between the years 1962 and 1977would be required to install additionalcontrol equipment, typically scrubbers.

Consistent with the RIA, we havelooked at the potential energy impactsassociated with scrubbers. About 60percent of the overall $72 millionestimate, or about $40 million, was aresult of scrubber cost calculations.These scrubber cost calculations arebased on cost models which determinethree types of costs for scrubbers: (1)Annualized capital costs, (2) fixedoperation and maintenance costs, and(3) variable operating and maintenancecosts. The cost models for variableoperating and maintenance costs tookinto account the energy needs of thescrubber, which was assumed to be2.0% of the electricity generated by aplant (or approximately 15,000Megawatt-hours per year (MW–h/yr) fora 100 MW scrubber).5 Although BARTrequirements may also be achieved withother control strategies and techniques(such as emission trading, or switchingtypes of fuels used to produce power),these scrubber cost calculations can beused to provide an order of magnitudeestimate of possible energy costs. TheEPA estimates that of the total annualcost estimate of $40 million forscrubbers, about 20 to 35 percent, orabout $9 million to $15 million, wouldbe variable operating and maintenancecosts. The energy costs for the scrubbers

would be some fraction of this $9 to $15million estimate, which also includesother elements such as the costs ofreagents and disposal. Applying thisenergy use to the roughly 35 utilityunits requires a total of 525 millionMW–h/yr, or 0.5 billion Kilowatt-hours/year (kWh–yr) of energy, which isvalued at $17 million.6

The EPA also believes that an annualcost of $40 million for the electric utilitysector for the year 2015 and beyondwould not result in significant changesin electricity or fuel prices, or insignificant changes in the consumptionof energy.

For non-utility sources, the costs ofthe BART requirements may result frominstalling, operating and maintainingpollution control equipment or fromother control strategies and techniques.As with utilities, a fraction of thesecosts in some cases would be related tothe energy used to operate the pollutioncontrol equipment, thus increasing theoverall demand for energy and fuels;however, such impacts are usually asmall fraction of the overall annualizedcosts of control equipment. Thus, EPAbelieves that the energy costs for non-utility categories would be a relativelysmall fraction of the $72 million costestimate. The EPA believes that theoverall effects on energy supply and usefor a small fraction of $72 million wouldbe trivial, and that this would notsignificantly affect the price or supply ofenergy.

Therefore, we conclude that based onthe analysis above that the BARTrequirements of the Regional Haze Rulewill have a minimal impact, if any, onenergy prices, or on the supply,distribution, or use of energy.

K. Guidelines for BART DeterminationsUnder the Regional Haze Rule

We are proposing to adopt guidelinesfor BART determinations under theregional haze rule. The guidelines andareas on which comment is requestedare described below. After we receivecomments on these guidelines, we willadd them to 40 CFR part 51 asappendix Y.

Guidelines for BART Determinations Underthe Regional Haze Rule

Table of ContentsI. Introduction and Overview

A. What is the purpose of the guidelines?A. What does the CAA require generally for

improving visibility?C. What is the BART requirement in the

CAA?D. What types of visibility problems does

EPA address in its regulations?



E. What are the BART requirements in EPA’sregional haze regulations?

F. Do States have an alternative to imposingcontrols on specific facilities?

G. What is included in the guidelines?H. Who is the target audience for the

guidelines?

II. How To Identify BART-eligible Sources

A. What are the steps in identifying BART-eligible sources?

1. Step 1: Identify emission units in BARTcategories

2. Step 2: Identify the start-up dates ofthose emission units

3. Step 3: Compare the potential emissionsto the 250 ton/yr cutoff

4. Final step: Identify the emission unitsand pollutants that constitute the BART-eligible source.

III. How To Identify Sources ‘‘Subject toBART’’

A. How can I identify the ‘‘geographic area’’or ‘‘region’’ that contributes to a givenClass I area?

IV. Engineering Analysis of BART Options

A. What factors must I address in theEngineering Analysis?

B. How does a BART engineering analysiscompare to a BACT review under thePSD program?

C. Which pollutants must I address in theengineering review?

D. What are the five basic steps of a case-by-case BART engineering analysis?

1. Step 1—How do I identify all availableretrofit emission control techniques?

2. Step 2—How do I determine whether theoptions identified in Step 1 aretechnically feasible?

a. In general, what do we mean bytechnical feasibility?

b. What do we mean by ‘‘available’’technology?

c. What do we mean by ‘‘applicable’’technology?

d. What type of demonstration is requiredif I conclude that an option is nottechnically feasible?

3. Step 3—How do I develop a ranking ofthe technically feasible alternatives?

a. What are the appropriate metrics forcomparison?

b. How do I evaluate control techniqueswith a wide range of emissionperformance levels?

c. How do I rank the control options?4. Step 4—For a BART engineering

analysis, what impacts must I calculateand report? What methods does EPArecommend for the impacts analyses?

a. Impact analysis part 1: how do I estimatethe costs of control?

b. How do I take into account a project’s‘‘remaining useful life’’ in calculatingcontrol costs?

c. What do we mean by cost effectiveness?d. How do I calculate average cost

effectiveness?e. How do I calculate baseline emissions?f. How do I calculate incremental cost

effectiveness?g. What other information should I provide

in the cost impacts analysis?h. Impact analysis part 2: How should I

analyze and report energy impacts?

i. Impact analysis part 3: How do I analyze‘‘non-air quality environmentalimpacts?’’

j. What are examples of non-air qualityenvironmental impacts?

5. Step 5—How do I select the ‘‘best’’alternative, using the results of steps 1through 4?

a. Summary of the impacts analysisb. Selecting a ‘‘best’’ alternativec. In selecting a ‘‘best’’ alternative, should

I consider the affordability of controls?

V. Cumulative Air Quality Analysis

A. What air quality analysis do we require inthe regional haze rule for purposes ofBART determinations?

B. How do I consider the results of thisanalysis in my selection of BART forindividual sources?

VI. Enforceable Limits / Compliance Date

VII. Emission Trading Program Overview

A. What are the general steps in developingan emission trading program?

B. What are emission budgets andallowances?

C. What criteria must be met in developingan emission trading program as analternative to BART?

1. How do I identify sources subject toBART?

2. How do I calculate the emissionsreductions that would be achieved ifBART were installed and operated onthese sources?

3. For a cap and trade program, how do Idemonstrate that my emission budgetresults in emission levels that areequivalent to or less than the emissionslevels that would result if BART wereinstalled and operated?

4. How do I ensure that trading budgetsachieve ‘‘greater reasonable progress?’’

5. How do I allocate emissions to sources?6. What provisions must I include in

developing a system for trackingindividual source emissions andallowances?

7. How would a regional haze tradingprogram interface with the requirementsfor ‘‘reasonably attributable’’ BARTunder § 51.302 of the regional haze rule?

I. Introduction and Overview

A. What Is the Purpose of theGuidelines?

The Clean Air Act (CAA), in sections169A and 169B, contains requirementsfor the protection of visibility in 156scenic areas across the United States. Tomeet the CAA’s requirements, EPArecently published regulations to protectagainst a particular type of visibilityimpairment known as ‘‘regional haze.’’The regional haze rule is found in thispart (40 CFR part 51), in §§ 51.300through 51.309. These regulationsrequire, in § 51.308(e), that certain typesof existing stationary sources of airpollutants install best available retrofittechnology (BART). The guidelines aredesigned to help States and others (1)identify those sources that must comply

with the BART requirement, and (2)determine the level of controltechnology that represents BART foreach source.

B. What Does the CAA RequireGenerally for Improving Visibility?

Section 169A of the CAA, added tothe CAA by the 1977 amendments,requires States to protect and improvevisibility in certain scenic areas ofnational importance. The scenic areasprotected by section 169A are called‘‘mandatory Class I Federal Areas.’’ Inthese guidelines, we refer to these as‘‘Class I areas.’’ There are 156 Class Iareas, including 47 national parks(under the jurisdiction of theDepartment of Interior—National ParkService), 108 wilderness areas (underthe jurisdiction of the Department ofInterior–Fish and Wildlife Service or theDepartment of Agriculture—US ForestService), and one International Park(under the jurisdiction of the Roosevelt-Campobello International Commission).The Federal Agency with jurisdictionover a particular Class I area is referredto in the CAA as the Federal LandManager. A complete list of the Class Iareas is contained in 40 CFR part 81,§§ 81.401 through 81.437, and you canfind a map of the Class I areas at thefollowing internet site: http://www.epa.gov/ttn/oarpg/t1/fr—notices/classimp.gif

The CAA establishes a national goalof eliminating man-made visibilityimpairment from the Class I areas wherevisibility is an important value. As partof the plan for achieving this goal, thevisibility protection provisions in theCAA mandate that EPA issueregulations requiring that States adoptmeasures in their State ImplementationPlans (SIPs), including long-termstrategies, to provide for reasonableprogress towards this national goal. TheCAA also requires States to coordinatewith the Federal Land Managers as theydevelop their strategies for addressingvisibility.

C. What Is the BART Requirement in theCAA?

Under section 169A(b)(2)(A) of theCAA, States must require certainexisting stationary sources to installBART. The BART requirement appliesto ‘‘major stationary sources’’ from oneof 26 identified source categories whichhave the potential to emit 250 tons peryear or more of any air pollutant. TheCAA requires only sources which wereput in place during a specific 15-yeartime interval to install BART. The BARTrequirement applies to sources thatexisted as of the date of the 1977 CAAamendments (that is, August 7, 1977)



1 As noted in the preamble to the regional hazerule, States need not include a BART-eligible sourcein the trading program if the source already hasinstalled BART-level pollution control technologyand the emission limit is a federally enforceablerequirement (64 FR 35742). We clarify in theseguidelines that States may also elect to allow asource the option of installing BART-level controlswithin the 5-year period for compliance with theBART requirement [see section VI of theseguidelines] rather than participating in a tradingprogram.

but which had not been in operation formore than 15 years (that is, not inoperation as of August 7, 1962).

The CAA requires BART when anysource meeting the above description‘‘emits any air pollutant which mayreasonably be anticipated to cause orcontribute to any impairment ofvisibility’’ in any Class I area. Inidentifying a level of control as BART,States are required by section 169A(g) ofthe CAA to consider:—The costs of compliance,—The energy and non-air quality

environmental impacts of compliance,—Any existing pollution control

technology in use at the source,—The remaining useful life of the

source, and—The degree of visibility improvement

which may reasonably be anticipatedfrom the use of BART.

The CAA further requires States to makeBART emission limitations part of theirSIPs. As with any SIP revision, this willbe a public process that provides anopportunity for public comment andjudicial review of any decision by EPAto approve or disapprove the revision.

D. What Types of Visibility ProblemsDoes EPA Address in Its Regulations?

The EPA addressed the problem ofvisibility in two phases. In 1980, EPApublished regulations addressing whatwe termed ‘‘reasonably attributable’’visibility impairment. Reasonablyattributable visibility impairment is theresult of emissions from one or a fewsources that are generally located inclose proximity to a specific Class I area.The regulations addressing reasonablyattributable visibility impairment arepublished in §§ 51.300 through 51.307.

On July 1, 1999, EPA amended theseregulations to address the second, morecommon, type of visibility impairmentknown as ‘‘regional haze.’’ Regionalhaze is the result of the collectivecontribution of many sources over abroad region. The regional haze ruleregulations slightly modified 40 CFR51.300 through 51.307, including theaddition of a few definitions in § 51.301,and added new §§ 51.308 and 51.309.

E. What Are the BART Requirements inEPA’s Regional Haze Regulations?

In the July 1, 1999 rulemaking, EPAadded a BART requirement for regionalhaze. You will find the BARTrequirements in 40 CFR 51.308(e)(1).Definitions of terms used in 40 CFR51.308(e)(1) are found in § 51.301.

As we discuss in detail in theseguidelines, the regional haze rulecodifies and clarifies the BARTprovisions in the CAA. The rule

requires that States identify and list‘‘BART-eligible sources,’’ that is, thatStates identify and list those sourcesthat fall within one of 26 sourcecategories, that were put in place duringthe 15-year window of time from 1962to 1977, and that have potentialemissions greater than 250 tons peryear. Once the State has identified theBART-eligible sources, the next step isto identify those BART eligible sourcesthat may ‘‘emit any air pollutant whichmay reasonably be anticipated to causeor contribute to any impairment ofvisibility.’’ Under the rule, a sourcewhich fits this description is ‘‘subject toBART.’’ For each source subject toBART, States must identify the level ofcontrol representing BART based uponthe following analyses:— First, paragraph 308(e)(1)(ii)(A)

provides that States must identify thebest system of continuous emissioncontrol technology for each sourcesubject to BART taking into accountthe technology available, the costs ofcompliance, the energy and non-airquality environmental impacts ofcompliance, any pollution controlequipment in use at the source, andthe remaining useful life of thesource.

— Second, paragraph 308(e)(1)(ii)(B),provides that States must conduct ananalysis of the degree of visibilityimprovement that would be achievedfrom all sources subject to BART thatare within a geographic area thatcontributes to visibility impairment inany protected Class I area.Once a State has identified the level

of control representing BART (if any), itmust establish an emission limitrepresenting BART and must ensurecompliance with that requirement nolater than 5 years after EPA approves theSIP. States are allowed to establishdesign, equipment, work practice orother operational standards whenlimitations on measurementtechnologies make emission standardsinfeasible.

F. Do States Have an Alternative toImposing Controls on SpecificFacilities?

States are given the option under 40CFR 51.308(e)(2) to adopt an alternativeapproach to imposing controls on acase-by-case basis for each sourcesubject to BART. However, while Statesmay instead adopt alternative measures,such as an emissions trading program,40 CFR 51.308(e)(2)(i) requires States toprovide a demonstration that any suchalternative will achieve greater‘‘reasonable progress’’ than would haveresulted from installation of BART from

all sources subject to BART. Such ademonstration must include:— a list of all BART-eligible sources;— an analysis of the best system of

continuous emission controltechnology available for all sourcessubject to BART, taking into accountthe technology available, the costs ofcompliance, the energy and non-airquality environmental impacts ofcompliance, any pollution controlequipment in use at the source, andthe remaining useful life of thesource. Unlike the analysis for BARTunder 40 CFR 51.308(e)(1), whichrequires that these factors beconsidered on a case-by-case basis,States may consider these factors ona category-wide basis, as appropriate,in evaluating alternatives to BART;

— an analysis of the degree of visibilityimprovement that would result fromthe alternative program in eachprotected Class I area.

States must make sure that a tradingprogram or other such measure includesall BART-eligible sources, unless asource has installed BART, or plans toinstall BART consistent with51.308(e)(1).1 A trading program alsomay include additional sources. 40 CFR51.308(e)(2) also requires that Statesinclude in their SIPs details on howthey would implement the emissiontrading program or other alternativemeasure. States must provide a detaileddescription of the program includingschedules for compliance, the emissionsreductions that they will require, theadministrative and technical proceduresfor implementing the program, rules foraccounting and monitoring emissions,and procedures for enforcement.

G. What Is Included in the Guidelines?In the guidelines, we provide

procedures States must use inimplementing the regional haze BARTrequirements on a source-by-sourcebasis, as provided in 40 CFR51.308(e)(1). We address general topicsrelated to development of a tradingprogram or other alternative allowed by40 CFR 51.308(e)(2), but we will addressmost of the details of guidance fortrading programs in separate guidelines.

The BART analysis process, and thecontents of this guidance, are as follows:



2 In order to account for the possibility thatBART-eligible sources could go unrecognized, werecommend that you adopt requirements placing aresponsibility on source owners to self-identify ifthey meet the criteria for BART-eligible sources.

–Identification of all BART-eligiblesources. Section II of this guidanceoutlines a step-by-step process foridentifying BART-eligible sources.

–Identification of sources subject toBART. As noted above, sources‘‘subject to BART’’ are those BART-eligible sources which ‘‘emit apollutant which may reasonably beanticipated to cause or contribute toany impairment of visibility in anyClass I area.’’ We discussconsiderations for identifying sourcessubject to BART in section III of theguidance.

–Engineering analysis. For each sourcesubject to BART, the next step is toconduct an engineering analysis ofemissions control alternatives. Thisstep requires the identification ofavailable, technically feasible, retrofittechnologies, and for each technologyidentified, analysis of the cost ofcompliance, and the energy and non-air quality environmental impacts,taking into account the remaininguseful life and existing controltechnology present at the source. Foreach source, a ‘‘best system ofcontinuous emission reduction’’ willbe selected based upon thisengineering analysis. Guidelines forthe engineering analysis are describedin section IV of this guidance.

—Cumulative air quality analysis. Therule requires a cumulative analysis ofthe degree of visibility improvementthat would be achieved in each Class

I area as a result of the emissionsreductions achievable from all sourcessubject to BART. The establishment ofBART emission limits must take intoaccount the cumulative impact overallfrom the emissions reductions fromall of the source-specific ‘‘besttechnologies’’ identified in theengineering analysis. Considerationsfor this cumulative air qualityanalysis are discussed in section V ofthis guidance.

