Rules and Regulations. Final Rule; Order on Rehearing of Order No
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BILLING CODE 4910-13-M DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Parts 2 and 33 [Docket No. RM05-34-002; Order No. 669-B] Transactions Subject to FPA Section 203 Issued July 20, 2006. AGENCY: Federal Energy Regulatory Commission. ACTION: Final Rule; Order on Rehearing of Order No. 669-A. SUMMARY: The Federal Energy Regulatory Commission (Commission) affirms, with certain clarifications, its determinations in Order Nos. 669 and 669-A. Order Nos. 669 and 669-A revised 18 CFR 2.26 and 18 CFR part 33 to implement amended section 203 of the Federal Power Act.
DATES: This order on rehearing will be effective on August 28, 2006. FOR FURTHER INFORMATION CONTACT: Roshini Thayaparan (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-6857. Phillip Nicholson (Technical Information), Office of Energy, Markets, and Reliability—West, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-8240. Andrew P. Mosier, Jr. (Technical Information), Office of Energy, Markets, and Reliability—West, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-6274. Jan Macpherson (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-8921. James Akers (Technical Information), Office of Energy, Markets, and Reliability—West, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-8101. SUPPLEMENTARY INFORMATION: Table of Contents Paragraph No. I. Introduction 2 II. Discussion 10 A. 18 CFR Section 33.1(b)(4)—Definition of “Electric Utility Company” and 18 CFR Section 33.1(c)(1)(i) and (ii)—Blanket Authorizations for Intrastate Commerce and Local Distribution 11 B. 18 CFR Section 33.1(c)(7)—Blanket Authorization for Cash Management Programs 18 C. Section 33.1(c)(2)—Blanket Authorizations for Purchases of Securities 24 D. 18 CFR Section 33.1(c)(8)—Blanket Authorization for a Holding Company Owning Only EWGs, QFs or FUCOs To Acquire Additional EWGs, QFs or FUCOs 30 E. Section 33.2(j)—General Information Requirements Regarding Cross-Subsidization 45 III. Information Collection Statement 52 IV. Document Availability 55 V. Effective Date 58 Before Commissioners: Joseph T. Kelliher, Chairman; Nora Mead Brownell, and Suedeen G. Kelly; Order on Rehearing and Clarification 1. In this order we affirm, with certain clarifications, the determinations made in Order Nos. 669 1 and 669-A. 2 1 *Transactions Subject to FPA Section 203* , Order No. 669, 71 FR 1348 (January 6, 2006), FERC Stats. & Regs. ¶ 31,200 (2005). On January 10, 2006, the Commission issued an errata notice to Order No. 669 revising parts of the regulatory text to conform to the version of the order that was issued in the **Federal Register** . *Transactions Subject to FPA Section 203* , Docket No. RM05-34-000 (January 10, 2006) (unpublished errata notice). 2 *Transactions Subject to FPA Section 203* , Order No. 669-A, Order on Rehearing, 71 FR 28422 (May 16, 2006), FERC Stats. & Regs. ¶ 31,214 (2006). I. Introduction 2. On August 8, 2005, the Energy Policy Act of 2005 (EPAct 2005) 3 was signed into law. Section 1289 (Merger Review Reform) of Title XII, Subtitle G (Market Transparency, Enforcement, and Consumer Protection), 4 of EPAct 2005 amends section 203 of the Federal Power Act (FPA). 5 3 Energy Policy Act of 2005, Public Law No. 109-58, 119 Stat. 594 (2005). 4 EPAct 2005 at 1281 *et seq.* 5 16 U.S.C. 824b (2000). 3. On October 3, 2005, the Commission issued a notice of proposed rulemaking
(NOPR)requesting comment on its proposal to amend its regulations to implement amended section 203. 6 On December 23, 2005, the Commission issued a final rule (Order No. 669) adopting certain modifications to 18 CFR 2.26 and 18 CFR part 33 to implement amended section 203. 7 Generally, Order No. 669: 6 *Transactions Subject to FPA Section 203* , 70 FR 58636 (October 7, 2005), FERC Stats. & Regs. ¶ 32,589 (2005). 7 A full background to Order Nos. 669 and 669-A is set forth in detail in those orders and will not be repeated in full here.
(1)Established regulations implementing amended section 203;
(2)Granted blanket authorizations, in some instances with conditions, for certain types of transactions, including acquisitions of foreign utilities by holding companies, intra-holding company system financing and cash management arrangements, certain internal corporate reorganizations, and certain acquisitions of securities of transmitting utilities and electric utility companies;
(3)Defined terms, including “electric utility company,” “holding company,” and “non-utility associate company;”
(4)Defined “existing generation facility;”
(5)Adopted rules on the determination of “value” as it applies to various section 203 transactions;
(6)Set forth a section 203 applicant's obligation to demonstrate that a proposed transaction will not result in cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets for the benefit of an associate company; and
(7)Provided for expeditious consideration of completed applications for the approval of transactions that are not contested, do not involve mergers, and are consistent with Commission precedent. 4. In Order No. 669, the Commission also announced that, at a technical conference on the Public Utility Holding Company Act of 2005 (PUHCA 2005), 8 to be held within the next year, 9 we would reevaluate certain issues raised in this proceeding. These issues include whether the blanket authorizations granted in Order No. 669 should be revised, and whether additional protection against cross-subsidization and pledges or encumbrances of utility assets is needed. 10 Order No. 669 became effective on February 8, 2006. 8 EPAct 2005 at 1261 *et seq.* *Repeal of the Public Utility Holding Company Act of 1935 and Enactment of the Public Utility Holding Company Act of 2005* , Order No. 667, 70 FR 75592 (Dec. 20, 2005), FERC Stats. & Regs. ¶ 31,197
(2005)(PUHCA 2005 Final Rule), *order on reh'g* , Order No. 667-A, 71 FR 28446 (May 16, 2006), FERC Stats. & Regs. ¶ 31,213
(2006)(PUHCA 2005 Order on Rehearing), *reh'g pending* . 9 PUHCA 2005 Final Rule at P 17. The Commission stated that we intend to hold a technical conference no later than one year after PUHCA 2005 became effective to evaluate whether additional exemptions, different reporting requirements, or other regulatory actions need to be considered. The PUHCA 2005 Final Rule took effect on February 8, 2006. 10 Order No. 669 at P 4. 5. On April 24, 2006, the Commission issued an order on rehearing (Order No. 669-A), reaffirming in part and granting rehearing in part of Order No. 669. Order No. 669-A addressed certain inconsistencies between Order No. 669 and the PUHCA 2005 Final Rule, expanded the focus on protection of captive customers, revised certain blanket authorizations, and provided new blanket authorizations. Among its holdings, the Commission:
(1)affirmed its determination that persons that own only Exempt Wholesale Generators (EWGs), Qualifying Facilities (QFs), or Foreign Utility Companies (FUCOs) are holding companies subject to section 203(a)(2);
(2)found that while EWGs, QFs and FUCOs are “electric utility companies” for purposes of PUHCA and for purposes of section 203, persons that are holding companies solely by virtue of owning EWGs, QFs or FUCOs should be granted a new blanket authorization to acquire additional EWGs, QFs and FUCOs without Commission pre-approval under section 203(a)(2);
(3)modified the regulatory text to clarify that public utilities have blanket authorization under section 203(a)(1) to acquire securities of other public utilities in the context of intra-system cash management transactions, subject to protections against cross-subsidization and encumbrances of utility assets;
(4)modified the regulatory text to provide, similar to the previously granted blanket authorization under section 203(a)(2) for certain holding company transactions involving internal corporate reorganizations, a blanket authorization under section 203(a)(1) for internal corporate reorganizations within the holding company, as long as the restructuring does not result in the reorganization of a traditional public utility that has captive customers or that owns or provides transmission service over Commission-jurisdictional transmission facilities;
(5)granted additional blanket authorizations to certain holding companies and their subsidiaries regulated by the Bank Holding Company Act of 1956 11 to acquire securities in the normal course of business, as a fiduciary, for derivatives hedging purposes incidental to the business of banking, as collateral for a loan or other limited purposes, but subject to certain restrictions and reporting requirements; and 11 12 U.S.C. 1843 (2000).
