Rules and Regulations. Final rule

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BILLING CODE 4120-01-P DEPARTMENT OF THE INTERIOR Bureau of Land Management 43 CFR Part 5420 [WO-270-1820-00-24 1A] RIN 1004-AD70 Preparation for Sale AGENCY: Bureau of Land Management, Interior. ACTION: Final rule. SUMMARY: The Bureau of Land Management

(BLM)amends its regulations on preparation for timber sales to allow third party scaling on density management sales with an upper limit on the quadratic mean diameter at breast height

(DBH)of the trees to be harvested of 20 inches. Third party scaling will be limited to the situations described in the amended provision, that is, if a timber disaster has occurred and a critical resource loss is imminent, and tree cruising and BLM scaling are inadequate to permit orderly disposal of the damaged timber, or if BLM is carrying out density management timber sales subject to the size limits stated above. Thus, third party scaling will generally not be used for sales of higher-value and/or larger diameter timber. BLM is amending the regulations in order to improve the efficiency of density management timber sales where the timber to be harvested may be designated by prescription (a written prescription included in the timber sale contract). The regulations will no longer require that BLM perform all scaling except in the event that a timber disaster is threatening imminent critical resource loss and scaling by BLM would be inadequate to permit orderly disposal of the damaged timber. In the case of density management timber sales when the quadratic mean DBH of trees to be cut and removed is equal to or less than 20 inches, the regulations will only allow third party scaling by scalers or scaling bureaus under contract to BLM. DATES: *Effective Date:* June 26, 2006. ADDRESSES: Inquiries or suggestions should be sent to Director (270), Bureau of Land Management, Eastern States Office, 7450 Boston Boulevard, Springfield, Virginia 22153, Attention: RIN 1004-AD70. FOR FURTHER INFORMATION CONTACT: For technical questions about the rule, contact Lyndon Werner at

(503)808-6071 or Scott Lieurance at

(202)452-0316. For procedural questions about the rulemaking process, contact Ted Hudson at

(202)452-5042. Persons who use a telecommunications device for the deaf

(TDD)may contact these persons through the Federal Information Relay Service

(FIRS)at 1-800-877-8339, 24 hours a day, 7 days a week. SUPPLEMENTARY INFORMATION: I. Background II. Discussion of Public Comments III. Procedural Matters I. Background BLM Districts have been testing different methods of selling timber, such as Designation-by-Prescription (DxP), attempting to gain efficiencies, especially with a program comprised of substantially more density management and small logs than was historically the case. This testing has revealed that the gain in efficiency by using such methods is lost due to the regulatory requirement that BLM personnel conduct all the scaling if a DxP sale is scale as opposed to lump sum. Otherwise, scale DxP sales can be more efficient in certain situations (small diameter density management). 43 CFR 5422.1 states: “[a]s the general practice, the Bureau will sell timber on a tree cruise basis,” which means lump-sum sales. Section 5422.2(a) states: “[s]caling by the Bureau will be used from time to time for administrative reasons.” Lump-sum sale is the default. There must be an interest-of-the-Government reason to conduct a scale sale. 43 CFR 5422.2(b) allows third party scaling when all of three conditions are met:

(1)A timber disaster has occurred;