—Emissions limits. Considering theengineering analysis and thecumulative air quality analysis, Statesmust establish enforceable limits,including a deadline for compliance,for each source subject to BART.Considerations related to these limitsand deadlines are discussed in sectionVI of the guidance.

—Considerations in establishing atrading program alternative. Generalguidance on how to develop anemissions trading program alternativeis contained in section VII of theguidance.

H. Who Is the Target Audience for theGuidelines?

The guidelines are written primarilyfor the benefit of State, local and tribalagencies to satisfy the requirements forincluding the BART determinations andemission limitations in their SIPs ortribal implementation plans (TIPs).Throughout the guidelines, which arewritten in a question and answer format,

we ask questions ‘‘How do I * * *?’’and answer with phrases ‘‘you should* * *, you must* * *’’ The ‘‘you’’means a State, local or tribal agencyconducting the analysis.2 We recognize,however, that agencies may prefer torequire source owners to assume part ofthe analytical burden, and that therewill be differences in how thesupporting information is collected anddocumented.

II. How To Identify BART-EligibleSources

This section provides guidelines onhow you identify BART-eligible sources.A BART-eligible source is an existingstationary source in 26 listed categorieswhich meets criteria for startup datesand potential emissions.

A. What Are the Steps In IdentifyingBART-Eligible Sources?

Figure 1 shows the steps foridentifying whether the source is a‘‘BART eligible source:’’

Step 1: Identify the emission units inBART categories,

Step 2: Identify the start-up dates ofthose emission units, and

Step 3: Compare the potentialemissions to the 250 ton/yr cutoff.



1. Step 1: Identify Emission Units in theBART Categories

The BART requirement only appliesto sources in specific categories listed inthe CAA. The BART requirement doesnot apply to sources in other sourcecategories, regardless of their emissions.The listed categories are:

(1) Fossil-fuel fired steam electricplants of more than 250 million Britishthermal units (BTU) per hour heatinput,

(2) Coal cleaning plants (thermaldryers),

(3) Kraft pulp mills,(4) Portland cement plants,(5) Primary zinc smelters,(6) Iron and steel mill plants,(7) Primary aluminum ore reduction

plants,(8) Primary copper smelters,(9) Municipal incinerators capable of

charging more than 250 tons of refuseper day,

(10) Hydrofluoric, sulfuric, and nitricacid plants,

(11) Petroleum refineries,(12) Lime plants,(13) Phosphate rock processing plants,(14) Coke oven batteries,(15) Sulfur recovery plants,(16) Carbon black plants (furnace

process),(17) Primary lead smelters,(18) Fuel conversion plants,(19) Sintering plants,



(20) Secondary metal productionfacilities,

(21) Chemical process plants,(22) Fossil-fuel boilers of more than

250 million BTUs per hour heat input,(23) Petroleum storage and transfer

facilities with a capacity exceeding300,000 barrels,

(24) Taconite ore processing facilities,(25) Glass fiber processing plants, and(26) Charcoal production facilities.Some plant locations may have

emission units from more than onecategory, and some emitting equipmentmay fit into more than one category.Examples of this situation are sulfurrecovery plants at petroleum refineries,coke oven batteries and sintering plantsat steel mills, and chemical processplants at refineries. For Step 1, youidentify all of the emissions units at theplant that fit into one or more of thelisted categories. You do not identifyemission units in other categories.

Example: A mine is collocated with aelectric steam generating unit and a coalcleaning plant. You would identify emissionunits associated with the electric steamgenerating unit and the coal cleaning plant,because they are listed categories but not themine, because coal mining is not a listedcategory.

The category titles are generally clearin describing the types of equipment tobe listed. Most of the category titles arevery broad descriptions that encompassall emission units associated with aplant site (for example, ‘‘petroleumrefining’’ and ‘‘kraft pulp mills’’). Inaddition, this same list of categoriesappears in the PSD regulations, forexample in 40 CFR 52.21. States andsource owners need not revisit anyinterpretations of the list madepreviously for purposes of the PSDprogram. We provide the followingclarifications for a few of the categorytitles and we request comment onwhether there are any additional sourcecategory titles for which EPA shouldprovide clarification in the finalguidelines:

—‘‘Steam electric plants of more than250 million BTU/hr heat input.’’Because the category refers to‘‘plants,’’ boiler capacities must beaggregated to determine whether the250 million BTU/hr threshold isreached.Example: Stationary source includes a

steam electric plant with three 100 millionBTU/hr boilers. Because the aggregatecapacity exceeds 250 million BTU/hr for the‘‘plant,’’ these boilers would be identified inStep 2.

‘‘Steam electric plants’’ includescombined cycle turbines because oftheir incorporation of heat recovery

steam generators. Simple cycle turbinesshould not be considered ‘‘steamelectric plants’’ because they typicallydo not make steam.—‘‘Fossil-fuel boilers of more than 250

million BTU/hr heat input.’’ The EPAproposes two options for interpretingthis source category title. The firstoption is the approach used in theregulations for prevention ofsignificant deterioration (PSD). In thePSD regulations, this same statutorylanguage has been interpreted inregulatory language to mean ‘‘fossilfuel boilers (or combinations thereof)totaling more than 250 million Britishthermal units per hour heat input.’’The EPA proposes that this sameinterpretation be used for BART aswell. Thus, as in the example above,you would aggregate boiler capacitiesto determine whether the 250 millionBTU/hr threshold is reached.Under the second option, this

category would be interpreted to coveronly those boilers that are individuallygreater than 250 million BTU/hr. Thisapproach would result in differinglanguage from the PSD program. It ispossible, however, that differentapproaches may be justified. The PSDprogram ensures that new sourceprojects do not circumvent the programby constructing several boilers withcapacities lower than 250 million BTU/hr. Because the BART program affectsonly sources already in existence as ofthe date of the 1977 CAA amendments,there may be a lesser need to aggregateboilers that are individually less than250 million BTU/hr. The EPA requestscomment on both options proposedabove.—Petroleum storage and transfer

facilities with a capacity exceeding300,000 barrels. The 300,000 barrelcutoff refers to total facility-wide tankcapacity for tanks that were put inplace within the 1962–1977 timeperiod, and includes gasoline andother petroleum-derived liquids.

—‘‘Phosphate rock processing plants.’’This category descriptor is broad, andincludes all types of phosphate rockprocessing facilities, includingelemental phosphorous plants as wellas fertilizer production plants.

—‘‘Charcoal production facilities.’’ In aletter sent to EPA on October 11,2000, the National Association ofManufacturers (NAM) noted that thereis some limited legislative history onthis source category list. Specifically,there is discussion in theCongressional Record from July 29,1976 (Cong. Record S. 12781–12784)which identifies a study in the 1970sby the Research Corporation of New

England (the TRC report). TheCongressional Record contains a tableextracted from the TRC report thatidentifies 190 source categoriesconsidered in developing a list of 28categories that led to the 26 categorieseventually listed in the CAA. In itsOctober 11, 2000 letter, NAM suggeststhat the Congressional Record and theTRC report are relevant to theinterpretation of the source category‘‘charcoal production facilities.’’While EPA does not believe that theTRC report or table contain anyinformation that would suggestsubdividing this category, EPA hasincluded the NAM letter and the citedpassage from the CongressionalRecord in the docket for this proposedrule. The EPA requests comment onwhether and how the informationcited by NAM is relevant to theinterpretation of this or othercategories.

2. Step 2: Identify the Start-Up Dates ofthe Emission Units

Emissions units listed under Step 1are BART-eligible only if they were ‘‘inexistence’’ on August 7, 1977 but werenot ‘‘in operation’’ before August 7,1962.

What does ‘‘in existence on August 7,1977’’ mean?

The regulation defines ‘‘in existence’’to mean that:

The owner or operator has obtained allnecessary preconstruction approvals orpermits required by Federal, State, or localair pollution emissions and air quality lawsor regulations and either has (1) begun, orcaused to begin, a continuous program ofphysical on-site construction of the facility or(2) entered into binding agreements orcontractual obligations, which cannot becanceled or modified without substantial lossto the owner or operator, to undertake aprogram of construction of the facility to becompleted in a reasonable time. See 40 CFR51.301.

Thus, the term ‘‘in existence’’ means thesame thing as the term ‘‘commenceconstruction’’ as that term is used in thePSD regulations. See 40 CFR51.165(a)(1)(xvi) and 40 CFR 52.21(b)(9).Thus, an emissions unit could be ‘‘inexistence’’ according to this test even ifit did not begin operating until severalyears later.

Example: The owner or operator obtainednecessary permits in early 1977 and enteredinto binding construction agreements in June1977. Actual on-site construction began inlate 1978, and construction was completed inmid-1979. The source began operating inSeptember 1979. The emissions unit was ‘‘inexistence’’ as of August 7, 1977.

We note that emissions units of this sizefor which construction commenced



3 Another possible interpretation would be toconsider sources built before 1962 but modifiedduring the 1962–1977 time window as a ‘‘new’’source at the time of the modification. Under this

approach, such sources would be considered tohave commenced operation during the 1962–1977time period, and thus would be BART eligible.Similarly, consistent with this interpretation, asource modified after the 1977 date would betreated as ‘‘new’’ as of the date of the modificationand therefore would not be BART-eligible. The EPAbelieves that this approach may be much moredifficult to implement, given that programs toidentify ‘‘modifications’’ were not in place for muchof the 1962–1977 time period.

AFTER August 7, 1977 (i.e., were not‘‘in existence’’ on August 7, 1977) weresubject to major new source review(NSR) under the PSD program. Thus, theAugust 7, 1977 ‘‘in existence’’ test isessentially the same thing as theidentification of emissions units thatwere grandfathered from the NSRreview requirements of the 1977 CAAamendments.

Finally, we note that sources are notBART eligible if the only change at theplant was the addition of pollutioncontrols. For example, if the onlychange at a copper smelter during the1962 through 1977 time period was theaddition of acid plants for the reductionof SO2 emissions, these emissioncontrols would not by themselvestrigger a BART review.

What does ‘‘in operation beforeAugust 7, 1962’’ mean?

An emissions unit that meets theAugust 7, 1977 ‘‘in existence’’ test is notBART-eligible if it was in operationbefore August 7, 1962. ‘‘In operation’’ isdefined as ‘‘engaged in activity relatedto the primary design function of thesource.’’ This means that a source musthave begun actual operations by August7, 1962 to satisfy this test.

Example: The owner or operator enteredinto binding agreements in 1960. Actual on-site construction began in 1961, andconstruction was complete in mid-1962. Thesource began operating in September 1962.The emissions unit was not ‘‘in operation’’before August 7, 1962 and is therefore subjectto BART.

What is a ‘‘reconstructed source?’’Under a number of CAA programs, an

existing source which is completely orsubstantially rebuilt is treated as a newsource. Such ‘‘reconstructed’’ sourcesare treated as new sources as of the timeof the reconstruction. Consistent withthis overall approach to reconstructions,the definition of BART-eligible facility(reflected in detail in the definition of‘‘existing stationary facility’’) includesconsideration of sources that were inoperation before August 7, 1962, butwere reconstructed during the August 7,1962 to August 7, 1977 time period.

Under the regulation, a reconstructionhas taken place if ‘‘the fixed capital costof the new component exceeds 50percent of the fixed capital cost of acomparable entirely new source.’’ Therule also states that ‘‘Any final decisionas to whether reconstruction hasoccurred must be made in accordancewith the provisions of §§ 60.15 (f)(1)through (3) of this title.’’ [40 CFR51.301]. ‘‘§§ 60.15(f)(1) through (3)’’refers to the general provisions for NewSource Performance Standards (NSPS).Thus, the same policies and proceduresfor identifying reconstructed ‘‘affected

facilities’’ under the NSPS programmust also be used to identifyreconstructed ‘‘stationary sources’’ forpurposes of the BART requirement.

You should identify reconstructionson an emissions unit basis, rather thanon a plantwide basis. That is, you needto identify only the reconstructedemission units meeting the 50 percentcost criterion. You should includereconstructed emission units in the listof emission units you identified in Step1.

The ‘‘in operation’’ and ‘‘in existence’’tests apply to reconstructed sources. Ifan emissions unit was reconstructedand began actual operation beforeAugust 7, 1962, it is not BART-eligible.Similarly, any emissions unit for whicha reconstruction ‘‘commenced’’ afterAugust 7, 1977, is not BART-eligible.

How are modifications treated underthe BART provision?

The NSPS program and the majorsource NSR program both contain theconcept of modifications. In general, theterm ‘‘modification’’ refers to anyphysical change or change in themethod of operation of an emissionsunit that leads to an increase inemissions.

The BART provision in the regionalhaze rule contains no explicit treatmentof modifications. Accordingly,guidelines are needed on how modifiedemissions units, previously subject tobest available control technology(BACT), lowest achievable emission rate(LAER) and/or NSPS, are treated underthe rule. The EPA believes that the bestinterpretation for purposes of thevisibility provisions is that modifiedemissions units are still ‘‘existing.’’ TheBART requirements in the CAA do notappear to provide any exemption forsources which were modified since1977. Accordingly, if an emissions unitbegan operation before 1962, it is notBART-eligible if it is modified at a laterdate, so long as the modification is notalso a ‘‘reconstruction.’’ Similarly, anemissions unit which began operationwithin the 1962–1977 time window, butwas modified after August 7, 1977, isBART-eligible. We note, however, that ifsuch a modification was a majormodification subject to the BACT,LAER, or NSPS levels of control, thereview process will take into accountthat this level of control is already inplace and may find that the level ofcontrols are already consistent withBART. The EPA requests comment onthis interpretation for ‘‘modifications.’’ 3

3. Step 3: Compare the potentialemissions to the 250 ton/yr cutoff

The result of Steps 1 and 2 will be alist of emissions units at a given plantsite, including reconstructed emissionsunits, that are within one or more of theBART categories and that were placedinto operation within the 1962–1977time window. The third step is todetermine whether the total emissionsrepresent a current potential to emit thatis greater than 250 tons per year of anysingle visibility impairing pollutant. Inmost cases, you will add the potentialemissions from all emission units on thelist resulting from Steps 1 and 2. In afew cases, you may need to determinewhether the plant contains more thanone ‘‘stationary source’’ as the regionalhaze rule defines that term, and as weexplain further below.

What pollutants should I address?Visibility-impairing pollutants

include the following:—Sulfur dioxide (SO2),—Nitrogen oxides (NOX),—Particulate matter. (You may use PM10

as the indicator for particulate matter.We do not recommend use of totalsuspended particulates (TSP). PM10

emissions include the components ofPM2.5 as a subset. There is no need tohave separate 250 ton thresholds forPM10 and PM2.5, because 250 tons ofPM10 represents at most 250 tons ofPM2.5, and at most 250 tons of anyindividual particulate species such aselemental carbon, crustal material,etc).

—Volatile organic compounds (VOC),and

—Ammonia.What does the term ‘‘potential’’

emissions mean?The regional haze rule defines

potential to emit as follows:‘‘Potential to emit’’ means the maximum

capacity of a stationary source to emit apollutant under its physical and operationaldesign. Any physical or operationallimitation on the capacity of the source toemit a pollutant including air pollutioncontrol equipment and restrictions on hoursof operation or on the type or amount ofmaterial combusted, stored, or processed,shall be treated as part of its design if thelimitation or the effect it would have onemissions is federally enforceable. Secondaryemissions do not count in determining thepotential to emit of a stationary source.



4 Note: Most of these terms and definitions are thesame for regional haze and the 1980 visibilityregulations. For the regional haze rule we use theterm ‘‘BART-eligible source’’ rather than ‘‘existingstationary facility’’ to clarify that only a limitedsubset of existing stationary sources are subject toBART.

5 The EPA recognizes that we are in transitionperiod from the use of the SIC system to a newsystem called the North American industryClassification System (NAICS). Our initial thinkingis that BART determinations, as a one-time activity,are perhaps best handled under the SICclassifications. We request comment on whether aswitch to the new system for the regional haze ruleis warranted—we expect that few if any BARTeligibility determinations would hinge on thisdistinction.

6 Note: The concept of support facility used forthe PSD program applies here as well. As discussedin the draft New Source Review Workbook Manual,October 1990, pages A.3–A.5, support facilities, thatis facilities that convey, store or otherwise assist inthe production of the principal product, must begrouped with primary facilities even when morethan one 2-digit SIC is present.

This definition is identical to that in thePSD program (40 CFR 51.166 and51.18). This means that a source whichactually emits less than 250 tons peryear of a visibility-impairing pollutant isBART-eligible if its emissions wouldexceed 250 tons per year whenoperating at its maximum physical andoperational design.