(6)established a blanket authorization for certain acquisitions of utility securities for purposes of underwriting and hedging transactions, but subject to conditions and reporting requirements. 6. The Commission on rehearing also added several important customer protection changes, including clarifying that “captive customers” include wholesale and retail electric energy customers served under cost-based regulation with respect to exemptions, and providing that certain blanket authorizations do not apply if a public utility owns or provides transmission service over Commission-jurisdictional transmission facilities. Regarding blanket authorization for holding companies to acquire securities of intrastate-only, local distribution-only and/or retail-only utilities, if there is any public utility within the holding company with captive customers or that owns or provides transmission service over jurisdictional facilities, Order No. 669-A also included a new condition that such company report the acquisition to the Commission, including any state actions or conditions related to the transaction, and provide an explanation of why the transaction does not result in cross-subsidization. 7. With respect to all section 203 transactions that do not receive a blanket authorization, the Commission on rehearing added to the regulatory text a specific requirement that an applicant disclose existing pledges and/or encumbrances of utility assets and provide four specific detailed showings that the proposed transaction will not result in cross-subsidization or pledges or encumbrances of utility assets or, if assurances cannot be provided that cross-subsidization, pledges or encumbrances will not occur, an explanation of how such cross-subsidization, pledge or encumbrance will be consistent with the public interest. 8. The Commission also reiterated that it will hold a technical conference this year to reevaluate numerous issues raised in both this proceeding and the PUHCA 2005 rulemaking proceeding. In Order No. 669-A, the Commission committed to consider additional issues raised in this proceeding, including whether the Commission should codify specific safeguards that must be adopted for money pool transactions, and whether our current merger policy should be revised. 12 12 Order No. 669-A at P 91, 162. 9. Order No. 669-A became effective on June 15, 2006. The aspects of Order No. 669-A for which requests for rehearing and clarification were filed are described in more detail below. 13 13 The entities that filed requests for rehearing and/or clarification are listed in an appendix to this order. II. Discussion 10. The requests for rehearing and/or clarification collectively address five categories of issues discussed in Order No. 669-A. As discussed below, we deny rehearing, and grant in part and deny in part requests for clarification on each of these issues. A. 18 CFR Section 33.1(b)(4)—Definition of “Electric Utility Company” and 18 CFR Section 33.1(c)(1)(i) and (ii)—Blanket Authorizations for Intrastate Commerce and Local Distribution 11. Section 203(a)(2) provides: No holding company in a holding company system that includes a transmitting utility or an electric utility shall purchase, acquire, or take any security with a value in excess of $10,000,000 of, or, by any means whatsoever, directly or indirectly, merge or consolidate with, a transmitting utility, an electric utility company, or a holding company in a holding company system that includes a transmitting utility, or an electric utility company, with a value in excess of $10,000,000 without first having secured an order of the Commission authorizing it to do so. 12. The definition of the term “electric utility company” is important because it affects whether an entity is a holding company subject to section 203(a)(2). In Order Nos. 669 and 669-A, the Commission concluded that the most reasonable interpretation of the term, as used in amended section 203(a)(2), is the definition in PUHCA 2005—“any company that owns or operates facilities used for the generation, transmission, or distribution of electric energy for sale.” 14 The definition thus is broader than the definition of “public utility” under the FPA; it is not limited to entities that engage in wholesale or interstate transactions. 14 EPAct 2005 at 1262(5). 13. However, while Order Nos. 669 and 669-A found that it was not reasonable to interpret section 203(a)(2) as being limited solely to holding company acquisitions and mergers involving utilities making wholesale sales or providing transmission in interstate commerce, the Commission concluded that there would be no benefit from the Commission's case-by-case evaluation of certain transactions under section 203(a)(2). 15 The Commission explained that our core jurisdiction under Part II of the FPA continues to be transmission and sales for resale of electric energy in interstate commerce. Accordingly, we concluded that it is consistent with the public interest to grant blanket authorizations for the following:
(1)Section 203(a)(2) purchases or acquisitions by holding companies of companies that own, operate, or control only facilities used solely for transmission or sales of electric energy in *intrastate* commerce; and
(2)section 203(a)(2) purchases or acquisitions by holding companies of only facilities used solely for local distribution and/or sales at retail regulated by a state commission. 16 15 An acquisition or merger involving “any company that owns or operates facilities used for the generation, transmission, or distribution of electric energy for sale” is not on its face limited to interstate facilities. Order No. 669 at P 55 n.51; Order No. 669-A at P 56 n.56. 16 Order No. 669 at P 56; Order No. 669-A at P 62-63. 14. In Order No. 669-A, the Commission clarified that it was not asserting jurisdiction over intrastate facilities, local distribution facilities, or retail-only companies under the blanket authorizations. Rather, it was asserting jurisdiction over holding company acquisitions of such companies or facilities for the purpose of ensuring that interstate interests are not adversely affected. The Commission also stated that it would eliminate these blanket authorizations if necessary to protect customers. 17 17 Order No. 669-A at P 63. 1. Requests for Rehearing and Clarification 15. NARUC reiterates the arguments raised in its initial comments and request for rehearing of Order No. 669, asserting that Congress did not intend for the term “electric utility company,” as used in PUHCA 2005, to be incorporated into the Commission's regulations implementing FPA section 203. First, NARUC argues that this interpretation violates the fundamental rule of statutory construction, *expressio unius est exlusio alterius* (express mention of one thing implies the exclusion of another). NARUC argues that the absence of an explicit expansion of the Commission's jurisdiction over entities in the PUHCA 2005 definition of “electric utility company” “fatally undermines” the Commission's justification of the result reached on rehearing. 18 Second, NARUC argues that adoption of the term “electric utility company” improperly extends the Commission's authority under amended section 203 to include facilities used for the transmission or sales of electric energy in intrastate commerce, facilities used for local distribution, and facilities used for making retail sales. NARUC states that such facilities fall under the exclusive jurisdiction of state commissions. 