(2)A critical resource loss is imminent; and

(3)Lump-sum timber measurement practices are inadequate to permit orderly disposal of the damaged timber. Regular commercial density management sales obviously do not meet these conditions. The definition of third party scaling found in 43 CFR 5400.0-5 is “the measurement of logs by a scaling organization, other than a Government agency, approved by the Bureau.” This includes the non-governmental scaling bureaus that normally contract with purchasers to scale in mill yards. BLM does contract with these scaling bureaus to scale for administrative check scales. Historically, BLM timber sales, particularly in western Oregon, were clearcuts of high-value large timber. Log accountability was the principal reason for the aforementioned regulations limiting scale sales and third party scaling. These provisions are intended to minimize the potential for log theft. Today's sale program, however, has a considerable component of density management sales in lower-value, smaller-log situations that meet one or more of the following objectives: Growth enhancement, habitat restoration, or fuels/fire hazard reduction. Density management sales are timber sales intended to accomplish these objectives by removing smaller trees and understory that may inhibit growth or forest health or contribute to fuel buildup. In addition, density management sales intended to enhance wildlife habitat may remove some dominant and co-dominant trees in the forest stand to enhance biological diversity. Smaller logs cannot be efficiently and effectively truck scaled. Scaling in the mill yards as trucks are unloaded is faster and more accurate. II. Discussion of Public Comments We published the proposed rule on November 17, 2005 (70 FR 69714). The comment period for the proposed rule closed on January 17, 2006. During the comment period, we received 4 public comments on the proposed rule. One comment expressed general opposition to third party scaling, stating that it would be a way to let profiteers cheat U.S. citizens who own the public lands even more than they do now. The comment went on to criticize the Mining Law of 1872. We have not changed the final rule in response to this comment. As we stated in the preamble to the proposed rule, third party scaling will provide flexibility in marketing and selling small diameter timber sales. This will be highly cost-effective for BLM and timber sale purchasers alike. The change to allow third party scaling of timber sales will lead to a dramatic efficiency improvement for the Bureau and timber sale purchasers when timber disasters threaten imminent resource loss. Ultimately, with third party scaling, BLM will receive higher timber payments for timber sold—as compared to the current regulation that precludes third party scaling. The current regulation is unnecessarily costly, inefficient, and affords no greater government accountability as to timber or logs. Three comments expressed general support for the proposed rule. One stated that the savings in risk assessment and man hours along with the efficiencies of operating a scaled sale, as opposed to a lump-sum sale, will be beneficial to both BLM and industry. Another stated that third party scaling will allow BLM managers use of both of the two commonly-accepted practices used by the forest products industry throughout the Northwestern United States. The comment went on to express agreement with the analysis of the effect of the rule stated in the preamble of the proposed rule. One of these comments expressed general support for selling timber on a “recovery” basis (i.e., scale sales) as outlined in the proposed rule, so long as implementation is carried out without detriment to the purchaser. The comment stated, however, that the proposed rule did not provide sufficient assurance or explanation of this. The comment addressed several specific concerns in this regard. The first related to the particular scaling rules used to measure the quantity of timber; the second related to accountability and security; the third related to log scaling site approval; and the fourth related to opportunities to sample scale. The comment recommended that Westside (long log) scaling rules, which it describes as the industry standard, be used. (These standards apply in western Oregon and Washington, and Alaska.) BLM interprets this comment to apply only to the timber sale program in western Oregon. Nationally, BLM uses Scribner short log board foot rules in order to have a consistent measure across the Bureau. In Oregon and Washington, where approximately three-quarters of BLM timber volume is offered for sale, BLM follows the Northwest Log Rules handbook, and specifically the Scribner short log rule. Northwest Log Rules is an association of Federal agencies (BLM, Forest Service, and Bureau of Indian Affairs), the States of Oregon and Washington, and the local scaling bureaus (non-profit third party scaling organizations). The Northwest Log Rules handbook also includes the Westside long log scaling rules, the industry standard. These Northwest short and long log rules employ consistent log rules and are readily converted from one to the other. Industry expressed considerable consternation when BLM was using cubic foot rules for lump-sum and scale sales, but BLM ceased that policy and returned to board foot measure in 2004. BLM believes that, with smaller diameter timber making up a substantial part of the total volume offered, a short log rule (as opposed to long log) more accurately predicts the actual board foot recovery from a given tree or log, since there is more volume not accounted for due to the greater amount of taper in a 32-foot log under long log rules as opposed to a 16-foot log under short log rules. Board feet measurement is made based on a cylinder whose diameter is measured at the narrow end of the log. The comment's concerns about BLM's procedures for log accountability and security measures, and standards for log scaling site approval, are important issues for BLM as well when conducting scale timber sales. However, BLM believes these issues should be matters of policy and not codified in regulation. Policy changes in response to changing conditions can be made much more readily than changes in regulations. BLM is interested in industry's particular concerns, and in effectiveness and efficiency for both parties. However, we recommend that industry representatives raise their concerns at the semi-annual Federal Timber Purchaser Committee meetings held with BLM representatives in western Oregon. Accordingly, we have not incorporated scaling procedures and rules in the regulations on scale sales, and have not amended the proposed rule in response to the comment. The final issue raised in the comment was the opportunity to sample scale. In Oregon and Washington, virtually all scale timber sales and administrative check scales have recently been and will likely continue to be sample scale measured. An administrative check scale occurs when the BLM, through third party scalers, scales a lump-sum timber sale to assess the actual volume removed as a quality control check on the original pre-sale estimate of timber volume. This scale volume does not affect the volume or value of the lump-sum timber sale contract. The uncommon exceptions, where 100 percent of the truck loads of logs are scaled, might be sales of less than 500,000 board feet and/or sales of large diameter and highly defective and/or otherwise variable timber. These kinds of sales may not all be sample scaled and will more likely be 100 percent scaled. III. Discussion of the Final Rule The final rule adds one sentence to § 5422.2 on scale sales: “BLM may also order third party scaling, only by scalers or scaling bureaus under contract to BLM, for the scaling of density management timber sales when the quadratic mean diameter of the trees to be cut and removed is equal to or less than 20 inches.” (The quadratic mean diameter is a measure used by foresters as an index of the size of trees in a stand. According to the Dictionary of Forestry, the quadratic mean diameter is the diameter of the tree corresponding to the tree of mean basal area. Basal area is the cross-sectional area of a tree measured at breast height. The basal area of a tree with DBH equal to the quadratic mean diameter is equal to the mean basal area of the stand.) This will enable us to conduct density management sales while taking advantage of the improved economies that third party scaling may provide, such as by allowing scaling in the mill yards as trucks are unloaded, which is faster and more accurate. For the sake of clarity, we also divide § 5422.2(b) into three paragraphs, the second of which comprises this new provision. Paragraph (b)(1) consists of the first sentence of existing paragraph (b), which covers the disaster situation in which third party scaling is allowed, and paragraph (b)(3) consists of the second sentence of existing paragraph (b), which requires that third party scaling must follow BLM standards in use for timber depletion computations, so that we can make sure that sales conform with sustained yield principles. Redesignated paragraph (b)(1) is also amended editorially to read in active voice. Neither paragraph (b)(1) nor (b)(3) contains substantive changes. The final rule does not represent a major shift to scale sales for density management. Rather, it provides a multifaceted “tool