Example: A source, while operating at one-fourth of its capacity, emits 75 tons per yearof SO2. If it were operating at 100 percent ofits maximum capacity, the source would emit300 tons per year. Because under the abovedefinition such a source would have‘‘potential’’ emissions that exceed 250 tonsper year, the source (if in a listed categoryand built during the 1962–1977 timewindow) would be BART-eligible.

A source’s ‘‘potential to emit’’ may takeinto account federally enforceableemission limits.

Example: The same source has a federallyenforceable restriction limiting it to operatingno more than 1⁄2 of the year. Because you cancredit this under the definition of potentialto emit, the source would have a potential of150 tons per year, which is less than the 250tons/year cutoff.

The definition of potential to emitallows only federally enforceableemission limits to be taken into accountfor this purpose, and does not creditemission limitations which areenforceable only by State and localagencies, but not by EPA and citizens inFederal court. As a result of some courtcases in other CAA programs, EPA isundertaking a rulemaking to determinewhether only federally enforceablelimits should be taken into account.This rulemaking will address theFederal enforceability restriction in theregional haze definition as well as otherprogram definitions. We expect that thisrulemaking will be complete well beforethe time period for determining whetherBART applies.

How do I identify whether a plant hasmore than one ‘‘stationary source?’’

The regional haze rule, in 40 CFR51.301, defines a stationary source as a‘‘building, structure, facility orinstallation which emits or may emitany air pollutant.’’ 4 The rule furtherdefines ‘‘building, structure or facility’’as:

All of the pollutant-emitting activitieswhich belong to the same industrialgrouping, are located on one or morecontiguous or adjacent properties, and areunder the control of the same person (orpersons under common control). Pollutant-emitting activities must be considered as part

of the same industrial grouping if they belongto the same Major Group (i.e., which have thesame two-digit code) as described in theStandard Industrial Classification Manual,1972 as amended by the 1977 Supplement(U.S. Government Printing Office stocknumbers 4101–0066 and 003–005–00176–0respectively).

In applying this definition, it is firstnecessary to draw the plant boundary,that is the boundary for the ‘‘contiguousor adjacent properties.’’ Next, withinthis plant boundary it is necessary togroup those emission units that areunder ‘‘common control.’’ The EPAnotes that these plant boundary issuesand ‘‘common control’’ issues are verysimilar to those already addressed inimplementation of the title V operatingpermits program and in NSR.

For emission units within the‘‘contiguous or adjacent’’ boundary andunder common control, you then groupemission units that are within the sameindustrial grouping (that is, associatedwith the same 2-digit StandardIndustrial Classification (SIC) code).5For most plants on the BART sourcecategory list, there will only be one 2-digit SIC that applies to the entire plant.For example, all emission unitsassociated with kraft pulp mills arewithin SIC code 26, and chemicalprocess plants will generally includeemission units that are all within SICcode 28. You should apply this ‘‘2-digitSIC test’’ the same way you are nowapplying this test in the major sourceNSR programs.6

For purposes of the regional haze rule,you group emissions from all emissionunits put in place within the 1962–1977time period that are within the 2-digitSIC code, even if those emission unitsare in different categories on the BARTcategory list.

Examples: A chemical plant which startedoperations within the 1962 to 1977 timeperiod manufactures hydrochloric acid(within the category title ‘‘Hydrochloric,sulfuric, and nitric acid plants’’) and variousorganic chemicals (within the category title‘‘chemical process plants’’), and has onsite anindustrial boiler greater than 250 million

BTU/hour. All of the emission units arewithin SIC 28 and, therefore, all the emissionunits are considered in determining BARTeligibility of the plant. You sum theemissions over all of these emission units tosee whether there are more than 250 tons peryear of potential emissions.

A steel mill which started operationswithin the 1962 to 1977 time period includesa sintering plant, a coke oven battery, andvarious other emission units. All of theemission units are within SIC 33. You sumthe emissions over all of these emission unitsto see whether there are more than 250 tonsper year of potential emissions.

4. Final Step: Identify the EmissionsUnits and Pollutants That Constitute theBART-Eligible Source

If the emissions from the list ofemissions units at a stationary sourceexceed a potential to emit of 250 tonsper year for any visibility-impairingpollutant, then that collection ofemissions units is a BART-eligiblesource. A BART analysis is required foreach visibility-impairing pollutantemitted.

Example: A stationary source comprisesthe following two emissions units, with thefollowing potential emissions:Emissions unit A

500 tons/yr SO2

150 tons/yr NOX

25 tons/yr PMEmissions unit B

100 tons/yr SO2

75 tons/yr NOX

10 tons/yr PM

For this example, potential emissions ofSO2 are 600 tons per year, whichexceeds the 250 tons/yr threshold.Accordingly, the entire ‘‘stationarysource’’ that is emissions units A and Bare subject to a BART review for SO2,NOX, and PM, even though the potentialemissions of PM and NOX each are lessthan 250 tons/yr.

Example: The total potential emissions,obtained by adding the potential emissions ofall emission units in listed categories at aplant site, are as follows:200 tons/yr SO2

150 tons/yr NOX

25 tons/yr PMEven though total emissions exceed 250

tons per year, no individual regulatedpollutant exceeds 250 tons per year and thissource is not BART-eligible.

III. How To Identify Sources ‘‘SubjectTo BART’’

After you have identified the BART-eligible sources, the next step isdetermining whether these sources aresubject to a further BART analysisbecause they emit ‘‘an air pollutantwhich may reasonably be anticipated tocause or contribute’’ to any visibility



impairment in a Federal Class I area. Aswe discuss in the preamble to theregional haze rule at 64 FR 35739–35740, the statutory language representsa very low triggering threshold. Inimplementing the regional haze rule,you should find that a BART-eligiblesource is ‘‘reasonably anticipated tocause or contribute’’ to regional haze ifthe source emits pollutants within ageographic region from whichpollutants can be emitted andtransported downwind to a Class I area.Where emissions from a givengeographic region contribute to regionalhaze in a Class I area, you shouldconsider any emissions from BART-eligible sources in that region tocontribute to the regional haze problem,thereby warranting a further BARTanalysis for those sources.

A. How Can I Identify ‘‘the GeographicArea’’ or ‘‘Region’’ That Contributes toa Given Class I Area?

As noted in the preamble to theregional haze rule, geographic ‘‘regions’’that can contribute to regional hazegenerally extend for hundreds orthousands of kilometers (64 FR 35722).Accordingly, most BART-eligiblesources are located within such ageographic region. For example, webelieve it would be difficult todemonstrate that a State or territory’semissions do not contribute to regionalhaze impairment in a Class I area withinthat State or territory.

The regional haze rule recognizes thatthere may be geographic areas(individual States or multi-State areas)within the United States, (in virtuallyall cases involving States that do nothave Class I areas) for which the totalemissions make only a trivialcontribution to visibility impairment inany Class I area. In identifying any suchState or area, you or a regional planningorganization must conduct an air qualitymodeling analysis to demonstrate thatthe total emissions from the State orarea makes only a trivial contribution tovisibility impairment in Class I areas.

One approach that can be used is todetermine whether a State or areacontributes in a non-trivial way wouldbe to do an analysis where you comparethe visibility impairment in a Class Iarea with the emissions from a State orarea to the visibility impairment in theClass I area in the absence of theemissions from the State or area. Thisapproach can be referred to as a ‘‘zero-out’’ approach where you zero out theemissions from the State or area that issuspected to make a trivial contributionto visibility impairment in a Class I area.Under this approach, you wouldcompare:

(1) the visibility impairment in eachaffected Class I area (for the average ofthe 20 percent most impaired days andthe 20 percent least impaired days)when the emissions from the State orarea suspected to have a trivialcontribution are included in themodeling analysis, and

(2) the visibility impairment in eachaffected Class I area (for the average ofthe 20 percent most impaired days andthe 20 percent least impaired days),excluding from the modeling analysisthe emissions from the geographic areasuspected to have a trivial impact.The difference in visibility betweenthese two model runs provides anindication of the impact on visibility ofemissions from the State(s) in question.In addition, it may be possible in thefuture to conduct analyses of thegeographic area that contributes tovisibility impairment in a Class I areathrough use of a source apportionmentmodel for PM. Source apportionmentmodels for PM are currently underdevelopment by private consultants.Guidance for regional modeling forvisibility and PM is found in adocument entitled ‘‘Guidance forDemonstrating Attainment of AirQuality Goals for PM2.5 and RegionalHaze.’’ [Note: this document is currentlyin draft form, but we expect a finaldocument before final publication of theBART guidelines]

IV. Engineering Analysis of BARTOptions

This section describes the process forthe engineering analysis of controloptions for sources subject to BART.

A. What Factors Must I Address in theEngineering Analysis?

The visibility regulations defineBART as follows:

Best Available Retrofit Technology (BART)means an emission limitation based on thedegree of reduction achievable through theapplication of the best system of continuousemission reduction for each pollutant whichis emitted by * * * [a BART-eligible source].The emission limitation must be established,on a case-by-case basis, taking intoconsideration the technology available, thecosts of compliance, the energy and non-airquality environmental impacts ofcompliance, any pollution control equipmentin use or in existence at the source, theremaining useful life of the source, and thedegree of improvement in visibility whichmay reasonably be anticipated to result fromthe use of such technology.

In the regional haze rule, we divide theBART analysis into two parts: anengineering analysis requirement in 40CFR 51.308(e)(1)(ii)(A), and a visibilityimpacts analysis requirement in 40 CFR51.308(e)(1)(ii)(B). This section of the

guidelines address the requirements forthe engineering analysis. Yourengineering analysis identifies the bestsystem of continuous emissionreduction taking into account:—The available retrofit control options,—Any pollution control equipment in

use at the source (which affects theavailability of options and theirimpacts),

—The costs of compliance with controloptions,

—The remaining useful life of thefacility (which as we will discussbelow, is an integral part of the costanalysis), and

—The energy and non-air qualityenvironmental impacts of controloptions.

We discuss the requirement for avisibility impacts analysis below insection V.

B. How Does a BART EngineeringAnalysis Compare to a BACT ReviewUnder the PSD Program?

In this proposal, we are seekingcomment on two alternative approachesfor conducting a BART engineeringanalysis. EPA prefers the first approach.Under this first alternative, the BARTanalysis would be very similar to theBACT review as described in the NewSource Review Workshop Manual(Draft, October 1990). Consistent withthe Workshop Manual, the BARTengineering analysis would be a processwhich provides that all available controltechnologies be ranked in descendingorder of control effectiveness. Underthis option, you must first examine themost stringent alternative. Thatalternative is selected as the ‘‘best’’unless you demonstrate and documentthat the alternative cannot be justifiedbased upon technical considerations,costs, energy impacts, and non-airquality environmental impacts. If youeliminate the most stringent technologyin this fashion, you then consider thenext most stringent alternative, and soon.

The EPA also requests comment on analternative decision-making approachthat would not necessarily begin withan evaluation of the most stringentcontrol option. Under this approach,you would have more choices in theway you structure your BART analysis.For example, you could choose to beginthe BART determination process byevaluating the least stringent technicallyfeasible control option or anintermediate control option drawn fromthe range of technically feasible controlalternatives. Under this approach, youwould then consider the additionalemission reductions, costs, and other



7 That is, emission uunits that were in existenceon August 7, 1977 and which began actualoperation on or after August 7, 1962.

8 In identifying ‘‘all’’ options, you must identifythe most stringent option and a reasonable set ofoptions for analysis that reflects a comprehensivelist of available technologies. It is not necessary tolist all permutations of available control levels thatexist for a given technology—the list is complete ifit includes the maximum level of control eachtechnology is capable of achieving.

9 In EPA’s 1980 BART guidelines for reasonablyattributable visibility impairment, we concludedthat NSPS standards generally, at that time,represented the best level sources could install asBART, and we required no further demonstration ifa NSPS level was selected. In the 20 year periodsince this guidance was developed, there have beenadvances in SO2 control technologies, confirmed bya number of recent retrofits at Western powerplants. Accordingly, EPA no longer concludes thatthe NSPS level of controls automatically represents‘‘the best these sources can install.’’ While it ispossible that a detailed analysis of the BART factorscould result in the selection of a NSPS level ofcontrol, we believe that you should only reach thisconclusion based upon an analysis of the full rangeof control options.

effects (if any) of successively morestringent control options. Under such anapproach, you would still be required to(1) display and rank all of the optionsin order of control effectiveness,including the most stringent controloption, and to identify the average andincremental costs of each option; (2)consider the energy and non-air qualityenvironmental impacts of each option;and (3) provide a justification foradopting the control technology thatyou select as the ‘‘best’’ level of control,including an explanation as to why yourejected other more stringent controltechnologies. While both approachesrequire essentially the same parametersand analyses, the EPA prefers the firstapproach described above, because webelieve it may be more straightforwardto implement than the alternative andwould tend to give more thoroughconsideration to stringent controlalternatives.

Although very similar in process,BART reviews differ in several respectsfrom the BACT review processdescribed in the NSR Draft Manual.First, because all BART reviews apply toexisting sources, the available controlsand the impacts of those controls maydiffer. Second, the CAA requires you totake slightly different factors intoaccount in determining BART andBACT. In a BACT analysis, thepermitting authority must consider the‘‘energy, environmental and economicimpacts and other costs’’ associatedwith a control technology in making itsdetermination. In a BART analysis, onthe other hand, the State must take intoaccount the ‘‘cost of compliance, theremaining useful life of the source, theenergy and nonair qualityenvironmental impacts of compliance,any existing pollution controltechnology in use at the source, and thedegree of improvement in visibility fromthe use of such technology’’ in makingits BART determination. Because of thedifferences in terminology, the BACTreview process tends to encompass abroader range of factors. For example,the term ‘‘environmental impacts’’ inthe BACT definition is more broad thanthe term ‘‘nonair quality environmentalimpacts’’ used in the BART definition.Accordingly, there is no requirement inthe BART engineering analysis toevaluate adverse air quality impacts ofcontrol alternatives such as the relativeimpacts on hazardous air pollutants,although you may wish to do so.Finally, for the BART analysis, there isno minimum level of control required,while any BACT emission limitationmust be at least as stringent as anyNSPS that applies to the source.

C. Which Pollutants Must I Address inthe Engineering Review?

Once you determine that a source issubject to BART, then a BART review isrequired for each visibility-impairingpollutant emitted. In a BART review, foreach affected emission unit, you mustestablish BART for each pollutant thatcan impair visibility. Consequently, theBART determination must address airpollution control measures for eachemissions unit or pollutant emittingactivity subject to review.

Example: Plantwide emissions fromemission units within the listed categoriesthat began operation within the ‘‘timewindow’’ for BART 7 are 300 tons per year ofNOX, 200 tons per year of SO2, and 150 tonsof primary particulate. Emissions unit Aemits 200 tons per year of NOX, 100 tons peryear of SO2, and 100 tons per year of primaryparticulate. Other emission units, units Bthrough H, which began operating in 1966,contribute lesser amounts of each pollutant.For this example, a BART review is requiredfor NOX, SO2, and primary particulate, andcontrol options must be analyzed for units Bthrough H as well as unit A.

D. What Are the Five Basic Steps of aCase-by-Case BART EngineeringAnalysis?

The five steps are:Step 1—Identify all 8 available retrofit

control technologies,Step 2—Eliminate Technically

Infeasible Options,Step 3—Rank Remaining Control

Technologies By ControlEffectiveness,

Step 4—Evaluate Impacts andDocument the Results, and

Step 5—Select ‘‘Best System ofContinuous Emission Reduction.’’

1. Step 1: How Do I Identify AllAvailable Retrofit Emission ControlTechniques?

Available retrofit control options arethose air pollution control technologieswith a practical potential for applicationto the emissions unit and the regulatedpollutant under evaluation. Airpollution control technologies caninclude a wide variety of availablemethods, systems, and techniques forcontrol of the affected pollutant.Available air pollution controltechnologies can include technologies

employed outside of the United Statesthat have been successfullydemonstrated in practice on full scaleoperations, particularly those that havebeen demonstrated as retrofits toexisting sources. Technologies requiredas BACT or LAER are available forBART purposes and must be includedas control alternatives. The controlalternatives should include not onlyexisting controls for the source categoryin question, but also take into accounttechnology transfer of controls that havebeen applied to similar sourcecategories and gas streams.Technologies which have not yet beenapplied to (or permitted for) full scaleoperations need not be considered asavailable; we do not expect the sourceowner to purchase or construct aprocess or control device that has notalready been demonstrated in practice.

Where a NSPS exists for a sourcecategory (which is the case for most ofthe categories affected by BART), youshould include a level of controlequivalent to the NSPS as one of thecontrol options.9 The NSPS standardsare codified in 40 CFR part 60. We notethat there are situations where NSPSstandards do not require the moststringent level of available control for allsources within a category. For example,post-combustion NOX controls (the moststringent controls for stationary gasturbines) are not required under subpartGG of the NSPS for Stationary GasTurbines. However, such controls muststill be considered availabletechnologies for the BART selectionprocess.

