Notices. Proposed rule

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BILLING CODE 3510-22-S 71 14 Monday, January 23, 2006 Proposed Rules DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 1033 [Docket No. AO-166-A72; DA-05-01-A] Milk in the Mideast Marketing Area; Final Partial Decision on Proposed Amendments to Marketing Agreement and to Order AGENCY: Agricultural Marketing Service, USDA. ACTION: Proposed rule. SUMMARY: This document proposes to adopt as a final rule order language contained in the interim final rule published in the **Federal Register** on September 26, 2005, concerning pooling standards of the Mideast milk marketing order.

This document also sets forth the final decision of the Department and is subject to approval by producers. A separate decision will be issued that will address proposals to deter the de-pooling of milk, transportation credits and clarification of the *Producer* definition. FOR FURTHER INFORMATION CONTACT: Gino Tosi, Marketing Specialist, Order Formulation and Enforcement Branch, USDA/AMS/Dairy Programs, STOP 0231-Room 2971, 1400 Independence Avenue, SW., Washington, DC 20250-0231,

(202)690-3465, e-mail address: *gino.tosi@usda.gov.* SUPPLEMENTARY INFORMATION: This final partial decision permanently adopts amendments that prohibit the ability to simultaneously pool the same milk on the Mideast Federal milk order and on a marketwide pool administered by another government entity. Additionally, this decision permanently adopts amendments that increase supply plant performance standards and lower diversion limit standards. This administrative action is governed by the provisions of Sections 556 and 557 of Title 5 of the United States Code and, therefore, is excluded from the requirements of Executive Order 12866. The amendments to the rules proposed herein have been reviewed under Executive Order 12988, Civil Justice Reform. They are not intended to have a retroactive effect. If adopted, the proposed amendments would not preempt any state or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Agricultural Marketing Agreement Act of 1937, (the Act), as amended (7 U.S.C. 601-674), provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may request modification or exemption from such order by filing with the Department of Agriculture (Department) a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with the law. A handler is afforded the opportunity for a hearing on the petition. After a hearing, the Department would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has its principal place of business, has jurisdiction in equity to review the Department's ruling on the petition, provided a bill in equity is filed not later than 20 days after the date of the entry of the ruling. Regulatory Flexibility Act and Paperwork Reduction Act In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the Agricultural Marketing Service has considered the economic impact of this action on small entities and has certified that this proposed rule will not have a significant economic impact on a substantial number of small entities. For the purpose of the Regulatory Flexibility Act, a dairy farm is considered a “small business” if it has an annual gross revenue of less than $750,000, and a dairy products manufacturer is a “small business” if it has fewer than 500 employees. For the purposes of determining which dairy farms are “small businesses,” the $750,000 per year criterion was used to establish a production guideline of 500,000 pounds per month. Although this guideline does not factor in additional monies that may be received by dairy producers, it should be an inclusive standard for most “small” dairy farmers. For purposes of determining a handler's size, if the plant is part of a larger company operating multiple plants that collectively exceed the 500-employee limit, the plant will be considered a large business even if the local plant has fewer than 500 employees. During March 2005, the month during which the hearing occurred, there were 9,767 dairy producers pooled, and 36 handlers regulated by, the Mideast order. Approximately 9,212 producers, or 94.3 percent, were considered small businesses based on the above criteria. Of the 36 handlers regulated by the Mideast order during March 2005, 26 handlers, or 72.2 percent, were considered small businesses. The permanent adoption of the proposed pooling standards serve to revise established criteria that determine those producers, producer milk and plants that have a reasonable association with and are consistently serving the fluid needs of the Mideast milk marketing area. Criteria for pooling are established on the basis of performance levels that are considered adequate to meet the Class I fluid needs and, by doing so, determine those producers who are eligible to share in the revenue that arises from the classified pricing of milk. Criteria for pooling are established without regard to the size of any dairy industry organization or entity. The criteria established are applied in an identical fashion to both large and small businesses and do not have any different economic impact on small entities as opposed to large entities. Therefore, the adopted amendments will not have a significant economic impact on a substantial number of small entities. A review of reporting requirements was completed under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). It was determined that these amendments would have no impact on reporting, recordkeeping, or other compliance requirements because they would remain identical to the current requirements. No new forms are proposed and no additional reporting requirements would be necessary. This decision does not require additional information collection that requires clearance by the Office of Management and Budget

(OMB)beyond currently approved information collection. The primary sources of data used to complete the forms are routinely used in most business transactions. Forms require only a minimal amount of information which can be supplied without data processing equipment or a trained statistical staff. Thus, the information collection and reporting burden is relatively small. Requiring the same reports from all handlers does not significantly disadvantage any handler that is smaller than the industry average. No other burdens are expected to fall on the dairy industry as a result of overlapping Federal rules. This rulemaking proceeding does not duplicate, overlap, or conflict with any existing Federal rules. Prior Documents in This Proceeding *Notice of Hearing:* Issued February 14, 2005; published February 17, 2005 (70 FR 8043). *Amendment to Public Hearing on Proposed Rulemaking:* Issued March 1, 2005; published March 3, 2005 (70 FR 10337). *Tentative Partial Decision:* Issued July 21, 2005; published July 27, 2005 (70 FR 43335). *Interim Final Rule:* Issued September 20, 2005; published September 26, 2005 (70 FR 56111). Preliminary Statement The proposed amendments set forth below are based on the record of a public hearing held in Wooster, Ohio, on March 7-10, 2005, pursuant to a notice of hearing issued February 14, 2005, published February 17, 2005 (70 FR 8043), and an amendment to the hearing notice issued March 1, 2005, published March 3, 2005 (70 FR 10337). The material issues, findings, conclusions and rulings of the tentative partial decision are hereby approved, adopted and are set forth herein. The material issues on the record of the hearing relate to: 1. Pooling Standards A. Standards for *Producer Milk* . a. Simultaneous pooling of milk on the order and on a marketwide pool administered by another government entity. b. Diversion limit standards. B. Supply Plant performance standards. 2. Determination that emergency marketing conditions exist that warranted the omission of a recommended decision. Findings and Conclusions This partial final decision specifically addresses proposals, published in the hearing notice as Proposals 1 and 2, along with a portion of Proposal 3, seeking to change the performance standards and producer milk provisions of the order. The portion of Proposal 3, seeking to clarify the definition of “temporary loss of Grade A approval”, Proposals 4-8, seeking to establish provisions to deter the “de-pooling” of milk, and Proposal 9, seeking to establish transportation credits, will be addressed in a separate decision. The following findings and conclusions on the material issues are based on evidence presented at the hearing and the record thereof: 1. Pooling Standards A. Standards for Producer Milk Three proposals were presented at the hearing that would amend certain features of the *Producer milk* provision of the Mideast order. A proposal, published in the hearing notice as Proposal 1, seeking to eliminate the ability to simultaneously pool the same milk on the Mideast Federal milk order and on a marketwide equalization pool administered by another government entity, commonly referred to as “double dipping,” previously adopted on an interim basis, is adopted on a permanent basis by this partial final decision. Additionally, a portion of a proposal published in the hearing notice as Proposal 2, seeking to seasonally adjust the percentage of total receipts a pool plant can divert to nonpool plants to 50 percent for the months of August through February and to 60 percent for the months of March through July, previously adopted on an interim basis, is adopted on a permanent basis by this partial final decision. Proposal 3, which sought to adjust the number of days of the milk production of a producer that must be physically received at a Mideast order pool plant before being eligible for diversion to a nonpool plant, commonly referred to as “touching base”, was abandoned at the hearing and will no longer be referenced. Proponents contend that milk has been simultaneously pooled on the Mideast order and on a marketwide pool administered by another government entity since January of 2000, and although no milk is currently simultaneously pooled on the Mideast order and a marketwide pool administered by another government entity, the possibility exists and provisions should be adopted to eliminate its occurrence. Additionally, proponents contend that inadequate limits on the amount of milk that pool plants can divert to non-pool plants is allowing large volumes of milk to be pooled on the Mideast order that does not demonstrate a reliable and consistent service to the fluid milk needs of the order. The Mideast order currently does not prohibit the simultaneous pooling of the same milk on the order and on a marketwide equalization pool operated by another government entity. Although no milk is currently simultaneously pooled on the Mideast order and a marketwide equalization pool operated by another government entity, the situation has occurred in the past and should be prevented from occurring in the future. The current *Producer milk* provision of the Mideast order considers the milk of a dairy farmer to be producer milk when the milk has been delivered to a pool plant of the order. As a condition for pooling the milk of a producer diverted to a nonpool plant on the Mideast order, a dairy farmer must ship two days' milk production to a pool plant during each of the months of December through July. This standard is applicable only if two days' milk production was not shipped to a Mideast pool plant in each of the previous months of August through November. A producer must also deliver two days' milk production to a pool plant during the months of August through November in order for the milk diverted to nonpool plants to be pooled. A pool handler may not divert more than 60 percent of its total receipts to a nonpool plant during the months of August through February and no more than 70 percent of its total receipts during the months of March through July. Proposals 1 and 2 were submitted by Dairy Farmers of America (DFA), Michigan Milk Producers Association (MMPA), Dairylea Cooperative Inc. (Dairylea) and the National Farmers Organization (NFO). DFA is a member owned Capper-Volstead cooperative of 13,500 farms that produce milk in 49 states. MMPA is a member owned Capper-Volstead cooperative of 1,350 farms producing milk in four states. Dairylea is a member owned Capper-Volstead cooperative of 2,400 farms producing milk in seven states. NFO is a member owned Capper-Volstead cooperative with over 1,500 members in 18 states. Hereinafter, this decision will refer to DFA, MMPA, Dairylea and NFO collectively as the “Cooperatives.” A witness appearing on behalf of the Cooperatives testified that adoption of Proposal 1 would eliminate the potential for the same milk to be simultaneously pooled on the Mideast Federal milk order and on a marketwide pool administered by another government entity. The witness referred to this practice as “double dipping” and as a practice resulting in disorderly marketing conditions. The witness noted that regulatory action has been taken in the Northeast, Central, Upper Midwest, Pacific Northwest and Arizona-Las Vegas Federal milk marketing orders to prohibit the practice. The witness testified that little milk is currently associated with the Mideast marketing order that is simultaneously pooled by another government entity, but should be prohibited in the same manner as in other Federal milk marketing order areas. The Cooperatives noted in their post-hearing briefs that no opposition to adoption of Proposal 1 was received at the hearing. A witness appearing on behalf of Dean Foods