kit” of sale method options allowing us to maintain as cost effective a program as possible. It is not in the best interest of the Government to scale all density management sales. In certain cases, the costs of administering a lump-sum sale are less than costs of conducting scaling, making the lump-sum sale the preferred in-the-interest-of-the-Government option. IV. Procedural Matters Executive Order 12866, Regulatory Planning and Review This final rule is not a significant regulatory action and is not subject to review by Office of Management and Budget under Executive Order 12866. The final rule will not have an effect of $100 million or more on the economy. The average cost of contract scaling is approximately $1.50 per thousand board feet. The approximate average annual number of sales contracts over the past several years that would have qualified for third party scaling under the final rule has been ten sales. The new provision will enable BLM to prepare and administer certain contracts (that otherwise qualify to be sold as a scale sale) more efficiently, saving approximately $90,000 per year. These savings are not directly passed onto purchasers. There may be a slight savings to a purchaser of a scale sale over a lump-sum sale due to their not having to conduct pre-sale measures of the sale volume to the same intensity. For the same reasons, the final rule will not adversely affect in a material way the economy, productivity, competition, jobs, the environment, public health or safety, or state, local, or Tribal governments or communities. The rule will impose no requirements on any governmental entities. The final rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. The approach in the final rule is similar to that of the Forest Service in using third party scaling. The final rule does not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the right or obligations of their recipients, having no effect on any of these matters; nor do they raise novel legal or policy issues. National Environmental Policy Act BLM has determined that this final rule authorizing certain timber cuts to be scaled by BLM-approved third parties is a regulation of an administrative and financial nature. Therefore, it is categorically excluded from environmental review under section 102(2)(C) of the National Environmental Policy Act, pursuant to 516 Departmental Manual (DM), Chapter 2, Appendix 1. In addition, the final rule does not meet any of the 10 criteria for exceptions to categorical exclusions listed in 516 DM, Chapter 2, Appendix 2. Pursuant to Council on Environmental Quality regulations (40 CFR 1508.4) and the environmental policies and procedures of the Department of the Interior, the term “categorical exclusions” means a category of actions which do not individually or cumulatively have a significant effect on the human environment and that have been found to have no such effect in procedures adopted by a Federal agency and for which neither an environmental assessment nor an environmental impact statement is required. Regulatory Flexibility Act Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as amended, 5 U.S.C. 601-612, to ensure that Government regulations do not unnecessarily or disproportionately burden small entities. The RFA requires a regulatory flexibility analysis if a rule would have a significant economic impact, either detrimental or beneficial, on a substantial number of small entities. The final rule will likely provide additional business opportunities to scalers and scaling bureaus, which are mostly if not all small entities. The average cost of contract scaling is approximately $1.50 per thousand board feet. The approximate average annual number of sales contracts over the past several years that would have qualified for third party scaling under the final rule has been ten sales. The new provision will enable BLM to prepare and administer certain contracts (that otherwise qualify to be sold as a scale sale) more efficiently, saving approximately $90,000 per year. These savings are not directly passed onto the purchasers. There may be a slight savings to a purchaser of a scale sale over a lump-sum sale due to their not having to conduct pre-sale measures of the sale volume to the same intensity. Therefore, BLM has determined under the RFA that this final rule will not have a significant economic impact on a substantial number of small entities. Small Business Regulatory Enforcement Fairness Act (SBREFA) This final rule is not a “major rule” as defined at 5 U.S.C. 804(2). That is, it will not have an annual effect on the economy of $100 million or more; it will not result in major cost or price increases for consumers, industries, government agencies, or regions; and it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. It merely allows BLM to contract out a management step in timber volume measurement for some types of timber sales to non-governmental entities that can operate more efficiently than the Bureau. Unfunded Mandates Reform Act The final rule does not impose an unfunded mandate on state, local, or Tribal governments or the private sector, in the aggregate, of $100 million or more per year; nor will the final rule have a significant or unique effect on state, local, or Tribal governments. The rule imposes no requirements on any of these entities. We have already shown, in the previous paragraphs of this section of the preamble, that the change in this rule will not have effects approaching $100 million per year on the private sector. Therefore, BLM is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq.) Executive Order 12630, Governmental Actions and Interference With Constitutionally Protected Property Rights (Takings) The final rule is not a government action capable of interfering with constitutionally protected property rights. The rule allows BLM to contract out one step in the timber volume measurement process, and does not provide for the taking or reduction in value of, or any other effect on any private property. Therefore, the Department of the Interior has determined that the rule will not cause a taking of private property or require further discussion of takings implications under this Executive Order. Executive Order 13132, Federalism The final rule will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. It does not apply to states or local governments or state or local governmental entities. Therefore, in accordance with Executive Order 13132, BLM has determined that this final rule does not have sufficient Federalism implications to warrant preparation of a Federalism Assessment. Executive Order 12988, Civil Justice Reform Under Executive Order 12988, we have determined that this final rule will not will burden the judicial system and that it meets the requirements of sections 3(a) and 3(b)(2) of the Order. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments In accordance with Executive Order 13175, we have found that this final rule does not include policies that have Tribal implications. There are no substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. There will be some small economic benefit to scalers and scaling bureaus, and therefore to any American Indians that may be employed by or otherwise financially connected to such entities. There are, however, no policy implications that require consultation with Indian Tribes. Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use In accordance with Executive Order 13211, BLM has determined that the final rule will not have substantial direct effects on the energy supply, distribution, or use, including a shortfall in supply or price increase. The rule does not relate to energy supply, distribution, or use in any respect. Executive Order 13352, Facilitation of Cooperative Conservation In accordance with Executive Order 13352, BLM has determined that this final rule is purely administrative and does not affect cooperative conservation. This final rule takes appropriate account of and considers the interests of persons with ownership or other legally recognized interests in land or other natural resources because it does not interfere with such interests. The final rule solely affects a Federal responsibility not involving state or local participation, and has no impact on public health and safety. Paperwork Reduction Act This final rule does not contain information collection requirements that the Office of Management and Budget must approve under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 *et seq.* Author The principal authors of this final rule are Scott Lieurance, Forester—Senior Specialist, Washington Office, and Lyndon Werner, Forester, Oregon State Office, assisted by Ted Hudson, Senior Regulatory Specialist, Washington Office, Bureau of Land Management. List of Subjects in 43 CFR Part 5420 Forests and forest products, Government contracts, Public lands, Reporting and recordkeeping requirements. Dated: April 20, 2006. Johnnie Burton, Acting Assistant Secretary of the Interior. Accordingly, for the reasons stated in the preamble and under the authorities stated below, BLM amends 43 CFR part 5420 as set forth below: PART 5420—PREPARATION FOR SALE 1. The authority citation for part 5420 continues to read as follows: Authority: 61 Stat. 681, as amended, 69 Stat. 367; Sec. 5, 50 Stat. 875; 30 U.S.C. 601 *et seq.* ; 43 U.S.C. 1181e. Subpart 5422—Volume Measurements 2. Amend § 5422.2 by revising paragraph

