Rules and Regulations. Direct final rule Correction; request for comments

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BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2006-24813; Airspace Docket No. 06-AAL-16] Modification of Legal Description of Class D and E Airspace; Fairbanks, Fort Wainwright Army Airfield, AK AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Direct final rule Correction; request for comments. SUMMARY: The U.S. Army will soon be changing the name of Fort (Ft.) Wainwright Army Airfield

(AAF)to Ladd AAF. This action amends the airport name accordingly for each of the Class D and Class E airspace descriptions in FAA Order 7400.9N. This action also amends an altitude omission which currently does not exist in the FAA Order 7400.9N. This action also redefines the airspace description to account for recent updates to the airfield coordinates. DATES: This direct final rule is effective on 0901 UTC, November 23, 2006. Comments for inclusion in the Rules Docket must be received on or before August 16, 2006. ADDRESSES: Send comments on this proposal to the Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001. You must identify the docket number FAA-2006-24813/Airspace Docket No. 06-AAL-16, at the beginning of your comments. You may also submit comments on the Internet at *http://dms.dot.gov* . You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Docket Office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Office (telephone 1-800-647-5527) is on the plaza level of the Department of Transportation NASSIF Building at the above address. FOR FURTHER INFORMATION CONTACT: Gary Rolf, Federal Aviation Administration, 222 West 7th Avenue, Box 14, Anchorage, AK 99513-7587; telephone number

(907)271-5898; fax:

(907)271-2850; e-mail: *gary.ctr.rolf@faa.gov* . Internet address: *http://www.alaska.faa.gov/at* . SUPPLEMENTARY INFORMATION: The coordinates for this airspace docket are based on North American Datum 83. The Class D airspace and Class E airspace areas designated as 700/1200 foot transition areas are published in paragraph 5000 and 6005 respectively, in FAA Order 7400.9N, *Airspace Designations and Reporting Points* , dated September 1, 2005, and effective September 15, 2005, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document would be published subsequently in the Order. Additionally, the present exclusionary clause listed in the Class E5 description is removed. The exclusionary language is redundant and therefore, unnecessary. The Direct Final Rule Procedure The FAA anticipates that this regulation will not result in adverse or negative comment and therefore, is issuing it as a direct final rule. Previous actions of this nature have not been controversial and have not resulted in adverse comments or objections. Unless a written adverse or negative comment, or written notice of intent to submit an adverse or negative comment is received within the comment period, the regulation will become effective on the date specified above. After the close of the comment period, the FAA will publish a document in the **Federal Register** indicating that no adverse or negative comments were received and confirming the date on which the final rule will become effective. If the FAA does receive, within the comment period, an adverse or negative comment, or written notice of intent to submit such a comment, a document withdrawing the direct final rule will be published in the **Federal Register** , and a notice of proposed rulemaking may be published with a new comment period. Comments Invited Interested parties are invited to participate in this rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2006-24813/Airspace Docket No. 06-AAL-16.” The postcard will be date/time stamped and returned to the commenter. Agency Findings The regulations adopted herein 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. Therefore, it is determined that this final rule does not have federalism implications under Executive Order 13132. The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation—(1) Is not “significant regulatory action” under Executive Order 12866;

(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and

(3)does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle 1, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 1, Section 40103, Sovereignty and use of airspace. Under that section, the FAA is charged with prescribing regulations to ensure the safe and efficient use of the navigable airspace. This regulation is within the scope of that authority because it follows the U.S. Army's actions in renaming Wainwright AAF to Ladd AAF and thereby changes the Class E airspace description in FAA Order 7400.9N and represents the FAA's continuing effort to safely and efficiently use the navigable airspace. List of Subjects in 14 CFR Part 71 Airspace, Incorporation by reference, Navigation (air). Adoption of the Amendment In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows: PART 71—DESIGNATION OF CLASS A, CLASS B, CLASS C, CLASS D, AND CLASS E AIRSPACE AREAS; AIRWAYS; ROUTES; AND REPORTING POINTS 1. The authority citation for part 71 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389. § 71.1 [Amended] 2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation Administration Order 7400.9N, *Airspace Designations and Reporting Points* , dated September 1, 2005, and effective September 15, 2005, is amended as follows: Paragraph 5000—General. AAL AK D Fairbanks, Ladd AAF, AK [Revised] That airspace extending upward from the surface within a 5.3-mile radius of lat. 64°50′11″ N., long. 147°37′01″ W. to and including 2900 feet MSL, excluding the portion north and west of a line from lat. 64°45′14″ N., long. 147°41′16″ W.; to lat. 64°51′10″ N., long. 147°44′09″ W.; to lat. 64°54′48″ N., long. 147°30′57″ W. This Class D airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Alaska Supplement (Airport/Facility Directory). Paragraph 6004—Class E Airspace Areas Designated as an Extentsion to a Class D Surface Area AAL AK E4 Fairbanks, Ladd AAF, AK [Revised] Fairbanks VORTAC (Lat. 64°48′00″ N., long. 148°00′43″ W.) Chena NDB (Lat. 64°50′19″ N., long. 147°29′42″ W.) That airspace extending upward from the surface within 2.4 miles each side of the Chena NDB 089° bearing extending from the 5.3-mile radius of lat. 64°50′11″ N., long. 147°37′01″ W. to 10.1 miles east of lat. 64°50′11″ N., long. 147°37′01″ W., and within 1.8 miles north of the Fairbanks VORTAC 078° radial extending from the 5.3-mile radius of lat. 64°50′11″ N., long. 147°37′01″ W. to 9.9 miles east of lat. 64°50′11″ N., long. 147°37′01″ W.; excluding the portion of the arrival extension south of a line from lat. 64°48′52″ N., long. 147°12′04″ W. to lat. 64°47′27″ N., long. 147°25′56″ W. This Class E airspace area is effective during the specific dates and times established in advance by a Notice to Airmen. The effective date and time will thereafter be continuously published in the Alaska Supplement (Airport/Facility Directory). Paragraph 6005 Class E Airspace Areas Extending Upward from 700 feet or More Above the Surface of the Earth AAL AK E5 Fairbanks, Ladd AAF, AK [Revised] Fairbanks VORTAC (Lat. 64°48′00″ N., long. 148°00′43″ W.) Chena NDB (Lat. 64°50′19″ N., long. 147°29′42″ W.) That airspace extending upward from 700 feet above the surface within a 6.8-mile radius of lat. 64°50′11″ N., long. 147°37′01″ W. and within 3.9 miles each side of the 089° bearing of the Chena NDB extending from the 6.8-mile radius to 12.9 miles east of lat. 64°50′11″ N., long. 147°37′01″ W. and within 3.8 miles north of the 078° radial of the Fairbanks VORTAC extending from the 6.8-mile radius to 9.9 miles east of lat. 64°50′11″ N., long. 147°37′01″ W. Issued in Anchorage, AK, on July 7, 2006. Anthony M. Wylie, Director, Flight Service Information Office (AK). [FR Doc. E6-11168 Filed 7-14-06; 8:45 am] BILLING CODE 4910-13-P COMMODITY FUTURES TRADING COMMISSION 17 CFR Part 30 Foreign Futures and Options Transactions AGENCY: Commodity Futures Trading Commission. ACTION: Amended Supplemental Order for Expanded Relief. SUMMARY: The Commodity Futures Trading Commission (“Commission or CFTC”) is issuing an Amended Supplemental Order for expanded relief, authorizing members of the Sydney Futures Exchange (“Exchange or SFE”) to solicit and accept orders from U.S. customers for otherwise permitted transactions on all non-U.S. and non-Australian exchanges (“foreign exchanges”) where such members are authorized by the regulations of the SFE to conduct futures business for customers. The Amended Supplemental Order supercedes the prior Supplemental Orders, relating to expanded relief, issued to SFE in 1997 and 1993. This Amended Supplemental Order is issued pursuant to Commission Regulation 30.10, which permits the Commission to grant an exemption from certain provisions of Part 30 of the Commission's regulations, and the Commission's Order to SFE dated November 1, 1988 (Original Order), granting relief under Regulation 30.10 to designated members of the Exchange. DATES: *Effective Date:* July 17, 2006. FOR FURTHER INFORMATION CONTACT: Lawrence B. Patent, Esq., Deputy Director, or Susan A. Elliott, Esq., Special Counsel, Division of Clearing and Intermediary Oversight, Commodity Futures Trading Commission, 1155 21st Street, NW., Washington, DC 20581. Telephone:

(202)418-5430. SUPPLEMENTARY INFORMATION: The Commission has issued the following Order: Amended Supplemental Order Under CFTC Regulation 30.10 Exempting Firms Designated by the Sydney Futures Exchange From the Application of Certain of the Foreign Futures and Option Regulations for Trading on Certain Non-U.S. and non-Australian Exchanges (“Foreign Exchanges”), After Filing of Consents by Such Firms and the Sydney Futures Exchange, as Appropriate, to the Terms and Conditions of the Order Herein. On November 1, 1988, the Commission issued an Order under Regulation 30.10 authorizing designated members of the SFE to offer or sell certain futures and option contracts traded on the Exchange to persons located in the United States. 1 The Original Order limited the scope of permissible brokerage activities undertaken by designated SFE members on behalf of U.S. customers to transactions “on or subject to the rules of the Exchange.” 2 Subsequently, the Commission issued Regulation 30.10 orders which did not include this limitation (expanded relief), including such orders to SFE. 3 1 53 FR 44856 (November 7, 1988). 2 53 FR at 44857. 3 58 FR 19209 (April 13, 1993), hereafter 1993 Supplemental Order, and 62 FR 10445 (March 7, 1997), hereafter 1997 Supplemental Order. The 1997 Supplemental Order clarified certain depository requirements later adopted as Regulation 30.7, 17 CFR 30.7 (2006). A condition of the Commission's grant of expanded relief in 1993 is that SFE carry out its compliance, surveillance and rule enforcement activities with respect to solicitations and acceptance of orders by designated SFE members of U.S. customers for futures business on Recognized Futures Exchanges, as defined in Section 9(b) of the Australian Corporations Law (ACL), other than a contract market designated as such pursuant to section 5a of the Commodity Exchange Act (Act), to the same extent that it conducts such activities with regard to SFE business. The passage of the Financial Services Reform Act

(FSRA)in Australia in March 2002 eliminated the list of Recognized Futures Exchanges as defined in the ACL. A condition for the granting of Part 30 Expanded Relief to SFE in 1993 was that a foreign exchange be included on that list. This Amended Supplemental Order eliminates this condition, and substitutes the condition that SFE must identify in its rules the foreign exchanges on which its members handle transactions on behalf of U.S. customers. 4 SFE has submitted a proposal to its regulator, the Australian Securities and Investments Commission (ASIC), 5 representing that it will identify in its rules the foreign exchanges on which its members may handle transactions on behalf of U.S. customers, pursuant to its expanded relief. SFE will make the rule effective on August 1, 2006. 4 Relief under this Amended Supplemental Order extends only to those products falling within the jurisdiction of the Act and remains subject to existing product restrictions under the Act and Commission regulations thereunder related to stock indices and foreign government debt (see Section 2(a)(1)(B)(v) of the Act and Securities and Exchange Commission Regulation 3a12-8, 17 CFR 240.3a12-8 (2006)). 5 Letter of April 3, 2006 from Barbara Jones, Senior Legal Counsel, SFE, to Ms. Tracey Lyons, Director, Markets Regulation, ASIC. The relief provided under this Amended Supplemental Order, however, is contingent on the SFE's Exchange Members' continued compliance with the Original Order and the Exchange's and Exchange Members' compliance with the following conditions:

(1)The SFE will carry out its compliance, surveillance and rule enforcement activities with respect to solicitations and acceptance of orders by designated Exchange Members of U.S. customers for options and futures business on all non-U.S. exchanges listed in Rule 2.2.30(a) of the Exchange rules to the same extent that it conducts such activities in regard to Exchange business;

(2)The SFE will cooperate with the Commission with respect to any inquiries concerning any activity that is the subject of this Amended Supplemental Order, including sharing the information specified in Appendix A to the Commission's part 30 regulations, 17 CFR part 30, on an “as needed” basis on the same basis as set forth in the Original Order;

(3)Each SFE Member confirmed for relief under the Original Order seeking to engage in activities that are the subject of this Amended Supplemental Order must agree to provide the books and records related to such activities required to be maintained under the applicable laws and regulations now in effect in Australia and Exchange regulations on the same basis as set forth in the Original Order; 6 6 SFE member firms that currently operate under the Original Order will be deemed to have consented to condition

(3)by effecting transactions pursuant to this Amended Supplemental Order. Exchange members who apply for confirmation of Regulation 30.10 relief subsequent to the issuance of this Amended Supplemental Order must submit representations to the National Futures Association consistent with condition

(3)of this Order, and the list of foreign exchanges required by condition (4), as well as the representations required by the Original Order.

(4)Foreign futures and options exchanges on which each SFE Member firm may engage in transactions on behalf of U.S. customers are those foreign exchanges identified in Rule 2.2.30(a) of the Exchange rules, provided however, that Exchange Members may not engage in any transactions on behalf of U.S. customers on an exchange designated as a contract market under section 5 of the Act;

(5)SFE Members who apply for confirmation of Regulation 30.10 relief with National Futures Association must provide a list of the foreign exchanges where they intend to engage in transactions on behalf of U.S. customers pursuant to the SFE Expanded Relief granted in this order and must agree to abide by the Original Order; and

(6)The SFE will continue to comply with the terms of the Original Order with respect to transactions effected for U.S. customers on the SFE. This Amended Supplemental Order is issued based on the information provided to the Commission and its staff. Any changes or material omissions may require the Commission to reconsider the authorization granted in this Amended Supplemental Order. List of Subjects in 17 CFR Part 30 Commodity futures, Commodity options, Foreign futures. Accordingly, the Commission hereby amends Chapter I of Title 17 of the Code of Federal Regulations as follows: PART 30—FOREIGN FUTURES AND FOREIGN OPTION TRANSACTIONS 1. The authority citation for part 30 continues to read as follows: Authority: Secs. 1a, 2(a)(1)(A), 4, 4c, and 8a of the Commodity Exchange Act, 7 U.S.C. 1a, 2, 6, 6c and 12a. Appendix C to Part 30—[Amended] 2. Appendix C to Part 30—Foreign Petitioners Granted Relief from the Application of Certain of the Part 30 Rules. The following citation is added: Firms designated by the Sydney Futures Exchange Limited. FR date and citation: 70 FR [insert number of page on which this release begins] July 17, 2006. Issued in Washington, DC, on July 11, 2006. Eileen A. Donovan, Acting Secretary of the Commission. [FR Doc. E6-11152 Filed 7-14-06; 8:45 am] BILLING CODE 6351-01-P DEPARTMENT OF THE TREASURY Alcohol and Tobacco Tax and Trade Bureau 27 CFR Part 9 [T.D. TTB-52; Re: Notice No. 55] RIN 1513-AB15 Establishment of the Saddle Rock-Malibu Viticultural Area (2003R-110P) AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury. ACTION: Final rule; Treasury decision. SUMMARY: This Treasury decision establishes the 2,090-acre Saddle Rock-Malibu viticultural area in Los Angeles County, California. We designate viticultural areas to allow vintners to better describe the origin of their wines and to allow consumers to better identify wines they may purchase. DATES: *Effective Date:* August 16, 2006. FOR FURTHER INFORMATION CONTACT: N.A. Sutton, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 925 Lakeville St., No. 158, Petaluma, CA 94952; telephone 415-271-1254. SUPPLEMENTARY INFORMATION: Background on Viticultural Areas TTB Authority Section 105(e) of the Federal Alcohol Administration Act (the FAA Act, 27 U.S.C. 201 *et seq.* ) requires that alcohol beverage labels provide consumers with adequate information regarding product identity and prohibits the use of misleading information on those labels. The FAA Act also authorizes the Secretary of the Treasury to issue regulations to carry out its provisions. The Alcohol and Tobacco Tax and Trade Bureau

(TTB)administers these regulations. Part 4 of the TTB regulations (27 CFR part 4) allows the establishment of definitive viticultural areas and the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) contains the list of approved viticultural areas. Definition Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region distinguishable by geographical features, the boundaries of which have been recognized and defined in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to its geographical origin. The establishment of viticultural areas allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of a viticultural area is neither an approval nor an endorsement by TTB of the wine produced in that area. Requirements Section 4.25(e)(2) of the TTB regulations outlines the procedure for proposing an American viticultural area and provides that any interested party may petition TTB to establish a grape-growing region as a viticultural area. Section 9.3(b) of the TTB regulations requires the petition to include— • Evidence that the proposed viticultural area is locally and/or nationally known by the name specified in the petition; • Historical or current evidence that supports setting the boundary of the proposed viticultural area as the petition specifies; • Evidence relating to the geographical features, such as climate, soils, elevation, and physical features, that distinguish the proposed viticultural area from surrounding areas; • A description of the specific boundary of the proposed viticultural area, based on features found on United States Geological Survey

(USGS)maps; and • A copy of the appropriate USGS map(s) with the proposed viticultural area's boundary prominently marked. Saddle Rock-Malibu Viticultural Area Petition and Rulemaking Background Lisa A. Semler and Derek Baugh of Semler Malibu Estate Vineyards in Malibu, California, submitted a petition to establish the Saddle Rock-Malibu viticultural area. Located in western Los Angeles County, California, the proposed viticultural area covers approximately 2,090 acres in the Santa Monica Mountains, approximately 32 miles west of downtown Los Angeles and 5 miles inland from the Pacific Ocean. The proposed area lies between 1,700 and 2,236 feet in elevation and has 70 acres of vineyards located between 1,800 and 2,000 feet in elevation. The primary distinguishing viticultural features of the proposed Saddle Rock-Malibu viticultural area include its high elevation and location, as well as its orientation within the Santa Monica Mountains, which limits its exposure to the cooling Pacific marine inversion layer, according to the petition. As a result, the proposed area receives more solar radiation and is warmer than neighboring areas with more marine influence during the growing season. The information submitted in support of the petition is summarized below. Name Evidence The name of the proposed Saddle Rock-Malibu viticultural area combines the name of a high, prominent rock formation within the proposed area, Saddle Rock, with the name of the surrounding region of western Los Angeles County, Malibu. According to the petition, the “Saddle Rock-Malibu” name provides an accurate geographical description of the proposed viticultural area. Located in the Santa Monica Mountains near the center of the proposed area, Saddle Rock is a prominent saddle-shaped rock formation that rises 2,000 feet above sea level. Saddle Rock is identified on the USGS Point Dume, California, quadrangle map in section 12, T1S/R19W. Saddle Rock Ranch is located within the proposed viticultural area, and the Saddle Rock Pictograph Site, located on the ranch between Saddle Rock and Mitten Rock, is a National Historic Landmark. The pictographs found at the Saddle Rock site are characteristic of the Chumash Indian art style, according to the National Park Service's National Historic Landmark Web site, which also notes that Saddle and Mitten Rocks served as landmarks for prehistoric and early historic travelers (see *http://www.cr.nps.gov/nhl/DOE_dedesignations/saddlerock.htm* ). The Malibu region, which the petition describes as encompassing western Los Angeles County from the ridge line of the Santa Monica Mountains in the north to the Pacific Ocean in the south and from Topanga Canyon in the east to the Ventura County line in the west, surrounds the Saddle Rock area. The Malibu region is shown on the July 2001 American Automobile Association map titled, “Coast & Valley Bay Area to Southern California,” in section G-12. The USGS Geographic Names Information System lists 30 Malibu name uses within Los Angeles County, including streams, beaches, lakes, a reservoir, parks, towns, buildings, and an airport. TTB's predecessor agency, the Bureau of Alcohol, Tobacco and Firearms (ATF), established the Malibu-Newton Canyon viticultural area (27 CFR 9.152) in T.D. ATF-375, published in the **Federal Register** (61 FR 29952) on June 13, 1996. The preamble of T.D. ATF-375 explained that the “Malibu” name originated with the Chumash Indians as “Mala I Boo,” meaning “place of cliffs.” The 1805 Topanga Malibu Sequit land grant of 13,315 acres, also referred to as Rancho Malibu, includes the modern day “Malibu” spelling. In the 1930s, with the construction of the Pacific Coast Highway, the petition states that the Malibu region developed into the nationally known community it is today. Boundary Evidence The modern history of the proposed Saddle Rock-Malibu viticultural area dates to the era of Spanish colonial land grants, and the proposed area lies between the historic Topanga Malibu Sequit land grant to the south and the El Conejo land grant to the north. Originally known as “El Malibu,” the petition states that the ranch surrounding the Saddle Rock formation was, by the 1930s, known as Saddle Rock Ranch. Wine grape production within the proposed Saddle Rock-Malibu viticultural area began in 1997, according to the petition, and as of February 2005 the area had 70 vineyard acres in commercial production. Roughly centered on the Saddle Rock formation, the proposed Saddle Rock-Malibu viticultural area encompasses a suspended valley within the higher elevations of the Santa Monica Mountains. Beginning at Decker Road, the northern boundary of the proposed area follows a portion of the southern boundary of the El Conejo land grant, and then follows the 1,700-foot contour line southeasterly to Mulholland Highway. Steep mountain terrain lies to the east and south of the proposed Saddle Rock-Malibu area, while the Malibu Country Club lies to its west. The petition uses trails, unimproved roads, and secondary roads to delineate the eastern, southern, and western portions of the proposed boundary, according to the written boundary description and USGS Point Dume map provided with the petition. Distinguishing Features The proposed Saddle Rock-Malibu viticultural area's high elevations, north-facing slope orientation, and geographical location in the Santa Monica Mountains all combine to create a microclimate with limited marine influence, according to the petition. As compared to surrounding areas with more marine influence, the proposed area receives more growing season sunshine and has warmer temperatures. The proposed area's microclimate, the petition continues, creates a distinctive and unique mountainous grape-growing region. Topography The proposed Saddle Rock-Malibu viticultural area, according to the petition, is a geographically suspended valley located largely on the leeward side of the crest of the Santa Monica Mountains. From the mountains' crest, elevations drop about 2,000 feet to the Pacific Ocean in the south and, in the north, about 1,000 feet to the Conejo Valley floor. Within the proposed viticultural area, elevations range from a low of 1,700 feet along much of the boundary line to a 2,236-foot peak along its northeast border, as shown on the Point Dume map. Intermittent streams flow from the higher elevations downward toward the Pacific Ocean or toward larger streams in the Conejo Valley to the north. Several secondary highways, light-duty roads, and a number of unimproved roads and jeep trails criss-cross the proposed Saddle Rock area, as shown on the Point Dume USGS map. Climate The unique microclimate of the proposed Saddle Rock-Malibu viticultural area is its most distinguishing viticultural feature, according to the petition, which included a climate report prepared by Fox Weather of Fortuna, California. While the larger Malibu regional climate is typical of southern California with mild, rainy winters and warm, dry summers, the petition states that the proposed Saddle Rock-Malibu viticultural area is climatically affected by its geographical location in the Santa Monica Mountains. The Pacific Ocean, about 5 miles south of the proposed viticultural area, provides an intrusive marine influence that permeates the Santa Monica Mountains area incrementally, based on elevation, time of year, and other factors, according to Fox Weather. In this region of Los Angeles County, this cool, moist, marine influence funnels northward from the ocean, through the low gaps in the mountain range, reaching various elevations at different times in the growing season. The proposed Saddle Rock-Malibu viticultural area's high elevations, its location on the leeward side of the mountains' crest, and its north-facing mountain slopes are significant factors in limiting the extent of the cooling marine influence received within the proposed area, according to the submitted Fox Weather data. Summers in the Malibu region are hot and dry at the higher elevations above the marine influence and are cooler and less sunny in the lower coastal areas and beaches, according to Fox Weather. A comparison of growing season heat accumulation as measured by degree-days shows that the proposed Saddle Rock-Malibu viticultural area, at 4,200 degree-days, is somewhat warmer than the nearby Malibu-Newton Canyon viticultural area, which accumulates 4,000 to 4,100 degree days during the growing season. (Degree-days represent a measurement of heat accumulation during the growing season, with one degree-day accumulating for each degree that a day's mean temperature is above 50 degrees Fahrenheit, which is the minimum temperature required for grapevine growth. See “General Viticulture,” by Albert J. Winkler, University of California Press, 1975.) Further inland, toward the San Fernando Valley, temperatures are warmer during the day and cooler at night than along the crest of the Santa Monica Mountains. The temperature and growing condition differences between the proposed Saddle Rock-Malibu viticultural area and the established Malibu-Newton Canyon viticultural area result from the prevailing wind flows of summer (south through west-northwest directions), according to the submitted Fox Weather data. Located on the leeward side of the Santa Monica Mountains' crest, the proposed Saddle Rock-Malibu area receives more sunshine and has higher daytime temperatures than the Malibu-Newton Canyon area, which is located just southeast of the Saddle Rock-Malibu area on the windward side of the mountain crest and is, therefore, more strongly influenced by the cooling Pacific marine air. Also, the warm, down slope wind that affects the Saddle Rock-Malibu area is less evident in the Malibu-Newton Canyon area. Soils Predominant soils of the proposed Saddle Rock-Malibu viticultural area include Cropley clay, Gilroy clay loam and rocky clay loam, and Hambright loam, clay loam and rocky clay loam, according to Robert Roche of Roche Vineyard Consulting in his June 5, 2004, letter to the petitioners. The U.S. Department of Agriculture's Soil Conservation Service (now the Natural Resources Conservation Service) publication, “Soils of the Malibu Area California” (October 1967), states at pages 65 and 66 that Cropley clay is well drained with slow permeability. Cropley clay occupies nearly level to moderately sloping alluvial fans, and bedrock is found more than 5 feet below the surface. According to the 1967 “Soils of the Malibu Area California” publication, Gilroy clays are well drained with slow permeability. They occupy gently rolling to steep upland areas, and bedrock is generally found between 2 feet and 3 1/3 feet below the surface. Hambright clay loams, described on pages 72 and 73 of the 1967 Malibu area soil publication, are well drained with moderate permeability. They occupy moderately steep to very steep upland areas, and bedrock is found from 2/3 foot to 1 1/2 feet below the surface. A comparison of the soils of the proposed Saddle Rock-Malibu viticultural area to those in the existing Malibu-Newton Canyon viticultural area shows distinct soil differences. Proposed Saddle Rock-Malibu viticultural area soils Established Malibu-Newton Canyon viticultural area soils Gilroy rocky clay loam and clay loams Gilroy clay loam. Hambright loam, clay loam, and rocky clay loam Hambright rocky clay loam. Cropley clay Castaic silty clay loam. Malibu loam. Malcolm loam. Rincon silty clay loam. The Hambright rocky clay loam and Gilroy clay loam series dominate the proposed Saddle Rock-Malibu area's northeast region, according to Robert Roche. He explains that although these two series are found throughout California, they contrast to the igneous rock found in the eastern area immediately beyond the proposed Saddle Rock-Malibu viticultural area boundary line. Mr. Roche compares the Malibu-Newton Canyon viticultural area to the proposed Saddle Rock-Malibu viticultural area by describing the Saddle Rock-Malibu area's soils as “deeper with more clay content overall, leading to more water holding capacity.” He explains that the “soil series and descriptions are different enough” between the two areas to conclude that “wine characteristics would be significantly different.” The northeast corner of the proposed Saddle Rock-Malibu viticultural area, the petition states, has the most evident differences in soil as compared to the region immediately beyond the boundary line. The petition, however, emphasizes that soil differences of the proposed Saddle Rock-Malibu area play a lesser role than the climate and physical geography in defining the distinctiveness of the proposed viticultural area. Notice of Proposed Rulemaking and Comments Received TTB published Notice No. 55 regarding the proposed Saddle Rock-Malibu viticultural area in the **Federal Register** (71 FR 1500) on January 10, 2006. We received 113 comments in response to that notice. All 113 comments supported the establishment of the Saddle Rock-Malibu viticultural area, and some specifically discussed the unique geography and microclimate of the region. TTB Finding After careful review of the petition and the comments received, TTB finds that the evidence submitted supports the establishment of the proposed viticultural area. Therefore, under the authority of the Federal Alcohol Administration Act and part 4 of our regulations, we establish the “Saddle Rock-Malibu” viticultural area in Los Angeles County, California, effective 30 days from the publication date of this document. Boundary Description See the narrative boundary description of the viticultural area in the regulatory text published at the end of this document. Maps The one map used to determine the boundary of the viticultural area is identified below in the regulatory text. Impact on Current Wine Labels Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. With the establishment of this viticultural area and its inclusion in part 9 of the TTB regulations, its name, “Saddle Rock-Malibu,” is recognized under 27 CFR 4.39(i)(3) as a name of viticultural significance. The text of the new regulation clarifies this point. Consequently, wine bottlers using “Saddle Rock-Malibu” in a brand name, including a trademark, or in another label reference as to the origin of the wine, must ensure that the product is eligible to use the viticultural area's name as an appellation of origin. For a wine to be eligible to use as an appellation of origin a viticultural area name or other term specified as being viticulturally significant in part 9 of the TTB regulations, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name or other term, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible to use the viticultural area name or other term as an appellation of origin and that name or other term appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the viticultural area name or other term appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Different rules apply if a wine has a brand name containing a viticultural area name that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details. Regulatory Flexibility Act We certify that this regulation will not have a significant economic impact on a substantial number of small entities. This regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name is the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required. Executive Order 12866 This rule is not a significant regulatory action as defined by Executive Order 12866, 58 FR 51735. Therefore, it requires no regulatory assessment. Drafting Information N.A. Sutton of the Regulations and Rulings Division drafted this document. List of Subjects in 27 CFR Part 9 Wine. The Regulatory Amendment For the reasons discussed in the preamble, we amend title 27 CFR, chapter 1, part 9, as follows: PART 9—AMERICAN VITICULTURAL AREAS 1. The authority citation for part 9 continues to read as follows: Authority: 27 U.S.C. 205. Subpart C—Approved American Viticultural Areas 2. Subpart C is amended by adding a new § 9.203 to read as follows: § 9.203 Saddle Rock-Malibu.