(Dean)testified in support of Proposal 1. Dean Foods owns and operates several distributing plants regulated by the Mideast order. The witness testified that double dipping should be prohibited in the Mideast order in the same manner as in other Federal orders. In their post-hearing brief, Dean added that if the ability to simultaneously pool milk is eliminated, the wording of the order language should be similar to the order language used to prohibit simultaneous pooling in the Central and Upper Midwest orders. Continental Dairy Products (Continental) noted support for adoption of Proposal 1 in their post-hearing brief. Continental is a member owned Capper-Volstead cooperative that pools milk on the Mideast order. Continental was of the opinion that double dipping should be prohibited for the Mideast marketing area as it has been in other Federal milk marketing orders. A witness appeared on behalf of the Cooperatives in support of the portion of Proposal 2 that would lower the diversion limit standards. The witness was of the opinion that current diversion limit standards are inadequate and have resulted in milk pooled on the order which does not demonstrate regular and consistent performance in supplying the Class I needs of the marketing area. The witness cited market administrator data showing that during the months of January through February and August through December of 2004, many pool distributing plants and cooperative handlers diverted more than 50 percent of their total milk receipts to nonpool plants. Adoption of the portion of Proposal 2 to limit diversions to no more than 50 percent of total milk receipts in August through February and 60 percent in March through July for distributing plants and cooperative handlers would increase shipments to distributing plants and raise returns for Mideast producers, the witness noted. A witness for MMPA appeared on behalf of the Cooperatives in support of the portion of Proposal 2 that would lower diversion limit standards. The witness was of the opinion that an adjustment to the diversion limit standards will serve to decrease market reserves and increase proceeds for producers servicing the needs of the fluid market on a regular and consistent basis. Several independent and cooperative member dairy farmers whose milk is pooled in the Mideast order also testified in support of the portion of Proposal 2 that would adjust diversion limit standards. Most were of the opinion that adjusting diversion limit standards will serve to more adequately identify the milk that is serving the needs of the Mideast order fluid market. A witness appearing on behalf of Prairie Farms Dairy (Prairie Farms) testified that they were not in support of, nor in opposition to, adoption of the portion of Proposal 2 that would adjust diversion limits. Prairie Farms is a member owned Capper-Volstead cooperative that pools milk on the Mideast order. A witness appeared on behalf of White Eagle Cooperative Federation (White Eagle) and “constituent members” in opposition to the portion of Proposal 2 that would lower diversion limit standards. The members of White Eagle Cooperative Federation include White Eagle Cooperative Association, Alto Dairy Cooperative, Scioto Cooperative, and Erie Cooperative Association. White Eagle Cooperative Federation also identified Superior Dairy, United Dairy, Family Dairies USA, Dairy Support Inc., Guggisberg Cheese and Brewster Cheese as constituent members. The White Eagle witness testified that lowering diversion limit standards will decrease the volume of milk that manufacturing plants can pool, and will remove milk located in Wisconsin, Illinois, Minnesota and Iowa from pooling on the Mideast order. The witness was of the opinion that when the volume of milk pooled in manufacturing uses is decreased, producer milk that supplies manufacturing plants can face decreased returns. In their post-hearing brief White Eagle reiterated that lowering diversion limit standards will decrease returns to producers whose milk is marketed through White Eagle. A consultant witness provided additional testimony on behalf of White Eagle in opposition to lowering the diversion limit standards of the order. The witness testified that reducing the diversion limit standards would disadvantage small cooperatives that pool milk on the Mideast order. The witness was of the opinion that lowering the diversion limit standards would increase the market power of large cooperatives and milk processors over small cooperatives and milk processors. The consultant White Eagle witness relied on Market Administrator data to demonstrate the effects of a 10 percent reduction in the diversion limit standards for the period of 2003-2004. The witness stated that if the proposed diversion limit standards had been effective for the month of October 2004, the total volume of milk pooled in the Mideast market would have been reduced by 4.1 percent. The witness predicted that the reduction in milk volume pooled would have increased the PPD by about 2 cents per hundredweight (cwt.) for milk remaining pooled, but would have decreased the relative PPD by about $0.73 per cwt. on the milk that was not able to be pooled because of lowered diversion limit standards. The witness noted that the majority of the milk not pooled would have been milk usually pooled by small cooperatives. Accordingly, the witness was of the opinion that lowering the diversion limit standards of the Mideast order should not be adopted until additional analysis is done on the possible negative effects on small cooperatives and processors. White Eagle reiterated opposition to the lowering of diversion limit standards in exceptions to the tentative partial decision. The White Eagle exceptions noted that changes to the diversion limit standards of the order are unnecessary since the fluid milk needs of the Mideast order are adequately met, and will pose difficulties to their members since access to distributing plants is limited. Exceptions to the tentative partial decision submitted by National All Jersey (NAJ), an organization promoting the Jersey breed with member farms in the Mideast marketing area, also opposed the lowering of diversion limit standards. The exception noted that the lowering of diversion limit standards is unnecessary since the fluid milk needs of the order are adequately met. NAJ commented that access to distributing plants for pooling is limited, and that producer milk able to service the fluid milk needs of the market may not be able to be pooled. NAJ was also of the opinion that supply plants seeking to be pooled may have to pay increased pooling fees in order to be pooled via plants or cooperatives that may have excess pooling capacity. In their exceptions to the tentative partial decision, NAJ noted that decreasing diversion limit standards will force the higher solid milk typically produced by the Jersey breed away from its optimum use, cheese plants, to distributing plants. NAJ was of the opinion that the processing efficiencies afforded to cheese plants using high-component Jersey milk will decrease, and put cheese plants in the Mideast at a disadvantage to competitor plants in surrounding areas. NAJ predicted that decreased diversion limits will lower the marketing options for Mideast dairy farmers and subsequently decrease the prices received for their milk. B. Supply Plant Performance Standards Several proposed changes to the supply plant pooling provisions of the Mideast order, contained in Proposal 2, are also adopted on a permanent basis by this partial final decision. The lack of adequate performance standards in the current supply plant pooling provisions allow large volumes of milk to be pooled on the order that do not demonstrate a regular service to the Class I needs of the market causing an unwarranted decrease in the order's blend price. Specifically, the following amendments are permanently adopted:

(1)Increasing supply plant performance standards for § 1033.7(c) by 10 percentage points, from 30 percent to 40 percent, for all months,

(2)Increasing performance standards for supply plants operated by a cooperative association under § 1033.7(d) by five percentage points, from 30 percent to 35 percent, for the month of August, and by 10 percentage points, from 30 percent to 40 percent, for the months of September through November, and