19 Moreover, NARUC asserts that, based on the Commission's overreach in jurisdiction over such entities, the Commission erred in granting a blanket authorization for holding company acquisitions of facilities used solely in intrastate commerce or used solely for local distribution and/or sales at retail regulated by a state commission. NARUC argues that the Commission's justifications for these blanket exemptions are valid, but the Commission's stated rationale provides further evidence that the Commission lacks jurisdiction over such entities. 20 18 NARUC Rehearing Request at 4-5. 19 *Id.* at 5-6. 20 *Id.* at 6-7. 2. Commission Determination 16. NARUC's request for rehearing is denied. NARUC's request for rehearing reiterates arguments made in its rehearing request of Order No. 669. The Commission addressed those arguments fully in Order No. 669-A. 21 21 *See* Order No. 669-A at P 41-54. 17. NARUC also argues that the Commission erred in Order No. 669-A in granting blanket authorizations of holding company acquisitions of facilities that NARUC asserts are outside the Commission's statutory authority. NARUC notes that the Commission gave three reasons for granting these blanket authorizations and argues that these reasons actually highlight why the Commission does not have jurisdiction over these matters. As the basis for this error, NARUC repeats the same argument made on rehearing of Order No. 669. The Commission responded fully to that argument as well in Order No. 669-A. 22 22 *See id.* P 62-63. B. 18 CFR Section 33.1(c)(7)—Blanket Authorization for Cash Management Programs 18. In Order No. 669, the Commission stated that cash management programs, money pools, and other intra-holding company financing arrangements 23 are a routine and important tool used by many large companies to lower the cost of capital for their regulated subsidiaries and to improve the rate of return the holding company and its subsidiaries can receive on their money. 24 The Commission found that it was consistent with the public interest to grant blanket authorization under section 203(a)(2) for holding companies and their subsidiaries to take part in intra-system cash management programs. 25 23 Order No. 669 at P 142; *see also* Order No. 669-A at P 84 (citing *Regulation of Cash Management Practices* , Order No. 634, 68 FR 40500 (July 8, 2003), FERC Stats. & Regs. ¶ 31,145
(2003)(Cash Management Rule), Order No. 634-A, 68 FR 61993 (October 31, 2003), FERC Stats. & Regs. ¶ 31,152
(2003)(Cash Management Rule II)). 24 Order No. 669 at P 142. 25 *Id* . 19. In Order No. 669-A, the Commission granted clarifications regarding this blanket authorization. The Commission clarified that the blanket authorization granted for money pool transactions is intended to authorize “horizontal” transactions between public utility company subsidiaries as well as “downward” loans from the holding company to its public utility company subsidiaries. However, the blanket authorization does not cover acquisitions of securities issued by entities outside the established intra-system cash management program 26 or money pool. 27 26 18 CFR 33.1(c)(7). 27 Order No. 669-A at P 89. 1. Requests for Rehearing and Clarification 20. In the time between the issuance of Order No. 669 and the issuance of Order No. 669-A, several entities sought explicit Commission approvals for certain of their subsidiary-to-subsidiary transactions, transactions in their money pools and other such cash management programs. EEI notes that, in several of these cases, the Commission granted such approval, subject to limits and reporting requirements imposed under the authorizations previously issued by the Securities and Exchange Commission (SEC). 28 The limits and reporting requirements put in place by the SEC differ from those in Order No. 669-A. EEI seeks clarification that the companies with Intervening Orders do not have to comply with the restrictions of their former SEC financing orders, as of the effective date of Order No. 669-A. 29 28 EEI Rehearing Request at 5-6 (citing *Exelon Corporation* , 114 FERC ¶ 61,116
(2006)( *Exelon* )). EEI identifies only one of the orders in a group that it calls the “Intervening Orders”— *Exelon* . Two similar orders, issued the same day, are *Entergy Services, Inc.* , 114 FERC ¶ 61,120
(2006)( *Entergy* ) and *National Grid plc and National Grid USA* , 114 FERC ¶ 61,115
(2006)( *National Grid* ). The group of three will be referred to as the “Intervening Orders.” 29 EEI Rehearing Request at 4-8. 21. Second, EEI notes that the preamble to Order No. 669-A describes the blanket authorization as covering transactions only within a “money pool,” 30 while the regulatory text uses the broader term, “intra-system cash management program.” 31 EEI argues that the Commission should not distinguish between formal money pools and other, less formal intra-system lending arrangements. It asks the Commission to clarify that subsidiary- to-subsidiary loans are authorized as part of cash management programs even if such loans are not under formal money pool arrangements. 32 30 *Id.* at 6 (citing Order No. 669-A at P 89). 31 *Id.* (citing 18 CFR 33.1(c)(7)). 32 *Id.* at 8-9. 2. Commission Determination 22. We will grant in part EEI's request for clarification on the first issue. To the extent companies with Intervening Orders engage in activities within Order No. 669-A's blanket authorizations, those activities are not subject to the SEC limits and reporting requirements incorporated by the Intervening Orders. However, activities exceeding Order No. 669-A's blanket authorizations remain subject to the SEC limits and reporting requirements incorporated by the Intervening Orders. 33 Activities authorized by the Intervening Orders were conditioned on compliance with the prior SEC limits and reporting requirements. Thus, we will waive those conditions only for activities subsequently authorized generally in Order No. 669-A. Those activities will be subject to the restrictions and requirements of Order No. 669-A, instead of the Intervening Orders. 33 *See Exelon* , 114 FERC ¶ 61,116 at P 9; *Entergy* , 114 FERC ¶ 61,120 at P 10; *National Grid* , 114 FERC ¶ 61,115 at P 10. 23. EEI's second request for clarification, regarding whether subsidiary-to-subsidiary loans are authorized as part of cash management programs even if such loans are not under formal money pool arrangements, is granted. Order No. 669-A's preamble inadvertently suggested a narrower authorization than its regulatory text. However, the blanket authorization granted under Order No. 669-A for a public utility subsidiary within a holding company system to acquire the security of another public utility within the system (horizontal transactions) specifically depends on the transaction occurring within the system's cash management program, subject to safeguards to prevent cross-subsidization or pledges or encumbrances of utility assets. 34 Further, we note that the Commission's Cash Management Rule prescribes certain documentation requirements for entities participating in cash management programs. For example, Cash Management Rule II requires that cash management agreements be filed with the Commission on a public basis. 