Notices. Notice of proposed priority for State Personnel Development Grants Program

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BILLING CODE 4000-01-P DEPARTMENT OF EDUCATION Office of Special Education Programs; State Personnel Development Grants Program AGENCY: Office of Special Education and Rehabilitative Services, Department of Education. ACTION: Notice of proposed priority for State Personnel Development Grants Program. SUMMARY: The Assistant Secretary for Special Education and Rehabilitative Services proposes a funding priority for the Office of Special Education Programs—State Personnel Development Grants Program authorized under the Individuals with Disabilities Education Act (IDEA). This priority may be used for competitions in fiscal year

(FY)2006 and later years. We take this action to focus attention on an identified national need to assist State educational agencies

(SEAs)improving their systems for personnel preparation and professional development in early intervention, educational, and transition services in order to improve results for children with disabilities; to promote the professional development of personnel as defined in section 651(b) of the IDEA to ensure that they have the knowledge and skills to deliver scientifically based instruction; and to recruit, and retain highly qualified special education teachers in accordance with section 602(10) and section 612(a)(14) of the IDEA. DATES: We must receive your comments on or before April 3, 2006. ADDRESSES: Address all comments about this proposed priority to Larry Wexler, U.S. Department of Education, 400 Maryland Avenue, SW., Room 4019, Potomac Center Plaza, Washington, DC 20204-2700. If you prefer to send your comments through the Internet, use the following address: *larry.wexler@ed.gov.* FOR FURTHER INFORMATION CONTACT: Larry Wexler. Telephone:

(202)245-7571. If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service

(FRS)at 1-800-877-8339. Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT . SUPPLEMENTARY INFORMATION: Invitation To Comment We invite you to submit comments regarding this proposed priority. We invite you to assist us in complying with the specific requirements of Executive Order 12866 and its overall requirement of reducing regulatory burden that might result from this proposed priority. Please let us know of any further opportunities we should take to reduce potential costs or increase potential benefits while preserving the effective and efficient administration of the program. During and after the comment period, you may inspect all public comments about this proposed priority in room 4019, 550 12th Street, SW., Potomac Center Plaza, Washington, DC, between the hours of 8:30 a.m. and 4 p.m., eastern time, Monday through Friday of each week except Federal holidays. Assistance to Individuals With Disabilities in Reviewing the Rulemaking Record On request, we will supply an appropriate aid, such as a reader or print magnifier, to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for this proposed priority. If you want to schedule an appointment for this type of aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT . We will announce the final priority in a notice in the **Federal Register** . We will determine the final priority after considering responses to this notice and other information available to the Department. This notice does not preclude us from proposing or funding additional priorities, subject to meeting applicable rulemaking requirements. Note: This notice does not solicit applications. In any year in which we choose to use this proposed priority, we invite applications through a notice in the **Federal Register** . When inviting applications we designate the priority as absolute, competitive preference, or invitational. The effect of each type of priority follows: *Absolute priority:* Under an absolute priority, we consider only applications that meet the priority (34 CFR 75.105(c)(3)). *Competitive preference priority:* Under a competitive preference priority, we give competitive preference to an application by either

(1)awarding additional points, depending on how well or the extent to which the application meets the competitive priority (34 CFR 75.105(c)(2)(i)); or

(2)selecting an application that meets the competitive priority over an application of comparable merit that does not meet the priority (34 CFR 75.105(c)(2)(ii)). *Invitational priority:* Under an invitational priority, we are particularly interested in applications that meet the invitational priority. However, we do not give an application that meets the invitational priority a competitive or absolute preference over other applications (34 CFR 75.105(c)(1)). Proposed Priority State Personnel Development Grants

(SPDG)Background of Proposed Priority Research shows that teacher quality is strongly correlated with student academic achievement and that effective teachers are key to improving student outcomes. High quality, comprehensive professional development programs are essential to ensuring that personnel responsible for providing early intervention, education, and transition services to children with disabilities possess the knowledge and skills necessary to address their particular needs. The Department also believes that Federal support provided under the IDEA should be targeted to those educational programs, activities, and strategies that have been demonstrated through rigorous scientific research to be effective and have a proven track record of success. Many schools have experimented with lessons and materials that have proven to be ineffective at the expense of their students. The State Personnel Development Grants program provides a vehicle for helping States ensure that SEAs and LEAs take steps to recruit, hire, and retain highly qualified special education teachers and that the professional development of special education teachers and other personnel is aimed at providing them with the knowledge and skills to deliver scientifically based instruction that is likely to improve outcomes for children with disabilities. Proposed Priority The Assistant Secretary proposes a priority to assist SEAs in reforming and improving their personnel preparation and professional development systems for teachers, principals, administrators, related services personnel, paraprofessionals, and early intervention personnel. The intent of the priority is to improve educational results for children with disabilities through the delivery of high quality instruction and the recruitment, hiring, and retention of highly qualified special education teachers. In order to meet this priority an applicant must demonstrate that the project for which it seeks funding:

(1)Provides professional development activities that improve the knowledge and skills of personnel as defined in section 651(b) of the IDEA in delivering scientifically based instruction to meet the needs of, and improve the performance and achievement of infants, toddlers, preschoolers, and children with disabilities;

(2)implements practices to sustain the knowledge and skills of personnel who have received training in scientifically based instruction; and

(3)implements strategies that are effective in promoting the recruitment, hiring, and retention of highly qualified special education teachers in accordance with section 602(10) and section 612(a)(14) of the IDEA. Projects funded under this priority also must:

(a)Budget for a three-day Project Directors' meeting in Washington, DC during each year of the project;

(b)Budget $4,000 annually for support of the State Personnel Development Program Web site currently administered by the University of Oregon ( *http://www.signetwork.org* ); and

(c)If a project receiving assistance under this program authority maintains a Web site, include relevant information and documents in a form that meets a government or industry-recognized standard for accessibility. Executive Order 12866 This notice of proposed priority has been reviewed in accordance with Executive Order 12866. Under the terms of the order, we have assessed the potential costs and benefits of this regulatory action. The potential costs associated with this notice are those resulting from statutory requirements and those we have determined as necessary for administering this program effectively and efficiently. In assessing the potential costs and benefits—both quantitative and qualitative—of the actions proposed in this notice, we have determined that the benefits of the proposed priority justify the costs. We have also determined that this regulatory action does not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions. Intergovernmental Review This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance. This document provides early notification of our specific plans and actions for this program. Electronic Access to This Document You may view this document, as well as all other Department of Education documents published in the **Federal Register** , in text or Adobe Portable Document Format

(PDF)on the Internet at the following site: *http://www.ed.gov/news/fedregister.* To use PDF you must have Adobe Acrobat Reader, which is available free at this site. If you have questions about using PDF, call the U.S. Government Printing Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC, area at

(202)512-1530. Note: The official version of this document is the document published in the **Federal Register** . Free Internet access to the official edition of the **Federal Register** and the Code of Federal Regulations is available on GPO Access at: *http://www.gpoaccess.gov/nara/index.htm.* Program Authority: 20 U.S.C. 1451-1455. Dated: February 27, 2006. John H. Hager, Assistant Secretary for Special Education and Rehabilitative Services. [FR Doc. E6-3006 Filed 3-1-06; 8:45 am] BILLING CODE 4000-01-P DEPARTMENT OF EDUCATION Office of Special Education and Rehabilitative Services; Overview Information; Technical Assistance and Dissemination To Improve Services and Results for Children With Disabilities—Model Demonstration Centers on Implementing Tertiary Level Behavioral Interventions Within a School-Wide Model for Children Who Are Not Responsive to Universal and Secondary Level Interventions; Notice Inviting Applications for New Awards for Fiscal Year

(FY)2006 *Catalog of Federal Domestic Assistance

(CFDA)Number:* 84.326M. *Dates: Applications Available:* March 2, 2006. *Deadline for Transmittal of Applications:* April 17, 2006. *Deadline for Intergovernmental Review:* June 16, 2006. *Eligible Applicants:* Institutions of higher education (IHEs). *Estimated Available Funds:* $1,200,000. *Estimated Average Size of Award:* $400,000. *Maximum Award:* We will reject any application that proposes a budget exceeding $400,000 for a single budget period of 12 months. The Assistant Secretary for Special Education and Rehabilitative Services may change the maximum amount through a notice published in the **Federal Register** . *Estimated Number of Awards:* 3. Note: The Department is not bound by any estimates in this notice. *Project Period:* Up to 48 months. Full Text of Announcement I. Funding Opportunity Description *Purpose of Program:* This program promotes academic achievement and improves results for children with disabilities by supporting technical assistance, model demonstration projects, dissemination of useful information, and implementation activities that are supported by scientifically based research. *Priority:* In accordance with 34 CFR 75.105(b)(2)(v), this priority is from allowable activities specified in the statute (see sections 663 and 681(d) of the Individuals with Disabilities Education Act (IDEA)). *Absolute Priority:* For FY 2006 this priority is an absolute priority. Under 34 CFR 75.105(c)(3), we consider only applications that meet this priority. This priority is: Model Demonstration Centers on Implementing Tertiary Level Behavioral Interventions within a School-Wide Model for Children who are Not Responsive to Universal and Secondary Level Interventions. Background During the last several years, increased attention and an emerging research base have focused on a response to intervention model that identifies and addresses the needs of children who do not respond sufficiently to high quality class-wide academic instruction and remedial evidence-based interventions. This response to intervention model, while gaining attention with respect to students experiencing academic challenges, is also applicable to students experiencing behavioral challenges. Despite high quality class-wide behavioral strategies and remedial interventions, some children with behavioral challenges fail to make sufficient progress and require more individualized and intensive supports to be successful in their educational program. The school setting is one of the most important settings for behavioral prevention and intervention programs and has been described as the ideal setting for these programs due to compulsory attendance and sustained contact with youth during the early years of development (Loeber & Farrington, 1998, Walker and Shinn, 2002). School-wide behavioral programs have received increased attention since the 1997 amendments to IDEA introduced the concept of “positive behavioral interventions and supports.” The three-tiered prevention model, originally adapted from mental health literature, has emerged as the prevailing model for school-wide implementation of behavioral prevention and intervention programs. Components of the model include:

(1)Universal interventions for all students;

(2)secondary interventions for smaller groups of students who may require some additional remedial interventions in order to be successful in their educational program; and

(3)tertiary level interventions for those students who, despite a high quality universal program and subsequent evidence-based secondary interventions, fail to make substantial progress without the implementation of individualized, intensive interventions. Assessment of progress throughout the multi-level tiers of support is based on a student's response to interventions. Currently, approximately one percent of all children who receive services under IDEA are children with emotional disturbances (ED). Students with ED are identified later than students with other disabilities, with the earliest identifications generally occurring at age nine (National Longitudinal Transition Study of Youth II). With evidence documenting the reduced effects of interventions that are implemented after antisocial and aggressive behaviors have persisted, early intervention is critical to mitigate and possibly reverse these negative behavioral trajectories (Webster-Stratton & Hammond, 1997 and Campbell, 1995). Young children who demonstrate significant, intractable, behavioral challenges and who do not respond sufficiently to universal or secondary interventions will need comprehensive tertiary level interventions to prevent extremely bleak outcomes both for the individual and society as a whole (Sprague, *et al.* , 2001). In the 1987 National Longitudinal Transition Study of Youth, students with ED had the poorest outcomes of all students with disabilities. Unfortunately, these outcomes persisted in a follow-up study conducted ten years later (SRI, 2004). Negative outcomes included: Poor grades, dropping out, arrest, teenage pregnancy, and unemployment. Students with ED, in spite of their average to above average intelligence, are significantly more likely than students without ED to experience academic problems. These academic problems may become more significant for children who do not respond to universal efforts and secondary interventions and, due to their behavior problems, these children are frequently removed from instructional environments. For these students with intractable behavioral challenges, tertiary level interventions are critical to enable them to participate in the educational system. Tertiary interventions are designed to focus on the needs of individuals who exhibit patterns of significant problem behavior that is dangerous or highly disruptive, impedes learning, or results in social or educational exclusion. Tertiary interventions are most effective when they are nested within a multi-tiered school-wide model. The goal of tertiary interventions is to diminish problem behavior and to increase the student's adaptive skills, access to instruction, and opportunities for an enhanced quality of life. Due to the complexity and intensity of behaviors targeted for intervention at this level and based on the individualized nature of the interventions implemented, a functional behavior assessment

(FBA)is a necessary tool to assist educators in determining the most appropriate interventions designed to meet the student's specific needs. An FBA is an evidence-based method of assessment that uses direct observation to develop hypothesis statements for behavior support plans and uses a comprehensive approach to identify antecedents and consequences that will help control problem behavior and to develop appropriate interventions (Horner, 1994). It provides data regarding the student's behavior and potential intervention strategies and assists educators in focusing on modifications that can be made to the environment to effect change in the student (Crone, Horner, & Hawken, 2004). Behavioral interventions based on FBAs are also three times more likely than those not based on FBAs to be effective in reducing problem behaviors and encouraging more appropriate behaviors (Carr, Turnbull, et al., 2001). Implementation of interventions that are effective in reducing problem behaviors likely will increase the student's exposure to instructional environments and result in improved achievement and more positive life outcomes. Priority The purpose of this priority is to support three

(3)centers, each of which is to develop a behavioral model that incorporates scientific evidence-based, tertiary level interventions within a school-wide behavior model for students in elementary and middle school, in regular and special education classrooms. Each Center's model must apply and test research findings in typical settings where children with disabilities receive services to determine the services' usefulness, effectiveness, and general applicability to these typical settings. To meet this priority, a Center must design and implement a model that:

(1)Targets the group of children who have not been responsive to universal behavioral strategies or secondary evidence-based interventions that have been shown to be effective based on scientific research and who require intensive and individualized behavioral interventions at the tertiary level;

(2)is based on evidence-based practices, strategies, and interventions;

(3)includes a process for the collection, analysis, and use of data for decision making; and

(4)includes a professional development strategy. A Center's model must have the same critical components across different school levels but these components may be implemented slightly differently based on the age of the students. Each Center must establish its model in at least three sites. A site must consist of, at a minimum, one elementary school and one middle school, and may include a pre-school or high school setting. In order to be considered for funding under this priority, an IHE must demonstrate that the key staff responsible for implementing the model have expertise in the full continuum of school-wide behavioral interventions—universal, secondary, and tertiary—which may be demonstrated by having refereed publications on this topic or federally supported grants addressing this area. Key staff must also have demonstrated success implementing behavioral interventions and models in typical settings. In addition, the IHE must establish a partnership with a local educational agency

(LEA)to facilitate the implementation of the model in school settings and increase the likelihood that school personnel will develop sufficient expertise in order to sustain the model after project completion. Each Center must coordinate with the Model Demonstration Coordination Center (MDCC), a separate center funded by the Department's Office of Special Education Programs

(OSEP)that is responsible for coordinating implementation and analyzing data to determine the effectiveness of the tertiary level intervention models. In 2005, OSEP awarded funds, through a contract, for the establishment of the MDCC. The MDCC is developing a data coordination plan and cross site data collection instruments, and will generate common evaluation questions, synthesize and analyze data collection, monitor fidelity of implementation, ensure reliability of data, and foster dissemination of information. The start date for the projects funded under this competition is expected to be January 1, 2007. A meeting of all Centers funded under this priority as well as the MDCC will be held one month after the awards are made. The purpose of this meeting is to review and, as necessary, modify proposals and discuss collaboration among the Centers and the MDCC. An applicant must describe, in its application—

(a)The sites where the model will be implemented and the methods used to recruit and select sites, including documentation of the implementation and fidelity of evidence-based universal and secondary practices and interventions and a reliable, effective process for determining which students have not responded to universal and secondary interventions and therefore require tertiary level interventions;

(b)The proposed model and the supporting evidence for the model as a whole or for the critical components that are included within the model; and

(c)The knowledge, experience, and capabilities of the key staff who will be responsible for the implementation of tertiary level interventions and the model. To meet the requirements of this priority, each Center, at a minimum, must—

(1)Implement a model and a data collection plan that includes: a selection or screening procedure for children who are not responsive to universal or secondary level interventions, a method for linking interventions to problem behaviors, a detailed description of critical elements of the model, a process for collecting, evaluating and formulating decisions based on individual student and systems ( *i.e.* , class, school, district) data, and a description of the system variables required to implement and sustain the model;

(2)Provide and document initial and continuing professional development to administrators, regular educators, and special educators on the use of tertiary level interventions nested within a school-wide behavior model;

(3)Collect data related to the fidelity of the implementation of the model and describe the methods of fidelity evaluation, as well as how these methods relate to continuing professional development and feedback provided to teachers and administrators;

(4)Identify methods for effectively increasing communication and collaboration among parents, community agencies, and school/Center staff;

(5)Collaborate with the other Centers funded under this competition and the MDCC in order to determine a plan for evaluating the impact of these models on children's behavior and academic progress and outcomes;

(6)Develop regular communication with OSEP's National Center on Positive Behavioral Supports and OSEP's other funded centers, as appropriate, to share information regarding topics such as successful strategies and less successful approaches for implementing behavioral interventions in schools;

(7)Develop strategies for the dissemination of implementation information, if the model proves to be successful, to specific audiences, including teachers, families, administrators, policymakers, and researchers. These dissemination strategies must involve collaboration with other technical assistance providers including parent centers funded by OSEP, organizations, and researchers;

(8)Prior to developing any new product, whether paper or electronic, submit for approval a proposal describing the content and purpose of the product to the Project Officer to be designated by OSEP and the document review board of OSEP's Dissemination Center;

(9)Budget for the Center's project director to attend a three-day Project Directors' meeting in Washington, DC during each year of the project; and

(10)If a Web site is maintained, format the information and documents on the Web site in a manner that meets a government or industry-recognized standard for accessibility. *Waiver of Proposed Rulemaking:* Under the Administrative Procedure Act

(APA)(5 U.S.C. 553), the Department generally offers interested parties the opportunity to comment on a proposed priority. However, section 681(d) of IDEA makes the public comment requirements under the APA inapplicable to the priority in this notice. *Program Authority:* 20 U.S.C. 1463 and 1481(d). *Applicable Regulations:* The Education Department General Administrative Regulations (EDGAR) in 34 CFR parts 74, 75, 77, 79, 80, 81, 82, 84, 85, 86, 97, 98, and 99. Note: The regulations in 34 CFR part 79 apply to all applicants except federally recognized Indian tribes. II. Award Information *Type of Award:* Cooperative agreement. *Estimated Available Funds:* $1,200,000. *Estimated Average Size of Award:* $400,000. *Maximum Award:* We will reject any application that proposes a budget exceeding $400,000 for a single budget period of 12 months. The Assistant Secretary for Special Education and Rehabilitative Services may change the maximum amount through a notice published in the **Federal Register** . *Estimated Number of Awards:* 3. Note: The Department is not bound by any estimates in this notice. *Project Period:* Up to 48 months. III. Eligibility Information 1. *Eligible Applicants:* IHEs. 2. *Cost Sharing or Matching:* This competition does not involve cost sharing or matching. 3. *Other: General Requirements* —(a) The projects funded under this competition must make positive efforts to employ and advance in employment qualified individuals with disabilities (see section 606 of IDEA).