(a)*Name.* The name of the viticultural area described in this section is “Saddle Rock-Malibu”. For purposes of part 4 of this chapter, “Saddle Rock-Malibu” is a term of viticultural significance.

(b)*Approved Map.* The following United States Geological Survey, 1:24,000 scale, topographic map is used to determine the boundary of the Saddle Rock-Malibu viticultural area: Point Dume Quadrangle California, 7.5-Minute Series (Orthophotoquad), 1995.

(c)*Boundary.* The Saddle Rock-Malibu viticultural area is located in Los Angeles County, California. The boundary of the Saddle Rock-Malibu viticultural area is as described below:

(1)The beginning point is on the Point Dume map at the intersection of Decker Road and Mulholland Highway, section 3, T1S/R19W;

(2)From the beginning point, proceed north-northeast along Decker Road approximately 0.7 mile to its intersection with the southern boundary of the El Conejo land grant, section 3, T1S/R19W; then

(3)Proceed straight east-southeast along the El Conejo land grant boundary line approximately 0.4 mile to the point where the land grant boundary line changes direction to the northeast, section 2, T1S/R19W; then

(4)Proceed straight northeast for approximately 0.5 mile along the El Conejo land grant boundary line to its second intersection with the 1,700-foot contour line in section 2, T1S/R19W; then

(5)Proceed southeasterly along the meandering 1,700-foot contour line, crossing the R19W/R18W range line near the southwest corner of section 6, T1S/R18W, and continue along the 1,700-foot contour line to its intersection with Kanan Road near the southwest corner of section 6, T1S/R18W; then

(6)Proceed south along Kanan Road approximately 0.35 mile to its intersection with the 1,800-foot contour line (very near the intersection of Kanan Road and an unnamed unimproved road), section 7, T1S/R18W; then

(7)Proceed southeasterly along the meandering 1,800-foot contour line to a point approximately 200 feet due north of the intersection of Mulholland Highway and two unnamed, unimproved roads near the center of section 7, T1S/R18W, and, from that point, proceed due south in a straight line to the intersection of Mulholland Highway and the two unnamed, unimproved roads, section 7, T1S/R18W; then

(8)Following the eastern-most unimproved road, proceed southerly along the meandering unimproved road, passing to the west of a 2,054-foot peak, and continue to the road's intersection with another unnamed, unimproved road immediately south of the section 18 north boundary line and due east of a 2,448-foot peak, section 18, T1S/R18W; then

(9)Proceed southwesterly along the unnamed, unimproved road to its intersection with the Latigo Canyon Road, just east of BM 2125, section 18, T1S/R18W; then

(10)Proceed northerly then westerly along Latigo Canyon Road to its intersection with Kanan Road very near the southeast corner of section 12, T1S/R19W; then

(11)Proceed south along Kanan Road for approximately 0.6 mile to its intersection with the 1,700-foot contour line, located immediately south of the four-way intersection of two unnamed, unimproved roads and Kanan Road, section 13, T1S/R19W; then

(12)Proceed 1.5 miles generally west and northwest along the unnamed, unimproved road that meanders westerly, crossing over several intermittent streams, and continues through Zuma Canyon to its intersection with Encinal Canyon Road at about the 1,806-foot elevation mark, section 11, T1S/R19W; then

(13)Crossing Encinal Canyon Road, proceed northwesterly along the unnamed, unimproved road, which becomes a trail, and continue northerly to the trail's intersection with the 1,900-foot contour line, near the center of section 11, T1S/R19W; then

(14)Proceed northwesterly along the meandering 1,900-foot contour line, circling to the west of the 2,189-foot peak in section 11, to the contour line's intersection with Mulholland Highway at the northern boundary of section 11, T1S/R19W; then

(15)Proceed westerly about 0.8 mile on Mulholland Highway and return to the beginning point. Signed: May 9, 2006. John J. Manfreda, Administrator. Approved: June 15, 2006. Timothy E. Skud, Deputy Assistant Secretary (Tax, Trade, and Tariff Policy). [FR Doc. E6-11076 Filed 7-14-06; 8:45 am] BILLING CODE 4810-31-P DEPARTMENT OF THE TREASURY Alcohol and Tobacco Tax and Trade Bureau 27 CFR Part 9 [T.D. TTB-51; Re: Notice No. 15] RIN 1513-AA41 Establishment of the Eola-Amity Hills Viticultural Area (2002R-216P) AGENCY: Alcohol and Tobacco Tax and Trade Bureau (TTB), Treasury. ACTION: Final rule; Treasury decision. SUMMARY: This Treasury decision establishes the Eola-Amity Hills viticultural area in Oregon. The viticultural area is entirely within the existing Willamette Valley viticultural area and encompasses roughly 37,900 acres within Polk and Yamhill Counties. We designate viticultural areas to allow vintners to better describe the origin of their wines and to allow consumers to better identify wines they may purchase. DATES: *Effective Date* : August 16, 2006. FOR FURTHER INFORMATION CONTACT: Jennifer Berry, Alcohol and Tobacco Tax and Trade Bureau, Regulations and Rulings Division, P.O. Box 18152, Roanoke, Virginia 24014; telephone 540-344-9333. SUPPLEMENTARY INFORMATION: Background on Viticultural Areas TTB Authority Section 105(e) of the Federal Alcohol Administration Act (the FAA Act, 27 U.S.C. 201 *et seq.* ) requires that alcohol beverage labels provide consumers with adequate information regarding product identity and prohibits the use of misleading information on those labels. The FAA Act also authorizes the Secretary of the Treasury to issue regulations to carry out its provisions. The Alcohol and Tobacco Tax and Trade Bureau

(USGS)maps; and • A copy of the appropriate USGS map(s) with the proposed viticultural area's boundary prominently marked. Rulemaking Proceedings Eola Hills Petition Mr. Russell Raney of Evesham Wood Vineyard and Mr. Ted Casteel of Bethel Heights Vineyard, both of Salem, Oregon, petitioned TTB for the establishment of a viticultural area to be called “Eola Hills.” The proposed viticultural area is within the State of Oregon and entirely within the existing Willamette Valley viticultural area described in 27 CFR 9.90. The petitioners estimate that the proposed area encompasses 37,900 acres, about 1,244 acres of which are planted to vines. At the time of the petition, 12 wineries operated within the proposed area. We summarize below the evidence submitted with the petition. Name Evidence As historical evidence of the use of the name “Eola Hills,” the petitioners submitted an excerpt from “Oregon Geographic Names” (published by the Oregon Historical Society, 5th edition, 1982, pp. 294-295). This source states that the Eola Hills were named for the village of Eola, situated at the southern end of the ridge. On January 17, 1856, the Oregon territorial legislature incorporated the village as “Eola,” a name derived from Aeolus, the Classical Greek god of winds. The source further states that the Eola Hills “constitute one of the important groups of isolated hills in the Willamette Valley.” It goes on to explain that the hills have been known by other names, but the name “Eola Hills seems firmly established.” For additional name evidence, the petitioners also submitted several maps that identify the area as “Eola Hills.” Four of the USGS maps used to show the boundaries (Rickreall, Salem West, Mission Bottom, and Amity) identify the area as Eola Hills. The petitioners also submitted two geologic maps of the area issued by the State of Oregon's Department of Geology and Mineral Industries. Both prominently label the area “Eola Hills.” According to the petitioners, Eola Hills has name recognition and a reputation for quality among wine consumers both in and outside of Oregon. For this reason, vineyards and wineries within the area utilize the name frequently in their promotional literature. The petitioners submitted two promotional maps demonstrating this fact. One map, entitled “The Wine Appellations of Oregon,” issued by the Oregon Wine Marketing Coalition, portrays the Eola Hills area as a subregion within the Willamette Valley. The other map, entitled “Eola Hills Winegrowing Region, Willamette Valley Oregon,” shows the location of all vineyards and wineries in the area. The petitioners note that a small portion of the proposed viticultural area is sometimes referred to as “Amity Hills.” “Oregon Geographic Names” describes the Amity Hills as a northern extension of the Eola Hills separated from the main ridge by a pass east of the town of Amity. USGS maps for McMinnville and Amity, Oregon, identify this area as Amity Hills. However, the geologic maps issued by Oregon's Department of Geology and Mineral Industries identify this area as part of the Eola Hills. The petitioners argue that, for the purpose of wine designation, consumers in Oregon have come to recognize the entire area as a single unit known as “Eola Hills.” They also state that vintners in the Amity Hills portion of the area support the designation of Eola Hills for the entire area. Boundary Evidence As evidence of the boundary, the petitioners submitted with the petition six USGS topographic maps on which the Eola Hills are dominant features. The main ridge of the Eola Hills runs north to south, starting approximately 5 3/4 miles northeast of the town of Amity and extending south for 16 miles to Oregon Highway 22, just north of the Willamette River at West Salem. At their widest point, toward the southern end, the Eola Hills are about 6 1/2 miles across, from Wallace Road in the east to U.S. Highway 99 in the west. The petitioners use the 200-foot contour line as the predominant boundary marker. They note that they occasionally diverge to use roads or highways where they form a more convenient boundary and to exclude land not deemed suitable for grape cultivation due to soil type, elevation, or urban development. Distinguishing Features Soils and Geology The petitioners state that the soils and geology of the Eola Hills, compared to those of the surrounding areas, are distinctive in two regards. The petitioners note that the prevailing basalt-derived soils of the Eola Hills are shallower than the soils of other hills in the north Willamette Valley, and that these well drained basalt soils are very different from the alluvial soils of the surrounding valley floor. As evidence of these differences, the petitioners submitted two geologic maps issued by the State of Oregon's Department of Geology and Mineral Industries. One is entitled “Geologic Map of the Rickreall and Salem Quadrangles, Oregon;” the other is entitled “Preliminary Geologic Map of the Amity and Mission Bottom Quadrangles, Oregon.” According to these documents, volcanic basalt rock from the lava flows of the Miocene epoch underlies the Eola Hills, and marine sedimentary rock of the Oligocene epoch underlies areas at the lower elevations of the ridge. The soils at the middle and higher elevations of the Eola Hills are largely well drained silty clay loams weathered from basalt; those on the lower slopes are silt loams weathered predominantly from sedimentary rock, particularly on the west-facing slopes. According to soil survey maps issued by the U.S. Department of Agriculture, Soil Conservation Service, the dominant basalt-derived soils on the Eola Hills are Nekia soils (recently reclassified as Gelderman soils) and Ritner and Jory soils. The preponderance of the shallower Nekia and Gelderman soils in the Eola Hills differentiates the Eola Hills from the Red Hills farther north, where Jory soils are predominant. Nekia and Gelderman soils have a much lower available water capacity than Jory soils. The most common sedimentary soils on the Eola Hills are Steiwer, Chehulpum, and Helmick soils, especially on the west side of the ridge. Also in the Eola Hills are soils formed in alluvial deposits, the most common of which are the silt loam Woodburn soils. Such alluvial soils generally are only at the lowest elevations of the proposed viticultural area (below 300 feet). Like the soils mentioned above, these alluvial soils also are suitable for wine grapes if they are on slopes steep enough for good water drainage. Finally, the Eola Hills are surrounded on almost all sides by, and are easily distinguished from, terraces of the Willamette Valley. With few exceptions, the terraces lie below the 200-foot elevation line and are characterized by less drained alluvial soils. According to the petitioners, the soils on these terraces generally are not suitable for the cultivation of premium wine grapes. Therefore, land below an elevation of 200 feet is not included within the proposed Eola Hills boundary. Topography The main ridge of the Eola Hills runs north-south and has numerous lateral ridges that run east-west on both sides. Slopes on the west side of the ridge tend to be somewhat steeper and pocketed, and they fall away below an elevation of 200 feet more abruptly than the slopes on the east side, which tend to be gentler and more extensive. Both sides, however, provide vineyard sites with very similar soils and growing conditions. The highest point in the south end of the hills is 1,093 feet. In the central area, near the Polk-Yamhill County line, the ridge peaks at around 1,160 feet; in the north, it peaks at 863 feet. The majority of vineyards in the Eola Hills are at elevations ranging from 250 to 700 feet, although suitable sites, given proper sun exposure and microclimate, are found above these elevations. Most vineyards in the Eola Hills have a southern, southwestern, or southeastern orientation. However, on gently sloping terrain, east- and west-facing sites are also capable of producing high quality wine grapes. Climate According to the petitioners, the Eola Hills are blessed with a temperate climate. Summers are warm, but seldom excessively hot; winters are mild, and in winter, temperatures are usually above freezing. Annual rainfall ranges from under 40 inches on the southeastern edge of the Eola Hills to more than 45 inches in the higher elevations. More important, only about 15 percent of the total annual rainfall in the mid-Willamette Valley occurs from April through September. Thus, rainfall averages during the growing season are uniform throughout the Eola Hills. The petitioners state that the Eola Hills are influenced more by their position due east of the Van Duzer corridor than by their location in the rain shadow of the Coast Range. Summer ocean winds vented through the corridor often cause dramatic late afternoon drops in temperature, which further distinguish the area from the hills further north. During the growing season, average maximum temperatures at the middle elevations range from 62 °F in April to 83 °F in July. These factors contribute to the ideal conditions for the “cool-climate” grape varieties that dominate in Eola Hills vineyards, such as Pinot Noir, Pinot Gris, and Chardonnay. The petitioners note that due to the effects of thermal inversion, during the growing season heat accumulation is greater on the slopes of the Eola Hills than on the floor of the surrounding Willamette Valley. Cool air, which drains toward the valley floor during the night, layers warmer air on the lower slopes. The petitioners submitted monthly heat accumulation data that compared a site at the Salem, OR airport on the valley floor with a site at the Seven Springs Vineyard in the Eola Hills for the years 1992-95. The data showed that, for those years, seasonal heat accumulation at the Seven Springs Vineyard site was consistently higher than that at the Salem airport site. Typically, the Seven Springs Vineyard site in the Eola Hills has, during the growing season (April 1 to October 31), a heat accumulation range of 2,300-2,500 degree days, with a base of 60 °F. Based on standards for determining climatic regions using temperature summation, this heat accumulation range places the vineyard high in the Region 1 category (2,500 degree days or less). Notice of Proposed Rulemaking On September 8, 2003, TTB published in the **Federal Register** (68 FR 52875) as Notice No. 15 a notice of proposed rulemaking regarding the establishment of the Eola Hills viticultural area. The comment period was originally scheduled to end on November 7, 2003. However, we received a request from a winery, Eola Hills Wine Cellars, Inc., of Salem, Oregon, to extend the comment period an additional 60 days. The winery stated it needed additional time to gather evidence to support its comment. In consideration of this and in light of the impact that the approval of the proposed Eola Hills viticultural area might have on Eola Hills Wine Cellars' wine labels, we published Notice No. 22 on November 7, 2003 (68 FR 63042), extending the comment period to January 6, 2004. Comments Received TTB received 86 comments regarding the proposed Eola Hills viticultural area. Nearly all of the comments discussed the impact that establishment of an area named “Eola Hills” would have on Eola Hills Wine Cellars and its existing labels. Eola Hills Wine Cellars, in its comments, opposed the proposed name because it would severely restrict its ability to use its “Eola Hills” and “Eola Hills Wine Cellars” brand names. The winery noted that because it depends on grapes from outside the proposed Eola Hills viticultural area to produce the wines labeled with these brand names, its wines will not qualify for viticultural area labeling. At least 85 percent of the wine must be derived from grapes grown within the viticultural area in order for the winery to use its brand names. The winery stated that it must obtain some of its grapes from outside the Eola Hills area in order to maintain consistent production. Even though the winery has been using the “Eola Hills Wine Cellars” brand name on its labels since 1988, it is ineligible for the grandfather provision in 27 CFR 4.39(i)(2), which applies only to brand names used on certificates of label approval issued prior to July 7, 1986. The winery stated that it has worked for years building recognition for its brand names. To lose the use of these names would be, it stated, financially devastating to the winery. The winery also argued that naming the area “Eola Hills” will cause consumers to confuse wines labeled with the new viticultural area name with Eola Hills Wine Cellars' wines. It contends that the Eola Hills area is known to consumers because of the reputation of Eola Hills Wine Cellars, and the petitioners are capitalizing on this reputation. In order to protect its name, the winery has applied for trademark status for its brand names with the U.S. Patent and Trademark Office. For these reasons, Eola Hills Wine Cellars urged that another name be used for the viticultural area. It proposed the names “Brunk House District,” “Eola/Amity Hills District,” and “Amity Hills/Eola Hills District” as alternative names. The winery also requested that it be granted an exemption under TTB regulations to continue to use its brand names, “Eola Hills” and “Eola Hills Wine Cellars,” on its wines regardless of the origin of the grapes used to produce the wine. The winery ended its comment by requesting that TTB hold a hearing regarding the naming of the viticultural area. Most of the other comments sympathized with the Eola Hills Wine Cellars position. Forty-one commenters stated that they opposed the new area unless a new name is found or some provision made allowing the winery unrestricted use of its brand names. Thirty other comments expressed support for the proposal as published, but urged that Eola Hills Wine Cellars be permitted to operate as if it were eligible for the grandfather provision of § 4.39(i). These commenters argued that the current grandfather date of July 7, 1986, is arbitrary and penalizes newer wine producing areas that have developed since that date. Several remaining comments expressed complete opposition to the proposal because of this issue, while a few expressed complete support. In an effort to find a solution to the problem, the petitioners submitted comments proposing new names for the area—Amity-Eola District, Aeolus Hills (District), and Aeolian Hills (District). They also requested that TTB create a grandfather clause that would permit Eola Hills Wine Cellars to continue using its brand names. Recently, the petitioners advised TTB by e-mail that they would accept a change in the proposed name to “Eola-Amity Hills.” TTB Finding After careful consideration of the evidence submitted in support of the petition and the public comments received, TTB finds that there is a substantial basis for the establishment of the viticultural area under the name “Eola-Amity Hills.” The petitioners submitted sufficient evidence of the viticultural distinctiveness of the proposed area, and nothing in the comments contradicted that evidence. The petitioners also submitted sufficient evidence (discussed above under “Name Evidence”) that a portion of the proposed viticultural area is known as “Amity Hills.” As explained earlier, the distinguishing features evidence for Eola Hills applies equally to the Amity Hills portion of the proposed area. Consumers therefore will know that the name “Eola-Amity Hills” refers to the area. Sufficient evidence was not submitted to support any of the other proposed alternative names. In addition, the name “Eola-Amity Hills” will adequately distinguish the viticultural area from the Eola Hills Wine Cellars brand name. Upon the effective date of this final rule, TTB will recognize only the entire name “Eola-Amity Hills” as having viticultural significance, and therefore Eola Hills Wine Cellars may continue to use its “Eola Hills” and “Eola Hills Wine Cellars” brand names on its wines. With the adoption of “Eola-Amity Hills” as the name of the new viticultural area, it is not necessary to address the issue of a “grandfather” provision for Eola Hills Wine Cellars. TTB is not granting Eola Hills Wine Cellars' request for a public hearing to discuss the name of the viticultural area. We have determined that a hearing is not necessary because the public record as described above provides a sufficient basis for a decision. Based on the above, we conclude that it is appropriate to establish the viticultural area under the name “Eola-Amity Hills.” Therefore, under the authority of the Federal Alcohol Administration Act and part 4 of our regulations, we establish the Eola-Amity Hills viticultural area in Polk and Yamhill Counties, Oregon, effective 30 days from this document's publication date. Boundary Description See the narrative boundary description of the viticultural area in the regulatory text published at the end of this document. Maps The maps for determining the boundary of the viticultural area are listed below in the regulatory text. Impact on Current Wine Labels Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. With the establishment of this viticultural area and its inclusion in part 9 of the TTB regulations, its name, “Eola-Amity Hills” is recognized under 27 CFR 4.39(i)(3) as a name of viticultural significance. The text of the new regulation clarifies this point. Consequently, wine bottlers using “Eola-Amity Hills” in a brand name, including a trademark, or in another label reference as to the origin of the wine, will have to ensure that the product is eligible to use the viticultural area's name as an appellation of origin. For a wine to be eligible to use as an appellation of origin a viticultural area name or other term specified as being viticulturally significant in part 9 of the TTB regulations, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name or other term, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible to use the viticultural area name or other term as an appellation of origin and that name or term appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the viticultural area name or other term appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Different rules apply if a wine has a brand name containing a viticultural area name that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details. Regulatory Flexibility Act We certify that this regulation will not have a significant economic impact on a substantial number of small entities. This regulation imposes no new reporting, recordkeeping, or other administrative requirements. Any benefit derived from the use of a viticultural area name is the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required. Executive Order 12866 This rule is not a significant regulatory action as defined by Executive Order 12866 (58 FR 51735). Therefore, it requires no regulatory assessment. Drafting Information Jennifer Berry of the Regulations and Rulings Division drafted this document. List of Subjects in 27 CFR Part 9 Wine. The Regulatory Amendment For the reasons discussed in the preamble, we amend 27 CFR, chapter 1, part 9, as follows: PART 9—AMERICAN VITICULTURAL AREAS 1. The authority citation for part 9 continues to read as follows: Authority: 27 U.S.C. 205. Subpart C—Approved American Viticultural Areas 2. Subpart C is amended by adding § 9.202 to read as follows: § 9.202 Eola-Amity Hills.

(a)*Name.* The name of the viticultural area described in this section is “Eola-Amity Hills”. For purposes of part 4 of this chapter, “Eola-Amity Hills” is a term of viticultural significance.

(b)*Approved maps.* The appropriate maps for determining the boundary of the Eola-Amity Hills viticultural area are six United States Geological Survey 1:24,000 scale topographic maps. They are titled—

(1)Rickreall, Oregon, 1969, photorevised 1976;

(2)Salem West, Oregon, 1969, photorevised 1986;

(3)Mission Bottom, Oregon, 1957, revised 1993;

(4)Dayton, Oregon, 1957, revised 1992;

(5)McMinnville, Oregon, 1957, revised 1992; and

(6)Amity, Oregon, 1957, revised 1993.

(c)*Boundary.* The Eola-Amity Hills viticultural area is located in the State of Oregon, within Polk and Yamhill Counties, and is entirely within the Willamette Valley viticultural area. The area's boundary is defined as follows—

(1)The beginning point is on the Rickreall, Oregon, map, at the intersection of State Highways 22 and 223;

(2)From the beginning point, proceed east on State Highway 22 to its intersection with Doaks Ferry Road on the Salem West, Oregon, map; then

(3)Proceed northeast on Doaks Ferry Road to its intersection with the 200-foot contour line southeast of Gibson Gulch, in section 65; then

(4)Follow the 200-foot contour line in a westerly loop until it rejoins Doaks Ferry Road; then

(5)Continue north on Doaks Ferry Road to its intersection with State Highway 221; then

(6)Continue north on State Highway 221 to its intersection with the 200-foot contour line at the point where the contour line departs from Highway 221 and runs southwest along the southern edge of Spring Valley (section 53 on the Mission Bottom, Oregon, map); then

(7)Follow the 200-foot contour line first south onto the Salem West, Oregon, map, then northwest around the southern and western edge of Spring Valley and back on to the Mission Bottom, Oregon, map; then

(8)Continue to follow the 200-foot contour line generally north on the Mission Bottom, Oregon, map, crossing onto and back from the Amity, Oregon, map and continue past the Yamhill County line and onto the Dayton, Oregon, map; then

(9)Follow the 200-foot contour line from the Dayton, Oregon, map onto the McMinnville, Oregon, map and back to the Dayton, Oregon, map and continue around the northeast edge of the Amity Hills spur of the Eola Hills; then

(10)Follow the 200-foot contour line onto the McMinnville, Oregon, map as it continues around the northern and western periphery of the Amity Hills spur; then

(11)Follow the 200-foot contour line onto the Amity, Oregon, map as it heads first south, then generally southeast, then generally south, along the western edge of the Eola Hills until it intersects Old Bethel Road at a point just north of the Polk County line; then

(12)Follow Old Bethel Road, which becomes Oak Grove Road, south until it intersects with the 200-foot contour line just northwest of the township of Bethel; then

(13)Follow the 200-foot contour line around in a southeasterly loop until it again intersects Oak Grove Road where Oak Grove and Zena Roads intersect; then

(14)Follow Oak Grove Road south until it intersects with Frizzell Road; then

(15)Follow Frizzell Road west for three-tenths mile until it intersects with the 200-foot contour line; then

(16)Follow the 200-foot contour line generally south until it intersects with the beginning point. Signed: May 9, 2006. John J. Manfreda, Administrator. Approved: June 15, 2006. Timothy E. Skud, Deputy Assistant Secretary (Tax, Trade, and Tariff Policy). [FR Doc. E6-11077 Filed 7-14-06; 8:45 am] BILLING CODE 4810-31-P DEPARTMENT OF THE TREASURY Alcohol and Tobacco Tax and Trade Bureau 27 CFR Part 9 [T.D. TTB-50; Re: Notice No. 50] RIN 1513-AA82 thru 1513-AA88 Establishment of the Alta Mesa, Borden Ranch, Clements Hills, Cosumnes River, Jahant, Mokelumne River, and Sloughhouse Viticultural Areas AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury. ACTION: Final rule; Treasury decision. SUMMARY: This Treasury decision establishes seven new viticultural areas within the boundary of the existing Lodi viticultural area, which lies within southern Sacramento and northern San Joaquin Counties in California. The seven new areas are Alta Mesa, Borden Ranch, Clements Hills, Cosumnes River, Jahant, Mokelumne River, and Sloughhouse. We designate viticultural areas to allow vintners to better describe the origin of their wines and to allow consumers to better identify wines they may purchase. DATES: *Effective Dates:* August 16, 2006. FOR FURTHER INFORMATION CONTACT: N. A. Sutton, Alcohol and Tobacco Tax and Trade Bureau, Regulations and Rulings Division, 925 Lakeville St., No. 158, Petaluma, CA 94952; telephone 415-271-1254. SUPPLEMENTARY INFORMATION: Background on Viticultural Areas TTB Authority Section 105(e) of the Federal Alcohol Administration Act (the FAA Act, 27 U.S.C. 201 *et seq.* ) requires that alcohol beverage labels provide consumers with adequate information regarding product identity and prohibits the use of misleading information on those labels. The FAA Act also authorizes the Secretary of the Treasury to issue regulations to carry out its provisions. The Alcohol and Tobacco Tax and Trade Bureau

(USGS)maps; and • A copy of the appropriate USGS map(s) with the proposed viticultural area's boundary prominently marked. Alta Mesa, Borden Ranch, Clements Hills, Cosumnes River, Jahant, Mokelumne River, and Sloughhouse Viticultural Area Petitions and Rulemaking Lodi American Viticultural Areas Steering Committee Petitions The Lodi American Viticultural Areas

(LAVA)Steering Committee petitioned TTB to establish seven new viticultural areas within the boundary of the existing Lodi viticultural area (27 CFR 9.107) in southern Sacramento and northern San Joaquin Counties in California. The seven LAVA Steering Committee petitions proposed the creation of the Alta Mesa, Borden Ranch, Clements Hills, Cosumnes River, Jahant, Mokelumne River, and Sloughhouse viticultural areas. The 16 wine industry members that comprise the committee stated that their proposal subdivides the existing Lodi area into “seven smaller viticultural areas of distinction.” The establishment of the seven proposed viticultural areas would not in any way affect the existing 551,500-acre Lodi viticultural area. The Lodi area will continue as a single American viticultural area within its current boundary. However, TTB notes that the seven proposed areas fall entirely within the 458,000 acres of the original 1986 boundary of the Lodi viticultural area and thus, as proposed, would not include any of the 93,500 acres added to the Lodi area when it was expanded along its western and southern borders in 2002. ( *See* T.D. ATF-223, published in the **Federal Register** at 51 FR 5324 on February 13, 1986, for the Lodi viticultural area as originally defined. *See* T.D. ATF-482, published in the **Federal Register** at 67 FR 56481 on September 4, 2002, for the Lodi area expansion in 2002.) The Seven Proposed Viticultural Areas—Background Location The proposed Cosumnes River, Alta Mesa, and Sloughhouse viticultural areas lie, respectively, in the northwestern, north-central, and northeastern portions of the existing Lodi viticultural area and are entirely within Sacramento County. The proposed Clements Hills and Mokelumne River areas cover, respectively, the southeastern and southwestern portions of the existing Lodi viticultural area and are entirely within San Joaquin County. The proposed Borden Ranch and Jahant areas cover, respectively, the east-central and central portions of the existing Lodi viticultural area and lie in portions of both Sacramento and San Joaquin Counties. The Cosumnes River flows southwest across the Sacramento County portion of the Lodi viticultural area and crosses the proposed Sloughhouse, Alta Mesa and Cosumnes River viticultural areas. The Cosumnes River joins the Mokelumne River, which flows west, then northwest, through the San Joaquin County portion of the Lodi area. The Mokelumne River crosses the proposed Clements Hills and Mokelumne River viticultural areas, and forms a portion of the southwestern boundary of the proposed Jahant area. Neither river touches the proposed Borden Ranch viticultural area. Summary of Distinguishing Features According to the LAVA Steering Committee petition, climate data—such as temperature, precipitation, and wind patterns—outline the distinctive microclimates of the seven proposed viticultural areas. To varying degrees, the petition notes, the Lodi viticultural area's climate is affected by its inland San Joaquin valley location between the Sierra Nevada Range to the east and the Sacramento Delta, with its Pacific coast marine influence, to the west. Differences in topography, elevation, and soils also help to distinguish the seven proposed areas from one another, according to the petition. In addition, the LAVA Committee uses the Storie Index (Huntington, 1992) to rate the agricultural potential of the soils within the seven proposed viticultural areas. This index ranges from 100 points for highly suitable soils to 0 points for unsuitable soils. The petition notes that Storie Index ratings for the seven proposed areas range from 95 to 15 points. The table below lists the general features of each of the seven proposed viticultural areas as outlined in the LAVA Steering Committee petition: Name of proposed viticultural area Total acreage Relative growing season length* Storie