35 Neither rule prohibits participation by a holding company in a cash management program in which the holding company's Commission-regulated public utility subsidiary also participates, nor do they dictate the content of or terms for participating in a cash management program. 36 Both rules, however, were issued under a broad array of statutory authority reaching many Commission-regulated entities, including public utilities under sections 203 and 204 of the FPA, in order to provide greater transparency of cash management activities. 37 With this background, we clarify that the blanket authorization in Order No. 669-A applies to activities that are part of cash management programs, even if they are not part of a formal money pool. Finally, we will reevaluate whether any changes need to be made to our Cash Management Rule in the technical conference to be held later this year. 34 18 CFR 33.1(c)(7). 35 Cash Management Rule II at P 43. 36 Cash Management Rule at P 45; Cash Management Rule II at P 31, 36. 37 Cash Management Rule II at P 19. C. Section 33.1(c)(2)—Blanket Authorizations for Purchases of Securities 24. In Order Nos. 669 and 669-A, the Commission provided a blanket authorization *under section 203(a)(2)* for holding companies to purchase, acquire, or take:
(i)Any non-voting security (that does not convey sufficient veto rights over management actions so as to convey control) in a transmitting utility, an electric utility company, or a holding company in a holding company system that includes a transmitting utility or an electric utility company;
(ii)any voting security in a transmitting utility, an electric utility company, or a holding company in a holding company system that includes a transmitting utility or an electric utility company if, after the acquisition, the holding company will own less than 10 percent of the outstanding voting securities; or
(iii)any security of a subsidiary company within the holding company system. 38 38 18 CFR 33.1(c)(2). *See also* Order No. 669 at P 144-45; Order No. 669-A at P 97, 101-03. 25. On rehearing, the Commission declined to extend to public utilities under section 203(a)(1) the blanket authorizations for dispositions of utility securities of less than 10 percent that we granted to public utility holding companies under section 203(a)(2). The Commission decided that it would continue to review dispositions of jurisdictional facilities by public utilities under FPA section 203(a)(1) on a case-by-case basis, finding that “[c]oncerns with control, markets and protection of captive customers or customers receiving transmission service over jurisdictional transmission facilities are closely linked with assets directly controlled by the public utilities.” 39 39 Order No. 669-A at P 103. 1. Requests for Rehearing and Clarification 26. EEI reiterates arguments, previously denied on rehearing, that the Commission should grant a blanket authorization under section 203(a)(1) for a public utility to dispose of up to 9.99 percent of its voting securities. Such authority, it argues, would parallel the blanket authorization granted in Order No. 669-A for holding companies to acquire up to 9.99 percent of voting securities of a transmitting utility or electric utility company and therefore, would be appropriate. EEI does not formally seek rehearing on this issue and, indeed, a second rehearing on the issue does *not* lie. However, in light of EEI's concerns that lack of a section 203(a)(1) parallel blanket authorization could thwart investment, we will include this issue in the technical conference to be held within one year of the effective date of amended section 203 and PUHCA 2005. EEI also seeks clarification on transactions that involve securities with a value below $10 million. EEI does not believe such transactions require authorization under section 203(a)(1) even if 10 percent or more voting securities are involved. It asks the Commission to confirm that the $10 million threshold is a minimum jurisdictional amount, regardless of the percentage of voting stocks involved. 27. EEI also asks that the Commission clarify that dispositions of less than 10 percent or more of voting securities, and of any amount of non-voting securities, do not require section 203(a)(1) review. 40 40 40 EEI Rehearing Request at 10-12. 2. Commission Determination 28. The Commission clarifies that, if a section 203(a)(1)(C) transaction involves securities with a value below $10 million, the transaction does not require authorization under section 203(a)(1)(C) even if 10 percent or more of voting securities are involved. Section 203(a)(1) addresses four types of transactions in separate parts. Under parts (A),
(C)and (D), a value in excess of $10 million is indeed the threshold below which section 203(a)(1) does not apply, unless a public utility is disposing of the whole of its facilities under section 203(a)(1)(A). 41 41 Section 203(a)(1)(A) provides that no public utility shall, without having secured an order authorizing it to do so: “sell, lease, or otherwise dispose of the whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of a value in excess of $10,000,000.” Because of the placement of the comma in this sentence, we do not interpret the $10,000,000 threshold as applying to dispositions of the whole of a utility's jurisdictional facilities. 29. On the question of the 10 percent limitation, EEI relies on *Goldman Sachs* 42 as support for its suggestion that the Commission adopt a jurisdictional threshold of 10 percent of voting securities before a public utility must seek authorization for transactions under section 203(a)(1). As noted, rehearing was already denied on this issue. EEI asks for blanket authorization under section 203(a)(1) for public utilities to engage in transactions involving non-voting securities in any amount. EEI cites to paragraph 15 of *Goldman Sachs* , but that paragraph does not support EEI's contention. The Commission provided there an example of how a group of non-utility companies under common control might each purchase just under 10 percent of a public utility, but stop at that point in order to avoid becoming holding companies under section 1262(8) of EPAct 2005 and, therefore, potentially subject to section 203(a)(2). The Commission explained that authorization for such transactions may nevertheless require approval under other provisions of section 203, and specifically mentioned sections 203(a)(1)(A) and (B). This was not a suggestion that acquisitions of voting securities in an amount less than 10 percent or that acquisitions of non-voting securities in any amount cannot trigger the requirement for prior authorization by the Commission. Accordingly, EEI's request for clarification on this issue is denied. 42 EEI Rehearing Request at 10 (citing *The Goldman Sachs Group, Inc.* , 114 FERC ¶ 61,118, at P 15 ( *Goldman Sachs* ), *order on reh'g* , 115 FERC ¶ 61,303 (2006)). D. 18 CFR Section 33.1(c)(8)—Blanket Authorization for a Holding Company Owning Only EWGs, QFs or FUCOs To Acquire Additional EWGs, QFs or FUCOs 30. In Order No. 669, the Commission rejected requests that we determine that only companies that own traditional utilities, not those that own solely FUCOs, EWGs and/or QFs, are “holding companies” under amended section 203. 43 The Commission noted that “holding company” in PUHCA 2005 means “any company that directly or indirectly owns, controls, or holds, with the power to vote, 10 percent or more of the outstanding voting securities of a public utility company or of a holding company of any public utility company; * * * ” 44 PUHCA 2005 defines “public-utility company” to include an “electric utility company.” 