(b)Applicants and grant recipients funded under this competition must involve individuals with disabilities or parents of individuals with disabilities ages birth through 26 in planning, implementing, and evaluating the projects (see section 682(a)(1)(A) of IDEA). IV. Application and Submission Information 1. *Address to Request Application Package:* Education Publications Center (ED Pubs), P.O. Box 1398, Jessup, MD 20794-1398. Telephone (toll free): 1-877-433-7827. FAX:

(301)470-1244. If you use a telecommunications device for the deaf (TDD), you may call (toll free): 1-877-576-7734. You may also contact ED Pubs at its Web site: *http://www.ed.gov/pubs/edpubs.html* or you may contact ED Pubs at its e-mail address: *edpubs@inet.ed.gov.* If you request an application from ED Pubs, be sure to identify this competition as follows: CFDA Number 84.326M. Individuals with disabilities may obtain a copy of the application package in an alternative format ( *e.g.* , Braille, large print, audiotape, or computer diskette) by contacting the Grants and Contracts Services Team listed under FOR FURTHER INFORMATION CONTACT in section VII of this notice. 2. *Content and Form of Application Submission:* Requirements concerning the content of an application, together with the forms you must submit, are in the application package for this competition. *Page Limit:* The application narrative (Part III of the application) is where you, the applicant, address the selection criteria that reviewers use to evaluate your application. You must limit Part III to the equivalent of no more than 70 pages, using the following standards: • A “page” is 8.5″ x 11″, on one side only, with 1″ margins at the top, bottom, and both sides. • Double space (no more than three lines per vertical inch) all text in the application narrative, including titles, headings, footnotes, quotations, references, and captions, as well as all text in charts, tables, figures, and graphs. • Use a font that is either 12 point or larger or no smaller than 10 pitch (characters per inch). The page limit does not apply to Part I, the cover sheet; Part II, the budget section, including the narrative budget justification; Part IV, the assurances and certifications; the one-page abstract, the resumes, the bibliography, the references, or the letters of support. However, you must include all of the application narrative in Part III. We will reject your application if— • You apply these standards and exceed the page limit; or • You apply other standards and exceed the equivalent of the page limit. 3. *Submission Dates and Times: Applications Available:* March 2, 2006. *Deadline for Transmittal of Applications:* April 17, 2006. Applications for grants under this competition may be submitted electronically using the Grants.gov Apply site (Grants.gov), or in paper format by mail or hand delivery. For information (including dates and times) about how to submit your application electronically, or by mail or hand delivery, please refer to section IV. 6. *Other Submission Requirements* in this notice. We do not consider an application that does not comply with the deadline requirements. *Deadline for Intergovernmental Review:* June 16, 2006. 4. *Intergovernmental Review:* This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. Information about Intergovernmental Review of Federal Programs under Executive Order 12372 is in the application package for this competition. 5. *Funding Restrictions:* We reference regulations outlining funding restrictions in the *Applicable Regulations* section of this notice. 6. *Other Submission Requirements:* Applications for grants under this competition may be submitted electronically or in paper format by mail or hand delivery. a. *Electronic Submission of Applications.* We have been accepting applications electronically through the Department's e-Application system since FY 2000. In order to expand on those efforts and comply with the President's Management Agenda, we are continuing to participate as a partner in the new government wide Grants.gov Apply site in FY 2006. The Model Demonstration Centers on Implementing Tertiary Level Behavioral Interventions within a School-Wide Model for Children who are Not Responsive to Universal and Secondary Level Interventions—CFDA Number 84.326M is one of the competitions included in this project. We request your participation in Grants.gov. If you choose to submit your application electronically, you must use the Grants.gov Apply site at *http://www.Grants.gov.* Through this site, you will be able to download a copy of the application package, complete it offline, and then upload and submit your application. You may not e-mail an electronic copy of a grant application to us. You may access the electronic grant application for The Model Demonstration Centers on Implementing Tertiary Level Behavioral Interventions within a School-Wide Model for Children who are Not Responsive to Universal and Secondary Level Interventions at: *http://www.grants.gov.* You must search for the downloadable application package for this program by the CFDA number. Do not include the CFDA number's alpha suffix in your search. Please note the following: • Your participation in Grants.gov is voluntary. • When you enter the Grants.gov site, you will find information about submitting an application electronically through the site, as well as the hours of operation. • Applications received by Grants.gov are time and date stamped. Your application must be fully uploaded and submitted, and must be date/time stamped by the Grants.gov system no later than 4:30 p.m., Washington, DC time, on the application deadline date. Except as otherwise noted in this section, we will not consider your application if it is date/time stamped by the Grants.gov system later than 4:30 p.m., Washington, DC time, on the application deadline date. When we retrieve your application from Grants.gov, we will notify you if we are rejecting your application because it was date/time stamped by the Grants.gov system after 4:30 p.m., Washington, DC time, on the application deadline date. • The amount of time it can take to upload an application will vary depending on a variety of factors including the size of the application and the speed of your Internet connection. Therefore, we strongly recommend that you do not wait until the application deadline date to begin the application process through Grants.gov. • You should review and follow the Education Submission Procedures for submitting an application through Grants.gov that are included in the application package for this competition to ensure that you submit your application in a timely manner to the Grants.gov system. You can also find the Education Submission Procedures pertaining to Grants.gov at *http://e-Grants.ed.gov/help/GrantsgovSubmissionProcedures.pdf.* • To submit your application via Grants.gov, you must complete all of the steps in the Grants.gov registration process (see *http://www.Grants.gov/GetStarted* ). These steps include

(1)registering your organization,

(2)registering yourself as an Authorized Organization Representative (AOR), and

(3)getting authorized as an AOR by your organization. Details on these steps are outlined in the Grants.gov 3-Step Registration Guide (see *http://www.grants.gov/assets/GrantsgovCoBrandBrochure8X11.pdf* ). You also must provide on your application the same D-U-N-S Number used with this registration. Please note that the registration process may take five or more business days to complete, and you must have completed all registration steps to allow you to successfully submit an application via Grants.gov. • You will not receive additional point value because you submit your application in electronic format, nor will we penalize you if you submit your application in paper format. • You may submit all documents electronically, including all information typically included on the Application for Federal Education Assistance (ED 424), Budget Information—Non-Construction Programs (ED 524), and all necessary assurances and certifications. If you choose to submit your application electronically, you must attach any narrative sections of your application as files in a .DOC (document), .RTF (rich text), or .PDF (Portable Document) format. If you upload a file type other than the three file types specified above or submit a password protected file, we will not review that material. • Your electronic application must comply with any page limit requirements described in this notice. • After you electronically submit your application, you will receive an automatic acknowledgment from Grants.gov that contains a Grants.gov tracking number. The Department will retrieve your application from Grants.gov and send you a second confirmation by e-mail that will include a PR/Award number (an ED-specified identifying number unique to your application). • We may request that you provide us original signatures on forms at a later date. Application Deadline Date Extension in Case of System Unavailability If you are prevented from electronically submitting your application on the application deadline date because of technical problems with the Grants.gov system, we will grant you an extension until 4:30 p.m., Washington, DC time, the following business day to enable you to transmit your application electronically, or by hand delivery. You also may mail your application by following the mailing instructions as described elsewhere in this notice. If you submit an application after 4:30 p.m., Washington, DC time, on the deadline date, please contact the person listed elsewhere in this notice under FOR FURTHER INFORMATION CONTACT , and provide an explanation of the technical problem you experienced with Grants.gov, along with the Grants.gov Support Desk Case Number (if available). We will accept your application if we can confirm that a technical problem occurred with the Grants.gov system and that that problem affected your ability to submit your application by 4:30 p.m., Washington, DC time, on the application deadline date. The Department will contact you after a determination is made on whether your application will be accepted. Note: Extensions referred to in this section apply only to the unavailability of or technical problems with the Grants.gov system. We will not grant you an extension if you failed to fully register to submit your application to Grants.gov before the deadline date and time or if the technical problem you experienced is unrelated to the Grants.gov system. b. *Submission of Paper Applications by Mail.* If you submit your application in paper format by mail (through the U.S. Postal Service or a commercial carrier), you must mail the original and two copies of your application, on or before the application deadline date, to the Department at the applicable following address: *By mail through the U.S. Postal Service:* U.S. Department of Education, Application Control Center, Attention: (CFDA Number 84.326M), 400 Maryland Avenue, SW., Washington, DC 20202-4260; or *By mail through a commercial carrier:* U.S. Department of Education, Application Control Center—Stop 4260, Attention: (CFDA Number 84.326M), 7100 Old Landover Road, Landover, MD 20785-1506. Regardless of which address you use, you must show proof of mailing consisting of one of the following:

(1)A legibly dated U.S. Postal Service postmark,

(2)A legible mail receipt with the date of mailing stamped by the U.S. Postal Service,

(3)A dated shipping label, invoice, or receipt from a commercial carrier, or

(4)Any other proof of mailing acceptable to the Secretary of the U.S. Department of Education. If you mail your application through the U.S. Postal Service, we do not accept either of the following as proof of mailing:

(1)A private metered postmark, or

(2)A mail receipt that is not dated by the U.S. Postal Service. If your application is postmarked after the application deadline date, we will not consider your application. Note: The U.S. Postal Service does not uniformly provide a dated postmark. Before relying on this method, you should check with your local post office. c. *Submission of Paper Applications by Hand Delivery* . If you submit your application in paper format by hand delivery, you (or a courier service) must deliver the original and two copies of your application by hand, on or before the application deadline date, to the Department at the following address: U.S. Department of Education, Application Control Center, Attention: (CFDA Number 84.326M), 550 12th Street, SW., Room 7041, Potomac Center Plaza, Washington, DC 20202-4260. The Application Control Center accepts hand deliveries daily between 8 a.m. and 4:30 p.m., Washington, DC time, except Saturdays, Sundays and Federal holidays. *Note for Mail or Hand Delivery of Paper Applications:* If you mail or hand deliver your application to the Department:

(1)You must indicate on the envelope and—if not provided by the Department—in Item 4 of ED 424 the CFDA number—and suffix letter, if any—of the competition under which you are submitting your application.

(2)The Application Control Center will mail a grant application receipt acknowledgment to you. If you do not receive the grant application receipt acknowledgment within 15 business days from the application deadline date, you should call the U.S. Department of Education Application Control Center at

(202)245-6288. V. Application Review Information *Selection Criteria:* The selection criteria for this competition are from 34 CFR 75.210 and are listed in the application package. VI. Award Administration Information 1. *Award Notices:* If your application is successful, we notify your U.S. Representative and U.S. Senators and send you a Grant Award Notification (GAN). We may also notify you informally. If your application is not evaluated or not selected for funding, we notify you. 2. *Administrative and National Policy Requirements:* We identify administrative and national policy requirements in the application package and reference these and other requirements in the *Applicable Regulations* section of this notice. We reference the regulations outlining the terms and conditions of an award in the *Applicable Regulations* section of this notice and include these and other specific conditions in the GAN. The GAN also incorporates your approved application as part of your binding commitments under the grant. 3. *Reporting:* At the end of your project period, you must submit a final performance report, including financial information, as directed by the Secretary. If you receive a multi-year award, you must submit an annual performance report that provides the most current performance and financial expenditure information as specified by the Secretary in 34 CFR 75.118. 4. *Performance Measures:* Under the Government Performance and Results Act (GPRA), the Department has developed measures that will yield information on various aspects of the Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities program. These measures focus on: The extent to which projects provide high quality products and services, the relevance of project products and services to educational and early intervention policy and practice, and the use of products and services to improve educational and early intervention policy and practice. We will notify grantees if they will be required to provide any information related to these measures. Grantees will also be required to report information on their projects' performance in annual reports to the Department (34 CFR 75.590). VII. Agency Contact *For Further Information Contact:* Renee Bradley, U.S. Department of Education, 400 Maryland Avenue, SW., room 4105, Potomac Center Plaza, Washington, DC 20202-2550. Telephone:

(202)245-7277. If you use a telecommunications device for the deaf (TDD), you may call the Federal Relay Service

(FRS)at 1-800-877-8339. Individuals with disabilities may obtain this document in an alternative format ( *e.g.* , Braille, large print, audiotape, or computer diskette) on request by contacting the following office: The Grants and Contracts Services Team, U.S. Department of Education, 400 Maryland Avenue, SW., Potomac Center Plaza, Washington, DC 20202-2550. Telephone:

(202)245-7363. VIII. Other Information *Electronic Access to This Document:* You may view this document, as well as all other documents of this Department published in the **Federal Register** , in text or Adobe Portable Document Format

(202)512-1530. Note: The official version of this document is the document published in the **Federal Register** . Free Internet access to the official edition of the **Federal Register** and the Code of Federal Regulations is available on GPO Access at: *http://www.gpoaccess.gov/nara/index.html.* Dated: February 27, 2006. John H. Hager, Assistant Secretary for Special Education and Rehabilitative Services. [FR Doc. E6-3012 Filed 3-1-06; 8:45 am] BILLING CODE 4000-01-P DEPARTMENT OF ENERGY Environmental Management Site-Specific Advisory Board, Savannah River AGENCY: Department of Energy. ACTION: Notice of open meeting. SUMMARY: This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EMSSAB), Savannah River. The Federal Advisory Committee Act (Pub. L. No. 92-463, 86 Stat. 770) requires that public notice of this meeting be announced in the **Federal Register** . DATES: Monday, March 27, 2006, 1 p.m.-5:15 p.m., Tuesday, March 28, 2006, 8:30 a.m.-4 p.m. ADDRESSES: Columbia Marriott, 1200 Hampton Street, Columbia, SC 29201. FOR FURTHER INFORMATION CONTACT: Gerri Flemming, Closure Project Office, Department of Energy Savannah River Operations Office, P.O. Box A, Aiken, SC, 29802; Phone:

(803)952-7886. SUPPLEMENTARY INFORMATION: *Purpose of the Board:* The purpose of the Board is to make recommendations to DOE in the areas of environmental restoration, waste management, and related activities. Tentative Agenda Monday, March 27, 2006: 1 p.m.—Combined Committee Session 5:15 p.m.—Adjourn Tuesday, March 28, 2006: 8:30 a.m.—Approval of Minutes, Agency Updates 9 a.m.—Public Comment Session 9:15 a.m.—Chair and Facilitator Update 9:45 a.m.—Nuclear Materials Committee Report 10:45 a.m.—Strategic and Legacy Management Committee Report 11:45 a.m.—Public Comment Session 12 p.m.—Lunch Break 1 p.m.—Administrative Committee Report. Bylaws Amendment Proposal 1:30 p.m.—Waste Management Committee Report 2:30 p.m.—Facility Disposition and Site Remediation Committee Report 3:30 p.m.—Public Comment Session 4 p.m.—Adjourn If needed, time will be allotted after public comments for items added to the agenda and administrative details. A final agenda will be available at the meeting Monday, March 27, 2006. *Public Participation:* The meeting is open to the public. Written statements may be filed with the Board either before or after the meeting. Individuals who wish to make oral statements pertaining to agenda items should contact Gerri Flemming's office at the address or telephone listed above. Requests must be received five days prior to the meeting and reasonable provision will be made to include the presentation in the agenda. The Deputy Designated Federal Officer is empowered to conduct the meeting in a fashion that will facilitate the orderly conduct of business. Individuals wishing to make public comment will be provided a maximum of five minutes to present their comments. *Minutes:* The minutes of this meeting will be available for public review and copying at the U.S. Department of Energy's Freedom of Information Public Reading Room, 1E-190, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585 between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Minutes will also be available by writing to Gerri Flemming, Department of Energy Savannah River Operations Office, P.O. Box A, Aiken, SC 29802, or by calling her at

(803)952-7886. Issued at Washington, DC, on February 24, 2006. Carol Matthews, Acting Advisory Committee Management Officer. [FR Doc. E6-2952 Filed 3-1-06; 8:45 am] BILLING CODE 6450-01-P DEPARTMENT OF ENERGY Environmental Management Site-Specific Advisory Board, Idaho National Laboratory AGENCY: Department of Energy. ACTION: Notice of open meeting and retreat. SUMMARY: This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EM SSAB), Idaho National Laboratory. The Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that public notice of this meeting be announced in the **Federal Register** . DATES: Monday, March 20, 2006, 4 p.m.-7 p.m. Tuesday, March 21, 2006, 8 a.m.-6 p.m. Wednesday, March 22, 2006, 8 a.m.-5 p.m. Opportunities for public participation will be held Tuesday, March 21, from 12:15 to 12:30 p.m. and 5:45 to 6 p.m.; and Wednesday, March 22, from 11:45 a.m. to 12 p.m. and 4 to 4:15 p.m. Additional time may be made available for public comment during the presentations. These times are subject to change as the meeting progresses, depending on the extent of comment offered. ADDRESSES: Shilo Inn, 1586 Blue Lakes Boulevard North, Twin Falls, ID 83301. FOR FURTHER INFORMATION CONTACT: Shannon A. Brennan, Federal Coordinator, Department of Energy, Idaho Operations Office, 1955 Fremont Avenue, MS-1216, Idaho Falls, ID 83415. Phone