(soil)index Location within the Lodi viticultural area Alta Mesa 55,400 3 25-40 North-central. Borden Ranch 70,000 2 15-30 East-central. Clements Hills 85,400 2 15-30 Southeast. Cosumnes River 54,700 2 24-40 Northwest. Jahant 28,000 1 25-40 Central. Mokelumne River 85,700 1 80-95 Southwest. Sloughhouse 78,800 4 15-30 Northeast. * 1 = coolest; 4 = warmest. In addition, the LAVA Steering Committee petition provided an overview of each proposed viticultural area's grape-growing environment, which we outline in this table: Proposed viticultural area Description Alta Mesa Intermediate-elevation river terraces and fans; prairie environment; San Joaquin soil series of intermediate age; heavy, red, clay loams; slightly warmer and less windy climate than the lowlands to the west; primarily red grape varietals. Borden Ranch High elevations, very old river terraces and hills; oldest valley floor soils; vernal pools and prairie mound environment with high ridges; windy, and warmer, and wetter climate than lowlands to the west; primarily red grape varietals. Clements Hills High-elevation river terraces and hills with older soils and volcanic sediments; woodland environment; warmer and wetter climate than lowlands to the west; primarily red grape varietals. Cosumnes River Low-elevation meadows and riverbank woodland environment; diversity of young soils along floodplain and sloughs with patches of intermediate-age soils on river terraces and fans; cool and windy climate; primarily white grape varietals. Jahant Intermediate elevations with erosion, dissected river terraces and old floodplain deposits; soils are sandy at surface and older and cemented at sub-surface depths; cool and breezy climate; both red and white grape varietals. Mokelumne River Intermediate-to-low-elevation alluvial fan; prairie environment; distinctive soils; cool and windy climate; both red and white grape varietals. Sloughhouse High-elevation river terraces and low bedrock hills of the Sierra Range; older soils; woodland environment; warmer and wetter climate than the lowlands to the west; both red and white grape varietals. Below, we discuss the evidence presented in the seven petitions. Alta Mesa The proposed Alta Mesa viticultural area is located in Sacramento County in the north-central portion of the established Lodi viticultural area, approximately 21 miles south of the city of Sacramento and 13 miles north of the city of Lodi. The proposed area covers 55,400 acres, of which approximately 5,000 acres are planted to grapes, according to the LAVA Steering Committee petition. This irregularly shaped, five-sided area is 13.3 miles long north to south, and 8.3 miles wide at its widest point east to west. The Alta Mesa region's “tabletop” landform and the Joaquin soil series are the proposed area's distinctive and unifying features, the petition states. Below, we summarize the evidence presented in the Alta Mesa petition. Name Evidence The petition explains that the name “Alta Mesa,” which means “high table” in Spanish, reflects California's history under Spanish-controlled Mexico. The petition states that local ranchers, farmers, and winemakers refer to this region within the existing Lodi viticultural area as “Alta Mesa,” and notes that the name is also used for places within the proposed viticultural area. The Alta Mesa Farm Bureau Hall, which is listed on the National Register of Historic Places, is on Alta Mesa Road, while the Alta Mesa Fair is held in Elk Grove and the Alta Mesa Dairy is in Wilton, both of which are within the proposed area's boundary. The name “Alta Mesa” also appears four times on the USGS Sloughhouse map within the proposed viticultural area's boundaries. The map shows the 138-foot high Alta Mesa benchmark and the Alta Mesa Community Hall in section 9, and the Alta Mesa Gun Club in section 8, T6N, R7E. Alta Mesa Road runs along the northern and eastern boundaries of section 5, T6N, R7E, and continues onto the USGS Clay, California map. The road serves as part of the Alta Mesa viticultural area's proposed eastern boundary. Boundary Evidence The Alta Mesa tabletop landform and the extent of the Joaquin soil series generally outline the boundary of the proposed Alta Mesa viticultural area, according to the petition. The petition explains that the American and Cosumnes Rivers have built up intermediate elevation river terraces and alluvial fans, which form the proposed area's tabletop or “mesa,” the elevation of which gently rises from approximately 35 feet in the west to 138 feet in the east at the Alta Mesa benchmark. The proposed Alta Mesa area's northern boundary coincides with the established Lodi viticultural area's boundary at Sheldon Road in Sacramento County. According to the petition, eroded terrain and a change in soil types mark the proposed area's southern boundary at the Dry Creek estuary. Changes in elevation from Alta Mesa's tabletop landform, the petition explains, mark the proposed area's eastern and western boundary lines. Also, the petition notes, the proposed area's western boundary marks a transition to the warmer climate of the proposed Cosumnes River viticultural area. In addition, the proposed Alta Mesa area is bordered on the east by the proposed Sloughhouse and Borden Ranch viticultural areas, and, to the south, by the proposed Jahant area. Distinguishing Features Topography The proposed Alta Mesa viticultural area's tabletop or mesa-like landform is one of the area's most distinctive and unifying features, the petition states. The proposed Alta Mesa area sits on intermediate elevation river terraces and alluvial fans, and, despite some depressions and mounds, the area has a generally flat surface. This tabletop landform peaks at 138 feet in its northeast corner and gradually declines to 35 feet along its western side. To the east of the proposed Alta Mesa area, the Sierra Range foothills begin to rise within the proposed Sloughhouse viticultural area. To the proposed Alta Mesa area's immediate west, the proposed Cosumnes River viticultural area has lower elevations that almost dip to mean sea level. Deer Creek and the lower course of the Cosumnes River run parallel and southwest through the proposed area. Soils The San Joaquin soil series, which covers about 90 percent of the Alta Mesa region, is also a distinctive feature of the proposed viticultural area, the petition states. The petition explains that this soil series consists of dense, heavy clay that limits rooting depth and the need for irrigation. Classified as Abruptic Durixeralfs, the San Joaquin soils have high percentages of clay and gravel, and intensive reddening and cementation caused by silica, clay, and iron. This soil series has intermediate-age parent materials, 12,000 to 45,000 years old, from stage 2 of the late Pleistocene glacial age, making these some of the oldest soils within the established Lodi viticultural area, according to the petition. The Storie Index places the Alta Mesa soils between 25 and 40 points of suitability. The San Joaquin soil series, the petition emphasizes, creates a distinctive and beneficial viticultural environment in the proposed Alta Mesa viticultural area. Climate The petition uses data from the Lodi, Sacramento, Folsom, and Camp Pardee weather stations, which are located close to the proposed Alta Mesa viticultural area. With a mean annual temperature of 60.5 degrees Fahrenheit, the petition states that the proposed Alta Mesa area is a transitional region that is warmer than most of the other proposed viticultural areas within the existing Lodi viticultural area. Only the Clements Hills area, which has the same annual mean temperature as the Alta Mesa area, and the more inland Sloughhouse area, are warmer. The warm climate of the proposed Alta Mesa viticultural area is seen in the area's heat accumulation as measured in degree days. 1 The degree day total for the Alta Mesa area is more than 200 degree days higher than the totals of the proposed Jahant and Mokelumne River viticultural areas to the south, which are closer to the cooling breezes of the Sacramento Delta. The degree day total for the proposed Alta Mesa area is also more than 100 degree days higher than the totals of the proposed Cosumnes River area to its west and the proposed Borden Ranch and Clements Hills viticultural areas to its east and southeast. 1 Each degree that a day's mean temperature is above 50 degrees Fahrenheit, which is the minimum temperature required for grapevine growth, is counted as one degree day; see “General Viticulture,” Albert J. Winkler, University of California Press, 1975. The sea breeze from the Pacific Ocean that funnels through the Carquinez Straits and the Sacramento Delta, the petition explains, cools the overall Lodi area. However, this natural air conditioning gradually decreases in intensity and disperses as it flows inland from west to east. As measured across the northern portion of the existing Lodi viticultural area from west to east, these marine winds are strongest in the proposed Cosumnes River viticultural area, less intense in the proposed Alta Mesa area, and weakest in the proposed Sloughhouse area. Winter fog is also common in the proposed Alta Mesa viticultural area, the petition explains, due to seasonal standing water and cold-air drainage from the foothills to the east. This fog slightly decreases the Alta Mesa area's degree-day total, according to the petition, by limiting the springtime heating of the soil and vines. In addition, the petition notes, the proposed Alta Mesa viticultural area's elevation provides a buffer between this fog from the west and the proposed Sloughhouse viticultural area to the east. The average annual rain total in the proposed Alta Mesa viticultural area, according to petition evidence, is 18.5 inches. This amount, the petition notes, is less than the 23-inch annual average in Sloughhouse to the east and more than the rainfall averages found in the regions to Alta Mesa's immediate south. Borden Ranch The proposed Borden Ranch viticultural area is located in southern Sacramento and northern San Joaquin Counties in the east-central portion of the established Lodi viticultural area, approximately 27 miles southeast of the city of Sacramento and 13 miles north of the city of Lodi. Covering 70,000 acres, the petition notes that approximately 11,000 acres within the proposed Borden Ranch area are planted to grapes. Located between the Sierra Foothills to the east and the San Joaquin Valley to the west, the proposed area has a distinctive terrain of old alluvial fans, river terraces and plains, and high elevations, according to the petition. Below, we summarize the evidence presented in the Borden Ranch petition. Name Evidence In 1864, Ivey Lewis Borden established the Borden Ranch in this area, and local residents have used the name ever since, according to the petition. For example, the petition notes an August 16, 1929, Stockton Daily Evening Record article reporting on a barn fire on the Borden Ranch that killed a famous horse. More recently, the Borden Ranch name appeared in a court case and related news media stories involving a developer who sued the U.S. Army Corps of Engineers over wetlands issues, and the petition included a January 6, 2003, Sacramento Business Journal article on the case. The petition states that since the 1970s, when the Burton and Dedomenico families began the first major grape plantings within the proposed area, local residents have also come to know Borden Ranch for its grape growing. Since that time, the petition continues, Sutter Home, Mondavi, and Delicato have also planted vineyards in the proposed area. The petition also claims that between 1995 and 1996, the single largest vineyard expansion in California history occurred in this area. In addition, the petition includes articles from the April 8, 2003, Stockton Record and the April 18, 2003, Modesto Bee that discuss recent vineyard development around Clay Station. Named for a popular stagecoach stop from the California Gold Rush days and located on the historic Borden Ranch, Clay Station is noted for its rich reddish clay soils and large stones, which provide for well-drained soil for grape growing, according to Stockton Record article. The petition also included statements from local residents regarding the use of the Borden Ranch name. For example, Jeff Sparrowk, a longtime Clements-area rancher, notes that the Borden Ranch is well known for its quality grazing land and vineyards. Robert Disch, a Borden Ranch-area farmer, states that Borden Ranch has become well known since vineyard development began there in the 1970s. He adds, “We are happy to see the notoriety of this region increasing and can declare that the Borden Ranch has a well-known history in our community.” Wine industry publications have also taken notice of the Borden Ranch area, according to several articles supplied with the petition. An article titled “Lodi & the Sacramento Valley Vintage 2000” from the Wine Institute's “Harvest 2000” publication comments on the “enormous quality potential” of newer grape growing areas “such as Borden Ranch.” The Spring, 2002 edition of the “V&E Trellis Wire,” a publication of the Department of Viticultural and Enology at the University of California-Davis, includes an article about a student field trip to the Lodi-Woodbridge wine region. The article describes the students' visit to the Borden Ranch, which it characterized as a 4,000-acre vineyard region. Boundary Evidence The proposed Borden Ranch viticultural area lies between the Sierra Range foothills to the east and the San Joaquin Valley to the west. The proposed area's northern and southern boundaries are based on two generally parallel streams-the Laguna, a tributary of the Cosumnes River, in the north, and Dry Creek, a tributary of the Mokelumne River, in the south. Both flow northeast to southwest from the Sierra Foothills to the San Joaquin Valley. The stream deposits from the Laguna and Dry Creek are the distinguishing and unifying feature of the proposed Borden Ranch viticultural area, according to the petition. The proposed area's predominant geographical features are the high elevation, older river terraces and hills located within the watersheds of the Laguna and Dry Creek. These deposits and river terraces, the petition explains, extend from the Laguna in the north to near Liberty Road at the area's proposed southern boundary near Dry Creek. As a result, the proposed Borden Ranch area's northern boundary follows the path of the Laguna, while Dry Creek runs slightly north of the proposed area's southern boundary. The petition uses roads to mark the proposed area's eastern and western boundaries. Distinguishing Features Topography As explained in the petition, the proposed Borden Ranch viticultural area has distinctive terrain due to its location between the Laguna and Dry Creek streams and its location at the base of the Sierra Foothills. The river terraces and stream deposits left by the Laguna and Dry Creek throughout the proposed Borden Ranch area are its distinguishing and unifying feature, according to the petition. The petition notes that the proposed area's lower, western elevations also have prairie mounds and vernal pools along these river terraces. Hills and ridges, which are the eroded remnants of very old river deposits, are found near the Sierra Foothills in the proposed area's higher eastern elevations. In addition, the petition states, the oldest alluvial fans in Sacramento and San Joaquin Counties are found in the eastern portion of the proposed area close to the Sierras. The proposed Borden Ranch viticultural area inclines upward toward the Sierra Range, from 73 feet in elevation along its western boundary to 520 feet along its eastern border, a rise of 447 feet. While these elevations and rise are similar to the proposed Sloughhouse viticultural area to the north of the Borden Ranch area, the proposed Alta Mesa and Jahant areas to the west of Borden Ranch have peak elevations of only 138 feet and 105 feet, respectively. The existing Lodi viticultural area's eastern boundary also marks the eastern limit of the proposed Borden Ranch area—beyond which lies the higher elevations and more mountainous terrain of the Sierra Foothills. Soils The terrain within the proposed Borden Ranch viticultural area exceeds 700,000 years in age, and is distinctively older than the terrain found in the other six proposed Lodi viticultural areas, according to the petition. In addition, the petition notes, the oldest valley soils in the Lodi region are found on the tops of the terraces above the streams in the proposed Borden Ranch area. These old Durixeralfs soils, the petition states, include the Redding, Hicksville, Corning, and Yellowlark soil series. In contrast, the petition states that the surface terrain in the proposed Sloughhouse viticultural area to the north of the Borden Ranch area and in the proposed Clements Hills viticultural area to its south is from 125,000 and 250,000 years old, respectively, to 700,000 years old. Additionally, the proposed Borden Ranch viticultural area's soils contain a large percentage of surface and below ground rock cobble, or stones, a feature unique to this area, according to the petition. Climate The petition incorporates data from the Lodi, Sacramento, Folsom, Camp Pardee, and Stockton weather stations, which are located near the proposed Borden Ranch viticultural area. The proposed Borden Ranch area, the petition notes, has a greater diversity of topographic-climatic vineyard sites than any of the other six areas proposed for establishment within the existing Lodi viticultural area. As the petition explains, vineyards within the proposed Borden Ranch area are found on hilltops or slopes, and in flat valley floors, facing different compass directions. These topographic variables, the petition states, are responsible for differences of sun, temperature, soil, water, and windiness in the vineyards. The proposed Borden Ranch area, according to the petition, is windier, warmer, and wetter, than the lowland regions to its west. The combination of cooling Sacramento Delta breezes from the west and cold air drainage from the Sierra Foothills to the east, the petition explains, generates high wind intensity and duration in the proposed Borden Ranch area. The petition notes that this windswept environment, in conjunction with the area's hills and stony soils, creates high water evaporation conditions in the vineyards that lessen the vigor of the grapevine growth. While the Borden Ranch area's degree day total is similar to that of the other six proposed viticultural areas discussed in this document, its annual mean temperature of 60.4 degrees Fahrenheit is slightly warmer than the proposed Cosumnes River, Jahant, and Mokelumne River areas to its west. The proposed Borden Ranch area is cooler than the Sloughhouse area to its north. Annual rainfall in the Borden Ranch area is 20 inches, which is less than the 23 inches of the Sloughhouse area to the north, the petition states, but higher than that of the proposed areas to its west. Clements Hills Located in northern San Joaquin County, the proposed Clements Hills viticultural area occupies much of the southeastern portion of the established Lodi viticultural area, approximately 41 miles southeast of Sacramento and 13 miles east of the city of Lodi. Covering 85,400 acres, of which approximately 16,000 acres are planted to grapes, the petition states that the proposed Clements Hills viticultural area is a hilly transitional region between the low, flat San Joaquin Valley floor to the west and the progressively higher Sierra Foothills to the east. The petition adds that the proposed area's high elevation river terraces and rounded hilltops distinguish it from surrounding grape-growing regions. Below, we summarize the evidence presented in the Clements Hills petition. Name Evidence The small town of Clements is located in the northern portion of the proposed Clements Hills viticultural area and is shown on the USGS Clements map and on California highway maps. According to the petition, Thomas Clements, who had settled in the region in 1857, donated 25 acres of land in 1882 to develop the town as a stop on the San Joaquin and Sierra Nevada Railroad. Named for its benefactor, the town served as a shipping point for the region's grain, wool, hops, fruit, and other agricultural commodities. The proposed “Clements Hills” viticultural area name combines the town's name with a reference to the proposed area's hilly terrain. Local residents, realtors, and members of the wine industry, the petition states, commonly use the Clements Hills name to refer to the land within the proposed area's boundaries. For example, realtor Tad Platt states that while marketing materials formerly referred to the “rolling hills of Clement,” the area has become better known simply as “Clements Hills” in recent years. Farmer Wesley Breitchenbucher and businessman Jeff Myers, whose families have lived in the Clements area for generations, also indicate that the proposed area is known as Clements Hills, according to the petition. The petition quotes Mr. Myers as stating that “the red, shallow soils of the Clements Hills” has attracted many vineyards and ranchette developments in the past decade. In addition, the petition notes the use of the Clements Hills name on the label of Vino Con Brio's 2001 Sangiovese wine. Boundary Evidence The high elevation river terraces and hills formed by the Mokelumne River, along with the region's older soils, distinguish the proposed Clements Hills area from surrounding areas, according to the petition. The Clements Hills area's proposed northern boundary, along Liberty Road, approximates the northern edge of the higher and older Mokelumne River terraces, the petition explains. The petition adds that, north of the proposed boundary, elevations decrease in the proposed Borden Ranch viticultural area due to the more eroded land found in the vicinity of Dry Creek. The Clements Hills proposed eastern boundary follows the San Joaquin County line, separating the proposed area from the more mountainous Amador, Calaveras, and Stanislaus Counties. These county lines, according to the petition, mark the transition from the rolling hills of the Clements Hills region to the Sierra Foothills more mountainous environment. The Clements Hills proposed southern boundary line follows the Calaveras River as it meanders west from the Sierra Foothills to the San Joaquin Valley. To the north of the Calaveras River, within the proposed area's boundaries, the terrain is made up primarily of hills from older Mokelumne River deposits, the petition explains. Also, the petition states, the Calaveras River's alluvial terrace and fan deposits become progressively younger as one moves south from the proposed area's southern boundary. The Clements Hills proposed western boundary is along Jack Tone and Elliott roads. To the east of these roads within the proposed area, the petition explains, the terrain consists primarily of hilly deposits from the older alluvial terraces and fans. The petition adds that to the west of Jack Tone and Elliott roads beyond the Clements Hills area, the hilly terrain gives way to younger, sandier, and lower alluvial fan formations and eventually the flat San Joaquin valley floor. Distinguishing Features Topography The proposed Clements Hills viticultural area is located between the flat, low elevations of the San Joaquin Valley floor to its west and the higher Sierra Foothills elevations to its east, according to the petition. Elevations within the proposed boundary area increase from a low of 90 feet on its western, San Joaquin Valley side to greater than 400 feet high at its eastern boundary line, according to the provided USGS maps. The petition also notes that the hilltops within the Clements Hills proposed viticultural area are distinctively convex and rounded. The Clements Hills, the petition states, contrast with the flat valley terrain to the west, the flat hilltops of the proposed Borden Ranch viticultural area to the north, and the more mountainous environment of the Sierras. Through time and weather, the petition adds, the bluffs and terraces of the Mokelumne River have become smooth topped, rolling hills that extend toward the proposed Clements Hills area's southern boundary at the Calaveras River. Soils The petition explains that the soils found within the proposed Clements Hills proposed viticultural area are old and primarily classified as Haploxerailfs, Durixeralfs, and Palexeralfs. These brown, red and yellow loams, clay loams, and clays, the petition states, principally belong to the Redding, Cometa, Yellowlark, and Montpellier soil series. Also, the petition notes, these low vigor soils have higher water holding capacities than the stony soils to the north in the proposed Borden Ranch viticultural area, but less than the loamy soils to the west in the proposed Mokelumne River area. The Storie Index rates the soils in the proposed Clements Hills viticultural area at between 15 and 30, according to the petition. Climate Using data from the Lodi, Sacramento, Folsom, Stockton, and Camp Pardee weather stations, which are located close to the proposed Clements Hills viticultural area, the petition states that the proposed Clements Hills viticultural area is warmer and wetter than the regions to its west. As documented in the petition, the mean annual temperature of the proposed Clements Hills viticultural area is 60.5 degrees Fahrenheit, which is the same as the Alta Mesa area's mean annual temperature. Also, only the proposed Sloughhouse viticultural area, north of the Clements Hills region, experiences a warmer annual mean temperature in the Lodi area. The Clements Hills area annual degree day total is approximately 100 degrees higher than those of the proposed Mokelumne River and Jahant viticultural areas to the west, according to the petition. The petition notes that fog is less frequent in the proposed Clements Hills viticultural area than in the lower elevation San Joaquin valley floor areas to its west and, therefore, the proposed area receives more hours of warming sunshine. Reduced winds also help warm the proposed Clements Hills area, according the petition. Although the proposed area receives consistent Sacramento Delta breezes, the hilly terrain of the proposed Clements Hills area, the petition notes, reduces the marine wind speed and movement across the proposed area. Air drainage from the higher slopes to the east, the petition adds, reduces frost occurrences in the proposed viticultural area as well. Rainfall in the proposed Clements Hills viticultural area averages 21 to 22 inches annually, according to the petition, which is more than what the lower elevation proposed Jahant and Mokelumne River areas to its west and the proposed Borden Ranch area to its north receive. The petition explains that the proposed Clements Hills area's hilly topography and its location just west of the Sierra Mountains bring more rain to the area since these higher elevations cause moisture-laden Pacific air to rise, forcing the air's moisture to condense and fall to the ground. Cosumnes River The proposed Cosumnes River viticultural area is in the northwestern portion of the existing Lodi viticultural area, approximately 20 miles south of the city of Sacramento and 14 miles north of the city of Lodi. Approximately 3,000 acres of the 54,700 acres within the proposed Cosumnes River viticultural area are currently planted to grapes, according to the petition. The climate of the proposed viticultural area, providing most notably a relatively cool and windy growing season, as well as its young, alluvial soils and low-elevation terrain distinguish the proposed area from surrounding areas, according to the petition. Below, we summarize the evidence presented in the Cosumnes River petition. Name Evidence The May 2001 California State Automobile Association “Central California” map shows the Cosumnes River from its headwaters in the Sierra Range to its confluence with the Mokelumne River between Walnut Grove and Thornton, California. The lower portion of the river flows through the proposed Cosumnes River viticultural area. The USGS quadrangle maps for Bruceville, Elk Grove, and Galt, California, which are used to define portions of the proposed Cosumnes River viticultural area boundary, identify the Cosumnes River and show its northeast-to-southwest path through the proposed area. The LAVA Committee considered using the “Upper Cosumnes” and “Lower Cosumnes” names for the proposed “Sloughhouse” and “Cosumnes River” viticultural areas, respectively, but believes the proposed name choices are more appropriate. As noted in the petition, the Cosumnes River name is associated with other places within the proposed viticultural area. For example, the Cosumnes River Preserve, located between Interstate Highways 5 and State Route 99 in southern Sacramento County, is also prominently shown on the California State Automobile Association's Central California map. The petition explains that this Nature Conservancy preserve, a 1,450-acre protected natural area and wildlife habitat, is in the heart of the proposed Cosumnes River viticultural area. Also, Cosumnes River College is located in the suburbs of Sacramento, just north of the proposed area's northern boundary. Historically, the petition explains, the name “Cosumnes” comes from the Native American Miwok people's term for “salmon people.” The petition adds that an alternative Miwok translation is “the place of the koso berry.” John Sutter, an early settler, provides an 1841 written reference to the term “Cosumnes River,” the petition states, and 1845 and 1848 maps by John Fremont label this waterway as the “Cosumnes River.” The March 1, 1851, edition of the Stockton Times, in describing the region, states: “Some of the earlier settlements made in this country were along the Cosumnes”. Boundary Evidence The existing Lodi viticultural area boundary marks the limits of the proposed Cosumnes River viticultural area to the north and west. To the east, the proposed Cosumnes River viticultural area shares a boundary with the proposed Alta Mesa viticultural area, and, to the south, with the proposed Jahant and Mokelumne River viticultural areas. A portion of the Mokelumne River marks the proposed area's southern boundary line. The proposed Cosumnes River viticultural area lies south of the city of Sacramento and borders the west side of the town of Galt. The proposed area primarily produces white wine grape varietals, as compared to red grape varietals in areas to the east and a mixture of red and white grape varietals in areas to the south. Distinguishing Features The relatively cool and windy growing season of the proposed Cosumnes River viticultural area, its young, alluvial soils, and its low-elevation terrain distinguish the proposed area from surrounding areas, according to the petition. Topography The petition explains that the proposed Cosumnes River viticultural area topography includes wetlands, natural and artificial levees, sloughs, streams, and the Cosumnes River. In addition, the Mokelumne River marks a portion of the area's southern boundary. A large alluvial fan crosses the proposed Cosumnes River viticultural area and slopes towards its southwest corner. The low elevations found in the proposed Cosumnes River viticultural area distinguish it from the surrounding, higher-elevation areas, the petition states. At its southwestern corner, where the Cosumnes River joins the Mokelumne River, the elevation of the proposed Cosumnes River viticultural area dips to almost sea level. Elevations within the proposed area gradually rise to a high point of 48 feet at its southeast corner, according to the provided USGS maps. In contrast, the petition notes, the proposed Alta Mesa viticultural area, to the east of the proposed Cosumnes River viticultural area, has elevations to 138 feet. To the south, the proposed Jahant viticultural area rises to 80 feet in elevation, and the proposed Mokelumne River viticultural area rises to 85 feet, according to the petition. Soils The proposed Cosumnes River viticultural area, the petition explains, is dominated by young, alluvial soils that distinguish it from the surrounding areas. The petition notes that 60 percent of the agricultural land within the proposed area is covered by a series of younger alluvial and organic soils, Xerothents and Histosols. These younger soils, the petition continues, predominate in the lower areas, including the floodplains, sloughs, and wetlands, and around the Cosumnes River and its tributaries along the western side of the proposed viticultural area. The intermediate-age, deep reddish, gravelly clay loam soils of the San Joaquin series cover the remaining 40 percent of the agricultural land within the proposed Cosumnes River viticultural area, according to the petition. These soils, classified as Abruptic Durixeralfs, have good water-holding capacity and moderate fertility. To the east of the proposed Cosumnes River viticultural area, the proposed Alta Mesa viticultural area soils are of intermediate age, and about 90 percent of its soils are from the San Joaquin series, according to the petition. To the south, the proposed Jahant and Mokelumne River viticultural areas have a combination of young and intermediate in age soils. According to the petition, the Storie Index places the Cosumnes River soils at between 24 and 40 points for suitability. Climate The petition provides statistics and data from the Lodi, Sacramento, and Folsom weather stations, which are close to the proposed Cosumnes River viticultural area. Overall, according to the petition, the proposed Cosumnes River viticultural area has a cool and breezy climate. With mean annual temperatures of 60 degrees Fahrenheit, the proposed Cosumnes River and Mokelumne River viticultural areas are the coolest of the proposed viticultural areas discussed in this document, according to the petition. The petition adds that the proposed Cosumnes River viticultural area sustains intermediate level winds. The surrounding areas to the north and east are warmer and have less wind than the proposed Cosumnes River area, according to the petition. Also, to the south, the proposed Jahant and Mokelumne River viticultural areas have similar cool and strong marine winds. The petition notes that the Pacific Ocean's cooling breezes funnel eastward through San Francisco's Golden Gate, the Carquinez Strait, and the Sacramento Delta to reach the Lodi area. These marine breezes cool the Lodi area's lower elevations, including the Cosumnes River floodplain and the areas to the river's south. The intensity and effect of these cooling winds, according to the petition, dissipate as they continue eastward over the proposed Cosumnes River viticultural area to the proposed Alta Mesa and Sloughhouse viticultural areas. The petition states that maritime and inland fog is persistent in the low elevations of the proposed Cosumnes River viticultural area. This fog cools the proposed viticultural area more than the surrounding areas, which are less influenced by the maritime winds. The annual precipitation within the proposed Cosumnes area is 17.4 inches, according to the petition, which is more than the low elevation areas to its immediate south, but less than the high elevation regions to the north and east of the proposed viticultural area's boundaries. Jahant The proposed Jahant viticultural area is located in the center of the existing Lodi viticultural area, about 29 miles south of the city of Sacramento and 7 miles north of the city of Lodi. Currently, approximately 8,000 acres of the 28,000 acres within the proposed Jahant viticultural area are planted to grapes, according to the petition. The pink Jahant loam soil found in the proposed viticultural area is its most distinguishing characteristic, according to the petition, giving the Jahant area a unique grape-growing environment. Also, the petition notes that the proposed Jahant viticultural area's climate is cooler, dryer, and windier than most of the other proposed viticultural areas discussed in this document. The petition adds that the terrain within the proposed Jahant viticultural area is noted for its river terraces and old floodplain deposits. Below, we summarize the evidence presented in the Jahant petition. Name Evidence The “Jahant” name is associated with the central portion of the established Lodi viticultural area in southern Sacramento and northern San Joaquin Counties, according to the petition. The name comes from Peter Jahant and several of his brothers, all 1850s settlers to the area, the petition states. The Jahant family settled and successfully farmed in the Acampo area of the Lodi region, and, in 1912, Peter Jahant's son Charles planted 130 acres to grapes on the original family farm and on additional purchased land. Jahant Slough and Jahant Road, a light-duty, east-west road, are shown on the Lodi North and Lockeford USGS maps, in the approximate center of the proposed Jahant viticultural area. Also, Jahant Road is shown in sections B-4, B-5, C-5, and C-6 of the Gold Country map, published in April 2002 by the California State Automobile Association. The Jahant Equestrian Center is on Jahant Road, and some area vineyards use Jahant in their names, according to the petition. Boundary Evidence The petition states that the unique pink Rocklin-Jahant loam soils found within the proposed Jahant viticultural area and the deep dissections through river deposits left by flooding within the past 20,000 years distinguish the proposed Jahant area from the surrounding proposed viticultural areas. To the south, the proposed Mokelumne River viticultural area has predominantly young, light-colored sandy soils, the petition notes, while to the north the proposed Alta Mesa viticultural area has predominantly intermediate-age red soils. The petition states that the boundaries of the proposed Jahant viticultural area encompass the extent of the Jahant soils within the existing Lodi viticultural area. The petition also explains that dissected river terraces and old floodplain deposits, located between Dry Creek and the Mokelumne River, distinguish the proposed Jahant area from the surrounding areas. Dry Creek is part of the northern boundary of the proposed Jahant viticultural area, and the creek flows through its northwest section. The Mokelumne River forms the western boundary of the proposed Jahant area, close to where it joins with the Cosumnes River, according to the provided USGS maps. Distinguishing Features Topography Elevations in the proposed Jahant viticultural area vary from about 10 feet to 100 feet, according to USGS maps of the area. Also, these elevations rise from the west to the east, increasing toward the Sierra Range. The proposed viticultural area, the petition explains, is bounded by rivers on its north and west and is dotted with small lakes and sloughs. The larger Tracy Lake lies in the area's southwest, while a gas field lies in the area's southeast corner. The contours of the area, predominantly river terraces and old, eroded floodplain deposits, the petition continues, have developed from the actions of Dry Creek and the Mokelumne River. Soils The proposed Jahant viticultural area, located primarily between Dry Creek and the Mokelumne River, has distinctive pink Rocklin-Jahant soils that are principally sandy loams and sandy clay loams with massive structure, thickness, and hardened depth, the petition explains. The soils are classified as Mollic Pelexeralfs. These old soils, the petition continues, have younger sandy surfaces and are generally different in structure, thickness, and depth from the San Joaquin deep reddish, gravelly clay loam soils found north of the proposed Jahant viticultural area. To the south, the petition states, the light sandy loam Tokay and Acampo soils are young, deep and well drained, tend to be granular and crumbly, and of a fine texture without gravel, in contrast to the Jahant soils. Climate The petition provides statistics and data from the Lodi, Sacramento, Folsom, Camp Pardee, and Stockton weather stations, which are close to the proposed Cosumnes River viticultural area. The proposed Jahant viticultural area, the petition comments, has cool climatic characteristics similar to those of the proposed Mokelumne River viticultural area to the south. Both regions, according to the petition, receive the Pacific marine breezes that funnel east from the San Francisco Golden Gate, through the Carquinez Strait, the Sacramento Delta, and into the Lodi area. The petition also notes the cooling effect of persistent valley and coastal fog within the proposed boundaries. The winds in the proposed Jahant viticultural area are of high intensity and prolonged duration, similar to those of the proposed Mokelumne River viticultural area to the south, the petition states. In contrast, to the north and northeast of the proposed Jahant area, the proposed Alta Mesa and Sloughhouse viticultural areas have less wind intensity and warmer temperatures, according to the petition. The mean annual temperature of the proposed Jahant viticultural area is 60.1 degrees Fahrenheit, which is lower than that of the other proposed viticultural areas discussed in this document except for the Cosumnes River and Mokelumne River areas, each of which has a slightly lower mean annual temperature of 60.0 degrees, according to the petition. Also, the degree day totals for the Jahant area are between 100 and 400 degree days lower than those of the other parts of the Lodi region, except for the proposed Mokelumne River viticultural area to the immediate south. Finally, the Jahant area's annual rainfall is 18.0 inches, which is less than rainfall totals in the other areas of the Lodi region with the exception of proposed Cosumnes River and Mokelumne River viticultural areas. Mokelumne River The proposed Mokelumne River viticultural area is in northern San Joaquin County in the southwestern portion of the existing Lodi viticultural area. According to the petition, the proposed Mokelumne River viticultural area covers 85,700 acres, of which approximately 42,000 acres are vineyards. The young alluvial fan created by the Mokelumne River distinguishes the proposed Mokelumne River viticultural area from the surrounding areas, the petition states. In addition, the distinctively breezy climate of this proposed viticultural area is the coolest within the original Lodi viticultural area, according to the petition. Below, we summarize the evidence presented in the Mokelumne River petition. Name Evidence Historically, the “Mokelumne” name is derived from the Miwok Indians and has been translated as “the place of the fish net,” according to the petition. Known earlier as the Rio Mokellemos, the present spelling of Mokelumne was set in 1848 by John C. Fremont, as documented in the “California Place Names,” by Erwin Gudde, published in 1960 by the University of California Press. The Mokelumne River, which flows west from the Sierras into the San Joaquin Valley, is shown on a number of USGS maps, including the Lockeford, Lodi North, Bruceville, Thornton, Clements, and Wallace maps. Other maps also show the river, including the Gold Country map published by the California State Automobile Association in April 2002. Boundary Evidence The petition explains that the “classic, young” alluvial fan of the Mokelumne River extends east-to-west through the proposed Mokelumne River viticultural area. Given its distinctive geology and topography, the river's alluvial fan contrasts with the geology and topography of the other proposed viticultural areas discussed in this document and the areas beyond. According to the petition, east of Jack Tone Road, beyond the proposed Mokelumne River viticultural area boundary line, are the older terrace deposits of the proposed Clements Hills viticultural area, while south of the proposed boundary, toward Linden and Farmington, the coarse deposits of the Calaveras River alluvial fan contrast with the sandy loam of the proposed Mokelumne River viticultural area. To the west of Interstate 5, and beyond the original Lodi viticultural area western boundary line, very young organic and inorganic soils dominate the Sacramento Delta region, according to the petition. To the north of the proposed Mokelumne River area boundary line are the older river deposits that distinguish the Jahant region. Distinguishing Features Topography The Mokelumne River meanders through the northern portion of the proposed Mokelumne River viticultural area, while creeks, sloughs, a canal, and an aqueduct run through its interior. Also, the city of Lodi is located on the south bank of the Mokelumne River in the approximate center of the proposed viticultural area. The topography of the proposed Mokelumne River viticultural area is dominated by a relatively young alluvial fan over an intermediate age fan, according to the petition. To the east, the fan joins with the older Mokelumne River terrace deposits along Jack Tone Road, which serves as part of the boundary line for the proposed viticultural area, the petition notes. The Mokelumne River alluvial fan extends from the higher eastern elevations of the Clements region to the lower elevations along Interstate 5 and Eight Mile Road to the southwest, according to the provided USGS maps and the petition. The USGS maps of the proposed Mokelumne River viticultural area show elevations sloping downward to the west from a high of 100 feet at the northeast corner of the proposed area to a low of 5 feet at its southwest corner. Soils The petition explains that sandy loam Tokay and Acampo soils dominate the proposed Mokelumne River viticultural area. These soils are young, deep and drain well, according to the petition. Also, the soils tend to be granular and crumbly, of a fine texture and without gravel. The sandy loams in the region, the petition describes, are generally between 6 and 12 feet in depth with low moisture holding capacity, especially in the western portion of the proposed area. Climate The petition uses climate statistics and data from the Lodi weather station, which is located near the proposed Mokelumne River viticultural area. The climates of the proposed Mokelumne River and Cosumnes River viticultural areas are the coolest within the existing Lodi viticultural area, the petition explains. However, as the petition notes, the Mokelumne River area has less heat accumulation than the Cosumnes River area due to the Mokelumne area's exposure to more intense cooling marine winds. The proposed Mokelumne River viticultural area, the petition continues, is the closest of the seven proposed Lodi viticultural areas to the Carquinez Strait that funnels cool Pacific Ocean breezes eastward from the Golden Gate, through the Sacramento Delta, to the Lodi area. The winds in the proposed Mokelumne River viticultural area are of high intensity and prolonged duration, blowing more than 70 percent of the time, the petition states. The winds lose little intensity as they cross the low elevations and flat terrain within the proposed boundaries, according to the petition. The mean annual temperature within the proposed Mokelumne viticultural area is 60.0 degrees Fahrenheit, which is the same as the Cosumnes River area to the north but lower than that of each of the other proposed viticultural areas discussed in this document, according to the petition. While the mean annual temperatures of the Mokelumne and Cosumnes areas are the same, the annual degree day total for the Mokelumne area is between 50 and 450 degree days lower than the totals for the other six proposed viticultural areas discussed in this document. Rainfall within the proposed Mokelumne River viticultural area is 17.57 inches, which is the next-to-lowest of the seven proposed viticultural areas discussed in this document, the petition states. Sloughhouse The proposed Sloughhouse viticultural area is located in southern Sacramento County, approximately 21 miles southeast of the city of Sacramento and 22 miles north of the city of Lodi. Located in the northeastern portion of the existing Lodi viticultural area, approximately 7,000 acres within the 78,800-acre proposed Sloughhouse viticultural area are currently planted to grapes, according to the petition. The petition states that warmer temperatures, more rain, less fog, higher elevations, and older soils distinguish the proposed Sloughhouse viticultural area from the other proposed viticultural areas discussed in this document. The proposed Sloughhouse viticultural area, which is also adjacent to the established Sierra Foothills viticultural area (27 CFR 9.120), has rolling plains and hilly terrain that transitions to the Sierra Foothills further east, according to the petition. Below, we summarize the evidence presented in the Sloughhouse petition. Name Evidence The Sacramento Bee newspaper published an article on January 19, 1998, detailing the history of the Sloughhouse region. In the 1850's the Sloughhouse Inn, which gave the region its name, was a popular stagecoach stop. According to the article, the building, rebuilt several times after fires, is a registered California historical landmark. Today, the Sloughhouse Inn is a restaurant. Modern usage of the Sloughhouse name, according to petition evidence, is also seen in the names of the Sloughhouse Resource Conservation District, the Sloughhouse Fire Protection District, and the Sloughhouse Area Genealogical Society. The USGS Geographic Names Information System