45 43 Order No. 669 at P 70. 44 *Id.* (citing EPAct 2005 at 1262(8)). 45 EPAct 2005 at 1262(14). 31. The Commission found that while Congress expressly excluded from the definition of holding company certain banks and other institutions, it did not similarly exclude from the definition of holding company entities that only own QFs, EWGs or FUCOs. Rather, section 1266(a) of PUHCA 2005 specifically directs the Commission to exempt QF/EWG/FUCO holding companies from the federal access to books and records provision; thus, the very language of the provision recognizes that such entities are holding companies. It directs the Commission to issue a final rule to exempt “any person that is a holding company, solely with respect to one or more [QFs, EWGs, or FUCOs].” Therefore, consistent with the concurrent determination in the PUHCA 2005 rehearing order, the Commission concluded that companies that acquire 10 percent or more of an EWG, FUCO or QF are holding companies as that term is used in PUHCA 2005 as well as FPA section 203(a)(2). 46 46 Order No. 669-A at P 49-51. 32. However, to ensure that investment in the electric industry is not hampered and that encouragement of QFs is not undermined, the Commission granted a blanket authorization under FPA section 203(a)(2) for holding companies that own or control *only* EWGs, QFs or FUCOs to acquire the securities of additional EWGs, FUCOs or QFs. 47 47 *Id.* at P 52; 18 CFR 33.1(c)(8). 1. Requests for Rehearing and Clarification 33. TAPSG states that the Commission erred in creating a new blanket authorization under section 203(a)(2) for holding companies that own or control only EWGs, QFs, or FUCOs to acquire the securities of additional EWGs, QFs, or FUCOs. 48 TAPSG asserts that the blanket authorization overlooks Congressional concern about the competitive effects of transfers of generation facilities and creates confusion that would discourage, rather than encourage, new investment. It contends that a holding company's acquisition of additional EWGs and QFs in the same geographic market could raise competitive concerns, particularly if the holding company owns other EWGs or QFs in the same geographic market that is a load pocket. TAPSG also argues that the confusion created by the blanket authorization under section 203(a)(2), in conjunction with section 203(a)(1) review of certain EWG and QF transactions, will create uncertainty that could chill, rather than encourage investment. TAPSG further argues that, if the Commission does not rescind the blanket authorization in 18 CFR section 33.1(c)(8), it should clarify which transactions remain subject to section 203(a)(1) review. 48 TAPSG Rehearing Request at 2-5. 34. In this regard, TAPSG and APPA/NRECA ask the Commission to affirm the conclusion in Order No. 669 that a holding company's acquisition of securities of an EWG that is a public utility, by which the holding company acquires control of the EWG, is a disposition of jurisdictional assets by the EWG and requires a filing with Commission under FPA section 203(a)(1) by the EWG. 49 APPA/NRECA argue that this clarification is important because a single holding company could gain market power by acquiring a number of EWGs in a relevant geographic market. 49 *Id.* at 5-6 (citing Order No. 669 at P 60 n.55); APPA/NRECA Rehearing Request at 9-12 (same). 35. TAPSG and APPA/NRECA request clarification that the blanket authorization does not override the Commission's conclusion regarding the scope of section 203(a)(1)(D), concerning the acquisition of an existing generation facility with a value of $10 million that is used for interstate wholesale sales and over which the Commission has jurisdiction, and that if a public utility acquires an existing generation facility used for Commission-jurisdictional sales, whether a QF or any other type of generation facility, the transaction is subject to section 203 review. TAPSG argues that the plain language of section 203(a)(1)(D) requires the review of acquisitions of generators, such as EWGs. 50 50 TAPSG Rehearing Request at 6-7 (citing Order No. 669 at P 87); APPA/NRECA Rehearing Request at 11-12. 36. Moreover, TAPSG requests that the Commission clarify that a transaction will trigger section 203(a)(1)(D) review when a holding company that controls an EWG that is a public utility acquires another EWG or QF. They maintain that this is required by *Enova Corporation and Pacific Enterprises* ( *Enova* ). 51 In addition, TAPSG argues that under *Enova* , section 203(a)(1)(D) review is required:
(1)For the acquisition of another EWG or QF where the holding company itself is not a public utility but owns or controls a public utility (such as an EWG), and
(2)for the acquisition by a holding company that is not a public utility of a holding company that is not itself a public utility but that owns a public utility. 52 51 TAPSG Rehearing Request at 7-8 (citing *Enova* , 79 FERC ¶ 61,107, at 61,494 (1997)); APPA/NRECA Rehearing Request at 11 (citing *Enova* , 79 FERC ¶ 61,107 at 61,491-94 and *Central Vermont Public Service Corporation* , 39 FERC ¶ 61,295, at 61,960 (1987)). 52 TAPSG Rehearing Request at 8. 37. In summary, TAPSG asks the Commission to clarify that the section 203(a)(2) blanket authorization applies only to:
(1)“a holding company owning/controlling only EWGs, QFs, or FUCOs that
(a)is not a public utility,
(b)does not yet own or control a public utility (such as an EWG), and
(c)is acquiring its first EWG or QF”; or
(2)“a holding company owning/controlling only EWGs, QFs, or FUCOs that acquires a FUCO.” 53 53 *Id.* 38. In comparison, Occidental requests that the Commission clarify (or, in the alternative, grant rehearing) that the section 203(a)(2) blanket authorization in section 33.1(c)(8) applies to an acquisition of securities of holding companies that are holding companies solely with respect to holding EWGs, QFs, or FUCOs. 54 Occidental argues that it would be inconsistent with the intent of Order No. 669-A for the acquisition of securities of such holding companies not to also be covered by this blanket authorization. 55 In addition, Occidental argues that it would be arbitrary and capricious to provide blanket authorization for holding companies that own or control only EWGs, QFs, or FUCOs only when they acquire directly the securities of additional EWGs, QFs or FUCOs and not where the acquisition is structured as acquisition of securities of a holding company that holds only EWGs, QFs, or FUCOs. Occidental argues that what it requests would not undermine any Commission policy or efforts to prevent cross-subsidization. Occidental argues that not granting blanket authority for the acquisition of securities of such holding companies will create unnecessary burdens on transactions and discourage investment in the electric industry. 54 Occidental Rehearing Request at 3-5. 55 *Id.* (citing Order No. 669-A at P 52). 