Potentially applicable retrofit controlalternatives can be categorized in threeways.

• Pollution prevention: use ofinherently lower-emitting processes/practices, including the use of materialsand production processes and workpractices that prevent emissions andresult in lower ‘‘production-specific’’emissions,

• Use of, (and where already in place,improvement in the performance of)add-on controls, such as scrubbers,



10 Because BART applies to existing sources, werecognize that there will probably be far feweropportunities to consider inherently lower-emittingprocesses than for NSR.

fabric filters, thermal oxidizers andother devices that control and reduceemissions after they are produced, and

• Combinations of inherently lower-emitting processes and add-on controls.Example: for a gas-fired turbine, acombination of combustion controls (aninherently lower-emitting process) andpost-combustion controls such asselective catalytic reduction (add-on)may be available to reduce NOX

emissions.For the engineering analysis, you

should consider potentially applicablecontrol techniques from all threecategories. You should consider lower-polluting processes based ondemonstrations from facilitiesmanufacturing identical or similarproducts from identical or similar rawmaterials or fuels. Add-on controls, onthe other hand, should be consideredbased on the physical and chemicalcharacteristics of the pollutant-bearingemission stream. Thus, candidate add-on controls may have been applied to abroad range of emission unit types thatare similar, insofar as emissionscharacteristics, to the emissions unitundergoing BART review.

In the course of the BART engineeringanalysis, one or more of the availablecontrol options may be eliminated fromconsideration because they aredemonstrated to be technicallyinfeasible or to have unacceptableenergy, cost, or non-air qualityenvironmental impacts on a case-by-case (or site-specific) basis. However, atthe outset, you should initially identifyall control options with potentialapplication to the emissions unit underreview.

We do not consider BART as arequirement to redesign the sourcewhen considering available controlalternatives. For example, where thesource subject to BART is a coal-firedelectric generator, we do not require theBART analysis to consider building anatural gas-fired electric turbinealthough the turbine may be inherentlyless polluting on a per unit basis.

In some cases, retrofit design changesmay be available for making a givenproduction process or emissions unitinherently less polluting.10 (Example:To allow for use of natural gas ratherthan oil for startup). In such cases, theability of design considerations to makethe process inherently less pollutingmust be considered as a controlalternative for the source.

Combinations of inherently lower-polluting processes/practices (or a

process made to be inherently lesspolluting) and add-on controls couldpossibly yield more effective means ofemissions control than either approachalone. Therefore, the option to use aninherently lower-polluting process doesnot, in and of itself, mean that noadditional add-on controls need to beincluded in the BART analysis. Thesecombinations should be identified inStep 1 for evaluation in subsequentsteps.

For emission units subject to a BARTengineering review, there will often becontrol measures or devices already inplace. For such emission units, it isimportant to include control optionsthat involve improvements to existingcontrols, and not to limit the controloptions only to those measures thatinvolve a complete replacement ofcontrol devices.

Example: For a power plant with anexisting wet scrubber, the current controlefficiency is 66 percent. Part of the reason forthe relatively low control efficiency is that 22percent of the gas stream bypasses thescrubber. An engineering review identifiesoptions for improving the performance of thewet scrubber by redesigning the internalcomponents of the scrubber and byeliminating or reducing the percentage of thegas stream that bypasses the scrubber. Fourcontrol options are identified: (1) 78 percentcontrol based upon improved scrubberperformance while maintaining the 22percent bypass, (2) 83 percent control basedupon improved scrubber performance whilereducing the bypass to 15 percent, (3) 93percent control based upon improving thescrubber performance while eliminating thebypass entirely, (this option results in a ‘‘wetstack’’ operation in which the gas leaving thestack is saturated with water) and (4) 93percent as in option 3, with the addition ofan indirect reheat system to reheat the stackgas above the saturation temperature. Youmust consider each of these four options ina BART analysis for this source.

You are expected to identify alldemonstrated and potentially applicableretrofit control technology alternatives.Examples of general information sourcesto consider include:

• The EPA’s Clean Air TechnologyCenter, which includes the RACT/BACT/LAER Clearinghouse (RBLC);

• State and Local Best AvailableControl Technology Guidelines—manyagencies have online information—forexample South Coast Air QualityManagement District, Bay Area AirQuality Management District, and TexasNatural Resources ConservationCommission;

• Control technology vendors;• Federal/State/Local NSR permits

and associated inspection/performancetest reports;

• Environmental consultants;

• Technical journals, reports andnewsletters, air pollution controlseminars; and

• EPA’s NSR bulletin board—http://www.epa.gov/ttn/nsr;

• Department of Energy’s Clean CoalProgram—technical reports;

• NOX Control Technology ‘‘CostTool’’—Clean Air Markets Division webpage—http://www.epa.gov/acidrain/nox/noxtech.htm;

• Performance of selective catalyticreduction on coal-fired steam generatingunits—final report. OAR/ARD, June1997 (also available athttp:www.epa.gov/acidrain/nox/noxtech.htm);

• Cost estimates for selectedapplications of NOX controltechnologies on stationary combustionboilers. OAR/ARD June 1997. (Docketfor NOX SIP call, A–96–56, II–A–03);

• Investigation of performance andcost of NOX controls as applied to group2 boilers. OAR/ARD, August 1996.(Docket for Phase II NOX rule, A–95–28,IV–A–4);

• Controlling SO2 Emissions: AReview of Technologies. EPA–600/R–00–093, USEPA/ORD/NRMRL, October2000.

• OAQPS Control Cost Manual.You should compile appropriate

information from all availableinformation sources, and you shouldensure that the resulting list of controlalternatives is complete andcomprehensive.

2. Step 2: How Do I Determine Whetherthe Options Identified in Step 1 AreTechnically Feasible?

In Step two, you evaluate thetechnical feasibility of the controloptions you identified in Step one. Youshould clearly document ademonstration of technical infeasibilityand should show, based on physical,chemical, and engineering principles,that technical difficulties wouldpreclude the successful use of thecontrol option on the emissions unitunder review. You may then eliminatesuch technically infeasible controloptions from further consideration inthe BART analysis.

In general, what do we mean bytechnical feasibility?

Control technologies are technicallyfeasible if either (1) they have beeninstalled and operated successfully forthe type of source under review, or (2)the technology could be applied to thesource under review. Two key conceptsare important in determining whether atechnology could be applied:‘‘availability’’ and ‘‘applicability.’’ Asexplained in more detail below, atechnology is considered ‘‘available’’ if



the source owner may obtain it throughcommercial channels, or it is otherwiseavailable within the common sensemeaning of the term. An availabletechnology is ‘‘applicable’’ if it canreasonably be installed and operated onthe source type under consideration. Atechnology that is available andapplicable is technically feasible.

What do we mean by ‘‘available’’technology?

The typical stages for bringing acontrol technology concept to reality asa commercial product are:

• Concept stage;• Research and patenting;• Bench scale or laboratory testing;• Pilot scale testing;• Licensing and commercial

demonstration; and• Commercial sales.A control technique is considered

available, within the context presentedabove, if it has reached the licensingand commercial sales stage ofdevelopment. Similarly, we do notexpect a source owner to conductextended trials to learn how to apply atechnology on a totally new anddissimilar source type. Consequently,you would not consider technologies inthe pilot scale testing stages ofdevelopment as ‘‘available’’ forpurposes of BART review.

Commercial availability by itself,however, is not necessarily a sufficientbasis for concluding a technology to beapplicable and therefore technicallyfeasible. Technical feasibility, asdetermined in Step 2, also means acontrol option may reasonably bedeployed on or ‘‘applicable’’ to thesource type under consideration.

Because a new technology maybecome available at various points intime during the BART analysis process,we believe that guidelines are neededon when a technology must beconsidered. For example, a technologymay become available during the publiccomment period on the State’s ruledevelopment process. Likewise, it ispossible that new technologies maybecome available after the close of theState’s public comment period andbefore submittal of the SIP to EPA, orduring EPA’s review process on the SIPsubmittal. In order to provide certaintyin the process, we propose that alltechnologies be considered if availablebefore the close of the State’s publiccomment period. You need not considertechnologies that become available afterthis date. As part of your analysis, youshould consider any technologiesbrought to your attention in publiccomments. If you disagree with publiccomments asserting that the technologyis available, you should provide an

explanation for the public record as tothe basis for your conclusion.

What do we mean by ‘‘applicable’’technology?

You need to exercise technicaljudgment in determining whether acontrol alternative is applicable to thesource type under consideration. Ingeneral, a commercially availablecontrol option will be presumedapplicable if it has been or is soon to bedeployed (e.g., is specified in a permit)on the same or a similar source type.Absent a showing of this type, youevaluate technical feasibility byexamining the physical and chemicalcharacteristics of the pollutant-bearinggas stream, and comparing them to thegas stream characteristics of the sourcetypes to which the technology had beenapplied previously. Deployment of thecontrol technology on a new or existingsource with similar gas streamcharacteristics is generally a sufficientbasis for concluding the technology istechnically feasible barring ademonstration to the contrary asdescribed below.

What type of demonstration isrequired if I conclude that an option isnot technically feasible?

Where you assert that a control optionidentified in Step 1 is technicallyinfeasible, you should make a factualdemonstration that the option iscommercially unavailable, or thatunusual circumstances preclude itsapplication to a particular emissionunit. Generally, such a demonstrationinvolves an evaluation of thecharacteristics of the pollutant-bearinggas stream and the capabilities of thetechnology. Alternatively, ademonstration of technical infeasibilitymay involve a showing that there areunresolvable technical difficulties withapplying the control to the source (e.g.,size of the unit, location of the proposedsite, or operating problems related tospecific circumstances of the source).Where the resolution of technicaldifficulties is a matter of cost, youshould consider the technology to betechnically feasible. The cost of acontrol alternative is considered later inthe process.

The determination of technicalfeasibility is sometimes influenced byrecent air quality permits. In somecases, an air quality permit may requirea certain level of control, but the levelof control in a permit is not expected tobe achieved in practice (e.g., a sourcehas received a permit but the projectwas canceled, or every operating sourceat that permitted level has beenphysically unable to achievecompliance with the limit). Where thisis the case, you should provide

supporting documentation showing whysuch limits are not technically feasible,and, therefore, why the level of control(but not necessarily the technology) maybe eliminated from furtherconsideration. However, if there is apermit requiring the application of acertain technology or emission limit tobe achieved for such technology(especially as a retrofit for an existingemission unit), this usually is sufficientjustification for you to assume thetechnical feasibility of that technologyor emission limit.

Physical modifications needed toresolve technical obstacles do not, inand of themselves, provide ajustification for eliminating the controltechnique on the basis of technicalinfeasibility. However, you mayconsider the cost of such modificationsin estimating costs. This, in turn, mayform the basis for eliminating a controltechnology (see later discussion).

Vendor guarantees may provide anindication of commercial availabilityand the technical feasibility of a controltechnique and could contribute to adetermination of technical feasibility ortechnical infeasibility, depending oncircumstances. However, we do notconsider a vendor guarantee alone to besufficient justification that a controloption will work. Conversely, lack of avendor guarantee by itself does notpresent sufficient justification that acontrol option or an emissions limit istechnically infeasible. Generally, youshould make decisions about technicalfeasibility based on chemical, andengineering analyses (as discussedabove), in conjunction with informationabout vendor guarantees.

A possible outcome of the BARTprocedures discussed in theseguidelines is the evaluation of multiplecontrol technology alternatives whichresult in essentially equivalentemissions. It is not EPA’s intent toencourage evaluation of unnecessarilylarge numbers of control alternatives forevery emissions unit. Consequently, youshould use judgment in deciding onthose alternatives for which you willconduct the detailed impacts analysis(Step 4 below). For example, if two ormore control techniques result incontrol levels that are essentiallyidentical, considering the uncertaintiesof emissions factors and otherparameters pertinent to estimatingperformance, you may evaluate only theless costly of these options. You shouldnarrow the scope of the BART analysisin this way, only if there is a negligibledifference in emissions and energy andnon-air quality environmental impactsbetween control alternatives.



3. Step 3: How Do I Develop a Rankingof the Technically FeasibleAlternatives?

Step 3 involves ranking all thetechnically feasible control alternativesidentified in Step 2. For the pollutantand emissions unit under review, yourank the control alternatives from themost to the least effective in terms ofemission reduction potential.

Two key issues that must beaddressed in this process include:

(1) Making sure that you express thedegree of control using a metric thatensures an ‘‘apples to apples’’comparison of emissions performancelevels among options, and

(2) Giving appropriate treatment andconsideration of control techniques thatcan operate over a wide range ofemission performance levels.In some instances, a control technologymay reduce more than one visibilityimpairing pollutant. We requestcomment on whether and how theBART guidelines should address theprocess for ranking such controltechnologies against controltechnologies which reduce emissions ofonly one pollutant.

What are the appropriate metrics forcomparison?

This issue is especially importantwhen you compare inherently lower-polluting processes to one another or toadd-on controls. In such cases, it isgenerally most effective to expressemissions performance as an averagesteady state emissions level per unit ofproduct produced or processed.

Examples of common metrics:• Pounds of SO2 emissions per

million Btu heat input, and• Pounds of NOX emissions per ton of

cement produced.How do I evaluate control techniques

with a wide range of emissionperformance levels?

Many control techniques, includingboth add-on controls and inherentlylower polluting processes, can performat a wide range of levels. Scrubbers andhigh and low efficiency electrostaticprecipitators (ESPs) are two of the manyexamples of such control techniquesthat can perform at a wide range oflevels. It is not our intent to requireanalysis of each possible level ofefficiency for a control technique, assuch an analysis would result in a largenumber of options. It is important,however, that in analyzing thetechnology you take into account themost stringent emission control levelthat the technology is capable ofachieving. You should use the mostrecent regulatory decisions andperformance data (e.g., manufacturer’s

data, engineering estimates and theexperience of other sources) to identifyan emissions performance level or levelsto evaluate.

In assessing the capability of thecontrol alternative, latitude exists toconsider any special circumstancespertinent to the specific source underreview, or regarding the priorapplication of the control alternative.However, you must document the basisfor choosing the alternate level (orrange) of control in the BART analysis.Without a showing of differencesbetween the source and other sourcesthat have achieved more stringentemissions limits, you should concludethat the level being achieved by thoseother sources is representative of theachievable level for the source beinganalyzed.

You may encounter cases where youmay wish to evaluate other levels ofcontrol in addition to the most stringentlevel for a given device. While you mustconsider the most stringent level as oneof the control options, you may considerless stringent levels of control asadditional options. This would beuseful, particularly in cases where theselection of additional options wouldhave widely varying costs and otherimpacts.

Finally, we note that for retrofittingexisting sources in addressing BART,you should consider ways to improvethe performance of existing controldevices, particularly when a controldevice is not achieving the level ofcontrol that other similar sources areachieving in practice with the samedevice.

How do I rank the control options?After determining the emissions

performance levels (using appropriatemetrics of comparison) for each controltechnology option identified in Step 2,you establish a list that identifies themost stringent control technologyoption. Each other control option is thenplaced after this alternative in a rankingaccording to its respective emissionsperformance level, ranked from lowestemissions to highest emissions (mosteffective to least stringent effectiveemissions control alternative). Youshould do this for each pollutant and foreach emissions unit (or grouping ofsimilar units) subject to a BARTanalysis.

4. Step 4: For a BART EngineeringAnalysis, What Impacts Must I Calculateand Report? What Methods Does EPARecommend for the Impacts Analysis?

After you identify and rank theavailable and technically feasiblecontrol technology options, you mustthen conduct three types of impacts

analyses when you make a BARTdetermination:

Impact analysis part 1: Costs ofcompliance, (taking into account theremaining useful life of the facility)

Impact analysis part 2: Energy impacts,and

Impact analysis part 3: Non-air qualityenvironmental impacts.

In this section, we describe how toconduct each of these three analyses.You are responsible for presenting anevaluation of each impact along withappropriate supporting information.You should discuss and, wherepossible, quantify both beneficial andadverse impacts. In general, the analysisshould focus on the direct impact of thecontrol alternative.

a. Impact analysis part 1: How do Iestimate the costs of control? Toconduct a cost analysis, you:

—Identify the emissions units beingcontrolled,

—Identify design parameters foremission controls, and

—Develop cost estimates based uponthose design parameters.

It is important to identify clearly theemission units being controlled, that is,to specify a well-defined area or processsegment within the plant. In some cases,multiple emission units can becontrolled jointly. However, in othercases it may be appropriate in the costanalysis to consider whether multipleunits will be required to install separateand/or different control devices. Theengineering analysis should provide aclear summary list of equipment and theassociated control costs. Inadequatedocumentation of the equipment whoseemissions are being controlled is apotential cause for confusion incomparison of costs of the same controlsapplied to similar sources.