(GNIS)database lists “Sloughhouse” as a populated place in Sacramento County, California. The USGS Sloughhouse quadrangle map shows the hamlet of Sloughhouse along State Road 16 on the Township 7 and 8 North line, between Ranges 6 and 7 East. Sloughhouse Road, a secondary road, is shown on the USGS Elk Grove and Sloughhouse maps within the proposed viticultural area boundary lines. Boundary Evidence Warmer temperatures, less intense winds, more rainfall, and greater climatic variations distinguish the proposed Sloughhouse viticultural area from the surrounding areas within the existing Lodi viticultural area according to the petition. It adds that elevations within the proposed Sloughhouse viticultural area are generally higher and the soils older than the other surrounding proposed viticultural areas. The distinguishing Sloughhouse terrain and climatic characteristics, the petition explains, make this proposed viticultural area significantly different from the surrounding areas. Red varietals, including Cabernet Sauvignon, Cabernet Franc, Merlot, and Zinfandel, are popular in the Sloughhouse area as they can withstand drought and other climatic variations, the petition states. The proposed Sloughhouse area's outer boundaries follow a portion of the existing Lodi viticultural area northern and eastern boundary lines, and the proposed area abuts the established Sierra Foothills viticultural area western boundary line. The petition explains that the shared Lodi and Sierra Foothills viticultural areas boundary line, which coincides with the Amador County line, is the logical division between the valley and mountain environments. Distinguishing Features Topography The proposed Sloughhouse viticultural area, the petition states, has the most diverse terrain of the seven proposed viticultural areas discussed in this document. Gently rolling hills, flat creek and river valleys, plains, and an alluvial fan characterize the proposed viticultural area, according to the petition. The proposed Sloughhouse viticultural area ranges in elevation from a low of 73 feet in its southwest region to a high of 590 feet in its northeast region, according to the provided USGS maps. The northeast region of Sloughhouse, which has the highest elevations in the proposed area, slopes upward and becomes the bedrock-based foothills of the Sierra Range, the petition notes. These higher elevations are similar to Borden Ranch to the south, but contrast with the lower elevations of between 35 and 138 feet of the proposed Alta Mesa viticultural area to the west. Three significant waterways, the Cosumnes River and its Deer Creek and Laguna tributaries flow west from the Sierra Foothills through the proposed Sloughhouse viticultural area. Deer Creek constitutes the northeastern boundary line of the proposed viticultural area, as noted in the petition's boundary description. Deer Creek, according to USGS maps, then meanders southwesterly through the interior of the proposed Sloughhouse area. The Cosumnes River runs roughly parallel to Deer Creek and through the approximate middle of the proposed Sloughhouse viticultural area. Deer Creek eventually joins the Cosumnes River to the west of the proposed viticultural area. The Laguna forms the south boundary line for the proposed Sloughhouse viticultural area and joins the Cosumnes River and Deer Creek to the west of the proposed area. Soils The petition notes that the predominant soils in the western portion of the proposed Sloughhouse viticultural area are found on an older alluvial fan. Classified as Durixeralfs and Haploxeralfs, the soils series found there include a complex of Redding, Corning, Pentz, and Hadlesville soils, which are generally of low vigor. Older soils, including patches of significantly older soils, are found in the higher eastern elevations of the proposed viticultural area. These older soils formed from sedimentary, metamorphic, and volcanic rock, including Sierra basement granite. Also, the Cosumnes River, Deer Creek, and the Laguna have left older river deposits within the proposed Sloughhouse viticultural area, according to the petition. Climate The petition uses statistics and data from the Lodi, Sacramento and especially the Folsom weather stations, located close to the proposed Sloughhouse viticultural area. The petition explains that the proposed Sloughhouse viticultural area has a climate distinguishable from the surrounding proposed viticultural areas due to its combination of warm growing season temperatures and heavy winter rains. The Sloughhouse area, at 61.6 mean annual degrees Fahrenheit, is the warmest of the seven proposed viticultural areas within the existing Lodi viticultural area, the petition states. The average degree day total for the Sloughhouse area, according to the petition, is more than 200 degree days higher than that of the proposed Alta Mesa area to the immediate west and more than 300 degree days higher than that of the cooler proposed Borden Ranch and Clements Hills areas to the south. The proposed Sloughhouse viticultural area, the petition claims, experiences little marine sea breeze influence as compared to the other proposed viticultural areas to the west, which are closer to the Sacramento Delta. Also, the Alta Mesa “table-top” landform, to the immediate west, acts as a buffer between the west-to-east marine breezes and the proposed Sloughhouse area. The proposed Sloughhouse viticultural area receives more rain, 23-inches annually according to petition documentation, than the other proposed viticultural areas discussed in this document. The petition states that to the west of the proposed Sloughhouse area, the proposed Alta Mesa viticultural area averages 18.5 inches annual rainfall, and, to the south, the proposed Borden Ranch viticultural area averages 20 inches annual rainfall. Also, other proposed viticultural areas discussed in this document average as low as 17.4 inches of annual rainfall, the petition notes. In addition, fog is less frequent in the proposed Sloughhouse viticultural area than in the adjacent lower elevation and cooler proposed Alta Mesa viticultural area to the west, the petition states. The upland environment, with less cooling marine influence and warmer temperatures, discourages the formation of fog. Notice of Proposed Rulemaking and Comments Received TTB published Notice No. 50 regarding the proposed Alta Mesa, Borden Ranch, Clements Hills, Cosumnes River, Jahant, Mokelumne River, and Sloughhouse viticultural areas in the **Federal Register** (70 FR 47740) on August 15, 2005. We received ten comments in response to the notice. All ten comments strongly favor the establishment of the seven viticultural areas. The comments focused on the appropriateness of the names, the differing distinguishing features of the petitioned areas, and the potential marketing advantage for the areas' wines. TTB Finding After careful review of the petition and the ten comments received, TTB finds that the evidence submitted supports the establishment of the proposed viticultural areas. Therefore, under the authority of the Federal Alcohol Administration Act and part 4 of our regulations, we establish the “Alta Mesa,” “Borden Ranch,” “Clements Hills,” “Cosumnes River,” “Jahant,” “Mokelumne River,” and “Sloughhouse” viticultural areas in southern Sacramento and northern San Joaquin Counties in California, effective 30 days from the publication date of this document. Boundary Description See the narrative boundary descriptions of the seven viticultural areas in the regulatory texts published at the end of this document. Maps The maps for determining the boundaries of the seven viticultural areas are listed below in the regulatory texts. Impact on Current Wine Labels Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. With the establishment of the “Alta Mesa,” “Borden Ranch,” “Clements Hills,” “Jahant,” and “Sloughhouse” viticultural areas and their inclusion in part 9 of the TTB regulations, their full names are recognized as names of viticultural significance. The text of the new regulations clarifies this point. Consequently, wine bottlers using “Alta Mesa,” “Borden Ranch,” “Clements Hills,” “Jahant,” or “Sloughhouse” in a brand name, including a trademark, or in another label reference as to the origin of the wine, must ensure that the product is eligible to use the viticultural area name in question as an appellation of origin. With the establishment of the Cosumnes River and Mokelumne River viticultural areas and their inclusion in part 9 of the TTB regulations, the full names “Cosumnes River” and “Mokelumne River” are recognized as names of viticultural significance. In addition, the term “Cosumnes” or “Mokelumne” standing alone are considered terms of viticultural significance since consumers and vintners could reasonably attribute the quality, reputation, or other characteristic of wine made from grapes grown in the Cosumnes River or Mokelumne River viticultural areas to the names “Cosumnes” or “Mokelumne” alone. The text of the new regulations clarifies these points. Consequently, wine bottlers using “Cosumnes River,” “Cosumnes,” “Mokelumne River,” or “Mokelumne” in a brand name, including a trademark, or in another label reference as to the origin of the wine, must ensure that the product is eligible to use the viticultural area name or term in question as an appellation of origin. For a wine to be eligible to use as an appellation of origin a viticultural area name or other term specified as being viticulturally significant in part 9 of the TTB regulations, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name or other viticulturally significant term, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible to use the viticultural area name or other viticulturally significant term as an appellation of origin and that name or term appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the viticultural area name or other viticulturally significant term appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label. Different rules apply if a wine has a brand name containing a viticultural area name that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details. Regulatory Flexibility Act We certify that this regulation will not have a significant economic impact on a substantial number of small entities. This regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name is the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required. Executive Order 12866 This rule is not a significant regulatory action as defined by Executive Order 12866, 58 FR 51735. Therefore, it requires no regulatory assessment. Drafting Information N.A. Sutton of the Regulations and Rulings Division drafted this document. List of Subjects in 27 CFR Part 9 Wine. The Regulatory Amendment For the reasons discussed in the preamble, we amend title 27 CFR, chapter 1, part 9, as follows: PART 9—AMERICAN VITICULTURAL AREAS 1. The authority citation for part 9 continues to read as follows: Authority: 27 U.S.C. 205. Subpart C—American Viticultural Areas 2. Amend subpart C by adding § 9.195 through § 9.201 to read as follows: § 9.195 Alta Mesa.

(a)*Name.* The name of the viticultural area described in this section is “Alta Mesa”. For purposes of part 4 of this chapter, “Alta Mesa” is a term of viticultural significance.

(b)*Approved maps.* The seven United States Geological Survey, 1:24,000 scale, topographic quadrangle maps used to determine the boundary of the Alta Mesa viticultural area are titled—

(1)North Lodi, Calif., 1968, photorevised 1976;

(2)Galt, Calif., 1968, photorevised 1980;

(3)Florin, Calif., 1968, photorevised 1980;

(4)Elk Grove, Calif., 1968, photorevised 1979;

(5)Sloughhouse, Calif., 1968, photorevised 1980, minor revision 1993;

(6)Clay, Calif., 1968, photorevised 1980, minor revision 1993; and

(7)Lockeford, Calif., 1968, photorevised 1979, minor revision 1993.

(c)*Boundary.* The Alta Mesa viticultural area is located in Sacramento County, California, and is entirely within the Lodi viticultural area (27 CFR 9.107). The Alta Mesa viticultural area boundary is as follows:

(1)The beginning point is on the Lodi North map at the intersection of Kost Road and the Southern Pacific railway, section 34, T5N, R6E. From the beginning point, proceed north-northwest 8.7 miles along the Southern Pacific railway to its intersection with State Route 99 at McConnel, section 20, T6N, R6E (Galt Quadrangle); then

(2)Proceed northwest 4.7 miles on State Route 99 to its intersection with Sheldon Road at the northern boundary of section 26, T7N, R5E (Florin Quadrangle); then

(3)Proceed east 5.2 miles on Sheldon Road to its intersection with the Central California Traction railroad at the northern boundary of section 27, T7N, R6E (Elk Grove Quadrangle); then

(4)Proceed southeast 3.85 miles along the Central California Traction railroad to Grant Line Road, then southwest on Grant Line Road to Wilton Road at the hamlet of Sheldon, and then continue southeast on Wilton Road to its intersection with Dillard Road, section 6, T6N, R7E (Elk Grove Quadrangle); then

(5)Proceed northeast 2.6 miles on Dillard Road to its intersection with Lee Shorthorn Road, T7N, R7E (Sloughhouse Quadrangle); then

(6)Proceed southeast 0.9 mile on Lee Shorthorn Road to its intersection with Tavernor Road, T7N, R7E (Sloughhouse Quadrangle); then

(7)Proceed south 0.95 mile on Tavernor Road to its first 90 degree turn to the west (where two unimproved roads join Tavernor Road from the east and south), section 4, T6N, R7E (Sloughhouse Quadrangle); then

(8)Continue due south 1 mile in a straight line to the line's intersection with the 105-foot contour line and an unimproved extension of Blake Road, section 9, T6N, R7E (Sloughhouse Quadrangle); then

(9)Proceed west 0.3 mile on the unimproved extension of Blake Road to its intersection with Tavernor Road, section 9, T6N, R7E (Sloughhouse Quadrangle); then

(10)Proceed south 0.7 mile on Tavernor Road to the center of the loop at the end of the road, section 16, T6N, R7E (Sloughhouse Quadrangle); then

(11)Proceed southwest in a straight line for 0.1 mile to the line's intersection with the east end of the landing strip shown in the northwest quadrant of section 16, T6N, R7E (Sloughhouse Quadrangle); then

(12)Proceed west along the landing strip and a line extending from its western end to the line's intersection with Alta Mesa Road on the eastern boundary of section 17, T6N, R7E (Sloughhouse Quadrangle); then

(13)Proceed south 6.1 miles on Alta Mesa Road, crossing State Route 104, to Alta Mesa Road's intersection with Borden Road at the southwest corner of section 9, T5N, R7E (Clay Quadrangle); then

(14)Proceed east 1 mile on Borden Road to its intersection with Alabama Road at the southeast corner of section 9, T5N, R7E (Clay Quadrangle); then

(15)Proceed south 2 miles on Alabama Road to its intersection with Simmerhorn Road at the southeast corner of section 21, T5N, R7E (Clay Quadrangle); then

(16)Proceed east 2 miles on Simmerhorn Road to its intersection with Clay Station Road at the northeast corner of section 26, T5N, R7E (Clay Quadrangle); then

(17)Proceed south 0.5 mile on Clay Station Road to its intersection with Dry Creek, section 26, T5N, R7E (Clay Quadrangle); then

(18)Proceed west-southwest (downstream) 7.8 miles along Dry Creek, crossing over the northwest corner of the Lockeford map, and twice crossing over the southeast corner of the Galt map, to Dry Creek's intersection with Lincoln Way, section 35, T5N, R6E (Lodi North Quadrangle); then

(19)Proceed northwest 0.1 mile on Lincoln Way to its intersection with Kost Road, section 35, T5N, R6E (Lodi North Quadrangle); and

(20)Proceed west 0.3 mile on Kost Road, returning to the beginning point. § 9.196 Borden Ranch.

(a)*Name.* The name of the viticultural area described in this section is “Borden Ranch”. For purposes of part 4 of this chapter, “Borden Ranch” is a term of viticultural significance.

(b)*Approved maps.* The six United State Geological Survey, 1:24,000 scale, topographic quadrangle maps used to determine the boundary of the Borden Ranch viticultural area are titled—

(1)Lockeford, Calif., 1968, photorevised 1979, minor revision 1993;

(2)Clay, Calif., 1968, photorevised 1980, minor revision 1993;

(3)Sloughhouse, Calif., 1968, photorevised 1980, minor revision 1993;

(4)Carbondale, Calif., 1968, photorevised 1980, minor revision 1993;

(5)Goose Creek, Calif., 1968, photorevised 1980, minor revision 1993; and

(6)Clements, Calif., 1968, minor revision 1993.

(c)*Boundary.* The Borden Ranch viticultural area is located in Sacramento and San Joaquin Counties, California, and is entirely within the Lodi viticultural area (27 CFR 9.107). The Borden Ranch viticultural area boundary is as follows:

(1)The beginning point is on the Lockeford map at the intersection of Liberty Road and Elliott Road at the southwest corner of section 36, T5N, R7E. From the beginning point, proceed north 2 miles on Elliot Road, which becomes Clay Station Road upon crossing the Sacramento-San Joaquin County line at Dry Creek, to Clay Station Road's intersection with Simmerhorn Road, at the southeast corner of section 23, T5N, R7E (Clay Quadrangle); then

(2)Proceed west 2 miles on Simmerhorn Road to its intersection with Alabama Road at the southwest corner of section 22, T5N, R7E (Clay Quadrangle); then

(3)Proceed north 2 miles on Alabama Road to its intersection with Borden Road at the northwest corner of section 15, T5N, R7E (Clay Quadrangle); then

(4)Proceed west 1 mile on Borden Road to its intersection with Alta Mesa Road at the southwest corner of section 9, T5N, R7E (Clay Quadrangle); then

(5)Proceed north 1.35 miles on Alta Mesa Road, crossing State Route 104, to Alta Mesa Road's intersection with the Laguna tributary along the western boundary line of section 4, T5N, R7E (Clay Quadrangle); then

(6)Proceed easterly (upstream) about 16.5 miles along the meandering Laguna tributary, crossing over the southeast corner of the Sloughhouse map, to the Laguna's intersection with the Sacramento-Amador County line, 0.75 mile south of the Ione Road, T6N, R9E (Carbondale Quadrangle); then

(7)Proceed south and then southeast about 10.8 miles along the Sacramento- Amador and Sacramento-San Joaquin County lines, crossing over the Goose Creek map, to the County line's intersection with Liberty Road, section 32, T5N, R9E (Clements Quadrangle); and

(8)Proceed west about 9.3 miles west along Liberty Road, returning to the beginning point. § 9.197 Clements Hills.

(a)*Name.* The name of the viticultural area described in this section is “Clements Hills”. For purposes of part 4 of this chapter, “Clements Hills” is a term of viticultural significance.

(b)*Approved maps.* The six United States Geological Survey 1:24,000 scale, topographic quadrangle maps used to determine the boundary of the Clements Hills viticultural area are titled—

(1)Waterloo, Calif., 1968, photoinspected 1978;

(2)Lockeford, Calif., 1968, photorevised 1979, minor revision 1993;

(3)Clements, Calif., 1968, minor revision 1993;

(4)Wallace, Calif., 1962;

(5)Valley Springs SW., Calif., 1962, photoinspected 1973; and

(6)Linden, Calif., 1968, minor revision 1993.