(3)Increasing performance standards for a supply plant with a marketing agreement with a cooperative under § 1033.7(e) by 10 percentage points, from 35 percent to 45 percent, for the months of August through November. Currently, the Mideast order provides that a supply plant must ship 30 percent of its total monthly receipts to a pool distributing plant in order for the plant and all of the receipts of the plant to be pooled for the month. This same standard applies to supply plants owned and operated by a cooperative association. A supply plant operated under a marketing agreement with a cooperative, however, must ship 35 percent of total receipts to a pool distributing plant in every month of the year in order for the plant and all the receipts of the plant to be pooled. A witness appeared on behalf of the Cooperatives in support of the portion of Proposal 2 that raises the performance standards for supply plants. The Cooperatives witness was of the opinion that supply plant performance standards are inadequate and in need of review and adjustment. Current supply plant performance standards, the witness testified, allow for more milk to be associated with the Mideast pool than is needed. Relying on market administrator data, the witness noted that the projected Class I utilization of the Mideast order of 58.9 percent, specified during Federal order reform, had only been achieved in one month since January 2000. The witness stressed that the Mideast order has ample reserve milk supplies located within the marketing area, but that milk located outside of the marketing area that is being pooled on the order is lowering the proceeds of producers who are consistently serving the fluid needs of the market. The Cooperatives witness was of the opinion that increasing supply plant performance standards will provide greater incentive to deliver local milk supplies to the Class I market than the current standards. The witness was of the opinion that returns to producers are increased the shorter the distance milk must travel to distributing plants because transportation costs are lower. The Cooperatives witness testified that the costs of transporting and procuring milk for Class I use is not being borne equally by all producers whose milk is pooled on the order even though Class I returns are shared by all. The witness added that increasing supply plant performance standards would prevent milk that does not service the fluid needs of the market from sharing in the additional proceeds generated from fluid sales in the marketing area. The Cooperatives witness relied on market administrator data which showed an increase in the volume of milk pooled on the Mideast order from states outside the marketing area including Illinois, Iowa, Minnesota and Wisconsin. The witness testified that although the volume of milk pooled from states outside of the Mideast marketing area has increased, the volume of milk pooled from states within the marketing area has remained constant. The witness added that the increase in the volume of milk pooled from states outside of the marketing area has not resulted in increased volumes of milk shipped to the order's pool distributing plants. When milk that does not service the needs of the Mideast fluid market is pooled from areas outside the states comprising the Mideast marketing area, the witness stressed, the blend price received by Mideast order producers who regularly demonstrate service to the fluid market is lowered. The Cooperatives witness relied on market administrator data to illustrate that supply-demand relationships for milk in five different regions of the Mideast marketing area—Northern Ohio, Southern Ohio, Michigan, Indiana and Pennsylvania indicate that there is sufficient locally produced milk to meet the needs of the fluid market. According to the witness, only in the Southern Ohio/Southern Indiana region do total Class I sales exceed the total amount of milk locally supplied. The witness attributed the deficit local milk supply in Southern Ohio/Southern Indiana to local milk being shipped to the Appalachian milk marketing area. The Cooperatives witness was also of the opinion that a “hard” 40 percent standard on cooperative owned supply plant shipments to distributing plants during the fall months is superior to using the “rolling annual average” method currently provided by the order. The witness added that if a cooperative owned supply plant shipped 40 percent of its total receipts to distributing plants during the fall months, the “rolling annual average” method could be used during the remainder of the year. The Cooperatives witness testified that the performance standards for supply plants in the Mideast order were increased as a result of a previous Federal order hearing in 2001, but was of the opinion that the market is in need of further refinement. The witness emphasized that while there is a seasonal need for supplemental milk across certain regions of the Mideast market, the current standards allow far more milk to associate with the market than is reasonably warranted. The witness added that increasing supply plant performance standards will increase returns for Mideast dairy farmers who do regularly and consistently service the needs of the fluid market. A witness appearing on behalf of Dean was also in support of increasing supply plant performance standards. Dean testified at the hearing, and reiterated in their post-hearing brief, that increasing supply plant performance standards will serve to better identify the milk that demonstrates a consistent ability to service the fluid milk needs of the market. In their post-hearing brief, Dean proposed a modification to Proposal 2 regarding cooperative owned supply plants. Specifically, Dean suggested that a cooperative owned supply plant should be located within the geographic boundaries of the Mideast marketing area and that qualifying shipments to distributing plants or nonpool plants must be classified as Class I. A witness from MMPA appearing on behalf of the Cooperatives modified a portion of Proposal 2 at the hearing. The witness testified that Proposal 2 should increase the performance standards for a cooperative owned supply plant by 5 percentage points, from 30 to 35 percent of total receipts, for the month of August, and by 10 percentage points, from 30 to 40 percent of total receipts for the months of September through November. The witness was of the opinion that an increase in performance standards are needed in order to ensure that the proceeds generated from Class I sales are shared among those who regularly supply the needs of the fluid market. The MMPA witness testified that their cooperative exceeded the current 30 percent performance standard (from 35 percent to 41 percent of total receipts) during the preceding months of August through November. The MMPA witness testified that they are in support of a “hard” performance standard during the August through November period, rather than the use of the annual rolling average provision currently provided for in all months by the order for cooperative owned supply plants. The witness also noted that if market conditions warrant a higher degree of performance, the Market Administrator has the authority to increase the performance standard. Several independent and cooperative member dairy farmers whose milk is pooled in the Mideast order also testified in support of increasing supply plant performance standards. Most were of the opinion that increasing supply plant performance standards will more adequately identify what milk is consistently serving the needs of the Mideast fluid market. A witness appeared on behalf of Smith Dairy in general support of any proposal that would serve to address the reduction of producer pay prices in the Mideast order and any proposals that will better identify milk that provides service to the Mideast fluid market. Smith Dairy operates two distributing plants regulated by the Mideast order that are primarily supplied by independent dairy farmers. A witness appearing on behalf of White Eagle testified in opposition to increasing supply plant performance standards at the hearing and reiterated this position in their post-hearing brief. White Eagle is of the opinion that increasing supply plant shipping standards will displace milk from outside of the geographic boundaries of the Mideast marketing area that has historically supplied the milk needs of the Mideast market. Discussion/Findings The record of this proceeding supports finding that several amendments to the pooling standards of the Mideast order be permanently adopted. These amendments will better identify the milk of producers that should share in the order's blend price and establish more appropriate performance measures for providing regular and consistent service in meeting the market's fluid needs. Currently, milk located outside the Mideast marketing area that does not demonstrate regular and consistent performance in supplying the needs of the Class I market is able to qualify for pooling on the Mideast order and share in the increased revenues arising from Class I sales in the marketing area. The vast majority of this milk is pooled on the order at low classified use-values and in turn lowers the blend price to those producers who regularly and consistently supply the Class I needs of the Mideast market. Such milk is not demonstrating a reasonable level of performance in servicing the Class I market to receive the additional revenue arising from the Class I use of milk in the Mideast marketing area. Such milk should not be pooled. The pooling standards of all Federal milk marketing orders, including the Mideast order, are intended to ensure that an adequate supply of milk is available to meet the Class I needs of the market and to provide the criteria for identifying the milk of those producers who are reasonably associated with the market as a condition for receiving the order's blend price. The pooling standards of the Mideast order are represented in the *Pool Plant, Producer,* and the *Producer milk* provisions of the order and are performance based. Taken as a whole, these provisions are intended to ensure that an adequate supply of milk is available to meet the Class I needs of the market and provide the criteria for determining the producer milk that has demonstrated reasonable measures of service to the Class I market and thereby should share in the marketwide distribution of pool proceeds. Pooling standards that are performance based provide the only viable method for determining those eligible to share in the marketwide pool. It is primarily the additional revenue generated from the higher-valued Class I use of milk that adds additional income, and it is reasonable to expect that only those producers who consistently bear the costs of supplying the market's fluid needs should be the ones to share in the returns arising from higher-valued Class I sales. Pooling standards are needed to identify the milk of those producers who are providing regular and consistent service in meeting the Class I needs of the market. If a pooling provision does not reasonably accomplish this end, the proceeds that accrue to the marketwide pool from fluid milk sales are not properly shared with the appropriate producers. The result is the unwarranted lowering of returns to those producers who actually incur the costs of servicing the fluid needs of the market. Pool plant standards, specifically standards that provide for the pooling of milk through supply plants, need to reflect the supply and demand conditions of the marketing area. This is important because producers whose milk is pooled, regardless of utilization, receives the order's blend price. When the pooling provisions of the order result in pooling milk that cannot reasonably be considered as regularly and consistently serving the fluid needs of the market, it is appropriate to re-examine those standards. The geographic boundaries of the Mideast order are not intended to limit or define which producers, which milk of those producers, or which handlers should enjoy the benefits of being pooled on the order. What is important and fundamental to all Federal orders, including the Mideast order, is the proper identification of those producers, the milk of those producers, and handlers that should share in the proceeds arising from Class I sales in the marketing area. The Mideast order's current pooling standards, specifically supply plant performance standards and diversion limit standards for producer milk do not reasonably accomplish this fundamental objective. Since the 1960's, the Federal milk order program has recognized the harm and disorder that results to both producers and handlers when the same milk of a producer is simultaneously pooled on more than one Federal order, commonly referred to as “double-dipping”. In the past, this situation caused price differences between producers and gave rise to competitive equity issues. The need to prevent “double-dipping” became critically important as distribution areas expanded and orders merged. When the same milk can be simultaneously pooled on a marketwide equalization pool operated by a government entity and on a Federal milk marketing order, it has the same undesirable outcomes as pooling the same milk on two Federal orders which was corrected many years ago. The Mideast order recently has experienced “double-dipping” and it is clear that the Mideast order should be permanently amended to prevent the ability to pool the same milk on the order and on a marketwide equalization pool operated by another government entity. This action is consistent with other recent Federal order amendatory actions regarding the simultaneous pooling of the same milk on a Federal order and on other government operated programs. The hearing record clearly indicates that the milk of producers that does not regularly and consistently service the needs of the fluid market is able to receive the Mideast order's blend price. Inadequate diversion limit standards are allowing large volumes of milk to be diverted to non-pool manufacturing plants located far from the marketing area. Additionally, inadequate supply plant performance standards also enable milk which has insufficient physical association with the market for demonstrating regular and consistent service to the Class I needs of the marketing area to receive the Mideast order's blend price. The Federal milk order system has consistently recognized that there is a cost incurred by producers in servicing an order's Class I market, and the order's blend price is the compensation to producers for performing such services. The amended pooling provisions will ensure that milk seeking to be pooled and receive the order's blend price will regularly and consistently service the marketing area's Class I needs. Consequently, the adopted pooling provisions will ensure the more equitable sharing of revenue generated from Class I sales among the appropriate producers. Accordingly, supply plant performance standards are permanently increased by 10 percentage points, from 30 percent to 40 percent of total receipts, for all months; cooperative owned supply plant performance standards should be increased by 10 percentage points, from 30 percent to 40 percent of total receipts, for the months of September through November. Additionally, cooperative owned supply plant performance standards for the month of August are permanently increased by five percentage points, from 30 percent to 35 percent of total receipts, as proposed in MMPA's modification of Proposal 2. These standards will be met using the “rolling annual average” standard during December through July and the “hard” standard during August through November as proposed in Proposal 2. Also, as suggested by Dean in their post-hearing brief, a cooperative owned supply plant must be located in the marketing area. Limiting a cooperative owned supply plant to only those that are located within the marketing area is consistent with other pooling conveniences afforded to other supply plants. For example, system pooling of supply plants that regularly and consistently perform in supplying the Class I needs of the marketing area are a legitimate reserve supply source of milk and are restricted to supply plants located within the marketing area. Qualifying shipments, as already specified in the order, may only include shipments of Class I milk to distributing plants or non-pool plants. Performance standards for a supply plant with a marketing agreement with a cooperative are permanently increased by 10 percentage points, from 35 percent to 45 percent of total receipts, for the months of August through November. This final decision finds that permanent changes are necessary in the standards of the amount of milk that can be diverted from pool plants to nonpool plants to ensure that milk pooled on the order is part of the legitimate reserve supply of Class I handlers. The hearing record evidence clearly reveals that large volumes of milk not part of the legitimate reserve supply of the pooling handler can be reported as diverted milk by the pooling handler and receive the order's blend price. Comments filed by the Cooperatives were in support of all changes to the order's pooling standards adopted in the tentative partial decision. Exceptions to the tentative partial decision submitted by White Eagle and NAJ opposed the lowering of diversion limit standards on the basis that the fluid milk needs of the Mideast market are adequately met. Both entities also argued that the costs and difficulties in obtaining access to distributing plants for pooling will increase as a result of lowered diversion limit standards. NAJ predicted that decreased diversion limits will lower the marketing options for Mideast dairy farmers and subsequently decrease the prices received for their milk. These arguments are not persuasive. Providing for the diversion of milk to nonpool facilities is a desirable and needed feature of an order because it facilitates the orderly and efficient disposition of milk when not needed for fluid use. Despite the comments by White Eagle and NAJ, this decision maintains that it is necessary to safeguard against excessive milk supplies becoming associated with the market through the diversion process. Associating more milk than is actually part of the legitimate reserve supply of the pooling handler unnecessarily reduces the potential blend price paid to dairy farmers who regularly and consistently service the market's Class I needs. Such milk should not be pooled. Without reasonable diversion limit provisions, the order's performance standards are weakened and give rise to disorderly marketing conditions. Accordingly, diversion limit standards for pool plants are permanently lowered by ten percentage points, from 60 percent to 50 percent for the months of August through February, and from 70 percent to 60 percent for the months of March through July. 3. Determination of Emergency Marketing Conditions Record evidence established that pooling standards of the Mideast order were inadequate and were resulting in the erosion of the blend price received by producers who were serving the Class I needs of the market and were changed on an emergency basis. The unwarranted erosion of such producer blend prices stemmed from improper diversion limits and supply plant performance standards. It was also appropriate to prohibit the ability to simultaneously pool the same milk on the Mideast Federal milk order and on a marketwide pool administered by another government entity. Consequently, it was determined that emergency marketing conditions existed in the Mideast marketing area and the issuance of a recommended decision was omitted. As stated in the tentative partial decision, a separate decision will be issued that will address proposals to deter the de-pooling of milk, establishing transportation credits and clarifying the Producer definition of the order. Rulings on Proposed Findings and Conclusions Briefs, proposed findings and conclusions were filed on behalf of certain interested parties. These briefs, proposed findings and conclusions, and the evidence in the record were considered in making the findings and conclusions set forth above. To the extent that the suggested findings and conclusions filed by interested parties are inconsistent with the findings and conclusions set forth herein, the requests to make such findings or reach such conclusions are denied for the reasons previously stated in this decision. General Findings The findings and determinations hereinafter set forth supplement those that were made when the Mideast order was first issued and when it was amended. The previous findings and determinations are hereby ratified and confirmed, except where they may conflict with those set forth herein.

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

(b)The parity prices of milk as determined pursuant to section 2 of the Act are not reasonable with respect to the price of feeds, available supplies of feeds, and other economic conditions which affect market supply and demand for milk in the marketing area, and the minimum prices specified in the tentative marketing agreement and the order, as hereby proposed to be amended, are such prices as will reflect the aforesaid factors, insure a sufficient quantity of pure and wholesome milk, and be in the public interest; and

(c)The tentative marketing agreement and the order, as hereby proposed to be amended, will regulate the handling of milk in the same manner as, and will be applicable only to persons in the respective classes of industrial and commercial activity specified in, the marketing agreement upon which a hearing has been held. Rulings on Exceptions In arriving at the findings and conclusions, and the regulatory provisions of this decision, each of the exceptions received was carefully and fully considered in conjunction with the record evidence. To the extent that the findings and conclusions and the regulatory provisions of this decision are at variance with any of the exceptions, such exceptions are hereby overruled for the reasons previously stated in this decision. Marketing Agreement and Order Annexed hereto and made a part hereof is one document: A Marketing Agreement regulating the handling of milk. An interim order amending the order regulating the handling of milk in the Mideast marketing area was approved by producers and published in the **Federal Register** on September 26, 2005 (70 FR 56111), as an Interim Final Rule. Both of these documents have been decided upon as the detailed and appropriate means of effectuating the foregoing conclusions. It is hereby ordered that this entire partial final decision and the Marketing Agreement annexed hereto be published in the **Federal Register** . Determination of Producer Approval and Representative Period March 2005 is hereby determined to be the representative period for the purpose of ascertaining whether the issuance of the order, as amended in the Interim Final Rule, published in the **Federal Register** on September 26, 2005 (70 FR 56111), regulating the handling of milk in the Mideast marketing area is approved or favored by producers, as defined under the terms of the order (as amended and as hereby proposed to be amended) who during such representative period were engaged in the production of milk for sale within the aforesaid marketing area. List of Subjects in 7 CFR Part 1033 Milk Marketing order. Dated: January 17, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. Order Amending the Order Regulating the Handling of Milk in the Mideast Marketing Area This order shall not become effective unless and until the requirements of § 900.14 of the rules of practice and procedure governing proceedings to formulate marketing agreements and marketing orders have been met. Findings and Determinations The findings and determinations hereinafter set forth supplement those that were made when the order was first issued and when it was amended. The previous findings and determinations are hereby ratified and confirmed, except where they may conflict with those set forth herein.

(a)*Findings* . A public hearing was held upon certain proposed amendments to the tentative marketing agreement and to the order regulating the handling of milk in the Mideast marketing area. The hearing was held pursuant to the provisions of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), and the applicable rules of practice and procedure (7 CFR part 900). Upon the basis of the evidence introduced at such hearing and the record thereof, it is found that:

(1)The said order as hereby amended, and all of the terms and conditions thereof, will tend to effectuate the declared policy of the Act:

(2)The parity prices of milk, as determined pursuant to section 2 of the Act, are not reasonable in view of the price of feeds, available supplies of feeds, and other economic conditions which affect market supply and demand for milk in the aforesaid marketing area. The minimum prices specified in the order as hereby amended are such prices as will reflect the aforesaid factors, insure a sufficient quantity of pure and wholesome milk, and be in the public interest; and

(3)The said order as hereby amended regulates the handling of milk in the same manner as, and is applicable only to persons in the respective classes of industrial or commercial activity specified in, a marketing agreement upon which a hearing has been held. Order Relative To Handling It is therefore ordered, that on and after the effective date hereof, the handling of milk in the Mideast marketing area shall be in conformity to and in compliance with the terms and conditions of the order, as amended, and as hereby amended, as follows: The provisions of the order amending the order contained in the interim amendment of the order issued by the Administrator, Agricultural Marketing Service, on September 20, 2005, and published in the **Federal Register** on September 26, 2005 (70 FR 56111), are adopted without change and shall be and are the terms and provisions of this order. [This marketing agreement will not appear in the Code of Federal Regulations] Marketing Agreement Regulating the Handling of Milk in Certain Marketing Areas The parties hereto, in order to effectuate the declared policy of the Act, and in accordance with the rules of practice and procedure effective thereunder (7 CFR part 900), desire to enter into this marketing agreement and do hereby agree that the provisions referred to in paragraph I hereof as augmented by the provisions specified in paragraph II hereof, shall be and are the provisions of this marketing agreement as if set out in full herein. I. The findings and determinations, order relative to handling, and the provisions of §§ 1033.1 to 1033.86 all inclusive, of the order regulating the handling of milk in the Mideast marketing area (7 CFR part 1033) which is annexed hereto; and II. The following provisions: Record of milk handled and authorization to correct typographical errors.