You then specify the control systemdesign parameters. Potential sources ofthese design parameters includeequipment vendors, backgroundinformation documents used to supportNSPS development, control techniqueguidelines documents, cost manualsdeveloped by EPA, control data in tradepublications, and engineering andperformance test data. The following area few examples of design parameters fortwo example control measures:

Control device Examples of designparameters

Wet Scrubbers .......... Type of sorbent used(lime, limestone,etc.)

Gas pressure dropLiquid/gas ratio.



11 The Control Cost Manual is updatedperiodically. While this citation refers to the latestversion at the time this guidance was written, youshould use the version that is current as of whenyou conduct your impact analysis. This documentis available at the following Web site: http://www.epa.gov/ttn/catc/dir1/chpt2acr.pdf.

12 You should include documentation for anyadditional information you used for the cost

calculations, including any information supplied byvendors that affects your assumptions regardingpurchased equipment costs, equipment life,replacement of major components, and any otherelement of the calculation that differs from theControl Cost Manual.

13 The reason for the year 2008 is that the year2008 is the latest year for which SIPs are due toaddress the BART requirement.

14 Whenever you calculate or report annual costs,you should indicate the year for which the costs areestimated. For example, if you use the year 2000 asthe basis for cost comparisons, you would reportthat an annualized cost of $20 million would be:$20 million (year 2000 dollars).

Control device Examples of designparameters

Selective CatalyticReduction.

Ammonia to NOX

molar ratioPressure dropCatalyst life.

The value selected for the designparameter should ensure that thecontrol option will achieve the level ofemission control being evaluated. Youshould include in your analysis,documentation of your assumptionsregarding design parameters. Examplesof supporting references would includethe Office of Air Quality Planning andStandards (OAQPS) Control CostManual (see below) and backgroundinformation documents used for NSPSand hazardous pollutant emissionstandards. If the design parameters youspecified differ from typical designs,you should document the difference bysupplying performance test data for thecontrol technology in question appliedto the same source or a similar source.

Once the control technologyalternatives and achievable emissionsperformance levels have been identified,you then develop estimates of capitaland annual costs. The basis forequipment cost estimates also should bedocumented, either with data suppliedby an equipment vendor (i.e., budgetestimates or bids) or by a referencedsource (such as the OAQPS Control CostManual, Fifth Edition, February 1996,EPA 453/B–96–001).11 In order tomaintain and improve consistency, werecommend that you estimate controlequipment costs based on the EPA/OAQPS Control Cost Manual, wherepossible.12 The Control Cost Manualaddresses most control technologies insufficient detail for a BART analysis.While the types of site-specific analysescontained in the Control Cost Manualare less precise than those based upona detailed engineering design, normallythe estimates provide results that areplus or minus 30 percent, which isgenerally sufficient for the BART

review. The cost analysis should takeinto account site-specific conditionsthat are out of the ordinary (e.g., use ofa more expensive fuel or additionalwaste disposal costs) that may affect thecost of a particular BART technologyoption.

b. How do I take into account aproject’s ‘‘remaining useful life’’ incalculating control costs? You treat therequirement to consider the source’s‘‘remaining useful life’’ of the source forBART determinations as one element ofthe overall cost analysis. The‘‘remaining useful life’’ of a source, if itrepresents a relatively short time period,may affect the annualized costs ofretrofit controls. For example, themethods for calculating annualizedcosts in EPA’s Control Cost Manualrequire the use of a specified timeperiod for amortization that varies basedupon the type of control. If theremaining useful life will clearly exceedthis time period, the remaining usefullife has essentially no effect on controlcosts and on the BART determinationprocess. Where the remaining useful lifeis less than the time period foramortizing costs, you should use thisshorter time period in your costcalculations.

For purposes of these guidelines, theremaining useful life is the differencebetween:

(1) January 1 of the year you areconducting the BART analysis (but notlater than January 1, 2008); 13 and

(2) The date the facility stopsoperations. This date must be assuredby a federally-enforceable restrictionpreventing further operation. Aprojected closure date, without such afederally-enforceable restriction, is notsufficient. (The EPA recognizes thatthere may be situations where a sourceoperator intends to shut down a sourceby a given date, but wishes to retain theflexibility to continue operating beyondthat date in the event, for example, thatmarket conditions change.) We requestcomment on how such flexibility couldbe provided in this regard while

maintaining consistency with thestatutory requirement to install BARTwithin 5 years. For example, one optionthat we request comment on is allowinga source to choose between:

(1) Accepting a federally enforceablecondition requiring the source to shutdown by a given date, or

(2) Installing the level of controls thatwould have been considered BART ifthe BART analysis had not assumed areduced remaining useful life if thesource is in operation 5 years after thedate EPA approves the relevant SIP. Thesource would not be allowed to operateafter the 5-year mark without suchcontrols.

c. What do we mean by costeffectiveness? Cost effectiveness, ingeneral, is a criterion used to assess thepotential for achieving an objective atleast cost. For purposes of air pollutantanalysis, ‘‘effectiveness’’ is measured interms of tons of pollutant emissionsremoved, and ‘‘cost’’ is measured interms of annualized control costs. Werecommend two types of cost-effectiveness calculations—average costeffectiveness, and incremental cost-effectiveness.

In the cost analysis, you should takecare to not focus on incomplete resultsor partial calculations. For example,large capital costs for a control optionalone would not preclude selection of acontrol measure if large emissionsreductions are projected. In such a case,low or reasonable cost effectivenessnumbers may validate the option as anappropriate BART alternativeirrespective of the large capital costs.Similarly, projects with relatively lowcapital costs may not be cost effective ifthere are few emissions reduced.

d. How do I calculate average costeffectiveness? Average cost effectivenessmeans the total annualized costs ofcontrol divided by annual emissionsreductions (the difference betweenbaseline annual emissions and theestimate of emissions after controls),using the following formula:

Average cost effectiveness(dollars per ton removed)

Control option annualized cost

Baseline annual emissions Annual emissions with Control option

14

=−



15 This is the approach in the current NSRregulations. It is possible that this definition ofbaseline period may change based upon a currenteffort to amend the NSR regulations. We proposethat these guidelines should be amended to beconsistent with the approach taken in that separaterulemaking.

Because you calculate costs in(annualized) dollars per year ($/yr) andbecause you calculate emissions rates intons per year (tons/yr), the result is anaverage cost-effectiveness number in(annualized) dollars per ton ($/ton) ofpollutant removed.

e. How do I calculate baselineemissions? The baseline emissions rateshould represent a realistic depiction ofanticipated annual emissions for thesource. In general, for the existingsources subject to BART, you willestimate the anticipated annualemissions based upon actual emissionsfrom a baseline period. For purposes ofestimating actual emissions, theseguidelines take a similar approach to thecurrent definition of actual emissions inNSR programs. That is, the baselineemissions are the average annualemissions from the two most recentyears, unless you demonstrate thatanother period is more representative ofnormal source operations.15

When you project that futureoperating parameters (e.g., limited hoursof operation or capacity utilization, typeof fuel, raw materials or product mix ortype) will differ from past practice, andif this projection has a deciding effect inthe BART determination, then you mustmake these parameters or assumptionsinto enforceable limitations. In theabsence of enforceable limitations, youcalculate baseline emissions based uponcontinuation of past practice.

Examples: The baseline emissionscalculation for an emergency standbygenerator may consider the fact that thesource owner would not operate more thanpast practice of 2 weeks a year. On the otherhand, baseline emissions associated with abase-loaded turbine should be based on itspast practice which would indicate a largenumber of hours of operation. This producesa significantly higher level of baselineemissions than in the case of the emergency/

standby unit and results in more cost-effective controls. As a consequence of thedissimilar baseline emissions, BART for thetwo cases could be very different.

f. How do I calculate incremental costeffectiveness? In addition to the averagecost effectiveness of a control option,you should also calculate incrementalcost effectiveness. You should considerthe incremental cost effectiveness incombination with the total costeffectiveness in order to justifyelimination of a control option. Theincremental cost effectivenesscalculation compares the costs andemissions performance level of a controloption to those of the next moststringent option, as shown in thefollowing formula:Incremental Cost Effectiveness (dollars

per incremental ton removed) =(Total annualized costs of control

option) ¥ (Total annualized costsof next control option) ÷

(Next control option annual emissions)¥ (Control option annualemissions)

Example 1: Assume that Option F onFigure 2 has total annualized costs of $1million to reduce 2000 tons of a pollutant,and that Option D on Figure 2 has totalannualized costs of $500,000 to reduce 1000tons of the same pollutant. The incrementalcost effectiveness of Option F relative toOption D is ($1 million ¥ $500,000) dividedby (2000 tons ¥ 1000 tons), or $500,000divided by 1000 tons, which is $500/ton.

Example 2: Assume that two controloptions exist: Option 1 and Option 2. Option1 achieves a 100,000 ton/yr reduction at anannual cost of $19 million. Option 2 achievesa 98,000 tons/yr reduction at an annual costof $15 million. The incremental costeffectiveness of Option 1 relative to Option2 is ($19 million ¥ $15 million) divided by(100,000 tons ¥ 98,000 tons). The adoptionof Option 1 instead of Option 2 results in anincremental emission reduction of 2,000 tonsper year at an additional cost of $4,000,000per year. The incremental cost of Option 1,then, is $2000 per ton ¥ 10 times the averagecost of $190 per ton. While $2000 per tonmay still be deemed reasonable, it is usefulto consider both the average and incrementalcost in making an overall cost-effectiveness

finding. Of course, there may be otherdifferences between these options, such as,energy or water use, or non-airenvironmental effects, which also deserveconsideration in selecting a BARTtechnology.

You should exercise care in derivingincremental costs of candidate controloptions. Incremental cost-effectivenesscomparisons should focus onannualized cost and emission reductiondifferences between ‘‘dominant’’alternatives. To identify dominantalternatives, you generate a graphicalplot of total annualized costs for totalemissions reductions for all controlalternatives identified in the BARTanalysis, and by identifying a ‘‘least-costenvelope’’ as shown in Figure 2.

Example: Eight technically feasible controloptions for analysis are listed in the BARTranking. These are represented as A throughH in Figure 2. The dominant set of controloptions, B, D, F, G, and H, represent the least-cost envelope, as we depict by the cost curveconnecting them. Points A, C and E areinferior options, and you should not usethem in calculating incremental costeffectiveness. Points A, C and E representinferior controls because B will buy moreemissions reductions for less money than A;and similarly, D and F will buy morereductions for less money than C and E,respectively.

In calculating incremental costs, you:(1) Rank the control options in

ascending order of annualized totalcosts,

(2) Develop a graph of the mostreasonable smooth curve of the controloptions, as shown in Figure 2, and

(3) Calculate the incremental costeffectiveness for each dominant option,which is the difference in total annualcosts between that option and the nextmost stringent option, divided by thedifference in emissions reductionsbetween those two options. Forexample, using Figure 2, you wouldcalculate incremental cost effectivenessfor the difference between options B andD, options D and F, options F and G,and options G and H.



A comparison of incremental costscan also be useful in evaluating theviability of a specific control optionover a range of efficiencies. Forexample, depending on the capital andoperational cost of a control device,total and incremental cost may varysignificantly (either increasing ordecreasing) over the operational range ofa control device.

In addition, when you evaluate theaverage or incremental costeffectiveness of a control alternative,

you should make reasonable andsupportable assumptions regardingcontrol efficiencies. An unrealisticallylow assessment of the emissionreduction potential of a certaintechnology could result in inflated cost-effectiveness figures.

g. What other information should Iprovide in the cost impacts analysis?You should provide documentation ofany unusual circumstances that exist forthe source that would lead to cost-effectiveness estimates that would

exceed that for recent retrofits. This isespecially important in cases whererecent retrofits have cost-effectivenessvalues that are within a reasonablerange, but your analysis concludes thatcosts for the source being analyzed arenot reasonable.

Example: In an arid region, large amountsof water are needed for a scrubbing system.Acquiring water from a distant location couldgreatly increase the cost effectiveness of wetscrubbing as a control option.



h. Impact analysis part 2: How shouldI analyze and report energy impacts?You should examine the energyrequirements of the control technologyand determine whether the use of thattechnology results in any significant orunusual energy penalties or benefits. Asource owner may, for example, benefitfrom the combustion of a concentratedgas stream rich in volatile organiccompounds; on the other hand, moreoften extra fuel or electricity is requiredto power a control device or incineratea dilute gas stream. If such benefits orpenalties exist, they should bequantified and included in the costanalysis. Because energy penalties orbenefits can usually be quantified interms of additional cost or income to thesource, the energy impacts analysis can,in most cases, simply be factored intothe cost impacts analysis. However,certain types of control technologieshave inherent energy penaltiesassociated with their use. While youshould quantify these penalties, so longas they are within the normal range forthe technology in question, you shouldnot, in general, consider such penaltiesto be an adequate justification foreliminating that technology fromconsideration.

Your energy impact analysis shouldconsider only direct energyconsumption and not indirect energyimpacts. For example, you couldestimate the direct energy impacts of thecontrol alternative in units of energyconsumption at the source (e.g., BTU,kWh, barrels of oil, tons of coal). Theenergy requirements of the controloptions should be shown in terms oftotal (and in certain cases, alsoincremental) energy costs per ton ofpollutant removed. You can thenconvert these units into dollar costs and,where appropriate, factor these costsinto the control cost analysis.

You generally do not considerindirect energy impacts (such as energyto produce raw materials forconstruction of control equipment).However, if you determine, eitherindependently or based on a showing bythe source owner, that the indirectenergy impact is unusual or significantand that the impact can be wellquantified, you may consider theindirect impact.

The energy impact analysis may alsoaddress concerns over the use of locallyscarce fuels. The designation of a scarcefuel may vary from region to region.However, in general, a scarce fuel is onewhich is in short supply locally and canbe better used for alternative purposes,or one which may not be reasonablyavailable to the source either at thepresent time or in the near future.

Finally, the energy impacts analysismay consider whether there are relativedifferences between alternativesregarding the use of locally or regionallyavailable coal, and whether a givenalternative would result in significanteconomic disruption or unemployment.For example, where two options areequally cost effective and achieveequivalent or similar emissionsreductions, one option may be preferredif the other alternative results insignificant disruption orunemployment.

i. Impact analysis part 3: How do Ianalyze ‘‘non-air quality environmentalimpacts?’’ In the non-air quality relatedenvironmental impacts portion of theBART analysis, you addressenvironmental impacts other than airquality due to emissions of the pollutantin question. Such environmentalimpacts include solid or hazardouswaste generation and discharges ofpolluted water from a control device.

You should identify any significant orunusual environmental impactsassociated with a control alternative thathave the potential to affect the selectionor elimination of a control alternative.Some control technologies may havepotentially significant secondaryenvironmental impacts. Scrubbereffluent, for example, may affect waterquality and land use. Alternatively,water availability may affect thefeasibility and costs of wet scrubbers.Other examples of secondaryenvironmental impacts could includehazardous waste discharges, such asspent catalysts or contaminated carbon.Generally, these types of environmentalconcerns become important whensensitive site-specific receptors exist orwhen the incremental emissionsreductions potential of the moststringent control is only marginallygreater than the next most-effectiveoption. However, the fact that a controldevice creates liquid and solid wastethat must be disposed of does notnecessarily argue against selection ofthat technology as BART, particularly ifthe control device has been applied tosimilar facilities elsewhere and the solidor liquid waste problem under review issimilar to those other applications. Onthe other hand, where you or the sourceowner can show that unusualcircumstances at the proposed facilitycreate greater problems thanexperienced elsewhere, this mayprovide a basis for the elimination ofthat control alternative as BART.

The procedure for conducting ananalysis of non-air qualityenvironmental impacts should be madebased on a consideration of site-specificcircumstances. It is not necessary to

perform this analysis of environmentalimpacts for the entire list oftechnologies you ranked in Step 3, ifyou propose to adopt the most stringentalternative. In that case, the analysisneed only address those controlalternatives with any significant orunusual environmental impacts thathave the potential to affect the selectionor elimination of a control alternative.Thus, any important relativeenvironmental impacts (both positiveand negative) of alternatives can becompared with each other.