(c)*Boundary.* The Clements Hills viticultural area is located in San Joaquin County, California, and is entirely within the Lodi viticultural area (27 CFR 9.107). The Clements Hills viticultural areas boundary is as follows—

(1)The beginning point is on the Waterloo map at the intersection of the Calaveras River and Jack Tone Road, section 31 west boundary line, T3N, R8E. From the beginning point, proceed north 6.9 miles on Jack Tone Road to its intersection with Elliot Road in the village of Lockeford (where Jack Tone Road is known as E. Hammond Street for a short distance), section 30, T4N, R8E (Lockeford Quadrangle); then

(2)Proceed northwest 5.4 miles on Elliott Road, crossing the Mokelumne River, to Elliott Road's intersection with Liberty Road at the northwest corner of section 1, T4N, R7E, (Lockeford Quadrangle); then

(3)Proceed east 9.3 miles on Liberty Road to its junction with the San Joaquin-Amador County line, north of the Camanche Reservoir, section 32, T5N, R9E (Clements Quadrangle); then

(4)Proceed south-southeast 13 miles along the San Joaquin-Amador and San Joaquin-Calaveras County lines, crossing over the Wallace map, to the County line's intersection with the Calaveras River, section 31, T3N, R10E (Valley Springs SW., Quadrangle); and

(5)Proceed southwest (downstream) 14.2 miles along the Calaveras River, crossing over the Linden map, returning to the beginning point. § 9.198 Cosumnes River.

(a)*Name.* The name of the viticultural area described in this section is “Cosumnes River”. For purposes of part 4 of this chapter, “Cosumnes River” and “Cosumnes” are terms of viticultural significance.

(b)*Approved maps* . The six United States Geological Survey, 1:24,000 scale, topographic quadrangle maps used to determine the boundary of the Cosumnes River viticultural area are titled—

(1)Bruceville, Calif., 1968, photorevised 1980;

(2)Florin, Calif., 1968, photorevised 1980;

(3)Elk Grove, Calif., 1968, photorevised 1979;

(4)Galt, Calif., 1968, photorevised 1980;

(5)Lodi North, Calif.,1968, photorevised 1976; and

(6)Thornton, Calif., 1978.

(c)*Boundary.* The Cosumnes River viticultural area is located in Sacramento County, California, and is entirely within the Lodi viticultural area (27 CFR 9.107). The Cosumnes River viticultural area boundary is as follows—

(1)The beginning point is on the Bruceville map at the intersection of the Mokelumne River and Interstate Highway 5, T5N, R5E. From the beginning point, proceed north 8.5 miles along Interstate 5 to its intersection with an unnamed light duty road, locally known to the west of Franklin as Hood-Franklin Road, section 18, T6N, R5E (Florin Quadrangle); then

(2)Proceed east 1.2 miles straight on Hood-Franklin Road to its intersection with Franklin Boulevard in the village of Franklin, section 17, T6N, R5E (Florin Quadrangle); then

(3)Proceed north 4.3 miles on Franklin Boulevard to its intersection with Sims Road on the west and Sheldon Road to the east at the northwest corner of section 28, T7N, R5E (Florin Quadrangle); then

(4)Proceed east 2.4 miles on Sheldon Road to its intersection with State Route 99 at the northern boundary section 26, T7N, R5E (Florin Quadrangle); then

(5)Proceed south-southeast 6 miles on State Route 99, crossing over the Elk Grove map, to the road's intersection with the Southern Pacific railway line at McConnell, section 20, T6N, R6E (Galt Quadrangle); then

(6)Proceed south-southeast 8.7 miles along the Southern Pacific railway line to its intersection with Kost Road, section 34, T5N, R6E (Lodi North Quadrangle); then

(7)Proceed west and then north 3.8 miles on Kost Road to its intersection with New Hope Road, T5N, R6E (Lodi North Quadrangle); then

(8)Proceed west then south 2.8 miles on New Hope Road to its intersection with the Mokelumne River and the Sacramento-San Joaquin County line, T5N, R5E (Thornton Quadrangle); and

(9)Proceed northerly then westerly (downstream) for about 2.7 miles along the meandering Mokelumne River, returning to the beginning point. § 9.199 Jahant.

(a)*Name.* The name of the viticultural area described in this section is “Jahant”. For purposes of part 4 of this chapter, “Jahant” is a term of viticultural significance.

(b)*Approved maps.* The five United States Geological Survey, 1:24000 scale, topographic quadrangle maps used to determine the boundary of the Jahant viticultural area are titled—

(1)Lodi North, Calif., 1968, photorevised 1976;

(2)Thornton, Calif., 1978;

(3)Galt, Calif., 1968, photorevised 1980;

(4)Lockeford, Calif., 1968, photorevised 1979; and

(5)Clay, Calif., 1968, photorevised 1980, minor revision 1993.

(c)*Boundary.* The Jahant viticultural area is located in Sacramento and San Joaquin Counties, California, and is entirely with the Lodi viticultural area (27 CFR 9.107). The Jahant viticultural area boundary is as follows—

(1)The beginning point is on the Lodi North map at the intersection of Peltier Road and the Mokelumne River, section 16 south boundary line, T4N, R6E. From the beginning point, proceed westerly (downstream) 6.7 miles along the Mokelumne River to its intersection with New Hope Road, about 0.7 mile north of the village of Thornton, T5N, R5E (Thornton Quadrangle); then

(2)Proceed north then east for 3 miles on New Hope Road to its intersection with Kost Road, T5N, R6E (Lodi North Quadrangle); then

(3)Proceed south then east for 4.1 miles on Kost Road to its intersection with Lincoln Way, section 35, T5N, R6E (Lodi North Quadrangle); then

(4)Proceed southeast 0.15 mile on Lincoln Way to its intersection with Dry Creek, section 35, T5N, R6E (Lodi North Quadrangle); then

(5)Proceed easterly (upstream) 7 miles along Dry Creek, crossing twice over and back at the southeast corner of the Galt map, and then crossing over the northwest corner of the Lockeford map, to Dry Creek's intersection with Elliott Road, section 26, T5N, R7E (Clay Quadrangle); then

(6)Proceed south 4.5 miles on Elliott Road to its intersection with Peltier Road at the southeast corner of section 14, T4N, R7E (Lockeford Quadrangle); and

(7)Proceed west 8.3 miles on Peltier Road, returning to the beginning point. § 9.200 Mokelumne River.

(a)*Name.* The name of the viticultural area described in this section is “Mokelumne River”. For purposes of part 4 of this chapter, “Mokelumne River” and “Mokelumne” are terms of viticultural significance.

(b)*Approved maps.* The seven United States Geological Survey, 1:24,000 scale, topographic quadrangle maps used to determine the boundary of the Mokelumne River viticultural area are titled—

(1)Lodi South, Calif., 1968, photorevised 1976;

(2)Terminous, Calif., 1978, minor revision 1993;

(3)Thornton, Calif., 1978;

(4)Bruceville, Calif., 1968, photorevised 1980;

(5)Lodi North, Calif., 1968, photorevised 1976;

(6)Lockeford, Calif., 1968, photorevised 1979, minor revision 1993; and

(7)Waterloo, Calif., edition of 1968, photoinspected 1978.

(c)*Boundary.* The Mokelumne River viticultural area is located in San Joaquin County, California, and is entirely within the Lodi viticultural area (27 CFR 9.107). The Mokelumne River viticultural area boundary is as follows—

(1)The beginning point is on the Lodi South map at the intersection of Eightmile Road and Interstate 5, section 36 south boundary line, T3N, R5E. From the beginning point, proceed north-northwest 14.7 miles on Interstate 5, crossing over the Terminous and Thornton maps, to the Interstate's intersection with the Mokelumne River, T5N, R6E (Bruceville Quadrangle); then

(2)Proceed southeast (upstream) 5 miles along the meandering Mokelumne River to its intersection with Peltier Road, section 16, T4N, R6E (Lodi North Quadrangle); then

(3)Proceed east 8.3 miles along Peltier Road to its intersection with Elliott Road at the northeast corner of section 23, T4N, R7E (Lockeford Quadrangle); then

(4)Proceed south then southeast 2.3 miles on Elliott Road to its intersection with Jack Tone Road in the village of Lockeford (where Jack Tone Road is known as E. Hammond Street for a short distance), section 30, T4N, R8E (Lockeford Quadrangle); then

(5)Proceed south 6.7 miles on Jack Tone Road to its intersection with the Calaveras River, section 36 east boundary line, T3N, R7E (Waterloo Quadrangle); then

(6)Proceed southwesterly (downstream) 0.9 mile along the meandering Calaveras River to its intersection with Eightmile Road, section 36 south boundary line, T3N, R7E (Waterloo Quadrangle); and

(7)Proceed west 8.6 miles on Eightmile Road, returning to the beginning point. § 9.201 Sloughhouse.

(a)*Name.* The name of the viticultural area described in this section is “Sloughhouse”. For purposes of part 4 of this chapter, “Sloughhouse” is a term of viticultural significance.

(b)*Approved maps.* The six United States Geological Survey, 1:24,000 scale, topographic quadrangle maps used to determine the boundary of the Sloughhouse viticultural area are titled—

(1)Clay, Calif., 1968, photorevised 1980, minor revision 1993;

(2)Sloughhouse, Calif., 1968, photorevised 1980, minor revision 1993;

(3)Elk Grove, Calif., 1968, photorevised 1979;

(4)Buffalo Creek, Calif., 1967, photorevised 1980;

(5)Folsom SE, Calif., 1954, photorevised 1980; and

(6)Carbondale, Calif., 1968, photorevised 1980, minor revision 1993.

(c)*Boundary.* The Sloughhouse viticultural area is located in Sacramento County, California, and is entirely within the Lodi viticultural area (27 CFR 9.107). The Sloughhouse viticultural area boundary is as follows—

(1)The beginning point is on the Clay map at the intersection of the Laguna estuary and Alta Mesa Road, on the western boundary of section 4, T5N, R7E. From the beginning point, proceed north 4.8 miles on Alta Mesa Road to the road's intersection with a line drawn due west from the western end of the landing strip shown in the northwestern quadrant of section 16, T6N, R7E (Sloughhouse Quadrangle); then

(2)Proceed east 0.5 mile to the eastern end of the landing strip, section 16, T6N, R7E (Sloughhouse Quadrangle); then

(3)Proceed northeast in a straight line 0.1 mile to the center of the loop at the south end of Tavernor Road, section 16, T6N, R7E (Sloughhouse Quadrangle); then

(4)Proceed north 0.75 mile on Tavernor Road to its intersection with Blake Road, section 9, T6N, R7E (Sloughhouse Quadrangle); then

(5)Proceed east 0.5 mile on the unimproved extension of Blake Road to its intersection with the 105-foot elevation line, section 9, T6N, R7E (Sloughhouse Quadrangle); then

(6)Proceed due north about 0.85 mile to the 90 degree turn in Tavernor Road and continue north about 0.9 mile on Tavernor Road to its intersection with Lee Shorthorn Road, T7N, R7E (Sloughhouse Quadrangle); then

(7)Proceed northwest 0.9 mile on Lee Shorthorn Road to its intersection with Dillard Road, T7N, R7E (Sloughhouse Quadrangle); then

(8)Proceed southwest about 2.6 miles on Dillard Road to its intersection with Wilton Road at the hamlet of Dillard, section 6, T6N, R7E (Elk Grove Quadrangle); then

(9)Proceed northwest 3.1 miles on Wilton Road to its intersection with Grant Line Road at the hamlet of Sheldon, section 27, T7N, R6E (Elk Grove Quadrangle); then

(10)Proceed northwest on Grant Line Road to its intersection with State Route 16 (Jackson Road), section 33, T8N, R7E (Buffalo Creek Quadrangle); then

(11)Proceed east-southeast 1.6 miles on State Route 16 to its intersection with Deer Creek at BM 108 near Sloughhouse, T8N, R7E (Sloughhouse Quadrangle); then

(12)Proceed northeasterly (upstream) about 11 miles along the meandering Deer Creek, crossing over the southeast corner of the Buffalo Creek map, to the creek's intersection with the Sacramento-El Dorado County line, section 1, T8N, R8E (Folsom, S.E. Quadrangle); then

(13)Proceed south-southeast followed by south for about 12.4 miles along the Sacramento-El Dorado and Sacramento-Amador County line to the County line's intersection with the Laguna estuary, 0.75 mile south of the Ione Road, T6N, R9E (Carbondale Quadrangle); and

(14)Proceed westerly (downstream) 17.5 miles along the meandering Laguna estuary, crossing over the Sloughhouse map, and return to the beginning point on the Clay Quadrangle. Signed: May 19, 2006. John J. Manfreda, Administrator. Approved: June 15, 2006. Timothy E. Skud, Deputy Assistant Secretary (Tax, Trade, and Tariff Policy). [FR Doc. E6-11079 Filed 7-14-06; 8:45 am] BILLING CODE 4810-31-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 117 [CGD05-06-017] RIN 1625-AA09 Drawbridge Operation Regulations; Atlantic Intracoastal Waterway (Alternate Route), Great Dismal Swamp Canal, South Mills, NC AGENCY: Coast Guard, DHS. ACTION: Final rule. SUMMARY: The Coast Guard is establishing regulations that govern the operation of the new Great Dismal Swamp Canal Bridge, at the Alternate Route of the Atlantic Intracoastal Waterway

(AICW)mile 28.0, in South Mills, NC. The final rule will maintain a level of operational capabilities that will continue to provide for the reasonable needs of the North Carolina Department of Parks and Recreation Visitor Center, at the Great Dismal Swamp, and vessel navigation. DATES: This rule is effective August 16, 2006. ADDRESSES: Comments and material received from the public, as well as documents indicated in this preamble as being available in the docket, are part of docket CGD05-06-017 and are available for inspection or copying at Commander (dpb), Fifth Coast Guard District, Federal Building, 1st Floor, 431 Crawford Street, Portsmouth, VA 23704-5004 between 8 a.m. and 4 p.m., Monday through Friday, except Federal holidays. The Fifth Coast Guard District maintains the public docket for this rulemaking. FOR FURTHER INFORMATION CONTACT: Bill H. Brazier, Bridge Management Specialist, Fifth Coast Guard District, at

(757)398-6422. SUPPLEMENTARY INFORMATION: Regulatory History On April 6, 2006, we published a notice of proposed rulemaking

(NPRM)entitled “Drawbridge Operation Regulation; Atlantic Intracoastal Waterway (Alternate Route), Great Dismal Swamp Canal, NC” in the **Federal Register** (66 FR 17394). We received one comment on the proposed rule. No public meeting was requested, and none was held. Background and Purpose The North Carolina Department of Parks and Recreation (NC Parks and Recreation) will own and operate this new swing-type bridge at the Alternate Route of the AICW mile 28.0 across the Great Dismal Swamp Canal. This final rule will allow the new Great Dismal Swamp Canal Bridge to remain open to vessel traffic, closing only for pedestrian crossings and periodic maintenance. This rule will also allow the Great Dismal Swamp Canal Bridge to be operated by the Park Service Rangers at the Great Dismal Swamp Visitors Center. The controller will also monitor marine channel 13.0. The final rule will require the draw to remain in the open-to-navigation position and only close to allow pedestrians (visitors to the park) to cross the bridge, and for periodic maintenance, and then the bridge will immediately reopen to navigation once the pedestrians have crossed the bridge. This will provide for an even flow of vessel traffic along the Great Dismal Swamp. Discussion of Comments and Changes The Coast Guard received one comment from the NC Parks and Recreation. The NC Parks and Recreation provided the following information to correct slight inaccuracies in the background and purpose of this rule:

(1)The Park Service Rangers at the Great Dismal Swamp Visitors Center will not operate the new bridge at a remote location;

(2)There are no closed circuit cameras or infrared sensors installed; and

(3)There will be no nighttime operation of the new bridge since the Deep Creek Lock System, which provides access to and from the Alternate Route of the AICW Great Dismal Swamp, functions daily only at 8:30 a.m., 11 a.m., 1:30 p.m. and 3:30 p.m., therefore installation of the channel traffic lights will not be required. The Coast Guard has incorporated the following changes: Insert the word “Great” preceding the phrase “Dismal Swamp Canal”. This will accurately reflect the proper name used for this waterway. Revise paragraph

(b)to read “The bridge shall be operated by the Park Service Rangers at the Great Dismal Swamp Visitors Center.” Remove in paragraphs

(b)and

(c)the sentences: “The remote operator shall monitor vessel traffic with closed circuit cameras and infrared sensors covering the swing radius.” And, “The bridge shall not be operated from the remote location in the following events: Failure or obstruction of the infrared sensors, closed-circuit cameras or marine-radio communications, or when remote operator's visibility is impaired”, respectively. In paragraph (d), remove the word “remote”. Revise paragraph

(e)to read “Before closing the draw, the horn will sound five short blasts. Five short blasts of the horn will continue until the Bridge is seated and locked down to vessels.” Revise paragraph

(f)to read “When pedestrian traffic has cleared, the horn will sound one prolonged blast followed by one short blast to indicate the draw is opening to vessel traffic.” Discussion of Rule The Coast Guard will adopt new regulations to govern the operation of the Great Dismal Swamp Canal Bridge, at mile 28.0, in South Mills, NC. The Coast Guard will insert this new specific regulation at 33 CFR 117.820. The final rule will allow the draw of the bridge to be operated by Park Service Rangers at the Great Dismal Swamp Visitors Center. The draw will remain in the open position for navigation and shall only be closed for the crossing of pedestrians and periodic maintenance authorized in accordance with subpart A of this part. Before the Great Dismal Swamp Visitor Center Bridge closes for any reason, the operator will monitor waterway traffic in the area. The bridge will only be closed if the operator's visual inspection shows that the channel is clear and there are no vessels transiting in the area. While the Great Dismal Swamp Visitor Center Bridge is moving from the full open to the full closed position, the operator will maintain constant surveillance of the navigation channel to ensure that no conflict with maritime traffic exists. Before closing the draw, the horn will sound five short blasts. Five short blasts of the horn will continue until the bridge is seated and locked down to vessels. When pedestrian traffic has cleared, the horn will sound one prolonged blast followed by one short blast to indicate that the draw of the Great Dismal Swamp Canal Bridge is about to return to its full open position to vessels. Regulatory Evaluation This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS). We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. We reached this conclusion based on the fact that the proposed changes have only a minimal impact on maritime traffic transiting the bridge. Although the Great Dismal Swamp Canal Bridge will be untended and operated by Park Service Rangers at the Great Dismal Swamp Visitors Center, mariners can continue their transits because the bridge will remain open to mariners, only to be closed for pedestrian crossings or periodic maintenance. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule would not have a significant economic impact on a substantial number of small entities. This rule would not have a significant economic impact on a substantial number of small entities for the following reason. The rule allows the Great Dismal Swamp Canal Bridge to be operated by Park Service Rangers at the Great Dismal Swamp Visitors Center and requires the bridge to remain in the open position to vessels the majority of the time, only closing for pedestrian crossings or periodic maintenance. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule so that they can better evaluate its effects on them and participate in the rulemaking process. No assistance was requested from any small entity. Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.lD and Department of Homeland Security Management Directive 5100.1, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969

(NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that would limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, this rule is categorically excluded, under Figure 2-1, paragraph (32)(e) of the Instruction, from further environmental documentation because it has been determined that the promulgation of operating regulations for drawbridges are categorically excluded. List of Subjects in 33 CFR Part 117 Bridges. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows: PART 117—DRAWBRIDGE OPERATION REGULATIONS 1. The authority citation for part 117 continues to read as follows: Authority: 33 U.S.C. 499; 33 CFR 1.05-1(g); Department of Homeland Security Delegation No. 0170.1; § 117.255 also issued under the authority of Public Law 102-587, 106 Stat. 5039. 2. Add new § 117.820 to read as follows: § 117.820 Atlantic Intracoastal Waterway (Alternate Route), Great Dismal Swamp Canal. The draw of the Great Dismal Swamp Canal Bridge, mile 28.0 at South Mills, NC, shall operate as follows:

(a)The draw shall remain in the open position for navigation. The draw shall only be closed for pedestrian crossings or periodic maintenance authorized in accordance with Subpart A of this part.

(b)The bridge shall be operated by the Park Service Rangers at the Great Dismal Swamp Visitors Center. Operational information will be provided 24 hours a day on marine channel 13.

(c)The bridge shall not be operated when the operator's visibility is impaired.

(d)Before the bridge closes for any reason, the operator will monitor waterway traffic in the area. The bridge shall only be closed if the operator's visual inspection shows that the channel is clear and there are no vessels transiting in the area. While the bridge is moving, the operator shall maintain constant surveillance of the navigation channel.

(e)Before closing the draw, the horn will sound five short blasts. Five short blasts of the horn will continue until the bridge is seated and locked down to vessels.

(f)When pedestrian traffic has cleared, the horn will sound one prolonged blast followed by one short blast to indicate the draw is opening to vessel traffic. Dated: July 3, 2006. L.L. Hereth, Rear Admiral, United States Coast Guard, Commander, Fifth Coast Guard District. [FR Doc. E6-11274 Filed 7-14-06; 8:45 am] BILLING CODE 4910-15-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 51 and 93 [EPA-HQ-OAR-2004-0491; FRL-8197-4] RIN 2060-AN60 PM 2.5 De Minimis Emission Levels for General Conformity Applicability AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: The EPA is taking final action to amend its regulations relating to the Clean Air Act

(CAA)requirement that Federal actions conform to the appropriate State, Tribal or Federal implementation plan for attaining clean air (“general conformity”) to add *de minimis* emissions levels for particulate matter with an aerodynamic diameter equal or less than 2.5 microns (PM 2.5 ) National Ambient Air Quality Standards (NAAQS) and its precursors. DATES: The final rule amendments are effective on July 17, 2006. ADDRESSES: The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2004-0491. All documents in the docket are listed on the *http://www.regulations.gov* Web site. 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, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through www.regulations.gov or in hard copy at the Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., 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 Air Docket is

(202)566-1742. FOR FURTHER INFORMATION CONTACT: Mr. Thomas Coda, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Mail Code C539-02, Research Triangle Park, NC 27711, phone number

(919)541-3037 or by e-mail at *coda.tom@epa.gov.* SUPPLEMENTARY INFORMATION: I. General Information A. Does This Action Apply to Me? Today's action applies to all Federal agencies and Federal activities. II. Background A. What Is General Conformity and How Does It Affect Air Quality? The intent of the General Conformity requirement is to prevent the air quality impacts of Federal actions from causing or contributing to a violation of the NAAQS or interfering with the purpose of a State implementation plan (SIP). For the purpose of this rule, the term “State implementation plan (SIP)” refers to all approved applicable and enforceable State, Federal and Tribal implementation plans (TIPs). In the CAA, Congress recognized that actions taken by Federal agencies could affect States, Tribes, and local agencies' abilities to attain and maintain the NAAQS. Section 176(c)(42 U.S.C. 7506) of the CAA requires Federal agencies to ensure that their actions conform to the applicable SIP for attaining and maintaining the NAAQS. The CAA Amendments of 1990 clarified and strengthened the provisions in section 176(c). Because certain provisions of section 176(c) apply only to highway and mass transit funding and approvals actions, EPA published two sets of regulations to implement section 176(c). The Transportation Conformity Regulations, first published on November 24, 1993 (58 FR 62188) and recently revised on July 1, 2004 (69 FR 40004) and May 6, 2005 (70 FR 24280), address Federal actions related to highway and mass transit funding and approval actions. The General Conformity Regulations, published on November 30, 1993 (58 FR 63214) and codified at 40 CFR 93.150, cover all other Federal actions. This action applies only to the General Conformity Regulations. When the applicability analysis shows that the action must undergo a conformity determination, Federal agencies must first show that the action will meet all SIP control requirements such as reasonably available control measures, and the emissions from the action will not interfere with the timely attainment of the standard, the maintenance of the standard or the area's ability to achieve an interim emission reduction milestone. Federal agencies then must demonstrate conformity by meeting one or more of the methods specified in the regulation for determining conformity: 1. Demonstrating that the total direct 1 and indirect 2 emissions are specifically identified and accounted for in the applicable SIP, 2. Obtaining written statement from the State or local agency responsible for the SIP documenting that the total direct and indirect emissions from the action along with all other emissions in the area will not exceed the SIP emission budget, 3. Obtaining a written commitment from the State to revise the SIP to include the emissions from the action, 4. Obtaining a statement from the metropolitan planning organization

(MPO)for the area documenting that any on-road motor vehicle emissions are included in the current regional emission analysis for the area's transportation plan or transportation improvement program, 1 Direct emissions are emissions of a criteria pollutant or its precursors that are caused or initiated by the Federal action and occur at the same time and place as the action. 2 Indirect emissions are emissions of a criteria pollutant or its precursors that:

(1)Are caused by the Federal action, but may occur later in time and/or may be further removed in distance from the action itself but are still reasonably foreseeable; and

(2)the Federal agency can practically control or will maintain control over due to the controlling program responsibility of the Federal action. 5. Fully offset the total direct and indirect emissions by reducing emissions of the same pollutant or precursor in the same nonattainment or maintenance area, or 6. Where appropriate, in accordance with 40 CFR 51.858(4), conduct air quality modeling that can demonstrate that the emissions will not cause or contribute to new violations of the standards, or increase the frequency or severity of any existing violations of the standards. B. Applicability Analysis for General Conformity The National Highway System Designation Act of 1995, (Pub. L. 104-59) added section 176(c)(5) to the CAA to limit applicability of the conformity programs to areas designated as nonattainment under section 107 of the CAA and areas that had been redesignated as maintenance areas with a maintenance plan under section 175A of the CAA only. Therefore, only Federal actions taken in designated nonattainment and maintenance areas are subject to the General Conformity regulation. In addition, the General Conformity Regulations (58 FR 63214) recognize that the vast majority of Federal actions do not result in a significant increase in emissions and, therefore, include a number of regulatory exemptions, such as *de minimis* emission levels based on the type and severity of the nonattainment problem in an area. In carrying out this type of applicability analysis, the Federal agency determines whether the total direct and indirect emissions from the action are below or above the *de minimis* levels. If the action is determined to have total direct and indirect emissions for a given pollutant that are at or above the *de minimis* level for that pollutant, Federal agencies must conduct a conformity determination for the pollutant unless the action is presumed to conform under the regulation or the action is otherwise exempt. If the action's emissions are below an applicable *de minimis* level, a Federal agency does not have to conduct a conformity determination. C. Why Is EPA Establishing *De Minimis* Levels for PM 2.5 Emissions at This Time? The EPA has not revised the General Conformity Regulations since they were promulgated in 1993, although EPA expects to promulgate, in a separate rulemaking, proposed revisions to the General Conformity Regulations in the near future. For the purposes of general conformity, the General Conformity Regulations (58 FR 63214) define NAAQS as “those standards established pursuant to section 109 of the Act and include standards for carbon monoxide (CO), Lead (Pb), nitrogen dioxide (NO 2 ), ozone, particulate matter (PM 10 ) and sulfur dioxide (SO 2 ).” Since 1993, EPA has reviewed and revised the NAAQS for particulate matter to include a new PM 2.5 standard (PM 2.5 is particulate matter with an aerodynamic diameter of up to 2.5 μ referred to as the fine particle fraction). Since PM 2.5 was established pursuant to section 109 of the CAA, general conformity requirements are applicable to areas designated nonattainment for this standard although it is not explicitly included in the examples of criteria pollutants in 58 FR 63214. In July 1997, EPA promulgated two new NAAQS (62 FR 38652), one for an 8-hour ozone standard and one established pursuant to section 109 of the CAA for fine particulate matter known as PM 2.5 . The new 8-hour and old 1-hour ozone NAAQS address the same pollutant but differ with respect to the averaging time, therefore, EPA retained the existing *de minimis* emission levels for ozone precursors. The EPA designated areas as nonattainment for PM 2.5 on April 5, 2005. Subsequently, EPA has proposed regulations to implement the new particulate matter standard (70 FR 65984; November 1, 2005). Currently, there are no *de minimis* emission levels for PM 2.5 . Although PM 2.5 is a subset of PM 10 , it differs from the rest of PM 10 . While the majority of ambient PM 10 results from direct emissions of the pollutant, a significant amount of the ambient PM 2.5 can result not only from direct emissions but also from transformation of precursors and condensing of gaseous pollutants in the atmosphere. In the preamble to the proposed regulation to implement the new particulate matter standard, EPA included a discussion about the key pollutants potentially contributing to PM 2.5 concentrations in the atmosphere which are direct PM 2.5 emissions, SO 2 , NO X , VOC and ammonia (70 FR 65998). The discussion also included EPA's intent to issue a separate rulemaking to establish *de minimis* levels for Federal actions covered by the General Conformity program (70 FR 66033). At that time, EPA said it expected the levels would be identical to the nonattainment area major source levels for the New Source Review

(NSR)program. While EPA recognized that SO 2 , NO X , VOC and ammonia are precursors of PM 2.5 in the scientific sense because these pollutants can contribute to the formation of PM 2.5 in the ambient air, the degree to which these individual precursors and pollutants contribute to PM 2.5 formation in a given location is complex and variable. For ammonia, there is uncertainty about emissions inventories and the potential efficacy of control measures from location to location. For VOC, the role and relationship of gaseous organic material in the formation of organic PM remains complex and further research and technical tools are needed to better characterize emissions inventories for specific VOC compounds. In light of these factors, EPA proposed in its rule to implement the PM 2.5 NAAQS that States are not required to address VOC's or ammonia as PM 2.5 nonattainment plan precursors, unless the State or EPA makes a finding that VOC's or ammonia significantly contribute to a PM 2.5 nonattainment problem in the State or to other downwind air quality concerns. For NO X EPA proposed that States are required to address NO X as a PM 2.5 nonattainment precursor, unless the State and EPA makes a finding that NO X emissions from sources in the State do not significantly contribute to the PM 2.5 problem in a given area or to other downwind air quality concerns. Section 176(c)(6) states that the general conformity requirements of section 176(c) do not apply to an area newly designated nonattainment for a new NAAQS until 1 year after such designation. The EPA made PM 2.5 designations on April 5, 2005; thus, the applicable general conformity requirements were not effective in these areas until April 5, 2006. Many Federal actions result in little or no direct or indirect emissions and EPA believes that non-exempt Federal actions that have covered emissions below the equivalent major source thresholds should not be required to prepare an applicability analysis under the general conformity rule. The general conformity rule should only apply to major sources, not *de minimis* sources. A different interpretation could result in an extremely wasteful process that generates vast numbers of useless applicability analyses with no environmental benefit. D. How Does EPA Determine the De Minimis Threshold? The EPA has previously considered options and taken comment on how to set *de minimis* levels to determine applicability of general conformity requirements. The following is a summary of the options previously considered and the methodology used in setting *de minimis* levels. In this final rule, the EPA is using the same methodology to set PM 2.5 *de minimis* levels that the Agency previously used for other NAAQS pollutants. In the preamble to the proposal for General Conformity Regulations (58 FR 13841), EPA recognized that the very broad definition of Federal action in the statute and the number of Federal agencies subject to the conformity requirements could create a requirement for individual conformity decisions in the thousands per day. To avoid creating an unreasonable administrative burden, EPA considered options for mechanisms to focus the efforts of affected agencies on key actions with significant environmental impact, rather than all actions. Prior to that proposal, EPA consulted with numerous Federal agencies, environmental groups, State and local air quality agencies, building industry representatives, and others. Following consultation, EPA initially proposed a *de minimis* level similar to that specified by EPA for modifications to major stationary sources under the CAA preconstruction review programs. Consequently, the *de minimis* levels proposed for general conformity were chosen to correspond to the emission rates defined in 40 CFR 51.165