(208)526-3993; Fax

(208)526-1926 or e-mail: *Shannon.Brennan@nuclear.energy.gov* or visit the Board's Internet home page at: *http://www.inelemcab.org.* SUPPLEMENTARY INFORMATION: *Purpose of the Board:* The purpose of the Board is to make recommendations to DOE in the areas of environmental restoration, waste management, and related activities. *Tentative Topics* (agenda topics may change up to the day of the meeting; please contact Shannon A. Brennan for the most current agenda): Board Retreat, Monday, March 20, 2006. Open Meeting, Tuesday, March 21, 2006 and Wednesday, March 22, 2006. • Idaho Cleanup Project Environmental Management Cleanup Status Report. • Fiscal Year 2007 Budget. • Long-Term Plans for Low-Level Radioactive Waste Management. • Radioactive Waste Management Complex Stakeholder Involvement Discussion. *Public Participation:* The meeting is open to the public. Written statements may be filed with the Board either before or after the meeting. Individuals who wish to make oral presentations pertaining to agenda items should contact Shannon A. Brennan at the address or telephone number listed above. The request must be received five days prior to the meeting and reasonable provision will be made to include the presentation in the agenda. The Deputy Designated Federal Officer is empowered to conduct the meeting in a fashion that will facilitate the orderly conduct of business. Individuals wishing to make public comment will be provided a maximum of five minutes to present their comments. *Minutes:* The minutes of this meeting will be available for public review and copying at the U.S. Department of Energy's Freedom of Information Public Reading Room, 1E-190, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585, between 9 a.m. and 4 p.m., Monday through Friday, except Federal holidays. Minutes will also be available by writing to Shannon A. Brennan, Federal Coordinator, at the address and phone number listed above. Issued at Washington, DC on February 24, 2006. Carol Matthews, Acting Advisory Committee Management Officer. [FR Doc. E6-2953 Filed 3-1-06; 8:45 am] BILLING CODE 6450-01-P DEPARTMENT OF ENERGY Environmental Management Site-Specific Advisory Board, Paducah AGENCY: Department of Energy (DOE). ACTION: Notice of open meeting. SUMMARY: This notice announces a meeting of the Environmental Management Site-Specific Advisory Board (EMSSAB), Paducah. The Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that public notice of this meeting be announced in the **Federal Register** . DATES: Thursday, March 16, 2006; 5:30 p.m.-9 p.m. ADDRESSES: 111 Memorial Drive, Barkley Centre, Paducah, Kentucky 42001. FOR FURTHER INFORMATION CONTACT: William E. Murphie, Deputy Designated Federal Officer, Department of Energy Portsmouth/Paducah Project Office, 1017 Majestic Drive, Suite 200, Lexington, Kentucky 40513,

(859)219-4001. SUPPLEMENTARY INFORMATION: *Purpose of the Board:* The purpose of the Board is to make recommendations to DOE in the areas of environmental restoration, waste management and related activities. Tentative Agenda 5:30 p.m. Informal Discussion 6 p.m. Call to Order Introductions Review of Agenda Approval of February Minutes 6:15 p.m. Deputy Designated Federal Officer's Comments 6:35 p.m. Federal Coordinator's Comments 6:40 p.m. Ex-officios' Comments 6:50 p.m. Public Comments and Questions 7 p.m. Task Forces/Presentations • Wildlife Management Area—Tim Kreher • Water Disposition/Water Quality Task Force—End State Maps 8 p.m. Public Comments and Questions 8:10 p.m. Break 8:20 p.m. Administrative Issues • Preparation for April Presentation • Budget Review • Review of Workplan • Review Next Agenda 8:30 p.m. Review of Action Items 8:35 p.m. Subcommittee Report • Executive Committee 8:50 p.m. Final Comments 9 p.m. Adjourn *Public Participation:* The meeting is open to the public. Written statements may be filed with the Board either before or after the meeting. Individuals who wish to make oral statements pertaining to agenda items should contact David Dollins at the address listed below or by telephone at

(270)441-6819. Requests must be received five days prior to the meeting and reasonable provision will be made to include the presentation in the agenda. The Deputy Designated Federal Officer is empowered to conduct the meeting in a fashion that will facilitate the orderly conduct of business. Individuals wishing to make public comment will be provided a maximum of five minutes to present their comments. *Minutes:* The minutes of this meeting will be available for public review and copying at the U.S. Department of Energy's Freedom of Information Public Reading Room, 1E-190, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585 between 9 a.m. and 4 p.m., Monday-Friday, except Federal holidays. Minutes will also be available at the Department of Energy's Environmental Information Center and Reading Room at 115 Memorial Drive, Barkley Centre, Paducah, Kentucky between 8 a.m. and 5 p.m., on Monday through Friday or by writing to David Dollins, Department of Energy, Paducah Site Office, Post Office Box 1410, MS-103, Paducah, Kentucky 42001 or by calling him at

(270)441-6819. Issued at Washington, DC, on February 23, 2006. Carol Matthews, Acting Advisory Committee Management Officer. [FR Doc. E6-2954 Filed 3-1-06; 8:45 am] BILLING CODE 6450-01-P DEPARTMENT OF ENERGY Western Area Power Administration Boulder Canyon Project AGENCY: Western Area Power Administration, DOE. ACTION: Notice of proposed base charge and rates adjustment. SUMMARY: The Western Area Power Administration (Western) is proposing an adjustment to the Boulder Canyon Project

(BCP)electric service base charge and rates. The current base charge and rates expire September 30, 2006. The current base charge is not sufficient to pay all annual costs including operation, maintenance, replacements, interest expense, and to repay investment obligations within the required period. The proposed base charge will provide sufficient revenue to pay all annual costs and to repay investment obligations within the allowable period. A detailed rate package that identifies the reasons for the base charge and rates adjustment will be available in March 2006. The proposed base charge and rates are scheduled to become effective on October 1, 2006, and will remain in effect through September 30, 2007. This **Federal Register** notice initiates the formal process for the proposed base charge and rates. DATES: The consultation and comment period will begin today and will end May 31, 2006. Western representatives will explain the proposed base charge and rates at a public information forum on April 4, 2006, beginning at 10:30 a.m. MST, in Phoenix, Arizona (AZ). Interested parties can provide oral and written comments at a public comment forum on May 3, 2006, beginning at 10:30 a.m. MST, at the same location. ADDRESSES: The meetings will be held at the Desert Southwest Customer Service Regional Office, located at 615 South 43rd Avenue, Phoenix, AZ. Send comments to: Mr. J. Tyler Carlson, Regional Manager, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, e-mail *carlson@wapa.gov* . Western will post information about the rate process on its Web site at *http://www.wapa.gov/dsw/pwrmkt/BCP/RateAdjust.htm* . Western must receive comments by the end of the consultation and comment period to be assured consideration. FOR FURTHER INFORMATION CONTACT: Mr. Jack Murray, Rates Team Lead, Desert Southwest Customer Service Region, Western Area Power Administration, P.O. Box 6457, Phoenix, AZ 85005-6457, telephone

(602)605-2442, e-mail *jmurray@wapa.gov* . SUPPLEMENTARY INFORMATION: The proposed base charge and rates for BCP electric service are designed to recover an annual revenue requirement that includes the investment repayment, interest, operation and maintenance, replacements, payment to states, visitor services and uprating payments. These annual costs are reduced by the projected revenue from water sales, visitor services, water pump energy sales, facility use charges, regulation and spinning reserve services, miscellaneous leases and late fees. The projected annual revenue requirement is the base charge for electric service and is divided equally between capacity and energy. Annual energy dollars are divided by annual energy sales, and annual capacity dollars are divided by annual capacity sales to determine the proposed energy rate and the proposed capacity rate. The Deputy Secretary of the Department of Energy

(DOE)approved the existing rate formula for calculating the base charge and rates in Rate Schedule BCP-F7 for BCP firm power service on August 11, 2005, (Rate Order No. WAPA-120, 70 FR 50316, August 26, 2005). The rate formula has been submitted to the Federal Energy Regulatory Commission for approval. Rate Schedule BCP-F7 became effective on October 1, 2005, for the period ending September 30, 2010. Under Rate Schedule BCP-F7 for FY 2007, the base charge is $62,177,350, the forecasted energy rate is 8.10 mills per kilowatthour (mills/kWh), the forecasted capacity rate is $1.48 per kilowattmonth (kWmonth) and the composite rate is 16.21 mills/kWh. Under Rate Schedule BCP-F7, the proposed rates for BCP electric service will result in an overall composite rate increase of about 15 percent. The following table compares the current and proposed base charge and rates. Comparison of Current and Proposed Base Charge and Rates Current October 1, 2005 through September 30, 2006 Proposed October 1, 2006 through September 30, 2007 Percent change increase Total Composite (mills/kWh) 14.05 16.21 15 Base Charge ($) 57,465,018 62,177,350 8 Energy Rate (mills/kWh) 7.03 8.10 15 Capacity Rate ($/kWmonth) 1.37 1.48 8 The increase in the base charge and rates is primarily the result of higher annual costs in operation and maintenance and lower revenue projections for the visitor center, as well as continued drought conditions. Additionally, the FY 2006 base charge and rates included a carry-over of non-reimbursable security costs from FY 2005, which had the effect of suppressing the FY 2006 base charge. Legal Authority Western will hold both a public information forum and a public comment forum. After considering comments, Western will recommend the proposed base charge and rates for final approval by the Deputy Secretary of Energy. Western is establishing an electric service base charge and rates for BCP under the DOE Organization Act, (42 U.S.C. 7152); the Reclamation Act of 1902, (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent laws, particularly section 9(c) of the Reclamation Project Act of 1939, (43 U.S.C. 485h(c)); and other acts that specifically apply to the project involved. By Delegation Order No. 00-037.00, effective December 6, 2001, the Secretary of Energy delegated:

(1)The authority to develop power and transmission rates to Western's Administrator,

(2)the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary of Energy, and

(3)the authority to confirm, approve, and place into effect on a final basis, to remand or to disapprove such rates to the Commission. Existing Department of Energy

(DOE)procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985 (50 FR 37835). Availability of Information Interested parties may review and copy all brochures, studies, comments, letters, memorandums or other documents that Western initiates or uses to develop the proposed rates. These documents are available for inspection and copying at the Desert Southwest Customer Service Regional Office, located at 615 South 43rd Avenue, Phoenix, AZ. Regulatory Procedure Requirements Regulatory Flexibility Analysis The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, *et seq.* ) requires Federal agencies to perform a regulatory flexibility analysis if a final rule is likely to have a significant economic impact on a substantial number of small entities and there is a legal requirement to issue a general notice of proposed rulemaking. This action does not require a regulatory flexibility analysis since it is a rulemaking specifically involving rates or services applicable to public property. Environmental Compliance In compliance with the National Environmental Policy Act of 1969

(NEPA)(42 U.S.C. 4321, *et seq.* ); Council On Environmental Quality Regulations (40 CFR parts 1500-1508); and DOE NEPA Regulations (10 CFR part 1021), Western has determined that this action is categorically excluded from preparing an environmental assessment or an environmental impact statement. Determination Under Executive Order 12866 Western has an exemption from centralized regulatory review under Executive Order 12866; accordingly, no clearance of this notice by the Office of Management and Budget is required. Small Business Regulatory Enforcement Fairness Act Western has determined that this rule is exempt from congressional notification requirements under 5 U.S.C. 801 because the action is a rulemaking of particular applicability relating to rates or services and involves matters of procedure. Dated: February 15, 2006. Michael S. Hacskaylo, Administrator. [FR Doc. E6-2955 Filed 3-1-06; 8:45 am] BILLING CODE 6450-01-P DEPARTMENT OF ENERGY Western Area Power Administration The Central Valley Project-Rate Order No. WAPA-128 AGENCY: Western Area Power Administration, DOE. ACTION: Notice of Proposed Change of Reactive Power and Voltage Control Revenue Requirement Component. SUMMARY: The Western Area Power Administration (Western) is proposing to revise the transmission revenue requirement

(TRR)for existing formula rates associated with Reactive Power and Voltage Control from the Central Valley Project

(CVP)and other non-Federal Generation Sources Service (VAR Support). The TRRs for transmission service from the CVP transmission system, the Pacific Alternating Current Intertie (PACI), and the California-Oregon Transmission Project

(COTP)are assigned a portion of the VAR Support costs under Rate Schedules CV-T1, CV-NWT3, PACI-T1, and COTP-T1 which extend through September 30, 2009. The proposed revision to the TRRs will remove the VAR Support costs from the TRRs. This formula rate will provide sufficient revenue to repay all annual costs, including interest expense, and repay required investment within the allowable period. Western will prepare a rate brochure that provides detailed information on the impact of this rate adjustment to all interested parties. This proposal is scheduled to go into effect on September 1, 2006, and will remain in effect through September 30, 2009. Publication of this **Federal Register** notice begins the formal process for the proposed revisions to the applicable revenue requirements. DATES: The consultation and comment period begins today and will end April 3, 2006. Western will accept written comments any time during the consultation and comment period. ADDRESSES: Send written comments to Mr. Sean Sanderson, Rates Manager, Sierra Nevada Customer Service Region, Western Area Power Administration, 114 Parkshore Drive, Folsom, CA 95630-4710, e-mail *ssander@wapa.gov* . Western will post information about the rate process on its Web site at *http://www.wapa.gov/sn/customers/rates/#currentrates/* . Western will post official comments received via letter and facsimile to its Web site after the close of the comment period. Western must receive the written comments by the end of the consultation and comment period to ensure they are considered in Western's decision process. FOR FURTHER INFORMATION CONTACT: Mr. Sean Sanderson, Rates Manager, Sierra Nevada Customer Service Region, Western Area Power Administration, 114 Parkshore Drive, Folsom, CA 95630-4710, telephone

(916)353-4466, e-mail *ssander@wapa.gov* . SUPPLEMENTARY INFORMATION: The current formula rates for transmission service on the CVP (CV-T1 and CV-NWT3), the PACI (PACI-T1), and the COTP (COTP-T1) transmission systems are based on a TRR that includes CVP and other non-Federal generator costs for providing VAR Support. The proposed revision to the TRR will remove the VAR Support costs from the TRRs. Western proposes to collect the revenue requirement for CVP VAR Support costs in the PRR under power rate schedule CV-F11. The removal of VAR Support costs will result in a more equitable treatment of all transmission customers. The Deputy Secretary of Energy approved Rate Schedules CV-T1, CV-NWT3, PACI-T1, and COTP-T1 for transmission service and CV-F11 for Base Resource and First Preference Power on November 18, 2004 (Rate Order No. WAPA-115, 69 FR 70510, December 6, 2004), and the Federal Energy Regulatory Commission (Commission) confirmed and approved the rate schedules on October 11, 2005, under FERC Docket No. EF0-5011-000 (113 FERC 61,026). Rate Schedules CV-T1, CV-NWT3, PACI-T1, COTP-T1, and CV-F11 began January 1, 2005, and end on September 30, 2009. The December 1, 2004, update of the approved rates resulted in annual CVP VAR Support costs of $336,070. Western currently estimates its annual costs associated with CVP and other non-Federal generator VAR Support to be $1,486,558. This cost was pro rata assigned to the respective transmission systems on a capacity basis and is one of the costs contained in Component 1 of the CVP, PACI, and COTP formula rates. As part of the implementing of Western's Open Access Transmission Tariff, Western separated its merchant function from Western's reliability function. It has come to Western's attention, that by including the CVP and other non-Federal generation sources' reactive power and voltage control costs in Western's TRR, Western, in certain circumstances, may be treating its merchant in a manner that is not comparable with other transmission customers. Under Western's current rates, all transmission customers would pay Western for VAR Support. As a result, a transmission customer who also has a generator that is directly connected to Western's system and who has an obligation to provide reactive power within the bandwidth (commonly referred to as the deadband) would also pay Western for VAR Support. Western believes that both Federal generators and non-Federal generators should be treated comparably when they provide VAR Support. To treat both Federal and non-Federal generators comparably, Western could either:

(1)Roll all the VAR Support costs from both types of generators into Western's TRR or

(2)Western could exclude all VAR Support from both types of generators from Western's TRR. Western's proposal is the latter. Based on Western's understanding of the Commission's comparability requirements, Western has agreed to compensate the Calpine Construction Finance Company (CCFC), a non-Federal generator connected to the CVP transmission system, for reactive power costs subject to the outcome of this rate proceeding. Western will compensate CCFC from December 2005 until new rates are in effect regardless of the outcome of this rate proceeding. At a minimum, such payments increase Western's annual costs for reactive power from approximately $341,000 to almost $1.2 million. While CCFC is the only entity that has currently sought to charge Western for reactive power, Western intends to treat every generator directly connected to Western's transmission system in a comparable fashion. Western cannot determine the cost associated with all such facilities. The obligation to provide such payments could create an open, indefinite, and undefined future liability for Western. Such costs could likely exceed $1.2 million. On the other hand, if Western excludes both the Federal and non-Federal generator costs for VAR Support in the TRR, it would ultimately fall to the customers who purchase power from the generator to pay for such costs. Customers who receive power from Western through Rate Schedule CV-F11 currently pay VAR Support costs in the PRR including the VAR Support associated with network service. Also included are VAR Support costs associated with the Rate Schedules PACI-T1 and COTP-T1 if not recovered from contracted sales. By excluding the VAR Support component from the TRR, Western can accurately determine the costs associated with transmission service. Furthermore, while Western's statutory customers, such as preference power customers, would be obligated to pay Western for all of the costs associated with reactive power from the United States generators in its power rates, the overall cost to Western's statutory customers would be lower and more predictable since they are paying for only the costs associated with the Federal generators. As a result, Western seeks comments from all interested parties on Western's rate proposal. In addition, Western seeks particular comments on the following:

(1)Whether Western should not make any changes to its rates (no action) and if Western takes no action, whether Western's current rates result in non-comparable treatment;

(2)whether Western should remove the VAR Support component from Western's TRR and apply to the PRR for the CVP; Schedule of Rates for Base Resource and First Preference Power (CV-F11); and

(3)whether including the costs associated with VAR Support in its TRR would be consistent with Western's statutory obligation to provide power at the lowest rates possible consistent with sound business principles. While Western seeks particular comments on the above, Western invites all interested parties to submit other comments related to the proposal. As part of Western's final decision, Western will evaluate all comments received before the end of the consultation and comment period. Under the 2004 Power Marketing Plan, Base Resource and First Preference power is primarily CVP hydrogeneration available subject to water conditions and operating constraints. The Base Resource and First Preference power formula rates recover a PRR through percentages of costs to First Preference and Base Resource Customers. Component 1 of the PRR for Base Resource and First Preference Power, as approved in the rate schedule (CV-F11), includes operations and maintenance (O&M), purchased power for project use and First Preference Customer loads, interest expense, annual expenses (including any other statutorily required costs or charges), investment repayment for the CVP, and the Washoe Project annual PRR that remains after project use loads are met. Revenues from project use, transmission, ancillary services, and other services are applied to the total PRR, and the remainder is collected from Base Resource and First Preference Customers. The proposed rate formula change for CV-F11 for the Base Resource and First Preference PRR is listed in Table 1. Table 1.—Proposed Formula Rate Change for Base Resource and First Preference PRR (CV-F11) Existing rates ($000) 1 Proposed rates ($000) 2 Percent change Base Resource and First Preference PRR 53,032 52,966 −0.13 Note 1: Includes the VAR Support costs from the CVP and CCFC. Note 2: Includes only the CVP VAR Support costs. Legal Authority The proposed revision to the revenue requirements described above constitutes a minor rate adjustment. Western has determined that it is not necessary to hold a public information or comment forum for this proposed minor rate adjustment as defined by 10 CFR part 903. After review of public comments, and possible amendments or adjustments, Western will recommend the Deputy Secretary of Energy approve the proposed rates on an interim basis. Western is establishing TRRs and a PRR for the formula rates for CV-T1, CV-NWT3, PACI-T1, and COTP-T1 transmission service and CV-F11 for Base Resource and First Preference Power under the Department of Energy Organization Act (42 U.S.C. 7152); the Reclamation Act of 1902 (ch. 1093, 32 Stat. 388), as amended and supplemented by subsequent laws, particularly section 9(c) of the Reclamation Project Act of 1939 (43 U.S.C. 485h(c)); and other acts that specifically apply to the project involved. By Delegation Order No. 00-037.00, effective December 6, 2001, the Secretary of Energy delegated:

(1)The authority to develop power and transmission rates to Western's Administrator;

(2)the authority to confirm, approve, and place such rates into effect on an interim basis to the Deputy Secretary of Energy; and

(3)the authority to confirm, approve, and place into effect on a final basis, to remand or to disapprove such rates to the Commission. Existing Department of Energy

(DOE)procedures for public participation in power rate adjustments (10 CFR part 903) were published on September 18, 1985. Availability of Information All brochures, studies, comments, letters, memorandums, or other documents that Western initiates or uses to develop the proposed rates are available for inspection and copying at the Sierra Nevada Regional Office, located at 114 Parkshore Drive, Folsom, California. Many of these documents and supporting information are also available on the Web site under the “Current Rates” section located at *http://www.wapa.gov/sn/customers/rates/#currentrates/* . Regulatory Procedure Requirements Regulatory Flexibility Analysis The Regulatory Flexibility Act of 1980 (5 U.S.C. 601, *et seq.* ) requires Federal agencies to perform a regulatory flexibility analysis if a final rule is likely to have a significant economic impact on a substantial number of small entities and there is a legal requirement to issue a general notice of proposed rulemaking. This action does not require a regulatory flexibility analysis since it is a rulemaking of particular applicability involving rates or services applicable to public property. Environmental Compliance In compliance with the National Environmental Policy Act of 1969

(NEPA)(42 U.S.C. 4321, *et seq.* ); Council on Environmental Quality Regulations (40 CFR parts 1500-1508); and DOE NEPA Regulations (10 CFR part 1021), Western has determined this action is categorically excluded from preparing an environmental assessment or an environmental impact statement. Determination Under Executive Order 12866 Western has an exemption from centralized regulatory review under Executive Order 12866; accordingly, no clearance of this notice by the Office of Management and Budget is required. Small Business Regulatory Enforcement Fairness Act Western has determined this rule is exempt from congressional notification requirements under 5 U.S.C. 801 because the action is a rulemaking of particular applicability relating to rates or services and involves matters of procedure. Dated: February 16, 2006. Michael S. Hacskaylo, Administrator. [FR Doc. E6-2956 Filed 3-1-06; 8:45 am] BILLING CODE 6450-01-P ENVIRONMENTAL PROTECTION AGENCY [OAR-2060-0088; FRL-8039-7] Agency Information Collection Activities; Proposed Collection; Comment Request; Consolidated Emissions Reporting (Renewal); EPA ICR No. 0916.12, OMB Control No. 2060-0088 AGENCY: Environmental Protection Agency (EPA). ACTION: Notice. SUMMARY: This notice announces that EPA is planning to submit a request to renew an existing approved Information Collection Request

(ICR)to the Office of Management and Budget (OMB). This ICR is scheduled to expire on May 31, 2006. Before submitting the ICR to OMB for review and approval, EPA is soliciting comments on specific aspects of the proposed information collection as described below. DATES: Comments must be submitted on or before May 1, 2006. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2005-0490, by one of the following methods: • *http://www.regulations.gov.* Follow the on-line instructions for submitting comments. • E-mail: *a-and-r-docket@epa.gov.* • Fax:

(202)566-1741. • Mail: Docket No. EPA-HQ-OAR-2005-0490, Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC 20460. • Hand Delivery: EPA Docket Center, 1301 Constitution Avenue, NW., Room B102, Washington, DC. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. *Instructions:* Direct your comments to Docket ID No. EPA-HQ-OAR-2005-0490. The EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *http://www.regulations.gov* , including any personal information provided, unless the comment includes information claimed to be Confidential Business Information

(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through *http://www.regulations.gov* , or e-mail. The *http://www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *http://www.regulations.gov* your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at *http://www.epa.gov/epahome/dockets.htm.* For additional instructions on submitting comments, go to the SUPPLEMENTARY INFORMATION section of this notice. FOR FURTHER INFORMATION CONTACT: For questions concerning today's action, please contact Bill Kuykendal, U.S. EPA, Office of Air Quality Planning and Standards, Air Quality Assessment Division, Mail Code D205-01, Research Triangle Park, NC, 27711, telephone

(919)541-5372, e-mail at *kuykendal.bill@epa.gov.* SUPPLEMENTARY INFORMATION: How Can I Access the Docket and/or Submit Comments? EPA has established a public docket for this ICR under Docket ID No. EPA-HQ-OAR-2005-0490, which is available for online viewing at *http://www.regulations.gov* , or in person viewing at the Air and Radiation Docket in the EPA Docket Center (EPA/DC), EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The EPA/DC Public Reading Room is open from 8 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is 202-566-1744, and the telephone number for the Air and Radiation Docket is 202-566-1742. Use *http://www.regulations.gov* to obtain a copy of the draft collection of information, submit or view public comments, access the index listing of the contents of the docket, and to access those documents in the public docket that are available electronically. Once in the system, select “search,” then key in the docket ID number identified in this document. What Information is EPA Particularly Interested in? Pursuant to section 3506(c)(2)(A) of the Paperwork Reduction Act (44 U.S.C. 3501 *et seq.* ), EPA specifically solicits comments and information to enable it to:

(i)Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Agency, including whether the information will have practical utility;

(ii)evaluate the accuracy of the Agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

(iii)enhance the quality, utility, and clarity of the information to be collected; and

(iv)minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated electronic, mechanical, or other technological collection techniques or other forms of information technology, *e.g.* , permitting electronic submission of responses. In particular, EPA is requesting comments from very small businesses (those that employ less than 25) on examples of specific additional efforts that EPA could make to reduce the paperwork burden for very small businesses affected by this collection. What Should I Consider When I Prepare My Comments for EPA? You may find the following suggestions helpful for preparing your comments: 1. Explain your views as clearly as possible and provide specific examples. 2. Describe any assumptions that you used. 3. Provide copies of any technical information and/or data you used that support your views. 4. If you estimate potential burden or costs, explain how you arrived at the estimate that you provide. 5. Offer alternative ways to improve the collection activity. 6. Make sure to submit your comments by the deadline identified under DATES . 7. To ensure proper receipt by EPA, be sure to identify the docket ID number assigned to this action in the subject line on the first page of your response. You may also provide the name, date, and **Federal Register** citation. What Information Collection Activity or ICR Does This Apply to? Docket ID No. EPA-HQ-OAR-2005-0490, EPA ICR No. 0916.12, OMB Control No. 2060-0088. *Affected entities:* Entities potentially affected by this action are generally State air pollution control agencies. An estimated 55 State and Territorial air pollution control agencies, as well as 49 local air agencies will be required to compile and report emissions information for large stationary point sources on an annual basis, and for smaller point sources, stationary nonpoint and mobile sources on a 3-year basis. Also, a portion of industry sources will be required by State and local air agencies to estimate and report PM2.5 and NH3 point source emissions. *Title:* Consolidated Emissions Reporting (Renewal). *ICR numbers:* EPA ICR No.0916.12, OMB Control No.2060-0088. *ICR status:* This ICR is currently scheduled to expire on May 31, 2006. *Abstract:* EPA has promulgated a Consolidated Emissions Reporting Rule

(CERR)(40 CFR part 51, subpart A) to coordinate new emissions inventory reporting requirements with existing requirements of the Clean Air Act

(CAA)and 1990 Amendments. Under the CERR, 55 State and Territorial air quality agencies, including the District of Columbia (DC), as well as an estimated 49 local air quality agencies, must annually submit emissions data for point sources emitting specified levels of volatile organic compounds (VOCs), oxides of nitrogen (NO X ), carbon monoxide (CO), sulfur dioxide (SO 2 ), particulate matter less than or equal to 10 micrometers in diameter (PM 10 ), particulate matter less than or equal to 2.5 micrometers in diameter (PM 2.5 ), and ammonia (NH 3 ). Every 3 years, States will be required to submit a point source inventory, as well as a statewide stationary nonpoint, nonroad mobile, onroad mobile, and biogenic source inventory for all criteria pollutants and PM 2.5 , and NH 3 . The emissions data submitted for the annual and 3-year cycle inventories for stationary point, nonpoint, nonroad mobile, and mobile sources will be used by EPA's Office of Air Quality Planning and Standards (OAQPS) to assist in developing ambient air quality emission standards, performing regional modeling, and in preparing national trends assessments and other special analyses and reports. Collection of PM 2.5 emissions data will be necessary to support implementation of the PM 2.5 National Ambient Air Quality Standard (NAAQS). The information collected under the authority of the CERR is mandatory and as specified in the CERR cannot be treated as confidential by EPA. *Burden Statement:* The annual public reporting and recordkeeping burden for this collection of information is estimated to average 30 hours per response. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements which have subsequently changed; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. The ICR provides a detailed explanation of the Agency's estimate, which is only briefly summarized here: *Estimated total number of potential respondents:* 2038. *Frequency of response:* Annual. *Estimated total average number of responses for each respondent:* 4. *Estimated total annual burden hours:* 60,812. *Estimated total annual costs:* $2,811,146. This includes an estimated burden cost of $2,580,246 and an estimated cost of $230,900 for capital investment or maintenance and operational costs. Are There Changes in the Estimates From the Last Approval? There is a decrease of 52,039 hours in the total estimated respondent burden compared with that identified in the ICR currently approved by OMB. This decrease resulted from the elimination of the “One Time Activities” that were accounted for under the currently approved ICR. All respondents have incurred these one time burdens and thus these burdens do not recur in this renewal ICR. What Is the Next Step in the Process for This ICR? EPA will consider the comments received and amend the ICR as appropriate. The final ICR package will then be submitted to OMB for review and approval pursuant to 5 CFR 1320.12. At that time, EPA will issue another **Federal Register** notice pursuant to 5 CFR 1320.5(a)(1)(iv) to announce the submission of the ICR to OMB and the opportunity to submit additional comments to OMB. If you have any questions about this ICR or the approval process, please contact the technical person listed under FOR FURTHER INFORMATION CONTACT. Dated: February 16, 2006. William H. Lamason, Acting Director, Air Quality Assessment Division. [FR Doc. E6-2950 Filed 3-1-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY [FRL-8039-6; OEI-2005-16] New—SORN—Kids Club; Privacy Act of 1974: Publication of New System of Record Notice AGENCY: Environmental Protection Agency (EPA). ACTION: Notice of Publication of Kids Club Membership List. SUMMARY: Pursuant to provisions of the Privacy Act of 1974 (5 U.S.C. 552a), the Region 5 Office of Public Affairs is giving notice that it proposes to publish a new system of records notice for the Kids Club Membership List. This system of records pertains to the collection of name, mailing address, age, and summaries of environmental projects from students in grades K-4. The kids club promotes environmental stewardship by encouraging kids in grades K-4 to receive recognition by completing environmental projects. Kids will receive a certificate and membership card for joining the club. Once kids complete a project, upon parent/guardian consent, it will be posted on *http://www.epa.gov/kids.* DATES: This notice will be effective April 11, 2006. ADDRESSES: Questions regarding this notice should be addressed to: Karen Reshkin, Public Access Coordinator, U.S. EPA Region 5, 77 W. Jackson Blvd. (P-19J), Chicago, IL 60604. FOR FURTHER INFORMATION CONTACT: Megan Gavin, Environmental Education Coordinator, U.S. EPA Region 5, 77 W. Jackson Blvd. (P-19J), Chicago, IL 60604, Ph:

(312)353-5282. SUPPLEMENTARY INFORMATION: EPA has established an official public docket for this action under Docket ID No. OEI-2005-16. The official public docket is the collection of materials that is available for public viewing at the OEI Docket in the EPA Docket Center, (EPA/DC) EPA West, Room B102, 1301 Constitution Avenue, NW., Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is

(202)566-1744, and the telephone number for the OEI Docket is

(202)566-1752. An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets ( *http://www.epa.gov/edocket/* ). EPA Dockets can be used to view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified above. Dated: February 21, 2006. Linda A. Travers, Acting Assistant Administrator and Chief Information Officer. EPA-57 System Name: Kids Club Membership List. Security Classification: None. System Location: Office of Public Affairs, U.S. Environmental Protection Agency, Region 5, 77 W. Jackson Blvd. (P-19J), Chicago, IL 60604. Categories of Individuals Covered by the System: Kids in grades K-4 and their parent/guardian who are members in the Kids Club will be part of the system. Categories of Records in the System: Information collected will include name, mailing address, email address, age, date of membership, date of receipt of environmental projects, consent form from the parent, and summaries of environmental projects. Authority for Maintenance of the System: National Environmental Education Act of 1990, 20 U.S.C. 5503(b)(2) (Pub. L. 101-619). Purpose(s): Kids Club Membership List promotes environmental stewardship to kids in grades K-4. Information submitted to the agency by members of the kids club will be maintained in a protected database system. Club promotes kids doing environmental education projects. Routine Uses of Records Maintained in the System Including Categories of Users and the Purposes of Such Uses: General Routine Uses A, F, and H. Policies and Practices for Storing, Retrieving, Accessing, Retaining, and Disposing of Records in the System: Storage: In a protected computer database. Data will be backed up on a CD which will be kept in a locked file cabinet. Hard copies will also be kept in a locked file cabinet. Retrievability: By last name, city, state. Safeguards: Computer records are maintained in a secure, password protected computer system. Paper records are maintained in lockable file cabinets. All records are maintained in secure, access-controlled areas or buildings. Access will be limited to EPA staff in the Office of Public Affairs as well as SEE employees whose official duties require such access. Retention and Disposal: A schedule for retention and disposal is currently under development. System Manager(s) and Address: Elissa Speizman, Director, Office of Public Affairs, U.S. EPA Region 5, 77 W. Jackson Blvd. (P-19J), Chicago, IL 60604. Notification Procedure: Any individual who wants to know whether this system of records contains a record about him or her, who wants access to his or her record, or who wants to contest the contents of a record, should make a written request to the Freedom of Information Office, Attention Privacy Act Officer. Complete EPA Privacy Act procedures are set out in 40 CFR part 16. Record Access Procedures: Any individual who wants to know whether this system of records contains a record about him or her, who wants access to his or her record, or who wants to contest the contents of a record, should make a written request to the system manager. Complete EPA Privacy Act procedures are set out in 40 CFR part 16. Contesting Records Procedures: Any individual who wants to know whether this system of records contains a record about him or her, who wants access to his or her record, or who wants to contest the contents of a record, should make a written request to the system manager. Requests for correction or amendment must identify the record to be changed and the corrective action sought. Complete EPA Privacy Act procedures are set out in 40 CFR part 16. Record Source Categories: Record will come from children in grades K-4 as well as parents/guardians. System Exempted from Certain Provisions of the Act: None. [FR Doc. E6-2951 Filed 3-1-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY [EPA-HQ-OW-2005-0005; FRL-8035-7] Small Drinking Water Systems Variances—Revision of Existing National-Level Affordability Methodology and Methodology To Identify Variance Technologies That Are Protective of Public Health AGENCY: Environmental Protection Agency (EPA). ACTION: Notice. SUMMARY: The 1996 amendments of the Safe Drinking Water Act