(a)Record of milk handled. The undersigned certifies that he/she handled during the month of September 2005, ____ hundredweight of milk covered by this marketing agreement.

(b)Authorization to correct typographical errors. The undersigned hereby authorizes the Deputy Administrator, or Acting Deputy Administrator, Dairy Programs, Agricultural Marketing Service, to correct any typographical errors which may have been made in this marketing agreement. Effective date. This marketing agreement shall become effective upon the execution of a counterpart hereof by the Department in accordance with Section 900.14(a) of the aforesaid rules of practice and procedure. In Witness Whereof, The contracting handlers, acting under the provisions of the Act, for the purposes and subject to the limitations herein contained and not otherwise, have hereunto set their respective hands and seals. Signature By

(Name)(Title) (Address)

(Seal)Attest [FR Doc. E6-684 Filed 1-20-06; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF AGRICULTURE Commodity Credit Corporation 7 CFR Part 1496 RIN 0560-AH39 Procurement of Commodities for Foreign Donation AGENCY: Commodity Credit Corporation, USDA. ACTION: Proposed rule: reopening and extension of comment period. SUMMARY: The Commodity Credit Corporation

(CCC)is reopening and extending the comment period for the proposed rule, Procurement of Commodities for Foreign Donation. The original comment period for the proposed rule closed January 17, 2006, and CCC is reopening and extending it for 45 days from the date of this notice. CCC also will consider any comments received from January 17, 2006, to the date of this notice. This action responds to requests from the public to provide more time to comment on the proposed rule. DATES: Comments on the proposed rule published at 70 FR 74717, December 16, 2005, must be submitted by March 9, 2006, to be assured consideration. Comments received after that date will be considered to the extent practical. The deadline for comments on the information collections in the proposed rule remains February 14, 2006, as specified in the proposed rule. ADDRESSES: CCC invites interested persons to submit comments. Comments may be submitted by any of the following methods: • E-Mail: Send comments to *Richard.Chavez@USDA.gov.* • Fax: Submit comments by facsimile transmission to:

(202)690-2221. • Mail: Send comments to: Director, Commodity Procurement Policy & Analysis Division, Farm Service Agency, United States Department of Agriculture (USDA), Rm. 5755-S, 1400 Independence Avenue, SW., Washington, DC 20250-0512. • Hand Delivery or Courier: Deliver comments to the above address. • Federal Rulemaking Portal: Go to *http://www.regulations.gov.* Follow the online instructions for submitting comments. SUPPLEMENTARY INFORMATION: On December 16, 2005, CCC published a proposed rule, Procurement of Commodities for Foreign Donation, in the **Federal Register** (70 FR 74717). The proposed rule would adopt new procedures to be used by CCC in the evaluation of bids in connection with the procurement of commodities for donation overseas. In general, CCC proposes to amend the existing regulations to provide for the simultaneous review of commodity and ocean freight offers when evaluating lowest-landed cost options in connection with the procurement of commodities. This proposed rule would enhance bidding opportunities for potential vendors while allowing CCC to more efficiently acquire commodities. The Agency believes the request for additional time to comment on the proposed rule is reasonable and will allow the rulemaking to proceed in a timely manner. As a result of the reopening and extension, the comment period for the proposed rule will close on March 9, 2006. Signed in Washington, DC, January 13, 2006. Teresa C. Lasseter, Executive Vice-President, Commodity Credit Corporation. [FR Doc. E6-683 Filed 1-20-06; 8:45 am] BILLING CODE 3410-05-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [CGD07-05-138] RIN 1625-AA11 Regulated Navigation Area: Savannah River, Savannah, GA AGENCY: Coast Guard, DHS. ACTION: Notice of proposed rulemaking. SUMMARY: The Coast Guard proposes to amend the Regulated Navigation Areas for Savannah River, Georgia. Two new berths have been created at the Liquefied Natural Gas

(LNG)facility on the Savannah River and the current regulation only addresses facility and vessel requirements when an LNG vessel is underway, or is moored parallel to the navigational channel outside of the slip. The current regulation is no longer adequate and the proposed changes address the addition of the new berths and requirements for three different mooring situations. DATES: Comments and related material must reach the Coast Guard on or before March 24, 2006. ADDRESSES: You may mail comments and related material to Coast Guard Marine Safety Unit Savannah, Juliette Gordon Low Federal Building, Suite 1017, 100 W. Oglethorpe, Savannah, Georgia 31401. Coast Guard Marine Safety Unit Savannah maintains the public docket for this rulemaking. Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket [CGD07-05-138], will become part of this docket and will be available for inspection or copying at Marine Safety Unit Savannah, between 7:30 a.m. and 4:30 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Lieutenant Commander Lawrence Greene, Chief of Response, Marine Safety Unit Savannah;

(912)652-4353 extension 205. SUPPLEMENTARY INFORMATION: Request for Comments We encourage you to participate in this rulemaking by submitting comments and related material. If you do so, please include your name and address, identify the docket number for this rulemaking [CGD07-05-138], indicate the specific section of this document to which each comment applies, and give the reason for each comment. Please submit all comments and related material in an unbound format, no larger than 8 1/2 by 11 inches, suitable for copying. If you would like to know they reached us, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period. We may change this proposed rule in view of them. Public Meeting We do not now plan to hold a public meeting. But you may submit a request for a meeting by writing to Marine Safety Unit Savannah (see ADDRESSES above) explaining why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at the time and place announced by a later notice in the **Federal Register** . Background and Purpose In May of 2002, Southern LNG Inc. submitted a letter of intent to expand the LNG facility on Elba Island that would nearly double LNG storage capacity and substantially increase the number of LNG tankship arrivals. The Coast Guard's endorsement was based upon the relocation of the primary LNG mooring facility in order to reduce the risk of allision and subsequent breaching of an LNG tankship's cargo tank. In order to address the Coast Guard's concerns, Southern LNG Inc. initiated a project to create a protected docking slip that allows for simultaneous LNG transfers from vessels. This expansion, scheduled for completion in late 2005, significantly reduces the level of risk associated with LNG tankship operations and vessels transiting near the LNG facility. This rule updates the current RNA and accounts for future LNG operations involving all tankship mooring configurations. Discussion of Proposed Rule The proposed RNA accounts for three potential mooring arrangements during operations at the new berths. All of these requirements are intended to reduce the risk associated with marine LNG transfer operations. On-scene towing vessels will be able to respond immediately during an emergency involving an LNG tankship or vessel transiting near a moored LNG tankship conducting transfer operations. Certain security operations will be exempt from the proposed rule. This will allow facility owned or operated security vessels as well as state and local law enforcement vessels to operate freely within the RNA. The LNG facility will be required to station and provide a minimum of two escort towing vessels each with a minimum of 100,000 pounds of bollard pull, 4,000 horsepower and capable of safely operating in the indirect mode, to escort transiting vessels 1600 gross tons or greater past LNG tankships that are moored outside of the LNG facility. Additionally, the LNG facility will be required to provide at least one standby towing vessel with a minimum of 90,000 pounds of bollard pull to take appropriate actions in an emergency as directed by the LNG vessel bridge watch. When a LNG tankship is moored only inside the new slip, the LNG facility will be required to station two standby towing vessels each with a minimum capacity of 100,000 pounds of bollard pull, 4,000 horsepower, and the ability to operate safely in the indirect mode, to take appropriate actions in an emergency. These towing vessels will be on scene to respond to any emergency situation for the LNG tankship moored within the slip or for vessels transiting the Savannah River past the LNG facility. To limit delays to other vessels operating within the RNA, we propose to allow vessels of 1600 gross tons or greater to pass the facility while the LNG tankships are maneuvering and mooring outside of the Savannah River shipping channel and within the facility confines (i.e., inside of the slip). We propose to add a requirement for emergency towing wires (fire wires) to follow standard industry practice and ensure the vessels are immediately available for emergency towing. We propose to add vessel operating restrictions to ensure safe LNG transfer operations due to anticipated hydrodynamic effects on the water within the LNG slip. We propose to add safety and security requirements in 33 CFR 165.756(d)(6)(v) to prevent unnecessary vessels from entering the LNG slip. In the interest of port security, this proposed rule also eliminates the requirement to issue a Broadcast Notice to Mariners on scheduled LNG tankship activities while the restrictions imposed by this section are in effect. The level of safety introduced by broadcasting LNG tankship schedules to the general public via marine radio does not outweigh the potential security impacts. Additionally, river pilots, who operate all vessels over 200 gross tons in the Savannah River, are aware of the LNG tankship transit times. While transiting within the RNA, the LNG tankships will generally be escorted by two towing vessels and security vessels that can affect notice of this rule to any vessels not requiring a river pilot. To ensure the timeliness of response operations and maximize safety and security, the waiver authority in this rule has been modified to allow verbal or written waivers by the Captain of the Port. Regulatory Evaluation This proposed rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Homeland Security. Because this proposed rule will minimize delays for inbound and outbound traffic during LNG vessel transits, we expect the economic impact of this proposed rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. Delays for inbound and outbound traffic due to LNG transits will be minimized through this change and through pre-transit conferences between the pilots and the Coast Guard Captain of the Port. The amended RNA requirements are less burdensome for smaller vessels, which are more likely to be small entities. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposal so that they could better evaluate its effects on them and participate in the rulemaking. If the rule would affect your small business and you have questions concerning its provisions or options for compliance, please contact the person listed under FOR FURTHER INFORMATION CONTACT . The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard. Collection of Information This proposed rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this proposed rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This proposed rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this proposed rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that might disproportionately affect children. Indian Tribal Governments This proposed rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this proposed rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( *e.g.* , specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this proposed rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969

(NEPA)(42 U.S.C. 4321-4370f), and have made a preliminary determination that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, we believe that this rule should be categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction, from further environmental documentation as this regulation is a special local regulation. A preliminary “Environmental Analysis Check List” is available in the docket where indicated under ADDRESSES. Comments on this section will be considered before we make the final decision on whether this rule should be categorically excluded from further environmental review. List of Subjects in 33 CFR Part 165 Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Safety measures, Waterways. For the reasons discussed in the preamble, the Coast Guard proposes to amend 33 CFR part 165 as follows: PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 reads as follows: Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1. 2. Revise § 165.756 to read as follows: § 165.756 Regulated Navigation Area; Savannah River, Georgia.

(a)*Regulated Navigation Area (RNA).* The Savannah River between Fort Jackson (32°04.93″ N, 081°02.19″ W) and the Savannah River Channel Entrance Sea Buoy is a regulated navigation area. All coordinates are North American Datum 1983.

(b)*Definitions.* The following definitions are used in this section: *Bollard pull* is an industry standard used for rating tug capabilities and is the pulling force imparted by the tug to the towline. It means the power that an escort tug can apply to its working line(s) when operating in a direct mode. *Direct Mode* is a towing technique, which is defined as a method of operation by which a towing vessel generates towline forces by thrust alone at an angle equal to or nearly equal to the towline, or thrust forces applied directly to the escorted vessel's hull. *Indirect Mode* is a towing technique that, for the purpose of this section, is defined as a method of operation by which an escorting towing vessel generates towline forces by a combination of thrust and hydrodynamic forces resulting from a presentation of the underwater body of the towing vessel at an oblique angle to the towline. This method increases the resultant bollard pull, thereby arresting and controlling the motion of an escorted vessel. *LNG tankship* means a vessel as described in 46 CFR 154. Made-up means physically attached by cable, towline, or other secure means in such a way as to be immediately ready to exert force on a vessel being escorted. *Make-up* means the act of, or preparations for becoming made-up. *Operator* means the person who owns, operates, or is responsible for the operation of a facility or vessel. *Savannah River Channel Entrance Sea Buoy* means the aid to navigation labeled R W “T” Mo

(A)WHIS on the National Oceanic and Atmospheric Administration's

(NOAA)Nautical Chart 11512. *Standby* means immediately available, ready, and equipped to conduct operations. *Underway* means that a vessel is not at anchor, not made fast to the shore, or not aground.