(NSR)and 51.166 (prevention of significant deterioration) as “significant.” Activities with emissions impacts below the proposed *de minimis* levels would not require conformity determinations. After EPA received comments on this proposal, we responded in the preamble to the final General Conformity Regulations (58 FR 63228) and stated: “Given the need to choose a threshold based on air quality criteria and one that avoids coverage of less significant projects, and in response to certain comments, the *de minimis* levels for conformity analyses in the final rule are based on the Act's major stationary source definitions-not the significance levels as proposed-for the various pollutants. Use of the *de minimis* levels assures that the conformity rule covers only major Federal actions. Under the major source definition, for example, the levels for ozone would range from 10 tons/year (VOC and NO X ) for an extreme ozone nonattainment area to 100 tons/year for marginal and moderate areas, not from 10 tons/year to 40 tons/year as proposed. The *de minimis* levels proposed were generally those used to define when modifications to existing stationary sources require preconstruction review. It was pointed out to EPA in comments on the proposal that these thresholds would result in the need to perform a conformity analysis and determination for projects that constituted a ‘modification’ to an existing source but not a ‘major’ source in some cases. The EPA agrees that conformity applies more appropriately to ‘major’ source and after careful consideration has decided to revise its original proposal in the final rule to use the emissions levels that define a major source, except as described above for lead. The definition of a major source under the amended Act is explained in more detail in the April 16, 1992 **Federal Register** in the EPA's General Preamble to Title I (57 FR 13498). Section 51.853(b)(3) of the rule has also been revised to remove the provisions that would automatically lower the *de minimis* levels to that established for stationary sources by the local air quality agency. In keeping with its conclusion that only major sources should be subject to conformity review, EPA agrees that a zero emissions threshold as established by some local agencies, should not be required by this rule.” The EPA adopts this rationale for the *de minimis* levels we are setting for PM 2.5 in this final action. This mechanism of relying on the major stationary source levels in the statute as *de minimis* levels for conformity has worked well over the last 12 years to lessen the administrative burden of Federal agencies for actions that emit relatively low emissions while addressing actions with significant emissions that could affect attainment of the NAAQS. The EPA believes it is appropriate to continue to use major stationary source levels as *de minimis* levels for the PM 2.5 NAAQS in line with past practice and recognizing that Congress generally concluded it was appropriate to apply more stringent air quality review requirements to major sources. For this reason, EPA has decided to use this reasonable and effective mechanism for setting *de minimis* levels for PM 2.5 . The EPA proposed regulations to implement the new particulate matter standard (70 FR 65984) on November 1, 2005). In the preamble to that proposal, EPA included a discussion about the key pollutants potentially contributing to PM 2.5 concentrations in the atmosphere which are direct PM 2.5 emissions, SO 2 , NO X , VOC and ammonia (70 FR 65998). While EPA recognized that SO 2 , NO X , VOC and ammonia are precursors of PM 2.5 in the scientific sense because these pollutants can contribute to the formation of PM 2.5 in the ambient air, the degree to which these individual precursors and pollutants contribute to PM 2.5 formation in a given location is complex and variable. For ammonia, there is uncertainty about emissions inventories and the potential efficacy of control measures from location to location. For VOC, the role and relationship of gaseous organic material in the formation of organic PM remains complex and further research and technical tools are needed to better characterize emissions inventories for specific VOC compounds. In light of these factors, EPA proposed in its rule to implement the PM 2.5 NAAQS that States are not required to address VOC's or ammonia as PM 2.5 nonattainment plan precursors, unless the State or EPA makes a finding that VOC's or ammonia significantly contribute to a PM 2.5 nonattainment problem in the State or to other downwind air quality concerns. For NO X EPA proposed that States are required to address NO X under all aspects of the program, unless the State and EPA makes a finding that NO X emissions from sources in the State do not significantly contribute to the PM 2.5 problem in a given area or to other downwind air quality concerns. For SO 2 EPA proposed that States are required to address SO 2 as a PM 2.5 nonattainment precursor. Therefore, for the purposes of general conformity applicability, VOC's and ammonia emissions are only considered PM 2.5 precursors in nonattainment areas where either a State or EPA has made a finding that they significantly contribute to the PM 2.5 problem in a given area or to other downwind air quality concerns; NO X emissions are considered a PM 2.5 precursor unless the State and EPA makes a finding that NO X emissions from sources in the State do not significantly contribute to the PM 2.5 problem in a given area or to other downwind air quality concerns; and SO 2 are always considered a PM 2.5 precursor. The EPA's proposed implementation strategy for the PM 2.5 standard included options for addressing PM 2.5 precursors in other air quality planning programs ( *e.g.* , New Source Review for stationary sources). The public has had the opportunity to comment on these options during the comment period for that rulemaking. The EPA will consider those comments in its final PM 2.5 implementation rule. Today's final rule should not be interpreted as prejudging our decision on the PM 2.5 precursor requirements that will be finalized in the PM 2.5 implementation rulemaking. Our final rule for the implementation proposal will reflect how PM 2.5 precursors should best be considered in those air quality planning programs and the comments received on that proposal. While EPA's final decisions on PM 2.5 precursors must be legally consistent, EPA could take differing positions with respect to various precursors in other programs ( *e.g.* , New Source Review for stationary sources) as appropriate to the programmatic needs, technical information, legal requirements and pollution sources relevant to the differing programs. The EPA notes, however, that if in the future we change our legal rationale or technical basis for considering PM 2.5 precursors among the various air quality planning programs from the positions currently under consideration as a result of comments received on the PM 2.5 implementation strategy proposal, such changes could necessitate a subsequent revision to the general conformity rule. In the case where an amendment to the General Conformity regulations is needed to reflect an alternative approach to considering PM 2.5 precursors, EPA would conduct such a revision through full public notice and comment rulemaking. III. Response to Comments The proposed rule published on April 5, 2006 solicited comments on establishing 100 tons per year of PM 2.5 direct or precursor emissions as the *de minimis* threshold for General Conformity applicability. Three comments were received, one in support of the proposed *de minimis* level, and two other comments suggesting lower levels. Responses to these comments follow. A. De Minimis Level for Prescribed Burning 1. Comment A commenter stated that “leaving out prescribed burning with its release of fine particulate matter and mercury is absolutely wrong.” In addition, the commenter stated that he does not understand why EPA does not address the way certain Federal agencies, like the National Park Service, engage in prescribed burning on Federal lands and that EPA needs to address this “wrongdoing.” 2. Response To the extent that this comment is stating that prescribed burning should be regulated as an activity by the General Conformity rule, such comment is beyond the scope of this action since this rulemaking does not concern any substantive requirements for any Federal activities nor does it address ways in which a Federal activity such as prescribed burning can be found to conform to an applicable implementation plan. EPA is currently considering whether to promulgate proposed revisions to the General conformity rule, including ways in which activities can be found to conform, and if such a rule were proposed in the future, EPA encourages the commenter to submit comments at that time. To the extent that the commenter intended his comment to mean that EPA should not promulgate a *de minimis* level for prescribed burning activities, EPA notes that the General Conformity regulations are not structured to provide differing *de minimis* levels for different types of Federal activities. The EPA has proposed uniform *de minimis* emission rates for all Federal activities independent of their source because pollution is pollution, whether caused by prescribed burning or any other Federal activity. In other words, all of the *de minimis* levels are based on levels of pollution impact from all types of federal activities, whatever they may be. Prescribed burning activities do not produce any new type of pollution which would necessitate a different type of *de minimis* level or no level at all. The EPA believes that the General Conformity rule's *de minimis* thresholds should provide for the uniform treatment of air pollution emissions regardless of their source. B. De Minimis Level for Direct PM 2.5 Emissions 1. Comment One commenter suggested lower *de minimis* levels for directly emitted PM 2.5 . The commenter proposed that the *de minimis* level for emissions of direct PM 2.5 should be set significantly lower than 100 tons per year—in the range of 25-50 tons per year in areas that are likely to attain the PM 2.5 NAAQS within 5 years, and a level of 10-25 tons per year in areas that are likely to take more than five years to achieve the NAAQS. 2. Response The intent of the *de minimis* levels is to assure that the General Conformity rule covers only major Federal actions that are major sources of emission. The Act in section 302(j) defines a major source as meaning “any stationary facility or source of air pollutants which directly emits, or has the potential to emit, one hundred tons per year or more of any air pollutant (including any major emitting facility or source of fugitive emissions of any such pollutant, as determined by rule by the Administrator).” This definition provides a Congressional threshold for a major source. As discussed in the preamble of the proposal, EPA is using the same methodology to set the *de minimis* level for PM 2.5 as it did for the other NAAQS pollutants (with the exception of lead). This methodology is based on a level found in statute as defining major stationary sources of air pollution. The commenter suggests a sliding scale for the direct PM 2.5 *de minimis* level based on the severity of the attainment problem which is akin to a classification scheme. A classification scheme was constructed for PM 10 non-attainment areas and the Act provides for a lower major sources definition threshold of 70 tons per year in section 189(b)(3) for PM 10 areas classified as serious. The EPA designated all PM 2.5 nonattainment areas under subpart 1 of the Act. Subpart 1 does not mandate a classification scheme for nonattainment areas based on the severity of an area's air quality problem. Therefore, there is no basis for EPA to determine in this rulemaking what would constitute a serious PM 2.5 nonattainment problem and set different *de minimis* levels based on seriousness of the air quality problem. Absent a classification scheme for PM 2.5 , EPA does not believe that basing the *de minimis* levels on differing air quality levels is warranted at this time. If a different classification approach is taken in the PM 2.5 implementation rule, we may consider addressing this issue differently. IV. Summary of the Action The EPA is revising the tables in sub-paragraphs (b)(1) and (b)(2) of 40 CFR 51.853 and 40 CFR 93.153 by adding the *de minimis* emission levels for PM 2.5 . The EPA is establishing the proposed 100 tons per year as the *de minimis* emission level for direct PM 2.5 and each of its precursors as defined in revised section 91.152. The precursors for the purposes of general conformity applicability are, VOC's and ammonia emissions are only considered PM 2.5 precursors in nonattainment areas where either a State or EPA has made a finding that they significantly contribute to the PM 2.5 problem in a given area or to other downwind air quality concerns; NO X emissions are considered a PM 2.5 precursor unless the State and EPA makes a finding that NO X emissions from sources in the State do not significantly contribute to the PM 2.5 problem in a given area or to other downwind air quality concerns; and SO 2 emissions are always considered a PM 2.5 precursor. Since EPA did not propose any classifications for the PM 2.5 nonattainment areas, EPA is not establishing PM 2.5 *de minimis* emission levels for higher classified nonattainment areas. This action will maintain the consistency between the conformity *de minimis* emission levels and the size of a major stationary source under the Act (section 302(j) and the NSR program (70 FR 65984). These levels are also consistent with the levels proposed for VOC and NO X emissions in subpart 1 areas under the 8-hour ozone implementation strategy (68 FR 32843). V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency must determine whether the regulatory action is “significant” and, therefore, subject to Office of Management and Budget

(OMB)review and the requirements of the Executive Order. The Order defines “significant regulatory action” as one that is likely to result in a regulation 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. Pursuant to the terms of Executive Order 12866, it has been determined that these revisions to the regulations are considered a “significant regulatory action” because although they do not impose any additional requirements on other Federal agencies, they do affect the process Federal agencies use to determine applicability of existing requirements. As such, this action was submitted to OMB for review. B. Paperwork Reduction Act This action does not directly impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 *et seq.* , on non-Federal entities. The General Conformity Regulations require Federal agencies to determine that their actions conform to the SIPs or TIPs. However, depending upon how Federal agencies implement the regulations, non-Federal entities seeking funding or approval from those Federal agencies may be required to submit information to that agency. 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; 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. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. C. Regulatory Flexibility Act The Regulatory Flexibility Act generally requires an Agency to prepare a regulatory flexibility analysis of any regulation subject to notice and comment rulemaking requirements under the Administrative Procedures Act or any other statute unless the Agency certifies the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of today's action on small entities, small entity is defined as: 1. A small business that is a small industrial entity as defined in the U.S. Small Business Administration

(SBA)size standards. (See 13 CFR 121.201); 2. A governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and 3. A small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. After considering the economic impacts of today's regulation revisions, I certify that this action will not have a significant economic impact on a substantial number of small entities. Today's action will not impose any requirements on small entities. The General Conformity Regulations require Federal agencies to conform to the appropriate State, Tribal or Federal implementation plan for attaining clean air. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final regulations with “Federal mandates” that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. Before promulgating an EPA regulation for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and to adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the regulation. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final regulations an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory actions with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. The EPA has determined that these revisions to the regulations do not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in any 1 year. Thus, today's regulation revisions are not subject to the requirements of sections 202 and 205 of the UMRA. The EPA has determined that these regulation revisions contain no regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments. E. Executive Order 13132: Federalism Executive Order 13132, entitled “Federalism” (64 FR 43255; August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications.” “Policies that have Federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects 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.” This action does not have Federalism implications. The regulations will not have substantial direct effects 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, as specified in Executive Order 13132. Previously, EPA determined the costs to States to implement the General Conformity Regulations to be less than $100,000 per year. Thus, Executive Order 13132 does not apply to these regulation revisions. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by Tribal officials in the development of regulatory policies that have Tribal implications.” This determination is stated below. These regulation revisions do not have Tribal implications as defined by Executive Order 13175. They do not have a substantial direct effect on one or more Indian Tribes, since no Tribe has to demonstrate conformity for their actions. Furthermore, these regulation revisions do not affect the relationship or distribution of power and responsibilities between the Federal government and Indian Tribes. The CAA and the Tribal Air Rule establish the relationship of the Federal government and Tribes in developing plans to attain the NAAQS, and these revisions to the regulations do nothing to modify that relationship. Because these regulation revisions do not have Tribal implications, Executive Order 13175 does not apply. G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks Executive Order 13045: “Protection of Children from Environmental Health and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that

(1)is determined to be “economically significant” as defined under Executive Order 12866, and

(2)concerns an environmental health or safety risk that EPA has reason to believe may have disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. These revisions to the regulations are not subject to Executive Order 13045 because they are not economically significant as defined in Executive Order 12866 and because EPA does not have reason to believe the environmental health or safety risk addressed by the General Conformity Regulations present a disproportionate risk to children. The General Conformity Regulations ensure that Federal agencies comply with the SIP, TIP or FIP for attaining and maintaining the NAAQS. H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use These revisions to the regulations are not considered a “significant energy action” as defined in Executive Order 13211, “Actions That Significantly Affect Energy Supply, Distribution, or Use,” (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. I. National Technology Transfer Advancement Act Section 12(d) of the National Technology Transfer Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards

(VCS)in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. The VCS are technical standards ( *e.g.* , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by VCS bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable VCS. This revision to the regulations does not involve technical standards. Therefore, EPA is not considering the use of any VCS. However, EPA will encourage the Federal agencies to consider the use of such standards, where appropriate, in the implementation of the General Conformity Regulations. J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 requires that each Federal agency make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health environmental effects of its programs, policies, and activities on minorities and low-income populations. The EPA believes that these revisions to the regulations should not raise any environmental justice issues. The revisions to the regulations would, if promulgated revise procedures for other Federal agencies to follow. They do not disproportionately affect the health or safety of minority or low income populations. The EPA encourages other agencies to carefully consider and address environmental justice in their implementation of their evaluations and conformity determinations. K. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. It requires that a Major rule cannot take effect until 60 days after it is published in the **Federal Register** . This action is not a “major rule” as defined by 5 U.S.C. 804(2). Therefore this rule will be effective July 17, 2006. List of Subjects 40 CFR Part 51 Environmental protection, Administrative practice and procedures, Air pollution control, Carbon monoxide, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide, Volatile organic compounds. 40 CFR Part 93 Environmental protection, Administrative practice and procedures, Air pollution control, Carbon monoxide, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur dioxide, Volatile organic compounds. Dated: July 11, 2006. Stephen L. Johnson, Administrator. For the reasons stated in the preamble, title 40, chapter I of the Code of Federal Regulations is proposed to be amended as follows: PART 51—[AMENDED] 1. The authority citation for part 51 continues to read as follows: Authority: 23 U.S.C. 101; 42 U.S.C. 7401-7671q. Subpart W—[Amended] 2. Section 51.852 is amended by removing the “; and” at the end of paragraph

(1)and adding a period in its place and adding paragraph

(3)to definition of “Precursors of criteria pollutant” to read as follows: § 51.852 Definitions. *Precursors of a criteria pollutant are:*

(3)For PM 2.5 :

(i)Sulfur dioxide (SO 2 ) in all PM 2.5 nonattainment and maintenance areas,

(ii)Nitrogen oxides in all PM 2.5 nonattainment and maintenance areas unless both the State and EPA determine that it is not a significant precursor, and

(iii)Volatile organic compounds

(VOC)and ammonia (NH 3 ) only in PM 2.5 nonattainment or maintenance areas where either the State or EPA determines that they are significant precursors. 3. Section 51.853 is amended by revising paragraph

(b)to read as follows: § 51.853 Applicability.

(b)For Federal actions not covered by paragraph

(a)of this section, a conformity determination is required for each criteria pollutant or precursor where the total of direct and indirect emissions of the criteria pollutant or precursor in a nonattainment or maintenance area caused by a Federal action would equal or exceed any of the rates in paragraphs (b)(1) or

(2)of this section.

(1)For purposes of paragraph

(b)of this section, the following rates apply in nonattainment areas (NAA's): Tons/year Ozone (VOC's or NO X ): Serious NAA's 50 Severe NAA's 25 Extreme NAA's 10 Other ozone NAA's outside an ozone transport region 100 Other ozone NAA's inside an ozone transport region: VOC 50 NO X 100 Carbon monoxide: All NAA's 100 SO 2 or NO 2 : All NAA's 100 PM-10: Moderate NAA's 100 Serious NAA's 70 PM 2.5 : Direct emissions 100 SO 2 100 NO X (unless determined not to be a significant precursor) 100 VOC or ammonia (if determined to be significant precursors) 100 Pb: All NAA's 25

(2)For purposes of paragraph

(1)and adding a period in its place and adding paragraph

(3)to definition of “Precursors of criteria pollutant” to read as follows: § 93.152 Definitions. *Precursors of a criteria pollutant* are:

(3)For PM 2.5 :

(i)Sulfur dioxide (SO 2 ) in all PM 2.5 nonattainment and maintenance areas,

(ii)Nitrogen oxides in all PM 2.5 nonattainment and maintenance areas unless both the State and EPA determine that it is not a significant precursor, and

(iii)Volatile organic compounds

(b)to read as follows: § 93.153 Applicability.

(b)For Federal actions not covered by paragraph

(2)of this section.

(1)For purposes of paragraph

(2)For purposes of paragraph

(b)of this section, the following rates apply in maintenance areas: Tons/year Ozone (NO X , SO 2 or NO 2 ): All Maintenance Areas 100 Ozone (VOC's): Maintenance areas inside an ozone transport region 50 Maintenance areas outside an ozone transport region 100 Carbon monoxide: All Maintenance Areas 100 PM-10: All Maintenance Areas 100 PM 2.5 : Direct emissions 100 SO 2 100 NO X (unless determined not to be a significant precursor) 100 VOC or ammonia (if determined to be significant precursors) 100 Pb: All Maintenance Areas 25 [FR Doc. E6-11241 Filed 7-14-06; 8:45 am] BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 174 [EPA-HQ-OPP-2006-0554; FRL-8076-5] Bacillus Thuringiensis Cry1A.105 Protein and the Genetic Material Necessary for Its Production in Corn in or on All Corn Commodities; Temporary Exemption From the Requirement of a Tolerance AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This regulation establishes a temporary exemption from the requirement of a tolerance for residues of the *Bacillus Thuringiensis* Cry1A.105 protein and the genetic material necessary for its production in corn on field corn, sweet corn, and popcorn when applied/used as a plant-incorporated protectant. Monsanto Company submitted a petition to EPA under the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended by the Food Quality Protection Act of 1996 (FQPA), requesting the temporary/tolerance exemption. This regulation eliminates the need to establish a maximum permissible level for residues of *Bacillus Thuringiensis* Cry1A.105 protein and the genetic material necessary for its production in corn. The temporary tolerance exemption will expire on June 30, 2009. DATES: This regulation is effective July 17, 2006. Objections and requests for hearings must be received on or before September 15, 2006, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION ). ADDRESSES: EPA has established a docket for this action under docket identification

(ID)number EPA-HQ-OPP-2006-0554. All documents in the docket are listed in the index for the docket. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information

(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available in the electronic docket at *http://www.regulations.gov* , or, if only available in hard copy, at the OPP Regulatory Public Docket in Rm. S-4400, One Potomac Yard (South Building), 2777 S. Crystal Drive, Arlington, VA. The Docket Facility is open from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays. The Docket telephone number is

(703)305-5805. FOR FURTHER INFORMATION CONTACT: Mike Mendelsohn, Biopesticides and Pollution Prevention Division (7511P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:

(703)308-8715; e-mail address: *mendelsohn.mike@epa.gov* . SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to: • Crop production (NAICS code 111). • Animal production (NAICS code 112) • Food manufacturing (NAICS code 311) • Pesticide manufacturing (NAICS code 32532). This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT. B. How Can I Access Electronic Copies of this Document? In addition to accessing an electronic copy of this **Federal Register** document through the electronic docket at *http://www.regulations.gov* , you may access this “ **Federal Register** ” document electronically through the EPA Internet under the “ **Federal Register** ” listings at *http://www.epa.gov/fedrgstr* . You may also access a frequently updated electronic version of 40 CFR part 174 through the Government Printing Office's pilot e-CFR site at *http://www.gpoaccess.gov/ecfr* . C. Can I File an Objection or Hearing Request? Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2006-0554 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before September 15, 2006. In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2006-0554, by one of the following methods. • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the on-line instructions for submitting comments. • *Mail* : Office of Pesticide Programs

(OPP)Regulatory Public Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-0001. • *Delivery* : OPP Regulatory Public Docket (7502P), Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South Building), 2777 S. Crystal Drive, Arlington, VA. Deliveries are only accepted during the Docket's normal hours of operation (8:30 a.m. to 4 p.m., Monday through Friday, excluding legal holidays). Special arrangements should be made for deliveries of boxed information. The Docket telephone number is

(703)305-5805. II. Background and Statutory Findings In the **Federal Register** of May 26, 2006 (71 FR 30401) (FRL-8066-5), EPA issued a notice pursuant to section 408(d)(3) of the FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide tolerance petition (PP 5G6940) by Monsanto Company, 800 North Lindbergh Blvd., St. Louis, MO 63167. The petition requested that 40 CFR part 174 be amended by establishing a temporary exemption from the requirement of a tolerance for residues of *Bacillus thuringiensis* Cry1A.105 protein and the genetic material necessary for its production in corn. This notice included a summary of the petition prepared by the petitioner Monsanto Company. One comment was received in response to the notice of filing. The commenter objected to an exemption from the requirement of a tolerance, stated that she does not favor genetically engineered corn, and stated that such corn should be labeled. The commentor also expressed concern about the mechanics of submitting comments via the www.regulations.gov site for the notice of filing. The Agency understands the commenter's concerns and recognizes that some individuals believe that genetically modified crops and food should be banned completely. Pursuant to its authority under the FFDCA, EPA conducted a comprehensive assessment of the Cry1A.105 protein and the genetic material necessary for its production in corn, including a review of acute oral toxicity data on the Cry1A.105 protein, amino acid sequence comparisons to known toxins and allergens, as well as data demonstrating that the Cry1A.105 protein is rapidly degraded by gastric fluid *in vitro* , is not glycosylated, and is present in low levels in corn tissue, and as concluded that there is a reasonable certainty that no harm will result from dietary exposure to this protein as expressed in genetically modified corn. Thus, under the standard in FFDCA section 408(b)(2), a tolerance exemption is appropriate. The labeling of food is under the jurisdiction of the Food and Drug Administration (FDA). When commenting on notices of filing, commentors should either choose “Notices” or “All Document Types” in the Document Type box. Section 408(c)(2)(A)(i) of the FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of the FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Pursuant to section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue....” Additionally, section 408(b)(2)(D) of the FFDCA requires that the Agency consider “available information concerning the cumulative effects of a particular pesticide's residues” and “other substances that have a common mechanism of toxicity.” EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. First, EPA determines the toxicity of pesticides. Second, EPA examines exposure to the pesticide through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. III. Toxicological Profile Consistent with section 408(b)(2)(D) of the FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Monsanto has submitted acute oral toxicity data demonstrating the lack of mammalian toxicity at high levels of exposure to the pure Cry1A.105 protein. These data demonstrate the safety of the product at a level well above maximum possible exposure levels that are reasonably anticipated in the crop. Basing this conclusion on acute oral toxicity data without requiring further toxicity testing and residue data is similar to the Agency position regarding toxicity testing and the requirement of residue data for the microbial *Bacillus thuringiensis* products from which this plant-incorporated protectant was derived (See 40 CFR Sec. 158.740(b)(2)(i)). For microbial products, further toxicity testing and residue data are triggered by significant adverse acute effects in studies such as the mouse oral toxicity study, to verify the observed adverse effects and clarify the source of these effects (Tiers II and III). An acute oral toxicity study in mice (MRID 46694603) indicated that Cry1A.105 is non-toxic to humans. Cry1A.105 produced from microbial culture was dosed by gavage as two doses separated by 4 hours (±20 minutes) to 10 females and 10 males (2,072 milligrams/kilogram (mg/kg) body weight). Two control groups were also included in the study: A bovine serum albumin protein control, and a vehicle control. One male in the test protein group was moribund and sacrificed on day 1 due to a mechanical dosing error; this death was not attributed to the test material. All other mice survived the study. There were no significant differences in body weight or body weight change among the three groups during the study, and no treatment-related gross pathological findings were observed. The oral LD50 for males, females, and combined mice was greater than 2,072 mg/kg. When proteins are toxic, they are known to act via acute mechanisms and at very low dose levels (Sjoblad, Roy D., *et al* ., “Toxicological Considerations for Protein Components of Biological Pesticide Products,” Regulatory Toxicology and Pharmacology 15, 3-9 (1992)). Therefore, since no acute effects were shown to be caused by Cry1A.105, even at relatively high dose levels, the Cry1A.105 protein is not considered toxic. Further, amino acid sequence comparisons showed no similarities between the Cry1A.105 and known toxic proteins in protein databases that would raise a safety concern. Since Cry1A.105 is a protein, allergenic potential was also considered. Currently, no definitive tests for determining the allergenic potential of novel proteins exist. Therefore, EPA uses a weight-of-evidence approach where the following factors are considered: source of the trait; amino acid sequence similarity with known allergens; prevalence in food; and biochemical properties of the protein, including *in vitro* digestibility in simulated gastric fluid

(SGF)and glycosylation. Current scientific knowledge suggests that common food allergens tend to be resistant to degradation by heat, acid, and proteases, may be glycosylated, and can be present at high concentrations in the food. 1. *Source of the trait* . *Bacillus thuringiensis* is not considered to be a source of allergenic proteins. 2. *Amino acid sequence* . A comparison of the amino acid sequence of Cry1A.105 with known allergens showed no overall sequence similarity or identity at the level of eight contiguous amino acid residues. 3. *Prevalence in food* . Expression level analysis indicated that the protein is present at relatively low levels in corn: Approximately 3 μg/g in grain on a dry weight basis. Thus, the expression has been shown to be in the parts per million range is much lower than the amounts of allergen protein found in commonly allergenic foods. In those foods, allergens are major protein components such as seed storage globulin proteins in nuts and legumes, meat associated proteins like tropomyosin in fish and shellfish, ovalbumin and ovomucoid in egg white and lactalbumin and casein in milk. In these cases, the allergens can be from 10% to 50% of the total protein found whereas the plant-incorporated protectant