(b)to read as follows: § 5422.2 Scale sales.

(1)BLM may order third party scaling after determining that all of the following factors exist:

(i)A timber disaster has occurred;

(ii)A critical resource loss is imminent; and

(iii)Measurement practices listed in § 5422.1 and paragraph

(a)of this section are inadequate to permit orderly disposal of the damaged timber.

(2)BLM may also order third party scaling, only by scalers or scaling bureaus under contract to BLM, for the scaling of density management timber sales when the quadratic mean diameter of the trees to be cut and removed is equal to or less than 20 inches.

(3)Third party scaling volumes must be capable of being equated to BLM standards in use for timber depletion computations, to insure conformance with sustained yield principles. [FR Doc. E6-8109 Filed 5-25-06; 8:45 am] BILLING CODE 4310-84-P DEPARTMENT OF HOMELAND SECURITY Federal Emergency Management Agency 44 CFR Part 62 [FEMA-2005-0057] RIN 1660-AA41 National Flood Insurance Program (NFIP); Appeal of Decisions Relating to Flood Insurance Claims AGENCY: Federal Emergency Management Agency (FEMA), Department of Homeland Security. ACTION: Interim final rule. SUMMARY: This interim final rule will amend the National Flood Insurance Program

(NFIP)regulations to include an appeals process for NFIP policyholders as required by Congress in Section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act

(FIRA)of 2004. DATES: *Effective:* This rule is effective June 26, 2006. *Comments:* Comments due on or before July 25, 2006. ADDRESSES: You may submit comments, identified by Docket Number FEMA-2005-0057, by one of the following methods: Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. E-mail: *FEMA-RULES@dhs.gov.* Include Docket Number FEMA-2005-0057 in the subject line of the message. Fax: 202-646-4536. Mail/Hand Delivery/Courier: Rules Docket Clerk, Office of General Counsel, Federal Emergency Management Agency, Room 406, 500 C Street, SW., Washington, DC 20472. *Instructions:* All Submissions received must include the agency name and docket number (if available) for this interim final rule. All comments received will be posted without change to *http://www.regulations.gov,* including any personal information provided. For detailed instructions on submitting comments, see the “Public Participation” heading of the SUPPLEMENTARY INFORMATION section of this document. *Docket:* For access to the docket to read background documents or comments received, go to the Federal eRulemaking Portal at *http://www.regulations.gov.* Submitted comments may also be inspected at FEMA, Office of General Counsel, 500 C Street, SW., Room 406, Washington, DC 20472. FOR FURTHER INFORMATION CONTACT: James Shortley, Director of Claims, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472,

(202)646-3418 (Phone),

(202)646-4327 (facsimile), or *James.Shortley@dhs.gov.* (e-mail). SUPPLEMENTARY INFORMATION: Public Participation Interested persons are invited to participate in this notice by submitting written data, views, or arguments on all aspects of the interim final rule. FEMA also invites comments that relate to the economic, environmental, or federalism affects that might result from this interim final rule. Comments that will provide the most assistance to FEMA in developing this interim final rule will reference a specific portion of the interim final rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change. See ADDRESSES above for information on how to submit comments. Background In the face of mounting flood losses and escalating costs of disaster relief to the taxpayers, the NFIP was established by Congress as part of the National Flood Insurance Act of 1968 (the Act). Public Law 90-448, Title XII (Aug. 1, 1968), as amended, 42 U.S.C. 4001, *et seq.* The intent of the NFIP is to reduce future flood damage through community floodplain management ordinances, and to make risk-based flood insurance generally available for property owners. FEMA was designated by Congress to be the administrator of the NFIP. In 1983, FEMA partnered with the private insurance industry to expand the NFIP policy base. This partnership between FEMA and the private sector property insurance companies is termed the Write Your Own

(WYO)Program. The WYO Program is a cooperative undertaking between the insurance industry and FEMA. The WYO Program allows participating property and casualty insurance companies to issue and service the NFIP Standard Flood Insurance policies (SFIPs) in their own names. FEMA also uses the services of contractors to process NFIP policy information from the WYO Companies and the agents and to service SFIPs sold directly by FEMA. Contractors are sometimes employed by the WYO Companies to handle and adjust claims. Section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act