2. Commission Determination 39. We reject TAPSG's request to rescind the blanket authorization in section 33.1(c)(8), granted under section 203(a)(2) for holding companies that own or control *only* EWGs, QFs, or FUCOs to acquire the securities of additional EWGs, FUCOs, or QFs. The concerns raised in TAPSG's rehearing petition are focused on the competitive effects of generation transfers involving EWGs and QFs if this section 203(a)(2) blanket authorization is retained. As an initial matter (and as discussed further below), we note that this blanket authorization in no way affects any section 203(a)(1) authorizations required by EWGs themselves. The vast majority of EWGs located in the United States are public utilities and, to the extent such EWGs seek to sell or transfer control of their jurisdictional facilities to a holding company, such EWGs will be subject to a competitive review of the transaction under section 203(a)(1)(A), irrespective of the holding company's blanket exemption. 56 Thus, TAPSG's concerns that EWG acquisitions will escape competitive review are misplaced. 56 Further, although most holding companies are not public utilities, to the extent a holding company is also a public utility, a transaction in which it acquired an EWG's or QF's generation facilities (if such facilities are used for jurisdictional wholesale sales) may trigger the requirements of section 203(a)(1)(D). 40. With respect to QFs, many QFs (cogeneration QFs, non-geothermal small power production QFs with capacity of 30 MWs or less, and geothermal small power production) are exempt from section 203 of the FPA and thus are not treated as public utilities subject to section 203(a)(1)(A); thus, unlike the situation with EWGs, if such QFs were to sell or transfer control of their jurisdictional facilities to a holding company, there would be no competitive review by the Commission under section 203(a)(1). 57 However, what TAPSG ignores is that there was no Federal review of such transactions by this Commission or by the SEC prior to EPAct 2005. QFs were largely exempted from PUHCA 1935 regulation by virtue of the Commission's exemption authority under the Public Utility Regulatory Policies Act of 1978 (PURPA), and companies that owned QFs (or EWGs, for that matter) were not considered holding companies by virtue of owning an EWG or QF under PUHCA 1935. Accordingly, our blanket exemption here does nothing more than maintain the status quo with respect to any regulatory review required of holding company acquisitions of QF facilities. 58 While we recognize the possibility that market power issues associated with QF ownership could become a concern in the future, even where the ownership is by a holding company that owns only QFs, EWG and FUCOs and there are no captive customers in the entire holding company system, TAPSG has not convinced us that there is a problem to remedy at this time or that our decision in any way undermines Congressional intent. Further, if in the future problems become apparent with respect to holding company acquisitions of QFs, the Commission may revisit the exemption from section 203 provided to QFs under PURPA and/or revisit the section 203(a)(2) blanket authorization at issue here. 59 We also disagree with TAPSG that the blanket authority creates any confusion that would discourage investment, and no other commenter argues that this is the case. At this time, we see no added benefit from the Commission's case-by-case evaluation of these transactions under section 203(a)(2). 60 57 However, if a transaction involved a public utility and a QF, section 203 review, including a competitive review, may be required. If a public utility acquires all or part of a QF's jurisdictional facilities, the transaction may be subject to FPA section 203(a)(1)(A). Similarly, if a public utility proposes to merge or consolidate its facilities with those of a QF, the transaction would be subject to section 203(a)(1)(B), which applies when a public utility merges or consolidates its facilities with those of “any other person.” “Person” would include a QF. Further, a transaction in which a public utility seeks to acquire a QF's existing generation facility (if the QF facility is used for jurisdictional wholesale sales) may trigger section 203(a)(1)(D). 58 We also have weighed the fact that to require new case-by-case review of holding company acquisitions of QFs could impose a substantial burden on QFs. 59 We note that in the Commission's recent rulemaking implementing revised section 210(n) of PURPA, the Commission proposed to eliminate certain QF exemptions from FPA sections 205 and 206 and sought comment on whether it should eliminate other exemptions. In the final rule, however, the Commission retained the FPA section 203 exemption. *Revised Regulations Governing Small Power Production and Cogeneration Facilities* , Order No. 671, 71 FR 7,852 at P 102 (February 15, 2006), FERC Stats. & Regs. P 31,203 (2006), *order on reh'g* , Order No. 671-A, 71 FR 30,585 (May 30, 2006), FERC Stats. & Regs. P 31,219 (2006). 60 *See* Order No. 669 at P 55; Order No. 669-A at P 56, 62. 41. Moreover, TAPSG does not explain why we should limit the applicability of the blanket authority in 18 CFR 33.1(c)(8) to situations where:
(1)The holding company is not and does not own a public utility, and is acquiring its first EWG or QF; or
(2)the holding company is acquiring a FUCO. As noted, it is likely that section 203(a)(1) would be triggered in any event for EWGs and, in many instances, QFs. Therefore, TAPSG's request that this restriction be placed on the applicability of the blanket authority is denied. 42. We grant APPA/NRECA's request to clarify that a holding company's acquisition of the securities of an EWG public utility, by which the holding company acquires control of the public utility EWG, may be a jurisdictional disposition of assets by the EWG, which requires approval under section 203(a)(1) even if the holding company has blanket authority under section 203(a)(2). The blanket authority under section 203(a)(2) in no way affects whether separate authorization for a particular transaction is required under section 203(a)(1). We reaffirm the statements made in Order No. 669 regarding section 203(a)(1) review regarding EWGs 61 and QFs. 62 Granting blanket authority in section 33.1(c)(8) under section 203(a)(2) does not affect authorizations required under section 203(a)(1). Thus, TAPSG and APPA/NRECA's requests for clarification to this effect are granted. 61 Order No. 669 at P 60 n.55 stating: [A] holding company acquisition of securities of an EWG would in some circumstances trigger section 203 review in any event by virtue of section 203(a)(1). This is because the EWG could well be a public utility and, to the extent the holding company acquired “control” of the EWG, we would construe the EWG to be “disposing” of its jurisdictional facilities and thus required to file for approval under section 203(a). A similar situation involving acquisition of securities of a QF would not trigger section 203 review, since QFs currently are exempted from FPA section 203 filing requirements by the Commission's PURPA regulations. 62 *Id.* P 87 stating: [I]f a public utility acquires an existing generation facility used for Commission-jurisdictional sales, whether a QF or any other type of generation facility, the transaction is subject to section 203. Although certain QFs themselves are exempted from any filing requirements under section 203 by virtue of our PURPA regulations, this does not mean that public utilities that acquire QFs are exempt. Additionally, there is no limitation in amended section 203(a)(1)(D) on the type of generation facilities that trigger section 203 review, if they are used for interstate wholesale sales and the Commission has jurisdiction over them for ratemaking purposes. Further, even if the Commission had the discretion to exempt QF acquisitions from section 203 review, we do not think it would be necessarily consistent with the public interest to do so in light of EPAct 2005's elimination of QF ownership restrictions. 