(PIP)that is the subject of this tolerance determination is found in the parts per million range. 4. *Digestibility* . The Cry1A.105 protein was digested within 30 seconds in simulated gastric fluid containing pepsin. 5. *Glycosylation* . Cry1A.105 expressed in corn was shown to have not to be glycosylated 6. *Conclusion* . Considering all of the available information, EPA has concluded that the potential for Cry1A.105 to be a food allergen is minimal. IV. Aggregate Exposures In examining aggregate exposure, section 408 of the FFDCA directs EPA to consider available information concerning exposures from the pesticide residue in food and all other non-occupational exposures, including drinking water from ground water or surface water and exposure through pesticide use in gardens, lawns, or buildings (residential and other indoor uses). The Agency has considered available information on the aggregate exposure levels of consumers (and major identifiable subgroups of consumers) to the pesticide chemical residue and to other related substances. These considerations include dietary exposure under the tolerance exemption and all other tolerances or exemptions in effect for the plant-incorporated protectants chemical residue, and exposure from non-occupational sources. Exposure via the skin or inhalation is not likely since the plant- incorporated protectant is contained within plant cells, which essentially eliminates these exposure routes or reduces these exposure routes to negligible. In addition, even if exposure can occur through inhalation, the potential for Cry1A.105 to be an allergen is low, as discussed above. Although the allergenicity assessment focuses on potential to be a food allergen, the data also indicate a low potential for Cry1A.105 to be an inhalation allergen. Exposure via residential or lawn use to infants and children is also not expected because the use sites for the Cry1A.105 protein is agricultural. Oral exposure, at very low levels, may occur from ingestion of processed corn products and, theoretically, drinking water. However oral toxicity testing showed no adverse effects. Furthermore, the expression of the Cry1A.105 protein in corn kernels has been shown to be in the parts per million range, which makes the expected dietary exposure several orders of magnitude lower than the amount of Cry1A.105 shown to have no toxicity. Therefore, even if negligible aggregate exposure should occur, the Agency concludes that such exposure would result in no harm due to the lack of mammalian toxicity and low potential for allergenicity demonstrated for the Cry1A.105 protein. V. Cumulative Effects Pursuant to FFDCA section 408(b)(2)(D)(v), EPA has considered available information on the cumulative effects of such residues and other substances that have a common mechanism of toxicity. These considerations included the cumulative effects on infants and children of such residues and other substances with a common mechanism of toxicity. Because there is no indication of mammalian toxicity from the plant-incorporated protectant, we conclude that there are no cumulative effects for the Cry1A.105 protein. VI. Determination of Safety for U.S. Population, Infants and Children A. Toxicity and Allergenicity Conclusions The data submitted and cited regarding potential health effects for the Cry1A.105 protein includes the characterization of the expressed Cry1A.105 protein in corn, as well as the acute oral toxicity study, amino acid sequence comparisons to known allergens and toxins, and *in vitro* digestibility of the protein. The results of these studies were used to evaluate human risk, and the validity, completeness, and reliability of the available data from the studies were also considered. Adequate information was submitted to show that the Cry1A.105 test material derived from microbial culture was biochemically and functionally equivalent to the protein produced by the plant-incorporated protectant ingredient in corn. Microbially produced protein was used in the safety studies so that sufficient material for testing was available. The acute oral toxicity data submitted support the prediction that the Cry1A.105 protein would be non-toxic to humans. As mentioned above, when proteins are toxic, they are known to act via acute mechanisms and at very low dose levels (Sjoblad, Roy D., *et al* ., “Toxicological Considerations for Protein Components of Biological Pesticide Products,” Regulatory Toxicology and Pharmacology 15, 3-9 (1992)). Since no treatment-related adverse effects were shown to be caused by the Cry1A.105 protein, even at relatively high dose levels, the Cry1A.105 protein is not considered toxic. Basing this conclusion on acute oral toxicity data without requiring further toxicity testing and residue data is similar to the Agency position regarding toxicity and the requirement of residue data for the microbial Bacillus thuringiensis products from which this plant-incorporated protectant was derived (See 40 CFR 158.740(b)(2)(i)). For microbial products, further toxicity testing and residue data are triggered when significant adverse effects are seen in studies such as the mouse oral toxicity study. Further studies verify the observed adverse effects and clarify the source of these effects (Tiers II and III). Residue chemistry data were not required for a human health effects assessment of the subject plant-incorporated protectant ingredients because of the lack of mammalian toxicity. However, data submitted demonstrated low levels of the Cry1A.105 in corn tissues. Since Cry1A.105 is a protein, potential allergenicity is also considered as part of the toxicity assessment. Considering all of the available information

(1)Cry1A.105 originates from a non-allergenic source;

(2)Cry1A.105 has no sequence similarities with known allergens;

(3)Cry1A.105 is not glycosylated;

(4)Cry1A.105 will only be present at low levels in food; and

(5)Cry1A.105 is rapidly digested in simulated gastric fluid; EPA has concluded that the potential for Cry1A.105 to be a food allergen is minimal. Neither available information concerning the dietary consumption patterns of consumers (and major identifiable subgroups of consumers including infants and children) nor safety factors that are generally recognized as appropriate for the use of animal experimentation data were evaluated. The lack of mammalian toxicity at high levels of exposure to the Cry1A.105 protein, as well as the minimal potential to be a food allergen, demonstrate the safety of the product at levels well above possible maximum exposure levels anticipated in the crop. The genetic material necessary for the production of the plant-incorporated protectant active ingredient include the nucleic acids (DNA, RNA) that encode these proteins and regulatory regions. The genetic material (DNA, RNA), necessary for the production of the Cry1A.105 protein has been exempted under the blanket exemption for all nucleic acids (40 CFR 174.475). B. Infants and Children Risk Conclusions FFDCA section 408(b)(2)(C) provides that EPA shall assess the available information about consumption patterns among infants and children, special susceptibility of infants and children to pesticide chemical residues and the cumulative effects on infants and children of the residues and other substances with a common mechanism of toxicity. In addition, FFDCA section 408(b)(2)(C) also provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database unless EPA determines that a different margin of safety will be safe for infants and children. In this instance, based on all the available information, the Agency finds that there is no toxicity for the Cry1A.105 protein and the genetic material necessary for its production. Thus, there are no threshold effects of concern and, as a result, the provision requiring an additional margin of safety does not apply. Further, the considerations of consumption patterns, special susceptibility, and cumulative effects do not apply. C. Overall Safety Conclusion There is a reasonable certainty that no harm will result from aggregate exposure to the U.S. population, including infants and children, to the Cry1A.105 protein and the genetic material necessary for its production. This includes all anticipated dietary exposures and all other exposures for which there is reliable information. The Agency has arrived at this conclusion because, as discussed above, no toxicity to mammals has been observed, nor any indication of allergenicity potential for the plant-incorporated protectant. VII. Other Considerations A. Endocrine Disruptors The pesticidal active ingredient is a protein, derived from a source that is not known to exert an influence on the endocrine system. Therefore, the Agency is not requiring information on the endocrine effects of this plant-incorporated protectant at this time. B. Analytical Method(s) A short description of an enzyme-linked immunosorbent assay for the detection and quantification of Cry1A.105 in corn tissue has been submitted. C. Codex Maximum Residue Level No Codex maximum residue level exists for the plant-incorporated protectant *Bacillus thuringiensis* Cry1A.105 protein and the genetic material necessary for its production in corn. VIII. Statutory and Executive Order Reviews This final rule establishes an exemption from the tolerance requirement under section 408(d) of the FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget

(OMB)has exempted these types of actions from review under Executive Order 12866, entitled *Regulatory Planning and Review* (58 FR 51735, October 4, 1993). Because this rule has been exempted from review under Executive Order 12866 due to its lack of significance, this rule is not subject to Executive Order 13211, *Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use* (66 FR 28355, May 22, 2001). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 *et seq.* , or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995

(UMRA)(Public Law 104-4). Nor does it require any special considerations under Executive Order 12898, entitled *Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations* (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled *Protection of Children from Environmental Health Risks and Safety Risks* (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Since tolerances and exemptions that are established on the basis of a petition under section 408(d) of the FFDCA, such as the exemption in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act

(RFA)(5 U.S.C. 601 *et seq.* ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, as specified in Executive Order 13132, entitled *Federalism* (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects 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.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of the FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled *Consultation and Coordination with Indian Tribal Governments* (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, 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, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. IX. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the **Federal Register** . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 174 Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements. Dated: June 29, 2006. James Jones, Director, Office of Pesticide Programs. Therefore, 40 CFR chapter I is amended as follows: PART 174—[AMENDED] 1. The authority citation for part 174 continues to read as follows: Authority: 7 U.S.C. 136-136y; 21 U.S.C. 346a and 371. 2. Section 174.453 is added to subpart W to read as follows: § 174.453 Bacillus Thuringiensis Cry1A.105 Protein and the Genetic Material Necessary for Its Production in Corn. *Bacillus thuringiensis* Cry1A.105 protein and the genetic material necessary for its production in corn is exempt from the requirement of a tolerance when used as plant-incorporated protectant in the food and feed commodities of field corn, sweet corn and popcorn. Genetic material necessary for its production means the genetic material which comprise genetic material encoding the Cry1A.105 protein and its regulatory regions. Regulatory regions are the genetic material, such as promoters, terminators, and enhancers, that control the expression of the genetic material encoding the Cry1A.105 protein. This temporary exemption from the requirement of a tolerance will permit the use of the food commodities in this paragraph when treated in accordance with the provisions of the experimental use permit 524-EUP-97 which is being issued under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), as amended (7 U.S.C. 136). This temporary exemption from the requirement of a tolerance expires and is revoked June 30, 2009; however, if the experimental use permit is revoked, or if any experience with or scientific data on this pesticide indicate that the tolerance is not safe, this temporary exemption from the requirement of a tolerance may be revoked at any time. [FR Doc. E6-11245 Filed 7-14-06; 8:45 am] BILLING CODE 6560-50-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 174 [EPA-HQ-OPP-2006-0553; FRL-8076-6] Bacillus Thuringiensis Cry2Ab2 Protein and the Genetic Material Necessary for Its Production in Corn in or on All Corn Commodities; Temporary Exemption From the Requirement of a Tolerance AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: This regulation establishes a temporary exemption from the requirement of a tolerance for residues of the *Bacillus Thuringiensis* Cry2Ab2 protein and the genetic material necessary for its production in corn on field corn, sweet corn, and popcorn when applied/used as a plant-incorporated protectant. Monsanto Company submitted a petition to EPA under the Federal Food, Drug, and Cosmetic Act (FFDCA), as amended by the Food Quality Protection Act of 1996 (FQPA), requesting the temporary/tolerance exemption. This regulation eliminates the need to establish a maximum permissible level for residues of *Bacillus Thuringiensis* Cry2Ab2 protein and the genetic material necessary for its production in corn. The temporary tolerance exemption will expire on June 30, 2009. DATES: This regulation is effective July 17, 2006. Objections and requests for hearings must be received on or before September 15, 2006, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION ). ADDRESSES: EPA has established a docket for this action under docket identification

(ID)number EPA-HQ-OPP-2006-0553. All documents in the docket are listed in the index for the docket. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information

(703)308-8715; e-mail address: *mendelsohn.mike@epa.gov* . SUPPLEMENTARY INFORMATION: I. General Information A. Does this Action Apply to Me? You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to: • Crop production (NAICS code 111). • Animal production (NAICS code 112). • Food manufacturing (NAICS code 311). • Pesticide manufacturing (NAICS code 32532). This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT. B. How Can I Access Electronic Copies of this Document? In addition to accessing an electronic copy of this **Federal Register** document through the electronic docket at *http://www.regulations.gov* , you may access this “ **Federal Register** ” document electronically through the EPA Internet under the “ **Federal Register** ” listings at *http://www.epa.gov/fedrgstr* . You may also access a frequently updated electronic version of 40 CFR part 174 through the Government Printing Office's pilot e-CFR site at *http://www.gpoaccess.gov/ecfr* . C. Can I File an Objection or Hearing Request? Under section 408(g) of the FFDCA, as amended by the FQPA, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. The EPA procedural regulations which govern the submission of objections and requests for hearings appear in 40 CFR part 178. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2006-0553 in the subject line on the first page of your submission. All requests must be in writing, and must be mailed or delivered to the Hearing Clerk on or before September 15, 2006. In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket that is described in ADDRESSES . Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit your copies, identified by docket ID number EPA-HQ-OPP-2006-0553, by one of the following methods. • Federal eRulemaking Portal: *http://www.regulations.gov* . Follow the on-line instructions for submitting comments. • *Mail* : Office of Pesticide Programs

(703)305-5805. II. Background and Statutory Findings In the **Federal Register** of May 26, 2006 (Volume 71 FR 30400) (FRL-8066-7), EPA issued a notice pursuant to section 408(d)(3) of the FFDCA, 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide tolerance petition (PP 5G7005) by Monsanto Company, 800 North Lindbergh Blvd., St. Louis, MO 63167. The petition requested that 40 CFR part 174 be amended by establishing a temporary exemption from the requirement of a tolerance for residues of *Bacillus thuringiensis* Cry2Ab2 protein and the genetic material necessary for its production in corn. This notice included a summary of the petition prepared by the petitioner Monsanto Company. One comment was received in response to the notice of filing. The commenter objected to an exemption from the requirement of a tolerance, stated that she does not favor genetically engineered corn, and stated that such corn should be labeled. The Agency understands the commenter's concerns and recognizes that some individuals believe that genetically modified crops and food should be banned completely. Pursuant to its authority under the FFDCA, EPA conducted a comprehensive assessment of the Cry2Ab2 protein and the genetic material necessary for its production in corn, including a review of acute oral toxicity data on the Cry2Ab2 protein, amino acid sequence comparisons to known toxins and allergens, as well as data demonstrating that the Cry2Ab2 protein is rapidly degraded by gastric fluid *in vitro* , is not glycosylated, and is present in low levels in corn tissue, and has concluded that there is a reasonable certainty that no harm will result from dietary exposure to this protein as expressed in genetically modified corn. Thus, under the standard in FFDCA section 408(b)(2), a tolerance exemption is appropriate. The labeling of food is under the jurisdiction of the Food and Drug Administration (FDA). Section 408(c)(2)(A)(i) of the FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of the FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Pursuant to section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue....” Additionally, section 408(b)(2)(D) of the FFDCA requires that the Agency consider “available information concerning the cumulative effects of a particular pesticide's residues” and “other substances that have a common mechanism of toxicity.” EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. First, EPA determines the toxicity of pesticides. Second, EPA examines exposure to the pesticide through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. III. Toxicological Profile Consistent with section 408(b)(2)(D) of the FFDCA, EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness and reliability and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Monsanto has submitted acute oral toxicity data demonstrating the lack of mammalian toxicity at high levels of exposure to the pure Cry2Ab2 protein. These data demonstrate the safety of the product at a level well above maximum possible exposure levels that are reasonably anticipated in the crop. Basing this conclusion on acute oral toxicity data without requiring further toxicity testing and residue data is similar to the Agency position regarding toxicity testing and the requirement of residue data for the microbial *Bacillus thuringiensis* products from which this plant-incorporated protectant was derived (See 40 CFR Sec. 158.740(b)(2)(i)). For microbial products, further toxicity testing and residue data are triggered by significant adverse acute effects in studies such as the mouse oral toxicity study, to verify the observed adverse effects and clarify the source of these effects (Tiers II and III). An acute oral toxicity study in mice (MRID 44966602) indicated that Cry2Ab2 is non-toxic to humans. Three groups of ten male and ten female mice were dosed by oral gavage with 30, 300, or 1,000 milligrams/kilogram (mg/kg) bodyweight of microbially-produced Cry2Ab2 protein. Two negative control groups were also included in the study: Bovine serum albumin protein control, and a vehicle control (purified water). Two deaths occurred in control group animals; both deaths were attributed to gavage injury. All other mice survived the study. Several animals in both the control and test groups lost weight during the study, and several abnormalities were observed by gross necropsy in several animals in both the test and control groups. There were no significant differences between the test and control groups; therefore, the Cry2Ab2 protein does not appear to cause any significant adverse effects at an exposure level of up to 1,000 mg/kg bodyweight. When proteins are toxic, they are known to act via acute mechanisms and at very low dose levels (Sjoblad, Roy D., *et al* ., “Toxicological Considerations for Protein Components of Biological Pesticide Products,” Regulatory Toxicology and Pharmacology 15, 3-9 (1992)). Therefore, since no acute effects were shown to be caused by Cry2Ab2, even at relatively high dose levels, the Cry2Ab2 protein is not considered toxic. Further, amino acid sequence comparisons showed no similarities between the Cry2Ab2 protein and known toxic proteins in protein databases that would raise a safety concern. Since Cry2Ab2 is a protein, allergenic potential was also considered. Currently, no definitive tests for determining the allergenic potential of novel proteins exist. Therefore, EPA uses a weight-of-evidence approach where the following factors are considered: Source of the trait; amino acid sequence similarity with known allergens; prevalence in food; and biochemical properties of the protein, including *in vitro* digestibility in simulated gastric fluid

(SGF)and glycosylation. Current scientific knowledge suggests that common food allergens tend to be resistant to degradation by heat, acid, and proteases, may be glycosylated, and can be present at high concentrations in the food. 1. *Source of the trait* . *Bacillus thuringiensis* is not considered to be a source of allergenic proteins. 2. *Amino acid sequence* . A comparison of the amino acid sequence of Cry2Ab2 with known allergens showed no significant overall sequence similarity or identity at the level of eight contiguous amino acid residues. 3. *Prevalence in food* . Expression level analysis indicated that the protein is present at relatively low levels in corn: Approximately 2.3 μg/g in grain on a dry weight basis. Thus, the expression has been shown to be in the parts per million range is much lower than the amounts of allergen protein found in commonly allergenic foods. In those foods, allergens are major protein components such as seed storage globulin proteins in nuts and legumes, meat associated proteins like tropomyosin in fish and shellfish, ovalbumin and ovomucoid in egg white and lactalbumin and casein in milk. In these cases, the allergens can be from 10% to 50% of the total protein found whereas the plant-incorporated protectant

(PIP)that is the subject of this tolerance determination is found in the parts per million range. 4. *Digestibility* . The Cry2Ab2 protein was digested within 15 seconds in simulated gastric fluid containing pepsin. 5. *Glycosylation* . Cry2Ab2 expressed in corn was shown not to be glycosylated. 6. *Conclusion* . Considering all of the available information, EPA has concluded that the potential for Cry2Ab2 to be a food allergen is minimal. IV. Aggregate Exposures In examining aggregate exposure, section 408 of the FFDCA directs EPA to consider available information concerning exposures from the pesticide residue in food and all other non-occupational exposures, including drinking water from ground water or surface water and exposure through pesticide use in gardens, lawns, or buildings (residential and other indoor uses). The Agency has considered available information on the aggregate exposure levels of consumers (and major identifiable subgroups of consumers) to the pesticide chemical residue and to other related substances. These considerations include dietary exposure under the tolerance exemption and all other tolerances or exemptions in effect for the plant-incorporated protectants chemical residue, and exposure from non-occupational sources. Exposure via the skin or inhalation is not likely since the plant- incorporated protectant is contained within plant cells, which essentially eliminates these exposure routes or reduces these exposure routes to negligible. In addition, even if exposure can occur through inhalation, the potential for Cry2Ab2 to be an allergen is low, as discussed above. Although the allergenicity assessment focuses on potential to be a food allergen, the data also indicate a low potential for Cry2Ab2 to be an inhalation allergen. Exposure via residential or lawn use to infants and children is also not expected because the use sites for the Cry2Ab2 protein is agricultural. Oral exposure, at very low levels, may occur from ingestion of processed corn products and, theoretically, drinking water. However, oral toxicity testing showed no adverse effects. Furthermore, the expression of the Cry2Ab2 protein in corn kernels has been shown to be in the parts per million range, which makes the expected dietary exposure several orders of magnitude lower than the amount of Cry2Ab2 shown to have no toxicity. Therefore, even if negligible aggregate exposure should occur, the Agency concludes that such exposure would result in no harm due to the lack of mammalian toxicity and low potential for allergenicity demonstrated for the Cry2Ab2 protein. V. Cumulative Effects Pursuant to FFDCA section 408(b)(2)(D)(v), EPA has considered available information on the cumulative effects of such residues and other substances that have a common mechanism of toxicity. These considerations included the cumulative effects on infants and children of such residues and other substances with a common mechanism of toxicity. Because there is no indication of mammalian toxicity from the plant-incorporated protectant, we conclude that there are no cumulative effects for the Cry2Ab2 protein. VI. Determination of Safety for U.S. Population, Infants and Children A. Toxicity and Allergenicity Conclusions The data submitted and cited regarding potential health effects for the Cry2Ab2 protein includes the characterization of the expressed Cry2Ab2 protein in corn, as well as the acute oral toxicity study, amino acid sequence comparisons to known allergens and toxins, and *in vitro* digestibility of the protein. The results of these studies were used to evaluate human risk, and the validity, completeness, and reliability of the available data from the studies were also considered. Adequate information was submitted to show that the Cry2Ab2 test material derived from microbial culture was biochemically and functionally equivalent to the protein produced by the plant-incorporated protectant ingredient in corn. Microbially produced protein was used in the safety studies so that sufficient material for testing was available. The acute oral toxicity data submitted support the prediction that the Cry2Ab2 protein would be non-toxic to humans. As mentioned above, when proteins are toxic, they are known to act via acute mechanisms and at very low dose levels (Sjoblad, Roy D., *et al* ., “Toxicological Considerations for Protein Components of Biological Pesticide Products,” Regulatory Toxicology and Pharmacology 15, 3-9 (1992)). Since no treatment-related adverse effects were shown to be caused by the Cry2Ab2 protein, even at relatively high dose levels, the Cry2Ab2 protein is not considered toxic. Basing this conclusion on acute oral toxicity data without requiring further toxicity testing and residue data is similar to the Agency position regarding toxicity and the requirement of residue data for the microbial Bacillus thuringiensis products from which this plant-incorporated protectant was derived (See 40 CFR 158.740(b)(2)(i)). For microbial products, further toxicity testing and residue data are triggered when significant adverse effects are seen in studies such as the mouse oral toxicity study. Further studies verify the observed adverse effects and clarify the source of these effects (Tiers II and III). Residue chemistry data were not required for a human health effects assessment of the subject plant-incorporated protectant ingredients because of the lack of mammalian toxicity. However, data submitted demonstrated low levels of the Cry1A.105 in corn tissues. Since Cry2Ab2 is a protein, potential allergenicity is also considered as part of the toxicity assessment. Considering all of the available information

(1)Cry2Ab2 originates from a non-allergenic source;

(2)Cry2Ab2 has no sequence similarities with known allergens;

(3)Cry2Ab2 is not glycosylated;

(4)Cry2Ab2 will only be present at low levels in food; and

(5)Cry2Ab2 is rapidly digested in simulated gastric fluid; EPA has concluded that the potential for Cry2Ab2 to be a food allergen is minimal. Neither available information concerning the dietary consumption patterns of consumers (and major identifiable subgroups of consumers including infants and children) nor safety factors that are generally recognized as appropriate for the use of animal experimentation data were evaluated. The lack of mammalian toxicity at high levels of exposure to the Cry2Ab2 protein, as well as the minimal potential to be a food allergen, demonstrate the safety of the product at levels well above possible maximum exposure levels anticipated in the crop. The genetic material necessary for the production of the plant-incorporated protectant active ingredient include the nucleic acids (DNA, RNA) that encode these proteins and regulatory regions. The genetic material (DNA, RNA), necessary for the production of the Cry2Ab2 protein has been exempted under the blanket exemption for all nucleic acids (40 CFR 174.475). B. Infants and Children Risk Conclusions FFDCA section 408(b)(2)(C) provides that EPA shall assess the available information about consumption patterns among infants and children, special susceptibility of infants and children to pesticide chemical residues and the cumulative effects on infants and children of the residues and other substances with a common mechanism of toxicity. In addition, FFDCA section 408(b)(2)(C) also provides that EPA shall apply an additional tenfold margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database unless EPA determines that a different margin of safety will be safe for infants and children. In this instance, based on all the available information, the Agency finds no toxicity for the Cry2Ab2 protein and the genetic material necessary for its production. Thus, there are no threshold effects of concern and, as a result, the provision requiring an additional margin of safety does not apply. Further, the considerations of consumption patterns, special susceptibility, and cumulative effects do not apply. C. Overall Safety Conclusion There is a reasonable certainty that no harm will result from aggregate exposure to the U.S. population, including infants and children, to the Cry2Ab2 protein and the genetic material necessary for its production. This includes all anticipated dietary exposures and all other exposures for which there is reliable information. The Agency has arrived at this conclusion because, as discussed above, no toxicity to mammals has been observed, nor any indication of allergenicity potential for the plant-incorporated protectant. VII. Other Considerations A. Endocrine Disruptors The pesticidal active ingredient is a protein, derived from a source that is not known to exert an influence on the endocrine system. Therefore, the Agency is not requiring information on the endocrine effects of this plant-incorporated protectant at this time. B. Analytical Method(s) A short description of an enzyme-linked immunosorbent assay for the detection and quantification of Cry2Ab2 in corn tissue has been submitted, and a commercially available qualitative immunochromatographic test strip was shown to detect the Cry2Ab2 protein in corn tissues. C. Codex Maximum Residue Level No Codex maximum residue level exists for the plant-incorporated protectant *Bacillus thuringiensis* Cry2Ab2 protein and the genetic material necessary for its production in corn. VIII. Statutory and Executive Order Reviews This final rule establishes an exemption from the tolerance requirement under section 408(d) of the FFDCA in response to a petition submitted to the Agency. The Office of Management and Budget

(RFA)(5 U.S.C. 601 *et seq.* ) do not apply. In addition, the Agency has determined that this action will not have a substantial direct effect on 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, as specified in Executive Order 13132, entitled *Federalism* (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects 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.” This final rule directly regulates growers, food processors, food handlers and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of section 408(n)(4) of the FFDCA. For these same reasons, the Agency has determined that this rule does not have any “tribal implications” as described in Executive Order 13175, entitled *Consultation and Coordination with Indian Tribal Governments* (65 FR 67249, November 6, 2000). Executive Order 13175, requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This rule will not have substantial direct effects on tribal governments, 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, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. IX. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 *et seq.* , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the **Federal Register** . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2). List of Subjects in 40 CFR Part 174 Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements. Dated: June 29, 2006. James Jones, Director Office of Pesticide Programs. Therefore, 40 CFR chapter I is amended as follows: PART 174—[AMENDED] 1. The authority citation for part 174 continues to read as follows: Authority: 7 U.S.C. 136-136y; 21 U.S.C. 346a and 371. 2. Section 174.454 is added to subpart W to read as follows: § 174.454 Bacillus Thuringiensis Cry2Ab2 Protein and the Genetic Material Necessary for Its Production in Corn. *Bacillus thuringiensis* Cry2Ab2 protein and the genetic material necessary for its production in corn is exempt from the requirement of a tolerance when used as plant-incorporated protectant in the food and feed commodities of field corn, sweet corn and popcorn. Genetic material necessary for its production means the genetic material which comprise genetic material encoding the Cry2Ab2 protein and its regulatory regions. Regulatory regions are the genetic material, such as promoters, terminators, and enhancers, that control the expression of the genetic material encoding the Cry2Ab2 protein. This temporary exemption from the requirement of a tolerance will permit the use of the food commodities in this paragraph when treated in accordance with the provisions of the experimental use permit 524-EUP-97 which is being issued under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), as amended (7 U.S.C. 136). This temporary exemption from the requirement of a tolerance expires and is revoked June 30, 2009; however, if the experimental use permit is revoked, or if any experience with or scientific data on this pesticide indicate that the tolerance is not safe, this temporary exemption from the requirement of a tolerance may be revoked at any time. [FR Doc. E6-11249 Filed 7-14-06; 8:45 am] BILLING CODE 6560-50-S DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 648 [Docket No. 060418103-6181-02; I.D. 040706F] RIN 0648-AT59 Fisheries of the Northeastern United States; Final 2006-2008 Specifications for the Spiny Dogfish Fishery AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule. SUMMARY: NMFS announces final specifications for the 2006-2008 fishing years, which is May 1, 2006, through April 30, 2009. NMFS is also establishing possession limits for dogfish at 600 lb (272 kg) for both quota periods 1 and 2 of the fishery. DATES: The regulatory change at 50 CFR 648.235 that sets the dogfish possession limits at 600 lb (272 kg) is effective August 16, 2006. The specifications are effective August 16, 2006, through April 30, 2009. ADDRESSES: Copies of supporting documents used by the Joint Spiny Dogfish Committee and the Spiny Dogfish Monitoring Committee (Monitoring Committee); the Environmental Assessment, Regulatory Impact Review, Initial Regulatory Flexibility Analysis (EA/RIR/IRFA); and the Essential Fish Habitat Assessment