(SDWA)provide States the authority to grant variances to small public water systems that cannot afford to comply with a primary drinking water standard. These variances allow a system to install and maintain technology that can remove a contaminant to the maximum extent that is affordable and protective of public health in lieu of technology that can achieve compliance with the regulation. One of the conditions for States to grant variances on a case-by-case basis is that the EPA must have found for systems of a similar size and with similar source water that there are no affordable technologies available that achieve compliance with the standard, but that there are affordable variance technologies that are protective of public health. The EPA currently determines if there are affordable compliance technologies available to small systems by comparing (for a representative system) the current household cost of water plus the estimated additional cost to comply with a new rule to an affordability “threshold” of 2.5 percent of the median household income (MHI). Today=s **Federal Register** notice requests comment on revisions to this existing national-level affordability methodology for small drinking water systems and an approach for determining if an affordable variance technology is protective of public health. The Agency is committed to working with State and local officials and stakeholders to update and improve affordability analyses under the Safe Drinking Water Act. DATES: Comments must be received on or before May 1, 2006. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OW-2005-0005, by one of the following methods: • *http://www.regulations.gov.* Follow the on-line instructions for submitting comments. • *E-mail: OW-Docket@epa.gov,* Attention Docket ID No. OW-2005-0005. • *Fax:*

(202)566-1749. • *Mail:* Water Docket, Environmental Protection Agency, Mailcode: 4101T, 1200 Pennsylvania Ave., NW., Washington, DC, 20460. • *Hand Delivery:* Water Docket, Environmental Protection Agency, EPA West Building, Room B102, 1301 Constitution Avenue, NW., Washington, DC. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. *Instructions:* Direct your comments to Docket ID No. EPA-HQ-OW-2005-0005. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *http://www.epa.gov/edocket,* including any personal information provided, unless the comment includes information claimed to be Confidential Business Information

(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through *http://www.regulations.gov,* or e-mail. The *http://www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *http://www.regulations.gov,* your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. *Docket:* All documents in the docket are listed in the *http://www.regulations.gov* index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in *http://www.regulations.gov* or in hard copy at the Water Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Avenue, NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is

(202)566-1744, and the telephone number for the Water Docket is

(202)566-1749. FOR FURTHER INFORMATION CONTACT: Dan Olson, Standards and Risk Management Division, Office of Ground Water and Drinking Water, (4607M), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC, 20460; telephone number:

(202)564-5239; fax number:

(202)564-3758; e-mail address: *olson.daniel@epa.gov.* SUPPLEMENTARY INFORMATION: I. General Information A. What Should I Consider as I Prepare My Comments for EPA? 1. *Submitting CBI.* Do not submit this information to EPA through *http://www.regulations.gov* or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. 2. *Tips for Preparing Your Comments.* When submitting comments, remember to: • Identify the rulemaking by docket number and other identifying information (subject heading, **Federal Register** date and page number). • Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations

(CFR)part or section number. • Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. • Describe any assumptions and provide any technical information and/or data that you used. • If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. • Provide specific examples to illustrate your concerns, and suggest alternatives. • Explain your views as clearly as possible. • Make sure to submit your comments by the comment period deadline identified. Table of Contents I. General Information A. What Should I Consider as I Prepare My Comments for EPA? II. Background A. What Is the Purpose of Today's Action? B. Statutory Background C. How Does EPA Currently Determine if Affordable Compliance Technologies Are Available to Small Drinking Water Systems? III. Affordability Methodology A. The EPA's Science Advisory Board Recommendations on Affordability 1. EPA's Approach to Determining Affordability for Small Systems 2. Components of the Affordability Determination Method 3. Source Water and Regional Disparities 4. Financial Assistance B. The National Drinking Water Advisory Council's Recommendations on Affordability Criteria 1. Should MHI or Another Income Measure (Such as Per Capita Income) Be Used for the Income Level? 2. Should 2.5 Percent or Another Percentage Be Used as the Income Percentage for Determining the Maximum Affordable Water Bill, and What Is the Basis for an Alternative Selection? 3. How Should the Expenditure Baseline Be Adjusted To Account for New Rules? 4. Should Separate Affordability Criteria Be Developed for Surface and Ground Water Systems? 5. Should Financial Assistance Be Incorporated in the Calculations of the Expenditure Baseline? 6. Should Regional Affordability Criteria Be Developed, Given Current Data Limitations? 7. NDWAC Perspective 8. NDWAC Work Group—Minority View C. Key Factors Considered in Developing Affordability Methodology Options 1. Variability in Household Costs of Water Treatment 2. Variability in the Ability of Small Systems To Pay for Treatment 3. Need for Improved Implementation at the Federal Level of the Small System Variance Provisions of the SDWA D. Affordability Methodology Options 1. Calculating Household Costs 2. Affordability Determination Options 3. Identification of Affordable Variance Technologies IV. Protection of Public Health Methodology A. How Does EPA Consider Public Health in Establishing Drinking Water Standards? 1. Setting the Maximum Contaminent Level Goal 2. Setting the MCL or Treatment Technique 3. Determining That Variance Technologies Are Protective of Public Health B. Methodology To Identify Affordable Variance Technologies That Are Protective of Public Health V. State Consultation VI. Request for Comment VII. References II. Background This section provides the purpose of today's action, a brief statutory background on affordability-based small drinking water system variances, and how EPA currently determines if affordability-based variances can be made available to small drinking water systems. A. What Is the Purpose of Today's Action? Today's notice seeks comment on revisions to EPA's national affordability methodology for small drinking water systems and a methodology for determining if an affordable variance technology is protective of public health. EPA believes such revisions are needed to address variability in both incomes and costs across small systems, and to maintain transparency and consistency in determinations regarding affordability and protectiveness of public health. Neither the national affordability methodology nor the methodology for determining if an affordable variance technology is protective of public health imposes any requirement on any person or entity. Rather, these methodologies will be applied by EPA in evaluating small system affordability of future National Primary Drinking Water Regulations (NPDWRs), except regulations for microbial contaminants (including bacteria, viruses, or other organisms) or indicators for microbial contaminants. SDWA section 1415(e)(6)(B) states that small system variances are not available for microbial contaminants. B. Statutory Background Today's **Federal Register** requests comment on a revised approach for implementing the small systems variance provision of the 1996 SDWA amendments. The SDWA, as amended in 1996, includes a provision intended to help reduce the economic impact that certain new regulations will have on some small systems. For small systems with a service population of less than 10,000, SDWA section 1415(e) authorizes a primacy agency to grant a variance from compliance with a Maximum Contaminant Level

(MCL)or treatment technique under certain conditions. (An MCL is the maximum permissible level of a contaminant in drinking water that is delivered to any user of a public water system. A treatment technique is an enforceable procedure or level of technological performance, which public water systems must follow to ensure control of a contaminant.) A primacy (primacy enforcement) agency may grant such a variance on a case-by-case basis for an NPDWR only if EPA has determined that there are no nationally affordable compliance technologies for small systems in the corresponding size category and with comparable source water quality and EPA has identified one or more affordable variance technologies that are protective of public health. In granting this variance, a primacy agency must provide public notice and an opportunity for a public hearing. The primacy agency must also make two system-specific determinations:

(1)That the system cannot otherwise afford to comply (using the State's affordability criteria) through treatment, using an alternative source of water supply or restructuring or consolidation; and

(2)that the terms of the variance ensure adequate protection of public health. In accordance with the SDWA, EPA evaluates the affordability of new drinking water rules for these categories of small systems:

(1)A service population of 10,000 or fewer but more than 3,300;

(2)a service population of 3,300 or fewer but more than 500; and

(3)a service population of 500 or fewer but more than, or equal to, 25. The legislative history of section 1415(e) does not provide guidance on how EPA is to interpret the term “affordable.” However, the Senate Report for S 1316, the Senate version of the SDWA amendments of 1996 which contained similar small system variance provisions, includes the following discussion. “Of the approximately 57,000 community water systems regulated under the Safe Drinking Water Act, nearly 54,000 serve populations of 10,000 or less. While EPA has taken steps to recognize the difficulties of small systems by establishing the Small System Technology Initiative, by forming the National Training Coalition, and by developing handbooks and computer software, the current Safe Drinking Water Act does not successfully address the problems of small systems. The fundamental problem is one of economics. Maximum contaminant levels in national primary drinking water regulations have been based on the best available treatment techniques that are affordable for large systems. Because small systems do not enjoy the economies of scale that are available to large systems (infrastructure costs cannot be spread over a large number of households) drinking water regulations can have a much greater economic impact on small systems. EPA and the Congressional Budget Office have published estimates indicating that systems serving more than 10,000 persons experience costs averaging less than $20 per household per year to comply with the current requirements of the Safe Drinking Water Act. By way of comparison, the average annual incremental household cost to comply with the requirements of the Safe Drinking Water Act for systems serving 25 to 100 persons is $145.” (Senate Report No. 104-169, Nov 7, 1995, pp 54-55) 1 1 The average annual household increases cited in the report is for the cumulative impact imposed by the drinking water regulations at the time of the report. These are average costs across all systems in the size category including those with no impact. Treatment costs would not be derived in that manner for the options in this notice. This language underscores the Senates concern for the burden imposed on very small systems by NPDWRs, and provides an indication of the treatment cost data considered by the Senate at the time they developed these small system variance provisions. The House and Conference Reports do not provide any additional guidance on interpreting section 1415(e). C. How Does EPA Currently Determine if Affordable Compliance Technologies Are Available to Small Drinking Water Systems? As explained in the August 6, 1998 **Federal Register** notice (63 FR 42032), EPA currently determines if there are any affordable compliance technologies for a given NPDWR by comparing the estimated household costs to national-level affordability criteria based on household income. If EPA cannot identify affordable compliance technologies, then EPA must identify affordable variance technologies, pursuant to section 1412(b)(15) of the SDWA. A variance technology is one that provides the maximum contaminant removal, or inactivation, that is affordable, considering the quality of the source water to be treated and the expected useful life of the technology, and that the Agency determines is protective of public health. To date, EPA has found no NPDWRs “unaffordable” for small systems. The focus of the current national-level affordability analysis is the household. Treatment technology costs are presumed affordable to the typical household if they do not cause median water bills to exceed an affordability threshold of 2.5 percent of MHI. This approach assumes that affordability to the median household in a system size category can serve as an adequate measure for the affordability of technologies to the size category as a whole. The current national-level affordability criteria consider current annual water bills, or baseline cost, the incremental cost of the new regulation, and the affordability threshold (i.e., 2.5 percent of MHI). For each NPDWR, EPA estimates the baseline cost using annual sales revenue per residential connection from the most recent Community Water System Survey (CWSS). The CWSS is a national survey that the Agency conducts and is designed to compile operating and financial information from a statistically representative sample of community water systems. EPA subtracts this baseline from the affordability threshold to yield an “expenditure margin.” The Agency then compares this expenditure margin with the projected per household treatment costs for a new rule to make affordable technology determinations. As previously stated, this national affordability threshold currently sets the maximum affordable water bill at 2.5 percent of the MHI for the median system in a given size category (e.g., public water systems serving

(1)a population of 10,000 or fewer but more than 3,300;

(2)a population of 3,300 or fewer but more than 500; and

(3)a population of 500 or fewer but more than, or equal to, 25). Some stakeholders have argued that the current criteria are too stringent and fail to recognize situations in which a significant minority of systems within a size category may find a regulation unaffordable. After seven years of experience with the current criteria, EPA agrees it is time to consider refinements to address the situations of communities with below average incomes or above average drinking water and treatment costs. In today's notice EPA has changed the term it uses to refer to the procedures for evaluating the affordability of compliance technologies. Today's notice refers to an “affordability methodology” rather than “affordability criteria.” EPA believes the term “methodology” better describes its procedures for determining small system affordability of NPDWRs. EPA again reiterates that this methodology imposes no regulatory requirements on the public. Its only purpose is to guide EPA in making small system affordability determinations under the SDWA. EPA may continue to update and refine this methodology as appropriate in the future. III. Affordability Methodology As part of the 2002 appropriations process, Congress directed EPA to review and update the national-level affordability methodology. In response, EPA sought the advice of its Science Advisory Board