In general, the analysis of impactsstarts with the identification andquantification of the solid, liquid, andgaseous discharges from the controldevice or devices under review.Initially, you should perform aqualitative or semi-quantitativescreening to narrow the analysis todischarges with potential for causingadverse environmental effects. Next,you should assess the mass andcomposition of any such discharges andquantify them to the extent possible,based on readily-available information.You should also assemble pertinentinformation about the public orenvironmental consequences ofreleasing these materials.

j. What are examples of non-airquality environmental impacts? Thefollowing are examples of how toconduct non-air quality environmentalimpacts:• Water Impact

You should identify the relativequantities of water used and waterpollutants produced and discharged asa result of the use of each alternativeemission control system relative to themost stringent alternative. Wherepossible, you should assess the effect onground water and such local surfacewater quality parameters as ph,turbidity, dissolved oxygen, salinity,toxic chemical levels, temperature, andany other important considerations. Theanalysis should consider whetherapplicable water quality standards willbe met and the availability andeffectiveness of various techniques toreduce potential adverse effects.• Solid Waste Disposal Impact

You should compare the quality andquantity of solid waste (e.g., sludges,solids) that must be stored and disposedof or recycled as a result of theapplication of each alternative emissioncontrol system with the quality andquantity of wastes created with the moststringent emission control system. Youshould consider the composition andvarious other characteristics of the solidwaste (such as permeability, waterretention, rewatering of dried material,



16 Documentation of the presumption that 90–95percent control is achievable is contained in arecent report entitled Controlling SO2 Emissions: AReview of Technologies, EPA–600/R–00–093,available on the internet at http://www.epa.gov/ORD/WebPubs/so2. This report summarizespercentage controls for flue gas desulfurization(FGD) systems worldwide, provides detailedmethods for evaluating costs, and explains thereasons why costs have been decreasing with time.

17 The EPA has used the cost models in theControlling SO2 Emissions report to calculate cost-effectiveness ($/ton) estimates for FGD technologiesfor a number of example cases. (See note to docketA–2000–28 from Tim Smith, EPA/OAQPS,December 29, 2000).

compression strength, leachability ofdissolved ions, bulk density, ability tosupport vegetation growth andhazardous characteristics) which aresignificant with regard to potentialsurface water pollution or transport intoand contamination of subsurface watersor aquifers.• Irreversible or Irretrievable

Commitment of ResourcesYou may consider the extent to which

the alternative emission control systemsmay involve a trade-off between short-term environmental gains at the expenseof long-term environmental losses andthe extent to which the alternativesystems may result in irreversible orirretrievable commitment of resources(for example, use of scarce waterresources).• Other Adverse Environmental Impacts

You may consider significantdifferences in noise levels, radiant heat,or dissipated static electrical energy.Other examples of non-air qualityenvironmental impacts would includehazardous waste discharges such asspent catalysts or contaminated carbon.Generally, these types of environmentalconcerns become important when theplant is located in an area that issensitive to environmental degradationand when the incremental emissionsreductions potential of the moststringent control option is onlymarginally greater than the next most-effective option.• Benefits to the Environment

It is important to consider relativedifferences between options regardingtheir beneficial impacts to non-airquality-related environmental media.For example, you may consider whethera given control option results in lessdeposition of pollutants to nearbysensitive water bodies.

5. Step 5: How Do I Select the ‘‘Best’’Alternative, Using the Results of Steps1 Through 4?

a. Summary of the Impacts Analysis.From the alternatives you ranked inStep 3, you should develop a chart (orcharts) displaying for each of the rankedalternatives:

• Expected emission rate (tons peryear, pounds per hour);

• Emissions performance level (e.g.,percent pollutant removed, emissionsper unit product, lb/MMbtu, ppm);

• Expected emissions reductions(tons per year);

• Costs of compliance—totalannualized costs ($), cost effectiveness($/ton), and incremental costeffectiveness ($/ton);

• Energy impacts (indicate anysignificant energy benefits ordisadvantages);

• Non-air quality environmentalimpacts (includes any significant orunusual other media impacts, e.g., wateror solid waste), both positive andnegative.

b. Selecting a ‘‘best’’ alternative. Asdiscussed above, we are seekingcomment on two alternative approachesfor evaluating control options for BART.The first involves a sequential processfor conducting the impacts analysis thatbegins with a complete evaluation of themost stringent control option. Underthis approach, you determine that themost stringent alternative in the rankingdoes not impose unreasonable costs ofcompliance, taking into account bothaverage and incremental costs, then theanalysis begins with a presumption thatthis level is selected. You then proceedto considering whether energy and non-air quality environmental impactswould justify selection of an alternativecontrol option. If there are nooutstanding issues regarding energy andnon-air quality environmental impacts,the analysis is ended and the moststringent alternative is identified as the‘‘best system of continuous emissionreduction.’’

If you determine that the moststringent alternative is unacceptable dueto such impacts, you need to documentthe rationale for this finding for thepublic record. Then, the next most-effective alternative in the listingbecomes the new control candidate andis similarly evaluated. This processcontinues until you identify atechnology which does not poseunacceptable costs of compliance,energy and/or non-air qualityenvironmental impacts.

The EPA also requests comment on analternative decision-making approachthat would not begin with an evaluationof the most stringent control option. Forexample, you could choose to begin theBART determination process byevaluating the least stringent,technically feasible control option or byevaluating an intermediate controloption drawn from the range oftechnically feasible control alternatives.Under this approach, you would thenconsider the additional emissionsreductions, costs, and other effects (ifany) of successively more stringentcontrol options. Under such anapproach, you would still be required to(1) display and rank all of the optionsin order of control effectiveness and toidentify the average and incrementalcosts of each option; (2) consider theenergy and non-air qualityenvironmental impacts of each option;

and (3) provide a justification foradopting the technology that you selectas the ‘‘best’’ level of control, includingan explanation as to why you rejectedother more stringent controltechnologies.

Because of EPA’s experience inevaluating SO2 control options forutility boilers, the Agency is proposingto establish a presumption regarding thelevel of SO2 control that is generallyachievable for such sources. Based onthe cost models in the Controlling SO2

Emissions report,16 it appears that,where there is no existing controltechnology in place, 90–95 percentcontrol can generally be achieved atcost-effectiveness values that are in thehundreds of dollars per ton range orless.17 We are thus proposing apresumption that, for uncontrolledutility boilers, an SO2-control level inthe 90–95 range is generally achievable.If you wish to demonstrate a BART levelof control that is less than anypresumption established the finalguidelines, you would need todemonstrate the source-specificcircumstances with respect to costs,remaining useful life, non-air qualityenvironmental impacts, or energyimpacts that would justify less stringentcontrols than for a typical utility boiler.We believe that the ‘‘consideration ofcost’’ factor for source-by-source BART,which is a technology-based approach,generally requires selection of controlmeasures that are within this level ofcost effectiveness. We recognize,however, that the population of utilityboilers subject to BART may have case-by-case variations (for example, type offuel used, severe space limitations, andpresence of existing control equipment)that could affect the costs of applyingretrofit controls. We invite comments onwhether the 90–95 percent presumptionis appropriate, or whether anotherpresumption should be establishedinstead. If commenters want to offer adifferent presumption they shouldprovide documentation supporting thebasis for their proposal.

For evaluating the significance of thecosts of compliance, EPA requests



18 Technical Support Documentation. VoluntaryEmissions Reduction Program for Major IndustrialSources of Sulfur Dioxide in Nine Western Statesand a Backstop Market Trading Program. An Annexto the Report of the Grand Canyon VisibilityTransport Commission. Section 6A.

19 (The current draft of this document is entitledGuidance for Attainment of Air Quality Goals forPM2.5 and Regional Haze. We expect this documentwill be released in final form before the publicationof the final rule for the BART guidelines.)

comment on whether the final ruleshould contain specific criteria, and onwhether such criteria would improveimplementation of the BARTrequirement. For example, in the workof the Western Regional Air Partnership(WRAP),18 a system is described whichviews as ‘‘low cost’’ those controls withan average cost effectiveness below$500/ton, as ‘‘moderate’’ those controlswith an average cost effectivenessbetween $500 to 3000 per ton, and as‘‘high’’ those controls with an averagecost effectiveness greater than $3000 perton.

c. In selecting a ‘‘best’’ alternative,should I consider the affordability ofcontrols? Even if the control technologyis cost effective, there may be caseswhere the installation of controls wouldaffect the viability of continued plantoperations.

As a general matter, for plants that areessentially uncontrolled at present, andemit at much greater levels per unit ofproduction than other plants in thecategory, we are unlikely to accept asBART any analysis that preserves asource’s uncontrolled status. While thisresult may predict the shutdown ofsome facilities, we believe that theflexibility provided in the regional hazerule for an alternative reductionapproach, such as an emissions tradingprogram, will minimize the likelihoodof shutdowns.

Nonetheless, we recognize there maybe unusual circumstances that justifytaking into consideration the conditionsof the plant and the economic effects ofrequiring the use of a given controltechnology. These effects would includeeffects on product prices, the marketshare, and profitability of the source.We do not intend, for example, that themost stringent alternative must alwaysbe selected, if that level would cause aplant to shut down, while a slightlylesser degree of control would not havethis effect. Where there are suchunusual circumstances that are judgedto have a severe effect on plantoperations, you may take intoconsideration the conditions of theplant and the economic effects ofrequiring the use of a controltechnology. Where these effects arejudged to have a severe impact on plantoperations you may consider them inthe selection process, so long as youprovide an economic analysis thatdemonstrates, in sufficient detail for ameaningful public review, the specific

economic effects, parameters, andreasoning. (We recognize that thisreview process must preserve theconfidentiality of sensitive businessinformation). Any analysis shouldconsider whether other competingplants in the same industry may also berequired to install BART controls.

V. Cumulative Air Quality Analysis

A. What Air Quality Analysis Do WeRequire in the Regional Haze Rule forPurposes of BART Determinations?

In the regional haze rule, we requirethe following in 40 CFR51.308(e)(1)(ii)(B):

An analysis of the degree of visibilityimprovement that would be achieved in eachmandatory Class I Federal area as a result ofthe emission reductions from all sourcessubject to BART located within the regionthat contributes to visibility impairment inthe Class I area, based on the * * * [resultsof the engineering analysis required by 40CFR 51.308(e)(1)(ii)(A)] * * *

This means that the regional haze rulerequires you to conduct a regionalmodeling analysis which addresses thetotal cumulative regional visibilityimprovement if all sources subject toBART were to install the ‘‘best’’ controlsselected according to the engineeringanalysis described above in section IV ofthese guidelines. We are developingguidelines for regional air qualitymodeling.19

B. How Do I Consider the Results of ThisAnalysis in My Selection of BART forIndividual Sources?

You use a regional modeling analysisto assess the cumulative impact onvisibility of the controls selected in theengineering analysis for the time periodfor the first regional haze SIP, that is,the time period between the baselineperiod and the year 2018. You use thiscumulative impact assessment to makea determination of whether the controlsyou identified, in their entirety, providea sufficient visibility improvement tojustify their installation. We believe thatthere is a sufficient basis for the controlsif you can demonstrate for any Class Iarea that any of the following criteria aremet:

(1) The cumulative visibilityimprovement is a substantial fraction ofthe achievable visibility improvementfrom all measures included in the SIP,or is a substantial fraction of thevisibility goal selected for any Class Iarea (EPA believes that for such

situations, the controls would beessential to ensure progress towards along-term improvement in visibility);OR

(2) The cumulative visibilityimprovement is necessary to preventany degradation from current conditionson the best visibility days.

Note that under 40 CFR51.308(e)(1)(ii)(B), the passage citedabove, the rule does not provide formodeling of subgroupings of the BARTpopulation within a region, nor fordeterminations that some, but not all, ofthe controls selected in the engineeringanalysis may be included in the SIP.Thus, to comply with 40 CFR51.308(e)(1), the visibility SIP mustprovide for BART emission limitationsfor all sources subject to BART (ordemonstrate that BART-level controlsare already in place and required by theSIP), unless you provide ademonstration that no BART controlsare justifiable based upon thecumulative visibility analysis.

VI. Enforceable Limits/Compliance DateTo complete the BART process, you

must establish enforceable emissionlimits and require compliance within agiven period of time. In particular, youmust establish an enforceable emissionlimit for each subject emission unit atthe source and for each pollutant subjectto review that is emitted from thesource. In addition, you must requirecompliance with the BART emissionlimitations no later than 5 years afterEPA approves your SIP. If technologicalor economic limitations in theapplication of a measurementmethodology to a particular emissionunit would make an emissions limitinfeasible, you may prescribe a design,equipment, work practice, operationstandard, or combination of these typesof standards. You should ensure thatany BART requirements are written in away that clearly specifies the individualemission unit(s) subject to BARTreview. Because the BART requirementsare ‘‘applicable’’ requirements of theCAA, they must be included as title Vpermit conditions according to theprocedures established in 40 CFR part70 or 40 CFR part 71.

Section 302(k) of the CAA requiresemissions limits such as BART to bemet on a continuous basis. Althoughthis provision does not necessarilyrequire the use of continuous emissionsmonitoring (CEMs), it is important thatsources employ techniques that ensurecompliance on a continuous basis.Monitoring requirements generallyapplicable to sources, including thosethat are subject to BART, are governedby other regulations. See, e.g., 40 CFR



20 We focus in this section on emission cap andtrade programs which we believe will be the mostcommon type of economic incentive programdeveloped as an alternative to BART.

21 An emission budget generally represents a totalemission amount for a single pollutant such as SO2.As noted in the preamble to the regional haze rule(64 FR 35743, July 1, 1999) we believe thatunresolved technical difficulties preclude inter-pollutant trading at this time.

part 64 (compliance assurancemonitoring); 40 CFR 70.6(a)(3) (periodicmonitoring); 40 CFR 70.6(c)(1)(sufficiency monitoring). Note also thatwhile we do not believe that CEMswould necessarily be required for allBART sources, the vast majority ofelectric generating units already employCEM technology for other programs,such as the acid rain program. Inaddition, emissions limits must beenforceable as a practical matter(contain appropriate averaging times,compliance verification procedures andrecordkeeping requirements). In light ofthe above, the permit must:

• Be sufficient to show compliance ornoncompliance (i.e., through monitoringtimes of operation, fuel input, or otherindices of operating conditions andpractices); and

• Specify a reasonable averaging timeconsistent with established referencemethods, contain reference methods fordetermining compliance, and providefor adequate reporting andrecordkeeping so that air quality agencypersonnel can determine thecompliance status of the source.

VII. Emission Trading ProgramOverview

40 CFR 51.308(e)(2) allows States theoption of implementing an emissionstrading program or other alternativemeasure instead of requiring BART.This option provides the opportunity forachieving better environmental resultsat a lower cost than under a source-by-source BART requirement. A tradingprogram must include participation byBART sources, but may also includesources that are not subject to BART.The program would allow forimplementation during the firstimplementation period of the regionalhaze rule (that is, by the year 2018)instead of the 5-year compliance periodnoted above. In this section of theguidance, we provide an overview of thesteps in developing a trading program 20

consistent with 40 CFR 51.308(e)(2).

A. What Are the General Steps inDeveloping an Emission TradingProgram?

The basic steps are to:(1) Develop emission budgets;(2) Allocate emission allowances to

individual sources; and(3) Develop a system for tracking

individual source emissions andallowances. (For example, proceduresfor transactions, monitoring, compliance

and other means of ensuring programaccountability).

B. What Are Emission Budgets andAllowances?

An emissions budget is a limit, for agiven source population, on the totalemissions amount 21 that may beemitted by those sources over a State orregion. An emission budget is alsoreferred to as an ‘‘emission cap.’’

In general, the emission budget issubdivided into source-specific amountsthat we refer to as ‘‘allowances.’’Generally, each allowance equals oneton of emissions. Sources must holdallowances for all emissions of thepollutant covered by the program thatthey emit. Once you allocate theallowances, source owners haveflexibility in determining how they willmeet their emissions limit. Sourceowners have the options of:—Emitting at the level of allowances

they are allocated (for example, bycontrolling emissions or curtailingoperations),

—Emitting at amounts less than theallowance level, thus freeing upallowances that may be used by othersources owned by the same owner, orsold to another source owner, or

—Emitting at amounts greater than theallowance level, and purchasingallowances from other sources orusing excess allowances from anotherplant under the same ownership.A good example of an emissions

trading program is the acid rain programunder title IV of the CAA. The acid rainprogram is a national program—itestablishes a national emissions cap,allocates allowances to individualsources, and allows trading ofallowances between all covered sourcesin the United States. The OzoneTransport Commission’s NOX

Memorandum of Understanding, andthe NOX SIP call both provide forregional trading programs. Other tradingprograms generally have applied only tosources within a single State. A regionalmulti-State program provides greateropportunities for emission trading, andshould be considered by regionalplanning organizations that areevaluating alternatives to source-specific BART. The WRAP hasrecommended a regional market tradingprogram as a backstop to its overallemission reduction program for SO2.Although regional trading programs

require more interstate coordination,EPA has expertise that it can offer toStates wishing to pursue such aprogram.

C. What Criteria Must Be Met inDeveloping an Emission TradingProgram as an Alternative to BART?

Under the regional haze rule, anemission trading program must achieve‘‘greater reasonable progress’’ (that is,greater visibility improvement) thanwould be achieved through theinstallation and operation of source-specific BART. The ‘‘greater reasonableprogress’’ demonstration involves thefollowing steps, which are discussed inmore detail below:—Identify the sources that are subject to

BART,—Calculate the emissions reductions

that would be achieved if BART wereinstalled and operated on sourcessubject to BART,

—Demonstrate whether your emissionbudget achieves emission levels thatare equivalent to or less than theemissions levels that would result ifBART were installed and operated,

—Analyze whether implementing atrading program in lieu of BARTwould likely lead to differences in thegeographic distribution of emissionswithin a region, and

—Demonstrate that the emission levelswill achieve greater progress invisibility than would be achieved ifBART were installed and operated onsources subject to BART.