43. We will continue to review dispositions of jurisdictional facilities by public utilities under section 203(a)(1) on a case-by-case basis and we will also review public utility acquisitions of generating facilities under the new section 203(a)(1)(D) on a case-by-case basis. 63 TAPSG requests other clarifications interpreting section 203(a)(1) in light of the blanket authority granted in section 33.1(c)(8). In effect, it asks us to modify the section 203(a)(2) blanket authority and we decline to do so. TAPSG's requests for clarification to this effect are denied. 63 Order No. 669-A at P 103. 44. Finally, we agree with Occidental that Order No. 669-A should be interpreted to provide blanket authorization for holding companies that own or control only EWGs, QFs, or FUCOs to acquire securities of a holding company that holds only EWGs, QFs, or FUCOs. We do so, however, consistent with our prior holding in Order No. 669 that such acquisitions will trigger review under section 203(a)(1) if the transaction results in a change of control of an EWG that is a public utility owned by the holding company whose securities are being acquired. E. Section 33.2(j)—General Information Requirements Regarding Cross-Subsidization 45. As modified by Order No. 669-A, section 33.2(j)(1) requires that a section 203 applicant must explain, with appropriate evidentiary support (Exhibit M to the application), how it is assuring that the proposed transaction will not result in cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets for the benefit of an associate company. This explanation must disclose all existing pledges or encumbrances of utility assets and include a detailed showing that the transaction will not result in:
(A)Transfers of facilities between a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, and an associate company;
(B)new issuances of securities by traditional public utility associate companies that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, for the benefit of an associate company;
(C)new pledges or encumbrances of assets of a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, for the benefit of an associate company; or
(D)new affiliate contracts between non-utility associate companies and traditional public utility associate companies that have captive customers or that own or provide transmission service over jurisdictional transmission facilities, other than non-power goods and services agreements subject to review under sections 205 and 206 of the FPA. 64 Section 33.2(j)(2) states that if no such assurance can be provided, the applicant must explain how such cross-subsidization, pledge, or encumbrance will be consistent with the public interest. 65 64 18 CFR 33.2(j)(1)(i) and (ii). 65 *Id.* at 33.2(j)(2). 1. Requests for Rehearing and Clarification 46. APPA/NRECA argue that the Commission should amend 18 CFR 33.2(j)(1) to require that the explanation in Exhibit M address “how applicants are providing assurance *that it is not reasonably foreseeable* that the proposed transaction will result in, *at the time of the transaction or in the future,* cross-subsidization of a non-utility associate company or pledge or encumbrance of utility assets for the benefit of an associate company.” 66 APPA/NRECA argue that the omission of the phrase “at the time of the transaction or in the future” from section 33.2(j)(1), a phrase found in the parallel regulation at section 33.1(c)(5) (the blanket authorization for holding companies that include a transmitting utility or an electric utility to acquire a FUCO), creates conflicting requirements and will “create confusion and invite abuse.” 67 APPA/NRECA assert that section 33.2(j)(1) is inconsistent with Congressional intent that the Commission have broad authority to ensure that section 203 transactions do not result in cross-subsidization or asset pledges or encumbrances, even after the transaction is consummated, unless the Commission has found that they are consistent with the public interest. 66 APPA/NRECA Rehearing Request at 2 (emphasis in the original). 67 *Id.* at 4. 47. APPA/NRECA also ask that the Commission clarify or amend section 33.2(j) to state that Exhibit M must be verified by a duly authorized corporate official of the holding company under 18 CFR 385.2005 (Subscription and verification). APPA/NRECA argue this requirement is consistent with section 33.1(c)(5) and the Commission's existing regulations for section 203 applications. 68 68 *Id.* at 6-7. 48. Moreover, APPA/NRECA request the Commission clarify that if the Commission later finds that an approved transaction has resulted in, at the time of the transaction or in the future, cross-subsidization of a non-utility associate company or pledge or encumbrance of utility assets for the benefit of an associate company, the Commission may find that such cross-subsidization, pledge, or encumbrance violates the Commission order and the relevant entities can be penalized. APPA/NRECA maintain that this will help to ensure that the holding company and its senior corporate officials are held responsible for the statements made in a section 203 application and to provide them notice of the consequences of a violation. 69 69 *Id.* at 7-8. 2. Commission Determination 49. We will grant APPA/NRECA's request in part. The Commission does not accept APPA/NRECA's assertion that section 33.2(j)(1), as revised in Order No. 669-A, creates confusion and invites abuse simply because it contains different requirements than the regulation against which APPA/NRECA chose to compare it or that it is inconsistent with Congressional intent. We agree, however, that adding to the regulations a verification requirement regarding the contents of the application and a requirement for the exercise of reasonable foresight in providing the explanation required under Exhibit M will help make the regulation more effective. With respect to reasonable foresight, we will modify the regulatory text of 18 CFR 33.2(j)(1) as follows: Of how applicants are providing assurance *, based on facts and circumstances known to them or that are reasonably foreseeable,* that the proposed transaction will not result in *, at the time of the transaction or in the future,* cross-subsidization of a non-utility associate company or pledge or encumbrance of utility assets for the benefit of an associate company.* * * 50. These changes will not create an undue burden on the applicants. Our rules already require that the information in the application be verified by one having knowledge of the matters contained in the application and exhibits. 70 70 A specific verification requirement applicable to Exhibit M, as requested by APPA/NRECA, is unnecessary since, under section 33.7, the original application, of which Exhibit M is a part, must be “signed by a person or persons having authority with respect thereto and having knowledge of the matters therein set forth, and must be verified under oath.” 51. In response to APPA/NRECA's request, the Commission clarifies that, if the Commission later finds that an approved transaction has resulted in cross-subsidization or a pledge or encumbrance, the Commission may find that it constitutes a violation of a Commission order and is subject to consequent penalties. Whether particular facts violate a Commission order is a matter for determination in an individual proceeding. If a violation is found, the appropriate remedy or penalty is also a matter properly addressed in that proceeding. Accordingly, a blanket statement in the regulations is not necessary. III. Information Collection Statement 52. The regulations of the Office of Management and Budget