(FIRA)of 2004 (Pub. L. 108-264 (June 30, 2004)), requires FEMA to establish by regulation an additional process for the appeal of decisions of flood insurance claims issued through the NFIP. This process will enable policyholders to formally appeal the decisions of any insurance agent or adjuster, or insurance company, or any FEMA employee or contractor with respect to their SFIP claims, proofs of loss, and loss estimates. FEMA traditionally has used an informal process to handle appeals regarding decisions related to coverage or claims under the NFIP. The initial correspondence and associated claims documentation are reviewed and additional investigation is conducted as necessary. The Federal Insurance Administrator is responsible for decisions on informal claims, and the appropriate entities are notified to facilitate full resolution of the appeal. FEMA is now codifying into regulation, pursuant to the FIRA of 2004, its informal appeals process. Under this new appeals process, FEMA will acknowledge receipt of a policyholder's appeal in writing and will advise the policyholder if additional information is required in order to consider fully the appeal. FEMA will review the documentation submitted by the policyholder and will conduct any necessary additional investigation. FEMA will advise the policyholder and the appropriate flood insurance carrier of FEMA's decision regarding the appeal. Discussion The Act and the SFIP authorize an insured (or policyholder) who is dissatisfied with an insurer's decision to deny a claim, in whole or part, to file a lawsuit in Federal district court for the disallowed portion of the claim, or to invoke the appraisal provision of the SFIP, a procedure to resolve disputes regarding the actual value of covered losses. This rule provides a formal appeals process for resolving flood insurance disputes prior to litigation. The appeals process outlined in this interim final rule does not abolish or replace the right to file a lawsuit against the insurer pursuant to the Act (42 U.S.C. 4072), nor does it expand or change the one-year statute of limitation to file suit against the insurer for the disallowed portion of the insured's claim. To avoid potentially conflicting results and duplicative efforts, an insured who files suit against an insurer is prohibited from filing an appeal under this appeals process. Similarly, this appeals process is not meant to provide an insured with multiple administrative, pre-litigation remedies. Accordingly, an insured who seeks to resolve issues regarding the actual cash value or, if applicable, replacement cost of damaged property, must elect to resolve this dispute through only one of the following: the appraisal provision in the SFIP or through this appeals process. Finally, this rule does not amend or change the conditions necessary to recover under the SFIP. In the case of a flood loss to insured property, the insured must comply with the requirements set out in the SFIP, including, but not limited to, providing the insurer with prompt notice of the loss, submitting a valid proof of loss within 60 days after the loss, cooperating with the adjuster, separating damaged and undamaged property so that the insurer may examine it, and preparing an inventory of damaged personal property. *See* SFIP 44 CFR Part 61, App.A(1), Part 61, App. A(2), Part 61, App. A(3). This appeals process is available after the issuance of the insurer's final claim determination, which is the insurer's written denial, in whole or in part, of the insured's claim. Once the final claim determination is issued, an insured may appeal any action taken by the insurer, FEMA employee, FEMA contractor, insurance adjuster, or insurance agent. An insured must file an appeal within 60 days after receiving the insurer's final claim determination. Administrative Procedure Act Statement In general, FEMA publishes a rule for public comment before issuing a final rule, under the Administrative Procedure Act (APA), 5 U.S.C. 553 and 44 CFR 1.12. However, the APA exempts from public notice and comment requirements those rules pertaining to “agency organization, procedure or practice.” 5 U.S.C. 553(b)(A). As the instant rule merely prescribes an available procedure being established by FEMA, it is exempt from the notice and comment requirements of the APA. Moreover, the APA provides an exception from the requirements where the agency for good cause finds the procedures for comment and response contrary to public interest. For the reasons set forth below, FEMA has determined that such good cause is present in the instant case. Hurricane Katrina caused monumental flooding which Hurricane Rita exacerbated. The magnitude and severity of the flood losses related to these hurricanes are unprecedented in the history of the NFIP. FEMA estimates that Hurricanes Katrina, Rita, and Wilma will result in approximately 240,000 flood insurance claims. This significantly exceeds the highest number of claims filed from any single event in the NFIP's history, and will more than triple the total number of claims filed in 2004. The public benefit of this rule is to establish a formal appeals process as soon as possible. Therefore, FEMA believes it is contrary to the public interest to delay the benefits of this rule. In accordance with the Administrative Procedure Act, 5 U.S.C. 553(d)(3), FEMA finds that there is good cause for the interim final rule to be published without a prior public comment period in order to allow processes for the appeals to be put into place prior to implementation. National Environmental Policy Act This interim final rule falls within the exclusion category 44 CFR 10.8(d)(2)(ii), which addresses the preparation, revision, and adoption of regulations, directives, and other guidance documents related to actions that qualify for categorical exclusions. Since this is an administrative action that qualifies for the exclusion category described in 44 CFR 10.8(d)(2)(ii) and because no other extraordinary circumstances have been identified, this interim final rule will not require the preparation of either an environmental assessment or an environmental impact statement as defined by the National Environmental Policy Act. Executive Order 12866, Regulatory Planning and Review FEMA has prepared and reviewed this rule under the provisions of Executive Order 12866, Regulatory Planning and Review. Under Executive Order 12866, 58 FR 51735, October 4, 1993, a significant regulatory action is subject to OMB review and the requirements of the Executive Order. The Executive Order defines “significant regulatory action” as one that is likely to result in a rule that may:

(1)Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2)create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3)materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4)raise novel legal or policy issues arising out of legal mandates, the President's priorities or the principles set forth in the Executive Order. In determining how to move forward with this rule, binding arbitration was not an option because the NFIP statutory authority prohibits it. In the case of non-binding arbitration or mediation, FEMA recognizes that mediation is an important tool for the resolution of claim disputes and encourages WYO Companies and policyholders to participate, or continue to participate, in mediation where it may lead to an expeditious and mutual resolution of a disputed claim. Mediation is most effective when it occurs early in the process. Therefore FEMA encourages the WYO Companies to offer this option to its flood insurance policyholders since some WYO carriers already offer this option as a part of their standard claims resolution service for their other lines of insurance. However, once the dispute has evolved, FEMA believes the appeals process as described in this interim final rule would be the most cost effective and efficient mechanism. Under the new appeals process, when a NFIP policyholder does not agree with a decision made by an insurer, including a determination of any insurance agent, adjuster, insurance company, or any FEMA employee or contractor with respect to a claim, proof of loss and loss estimate the policyholder may submit an appeal of the insurer's decision to FEMA. FEMA will provide written acknowledgement of the policyholder's appeal and will advise the policyholder if additional information is required in order to consider the appeal. FEMA will review the documentation submitted by the policyholder and will conduct any additional investigation that is necessary to formulate a decision concerning the appeal. FEMA will advise the policyholder and the appropriate flood insurance carrier of FEMA's decision regarding the appeal. Currently, when policyholders are not satisfied with a claim settlement they may informally appeal to FEMA. The initial correspondence and associated claims documentation are reviewed and additional investigation is conducted as necessary. The Federal Insurance Administrator is responsible for decisions on informal claims, and the appropriate entities are notified to facilitate the full resolution of the appeal. Under section 1341 of the Act (42 U.S.C. 4072) and the provisions of the SFIP, a policyholder may file suit in the United States District Court of the district in which the insured property was located at the time of loss within one year after the written denial of all or part of the claim. This one year time period starts from the date of the original denial and not the date of a decision regarding an appeal. A policyholder may choose the appraisal process under the policy, or participate in the appeals process created by this interim final rule instead of filing a lawsuit. The one year period for filing a suit is not extended by the submission of an appeal or participating in the appraisal provision of the SFIP. Historically, significantly less than 1 percent of all NFIP claims result in litigation. A policyholder who chooses to file suit either sues a WYO Company if the policy was issued by a WYO Company or the Director of FEMA if the policy was issued directly by FEMA. The policyholder is responsible for their litigation costs including filing fees, attorney costs, and expenses. Federal law does not allow the policyholder to recover attorney's fees or other legal expense if they prevail in the lawsuit. The NFIP received 686,389 claims beginning in fiscal year 1996 and ending with fiscal year 2005. Using these years as a reference point for the impact on claims when this interim final rule establishes a formal appeals process, it is estimated that in a typical year, claims will be slightly more than 68,000. In 2004, NFIP received 75,022 claims; of those claims, FEMA received 360 informal appeals concerning claim disputes. The total number of claims received from Hurricanes Katrina, Rita, and Wilma is approximately 240,000 which is approximately three and a third times greater than an average year and more than triple the total number of claims filed in 2004. Based on the above, the number of appeals is estimated to be three and a third times the number for an average year, or approximately 1,200. However, given the magnitude and severity of Hurricane Katrina, FEMA believes that with the publication of this interim final rule and the distribution of the National Flood Insurance Program Flood Insurance Claims Handbook, FEMA estimates that the number of appeals could be as high as approximately 2,000 in 2006. FEMA anticipates that, after 2006, it will receive somewhere between the lower average of 360 and 1200 appeals. FEMA also anticipates that a successful appeal will result in an average range of approximately $3,000 to $8,000 more being paid to a policyholder. Therefore, this interim final rule is not a economically significant regulatory action; as, FEMA estimates that formalizing FEMA's appeals process will result in less than $10 million dollars in additional flood insurance payments. Therefore, this rule is a significant regulatory action, but not an economically significant regulatory action within the definition of section 3(f) of Executive Order 12866, and it adheres to the principles of regulation of the Executive Order. OMB has reviewed this rule under the provisions of the Executive Order. Paperwork Reduction Act This interim final rule contains information collection requirements subject to the Paperwork Reduction Act of 1995. Under the Paperwork Reduction Act, a person may not be penalized for failing to comply with an information collection that does not display a currently valid OMB control number. FEMA has submitted an information collection request for review and approval of an existing collection in use without an OMB control number under the emergency processing procedures in OMB regulation 5 CFR 1320.13, and requested expedited approval, allowing FEMA to use the collection for 180 days. The proposed information collection request is published to solicit and obtain comments from the public and affected agencies. FEMA will follow this emergency request with a request for a 3-year approval under normal clearance procedures in accordance with the provisions of OMB regulation 5 CFR 1320.10. Comments should be directed to OMB, Office of Information and Regulatory Affairs, Attention: FEMA Desk Officer, Washington, DC 20530. FEMA will accept comments on the proposed collection through July 25, 2006. All comments and suggestions, or questions regarding additional information, including obtaining a copy of the proposed information collection instrument with instructions, should be directed to Chief, Records Management Section, Information Resources Management Branch, Information Technology Services Division, FEMA, 500 C Street, SW., Room 306, Washington, DC 20472. FEMA requests written comments and suggestions from the public and affected agencies addressing one or more of the following points:

(1)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.

(2)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.

(3)Suggestions to enhance the quality, utility, and clarity of the information to be collected.

(4)Suggestions to 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. The following is an overview of this information collection:

(1)*Type of Information Collection:* Existing Collection In Use Without an OMB Control Number.

(2)*Title of the Forms/Collection:* National Flood Insurance Program Appeals Process.

(3)*Agency form number, if any, and the applicable component of FEMA sponsoring the collection:* Forms are not used in the appeals process, but rather the policyholder will submit a letter requesting an appeal.

(4)*Affected public who will be asked or required to respond, as well as a brief abstract. Primary:* National Flood Insurance Program policyholders that dispute the results of their claim, proof of loss, and loss estimate determinations. These policyholders will be asked to provide relevant information that will facilitate the resolution of the appeal. Brief abstract: This information collection implements the mandates of section 205 of the FIRA of 2004 to establish by regulation what was traditionally an informal appeals process for NFIP policyholders in cases of unsatisfactory decisions on claims, proof of loss, and loss estimates made by any insurance company, agent, adjuster, or FEMA employee or contractor.