(c)*Applicability.* This section applies to all vessels operating within the RNA, including naval and other public vessels, except vessels that are engaged in the following operations:

(1)Law enforcement, security, or search and rescue;

(2)Servicing aids to navigation;

(3)Surveying, maintenance, or improvement of waters in the RNA; or

(4)Actively engaged in escort, maneuvering, or support duties for an LNG tankship.

(d)Regulations.

(1)*Requirements for the LNG facility while a LNG tankship is moored outside of the LNG facility slip or while LNG tankships are moored both inside the LNG facility slip and outside the LNG facility slip.*

(i)The operator of the facility where an LNG tankship is moored outside of the LNG facility slip shall station and provide a minimum of two escort towing vessels each with a minimum of 100,000 pounds of bollard pull, 4,000 horsepower and capable of safely operating in the indirect mode, to escort transiting vessels 1600 gross tons or greater past the moored LNG tankship.

(ii)In addition to the two towing vessels required by paragraph (d)(3)(i) of this section, the operator of the facility where the LNG tankship is moored outside of the slip shall provide at least one standby towing vessel with a minimum of 90,000 pounds of bollard pull to take appropriate actions in an emergency as directed by the LNG vessel bridge watch required in (d)(7) of this section.

(2)Requirements for the LNG facility while an LNG tankship is moored only inside the LNG facility slip. The operator of the facility where one or more LNG tankships are moored in the LNG facility slip and no LNG tankship is present at the pier outside the slip, shall station two standby towing vessels, each with a minimum capacity of 100,000 pounds of bollard pull, 4,000 horsepower, and the ability to operate safely in the indirect mode, to take appropriate actions in an emergency as directed by the LNG vessel bridge watch required in (d)(7) of this section.

(3)*Requirements for vessel operations while a LNG tankship is underway within the Savannah River Shipping Channel within the RNA.*

(i)Except for a vessel that is moored at a marina, wharf, or pier, and remains moored, no vessel 1600 gross tons or greater may approach within two nautical miles of a LNG tankship that is underway within the Savannah River shipping channel without the permission of the Captain of the Port (COTP).

(ii)All vessels under 1600 gross tons shall keep clear of transiting LNG tankships.

(iii)The owner, master, or operator of a vessel carrying liquefied natural gas

(LNG)shall:

(A)Comply with the notice requirements of 33 CFR 160 and updates are encouraged at least 12 hours before arrival at the RNA boundaries. The COTP may delay the vessel's entry into the RNA to accommodate other commercial traffic.

(B)Obtain permission from the COTP before commencing the transit into the RNA.

(C)Not enter or get underway within the RNA if visibility during the transit is not sufficient to safely navigate the channel, and/or wind speed is, or is expected to be, greater than 25 knots.

(D)While transiting the RNA, the LNG tankship shall have sufficient towing vessel escorts.

(4)*Requirements for vessel operations while a LNG tankship is within the LNG Facility and outside the Savannah River Shipping Channel within the RNA.* Vessels of 1600 gross tons or greater may pass the facility while the LNG tankships are maneuvering and mooring outside of the Savannah River shipping channel and within the facility confines (i.e., inside of the slip).

(5)*Requirements for vessels 1600 gross tons or greater and within the RNA when passing a LNG Tankship moored outside of the LNG Facility slip.*

(i)Transiting vessels 1600 gross tons or greater, when passing a LNG tankship moored outside of the LNG facility slip, shall have a minimum of two towing vessels, each with a minimum capacity of 100,000 pounds of bollard pull, 4,000 horsepower, and the ability to operate safely in the indirect mode, made-up in such a way as to be immediately available to arrest and control the motion of an escorted vessel in the event of steering, propulsion or other casualty. While it is anticipated that vessels will utilize the facility provided towing vessel services required in paragraph (d)(1) of this section, this regulation does not preclude escorted vessel operators from providing their own towing vessel escorts, provided they meet the requirements of this part.

(A)Outbound vessels shall be made-up and escorted from Bight Channel Light 46 until the vessel is safely past the LNG dock.

(B)Inbound vessels shall be made-up and escorted from Elba Island Light 37 until the vessel is safely past the LNG dock.

(ii)Vessels 1600 gross tons or greater shall not meet nor overtake within an area 1,000 yards on either side of the LNG facility slip and shall transit that area at minimum safe speed when an LNG tankship is present within the slip.

(6)*Requirements for all other vessels within the RNA.* All vessels less than 1600 gross tons shall not approach within 70 yards of an LNG tankship nor shall any vessel enter the LNG Facility slip without the permission of the Captain of the Port.

(7)*Requirements for moored LNG tankships.*

(i)While moored within the RNA, LNG tankships shall maintain a bridge watch consisting of a docking pilot or licensed deck officer to monitor vessels passing and to coordinate the actions of the towing vessel(s) required in this section and in the event of emergency.

(ii)While moored within the RNA, LNG tankships shall have emergency towing wires (fire wires), positioned one meter above the waterline, both on the off-shore bow and quarter of the ship.

(e)*Waivers.*

(1)The COTP may waive any requirement in this section, if the COTP finds that it is in the best interest of safety or in the interest of national security. Such waivers may be made verbally or in writing.

(2)An application for a waiver must state the compelling need for the waiver and describe the proposed operation and methods by which adequate levels of safety and security are to be obtained.

(f)*Enforcement.* In accordance with the general regulations in § 165.13 of this part, no person may cause or authorize the operation of a vessel in the regulated navigation area contrary to the provisions of this section. Dated: December 27, 2005. D.B. Peterman, Rear Admiral, U.S. Coast Guard, Commander, Seventh Coast Guard District. [FR Doc. E6-654 Filed 1-20-06; 8:45 am] BILLING CODE 4910-15-P DEPARTMENT OF DEFENSE Department of the Army, Corps of Engineers 33 CFR Part 207 RIN 0710-AA62 Navigation Regulations AGENCY: U.S. Army Corps of Engineers, DoD. ACTION: Proposed rule; withdrawal. SUMMARY: The U.S. Army Corps of Engineers (Corps) is withdrawing the proposed rule published on May 25, 2005 (70 FR 30042) which proposed to establish a procedure for modifying the scheduled operational hours at the Lake Washington Ship Canal, Hiram M. Chittenden Locks in Seattle, Washington. The proposed rule would have permitted the District Engineer to change the scheduled operational hours of the locks following issuance of a public notice and after providing a 30-day comment period for any proposed change. The Corps has determined that there is no present need to implement changes in the operation of the Hiram M. Chittenden Locks. The Corps intends to initiate rulemaking in the future if circumstances necessitate instituting a change in the schedule or other parameters of Locks operation. DATES: The proposed rule is withdrawn as of January 23, 2006. FOR FURTHER INFORMATION CONTACT: Mr. John Post, Operations Manager, Hiram M. Chittenden Locks, at

(206)789-2622; or Ms. Andrea Takash, Public Affairs Office,

(206)764-3760. Dated: January 12, 2006. Gerald W. Barnes, Chief, Operations, Directorate of Civil Works. [FR Doc. E6-708 Filed 1-20-06; 8:45 am] BILLING CODE 3710-92-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 201, 205, 211, 216, 217, 219, 223, 225, 228, 232, 236, 237, and 252 [DFARS Case 2004-D022] RIN 0750-AF16 Defense Federal Acquisition Regulation Supplement; Inflation Adjustment of Acquisition-Related Thresholds AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule with request for comments. SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to adjust acquisition-related thresholds for inflation. Section 807 of the National Defense Authorization Act for Fiscal Year 2005 requires periodic adjustment of statutory acquisition-related dollar thresholds for inflation, except those established by the Davis-Bacon Act, the Service Contract Act, or trade agreements. This proposed rule also amends other acquisition-related thresholds that are based on policy rather than statute. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before March 24, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2004-D022, using any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the instructions for submitting comments. • E-mail: *dfars@osd.mil* . Include DFARS Case 2004-D022 in the subject line of the message. • Fax:

(703)602-0350. • Mail: Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received will be posted without change to *http://www.regulations.gov* , including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams,

(703)602-0328. SUPPLEMENTARY INFORMATION: A. Background This proposed rule implements Section 807 of the National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). Section 807 provides for adjustment of statutory acquisition-related dollar thresholds every 5 years, except for those established by the Davis-Bacon Act, the Service Contract Act, or trade agreements. This case presented an opportunity to review all acquisition-related dollar thresholds, including those that are non-statutory. The proposed rule published at 70 FR 73415 on December 12, 2005 (FAR Case 2004-033), contained comparable changes to acquisition-related dollar thresholds in the FAR. Definition of Acquisition-Related Threshold The statute defines an acquisition-related threshold as a dollar threshold that is specified in law as a factor in defining the scope of the applicability of a policy, procedure, requirement, or restriction provided in that law to the procurement of property or services by an executive agency, as determined by the FAR Council. The statute also impacts acquisition-related thresholds in the DFARS, since the DFARS is part of the FAR System. Acquisition-related thresholds are generally tied to the value of a contract, subcontract, or modification. Examples of thresholds that are not viewed as “acquisition-related” are thresholds relating to claims, penalties, withholding, payments, required levels of insurance, small business size standards, and liquidated damages. Acquisition-Related Thresholds Not Subject to Escalation Adjustment Under This Proposed Rule The statute does not permit escalation of acquisition-related thresholds established by the Davis Bacon Act, the Service Contract Act, or trade agreements. Additionally, the statute does not authorize the escalation of thresholds set by Executive order or by the implementing agency, unless the Executive order or agency regulations are first amended. Analysis of Statutory Acquisition-Related Thresholds A matrix showing the thresholds reviewed in preparation of this proposed rule is available at *http://www.acq.osd.mil/dpap/dars/dfars/changenotice/index.htm#2004-D022* . The statute requires adjustment of acquisition-related thresholds for inflation using the Consumer Price Index