(EFHA)are available from Daniel Furlong, Executive Director, Mid-Atlantic Fishery Management Council (MAFMC), Federal Building, Room 2115, 300 South Street, Dover, DE 19904. The EA, RIR, IRFA and EFHA are accessible via the Internet at *http:/www.nero.gov* . FOR FURTHER INFORMATION CONTACT: Eric Jay Dolin, Fishery Policy Analyst, (978)281-9259, fax (978)281-9135. SUPPLEMENTARY INFORMATION: Background A proposed rule for this action was published in the **Federal Register** on May 8, 2006 (71 FR 26726), with public comment accepted through May 23, 2006. The final specifications are unchanged from those that were proposed. A complete discussion of the development of the specifications appears in the preamble to the proposed rule and is not repeated here. 2006-2008 Specifications The commercial spiny dogfish quota for the 2006-2008 fishing years is 4 million lb (1.81 million kg) annually, to be divided into two semi-annual periods as follows: 2,316,000 lb (1.05 million kg) for quota period 1 (May 1 - Oct. 31); and 1,684,000 lb (763,849 kg) for quota period 2 (Nov. 1 - April 30). The possession limits are 600 lb (272 kg) for quota periods 1 and 2, to discourage a directed fishery. Comments and Responses There were 1,099 comments submitted on the proposed measures, by 4 organizations and 1,095 individuals. *Comment 1:* Three organizations and 1,081 individuals argued that NMFS should have followed the Monitoring Committee's recommendation, setting the quota at 2 million lb (907 mt) and the possession limits at 600 lb (272 kg) and 300 lb (136 kg), respectively. These commenters argued that the Monitoring Committee's recommendation represented the best available scientific information. *Response:* The Council's analysis concluded that the U.S. commercial spiny dogfish landings are controlled more by the possession limits than the overall quota. Maintaining the limits of 600 lb (272 kg) for both quota periods does not erode the control over landings and would allow for a limited level of retention of spiny dogfish caught incidentally while fishing for other species. Standardizing the possession limits for both quota periods will address a perceived inequity that has been identified by some vessel operators, without creating an incentive for directed fishing. Discouraging directed fishing through this modest possession limit and an incidental catch quota will provide protection for mature female spiny dogfish, the portion of the stock that has traditionally been targeted by the directed fishery, and the stock component that is most in need of protection and rebuilding. These measures would also be consistent with the measures being implemented under the Atlantic States Marine Fishieries Commission's (ASMFC) Interstate Fishery Management Plan in state waters, at least for FY 2006. This would have the benefit of establishing consistent management measures in Federal and state jurisdictions, and would simplify monitoring and enforcement. As demonstrated in previous years, when measures differed in state and Federal waters, the benefits of a more restrictive quota in Federal waters would likely be slight because fishing would continue in state waters under the less restrictive ASMFC quota. In addition, discard mortality associated with continuing incidental catches would continue to occur after a quota period was closed, further undermining the conservation benefits expected from a more restrictive quota in Federal waters. The Northeast Fisheries Science Center's (NEFSC) review of the proposed measure concluded that the higher quota would not significantly alter the rebuilding period (no more than 1 or 2 years), though continued low recruitment could change this conclusion. Although the specifications are being set for 3 years, the Council and NMFS will continue to review new information in intervening years, and if that information indicates that the specifications need to be modified to ensure continued rebuilding of the stock, the specifications-setting process would be re-initiated to take that information into account. *Comment 2:* One organization argued that by not following the Monitoring Committee's recommendation, NMFS would be violating the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) because it would allow mortality to increase, and therefore increase the time horizon for rebuilding. *Response:* The Dogfish Fishery Management Plan

(FMP)implemented a strategy to eliminate the directed fishery for dogfish, which was the largest source of dogfish mortality prior to management. A quota was established to allow a limited amount of incidental catch to be landed. Even if the quota were reduced to 0, dogfish mortality would continue to occur since dogfish are caught incidentally in other fisheries. Thus, this action maintains the FMP strategy of eliminating mortality associated with directed fishing for dogfish and allowing limited landings of incidental catch. NMFS believes that this incidental level of harvest is a reasonable exercise of its discretion in line with the court's decision in *Natural Resources Defense Council, Inc.* , v. *National Marine Fisheries Service 4211 F.3d 872* , (9th Cir. 2005). This level will allow those fishing for other species to land a limited amount of dogfish caught incidentally. This will not allow a directed fishery for dogfish, which is the principal objective of the Dogfish FMP. NMFS believes that setting an incidental quota in line with the Monitoring Committee's recommendation would result in discard mortality of dogfish caught incidentally that would otherwise be landed under a higher incidental quota. This deprives fishermen of the limited income they could derive from fish that they would have to discard under the lower quota without having a material benefit to the stock. While section 304(e) of the Magnuson-Stevens Act specifies that a rebuilding period should be short as possible, it invests NMFS with a certain amount of discretion to take into account other factors such as the stock status and biology and the needs needs of fishing communities in determining the length of any rebuilding period. *Comment 3:* One organization also did not agree with NMFS's contention that setting the quota at 4 million lb, and possession limits at 600 lb (272 kg) for both periods would be beneficial because it would mirror the ASFMC management measures for 2006. This organization argued that such a decision, “turned the requirements of the Magnuson-Stevens Act on its head,” because instead of mirroring the ASFMC, NMFS should focus on rebuilding the stock as quickly as possible. The commenter also suggested that the preemption section of the Magnuson-Stevens Act could be used to resolve conflicts with state law. *Response:* As noted in the response to comment 2, NMFS has discretion to take into account other factors in determining how long the rebuilding period should be. There is no absolute legal requirement that a rebuilding period needs to be as short as possible. NMFS has determined that an incidental harvest of dogfish should be allowed. The views of the commenters differ from that of the agency as to what that level should be. Only one commenter suggested that the level should be set at 0. Obviously, there is a recognition that dogfish mortality would continue even were the quota 0, since it is caught incidentally in other fisheries. It would also be a questionable exercise of agency authority to close other fisheries to prevent the incidental mortality of dogfish. NMFS believes that it is a reasonable exercise of its discretion to allow for a 4-million lb (1,814-mt) incidental quota. This will prevent discards of incidentally caught dogfish that would otherwise be landed but for a lower quota, and not allow for directed fishing. The fact that the 4-million lb (1,814-mt) quota will mirror that set by the ASMFC and achieve a consistent management program is important yet ancillary to the establishment of an incidental quota that NMFS believes is reasonable and does not represent a material delay in rebuilding the dogfish fishery. Preempting state law under the Magnuson-Stevens Act is a politically sensitive process involving strongly held states rights. It is not invoked lightly. It has been used only once or twice during the history of the Magnuson-Stevens Act and then only with the cooperation of the affected state. The Magnuson-Stevens Act reserves the use of this provision only for rare occasions where a state has taken any action or omitted to take any action, the results of which will substantially and adversely affect the carrying out of a FMP. The implementation of a dogfish quota higher than the Federal quota by the states does not fall within those narrowly prescribed circumstances that would allow preemption under the Magnuson-Stevens Act. *Comment 4:* Seven individuals argued that the proposed action was not supported by the science, but they did not recommend a specific alternative. *Response:* Although these measures do not reflect the Monitoring Committee's recommendation, they are not without scientific support, as is indicated by the analysis presented in the Council's environmental assessment. Specifically, the measures will continue to preclude a directed fishery and contribute to the rebuilding of the stock. As noted in the response to comment 1, the NEFSC's review of the proposed measure concluded that the higher quota, if reached, would not significantly alter the rebuilding period (no more than 1 or 2 years); and given the restraining influence of the low possession limit, it is unlikely that the higher quota will be attained. In light of this, and comments made in other responses included in this action, these measures are a reasonable exercise of the discretion invested in NMFS by the Magnuson-Stevens Act. *Comment 5:* One organization and five individuals claimed that there were too many dogfish in the ocean, that NMFS has mismanaged the resource and relied on faulty assessment science, and that NMFS should increase the quota and the possession limits. *Response:* NMFS does not question that fishermen frequently encounter dogfish and in large numbers while fishing. However, the best available science indicates that spiny dogfish are overfished and, as such, the Magnuson-Stevens Act requires the development of a management program to rebuild the stock. Given the status of the stock, a directed fishery is not appropriate at this time. Increasing the quota and the possession limits would risk the re-initiation of a directed fishery. *Comment 6:* One individual agreed that there were too many dogfish and urged NMFS to allow a male-only fishery. *Response:* A directed fishery of any type is inappropriate in light of the overfished condition of the spiny dogfish stock. No one has identified a way to successfully direct fishing on males only.Therefore, If a directed fishery for male dogfish developed, it would likely require the discard of female dogfish, and increase the associated discard mortality. That would likely have a negative impact on the rebuilding program, as it could increase the mortality of mature females. *Comment 7:* One individual wanted the dogfish quota set at zero. *Response:* For the reasons cited in response 3, NMFS believes that this is not appropriate. *Comment 8:* One organization urges NMFS to limit the specifications to 1 year until the 2006 stock assessment is completed and analyzed. After that assessment is completed, the commenter argued, multi-year specifications can be set. *Response:* Because the recovery trajectory for spiny dogfish is expected to be rather gradual under the most conservative management regime, NMFS believes that it is appropriate to set the specifications for 3 years. As noted in the response to comment 1, the Council and NMFS will continue to review new information as it is brought forward, and if that information indicates that the specifications need to be modified to ensure continued rebuilding of the stock, the specifications-setting process would be re-initiated to take that information into account. Thus, if the 2006 stock assessment warrants a change in the specifications, in either direction, such a change will be made. Classification Included in this final rule is the FRFA prepared pursuant to 5 U.S.C. 604(a). The FRFA incorporates the discussion that follows, the comments and responses to the proposed rule, and the initial regulatory flexibility analysis

(IRFA)and other analyses completed in support of this action. A copy of the IRFA is available from the Regional Administrator (see ADDRESSES). Final Regulatory Flexibility Analysis Statement of Objective and Need A description of the reasons why this action is being considered, and the objectives of and legal basis for this action, is contained in the preamble to this proposed rule and is not repeated here. Description and Estimate of Number of Small Entities to Which the Rule Will Apply All of the potentially affected businesses are considered small entities under the standards described in NMFS guidelines because they have gross receipts that do not exceed $3.5 million annually. Information from the 2004 fishing year was used to evaluate impacts of this action, as that is the most recent year for which data are complete. According to NMFS permit file data, 2,911 vessels possessed Federal spiny dogfish permits in 2004, while 180 of these vessels contributed to overall landings. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements This action does not contain any new collection-of-information, reporting, recordkeeping, or other compliance requirements. It does not duplicate, overlap, or conflict with any other Federal rules. Minimizing Significant Economic Impacts on Small Entities The FRFA evaluated three alternatives. The action described in this final rule establishes a commercial quota of 4 million lb (1,814 mt), and a possession limit of 600 lb (272 kg), in both quota periods, for a period of 3 years. Alternative 2 is the MAFMC proposal, which establishes a 2-million lb (907-mt) quota with possession limits of 600 lb (272 kg) in both quota periods, for a period of 3 years. Alternative 3 is the NEFMC proposal, which establishes a commercial quota of 4-million lb (1,814 mt), with possession limits of 600 lb (272 kg) in both quota periods, for a period of 1 year. Based on NMFS dealer reports, spiny dogfish landings in fishing year 2004 were roughly 1.5 million lb (680 mt). These landings occurred at a time when the Federal and state management measures for spiny dogfish were identical, with a quota of 4 million lb (1,814 mt), and the possession limits for periods 1 and 2 set at 600 lb (272 kg) and 300 lb (136 kg), respectively. This shows that the U.S. commercial spiny dogfish landings are controlled more by the possession limits than the overall quota, unless the quota is set so low as to be constraining. All three of the alternatives to the no-action alternative considered could lead to a slight increase in revenues to individual fishermen from the sale of dogfish. This is because all three of the alternatives would increase the possession limit in quota period 2 to 600 lb (272 kg). Setting the possession limit at 600 lb (272 kg) throughout the year, as opposed to 600 (272 kg) and 300 lb (136 kg) in periods 1 and 2 respectively, would allow fishermen to land higher amounts of dogfish in the second period as compared to what was landed in fishing year 2004. If the 1,124 fishing trips that landed spiny dogfish in period 2 of FY2004 had all landed 600 lb (272 kg), periodic landings would have increased from 320,000 lb (145 mt) to 560,000 lb (254 mt), for a net increase of 240,000 lb (109 mt), which, at the average price of 0.17 cents per pound of dogfish, equals roughly an addition $41,000 in net revenue. Small Entity Compliance Guide Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996 states that, for each rule, or group of related rules, for which an agency is required to prepare a FRFA, the agency shall publish one or more guides to assist small entities in complying with the rule and shall designate such publications as “small entity compliance guides.” The agency shall explain the actions a small entity is required to take to comply with a rule or group of rules. As part of this rulemaking process, a small entity compliance guide will be sent to all holders of permits issued for the spiny dogfish fishery. In addition, copies of this final rule and guide (i.e., permit holder letter) are available from the Regional Administrator (see ADDRESSES ) and may be found at the following web site: *http://www.nmfs.gov/ro/doc/nero.html* List of Subjects in 50 CFR Part 648 Fisheries, Fishing, Reporting and recordkeeping requirements. Dated: July 11, 2006. Samuel D. Rauch III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service. For the reasons set out above, 50 CFR part 648 is amended as follows: PART 648—FISHERIES OF THE NORTHEASTERN UNITED STATES 1. The authority citation for part 648 continues to read as follows: Authority: 16 U.S.C. 1801 *et seq.* 2. In § 648.235, paragraph (b)(1) is revised as follows: § 648.235 Possession and landing restrictions.

(b)* * *

(1)Possess up to 600 lb (272 kg) of spiny dogfish per trip; and [FR Doc. E6-11134 Filed 7-14-06; 8:45 am] BILLING CODE 3510-22-S 71 136 Monday, July 17, 2006 Proposed Rules FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 328 RIN 3064-AD05 Advertisement of Membership AGENCY: Federal Deposit Insurance Corporation (FDIC). ACTION: Notice of proposed rulemaking. SUMMARY: The FDIC is proposing to revise its regulation governing official FDIC signs and advertising of FDIC membership. The proposed rule would replace the separate signs used by Bank Insurance Fund

(BIF)and Savings Association Insurance Fund

(SAIF)members with a new sign, or insurance logo, to be used by all insured depository institutions. In addition, the proposed rule would extend the advertising requirements to savings associations and consolidate the exceptions to those requirements. The proposed rule also would restructure the text in certain sections in order to make them easier to read. Finally, the current prohibition pertaining to receipt of deposits at the same teller's station or window as noninsured institutions would be placed in its own section. DATES: Written comments must be received by the FDIC on or before September 15, 2006. ADDRESSES: You may submit comments by any of the following methods: • *Agency Web site: http://www.FDIC.gov/regulations/laws/federal/propose.html.* Follow the instructions for submitting comments. • *E-mail: comments@fdic.gov.* • *Mail:* Robert E. Feldman, Executive Secretary, Attention: Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th Street, NW., Washington, DC 20429. • *Hand Delivered/Courier:* The guard station at the rear of the 550 17th Street Building (located on F Street), on business days between 7 a.m. and 5 p.m. • *Public Inspection:* Comments may be inspected and photocopied in the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, Virginia 22226, between 9 a.m. and 5 p.m. on business days. • *Internet Posting:* Comments received will be posted without change to *http://www.FDIC.gov/regulations/laws/federal/propose.html,* including any personal information provided. • *Federal e-Rulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. FOR FURTHER INFORMATION CONTACT: Kara L. Ritchie, Policy Analyst,

(202)898-3716, Division of Supervision and Consumer Protection (DSC); John M. Jackwood, Acting Chief, Compliance Section,

(202)898-3991, DSC; Kathleen G. Nagle, Supervisory Consumer Affairs Specialist,

(202)898-6541, DSC; or Richard B. Foley, Counsel,

(202)898-3784, Legal Division, Federal Deposit Insurance Corporation, Washington, DC 20429. SUPPLEMENTARY INFORMATION: I. The Proposed Rule A. Section 328.0—Scope The scope provision would be revised by the proposed rule to reflect that there would now be one sign used by all insured depository institutions and the advertising requirements in section 328.3 would be extended to savings associations. B. Section 328.1—Official Sign Pursuant to section 18(a) of the Federal Deposit Insurance Act (FDI Act), as amended by section 2(c)(2) of the Federal Deposit Insurance Reform Conforming Amendments Act of 2005, Public Law 109-173, 119 Stat. 3601-19 (FDIRCA Act), the FDIC must promulgate regulations prescribing a sign or signs that each insured depository institution will be required to display at each place of business it maintains. Section 18(a)(1)(B) of the FDI Act, as amended by the FDIRCA Act, specifies that the required sign must include a statement that insured deposits are backed by the full faith and credit of the United States Government. Therefore, this section would be revised to eliminate the separate official bank sign and official savings association sign, and display a black and white version of the new official sign that would be used by all insured depository institutions. The proposed official sign would be 7″ by 3″ in size, with black lettering and gold background. The design is similar in color scheme and layout to the current bank sign but with the following differences: First, the language above “FDIC” states “Each depositor insured to at least $100,000,” instead of “Each depositor insured to $100,000.” The revised language more accurately reflects the new deposit insurance coverage limits in the FDIRCA Act and the Federal Deposit Insurance Reform Act of 2005, Public Law 109-171, title II, subtitle B, 120 Stat. 9-21. Second, the proposed sign includes the FDIC's internet website and leaves out the FDIC seal. Finally, the full faith and credit statement required by the FDIRCA Act is in italics on the left side of the proposed sign and is bordered by a semi-circle of stars, a design that partially reflects the current savings association sign. Section 328.1 also describes the “symbol” of the Corporation that insured depository institutions could use at their option as the official advertising statement. The “symbol” would be that portion of the proposed official sign consisting of “FDIC” and the two lines of smaller type above and below “FDIC.” C. Section 328.2—Display and Procurement of Official Sign Conforming changes have been proposed to this section in order to make it applicable to all insured depository institutions, not just insured banks. The proposed rule also restructures this section to make it easier to read but without making any substantive changes. Part 328 uses the term “automatic service facilities” in some places, and the term “remote service facilities” in other places, although the two terms have the same meaning within that part. The proposed rule uses the term “remote service facility” in each place and defines that term in section 328.2(a)(1)(ii) to include any automated teller machine, cash dispensing machine, point-of-sale terminal, or other remote electronic facility where deposits are received. The current sections 328.2 and 328.4 are virtually identical, except that one applies to insured banks and the other applies to insured savings associations. The key difference between these provisions is that section 328.4 has a paragraph

(e)prohibiting insured savings associations from using the official bank sign. As the new official sign would be applicable to all insured depository institutions, the proposed rule would combine current sections 328.2 and 328.4 into a new section 328.2. As in the current section 328.2, the proposed revision would allow an insured depository institution to vary the size, color, and materials of the official sign at its expense, and to display such altered signs within the institution at locations other than where insured deposits are received. However, the official sign provided by the FDIC would adhere to the specifications of section 328.1, and only the official sign could be displayed where insured deposits are received. The proposed rule refers to the FDIC's Internet Web site, *http://www.fdic.gov,* for information on obtaining the official sign. D. Section 328.3—Official Advertising Statement Requirements

(1)Proposal to Extend Official Advertising Statement Requirement to Savings Associations Section 328.3 requires insured banks to include the official advertising statement in all their advertisements (with certain exceptions). The basic form of the statement is “Member of the Federal Deposit Insurance Corporation,” which may be shortened to “Member FDIC.” There is no equivalent requirement for insured savings associations. The FDIC proposes to revise section 328.3 to provide for consistent treatment of banks and savings associations by requiring all insured depository institutions to include the official advertising statement in their advertisements. The FDIC believes there are compelling reasons to apply the advertising requirements equally to banks and savings associations, particularly now that the BIF and SAIF have been merged into one fund, the Deposit Insurance Fund, and there will be one official sign for both banks and savings associations. Consistent treatment of banks and savings associations on this matter would significantly enhance the public's ability to determine whether an institution's deposits are federally insured or not, and it would eliminate any possibility for public confusion. A consistent and uniform rule applicable to both banks and savings associations would best serve the interests of the public and best protect the Deposit Insurance Fund.

(2)Proposals To Consolidate Exceptions to the Required Use of the Official Advertising Statement There are currently twenty exceptions to the required use of the official advertising statement. The FDIC proposes to simplify the advertising requirements by reducing the number of exceptions to five. The proposed rule does this by limiting the applicability of section 328.3 to advertisements that specifically promote deposit products or generally promote banking services offered by an insured depository institution. The latter would include advertisements that contain an institution's name and a statement about the availability of general banking services. The term *advertisement* is defined as a commercial message, in any medium, that is designed to attract public attention or patronage to a product or business. By limiting the applicability of section 328.3 in this way, most of the current exceptions to the advertising requirements become unnecessary. The exemptions eliminated from the proposed rule are for: statements and reports of condition; bank supplies; listings in directories; and advertisements relating to loan services, safekeeping box services, trust services, real estate services, armored car services, service or analysis charges, securities services, travel department business, and savings bank life insurance.

(3)Other Proposed Revisions The proposed rule also would make certain clarifying, non-substantive, and conforming editorial changes in section 328.3. In addition, three provisions in the current rule have not been included in the proposed rule because they address narrow situations that rarely occur. The first provision, section 328.3(a)(2), allows the Board to grant temporary exemptions from the advertising requirements for good cause. The second provision, section 328.3(a)(3), concerns advertising copy not including the official advertising statement that is on hand on the date the advertising requirements become operative. The third provision, section 328.3(d), addresses how to handle outstanding billboard advertisements that require use of the official advertising statement. E. Section 328.4—Prohibition Against Receiving Deposits at Same Teller's Station or Window as Noninsured Institution Sections 328.2 currently has a provision that prohibits banks from receiving deposits at the same teller's station or window where a noninsured institution receives deposits, except for a remote service facility. Since this provision does not relate directly to the display and procurement of the official sign and is significant enough that it should be set apart in a separate section, the proposed rule would move the provision to section 328.4. II. Effective Date In order to give insured depository institutions a transition period to adjust to the new requirements in the proposed revision of part 328, the final rule would be effective six months after publication in the **Federal Register** . III. Request for Comments The FDIC requests comments on all aspects of the proposed rule and, in particular, the following issues:

(1)Effective Date The final rule would be effective six months after publication in the **Federal Register** . The FDIC solicits comment on whether the proposed effective date would give insured depository institutions sufficient time to adjust to the new requirements in the proposed revision of part 328.

(2)Use of Official Advertising Statement in Advertisements Marketing Non-Deposit Products Many insured depository institutions offer both deposit products and non-deposit products (NDPs). NDPs include both insurance and investment products. Where NDPs are offered, insured depository institutions are required to disclose that they are not federally insured. 1 However, consumers may be confused about Federal deposit insurance coverage when the official advertising statement is used in advertisements that market NDPs. The FDIC therefore solicits comment on whether the final rule should include a provision that would:

(1)Prohibit use of the official advertising statement in advertisements relating solely to NDPs or hybrid products containing NDP and deposit features (e.g., sweep accounts); and

(2)require that the official advertising statement be clearly segregated from information about NDPs in advertisements containing information about both NDPs and insured deposit products. 1 *See* e.g., 12 CFR 343.40 (Consumer Protection in Sales of Insurance rules applicable to FDIC supervised institutions) and the *Interagency Policy Statement on retail Sales of Nondeposit Investment Products,* issued on February 15, 1994. IV. Paperwork Reduction Act The proposed rule does not contain any “collections of information” within the meaning of section 3502(3) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3502(3)). V. Regulatory Flexibility Act Display of the official sign is required by section 18(a) of FDI Act, as amended by section 2(c)(2) of the FDIRCA Act. There would not be any compliance costs with displaying the official sign, because it would be provided by the FDIC free of charge. Insured banks have complied with similar advertising requirements for over seventy years without significant expense. Although savings associations have not been subject to such advertising requirements, many have used the official advertising statement voluntarily. Moreover, mandatory compliance with the advertising requirements by savings association would not entail significant expense. Accordingly, the Board hereby certifies that the proposed rule would not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act (5 U.S.C. 601-612). VI. The Treasury and General Government Appropriations Act, 1999—Assessment of Federal Regulations and Policies on Families The FDIC has determined that the proposed rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, enacted as part of the Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 (Pub. L. 105-277, 112 Stat. 2681). List of Subjects in 12 CFR Part 328 Advertising, Bank deposit insurance, Savings associations, Signs and symbols. For the reasons stated above, the Board of Directors of the Federal Deposit Insurance Corporation hereby proposes to amend part 328 of title 12, chapter III of the Code of Federal Regulations by revising it to read as follows: PART 328—ADVERTISEMENT OF MEMBERSHIP Sec. 328.0 Scope. 328.1 Official sign. 328.2 Display and procurement of official sign. 328.3 Official advertising statement requirements. 328.4 Prohibition against receiving deposits at same teller's station or window as noninsured institution. Authority: 12 U.S.C. 1818(a), 1819 (Tenth), 1828(a). § 328.0 Scope. Part 328 describes the official sign of the FDIC and prescribes its use by insured depository institutions. It also prescribes the official advertising statement insured depository institutions must include in their advertisements. For purposes of part 328, the term “insured depository institution” includes insured branches of a foreign depository institution. Part 328 does not apply to non-insured offices or branches of insured depository institutions located in foreign countries. § 328.1 Official sign.

(a)The official sign referred to in this part shall be 7″ by 3″ in size, with black lettering and gold background, and of the following design: EP17JY06.000

(b)The symbol of the Corporation, as used in this part, shall be that portion of the official sign consisting of “FDIC” and the two lines of smaller type above and below “FDIC.” § 328.2 Display and procurement of official sign.

(a)*Display of official sign.* Each insured depository institution shall continuously display the official sign at each station or window where insured deposits are usually and normally received in the depository institution's principal place of business and in all its branches.

(1)*Other locations—*

(i)*Within the institution.* An insured depository institution may display signs in other locations within the insured depository institution that vary from the official sign in size, colors, or materials.

(ii)*Other facilities.* An insured depository institution may display the official sign on or at Remote Service Facilities. If an insured depository institution displays the official sign at a Remote Service Facility, and if there are any noninsured institutions that share in the Remote Service Facility, any insured depository institution that displays the official sign must clearly show that the sign refers only to a designated insured depository institution(s). As used in this part, the term “Remote Service Facility” includes any automated teller machine, cash dispensing machine, point-of-sale terminal, or other remote electronic facility where deposits are received.

(2)*Newly insured institutions.* A depository institution shall display the official sign no later than its twenty-first day of operation as an insured depository institution, unless the institution promptly requested the official sign from the Corporation, but did not receive it before that date.

(b)*Procuring official sign.* An insured depository institution may procure the official sign from the Corporation for official use at no charge. Information on obtaining the official sign is posted on the FDIC's Internet Web site, *www.fdic.gov* . Alternatively, insured depository institutions may procure from commercial suppliers signs that vary from the official sign in size, colors, or materials. However, only the official sign may be displayed at stations or windows where insured deposits are usually and normally received. Any insured depository institution which has promptly submitted a written request for an official sign to the Corporation shall not be deemed to have violated this section by failing to display the official sign, unless the insured depository institution fails to display the official sign after receipt thereof.

(c)*Required changes in sign.* The Corporation may require any insured depository institution, upon at least thirty

(30)days’ written notice, to change the wording of the official sign in a manner deemed necessary for the protection of depositors or others. § 328.3 Official advertising statement requirements.

(a)*Advertisement defined.* The term *advertisement* , as used in this part, shall mean a commercial message, in any medium, that is designed to attract public attention or patronage to a product or business.

(b)*Official advertising statement.* The official advertising statement shall be in substance as follows: “Member of the Federal Deposit Insurance Corporation.”

(1)*Optional short title and symbol.* The short title “Member of FDIC” or “Member FDIC,” or a reproduction of the “symbol” of the Corporation (as defined in section 328.1 of this part), may be used by insured depository institutions at their option as the official advertising statement.

(2)*Size and print.* The official advertising statement shall be of such size and print to be clearly legible. If the “symbol” of the Corporation is used as the official advertising statement, and the “symbol” must be reduced to such proportions that the two lines of smaller type above and below “FDIC” are indistinct and illegible, those lines of smaller type may be blocked out or dropped.

(c)*Use of official advertising statement in all advertisements.*

(1)*General requirement.* Except as provided in paragraph

(d)of this section, each insured depository institution shall include the official advertising statement, prescribed in paragraph

(b)of this section, in all advertisements that either promote deposit products and services or generally promote banking services offered by the institution.

(2)*Foreign depository institutions.* When a foreign depository institution has both insured and noninsured U.S. branches, the depository institution must also identify which branches are insured and which branches are not insured in all of its advertisements requiring use of the official advertising statement.

(3)*Newly insured institutions.* A depository institution shall include the official advertising statement in its advertisements no later than its twenty-first day of operation as an insured depository institution.

(d)*Types of advertisements which do not require the official advertising statement.* The following types of advertisements do not require use of the official advertising statement:

(1)Signs or plates in the insured depository institution offices or attached to the building or buildings in which such offices are located;

(2)Joint or group advertisements of banking services where the names of insured depository institutions and noninsured institutions are listed and form a part of such advertisements;

(3)Advertisements by radio or television, other than display advertisements, which do not exceed thirty

(30)seconds in time;

(4)Advertisements which are of the type or character that make it impractical to include the official advertising statement, including, but not limited to, promotional items such as calendars, matchbooks, pens, pencils, and key chains; and

(5)Advertisements which contain a statement to the effect that the depository institution is a member of the Federal Deposit Insurance Corporation, or that the depository institution is insured by the Federal Deposit Insurance Corporation, or that its deposits or depositors are insured by the Federal Deposit Insurance Corporation to at least $100,000 for each depositor.

(e)*Official advertising statement in non-English language.* The non-English equivalent of the official advertising statement may be used in any advertisement, provided that the translation has had the prior written approval of the Corporation. § 328.4 Prohibition against receiving deposits at same teller's station or window as noninsured institution.

(a)*Prohibition.* An insured depository institution may not receive deposits at any teller's station or window where any noninsured institution receives deposits or similar liabilities.

(b)*Exception* . This section does not apply to deposits received at a Remote Service Facility. Dated at Washington DC, this 11th day of July, 2006. By order of the Board of Directors. Federal Deposit Insurance Corporation. Robert E. Feldman, Executive Secretary. [FR Doc. 06-6261 Filed 7-14-06; 8:45 am]

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