(5)*An estimate of the total number of respondents and the amount of time estimated for an average respondent to respond to the FIRA of 2004 appeals process:* It is estimated that in a typical year claims received will be approximately 68,000 resulting in 360 appeals. However, considering the recent impact of Hurricanes Katrina, Rita, and Wilma in the number of claims received referenced earlier, the program has estimated that approximately 2,000 respondents per year will file an appeal, each spending an average of two hours drafting the letter and compiling the required information.

(6)*An estimate of the total public burden (in hours) associated with the collection:* 4,000 hours per year. If additional information is required, contact: Sylvia Correa, FEMA, 500 C Street, SW., Room 316, Washington, DC 20472. Executive Order 13175, Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distinction of power and responsibilities between the Federal Government and Indian tribes. It does not have a substantial direct effect because the rule does not make distinctions of where the property insured is located, the rule will apply uniformly to all policyholders regardless if they live on or off Tribal lands. Executive Order 13132, Federalism Executive Order 13132, Federalism, dated August 4, 1999, sets forth principles and criteria that agencies must adhere to in formulating and implementing policies that have federalism implications, that is, regulations that have substantial direct effects on the States, or on the distribution of power and responsibilities among the various levels of government. Federal agencies must closely examine the statutory authority supporting any action that would limit the policymaking discretion of the States, and to the extent practicable, must consult with State and local officials before implementing any such action. FEMA has reviewed this rule under Executive Order 13132 and has concluded the rule does not have federalism implications as defined by the Executive Order. FEMA has determined the rule does not significantly affect the rights, roles, and responsibilities of States, and involves no preemption of State law nor does it limit State policymaking discretion. Executive Orders 12898 and 12948, Environmental Justice Under Executive Orders 12898 and 12948, respectively, “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations,” FEMA incorporates environmental justice into our policies and programs. Executive Order 12898 requires each Federal agency to conduct its programs, policies, and activities that substantially affect human health or the environment in a manner that ensures those programs, policies, and activities do not have the effect of excluding persons from participation in, denying persons the benefits of, or subjecting persons to discrimination because of their race, color, or national origin. Executive Order 12898 also requires that each Federal Agency shall identify and address as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations. FEMA does not anticipate that actions under the rule would have a disproportionately high and adverse human health effect on any segment of the population. FEMA has determined that the requirements of these Executive Orders do not apply to this rule. Regulatory Flexibility Act The Regulatory Flexibility Act

(RFA)mandates that an agency conduct an RFA analysis when an agency is “required by section 553 * * *, or any other law, to publish general notice of proposed rulemaking for any proposed rule, or publishes a notice of proposed rulemaking for interpretative rule involving the internal revenue laws of the United States * * *.” 5 U.S.C. 603(a). RFA analysis is not required when a rule is exempt from notice and comment rulemaking under 5 U.S.C. 553(b). FEMA has determined that good cause exists under 5 U.S.C. 553(b)(B) to exempt this rule from the notice and comment requirements of 5 U.S.C. 553(b). Therefore no RFA analysis under 5 U.S.C. 603 is required for this rule. Executive Order 12988 This interim final rule meets the applicable standards of Executive Order 12988. List of Subjects in 44 CFR Part 62 Flood insurance. Accordingly, for the reasons set forth in the preamble, FEMA amends 44 CFR part 62 as follows: PART 62-SALE OF INSURANCE AND ADJUSTMENT OF CLAIMS 1. The authority citation for part 62 continues to read as follows: Authority: 42 U.S.C. 4001 *et seq.* ; Reorganization Plan No. 3 of 1978, 43 FR 41943, 3 CFR, 1978 Comp., p. 329; E.O. 12127 of Mar. 31, 1979, 44 FR 19367, 3 CFR, 1979 Comp., p. 376. 2. Revise the title of subpart B of part 62, to read as follows: Subpart B—Claims Adjustment, Claims Appeals, and Judicial Review 3. Add § 62.20 to read as follows: § 62.20 Claims appeals.

(a)*Definitions.* *Administrator* means the Federal Insurance Administrator. *Appeal decision* means the disposition of the appeal by the Administrator. *Decision* means the insurer's final claim determination, which is the insurer's written denial, in whole or in part, of the insured's claim.

(b)*Appeal.* A National Flood Insurance Program

(NFIP)policyholder, whether insured by a participating Write-Your-Own

(WYO)Company or directly by the Federal Emergency Management Agency (FEMA), may appeal a *decision* , including a determination of any insurance agent, adjuster, insurance company, or any FEMA employee or contractor with respect to a claim, proof of loss, and loss estimate. In order to file an appeal, the insured must comply with all requirements set out in the Standard Flood Insurance Policy (SFIP). This appeals process is available after the issuance of the insurer's final claim determination, which is the insurer's written denial, in whole or in part, of the insured's claim. Once the final claim determination is issued, an insured may appeal any action taken by the insurer, FEMA employee, FEMA contractor, insurance adjuster, or insurance agent.

(c)*Limitations on Appeals.* The appeals process is intended to resolve claim issues and is not intended to grant coverage or limits that are not provided by the SFIP. Filing an appeal does not waive any of the requirements for perfecting a claim under the SFIP or extend any of the time limitations set forth in the SFIP.

(1)Disputes that are or have been subject to appraisal as provided for in the SFIP cannot be appealed under this section.

(2)When a policyholder files an appeal on any issue, that issue is no longer subject to resolution by appraisal or other pre-litigation remedies.

(d)*Litigation preclusion.* An insured who files suit against an insurer on the flood insurance claim issue is prohibited from filing an appeal under this section. All appeals submitted for decision but not yet resolved shall be terminated upon notice of the commencement of litigation regarding the claim.