(CPI)for all-urban consumers. Acquisition-related thresholds in statutes that were in effect on October 1, 2000, are subject to 5 years of inflation. For purposes of this proposed rule, the matrix includes calculation of escalation based on the CPI from December 1999 to December 2004 (the most recent available data when the proposed rule was in preparation), which calculates as 13.07 percent. Acquisition-related thresholds in statutes that took effect after October 1, 2000, are escalated proportionately for the number of months between the effective date of the statute and October 1, 2005. The final rule will be adjusted to the actual CPI data for October 2000 through October 2005. After the escalation factor is applied to the acquisition-related threshold, the threshold must be rounded as follows: < $10,000—Nearest $500 $10,000-<$100,000—Nearest $5,000 $100,000-<$1,000,000—Nearest $50,000 $1,000,000 or more—Nearest $500,000 At the current rate of inflation, this means that thresholds of $1,000, $10,000, $100,000, and $1,000,000, although subject to inflation calculation, will not actually be changed until 2010, because the inflation is insufficient to overcome the rounding requirements. Analysis of Non-Statutory Acquisition-Related Thresholds No statutory authorization is required to escalate thresholds that were set as policy within the DFARS. Policy acquisition-related thresholds have been escalated using the same formula applied to the statutory thresholds. Further Explanation of Proposed Changes *217.170-217.174* . The thresholds relating to economic order quantity ($20 million), unfunded contingent liability ($20 million), and multiyear contracts for systems or components ($500 million) are repeated annually in the Defense Appropriations Act and, therefore, cannot be escalated unless correspondingly increased in the Appropriations Act. The $500 million threshold relating to multiyear contracts for services does not appear in the annual appropriations acts and, therefore, is proposed for escalation. The $100 million threshold relating to a contract cancellation ceiling does not appear in annual appropriations acts, but was the basis for additional requirements in Section 814 of the National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). Therefore, the $100 million threshold is not proposed for escalation. *223.803(2)* . This text is proposed for deletion, as it applies only to contracts awarded before June 1, 1993, and the underlying statute has been repealed. *228.102-1* . The threshold of $25,000 is proposed for escalation to $30,000, for consistency with the proposed change to FAR 28.102-1 published at 70 FR 73415 on December 12, 2005. The $100,000 threshold at 228.102-1(1) was not implemented until June 2003, and, therefore, is not proposed for escalation. *232.404(a)(9)* . This threshold was increased from $500 to $2,500 in the final DFARS rule published at 70 FR 75412 on December 20, 2005. The threshold is now proposed for escalation to $3,000, for consistency with the micro-purchase threshold of $3,000 included in the proposed FAR rule published at 70 FR 73415 on December 12, 2005. *237.170-2* . This approval requirement implements Section 801(b) of the National Defense Authorization Act for Fiscal Year 2002 (Pub. L. 107-107), but the threshold is not set by statute. The threshold of $50 million was derived from the justification and approval (J&A) threshold for DoD senior procurement executive approval at FAR 6.304(a)(4). This J&A threshold is now $75 million and was proposed for escalation to $77.5 million in the proposed FAR rule published at 70 FR 73415 on December 12, 2005. Therefore, this proposed rule includes a corresponding increase at DFARS 237.170-2. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the adjustment of acquisition-related dollar thresholds is intended to keep pace with inflation and thus maintain the status quo. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2004-D022. C. Paperwork Reduction Act The proposed changes to the DFARS do not impose any new information collection requirements that require the approval of the Office of Management and Budget

(OMB)under 44 U.S.C. 3501, *et seq.* The information collection requirements of the provision and clauses at 252.225-7003, 252.225-7004, and 252.225-7006 are approved for use through May 31, 2007, under OMB Clearance Number 0704-0229. List of Subjects in 48 CFR Parts 201, 205, 211, 216, 217, 219, 223, 225, 228, 232, 236, 237, and 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, DoD proposes to amend 48 CFR parts 201, 205, 211, 216, 217, 219, 223, 225, 228, 232, 236, 237, and 252 as follows: 1. The authority citation for 48 CFR parts 201, 205, 211, 216, 217, 219, 223, 225, 228, 232, 236, 237, and 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 201—FEDERAL ACQUISITION REGULATIONS SYSTEM 2. Section 201.109 is added to read as follows: 201.109 Statutory acquisition-related dollar thresholds-adjustment for inflation.

(d)A matrix showing calculation of the most recent escalation adjustments of statutory acquisition-related dollar thresholds is available at PGI 201.109. PART 205—PUBLICIZING CONTRACT ACTIONS 205.303 [Amended] 3. Section 205.303 is amended by removing “$5 million” and adding in its place “$5.5 million” as follows: a. In paragraph (a)(i) introductory text, in the first and second sentences; b. In paragraph (a)(i)(A), in the second sentence; and c. In paragraph (a)(i)(B), in the first and second sentences. PART 211—DESCRIBING AGENCY NEEDS 211.503 [Amended] 4. Section 211.503 is amended in paragraph (b), in the first and second sentences, by removing “$500,000” and adding in its place “$550,000”. PART 216—TYPES OF CONTRACTS 216.203-4 [Amended] 5. Section 216.203-4 is amended in paragraph (c)(2), in the first sentence, by removing “$50,000” and adding in its place “$55,000”. PART 217—SPECIAL CONTRACTING METHODS 6. Section 217.170 is amended by revising paragraph (d)(1)(i) to read as follows: 217.170 General. (d)(1) * * *

(i)Exceed $500 million for supplies (see 217.172(c) and 217.172(e)(4)) or $565.5 million for services (see 217.171(a)(6)); 217.171 [Amended] 7. Section 217.171 is amended in paragraph (a)(6) by removing “$500 million” and adding in its place “$565.5 million”. PART 219—SMALL BUSINESS PROGRAMS 219.502-2 [Amended] 8. Section 219.502-2 is amended in paragraph (a)(i) by removing “$2 million” and adding in its place “$2.5 million”. PART 223—ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE 9. Section 223.803 is revised to read as follows: 223.803 Policy. No DoD contract may include a specification or standard that requires the use of a class I ozone-depleting substance or that can be met only through the use of such a substance unless the inclusion of the specification or standard is specifically authorized at a level no lower than a general or flag officer or a member of the Senior Executive Service of the requiring activity in accordance with Section 326, Public Law 102-484 (10 U.S.C. 2301 (repealed) note). This restriction is in addition to any imposed by the Clean Air Act and applies after June 1, 1993, to all DoD contracts, regardless of place of performance. PART 225—FOREIGN ACQUISITION 225.7204 [Amended] 10. Section 225.7204 is amended as follows: a. In paragraphs

(a)and

(b)by removing “$10 million” and adding in its place “$11.5 million”; and b. In paragraph

(c)by removing “$500,000” and adding in its place “$550,000”. PART 228—BOND INSURANCE 228.102-1 [Amended] 11. Section 228.102-1 is amended in the second sentence of the introductory text and in paragraph

(1)by removing “$25,000” and adding in its place “$30,000”. PART 232—CONTRACT FINANCING 232.404 [Amended] 12. Section 232.404 is amended in paragraph (a)(9) by removing “$2,500” and adding in its place “$3,000”. 232.502-1 [Amended] 13. Section 232.502-1 is amended in paragraph (b)(1) by removing “$50,000” and adding in its place “$55,000”. PART 236—CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS 236.601 [Amended] 14. Section 236.601 is amended in paragraph (1)(ii) by removing “$500,000” and adding in its place “$550,000”. PART 237—SERVICE CONTRACTING 237.170-2 [Amended] 15. Section 237.170-2 is amended in paragraphs (a)(1) and

(2)by removing “$50,000,000” and adding in its place “$77.5 million”. PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 16. Section 252.209-7004 is amended by revising the clause date and paragraph

(a)to read as follows: 252.209-7004 Subcontracting with firms that are owned or controlled by the government of a terrorist country. Subcontracting With Firms That Are Owned or Controlled by the Government of a Terrorist Country (XXX 2006)

(a)Unless the Government determines that there is a compelling reason to do so, the Contractor shall not enter into any subcontract in excess of $30,000 with a firm, or a subsidiary of a firm, that is identified in the Excluded Parties List System as being ineligible for the award of Defense contracts or subcontracts because it is owned or controlled by the government of a terrorist country. 252.225-7003 [Amended] 17. Section 252.225-7003 is amended as follows: a. By revising the clause date to read “(XXX 2006)”; b. In paragraph (b)(1) by removing “$10 million” and adding in its place “$11.5 million”; and c. In paragraph (b)(2)(i) by removing “$500,000” and adding in its place “$550,000”. 252.225-7004 [Amended] 18. Section 252.225-7004 is amended as follows: a. By revising the clause date to read “(XXX 2006)”; and b. In paragraph (b)(1) by removing “$500,000” and adding in its place “$550,000”. 252.225-7006 [Amended] 19. Section 252.225-7006 is amended as follows: a. By revising the clause date to read “(XXX 2006)”; and b. In paragraph (f)(1) by removing “$500,000” and adding in its place “$550,000”. 252.232-7009 [Amended] 20. Section 252.232-7009 is amended as follows: a. By revising the clause date to read “(XXX 2006)”; and b. By removing “$2,500” and adding in its place “$3,000”. 252.249-7002 [Amended] 21. Section 252.249-7002 is amended as follows: a. By revising the clause date to read “(XXX 2006)”; and b. In paragraph (d)(1) by removing “$500,000” and adding in its place “$550,000”. [FR Doc. E6-701 Filed 1-20-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE 48 CFR Part 225 [DFARS Case 2005-D012] RIN 0750-AF21 Defense Acquisition Regulations System; Defense Federal Acquisition Regulation Supplement; Foreign Acquisition Procedures AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule with request for comments. SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to delete text addressing internal DoD procedures pertaining to foreign acquisition. This text will be relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI). The proposed rule is a result of a transformation initiative undertaken by DoD to dramatically change the purpose and content of the DFARS. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before March 24, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2005-D012, using any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. • E-mail: *dfars@osd.mil* . Include DFARS Case 2005-D012 in the subject line of the message. • Fax:

(703)602-0350. • Mail: Defense Acquisition Regulations System, Attn: Ms. Amy Williams, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received will be posted without change to *http://www.regulations.gov,* including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams,

(703)602-0328. SUPPLEMENTARY INFORMATION: A. Background DFARS Transformation is a major DoD initiative to dramatically change the purpose and content of the DFARS. The objective is to improve the efficiency and effectiveness of the acquisition process, while allowing the acquisition workforce the flexibility to innovate. The transformed DFARS will contain only requirements of law, DoD-wide policies, delegations of FAR authorities, deviations from FAR requirements, and policies/procedures that have a significant effect beyond the internal operating procedures of DoD or a significant cost or administrative impact on contractors or offerors. Additional information on the DFARS Transformation initiative is available at *http://www.acq.osd.mil/dpap/dars/dfars/transformation/index.htm.* This proposed rule is a result of the DFARS Transformation initiative. The proposed rule deletes DFARS text addressing internal DoD procedures in the following areas: DFARS 225.670-4—Processing of requests for waiver of foreign source restrictions. DFARS 225.871-4—Processing of requests for waiver under North Atlantic Treaty Organization cooperative projects. DFARS 225.7017-3—Preparation of determinations regarding award of a contract for ballistic missile defense research, development, test, and evaluation to a foreign source. DFARS 225.7502—Application of the Balance of Payments Program to an acquisition. This text will be relocated to the new DFARS companion resource, Procedures, Guidance, and Information (PGI), available at *http://www.acq.osd.mil/dpap/dars/pgi.* This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD does not expect this rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the proposed rule addresses internal DoD procedural matters and makes no significant change to DoD contracting policy. Therefore, DoD has not performed an initial regulatory flexibility analysis. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2005-D012. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Part 225 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, DoD proposes to amend 48 CFR part 225 as follows: 1. The authority citation for 48 CFR part 225 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 225—FOREIGN ACQUISITION 2. Section 225.670-4 is revised to read as follows: 225.670-4 Waivers. The Secretary of Defense may waive this restriction on the basis of national security interests. To request a waiver, follow the procedures at PGI 225.670-4. 3. Section 225.871-4 is amended by revising paragraph

(c)to read as follows: 225.871-4 Statutory waivers.

(c)To request a waiver under a cooperative project, follow the procedures at PGI 225.871-4. 4. Section 225.7017-3 is amended by revising paragraph

(b)to read as follows: 225.7017-3 Exceptions.