1. How Do I Identify Sources Subject toBART?

For a trading program, you wouldidentify sources subject to BART in thesame way as we described in sections IIand III of these guidelines.

2. How Do I Calculate the EmissionsReductions That Would Be Achieved IfBART Were Installed and Operated onThese Sources?

For a trading program under51.308(e)(2), you may identify theseemission reductions by:—Conducting a case-by-case analysis for

each of the sources, using theprocedures described above in theseguidelines in sections II through V;

—Conducting an analysis for eachsource category that takes intoaccount the available technologies,the costs of compliance, the energyimpacts, the non-air qualityenvironmental impacts, the pollutioncontrol equipment in use, and theremaining useful life, on a category-wide basis; or



22 We request comment on whether theseguidelines should recommend a weighted averageof the values instead of presenting the values as arange.

23 As required by 40 CFR 51.308(e)(2)(iii),emissions reductions must take place during theperiod of the first long-term strategy for regionalhaze. This means the reductions must take place nolater than the year 2018.

24 The base year must reflect the year of the mostcurrent available emission inventory, in many casesthe year 2002, and this base year should not be laterthan the 2000–2004 time period used for baselinepurposes under the regional haze rule.

—Conducting an analysis that combinesconsiderations on both source-specificand category-wide information.

For a category-wide analysis ofavailable control options, you developcost estimates and estimates of energyand non-air quality environmentalimpacts that you judge representative ofthe sources subject to BART for a sourcecategory as a whole, rather than analyzeeach source that is subject to BART. Thebasic steps of a category-wide analysisare the same as for a source-specificanalysis. You identify technicallyfeasible control options and rank themaccording to control stringency. Next,you calculate the costs and costeffectiveness for each control option,beginning with the most stringentoption. Likely, the category-wideestimate will represent a range of costand cost-effectiveness values rather thana single number.22 Next, you evaluatethe expected energy and non-air qualityimpacts (both positive and negativeimpacts) to determine whether theseimpacts preclude selection of a givenalternative.

The EPA requests comment on anapproach to the category-wide analysisof BART that would allow the States toevaluate different levels of BARTcontrol options (e.g., all measures lessthan $1000/ton vs. all measures lessthan $2000/ton vs. all measures lessthan $3000/ton) through an iterativeprocess of assessing relative changes incumulative visibility impairment. Forexample, States or regional planningorganizations could use $1000 or $2000/ton as an initial cutoff for selectingreasonable control options. The Statesor regional planning organizations couldthen compare the across-the-boardregional emissions and visibilitychanges resulting from theimplementation of the initial controloption and that resulting from theimplementation of control options witha $3000/ton cutoff (or $1500/ton, etc).This approach would allow States andother stakeholders to understand thevisibility differences among BARTcontrol options achieving less cost-effective or more cost-effective levels ofoverall control.

3. For a Cap and Trade Program, HowDo I Demonstrate That My EmissionBudget Results in Emission Levels ThatAre Equivalent To or Less Than theEmissions Levels That Would Result IfBART Were Installed and Operated?

Emissions budgets must address twocriteria. First, you must develop anemissions budget for a future year 23

which ensures reductions in actualemissions that achieve greaterreasonable visibility progress thanBART. This will generally necessitatedevelopment of a ‘‘baseline forecast’’ ofemissions for the population of sourcesincluded within the budget. A baselineforecast is a prediction of the futureemissions for that source population inabsence of either BART or thealternative trading program. Second,you must take into consideration thetiming of the emission budget relative tothe timetable for BART. If theimplementation timetable for theemission trading program is asignificantly longer period than the 5-year time period for BARTimplementation, you should establishbudgets for interim years that ensuresteady and continuing progress inemissions reductions.

In evaluating whether the programmilestone for the year 2018 provides fora BART-equivalent or better emissioninventory total, you conduct thefollowing steps:—Identify the source population

included within the budget, whichmust include all BART sources andmay include other sources,

—For sources included within thebudget, develop a base year 24

emissions inventory for stationarysources included within the budget,using the most current availableemission inventory,

—Develop a future emissions inventoryfor the milestone year (in most cases,the year 2018), that is, an inventory ofprojected emissions for the milestoneyear in the absence of BART or atrading program,

—Calculate the reductions from theforecasted emissions if BART wereinstalled on all sources subject toBART,

—Subtract this amount from theforecasted total, and

—Compare the budget you have selectedand confirm that it does not exceedthis level of emissions.Example: For a given region for which a

budget is being developed for SO2, the mostrecent inventory is for the year 2002. Thebudget you propose for the trading programis 1.2 million tons. The projected emissionsinventory total for the year 2018, using theyear 2002 inventory and growth projections,is 4 million tons per year. Application ofBART controls on the population of sourcessubject to BART would achieve 2.5 milliontons per year of reductions. Subtracting thisamount from the project inventory yields avalue of 1.5 million tons. Because yourselected budget of 1.2 million tons is lessthan this value, it achieves a better than aBART-equivalent emission total.

4. How Do I Ensure That TradingBudgets Achieve ‘‘Greater ReasonableProgress?’’

In some cases, you may be able todemonstrate that a trading program thatachieves greater emissions progress mayalso achieve greater visibility progresswithout necessarily conducting adetailed dispersion modeling analysis.This could be done, for example, if youcan demonstrate, using economicmodels, that the likely distribution ofemissions when the trading program isimplemented would not be significantlydifferent than the distribution ofemissions if BART was in place. Ifdistribution of emissions is notsubstantially different than underBART, and greater emissions reductionsare achieved, then the trading programwould presumptively achieve ‘‘greaterreasonable progress.’’

If the distribution of emissions isdifferent under the two approaches,then the possibility exists that thetrading program, even though itachieves greater emissions reductions,may not achieve better visibilityimprovement. Where this is the case,then you must conduct dispersionmodeling to determine the visibilityimpact of the trading alternative. Thedispersion modeling should determinedifferences in visibility between BARTand the trading program for eachimpacted Class I area, for the worst andbest 20 percent of days. The modelingshould identify:

—The estimated difference in visibilityconditions under the two approachesfor each Class I area,

—The average difference in visibilityover all Class I areas impacted by theregion’s emissions. [For example, ifsix Class I areas are in the regionimpacted, you would take the averageof the improvement in deciviews overthose six areas].



The modeling study would demonstrate‘‘greater reasonable progress’’ if both ofthe following two criteria are met:—Visibility does not decline in any

Class I areaExample: In Class I area X, BART would

result in 2.5 deciviews of improvement butthe trading program would achieve 1.4deciviews. The criterion would be metbecause the trading program results inimprovement of 1.4 deciviews, rather than adecline in visibility.

—Overall improvement in visibility,determined by comparing the averagedifferences over all affected Class IareasExample: For the same scenario, assume

that ten Class I areas are impacted. Theaverage deciview improvement from BARTfor the ten Class I areas is 3.5 deciviews (the2.5 deciview value noted above, and valuesfor the remaining areas of 3.9, 4.1, 1.7, 3.3,4.5, 3.1, 3.6, 3.8 and 4.5). The average of theten deciview values for the trading programmust be 3.5 deciviews or more.

5. How Do I Allocate Emissions toSources?

Emission allocations must beconsistent with the overall budget thatyou provide to us. We believe it is notappropriate for EPA to require aparticular process and criteria forindividual source allocations, and thuswe will not dictate how to allocateallowances. We will provideinformation on allocation processes toState and local agencies, and to regionalplanning organizations.

6. What Provisions Must I Include inDeveloping a System for TrackingIndividual Source Emissions andAllowances?

The EPA requests comment generallyon what the BART guidelines shouldrequire in terms of the level of detail forthe administration of a trading programand for the tracking of emissions andallowances. In general, we expectregional haze trading programs tocontain the same degree of rigor astrading programs for criteria pollutants.In terms of ensuring the overall integrityand enforceability of a trading program,we expect that you will generally followthe guidance already being developedfor other economic incentive programs(EIPs) in establishing a trading programfor regional haze. In addition, we expectthat any future trading programsdeveloped by States and/or regionalplanning organizations will bedeveloped in consultation with a broadrange of stakeholders.

There are two EPA-administeredemission trading programs that webelieve provide good examples of thefeatures of a well-run trading program.

These two programs provideconsiderable information that would beuseful to the development of regionalhaze trading programs as an alternativeto BART.

The first example is EPA’s acid rainprogram under title IV of the CAA.Phase I of the acid rain reductionprogram began in 1995. Under phase I,reductions in the overall SO2 emissionswere required from large coal-burningboilers in 110 power plants in 21midwest, Appalachian, southeasternand northeastern States. Phase II of theacid rain program began in 2000, andrequired further reductions in the SO2

emissions from coal-burning powerplants. Phase II also extended theprogram to cover other lesser-emittingsources. Allowance trading is thecenterpiece of EPA’s acid rain programfor SO2. You will find information onthis program in:—Title IV of the CAA Amendments

(1990),—40 CFR part 73 at 58 FR 3687 (January

1993),—EPA’s acid rain website, at

www.epa.gov/acidrain/trading.html.The second example is the rule for

reducing regional transport of ground-level ozone (NOX SIP call). The NOX SIPcall rule requires a number of eastern,midwestern, and southeastern Statesand the District of Columbia to submitSIPs that address the regional transportof ground-level ozone throughreductions in NOX. States may meet therequirements of the rule by participatingin an EPA-administered tradingprogram. To participate in the program,the States must submit rules sufficientlysimilar to a model trading rulepromulgated by the Agency (40 CFRpart 96). More information on thisprogram is available in:—The preamble and rule in the Federal

Register at 63 FR 57356 (October1998),

—The NOX compliance guide, availableat www.epa.gov/acidrain/modlrule/main.html#126,

—Fact sheets for the rule, available atwww.epa.gov/ttn/rto/sip/related.html#prop,

—Additional information available onEPA’s web site, at www.epa.gov/acidrain/modlrule/main.html.A third program that provides a good

example of trading programs is the theOzone Transport Commission (OTC)NOX budget program. The OTC NOX

budget program was created to reducesummertime NOX emissions in thenortheast United States. The programcaps NOX emissions for the affectedStates at less than half of the 1990baseline emission level of 490,000 tons,

and uses trading to achieve cost-effective compliance. For moreinformation on the trading provisions ofthe program, see:—Memorandum of Understanding

(MOU), available at www.sso.org/otc/att2.HTM,

—Fact sheets available at www.sso.org/otc/Publications/327facts.htm,

—Additional information, available atwww.epa.gov/acidrain/otc/otcmain.html.The EPA is including in the docket for

this rulemaking a detailed presentationthat has been used by EPA’s Clean AirMarkets Division to explain theprovisions of NOX trading programswith State and local officials. Thispresentation provides considerableinformation on EPA’s views on soundtrading programs.

The EPA recognizes that it is desirableto minimize administrative burdens forsources that may be subject to theprovisions of several different emissiontrading programs. We believe that it isdesirable for any emission tradingprogram for BART to use existingtracking systems to the extent possible.At the same time, we request commenton whether States and/or regionalplanning organizations should conductadditional technical analyses (and, if so,to what extent) to determine whetherthe time periods for tracking ofallowances under existing programs(i.e., annual allowances for SO2 for theacid rain program, and allowances forthe ozone season for NOX) areappropriate for purposes ofdemonstrating greater reasonableregional progress vis a vis BART. TheEPA expects that if such analyses areconducted, they would be conducted inconjunction with the timelines fordevelopment of SIPs for regional haze.

7. How Would a Regional Haze TradingProgram Interface With theRequirements for ‘‘ReasonablyAttributable’’ BART Under 40 CFR51.302 of the Regional Haze Rule?

If a State elects to impose case-by-caseBART emission limitations according to40 CFR 51.308(e)(1) of the regional hazerule, then there should be no difficultiesarising from the implementation ofrequirement for ‘‘reasonablyattributable’’ BART under 40 CFR51.302. However, if a State chooses analternative measure, such as anemissions trading program, in lieu ofrequiring BART emissions limitation onspecific sources, then the requirementfor BART is not satisfied untilalternative measures reduce emissionssufficient to make ‘‘more reasonableprogress than BART.’’ Thus, in that



period between implementation of anemissions trading program and thesatisfaction of the overall BARTrequirement, an individual source couldbe required to install BART forreasonably attributable impairmentunder 40 CFR 51.302. Because such anoverlay of the requirements under 40CFR 51.302 on a trading program under40 CFR 51.308 might affect theeconomic and other considerations thatwere used in developing the emissionstrading program, the regional haze ruleallows for a ‘‘geographic enhancement’’under 40 CFR 51.308. This provisionaddresses the interface between aregional trading program and therequirement under 40 CFR 51.302regarding BART for reasonablyattributable visibility impairment. (See40 CFR 51.308(e)(2)(v)).

The EPA recognizes the desirability ofaddressing any such issues at the outsetof developing an emissions tradingprogram to address regional haze. Wenote that the WRAP, the planningorganization for the nine western Statesconsidering a trading program under 40CFR 51.309 (which contains a similargeographic enhancement provision), hasadopted policies which target use of the51.302 provisions by the Federal LandManagers (FLMs). In this case for thenine WRAP States, the FLMs haveagreed that they will certify reasonableattributable impairment only undercertain specific conditions. Under thisapproach, the FLMs would certify under40 CFR 51.302 only if the regionaltrading program is not decreasingsulfate concentrations in a Class I areawithin the region. Moreover, the FLMswill certify impairment under 40 CFR51.302 only where: (1) BART-eligiblesources are located ‘‘near’’ that class Iarea and (2) those sources have notimplemented BART controls. Inaddition, the WRAP is investigatingother procedures for States to follow inresponding to a certification of

‘‘reasonably attributable’’ impairment ifan emissions trading approach isadopted to address the BARTrequirement based on the sources’impact on regional haze.

The specific pollutants and themagnitude of impacts under the regionalhaze rule and at specific Class I areasmay vary in different regions of thecountry. We expect that each Statethrough its associated regional planningorganization will evaluate the need forgeographic enhancement procedureswithin any adopted regional emissionstrading program.

List of Subjects in 40 CFR Part 51Environmental protection,

Administrative practice and procedure,Air pollution control, Carbon monoxide,Nitrogen dioxide, Particulate matter,Sulfur oxides, Volatile organiccompounds.

Dated: June 22, 2001.Christine T. Whitman,Administrator.

In addition to the guidelinesdescribed above, part 51 of chapter I oftitle 40 of the Code of FederalRegulations is proposed to be amendedas follows:

PART 51—REQUIREMENTS FORPREPARATION, ADOPTION, ANDSUBMITTAL OF IMPLEMENTATIONPLANS


Authority: 23 U.S.C. 101; 42 U.S.C. 7410–7671q.

2. Section 51.302 is amended byrevising paragraph (c)(4)(iii) to read asfollows:

§ 51.302 Implementation control strategiesfor reasonably attributable visibilityimpairment.* * * * *

(c) * * *

(4) * * *(iii) BART must be determined for

fossil-fuel fired generating plants havinga total generating capacity in excess of750 megawatts pursuant to ‘‘Guidelinesfor Determining Best Available RetrofitTechnology for Coal-fired Power Plantsand Other Existing Stationary Facilities’(1980), which is incorporated byreference, exclusive of appendix E,which was published in the FederalRegister on February 6, 1980 (45 FR8210), except that options morestringent than NSPS must beconsidered. Establishing a BARTemission limitation equivalent to theNSPS level of control is not a sufficientbasis to avoid the detailed analysis ofcontrol options required by theguidelines. It is EPA publication No.450/3–80–009b and is for sale from theU.S. Department of Commerce, NationalTechnical Information Service, 5285Port Royal Road, Springfield, Virginia22161.* * * * *

3. Section 51.308 is amended byadding paragraph(e)(1)(ii)(C) as follows:

§ 51.308 Regional haze programrequirements.

* * * * *(e) * * *(1) * * *(ii) * * *(C) Appendix Y of this part provides

guidelines for conducting the analysesunder paragraphs (e)(1)(ii)(A) and(e)(1)(ii)(B) of this section. All BARTdeterminations that are required inparagraph (e)(1) of this section must bemade pursuant to the guidelines inappendix Y of this part.* * * * *[FR Doc. 01–18094 Filed 7–19–01; 8:45 am]



i

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FEDERAL REGISTER PAGES AND DATE, JULY

34783–35076......................... 235077–35364......................... 335365–35528......................... 535529–35750......................... 635751–35888......................... 935889–36144.........................1036145–36440.........................1136441–36694.........................1236695–36906.........................1336907–37102.........................1637103–37396.........................1737397–37574.........................1837575–37880.........................1937883–38136.........................20

CFR PARTS AFFECTED DURING JULY

At the end of each month, the Office of the Federal Registerpublishes separately a List of CFR Sections Affected (LSA), whichlists parts and sections affected by documents published sincethe revision date of each title.