(e)*Procedures.* To pursue an appeal under this section a policyholder must:

(1)Submit a written appeal to FEMA within 60 days from the date of the decision. The appeal should be sent to: Federal Emergency Management Agency, Federal Insurance Administrator, Mitigation Division, 500 C Street, SW., Washington, DC 20472;

(2)Identify relevant policy and claim information and state the basis for the appeal;

(3)Submit relevant documentation; and

(4)Submit a copy of the proof of loss submitted to the insurer as required in the policy.

(f)*Appeal resolution.*

(1)FEMA will acknowledge, in writing, receipt of a policyholder's appeal.

(2)The *Administrator* will review the appeal documents and may notify the policyholder in writing of the need for additional information. A request for the additional information will include the date by which the information must be provided, and shall in no case be less than 14 calendar days. Failure to provide the requested information in full, or to request an extension by the due date, may result in a dismissal of the appeal. A re-inspection of the policyholder's property may be conducted at the discretion of the *Administrator* to gather more information. The *Administrator* will ensure that all information necessary to rule on the appeal has been provided prior to making an *appeal decision.*

(3)The *Administrator* will review the appeal documents, including any reinspection report, if appropriate. The Administrator will provide an *appeal decision* in writing to the policyholder and insurer. No further administrative review will be provided to the insured.

(4)A policyholder who does not agree with FEMA's appeal decision should refer to the SFIP, for options for further action ( *see* Part 61, App. A(1) VII.R., Part 61, App. A(2) VII.R., and Part 61, App. A(3) VIII.R.). The one-year period to file suit commences with the written denial from the insurer and is not extended by the appeals process. Dated: May 23, 2006. R. David Paulison, Acting Director, Federal Emergency Management Agency, Department of Homeland Security. [FR Doc. E6-8180 Filed 5-25-06; 8:45 am] BILLING CODE 9110-11-P FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 54 [CC Docket No. 96-45 and WC Docket No. 05-337, FCC 06-69] Federal-State Joint Board on Universal Service, High-Cost Universal Service Support AGENCY: Federal Communications Commission. ACTION: Interim order. SUMMARY: In this document, the Commission extends the high-cost universal service support rules adopted in, among others, the *Rural Task Force Order* on an interim basis until the Commission concludes its rural review proceeding and adopts changes, if any, to those rules as a result of that proceeding. DATES: Effective June 26, 2006, the framework adopted at 66 FR 30081, June 5, 2001, is extended. FOR FURTHER INFORMATION CONTACT: Katie King, Special Counsel, Wireline Competition Bureau, Telecommunications Access Policy Division,

(202)418-7400, TTY

(202)418-0484. SUPPLEMENTARY INFORMATION: This is a summary of the Commission's *Order* , in CC Docket No. 96-45 and WC Docket No. 05-337, released May 16, 2006. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC 20554. I. Introduction 1. This *Order* , extends the high-cost universal service support rules adopted in the *Rural Task Force Order, Fourteenth Report and Order and Twenty-Second Order on Reconsideration* , 66 FR 30080, June 5, 2001 and 66 FR 34603, June 20, 2001, on an interim basis until the Commission concludes its rural review proceeding and adopts changes, if any, to those rules as a result of that proceeding. Based on the recommendations of the Rural Task Force and the Federal-State Joint Board on Universal Service (Joint Board), the Commission adopted a modified embedded cost support mechanism for rural carriers for a five-year period beginning on July 1, 2001. Thus, the Commission intended that the Rural Task Force plan would remain in effect util June 30, 2006. At the same time, the Commission expected to complete a review, with Joint Board input, of the rules relating to the rural high-cost support mechanism before the end of the five year period. 2. On June 28, 2004, the Commission asked the Joint Board to review the Commission's rules relating to high-cost support for rural carriers and to determine the appropriate rural mechanism to succeed the five-year plan adopted in the *Rural Task Force Order.* On August 16, 2004, the Commission released a Joint Board Public Notice seeking comment on the rural review issues referred to the Joint Board. On August 17, 2005, the Commission released another Joint Board Public Notice seeking comment on several proposals that state Joint Board members and staff had developed. The Joint Board has been diligently reviewing the record and considering what support mechanism should succeed the Rural Task Force plan. Nonetheless, the Commission finds that it may not have adequate time after the Joint Board issues a recommended decision in the rural review proceeding to develop a record on that recommendation and to adopt any changes to the current rules prior to June 30, 2006. In light of the ongoing Joint Board review, the interim nature of these rules, and the need to ensure continuity pending further Commission action, good cause exists to extend the rural high-cost support rules adopted in the *Rural Task Force Order.* The Commission also finds it has authority to adopt interim rules without notice and comment when necessary. 5 U.S.C. 553(b)(3)(B); see *Mid-Tex Elec. Coop., Inc.* v. *FERC* , 822 F.2d 1123 (D.C. Cir. 1987). Accordingly, the rural high-cost support rules adopted in the *Rural Task Force Order* , as amended, will remain in effect after this date until the Commission adopts new high-cost support rules for rural carriers. 3. Pursuant to the authority contained in sections 1-4, 201-205, 214, 218-220, 254, 303(r), 403, 405, and 410 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 214, 218-220, 254, 303(r), 403, 405, and 410, that this *Order* in CC Docket No. 96-45 and WC Docket No. 05-337 *is adopted.* 4. The extension of the high-cost universal service support rules applicable to rural carriers shall be effective June 26, 2006. Federal Communications Commission. Marlene H. Dortch, Secretary. [FR Doc. 06-4856 Filed 5-25-06; 8:45am]

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