(b)If the head of the contracting activity certifies in writing, before contract award, that a U.S. firm cannot competently perform a contract for RDT&E at a price equal to or less than the price at which a foreign government or firm would perform the RDT&E. The contracting officer or source selection authority, as applicable, shall make a determination, in accordance with PGI 225.7017-3(b), that will be the basis for the certification. 5. Section 225.7502 is revised to read as follows: 225.7502 Procedures. If the Balance of Payments Program applies to the acquisition, follow the procedures at PGI 225.7502. [FR Doc. E6-706 Filed 1-20-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE 48 CFR Parts 242 and 252 [DFARS Case 2005-D006] RIN 0750-AF19 Defense Acquisition Regulations System; Defense Federal Acquisition Regulation Supplement; Earned Value Management Systems AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Proposed rule with request for comments. SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to update requirements for DoD contractors to establish and maintain earned value management systems (EVMS). The rule revises the dollar thresholds at which EVMS requirements are applied and eliminates requirements for contractors to submit cost/schedule status reports under DoD contracts. DATES: Comments on the proposed rule should be submitted in writing to the address shown below on or before March 24, 2006, to be considered in the formation of the final rule. ADDRESSES: You may submit comments, identified by DFARS Case 2005-D006, using any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. • E-mail: *dfars@osd.mil.* Include DFARS Case 2005-D006 in the subject line of the message. • Fax:

(703)602-0350. • Mail: Defense Acquisition Regulations System, Attn: Ms. Deborah Tronic, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. • Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402. Comments received will be posted without change to *http://www.regulations.gov,* including any personal information provided. FOR FURTHER INFORMATION CONTACT: Ms. Deborah Tronic,

(703)602-0289. SUPPLEMENTARY INFORMATION: A. Background This proposed rule revises DFARS Subpart 242.11 and the corresponding clauses in DFARS Part 252 to reflect changes in DoD policy on the application of EVMS compliance requirements. The proposed changes— • Require compliance with American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems, for cost or incentive contracts and subcontracts valued at $20,000,000 or more; • Require a formally validated and accepted EVMS for cost or incentive contracts and subcontracts valued at $50,000,000 or more; • Discourage the application of earned value management to fixed-price contracts and subcontracts; and • Eliminate requirements for contractors to submit cost/schedule status reports. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 603. The analysis is summarized as follows: This proposed rule amends the DFARS to update requirements for DoD contractors to establish and maintain earned value management systems (EVMS). The rule revises the dollar thresholds at which EVMS requirements are applied and eliminates requirements for contractors to submit cost/schedule status reports under DoD contracts. The objective of the proposed rule is to streamline, improve, and increase consistency in earned value management implementation and application. The threshold at which a DoD contractor previously was required to have an EVMS that complied with American National Standards Institute/Electronic Industries Alliance Standard 748 (ANSI/EIA-748) was $73 million for contracts and subcontracts funded with research, development, test and evaluation funding; and $315 million for contracts and subcontracts funded with operation and maintenance or procurement funding. This proposed rule would lower those thresholds to a single $20 million threshold for all cost or incentive contracts and subcontracts, regardless of funding type, and would establish a new threshold of $50 million for an EVMS that has been formally validated and accepted as complying with the standard. According to the Defense Contract Action Data System, in Fiscal Year 2004, 7 small businesses received a cost or incentive type award obligating funds in excess of $20 million, and 46 small businesses received a fixed-price type award obligating funds in excess of $20 million. EVMS compliance requirements would only be used in fixed-price contracts in extremely rare instances. The Dynamic Small Business Search database hosted on the Central Contractor Registration Web site indicates there are 304,961 small businesses registered in that database. The proposed rule is consistent with the proposed changes to the Federal Acquisition Regulation

(FAR)published in the **Federal Register** on April 8, 2005 (70 FR 17945), that would extend Governmentwide the requirement for a contractor to have an EVMS that complies with ANSI/EIA-748. The initial regulatory flexibility analysis for the proposed FAR rule anticipated that agencies would establish a threshold of $20 million for EVMS compliance. A copy of the analysis may be obtained from the point of contact specified herein. DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subpart in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2005-D006. C. Paperwork Reduction Act The proposed rule does not impose any new information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* The contract performance reports required by the rule are approved under Office of Management and Budget Clearance Number 0704-0188, Acquisition Management Systems and Data Requirements Control List, for use through May 31, 2006. List of Subjects in 48 CFR Parts 242 and 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, DoD proposes to amend 48 CFR parts 242 and 252 as follows: 1. The authority citation for 48 CFR parts 242 and 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 242—CONTRACT ADMINISTRATION AND AUDIT SERVICES 2. Section 242.1106 is revised to read as follows: 242.1106 Reporting requirements. (a)(i) See DoDI 5000.2, Operation of the Defense Acquisition System, for reporting requirements for defense technology projects and acquisition programs. The earned value management system requirement is applied as follows:

(A)For cost or incentive contracts and subcontracts valued at $20,000,000 or more, the earned value management system shall comply with American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems.

(B)For cost or incentive contracts and subcontracts valued at $50,000,000 or more, the contractor shall have an earned value management system that has been formally validated and accepted by the contracting officer.

(C)For cost or incentive contracts and subcontracts valued at less than $20,000,000, earned value management application is optional and is a risk-based decision that is at the discretion of the program manager. See PGI 242.1106(a)(i)(C) for information on conducting a cost-benefit analysis.

(D)For firm-fixed-price contracts and subcontracts of any dollar value, the application of earned value management is discouraged. See PGI 242.1106(a)(i)(D) for information on obtaining a waiver before applying earned value management to a firm-fixed-price contract or subcontract.

(ii)When an offeror proposes a plan for compliance with earned value management system guidelines, follow the review procedures at PGI 242.1106(a)(ii).

(iii)The Defense Contract Management Agency is the DoD executive agency for earned value management system compliance reviews.

(iv)Additional guidance on earned value management can be found in the Defense Acquisition Guidebook at *http://akss.dau.mil/dag* and the DoD Earned Value Management Implementation Guide at *http://guidebook.dcma.mil/79/guidebook_process.htm.* 3. Section 242.1107-70 is revised to read as follows: 242.1107-70 Solicitation provisions and contract clauses.

(a)For cost or incentive contracts valued at $50,000,000 or more—

(1)Use the provision at 252.242-7001, Notice of Earned Value Management System—Validation Requirement, in the solicitations; and

(2)Use the clause at 252.242-7002, Earned Value Management System—Validation Requirement, in the solicitation and contract.

(b)For cost or incentive contracts valued at $20,000,000 or more but less than $50,000,000—

(1)Use the provision at 252.242-7005, Notice of Earned Value Management System—Compliance Requirement, in the solicitation; and

(2)Use the clause at 252.242-7006, Earned Value Management System—Compliance Requirement, in the solicitation and contract. PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 4. Sections 252.242-7001 and 252.242-7002 are revised to read as follows: 252.242-7001 Notice of Earned Value Management System—Validation Requirement. As prescribed in 242.1107-70(a)(1), use the following provision: NOTICE OF EARNED VALUE MANAGEMENT SYSTEM—VALIDATION REQUIREMENT (XXX 2006)

(a)The offeror shall provide documentation that its proposed earned value management system

(EVMS)complies with the EVMS guidelines in American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems (ANSI/EIA-748), or that the proposed EVMS has been validated and accepted by the Department of Defense.

(b)If the offeror proposes to use a system that does not meet the requirements of paragraph

(a)of this provision, the offeror shall submit its comprehensive plan for compliance with the EVMS guidelines to the Government for approval.

(1)The plan shall—

(i)Describe the EVMS the offeror intends to use in performance of the contract;

(ii)Distinguish between the offeror's existing management system and modifications proposed to meet the EVMS guidelines;

(iii)Describe the management system and its application in terms of the EVMS guidelines;

(iv)Describe the proposed procedure for administration of the EVMS guidelines as applied to subcontractors;

(v)Provide documentation describing the process, results, and any Government participation in any third-party or self-evaluation of the system's compliance with EVMS guidelines; and

(vi)Include a schedule that provides a timetable of events leading up to Government validation and acceptance of the Contractor's EVMS. This schedule should include a progress assistance visit no later than 30 days after contract award, and a compliance review as soon as practicable. The Department of Defense Earned Value Management Implementation Guide outlines the requirements for conducting a progress assistance visit and compliance review.

(2)The Government will review the offeror's EVMS plan before contract award.

(c)Offerors shall identify the subcontractors, or subcontracted effort if subcontractors have not been selected, to whom the EVMS requirements will apply. The offeror and the Government shall agree to the subcontractors or subcontracted effort selected.

(1)For proposed subcontracts with an estimated dollar value of $50,000,000 or more, the offeror shall be responsible for ensuring that the selected subcontractors comply with the requirements of the Earned Value Management System—Validation Requirement clause of the contract.

(2)For proposed subcontracts with an estimated dollar value of $20,000,000 or more but less than $50,000,000, the offeror shall be responsible for ensuring that the selected subcontractors comply with ANSI/EIA-748. The terms for compliance with ANSI/EIA-748 may be subject to negotiation between the offeror and the subcontractor. The conduct of integrated baseline reviews also may be subject to negotiation between the offeror and the subcontractor.

(d)The offeror shall incorporate its compliance evaluation factors for subcontractors into the plan required by paragraph

(b)of this provision. (End of provision) 252.242-7002 Earned Value Management System—Validation Requirement. As prescribed in 242.1107-70(a)(2), use the following clause: EARNED VALUE MANAGEMENT SYSTEM—VALIDATION REQUIREMENT (XXX 2006)

(a)In the performance of this contract, the Contractor shall use—

(1)An earned value management system

(EVMS)that has been accepted by the Administrative Contracting Officer

(ACO)as complying with the EVMS guidelines in American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems (ANSI/EIA-748); and

(2)Management procedures that provide for generation of timely and reliable information for the contract performance report

(CPR)required by the CPR data item of this contract.

(b)If, at the time of award, the Contractor's EVMS has not been accepted by the ACO as complying with the EVMS guidelines, the Contractor shall apply the system to the contract and shall take timely action to implement its plan to obtain compliance. If the Contractor does not follow the implementation schedule in the compliance plan or, within a reasonable time, correct all system deficiencies identified during the compliance review specified in that plan, the Contracting Officer may take remedial action.

(c)The Government will require integrated baseline reviews. Such reviews shall be scheduled as early as practicable, and the review process should be initiated no later than 180 calendar days after

(1)contract award,

(2)the exercise of significant contract options, and

(3)the incorporation of major modifications. The objective of the integrated baseline review is for the Government and the Contractor to jointly assess the Contractor's baseline to be used for performance measurement, to ensure complete coverage of the statement of work, logical scheduling of the work activities, adequate resourcing, and identification of inherent risks.

(d)Unless a waiver is granted by the ACO, Contractor-proposed EVMS changes require approval of the ACO prior to implementation. The ACO shall advise the Contractor of the acceptability of such changes within 30 calendar days after receipt of the notice of proposed changes from the Contractor. If the advance approval requirements are waived by the ACO, the Contractor shall disclose EVMS changes to the ACO at least 14 calendar days prior to the effective date of implementation.

(e)The Contractor agrees to provide access to all pertinent records and data requested by the ACO or the ACO's authorized representative. Access is to permit Government surveillance to ensure that the EVMS complies, and continues to comply, with the EVMS guidelines referenced in paragraph

(a)of this clause and to demonstrate—

(1)Proper implementation of the procedures generating the cost and schedule information being used to satisfy the contract data requirements;

(2)Continuing application of the accepted company procedures in satisfying the CPR data item through recurring program/project and contract surveillance; and

(3)Implementation of any corrective actions identified during the surveillance process.

(f)The Contractor shall require its subcontractors to comply with EVMS requirements as follows:

(1)For subcontracts with an estimated dollar value of $50,000,000 or more, the following subcontractors shall comply with the requirement of this clause. *(Contracting Officer to insert names of subcontractors selected for compliance with the EVMS validation requirement in accordance with 252.242-7001(c)(1).)*

(2)For subcontracts with an estimated dollar value of $20,000,000 or more but less than $50,000,000, the following subcontractors shall comply with ANSI/EIA-748. *(Contracting Officer to insert names of subcontractors selected for compliance with ANSI/EIA-748 in accordance with 252.242-7001(c)(2).)*

(g)If indicated by the CPR, the Contractor shall submit a request for approval to begin implementation of an over-target baseline or over-target schedule to the Contracting Officer. This request shall include a top-level projection of cost and/or schedule growth, a determination of whether or not performance variances will be retained, and a schedule of implementation for the rebaselining. The Government will have 30 calendar days to respond after receipt of the request. Failure of the Government to respond within the 30-day period will constitute automatic approval. For cost-reimbursement contracts, the contract budget base should include authorized changes to the contract scope but should exclude changes for cost growth. (End of clause) 5. Sections 252.242-7005 and 252.242-7006 are revised to read as follows: 252.242-7005 Notice of Earned Value Management System—Compliance Requirement. NOTICE OF EARNED VALUE MANAGEMENT SYSTEM—COMPLIANCE REQUIREMENT (XXX 2006) As prescribed in 242.1107-70(b)(1), use the following provision:

(a)The offeror shall submit a written summary of the management procedures it will establish, maintain, and use in the performance of any resultant contract to comply with the requirements of the Earned Value Management System—Compliance Requirement clause of this contract. This description shall include a matrix that correlates each guideline in American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems (ANSI/EIA-748), to the corresponding process in the Contractor's written summary.