(SAB)and the National Drinking Water Advisory Committee (NDWAC). This section summarizes the SAB and NDWAC recommendations to EPA for revising the national-level affordability methodology, presents the key issues EPA considered in evaluating its affordability methodology, and discusses a range of options for revising the existing national-level affordability methodology. A. The EPA's Science Advisory Board Recommendations on Affordability The EPA SAB is a public advisory group that provides extramural scientific information and advice to the Administrator and other EPA officials. The Board is structured to provide balanced and expert assessment of scientific matters related to problems facing the Agency. In March 2002, the EPA asked the SAB to consider the economic issues associated with the current national-level affordability methodology, as well as the factors that were used to establish the methodology. The SAB's Environmental Economics Advisory Committee met twice to prepare recommendations regarding four key topics: 1. EPA's approach to determining affordability for small systems. 2. Components of the affordability determination method. 3. Source water and regional disparities. 4. Whether financial assistance should be considered in EPA's national-level affordability methodology. The SAB's findings and recommendations on these topics were published in the report *Affordability Criteria for Small Drinking Water Systems: An EPA Science Advisory Board Report* (EPA-SAB-EEAC-03-004) which can be found in the EPA Docket. The discussion in today's notice summarizes the key findings with respect to the four general areas noted above. 1. EPA's Approach To Determining Affordability for Small Systems The SAB found that EPA's approach to determining affordability for small systems addressed equity, efficiency, and administrative practicality considerations. However, the SAB recommended that the Agency consider some modifications to address long-term efficiency issues (i.e., allowing variances potentially inhibit movement toward small system consolidation) and to more effectively deal with the diversity among small systems. 2. Components of the Affordability Determination Method a. *Measures other than median.* The SAB highlighted some concerns with relying on median household income as the basis for the affordability threshold for small systems. One concern is that it does not reflect income inequality within water systems. That is, even if the median household can afford to pay the increased water bill, poorer households within a water system may find it unaffordable. Another concern about using median household income arises from income inequality across water systems within a size class. That is, even if the median system in a size category can afford to pay for a treatment technology, poorer systems may find it unaffordable. The SAB identified three approaches to account for these income inequalities. To address within-system income inequality, SAB suggested that EPA could keep the current affordability formula, but specify a lower household income percentile within water systems (instead of the current MHI) such as the 10th or 25th percentile. To address between-system income inequality, SAB suggested that EPA could consider whether a significant percentage of systems (e.g., 10 percent or 25 percent) fall below the threshold, even when the median system does not. A third approach that may address both issues involves basing the threshold on some statistical measure of dispersion, such as variance or standard deviation, in addition to the mean (i.e., basing it on 1.5 standard deviations below the mean household income within a system size category). b. *Alternatives to 2.5 percent as the income percentage.* The SAB highlighted the fact that the national affordability threshold has never been exceeded and that there was evidence suggesting that some small water systems have genuinely struggled with compliance costs. They believe that this suggests that the 2.5 percent threshold is too high, and that a lower cutoff should be used resulting in a greater likelihood that small systems variances would be authorized. c. *Alternatives to the expenditure baseline calculation.* The use of an expenditure baseline (e.g., current water bills) potentially has the effect of causing early regulations to be considered affordable, whereas later, if the affordability threshold is exceeded, even regulations with trivial costs could be found unaffordable to small systems. The SAB recommended eliminating the expenditure baseline from the formula and evaluating the affordability of each set of regulations incrementally (i.e., where the cost of each new rule is compared to a percentage of household income). EPA notes that in practice, this has not been an issue, as the expenditure margin calculated using 2.5 percent of MHI has widened, not narrowed, over time. 3. Source Water and Regional Disparities a. *Ground water versus surface water.* The SAB noted that a significant number of (typically) small rural communities have historically relied on ground water as their source of supply with little or no treatment. For these communities to comply with new drinking water regulations, they may incur costs of establishing a Awhole treatment system@ rather than simply adding onto an existing system. While this may be more likely for groundwater systems, the SAB noted that some surface water supplies also require little treatment. The SAB also noted that there is great variation in treatment costs for both surface water and ground water systems. Therefore, the SAB recommended that the affordability methodology not differentiate between ground water and surface water systems. b. *Regional versus national basis.* The SAB discussed making determinations on a regional or even local basis as well as adding an urban/rural distinction. The SAB stated that “regional income measures and expenditure baselines would capture affordability relative to the resources available in a community more accurately than the national values; however, a national affordability threshold is necessary to implement the fairness goal.” 4. Financial Assistance Funding is available to assist small systems through the Drinking Water State Revolving Loan Fund and the Rural Utilities Service of the U.S. Department of Agriculture. However, it is not available to all systems because affordability is only one criterion used in awarding this type of assistance. The SAB stated that since this funding is only available to some systems, it should not affect the national-level affordability determination. B. The National Drinking Water Advisory Council's Recommendations on Affordability Criteria One of the formal means by which EPA works with its stakeholders is the National Drinking Water Advisory Council. The NDWAC, comprised of members of the general public, State and local agencies, and private groups concerned with safe drinking water, advises the EPA on everything that the Agency does relating to drinking water. To assist in this process, the NDWAC forms work groups of experts to perform assessments of specific drinking water issues. The work groups prepare reports and recommendations that the NDWAC considers when making its recommendations to EPA. The NDWAC Affordability Work Group met five times between September 2002 and January 2003. The NDWAC Work Group was comprised of 18 individuals representing an array of backgrounds and perspectives. Collectively, these individuals brought into the discussion the perspectives of State, local, and tribal governments, environmental and consumer groups, drinking water utilities, small system advocates, technical assistance providers, and academia. The NDWAC Work Group was specifically asked—based on six charge questions posed by EPA—to provide advice on EPA's national-level affordability methodology, the process used to derive the methodology, and EPA's approach to applying this methodology to NPDWRs. The six questions were as follows: 1. Should MHI or another income measure (such as per capita income) be used for the income level? 2. Should 2.5 percent or another percentage be used as the income percentage for determining the maximum affordable water bill, and what is the basis for an alternative selection? 3. How should the expenditure baseline be adjusted to account for new rules? 4. Should separate affordability criteria be developed for surface and ground water systems? 5. Should financial assistance be incorporated in the calculations of the expenditure baseline? 6. Should regional affordability criteria be developed, given current data limitations? The NDWAC's findings and recommendations on these topics were published in the report *Recommendations of the National Drinking Water Advisory Council to U.S. EPA on Its National Small Systems Affordability Criteria* (NDWAC, 2003) and can be found in the EPA Docket. The discussion in today's notice summarizes the key findings with respect to the six general areas noted earlier. 1. Should MHI or Another Income Measure (Such as Per Capita Income) Be Used for the Income Level? The NDWAC found that since the MHI is clearly defined and available for all regions of the nation, it was the most appropriate income metric to use for this purpose at the time of the report. The NDWAC members noted that a better metric may be found in the future. 2. Should 2.5 Percent or Another Percentage Be Used as the Income Percentage for Determining the Maximum Affordable Water Bill, and What Is the Basis for an Alternative Selection? The NDWAC recommended that EPA replace its current approach with an incremental approach where the cost of each new rule is compared to a percentage of household income ( *e.g.* , one percent) because it “is theoretically sounder, is simpler to administer, and has greater transparency than the current EPA method.” The NDWAC observed that the incremental approach permits EPA to assess each new rule independently of the cumulative costs of preceding regulations. While this recommendation does not involve calculating a maximum water bill, the NDWAC did recommend that the incremental affordability threshold be set at a fixed percent of MHI. The NDWAC stated that the incremental percentage of MHI could be based on an analysis of willingness to pay measures (comparable expenditures as a percent of MHI), defensive expenditures (i.e., bottled water or point-of-use/filter devices), or other considerations related to household affordability such as a “doubling of current water bills.” The NDWAC did not believe that an affordability threshold should be greater than twice the amount of current household water bills. The NDWAC stated that national data indicated the average water bill for households amounted to 0.5-0.6 percent of MHI. In addition, NDWAC stated that one percent of MHI was approximately equal to 1.5 times the cost of point-of-use technologies used to treat water. Based on these observations, the NDWAC recommended that EPA use one percent of MHI as the incremental affordability threshold. 3. How Should the Expenditure Baseline Be Adjusted To Account for New Rules? The NDWAC recommended an incremental approach that eliminates the need for establishing or updating an expenditure baseline. 4. Should Separate Affordability Criteria Be Developed for Surface and Ground Water Systems? The NDWAC recommended that EPA use the same criteria for surface water and ground water systems. The NDWAC Work Group observed not only minimal cost differences between surface and ground water systems, but also that treatment costs vary widely for both types of systems. 5. Should Financial Assistance Be Incorporated in the Calculations of the Expenditure Baseline? The NDWAC recommended an incremental approach that eliminates the need for establishing or updating an expenditure baseline. However, if EPA retains its present approach to making the national affordability determination, the NDWAC recommended incorporating financial assistance into the calculations if the financial support is generally available to all systems nationwide. The NDWAC further recommended that States consider the availability of financial assistance in their analysis and calculations when determining whether a variance should be granted to a particular system, regardless of EPA's approach to making the national affordability determination. 6. Should Regional Affordability Criteria Be Developed, Given Current Data Limitations? The NDWAC recommended that EPA establish differential regional affordability criteria when sufficient supporting data are available. In particular, the NDWAC recommended that EPA separate the MHI into rural and urban categories to more accurately reflect actual ability and willingness to pay. 7. NDWAC Perspective The NDWAC adopted the Work Group report with minor modifications to some of the Work Group's recommendations, and provided additional recommendations and perspective on affordability issues associated with small public water systems. These are summarized below. The recommendations of the NDWAC Work Group were made in the context of the SDWA requirement to make affordability-based variances available to small systems when the statutory criteria are satisfied. However, the NDWAC did not believe that this is generally the best approach for addressing affordability issues at small systems. The NDWAC stated specifically that “significant practical, logistical, and ethical issues mitigate against the use of variances.” The NDWAC noted that the regulatory burden associated with the procedures for obtaining a variance (40 CFR part 142, subpart K) may be substantial to both small drinking water systems and primacy (primacy enforcement) agencies. Furthermore, the NDWAC found that “the potential acceptance of lower water quality for disadvantaged communities is ethically troublesome.” The NDWAC believes that alternatives to the variance process, including cooperative strategies ( *e.g.* , State leadership to promote consolidation or other types of cooperation among small systems), and targeted use of funding to disadvantaged water systems ( *e.g.* , supporting individual households with a Low-Income Water Assistance Program funded through Congressional appropriation) are more appropriate means to address affordability issues associated with small public water systems that cannot afford to comply with a NPDWR. 8. NDWAC Work Group—Minority View Through its representative on the Work Group, the National Rural Water Association

(NRWA)filed a minority report indicating disagreement with the recommendations of the majority of the Work Group members. The minority report is entitled *Small and Rural Community Affordability Consensus Report* and is included as an appendix to the NDWAC Report. The NRWA Report identifies three issues on which it dissents from the NDWAC recommendations. First, the NRWA Report states that the NDWAC Work Group recommended affordability level is “clearly unaffordable for millions of low-income families and many communities by any reasonable definition of affordable.” The NRWA Report also identifies a problem with the use of median household income

(MHI)as a metric for determining affordability, noting that, “The fact that a certain level of expenditure is affordable to the median income household in a community tells us very little about the ability of the low-income households in the community to afford the same levels of expenditure.” To address these concerns, the NRWA suggested an alternative “Safe and Affordable Variance Approach” under which EPA would list variance technologies for each applicable rule, and States would decide on a case by case basis if a variance technology is appropriate. Under this approach, all NPDWRs would be found potentially “unaffordable” at the national level, and it would be up to States to determine which small systems actually could not afford to comply and thus were eligible for a variance. Second, NRWA found that the NDWAC Work Group recommendations do not “provide a reasonable and workable small systems variance technology program as mandated in the SDWA.” NRWA expressed concern that the NDWAC Work Group's recommended affordability level was designed to avoid requiring EPA “to determine a variance technology policy, which incidentally is the Congressionally prescribed solution to unaffordable EPA rules.” Finally, the NRWA identified concerns with the NDWAC recommendations regarding consolidation, USDA Program Initiatives, low-income water assistance programs (LIWAP) and other potential federal initiatives. NRWA found these to be “steps in the wrong direction for assisting small and low-income communities to comply with rules because each recommendation shares a common theme of eroding local government authority, control and protection.” In developing the proposed revisions to its national affordability methodology, EPA has carefully considered the recommendations of both the NDWAC majority report, and the NRWA minority report. C. Key Factors Considered in Developing Affordability Methodology Options Based on the recommendations of the SAB, the NDWAC and the NRWA, the Agency identified three key factors that it considered in developing revisions to its affordability methodology: Variability in household costs of water treatment, variability in small system ability to pay, and the need for improved implementation at the Federal level of the small system variance provisions of the SDWA. This section discusses these issues. 1. Variability in Household Costs of Water Treatment Within and among the approximate 50,000 small systems in the U.S., there are a number of factors that affect the household cost of a given technology. Among these, the SDWA requires the Agency to consider two: population served and source water quality. a. *Population served.* EPA currently selects the median sized system as representative of the costs within a system size category and estimates the household costs for each of the technologies that can achieve compliance with the primary drinking water standard. In general, total costs for installation, operation, and maintenance of treatment units are greater for systems that serve large populations than for systems that serve small populations. However, on a per household basis, the opposite is true. Because of fixed costs and substantial economies of scale, the per household costs of treatment are higher for small water systems (especially very small systems serving less than 500 people) than for large regional systems. It was this concern that led Congress to include the affordability-based small system variance provisions in the 1996 SDWA amendments. Table III-1 demonstrates the increasing per household cost for compliance as system size decreases by presenting the average household costs for compliance among system size categories for recently promulgated or proposed drinking water standards. In addition to economies of scale, average household costs presented in Table III-1 are also affected by larger systems being more likely to have multiple sources of water, not all of which will have source water concentrations of a contaminant that require treatment. Table III-1.—Comparison of Average Costs 1 Per Household by System Size for Three Recent Rulemakings System size Arsenic 2 Radon 3 Stage 1 DBPR 4 25-100 $327 $270 $177 101-500 163 99 123 501-1,000 71 27 84 1,001-3,300 58 27 55 3,301-10,000 38 17 27 10,001-50,000 32 12 14 50,001-100,000 25 12 8 100,001-1 million 21 10 7 > 1 million 1 10 6 1 Costs are an average of the treatment costs for all systems installing treatment in the size category. The majority of these systems do not need significant removal of the contaminant, since they are just above the MCL. 2 Costs are based on Exhibit 6-17 in the *Arsenic in Drinking Water Rule Economic Analysis* (EPA 815-R-00-026) and can be found in the Docket. 3 Costs are presented for compliance with the proposed Radon MCL of 300 pCi/L and are taken from Table XIII.11 of the Proposed Radon Rule preamble (64 FR 59246-59378) and can be found in the Docket. The costs presented do not reflect the proposed AMCL in combination with a multi-media mitigation plan. 4 The Stage 1 DBPR economic analyses does not present an average of household costs across influent and treatment conditions as was done in arsenic and radon. The values listed are a weighted average from tables F-1 through F-4 in Appendix F of the November 1998 *Regulatory Impact Analysis of Final Disinfectant/Disinfection By-Products Regulations* (EPA 815-B-98-002) and can be found in the Docket. As the table shows, there is significant variability in per household costs, even within the statutory system size categories, particularly within the smallest size category. For example, for the arsenic rule, the average per household cost for systems serving <101 persons was roughly double that for systems serving 101-500 persons, while for the proposed radon rule, it was roughly triple. For the Stage 1 DBP rule, the average per household cost for systems serving <101 persons was roughly 50 percent higher than that for systems serving 101-500 persons. These figures suggest that the per household costs for the median sized system within a statutory size category may not be the best proxy for per household costs within the category generally, particularly for the smallest size category. b. *Source water quality.* The type of treatment a system must install and the treatment costs are also affected by the quality of the source water, including the concentration of the contaminant to be removed, the pH of the source water, and the presence of other dissolved or suspended solids. The concentration of the contaminants may affect the size of the treatment units, the amount of treatment chemicals that must be used, or the amount of residual to be disposed of—all of which affect the cost to install, operate, and maintain the treatment units. Source water quality parameters such as pH or the presence of dissolved solids can make some treatment technologies ineffective, requiring a system to select a different technology or to install and operate a pretreatment system that removes or adjusts these parameters so that the treatment to remove the contaminant will be effective. Source water varies significantly among public water systems. It is affected by the source water type (ground water or surface water) and the conditions in the watershed or aquifer from which it is drawn. Population served and source water quality are perhaps the most significant factors that affect the household cost of technologies. Therefore, it is appropriate that the SDWA requires the Agency to consider these factors in its evaluation of the affordability of new drinking water rules. The national affordability methodology should address the variability in these factors, such that a reasonable range of potential household costs are considered by the Agency in its national affordability determination. 2. Variability in the Ability of Small Systems To Pay for Treatment Under the approaches EPA is currently considering for revising the national affordability methodology, EPA would continue to use an income threshold (i.e., a fixed percentage of household income) as a screen to make general findings of unaffordability. The affordability threshold has two components: the income percentile and the income percentage. The income percentile is the value selected from the distribution of household incomes. It can be based either on the distribution of individual incomes, or on the distribution of system-level median incomes. The income percentage is the percentage by which the selected income level is multiplied to determine the affordable level of per household treatment costs. For example, EPA's current threshold is 2.5 percent of the MHI for the median system in a given size category (currently $44,544 for the smallest size category). In this example, the income percentile is 50 percent and it is based on the distribution of system-level median incomes. The income percentage is 2.5 percent ($1,114, or $44,544 times 2.5 percent). EPA views the affordability determination to be made under SDWA Section 1412(b)(4)(E) as a general screen to determine the likelihood that a significant number of systems may find a regulation unaffordable. Congress left to the primacy (primacy enforcement) agencies (usually the States) the task of determining which particular small systems cannot afford compliance technologies once EPA determines that affordability may be an issue for a particular regulation. The Agency established household income as the basic measure to determine affordability for the current methodology. If the households served by a system do not have income available to pay for increased water bills, then the modifications to the system are unaffordable. Because systems ultimately pass additional water treatment costs on to customers, EPA believes that household income remains the appropriate basis for determining affordability. EPA believes that system-level MHI is the most appropriate income metric for determining water system affordability because it meets several reasonable criteria for a national-level affordability methodology. First, MHI data are available nation-wide. Second, the calculation of system-level MHI is simple (it is based on readily available Census data on household income), and finally, the metric can be easily understood. Consequently, it provides a consistent income-based metric for determining affordability or “ability to pay” for new drinking water regulations. Additionally, the NDWAC supported the use of system-level MHI as the metric for determining small water system affordability. EPA used system-level MHI as the basis for its original affordability threshold for several reasons. EPA stated that the approach was based on the assumption that affordability to the median household served by a system can serve as an adequate measure of the affordability of technologies to the system as a whole. EPA does not believe that the economic circumstances of the poorest households within a system should drive its national level affordability methodology. Communities have other mechanisms (e.g., financial assistance, rate structures) for addressing inequalities within a community. EPA chose the median system-level MHI for its original affordability methodology, based on income data from the 1995 CWSS. EPA reasoned that the median is a measure of central tendency and would thus be appropriate for a national level affordability screen because it reflects the characteristics of “typical” systems rather than those at the low end of the income distribution. However, one limitation of basing the national level affordability determination on the median system is that there may be a significant number of systems below the median that might find a regulation unaffordable even when it is affordable to the median system. As a practical matter, this concern can be addressed in two equivalent ways, basing the threshold on a lower MHI percentile (e.g., 25th or 10th percentile, as was suggested by the SAB), or basing it on a lower percentage of the median MHI. The revised approaches that EPA is considering would retain the median MHI and consider lower percentages (rather than using a lower percentile of MHI) because EPA believes this method is more transparent and better supported by existing data. However, EPA wishes to emphasize that looking at lower percentages is to some extent a proxy for looking at lower percentiles. In other words, if EPA were to ultimately select a threshold of, say, 0.5 percent of MHI (one of the options presented below), this is partially in recognition of the fact that that particular income level ($220 for the 25-500 system size category) represents a significantly higher percentage of income for systems at the low end of the income distribution, and it is exactly these systems that are most likely to find a new regulation unaffordable and may thus need a small system variance. In examining the distribution of system-level income across a size category, another argument in favor of applying a lower income percentage to the median system, as opposed to applying a higher percentage to a significantly below-median system (as ranked by its MHI) is the shape of the distribution of system-level MHIs. Toward the lower end of the range, especially at around the 10th percentile system, the income figures tend to drop off sharply. This implies that relatively slight data inaccuracies could have relatively large impacts on estimated income levels. Given the inherent difficulties of measuring income, EPA believes the median system provides a more reliable basis for its national affordability methodology than a system at the low end of the income distribution (e.g., 10th percentile). This is not to suggest that EPA is not concerned about affordability for these systems. On the contrary, it is exactly these systems that are most likely to have affordability issues. But EPA believes that these can be better addressed by choosing a lower income percentage and applying it to the median system MHI. As previously stated, EPA established the current threshold at 2.5 percent of median system MHI. However, that income percentage was applied to a cumulative approach. As recommended by both the SAB and NDWAC, EPA is considering revisions that would drop the expenditure baseline and move to an incremental approach. This means that the total cost of water (including current costs) could be significantly higher than whatever affordability threshold EPA selects, because the threshold is compared only to the incremental cost of complying with the regulation. In addition, as water systems are subject to future regulations, they could potentially be required to undergo expenditures up to the affordability threshold multiple times. The current methodology has also never triggered a finding that a regulation was unaffordable, while the evidence suggests that there may in fact be significant numbers of systems that have struggled with compliance costs for some recent regulations. For all of these reasons, the options EPA is considering for revising its affordability methodology are based on a range of income percentages significantly below the current 2.5% threshold. 3. Need for Improved Implementation at the Federal Level of the Small System Variance Provisions of the SDWA As previously stated, SDWA section 1415(e) authorizes a primacy (primacy enforcement) agency to grant small systems a variance from compliance with an MCL or treatment technique for a NPDWR *only* if EPA has determined that there are no affordable compliance technologies for small systems and EPA has identified affordable variance technologies that are protective of public health. To date, EPA has found no NPDWRs (either existing or new) unaffordable using the current methodology. However, the SAB and various stakeholders have suggested, and EPA recognizes, that some small systems have legitimate affordability concerns regarding compliance with some of these regulations. EPA recognizes that its current approach has not allowed small system variances to be included among the options that States and systems consider as they struggle to address small system affordability issues. EPA is therefore considering revisions that would make a national level determination of unaffordability significantly more likely, thus triggering the listing of affordable variance technologies that are protective of public health. This will in turn give primacy states which choose to include small system variance provisions in their drinking water programs the option to evaluate small system variance applicants on a case-by-case basis and to authorize adoption of affordable alternatives to compliance technologies that provide some measure of regulatory relief while still protecting public health. D. Affordability Methodology Options Based on the SAB and NDWAC recommendations, the Agency is considering several options under which the incremental increase in household water costs that is expected to occur as a result of the system installing, operating, and maintaining a treatment technology required to comply with a NPDWR would be compared to an affordability threshold based on a percentage of household income. In evaluating different household cost and affordability threshold options, EPA considered the three key factors discussed in section III.C (i.e., variability in the household costs of water treatment, variability in the ability of small systems to pay for treatment, and the need for improved implementation at the Federal level of the small system variance provisions of the SDWA). This section discusses the household cost and affordability threshold options EPA is seeking comment on as a result of this process, and discusses EPA's interpretation of affordability for both compliance and variance technologies. 1. Calculating Household Costs There are two issues concerning the calculation of household costs on which EPA is requesting comment:

(1)Should only incremental costs (i.e., those of complying with the new regulation) be considered, or the total (i.e., cumulative) cost of water to consumers after the new treatment technology is installed, and

(2)should costs be evaluated for the 10th percentile or the 50th percentile sized system within a given small system size category. The following discusses each of these issues in turn. EPA is considering using incremental costs of compliance with the new regulation only, rather than the cumulative costs of providing water, as the basis for its affordability determination. This is a change from the Agency's current approach which adds incremental costs to an expenditure baseline to determine affordability. An incremental approach would not calculate or consider current household water bills, nor would it provide a ceiling on the total increase in household costs due to the cumulative effects of different NPDWRs. The Agency believes the incremental approach is a better approach than the current cumulative approach for several reasons. First, the incremental approach focuses directly on the regulation for which affordability is being evaluated. The cumulative approach, in contrast, considers not just the cost of treatment to comply with the new standard but also takes into account costs for existing water system improvements, which may involve treatment for odor control, taste, or other items not regulated under NPDWRs, as well as costs for distributing and storing water. These costs may not be relevant for determining whether a system can afford to comply with NPDWRs. In addition, the cumulative approach could have the effect of making new rules with similar system costs affordable in the near-term, but not in the future, as cumulative costs increase. Additionally, an incremental approach is consistent with SAB and NDWAC recommendations. An incremental approach may also be more transparent than the cumulative approach because it deals with fewer variables and calculations in that it only considers the costs of the regulation in question. EPA requests comment on moving to an incremental approach for calculating household costs. Under its current national affordability methodology, EPA estimates household costs for small systems by estimating each technology's per household cost for the 50th percentile (median) system size in each size category. This approach assumes that affordability to the median sized system within a small system size category can serve as an adequate measure for the affordability of technologies to systems within the size category as a whole. However, household costs for systems at the low end of a system size category are likely to be significantly higher than costs for the median-sized system. This is particularly true for the smallest system size category (serving 25 to 500 people). Thus, even if a NPDWR is affordable to the median sized system within this size category, there may be a significant number of systems at the low end of this category (i.e., serving less than 100 people) for which compliance with the standard would not be affordable. To address this concern, EPA is considering basing its affordability determination on the incremental per household costs for the 10th percentile system size in each system size category rather than the median. This approach recognizes that smaller systems do not enjoy the same economies of scale and have a smaller customer base over which to spread fixed costs of providing water. In general, household costs would most likely be significantly greater for the 10th percentile than for the 50th percentile sized system in a system size category due to this lack of economies of scale. For the current methodology, the Agency determined the 50th percentile system size by compiling the population sizes for all systems in a given size category and finding the system where half of the systems serve fewer individuals. For today's notice, EPA used the same method to determine the 10th percentile system size (i.e., finding the system where 10 percent of the systems serve fewer individuals). Table III-2 provides an example of household costs for the 10th and the 50th percentile size systems within each of the small system size categories. This example demonstrates that the greatest difference in household costs are typically found in the 25-500 size category, as the estimated household cost for the 10th percentile size system is more than double that for the 50th percentile (median) size system. It is this smallest system size category where there is most likely to be an affordability concern. Table III.-2—Comparison of Annual Per Household Costs of Ion Exchange Treatment System size 10th Percentile sized system Population size Treatment costs 50th Percentile sized system Population size Treatment costs 25-500 40 $540 120 $200 501-3,300 600 72 1,195 54 3,301-10,000 3,609 40 5,325 35 Note: Costs are based on cost curve equations in the document *Technologies and Costs for Removal of Arsenic from Drinking Water* (EPA-815-R-00-028). System sizes are determined from SDWISFED January 2004. EPA requests comment on whether it should continue to base affordability determinations on the median system within a size category, or should move to an approach based on costs to the 10th percentile size system. Section 1412(b)(15)(A) of SDWA requires the Administrator to list affordable variance technologies “considering the size of the system and the quality of the source water.” Under the current methodology, EPA estimates household costs for small systems within a size category under a range of scenarios that represent the range of expected source water conditions that these systems are likely to encounter. Thus, the Agency might find a new regulation affordable for systems with a particular source water quality, but not for systems in the same size category with a different source water quality. The Agency plans to continue to evaluate household costs in the same manner. This involves estimating the range of expected levels of a contaminant that may be present in the source water based on available data, as well as considering other source water parameters likely to affect the efficiency of identified treatment technologies, and estimating incremental per household costs separately for each relevant source water quality. If a new regulation is found unaffordable only for some subset of systems within a size category, based on poor source water quality, only those systems with comparably poor source water quality, and for which the regulation may thus be unaffordable, would be eligible to apply for small system variances. EPA requests comment on continuing to evaluate source water quality in this manner. 2. Affordability Determination Options EPA is requesting comment on two distinct approaches for determining affordability. Both approaches would start by determining whether the incremental household cost of treatment to meet a new regulation exceeds an increment based threshold. Under the first approach, this would be the sole criterion for determining affordability. Under the second approach, if EPA were to find the compliance technology affordable at the national level, we would then take the additional step of identifying counties that are economically at-risk, and list affordable variance technologies for small systems in these counties. These systems could then apply to their primacy agency for a variance. In other words, EPA would determine that any regulation is potentially unaffordable for small systems in these economically at-risk counties, and leave it to the primacy agency to evaluate affordability individually for systems applying for a variance, as they are required to do under the SDWA for all small system variance requests if the State includes such variances in its drinking water program. EPA requests comment on which of these two approaches to adopt. EPA further requests comment as to what the most appropriate national affordability threshold is and what system size should be used to calculate costs (i.e., 10th or 50th percentile) for each of the three population size categories defined in SDWA (i.e., 25-500, 501-3,300, and 3,301-10,000). Specifically, EPA requests comment on three affordability thresholds: 0.25 percent, 0.50 percent, and 0.75 percent of the median MHI for small systems in a particular small system size category. The thresholds represent an approximate one third, two thirds, and 100 percent increase in a current median water bills though for any individual system these percent increases might be greater or smaller. EPA also requests comment on comparing the selected threshold with household treatment costs for either the 10th percentile or 50th percentile system size in each of the three population size categories. Table III-3 presents the three thresholds as a percentage of the median incomes among small systems, the current dollar amount for each threshold for a given size category, and the current median, 10th percentile and 90th percentile water bills for each system size category. While the options under consideration are based on an incremental approach, commenters can see from the table what the 10th percentile, median, and 90th percentile projected total cost of water would need to be both before and after a regulation for compliance technologies to be considered unaffordable at a national level. For example, if the 0.5 percent threshold option were selected, compliance technologies would be considered unaffordable if they raised the median water bill for a system in the smallest size category from about $300 to about $520 per year. This would also have the effect of raising the 10th percentile water bill (i.e., a system with low baseline costs) from about $105 to about $325 per year, and of raising the 90th percentile water bill (i.e., a system with high baseline costs) from about $580 to about $800 per year. It should be noted that over time, the total baseline cost of water would rise as new regulations are added, but under the incremental approach being considered today, the affordability threshold would not be adjusted to compensate for this rise, as it is under the current expenditure baseline approach. Table III-3.—Affordability Threshold Options Income threshold Current dollar value (median system MHI 1 ) 25-500 ($44,544) 501-3,300 ($40,872) 3,301-10,000 ($42,459) Threshold 2, 3 = 0.25% MHI $110 $100 $110 Threshold 2, 3 = 0.50% MHI $220 $200 $210 Threshold 2, 3 = 0.75% MHI $330 $310 $320 Current Median Water Bill $299 $294 $285 Current 10th Percentile Water Bill $106 $176 $151 Number of Systems <10th Percentile 4 3,013 1,426 466 Current 90th Percentile Water Bill $576 $492 $488 Number of Systems >90th Percentile 4 3,013 1,426 466 Total Number of Systems 4 30,1323 14,263 4,661 1 Based on 2000 U.S. Census figures adjusted to 2004 using national trends and then to September 2005 using the Consumer Price Index. 2 Percentage of the median value (50th percentile) of a distribution of system-level median household incomes. 3 Threshold calculations are adjusted to two significant figures. 4 Total number of systems in each size category based on January 2004 SDWIS/FED. The second approach is based upon analysis presented in two papers prepared by Scott Rubin (Rubin, 2001 and Rubin, 2002). Under this approach, EPA would use a two-part test to screen at first the national level and then the county level for systems that cannot afford compliance. The national-level screen would work the same way as under the first approach, except that because of the additional screen for at-risk counties, EPA might choose a higher percentage of median system MHI for the national screen than it would under the first approach. Should the national-level screen find that the compliance treatment costs are affordable for some or all small systems, the Agency would proceed to a county level screen to identify economically at-risk counties, in which States could still grant variances. For any small drinking water system in counties deemed to be at-risk in this second part of the affordability test, compliance technologies would be considered potentially unaffordable, regardless of EPA's national per household cost estimates, and it would be up to the primacy agency to grant variances where appropriate based on a system specific analysis of affordability. That is, States would be enabled to determine, based on the criteria in SDWA section 1415(e), whether to grant small system variances to small systems in those at-risk counties. EPA is requesting comment on three socioeconomic triggers for the county-level screen:

(1)MHI less than or equal to 65 percent of the national MHI,

(2)U.S. Census Bureau-defined poverty rate at least twice the national average, or

(3)two-year average unemployment rate at least twice the two-year national average. Under this option, triggering any one of these measures would be sufficient to trigger a finding of unaffordability for small systems within the county. Therefore, this methodology allows for regional socioeconomic conditions to supplement the national-level affordability determination. Table III-4 shows how many counties and small systems would be eligible for variances under this county-level screen. Table III-4.—The Number of Counties, Small Drinking Water Systems, and the Population Served That Would Be Eligible for Small System Variances Under the County-Level Screen Criterion Number of counties 1 Percent all counties Number of small systems 2 Percent all small systems Population served Percent of national population 3 MHI ≤0.65 National MHI 356 11.3 3,485 7.3 4,372,677 1.5 Poverty Rate ≥Twice National Average 81 2.6 532 1.1 950,205 0.3 Two-year Unemployment Rate ≥Twice National Average 80 2.5 920 1.9 1,391,226 0.5 One or more of the Above 410 13.1 4,249 8.8 5,485,158 1.9 1 Based on 3,140 total counties in the U.S. 2 There are 48,025 small drinking water systems in SDWIS that could be linked to counties. 3 Based on July 1, 2004 U.S. Census, the national population was 293,655,404. EPA requests comment on this approach to a county-level affordability screen, and on the specific criteria listed above for identifying economically at-risk counties. 3. Identification of Affordable Variance Technologies As previously stated, SDWA section 1415(e) authorizes a primacy (primacy enforcement) agency to grant small systems a variance from compliance with an MCL or treatment technique for a NPDWR only if EPA has determined that there are no affordable compliance technologies for small systems and EPA has identified affordable variance technologies that are protective of public health. Under the current methodology, EPA uses the same threshold to determine affordability for both compliance and variance technologies. While this seems sensible on its face, it can lead to a situation where no compliance technologies are found to be affordable, but there are no variance technologies that are found to be affordable either. As a result, EPA would not list any variance technologies and primacy agencies (in most cases the States) would be unable to grant small system variances under section 1415(e). This could occur even if there were candidate variance technologies that were both cheaper than the compliance technologies and protective of public health, if these cheaper technologies still exceeded a predetermined affordability threshold. Not listing “affordable” variance technologies in this case would be inconsistent with Congressional intent that States be provided the authority to grant variances which allow small systems that cannot afford to comply fully with NPDWRs to instead adopt alternative protective but less expensive technologies where such technologies are available. EPA is thus considering an alternate approach to determining affordability for variance technologies in situations where there is no candidate variance technology that falls below the affordability threshold. Under this approach, EPA would consider variance technologies “affordable” if they are cheaper than the least expensive compliance technology and still protective of public health. Of course, the Agency's first choice would still be to list variance technologies whose costs fall below the affordability threshold if such technologies are available and protective of public health. As an example, suppose the affordability threshold were set such that it equated to an incremental per household cost of $200 per household per year, and suppose further that the cheapest compliance technology for a particular size category cost $300 per household per year. If there were a candidate variance technology that cost less than $200 per household per year and were protective of public health, EPA would list this technology. But if there were no such technology, and EPA identified a candidate variance technology costing $250 per household per year (and it was protective of public health), EPA would list this as an affordable variance technology even though its costs exceed the affordability threshold of $200 per household per year (in this example). Under this approach, EPA would interpret “affordability” of variance technologies under section 1412(b)(15) as not being limited by the affordability threshold (i.e., 0.25 percent, 0.50 percent, or 0.75 percent of median system MHI) under section 1412(b)(4)(E). Rather, in cases where no variance technology had costs below the affordability threshold, EPA would interpret “affordable” for purposes of listing variance technologies as meaning any technology that is less costly than the corresponding compliance technologies and that is protective of public health. EPA requests comment on this approach to determining affordability for variance technologies. EPA reiterates that its national level affordability methodology is only a screen to make general findings of unaffordability, in accordance with SDWA section 1412(b)(4)(E), not a definitive finding of whether the application of a technology at a particular small system will be affordable. If EPA determines that compliance technologies are not affordable for small systems in one or more categories, then, under section 1412(b)(15), EPA must identify variance technologies that are affordable and protective of public health. Congress left to the primacy (primacy enforcement) agencies (usually the States) the task of granting small system variances on a case-by-case basis to those small systems included in any size/water quality category for which EPA has determined that compliance technologies are generally “unaffordable.” States may utilize EPA's methodology or develop a different methodology for evaluating the affordability of compliance technologies for individual systems. Only if the primacy agency finds that compliance is unaffordable for a specific system, using its chosen affordability methodology, is it authorized under SDWA to grant a small system variance, and as a condition of that variance, the system must install, operate and maintain an alternative variance technology from among the list identified by EPA at the time the regulation was promulgated. Further, the system must operate the variance technology in a way that both EPA (at the national level) and the primacy agency (at the system specific level) determine to be protective of public health. EPA's methodology for determining protectiveness of public health is discussed in Section IV below. EPA believes that interpreting “affordable” to mean something different for compliance and for variance technologies is a reasonable way to implement these provisions in a manner consistent with Congressional intent. First, while Congress provided the same phrase “affordable, as determined by the Administrator in consultation with the States” in both sections of the statute, Congress did not cross-reference the two provisions and expressly left the definition of “affordable” to EPA (in consultation with States). As a result, EPA believes there is flexibility to interpret the terms differently based on the different purposes of these provisions. As noted above, the purpose of the “affordable” finding in section 1412(b)(4)(E) is to serve as a general screen to determine when, as a class, compliance technologies may not be affordable for entire categories of small systems. In contrast, the purpose of the “affordable” finding in section 1412(b)(15) is to list for States those technologies that are generally protective of public health even though the technology would not achieve full compliance with NPDWRs and that would provide some relief for small systems for which compliance technology are not affordable. States must make a site-specific finding of protectiveness and affordability prior to granting a small system variance and it is appropriate for them to have protective technologies available to choose from in order to select the most appropriate for each system. Finally, to interpret the statute in a way that makes variances unavailable when there are no affordable compliance technologies defeats the Congressional purpose in setting up small system variances. If this approach is adopted, and depending on the threshold selected, the actual cost of a variance technology could be greater than the affordability threshold. The lower the affordability threshold chosen, the more likely this result would be. IV. Protective of Public Health Methodology This section presents EPA's approach for determining if an affordable variance technology is protective of public health. As background, this section also discusses how EPA considers public health in establishing drinking water standards. A. How Does EPA Consider Public Health in Establishing Drinking Water Standards? The SDWA requires EPA to consider public health impacts of contaminants at several steps in the process for establishing NPDWRs. EPA considers peer-reviewed science and data collected in accordance with accepted methods to support an intensive evaluation of public health impacts of the contaminant under consideration, which includes factors such as: Occurrence in the environment; human exposure and risks of adverse health effects in the general population and sensitive subpopulations; analytical methods of detection; technical feasibility; and impacts of regulation on water systems, the economy, and public health. However, while the general purpose of SDWA is to protect public health from unacceptable risks that may be posed by contaminants in tap (drinking) water, the criterion in section 1412(b)(15) that variance technologies be “protective of public health” is distinct from the requirements for setting drinking water standards. 1. Setting the Maximum Contaminant Level Goal The Maximum Contaminant Level Goal

(MCLG)is the maximum level of a contaminant in drinking water at which no known or anticipated adverse effect on the health of persons would occur, and which allows an adequate margin of safety. MCLGs are non-enforceable public health goals. Since MCLGs consider only public health and not the limits of detection and costs and capabilities of treatment technologies, sometimes they are set at levels which water systems cannot meet using available technologies, or that can not currently be reliably measured. EPA has traditionally established MCLGs of zero for known or probable human carcinogens based on the default assumption that any exposure to carcinogens might represent some non-zero level of risk. If there is substantial scientific evidence, however, that indicates there is a threshold below which no adverse effect is expected to occur, then a non-zero MCLG can be established with an adequate margin of safety. For non-carcinogens that can cause adverse noncancer health effects, the MCLG is based on the reference dose (RfD). A reference dose is an estimate (with uncertainty spanning perhaps an order of magnitude) that is likely to be without appreciable risk of deleterious effects during a lifetime. It can be derived from a no-observed adverse effect level, lowest-observed adverse effect level, benchmark dose level (the lowest confidence limit of the dose that will result in a level of “x” percent response), or other suitable point of departure. Uncertainty factors are generally applied to reflect limitations of the data used and ensure an appropriate margin of safety. The RfD is multiplied by typical adult body weight and divided by daily water consumption. The result is then multiplied by a percentage of the total allowable daily exposure contributed by drinking water to determine the MCLG. 2. Setting the MCL or Treatment Technique Once the MCLG is determined, EPA sets an enforceable standard. In most cases, the standard is an MCL. When it is not economically and technically feasible to ascertain the level of a contaminant in drinking water, EPA may set a treatment technique rather than an MCL. The MCL is set as close to the MCLG as feasible, which the SDWA defines as the level that may be achieved with the use of the best available technology, treatment techniques, and other means that EPA finds are available taking cost into consideration. The legislative history for this provision makes it clear that “feasibility” is to be defined relative to “what may reasonably be afforded by large metropolitan or regional public water systems.” 2 Thus affordability may be considered in establishing the feasible level, but it is affordability to large water systems. As noted above, costs are generally significantly higher on a per household basis for customers of small systems than for customers of large ones. As a result, what is feasible (taking cost into consideration) for large systems may not be feasible (taking costs into consideration) for small ones. To address this situation, in addition to other tools, SDWA requires EPA to determine if affordable small system compliance technologies are available, and when there are none, SDWA requires EPA to identify small system variance technologies. 2 a Legislative History of the Safe Drinking Water Act, Committee Print, 97th Cong., 2d Sess.