3 CFR

Proclamations:7453.................................353617454.................................353657455.................................37103Executive Orders:13129 (See Notice of

June 30, 2001 ..............3536313220...............................35527Administrative Orders:Memorandum of July

4, 2001 .........................37105Notices:Notice of June 30,

2001 .............................35363Presidential

Determinations:No. 2001–20 of July 2,

2001 .............................37109No. 2001–21 of July 4,

2001 .............................37111

5 CFR

575...................................37883Proposed Rules:1650.................................36494

7 CFR

1.......................................36907300...................................37397301 ..........37113, 37401, 37575353.......................37114, 37397800.......................35751, 36834930.......................35889, 358911218.................................371171773.....................37405, 37406Proposed Rules:274...................................36495300...................................37425318...................................37425319...................................36892400...................................369511219.....................36870, 36886

8 CFR

3.......................................37119Proposed Rules:211...................................37429212...................................37429

9 CFR

74.....................................3712594.....................................36695Proposed Rules:113...................................37194145...................................37919147...................................37919301...................................35112303...................................35112317...................................35112318...................................35112

319...................................35112320...................................35112325...................................35112331...................................35112381...................................35112417...................................35112430...................................35112

10 CFR

150...................................35529170...................................35529171...................................35529600...................................34783Proposed Rules:20.....................................3650250.....................................37432430...................................36960

12 CFR1...........................34784, 368345.......................................347927...........................34784, 368349.......................................3479223.........................34784, 36834201...................................35529506...................................37406552...................................37407560...................................37406563...................................37406566...................................37406584...................................37406613...................................36908Proposed Rules:7.......................................3485525.....................................37602228...................................37602345...................................37602563...................................37602950...................................36715952...................................36715

14 CFR

23.....................................3712825.........................36697, 3740839 ...........34798, 34800, 34802,

35077, 35371, 35530, 35532,35533, 35535, 35536, 35538,35896, 36145, 36146, 36149,36150, 36152, 36154, 36441,36443, 36445, 36447, 36449,36450, 36452, 36453, 36455,36456, 36699, 37130, 37271,

3788471 ...........34807, 35080, 35540,

36700, 3690873.....................................3480897.........................37132, 37134107...................................37274108...................................37330139...................................372741214.................................37410Proposed Rules:13.....................................37520

VerDate 11-MAY-2000 20:28 Jul 19, 2001 Jkt 194001 PO 00000 Frm 00001 Fmt 4712 Sfmt 4712 E:\FR\FM\20JYCU.LOC pfrm11 PsN: 20JYCU

ii Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Reader Aids

39 ...........35912, 36215, 36509,36513, 36516, 36520, 37197,

3743561.....................................3752071 ............35914, 35916, 3591791.....................................37520119...................................37520125...................................37520135...................................37520142...................................37520

15 CFR

303...................................34810740...................................36676742...................................36676746...................................36676772.......................36676, 36909774.......................36676, 36909

16 CFR

801...................................35541802...................................35541803...................................35541

17 CFR

200...................................35836211...................................36457240...................................35836249...................................36701270...................................36156274...................................36156Proposed Rules:41 ............34864, 36218, 37932240...................................34864

19 CFR

24.....................................34813Proposed Rules:177...................................37370

21 CFR

129...................................35373165...................................35373510...................................36162520.......................35755, 35898522...................................35756556...................................35544558...................................36162

22 CFR

124...................................35899125...................................35899126.......................35899, 36834

24 CFR

27.....................................35846207...................................35070290...................................35846598...................................35850599...................................35850Proposed Rules:1000.................................37098

26 CFR

1...........................37886, 37897Proposed Rules:1.......................................35112

27 CFR

4.......................................3757624.....................................37576Proposed Rules:4.......................................37609

20.....................................37198

28 CFR

0.......................................379022.......................................3713616.....................................3537427.....................................37902Proposed Rules:16.....................................3793925.....................................35567

29 CFR

1926.................................371372520.....................34994, 363682560.................................358864022.................................367024044.................................36702Proposed Rules:1904.................................35113

30 CFR

57.....................................35518Proposed Rules:57.....................................35521250...................................37611

31 CFR

29.....................................36703515...................................36683538...................................36683550...................................36683560...................................36683

32 CFR

668...................................36711Proposed Rules:808...................................36523

33 CFR

100 .........34819, 34821, 34823,34825, 34826, 34828, 37414

117 .........34829, 35901, 36162,36163, 36164, 36165, 36466,37139, 37140, 37578, 37579

165 .........34829, 34831, 34832,34834, 34836, 34838, 34839,34841, 34842, 34844, 34846,34848, 35080, 35544, 35756,35758, 36165, 36167, 36168,37141, 37416, 37580, 37581,

37582, 37584, 37585Proposed Rules:100...................................37200117 .........36525, 36527, 36529,

37615151...................................36530153...................................36530164...................................36223

36 CFR

51.....................................35082Proposed Rules:219...................................35918294...................................359181228.................................37202

37 CFR

202...................................37142Proposed Rules:1.......................................35763

38 CFR

17.....................................36467

20.........................35902, 37150Proposed Rules:3.......................................379404.......................................3794017.....................................36960

39 CFR

111...................................37151Proposed Rules:111...................................36224

40 CFR

52 ...........35374, 35546, 35903,35906, 36035, 36170, 36913,36919, 36921, 37151, 37154,37418, 37587, 37904, 37906,

37908, 37914, 3791660.....................................3647362.....................................3554663 ...........35083, 35087, 36173,

36924, 3759180.....................................3715681.........................34994, 3647682.....................................37752152...................................37772174 ..........37772, 37817, 37830180 ..........36477, 36481, 37593261...................................35379264...................................35087300 .........34849, 35385, 35547,

36946Proposed Rules:9.......................................3557251.....................................3810852 ...........34864, 34878, 35573,

35920, 36226, 36370, 36532,36542, 36656, 36717, 36963,36964, 37203, 37204, 37439,

37941, 37942, 3794360.....................................3654761.....................................3511563 ...........35115, 35124, 35126,

35326, 36228, 3683670.....................................3490182.....................................38064122...................................35572123...................................35572124...................................35572125...................................35572141...................................37617142...................................37617174...................................37855180...................................35921194...................................36723261...................................36725264.......................35124, 35126265...................................35126266...................................35126270...................................35126300 .........34906, 35395, 36966,

37439450...................................35576

41 CFR

101-6................................37728102-3................................37728

42 CFR

Proposed Rules:100...................................36735416...................................35395482...................................35395485...................................35395

43 CFR

Proposed Rules:2.......................................36966

44 CFR

64.....................................36947

45 CFR

Proposed Rules:46.....................................35576

46 CFR

Ch. IV...............................37419310...................................36175401...................................36484Proposed Rules:4.......................................3653025.....................................3622327.....................................36223520...................................37442

47 CFR

1...........................35387, 3617736.....................................3510753.....................................3620664.....................................3671173 ...........35107, 35387, 35388,

35760, 36949, 37420, 37599101...................................35107Proposed Rules:1.......................................379432.......................................3539920.....................................3698925.....................................3539964.........................35765, 3763173 ...........35406, 35407, 35767,

35768, 35925, 37442, 37443,37632, 37633

101...................................35399

48 CFR

1804.................................364901852.................................36490

49 CFR

Proposed Rules:171...................................35155571...................................35177575...................................35179

50 CFR

17.........................35547, 36078223...................................37599300...................................36208600...................................35388622...................................35761635.......................36711, 37421648 ..........35566, 36208, 37165660.......................35388, 36212679 .........35761, 35911, 36213,

36492, 37166, 37167, 37600Proposed Rules:17.........................35580, 3622932.....................................35193216...................................35209223...................................35407600...................................37634622.......................37634, 37635640...................................37635648...................................36246679...................................34852


iiiFederal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Reader Aids

REMINDERSThe items in this list wereeditorially compiled as an aidto Federal Register users.Inclusion or exclusion fromthis list has no legalsignificance.

RULES GOING INTOEFFECT JULY 20, 2000

AGRICULTUREDEPARTMENTAnimal and Plant HealthInspection ServiceExportation and importation of

animals and animalproducts:Ports of entry—

Honolulu, HI; limited portof entry designation;Hawaii Animal ImportCenter closed;published 6-20-00

User fees:Veterinary services—

Pet food facility inspectionand approval fees;published 7-20-00

Veterinary services; pet foodfacility inspection andapproval fees; published6-20-00

HEALTH AND HUMANSERVICES DEPARTMENTFood and DrugAdministrationHuman drugs:

Labeling of drug products(OTC)—Standardized format;

compliance dates,partial extension;published 6-20-00

NUCLEAR REGULATORYCOMMISSIONProduction and utilization

facilities; domestic licensing:Noncombustible fire barrier

penetration seal materials;requirement eliminated,etc.; published 6-20-00

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

Airbus; published 6-15-00Dassault; published 6-15-00Saab; published 6-15-00

VETERANS AFFAIRSDEPARTMENTVocational rehabilitation and

education:Veterans education—

Montgomery GI Bill-ActiveDuty; rates payableincrease; published 7-20-00

COMMENTS DUE NEXTWEEK

AGRICULTUREDEPARTMENTAnimal and Plant HealthInspection ServiceIrradiation phytosanitary

treatment of imported fruitsand vegetables; commentsdue by 7-25-00; published5-26-00

AGRICULTUREDEPARTMENTRural Utilities ServiceSeismic safety; comments due

by 7-25-00; published 5-26-00

COMMERCE DEPARTMENTNational Oceanic andAtmospheric AdministrationFishery conservation and

management:Alaska; fisheries of

Exclusive EconomicZone—Pacific halibut and red

king crab; commentsdue by 7-27-00;published 6-27-00

ENVIRONMENTALPROTECTION AGENCYAir pollutants, hazardous;

national emission standards:Vegetable oil production;

solvent extraction;comments due by 7-25-00; published 5-26-00

Air pollution control:State operating permits

programs—North Carolina; comments

due by 7-24-00;published 6-22-00

North Carolina; commentsdue by 7-24-00;published 6-22-00

Air programs:Ambient air quality

standards, national—Northern Ada County/

Boise, ID; PM-10standardsnonapplicability findingrescinded; commentsdue by 7-26-00;published 6-26-00

Air programs; approval andpromulgation; State plansfor designated facilities andpollutants:Arizona; comments due by

7-24-00; published 6-22-00

Various States; commentsdue by 7-24-00; published6-22-00

Air quality implementationplans; approval and

promulgation; variousStates:Arizona; comments due by

7-28-00; published 7-14-00

Solid wastes:Municipal solid waste landfill

permit programs;adequacydeterminations—Virgin Islands; comments

due by 7-24-00;published 5-8-00

Superfund program:National oil and hazardous

substances contingencyplan—National priorities list

update; comments dueby 7-24-00; published6-22-00

National priorities listupdate; comments dueby 7-24-00; published6-22-00

FEDERALCOMMUNICATIONSCOMMISSIONDigital television stations; table

of assignments:Alaska; comments due by

7-27-00; published 6-12-00

Georgia; comments due by7-27-00; published 6-12-00

Texas; comments due by 7-27-00; published 6-12-00

Virginia; comments due by7-27-00; published 6-12-00

Radio services, special:Maritime communications;

rules consolidation,revision, and streamlining;comments due by 7-24-00; published 4-24-00

Radio stations; table ofassignments:Florida; comments due by

7-24-00; published 6-16-00

Georgia; comments due by7-24-00; published 6-16-00

Virgin Islands; commentsdue by 7-24-00; published6-16-00

GENERAL SERVICESADMINISTRATIONAcquisition regulations:

Tax adjustment; commentsdue by 7-24-00; published5-25-00

HEALTH AND HUMANSERVICES DEPARTMENTFood and DrugAdministrationMedical devices:

Device tracking; commentsdue by 7-24-00; published4-25-00

National Environmental PolicyAct; implementation:Food contact substance

notification system;comments due by 7-25-00; published 5-11-00

HOUSING AND URBANDEVELOPMENTDEPARTMENTFederal Housing EnterpriseOversight OfficeFreedom of Information Act;

implementation:Releasing information;

comments due by 7-24-00; published 5-25-00

INTERIOR DEPARTMENTFish and Wildlife ServiceEndangered and threatened

species:Critical habitat

designations—Alameda whipsnake;

comments due by 7-24-00; published 6-23-00

Tidewater goby;comments due by 7-28-00; published 6-28-00

Dusky gopher frog;Mississippi gopher frogdistinct populationsegment; comments dueby 7-24-00; published 5-23-00

Preble’s meadow jumpingmouse; comments due by7-24-00; published 6-23-00

INTERIOR DEPARTMENTSurface Mining Reclamationand Enforcement OfficePermanent program and

abandoned mine landreclamation plansubmissions:Kentucky; comments due by

7-26-00; published 6-26-00

NATIONALTRANSPORTATION SAFETYBOARDPractice and procedures:

Air safety enforcementproceedings; emergencydeterminations; commentsdue by 7-26-00; published7-11-00

NUCLEAR REGULATORYCOMMISSIONRulemaking petitions:

Epstein, Eric Joesph;comments due by 7-26-00; published 5-12-00

United Plant Guard Workersof America; commentsdue by 7-24-00; published5-10-00

Spent nuclear fuel and high-level radioactive waste;independent storage;licensing requirements:


iv Federal Register / Vol. 66, No. 140 / Friday, July 20, 2001 / Reader Aids

Approved spent fuel storagecasks; list additions;comments due by 7-24-00; published 6-22-00

Spent nuclear fuel and high-level radioactive waste;independent storage; licensing requirements:Approved spent fuel storage

casks; list additions;comments due by 7-24-00; published 6-22-00

Spent nuclear fuel and high-level radioactive waste;independent storage;licensing requirements:Approved spent fuel storage

casks; list additions;comments due by 7-24-00; published 6-22-00

PERSONNEL MANAGEMENTOFFICEPay administration:

Grade and pay retention;discretionary authority byagencies; comments dueby 7-24-00; published 5-25-00

TRANSPORTATIONDEPARTMENTCoast GuardPorts and waterways safety:

Lower Mississippi River;Vessel Traffic Service;comments due by 7-25-00; published 4-26-00

United NationsHeadquarters, East River,NY; dignitary arrival/

departure and UNmeetings; permanentsecurity zones; commentsdue by 7-24-00; published6-8-00

TRANSPORTATIONDEPARTMENTFederal AviationAdministrationAirworthiness directives:

Air Tractor Inc.; commentsdue by 7-28-00; published6-2-00

Airbus; comments due by 7-28-00; published 6-28-00

Boeing; comments due by7-24-00; published 5-24-00

British Aerospace;comments due by 7-28-00; published 6-28-00

Commander Aircraft Co.;comments due by 7-28-00; published 6-1-00

Empresa Brasileira deAeronautica S.A.;comments due by 7-27-00; published 6-27-00

Empresa Brasileira deAeronautica S.A.;correction; comments dueby 7-27-00; published 7-13-00

Learjet; comments due by7-24-00; published 6-8-00

REVO, Inc.; comments dueby 7-28-00; published 5-26-00

Class D airspace; commentsdue by 7-24-00; published6-23-00

Class D airspace; correction;comments due by 7-24-00;published 7-13-00

Class E airspace; commentsdue by 7-24-00; published6-16-00

Federal airways; commentsdue by 7-28-00; published6-12-00

TREASURY DEPARTMENTCustoms ServiceMerchandise, special classes:

Softwood lumber shipmentsfrom Canada; commentsdue by 7-24-00; published5-23-00

LIST OF PUBLIC LAWS

This is a continuing list ofpublic bills from the currentsession of Congress whichhave become Federal laws. Itmay be used in conjunctionwith ‘‘P L U S’’ (Public LawsUpdate Service) on 202–523–6641. This list is alsoavailable online at http://www.nara.gov/fedreg.

The text of laws is notpublished in the FederalRegister but may be orderedin ‘‘slip law’’ (individualpamphlet) form from theSuperintendent of Documents,U.S. Government PrintingOffice, Washington, DC 20402(phone, 202–512–1808). Thetext will also be made

available on the Internet fromGPO Access at http://www.access.gpo.gov/nara/index.html. Some laws maynot yet be available.

S. 657/P.L. 107–19

To authorize funding for theNational 4-H ProgramCentennial Initiative. (July 10,2001; 115 Stat. 153)

Last List July 9, 2001

Public Laws ElectronicNotification Service(PENS)

PENS is a free electronic mailnotification service of newlyenacted public laws. Tosubscribe, go to http://hydra.gsa.gov/archives/publaws-l.html or send E-mailto [email protected] the following textmessage:

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