(b)If the offeror proposes to use an earned value management system

(EVMS)that has been previously accepted by the Administrative Contracting Officer as complying with the EVMS guidelines in ANSI/EIA-748, the offeror may submit a copy of the documentation of such acceptance instead of the written summary required by paragraph

(a)of this provision.

(c)The offeror shall identify the subcontractors, or subcontracted effort if subcontractors have not been selected, to whom the EVMS requirements will apply. The offeror and the Government shall agree to the subcontractors or the subcontracted effort selected for application of the EVMS compliance requirement. The offeror shall be responsible for ensuring that the selected subcontractors comply with ANSI/EIA-748. The offeror shall incorporate its compliance evaluation factors for the subcontractors into the plan required by paragraph

(a)of this provision. (End of provision) 252.242-7006 Earned Value Management System—Compliance Requirement. As prescribed in 242.1107-70(b)(2), use the following clause: EARNED VALUE MANAGEMENT SYSTEM—COMPLIANCE REQUIREMENT (XXX 2006)

(a)The Contractor shall use management procedures in the performance of this contract that provide for—

(1)Planning and control of cost and schedule performance;

(2)Measurement of performance (value for completed tasks); and

(3)Generation of timely and reliable information for the contract performance report

(CPR)required by the CPR data item of this contract.

(b)The Contractor shall use and maintain an earned value management system

(EVMS)that complies with American National Standards Institute/Electronic Industries Alliance Standard 748, Earned Value Management Systems (ANSI/EIA-748), throughout the life of the contract. However, the terms for compliance with ANSI/EIA-748 may be subject to negotiation between the Contractor and the Contracting Officer. The Government will not formally accept the Contractor's EVMS with respect to this contract. The use of the Contractor's EVMS for this contract does not imply Government acceptance of the Contractor's EVMS for application to future contracts.

(c)The Contractor may elect to use an EVMS that has been formally reviewed and accepted by the Administrative Contracting Officer

(ACO)as complying with the EVMS guidelines in ANSI/EIA-748.

(d)The Government will require integrated baseline reviews. Such reviews shall be scheduled as early as practicable, and the review process should be initiated not later than 180 calendar days after

(1)contract award,

(2)the exercise of significant contract options, and

(e)The Contractor shall provide access to all pertinent records, company procedures, and data requested by the ACO, or the ACO's authorized representative, to demonstrate—

(1)Proper implementation of the procedures generating the cost and schedule information being used to satisfy the contract data requirements;

(2)Continuing application of the company procedures in satisfying the CPR data item through recurring program/project and contract surveillance; and

(3)Implementation of any corrective actions identified during the surveillance process.

(f)The Contractor shall submit notification of any substantive changes to the EVMS procedures and the impact of those changes to the ACO or the ACO's authorized representative.

(g)The Contractor shall require the following subcontractors to comply with the requirements of this clause: *(Contracting Officer to insert names of subcontractors selected for application of the EVMS compliance requirement in accordance with 252.242-7005(c).)*

(h)If indicated by the CPR, the Contractor shall submit a request for approval to begin implementation of an over-target baseline or over-target schedule to the Contracting Officer. This request shall include a top-level projection of cost and/or schedule growth, a determination of whether or not performance variances will be retained, and a schedule of implementation for the rebaselining. The Government will have 30 calendar days to respond after receipt of the request. Failure of the Government to respond within this 30-day period will constitute automatic approval. For cost-reimbursement contracts, the contract budget base should include authorized changes to the contract scope but should exclude changes for cost growth. (End of clause) [FR Doc. E6-705 Filed 1-20-06; 8:45 am] BILLING CODE 5001-08-P 71 14 Monday, January 23, 2006 Notices DEPARTMENT OF AGRICULTURE Forest Service Navy Timber Sale Environmental Impact Statement AGENCY: Forest Service, USDA. ACTION: Notice of intent to prepare an Environmental Impact Statement. SUMMARY: The Department of Agriculture, Forest Service, will prepare an Environmental Impact Statement

(EIS)on a proposal to harvest timber in the Navy Timber Sale project area on the Wrangell Ranger District, Tongass National Forest. The Proposed Action for this project is to harvest 70-80 million board feet from approximately 2,900 acres in one or more offerings and would construct approximately 33 files of new temporary and classified road to facilitate access for logging. The Proposed Action includes harvest units and road construction within Inventoried Roadless Areas, as identified in the Forest Plan SEIS. The Proposed Action includes the use of the existing Log Transfer Facility

(LTF)at Anita Bay as well as the construction of a new LTF at the entrance to Burnett Inlet near Navy Creek. The Proposed Action includes a non-significant amendment to the Forest Plan to relocate and/or modify the boundaries of the Mosman and Quiet small old-growth reserves. The Forest Supervisor will decide if and how much timber harvest and road building will occur within the project area, as well as whether to modify the existing small old-growth reserves. The decision will be documented in a Record of Decision based on the information disclosed in the EIS. DATES: A public mailing that outlines the project timeline and public involvement opportunities (Schedule of Proposed Actions) was distributed in January 2006. Individuals interested in receiving a scoping package should contact us at the address listed in the addresses section within 30 days of the publication of this Notice of Intent (NOI). Opportunities for comment are available throughout the process. Comments on this project would be most helpful if received by February 17, 2006. Additional opportunities for comment will be provided after release of the Draft Environmental Impact Statement (DEIS). The DEIS is projected to be filed with the Environmental Protection Agency

(EPA)in April 2007 and will begin a 45-day comment period. The Final Environmental Impact Statement

(FEIS)and Record of Decision are anticipated to be published in October 2007. ADDRESSES: Please send written comments to Wrangell Ranger District, Attn: Navy EIS, P.O. Box 51, Wrangell, AK 99929. Electronic comments can be e-mailed to *comments-alaska-tongass-wrangell@fs.fed.us.* Please include the word “Navy” in the subject line. FOR FURTHER INFORMATION CONTACT: Jamie Roberts, Planning Team Leader, or Mark Hummel, District Ranger, Wrangell Ranger District, P.O. Box 51, Wrangell, AK 99929, telephone

(907)874-2323. SUPPLEMENTARY INFORMATION: The Navy project area is located on central Etolin Island approximately 22 air miles southwest of Wrangell, Alaska. The project area is within portions of Value Comparison Units #464, 465, 466, 467 and 468. Portions of two Inventoried Roadless Areas, North Etolin #232 and Mosman #233 as identified in the Forest Plan SEIS, are located within the project area. Timber harvest and road building is proposed within the Inventoried Roadless Areas. The project area includes three small old-growth reserves (Mosman, Quiet and Burnett) as designated in the Forest Plan. A Forest Plan amendment would be required if a decision is made to modify any old-growth reserve. The Forest Supervisor will decide if and how much timber harvest and road building will occur within the project area, as well as whether to modify the existing small old-growth reserves. The decision will be based on the information that is disclosed in the EIS. The Forest Supervisor will consider comments, responses, the disclosure of environmental effects, and applicable laws, regulations, and policies in making the decision. The rationale for the decision will be included in the Record of Decision. *Purpose and Need for Action:* The purpose and need for the Navy timber Sale is:

(1)To manage suitable lands to achieve 1997 Forest Plan goals and objectives in order to reach the desired future conditions prescribed for the Land Use Designations;

(2)to assist in providing a continuous wood supply to meet society's needs;

(3)to contribute to the job market and the overall economy of southeast Alaska; and

(4)to harvest 50-80 million board feet of timber. *Public participation:* Public participation has been an integral component of the study process and will continue to be especially important at several points during the analysis. The Forest Service will seek information, comments and assistance from tribal governments, federal, state and local agencies, individuals and organizations that may be interested in or affected by the proposed activities. Written scoping comments have been solicited through a preliminary scoping package that was sent to persons on the project mailing list in November 2005. Additional written scoping comments are being solicited through a scoping package that will be sent to the project mailing list concurrent with the publication of this NOI. For the Forest Service to best use the scoping input, comments should be received by February 17, 2006. If comments have already been submitted during the November 2005 preliminary scoping period, they are being considered and it is not necessary to re-submit the same comments. Based on the results of scoping and the resource concerns and capabilities within the project area, alternatives including a no-action alternative will be developed for the DEIS. Subsistence hearings, as provided for in Title VIII, Section 810 of the Alaska National interest Lands Conservation Act (ANILCA), will be provided, if necessary, during the comment period on the DEIS. *Electronic Filing Address:* Electronic comments can be emailed to *comments-alaska-tongass-wrangell@fs.fed.us.* Please include the word “Navy” in the subject line. *Preliminary Issues:* Tentative issues identified for analysis in the EIS include the potential effects of the project on and the relationship of the project to:

(1)Timber sale economics,

(2)conflicts with permitted outfitter/guides and other users of this area,

(3)conflicts with Special Use permit holders in the vicinity of this area,

(4)proximity to the South Etolin Wilderness area,

(5)timber harvest and road building in Inventoried Roadless Areas,

(6)economic trade-offs, and

(7)modification of small old-growth reserves. *Range of Alternatives:* The range of alternatives that will be developed to respond to the significant issues, besides no action, could range from 15-120 million board feet. *Draft environmental Impact Statement:* A Draft Environmental Impact Statement

(DEIS)will be prepared for comment. The comment period on the DEIS will be 45 days from the date the Environmental Protection Agency publishes the Notice of Availability in the Federal Register. The Forest Service believes, at this early stage, it is important to give reviewers notice of several court rulings related to public participation in the environmental review process. First, reviewers of Draft Environmental Impact Statements must structure their participation in the environmental review of the proposal so that it is meaningful and alerts an agency to the reviewer's position and contentions. *Vermont Yankee Nuclear Power Corp.* v. *NRDC* , 435 U.S. 519, 553 (1978). Also, environmental objections that could be raised at the DEIS stage but that are not raised until after completion of the Final Environmental Impact Statement

(FEIS)may be waived or dismissed by the courts. *City of Angoon* v. *Hodel* , 803 F.2d 1016, 1022 (9th cir. 1986) and *Wisconsin Heritages, Inc.* v. *Harris* , 490 F. Supp. 1334, 1338 (E.D. Wis. 1980). Because of these court rulings, it is very important that those interested in this proposed action participate by the close of the comment period so that substantive comments and objections are made available to the Forest Service at a time when it can meaningfully consider them and respond to them in the FEIS. To assist the Forest Service in identifying and considering issues and concerns on the proposed action, comments on the DEIS should be as specific as possible. It is also helpful if comments refer to specific pages or chapters of the draft statement. Comments may also address the adequacy of the DEIS or the merits of the alternatives formulated and discussed in the statement. Reviewers may wish to refer to the Council on Environmental Quality Regulations for implementing the procedural provisions of the National Environmental Policy Act at 40 CFR 1503.3 in addressing these points. Comments received, including the names and addresses of those who comment, will be considered part of the public record on this proposal and will be available for public inspection. *Responsible Official:* Forrest Cole, Forest Supervisor, Tongass National Forest, Federal Building, Ketchikan, Alaska 99901, is the responsible official. The responsible official will consider comments, responses, the disclosure of environmental effects, and applicable laws, regulations, and policies in making the decision. The rationale for the decision will be included in the Record of Decision. (Authority: 40 CFR 1501.7 and 1508.22; Forest Service Handbook 1909.15, Section 21) Dennis Neill, Acting Forest Supervisor. [FR Doc. 06-555 Filed 1-20-06 8:45am]

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