(1982)at 550. After determining a feasible level of treatment or treatment technique based on affordable technologies for large systems, EPA prepares a health risk reduction and cost analysis to determine whether the benefits of the feasible level justify the costs. If not, the Administrator may in some cases set the MCL at a less stringent level that “maximizes health risk reduction benefits at a cost that is justified by the benefits.” In evaluating the quantified benefits and costs, EPA has found the ratio of benefits to costs is likely to be much greater among large systems than it is among small systems. This is because the per household costs are likely to be significantly higher for customers of small systems than for customers of large ones, while the per household benefits will be about the same for both groups. As a general matter, EPA considers the total cost and benefits for all systems (large and small) as the principal factor when determining whether or not benefits of a proposed NPDWR justify its costs. 3 Because this analysis will generally be dominated by the costs and benefits for large systems, it can mask a situation where benefits justify costs for large systems but would not justify the significantly higher costs for small systems. 3 The one exception is that, under the SDWA, EPA must exclude systems likely to be granted small system variances from this determination based on information provided by the States. This is not to suggest that the costs and benefits at small systems can never influence NPDWRs. In fact, small system impacts were a factor in the Agency's determination to utilize this SDWA authority to establish the MCLs for arsenic and uranium at levels less stringent than the feasible levels. However, use of this authority will not ensure that a drinking water standard is affordable to small systems; therefore Congress provided the small system variance provisions as a mechanism for EPA to recognize in the standard setting process the different economic situations of large and small systems. 3. Determining that Variance Technologies are Protective of Public Health As discussed in the previous section, EPA sets drinking water standards based on what is affordable for large systems. In 1996, Congress amended the SDWA to address affordability issues for small systems. Rather than change the Congressional mandate by which EPA establishes drinking water standards (i.e., as close to the MCLG as is “feasible”), Congress established a new small system variance provision under which States would be able to grant special variances to small systems if

(1)EPA makes a finding as part of a new drinking water standard that compliance with the MCL or treatment technique is “unaffordable” for specific groups of small systems and identifies variance technologies that are available, affordable, and “protective of public health,” (section 1412(b)(15)), and

(2)the State makes a subsequent finding that compliance with the new MCL or treatment technique would be unaffordable for a particular small system applying for a variance and that an alternative variance technology identified by EPA would provide adequate protection of human health when installed by that system (section 1415(e)). Thus, the 1996 amendments established a two-step process for granting these variances under which EPA would make general findings of unaffordability and protectiveness at a national level, but where the determinative findings of actual unaffordability and protectiveness at a specific water system would be made by the State, after consultation with the affected consumers following the comprehensive public process for variances set out in section 1415(e) and EPA's regulations at 40 CFR part 142, subpart K. When granted by the State, a small system variance allows a small system that cannot afford to comply with a new drinking standard to install a variance technology that provides treatment which is affordable and protective of human health. SDWA 1412(b)(15)(A) specifically recognizes that the variance technology “ * * * may not achieve compliance with the maximum contaminant level or treatment technique requirement of such regulation * * *,” but does require that the variance technology “ * * * achieve the maximum reduction or inactivation efficiency that is affordable considering the size of the system and the quality of the source water.” Thus, by requiring EPA to establish affordable variance technologies that are protective of public health for systems unable to comply with a new drinking water standard, Congress was clearly intending that EPA consider contaminant levels above the MCL protective of public health for purposes of identifying small system variance technologies. This interpretation is also consistent with the standard setting process itself, which is designed to identify a feasible MCL or treatment technique that provides an acceptable level of public health protection, consistent with the statutory factors considered, which include cost, but only the cost reasonably affordable to large systems. As a result of the two-step statutory findings as well as the fact that Congress clearly intended that the “protective of public health” mandate would necessarily encompass situations in which the applicable federal drinking water standard is not met, EPA views the protectiveness finding to be made under SDWA section 1412(b)(15) as a national-level screen, not a definitive finding that a particular technology or contaminant level is adequately protective for a particular public water system and its customers. Instead, Congress left to the primacy agencies (usually States) the task of determining:

(1)Which specific small systems, within a class for which EPA has determined that compliance is generally “unaffordable,” are truly unable to afford to comply with the standard, and

(2)the specific conditions under which the use of a listed variance technology would be protective of public health at a particular system. EPA expects that States would be partially guided by public input from within the affected communities in making these system-specific determinations, particularly the determination regarding the appropriate level of public health protection. B. Methodology To Identify Affordable Variance Technologies That Are Protective of Public Health The Agency requests comment on finding a variance technology to be sufficiently protective of public health for purposes of the national-level screen required by SDWA section 1412(b)(15) if the concentration of the target contaminant after treatment by the variance technology is no more than three times the MCL. When evaluating variance technologies for treatment technique standards, EPA similarly requests comment on finding a variance technology sufficiently protective of public health if the Agency determines that the expected concentration of the target contaminant in water treated by the variance technology would not be more than three times greater than the expected concentration of the contaminant if the same source water were treated in accordance with the requirements of the treatment technique. EPA would view this 3x level as a general guideline, which might be modified for a specific contaminant if unusual factors associated with the contaminant or EPA's risk assessment suggested that an alternate level, whether higher or lower, was appropriate. In such cases, EPA would clearly explain its reasons for departing from the 3x guideline in the proposed rule and request public comment on the alternate level. EPA is required under the SDWA to establish MCLGs based on best available science. Even the best available science is limited and therefore has some degree of uncertainty. For contaminants with non-zero MCLGs, the uncertainty in the estimate of the level of exposure that is likely to represent an appreciable risk may span an order of magnitude (i.e., 10 fold or one log unit) or more. For carcinogens, EPA generally uses a default assumption that sets the MCLG at zero and uses the cancer slope factor (which contains some uncertainty) to inform its MCL decision. In addition, SDWA requires that MCLGs be set at a level at which no adverse effects occur and “which allows an adequate margin of safety.” In many cases, the margin of safety may also span an order of magnitude or more in recognition of this uncertainty (as well as other factors). The margin of safety embodied in the MCLG may be explicit, or it may result from the parameter choices used in the risk assessment (e.g., use of 95th percentile upper confidence bound for a dose response function or point of departure). As described in Section IV.A.2 of this notice, SDWA generally requires EPA to set the MCL as close to the MCLG as is feasible. Determining what is feasible involves considerations of treatment technology effectiveness, measurement capabilities, and cost, all of which also involve uncertainty. In SDWA section 1412(b)(15), Congress assumed that some level less stringent than the MCL would still be sufficiently “protective” for small systems for which compliance with the MCL is unaffordable. Therefore, EPA believes that for purposes of determining what is “protective” under this section, it is reasonable to allow variance technologies to be considered by the primacy agency if such technologies achieve removal of a contaminant from drinking water within a span of one log unit

(10x)centered on the MCL, which is established through a SDWA mandated procedure designed to identify an acceptable level of risk for drinking water, taking all of the statutory factors into account. Therefore, EPA requests comment upon considering concentrations up to three times the MCL “protective of public health” under SDWA section 1412(b)(15)(B). EPA believes that for the majority of contaminants, restricting the contaminant level for a variance technology to not more than three times the level that would be produced by a compliance technology would be adequately protective for purposes of enabling States to make a variance decision. While EPA recognizes that consuming water with as much as three times the concentration of a particular contaminant results in greater exposure and may translate to a greater risk of adverse health effects, EPA believes that the small system variance provisions, as directed by Congress, are intended to permit State primacy agencies, small water systems, and their consumers to decide, within a range of levels close to the drinking water standard, the specific conditions upon which they can best assure the safety of their water supply when they are unable to afford compliance. EPA believes that this methodology for determining if a variance technology is protective of public health is transparent and reproducible. State officials, water system operators, and water system consumers will be able to readily understand the basis for the national determination and evaluate its applicability to their system specific conditions. V. State Consultation SDWA section 1412(b)(15)(A) requires “consultation with the States” by EPA in its determination that variance technologies are available and affordable. EPA has consulted with administrators of State drinking water programs in developing the options for revising the affordability methodology presented in today's notice. The NDWAC Work Group whose recommendations on the affordability methodology are described earlier in this notice included administrators of the drinking water programs from two States. Additionally, on December 5, 2005 EPA consulted with drinking water administrators from seven States regarding the options under consideration for revisions to the methodology for evaluating the affordability of new drinking water standard and determining if variance technologies are protective of public health. State administrators expressed concern that implementation of the revisions described in today's notice would result in a two level standard: one standard for small systems that cannot afford compliance, and another more stringent standard for all other systems. A State administrator noted the risk communication challenge that such a situation would pose. States expressed concern that reviewing and issuing small system variances for future regulations will place additional demands upon their already limited, and in many cases decreasing, State drinking water program resources. If a State chooses to include small system variances in its drinking water program, SDWA section 1415(e)(3) requires the State to determine that a system on a case by case basis, cannot afford to comply and that the terms of a variance will ensure adequate protection of public health before it may grant a variance. SDWA section 1415(e)(7) requires notification of customers, and a public hearing before granting a variance. States agreed with the conclusion of the NDWAC that alternatives to the variance process, including cooperative strategies (e.g., State leadership to promote cooperation among small systems), and targeted use of funding to disadvantaged water systems (e.g., supporting individual households with a LIWAP funded through Congressional appropriation) are more appropriate means to address affordability issues associated with small public water systems that cannot afford to comply with a NPDWR. States also believe that EPA should consider NDWAC's recommendation of an incremental affordability threshold of one percent of median household incomes among small systems (approximately $400 per year). EPA appreciates and has carefully considered the State administrators' concerns. EPA is sensitive to the risk communication challenge posed by different systems effectively having different standards, based on affordability. However, Congress in amending SDWA determined that cost differences between large and small systems may make it appropriate for a small system to operate above the MCL as long as it achieves the maximum reduction that is affordable. Small systems have the greatest treatment costs per household served due to economies of scale. Households that receive water from these systems face the greatest challenge of affording to comply with a drinking water standard. Congress established the small system variances as an answer to this problem; however, the current methodology has never triggered a finding that a regulation was unaffordable. The options being considered by EPA are more likely to trigger such a finding and thus make small system variances available as one option that States and small systems customers may consider. States that choose to implement a small system variance program would make the system-specific determinations on affordability and protectiveness for regulations EPA determines are unaffordable. It is the choice of an individual small system and the community it serves whether to apply for a variance following a comprehensive public process (set out in SDWA section 1415(e)). This process ensures that customers of a small system will be fully informed and have opportunity for input into the decision before a system receives a variance. EPA would not expect a variance application to be successful without significant community support. EPA is also mindful of the potential strain on State resources of evaluating small system variance applications. EPA notes that States are not required to include small system variances in their drinking water programs. EPA's affordability methodology is merely a screen. If a regulation is found unaffordable and EPA is able to identify more affordable variance technologies which are protective of public health, States that wish to grant small system variances and communities that wish to apply for them may do so. EPA also appreciates the State recommendations for alternatives to small system variances. EPA believes that such variances should be a last resort. Where a State is able to make financial assistance available to small systems for compliance through its SRF, or aggressively encourage cooperation among small systems, EPA strongly encourages States to do so. As for the recommendation that assistance be targeted directly to low income consumers through some kind of LIWAP program, only Congress can authorize such an approach. In the meantime, EPA has a responsibility to utilize the existing tools under the Safe Drinking Water Act, which include small system variances, as mechanisms to address the legitimate affordability concerns of small systems and their customers. Finally, EPA has not included the NDWAC recommendation among the options it is considering because, in EPA's judgment, it would not allow for appropriate implementation at the Federal level of the small system variance provisions that Congress included in the SDWA. As Table III-1 shows, an incremental threshold of $400 would not likely have triggered an unaffordability finding or the listing of alternative, protective variance technologies for any size category of small systems for any recent drinking water standard. For all of the reasons discussed previously in this notice, EPA believes that some small systems have genuinely struggled with compliance costs for some recent NPDWRs, and that EPA needs an affordability methodology that will allow States that wish to do so an opportunity to address these concerns through, among other strategies, the granting of protective small system variances where appropriate. VI. Request for Comment The EPA seeks comments on the range of issues addressed in this notice. The information and comments submitted in response to this notice will be considered in determining the affordability methodology for small drinking water systems and the methodology for determining when variance technologies are protective of public health. Specifically, EPA seeks comments on the following issues: 1. EPA requests comment on basing its determination of affordability on the incremental cost of new treatment required rather than the total (i.e., cumulative) cost of water to consumers after the new treatment technology is installed. 2. EPA requests comment on whether it is more appropriate to base its affordability determination on the incremental costs of treatment for the system at the 10th percentile or the 50th percentile of system size in each small system category. 3. EPA requests comment on what the most appropriate national-level percentage threshold is (i.e., 0.25 percent, 0.50 percent, or 0.75 percent of the median MHI among small systems within a size category). 4. EPA requests comment on the key factors considered in developing affordability methodology options as described in section III.C of this notice. Do commenters believe these are the appropriate factors to consider? Are there other factors commenters would suggest the Agency consider? 5. EPA requests comment on whether the Agency should use a two-part test to screen at the national and county levels for systems that cannot afford compliance. Additionally, EPA seeks comment on whether the county or a different level is the appropriate unit of analysis for the second part of this test. The approach would first compare the incremental household cost of compliance to a national income-based threshold. If EPA were to find compliance affordable at the national level, we would then identify counties that are economically at-risk based on three socioeconomic triggers (MHI less than or equal to 65 percent of the national MHI, a U.S. Census Bureau-defined poverty rate at least twice the national average, or a two-year average unemployment rate at least twice the two-year national average). EPA also requests comment on the specific triggers that should be used to identify economically at-risk counties. 6. EPA requests comment upon its interpretation of affordability in section III.D.3 of today's notice. That is, should EPA consider variance technologies affordable even when they do not fall below the affordability threshold in cases where there would otherwise be no affordable variance technologies to list. 7. EPA requests comment on implementation challenges to States in reviewing and issuing small system variances. 8. EPA requests comment on finding a variance technology to be protective of public health if the concentration of the target contaminant after treatment by the variance technology is no more than three times the MCL unless unusual factors associated with the contaminant or EPA's risk assessment suggest that an alternate level is appropriate, in which case EPA would explain its basis for the alternate level and request public comment in the proposed rule. EPA requests comment on whether a finding that variance technologies are protective of public health if they achieve a contaminant level within three times the MCL should be “capped” at a particular risk level (i.e., 10 -3 ) in order to provide further assurance that variance technologies are in fact protective. The Agency also requests comment on any other issue raised by this notice on options for revising its national-level affordability methodology or its methodology for determining if a variance technology is protective of public health. VII. References National Drinking Water Advisory Council (NDWAC). 2003. Recommendations of the National Drinking Water Advisory Council to U.S. EPA on Its National Small Systems Affordability Criteria. Available at *http://www.epa.gov/safewater/ndwac/council.html.* Rubin, Scott, J. 2001. White Paper for National Rural Water Association, Criteria to Assess the Affordability of Water Service. Available at *http://www.nrwa.org.* Rubin, Scott, J. 2002. White Paper for National Rural Water Association, Criteria to Assess Affordability Concerns in Conference Report for H.R. 2620. Available at *http://www.nrwa.org.* U.S. EPA. 1998. Announcement of Small System Compliance Technology Lists for Existing National Primary Drinking Water Regulations and Findings Concerning Variance Technologies. Notice. **Federal Register** Vol 63, No. 151, p. 42032. August 6, 1998. Available at *http://www.epa.gov/safewater/standard/clistfrn.pdf.* U.S. EPA Science Advisory Board (SAB). 2002. Affordability Criteria for Small Drinking Water Systems: An EPA Science Advisory Report. EPA-SAB-EEAC-03-004, U.S. EPA Science Advisory Board, Washington, DC, December 2002. Available at *http://www.epa.gov/sab.* Dated: February 14, 2006. Benjamin H. Grumbles, Assistant Administrator, Office of Water. [FR Doc. 06-1917 Filed 3-1-06; 8:45 am]

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