(OMB)71 require that OMB approve certain information requirements imposed by an agency. OMB has approved the information requirements contained in Order Nos. 669 and 669-A. Specifically, OMB approved the following information collection and assigned the corresponding OMB control numbers: “Application under Federal Power Act Section 203” (FERC-519) (1902-0082). This order denies rehearing requests and only clarifies the provisions of Order Nos. 669 and 669-A. This order does not make substantive modifications to the Commission's information collection requirements and, accordingly, OMB approval for this order is not necessary. However, the Commission will send a copy of this order to OMB for informational purposes. 71 5 CFR 1320.12 (2005). 53. Interested persons may obtain information on the information requirements by contacting the following: The Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 [Attention: Michael Miller, Office of the Executive Director, ED-34], Phone:
(202)502-8415, Fax:
(202)273-0873, e-mail: *michael.miller@ferc.gov* . 54. To submit comments concerning the collection(s) of information and provide estimates on the associated burden of these requirements, please send your comments to the contact listed above and to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission], Phone:
(202)395-4650. Comments should be e-mailed to *oira_submission@omb.eop.gov* and reference the OMB Control number listed above. IV. Document Availability 55. In addition to publishing the full text of this document in the **Federal Register** , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through Commission's Home Page ( *http://www.ferc.gov* ) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426. 56. From the Commission's Home Page on the Internet, this information is available in the Commission's document management system, eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type “RM05-34” in the docket number field. 57. User assistance is available for eLibrary and the Commission's Web site during normal business hours. For assistance, please contact FERC Online Support at 1-866-208-3676 (toll free) or 202-502-6652 (e-mail at *FERCOnlineSupport@FERC.gov* ), or the Public Reference Room at 202-502-8371, TTY 202-502-8659 (e-mail at *public.referenceroom@ferc.gov* ). V. Effective Date 58. The revisions in this order on rehearing will become effective on August 28, 2006. List of Subjects 18 CFR Part 2 Administrative practice and procedure, Electric power, Natural gas, Pipelines, Reporting and recordkeeping requirements. 18 CFR Part 33 Electric utilities, Reporting and recordkeeping requirements, Securities. The Commission Orders Requests for rehearing are hereby denied and requests for clarification are hereby granted in part and denied in part, as discussed in the body of this order. By the Commission. Magalie R. Salas, Secretary. In consideration of the foregoing, under the authority of EPAct 2005, the Commission is amending part 33 of Chapter I, Title 18, *Code of Federal Regulations,* as set forth: PART 33—APPLICATIONS UNDER FEDERAL POWER ACT SECTION 203 1. Section 33.2 amended by revising (j)(1) introductory text to read as follows: § 33.2 Contents of application—general information requirements.
(j)An explanation, with appropriate evidentiary support for such explanation (to be identified as Exhibit M to this application):
(1)Of how applicants are providing assurance, *based on facts and circumstances known to them or that are reasonably foreseeable* , that the proposed transaction will not result in *, at the time of the transactions or in the future,* cross-subsidization of a non-utility associate company or pledge or encumbrance of utility assets for the benefit of an associate company, including: Appendix A Note: The following Appendix will not be published in the *Code of Federal Regulations* . List of Petitioners Requesting Rehearing and/or Clarification [Petitioner acronyms] Acronym Name APPA/NRECA American Public Power Association and the National Rural Electric Cooperative Association. EEI Edison Electric Institute. NARUC National Association of Regulatory Utility Commissioners. Occidental Occidental Chemical Corporation. TAPSG Transmission Access Policy Study Group. [FR Doc. E6-12047 Filed 7-26-06; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 35 [Docket No. RM02-12-002; Order No. 2006-B] Standardization of Small Generator Interconnection Agreements and Procedures Issued July 20, 2006. AGENCY: Federal Energy Regulatory Commission, DOE. ACTION: Order on clarification. SUMMARY: The Federal Energy Regulatory Commission clarifies one issue regarding Order No. 2006-A. Order Nos. 2006-A and 2006 require all public utilities that own, control, or operate facilities for transmitting electric energy in interstate commerce to file revised open access transmission tariffs containing standard small generator interconnection procedures and a standard small generator interconnection agreement, and to provide interconnection service under them to small generating facilities of no more than 20 megawatts. DATES: *Effective Date:* August 28, 2006. FOR FURTHER INFORMATION CONTACT: Michael G. Henry (Legal Information), Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-8532. Kirk F. Randall, Office of Energy Markets and Reliability, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-8092. SUPPLEMENTARY INFORMATION: Before Commissioners: Joseph T. Kelliher, Chairman; Nora Mead Brownell, and Suedeen G. Kelly; Order on Clarification I. Introduction 1. This order grants a request for clarification of Order No. 2006-A submitted by Southern California Edison (SoCal Edison). 1 Order Nos. 2006 and 2006-A require that all public utilities that own, control, or operate facilities used for transmitting electric energy in interstate commerce 2 have on file with the Commission standard generator interconnection procedures ( *pro forma* SGIP) and a standard small generator interconnection agreement ( *pro forma* SGIA) for interconnecting with the Transmission Provider's Transmission System any Small Generating Facility capable of producing no more than 20 megawatts of power. 3 Order No. 2006 requires that all public utilities subject to it modify their open access transmission tariffs (OATTs) to include the *pro forma* SGIP and *pro forma* SGIA. On November 22, 2005, the Commission issued Order No. 2006-A, which modified portions of Order No. 2006. 4 1 Standardization of Small Generator Interconnection Agreements and Procedures, Order No. 2006, 70 FR 34189 (June 13, 2005), FERC Stats. & Regs. ¶ 31,180
(2005)(Order No. 2006), *order on reh'g* , Order No. 2006A, 70 FR 71760 (November 30, 2005), FERC Stats. & Regs. ¶ 31,196 (2005). 2 A public utility is a utility that owns, controls, or operates facilities used for transmitting electric energy in interstate commerce, as defined in section 201(e) of the Federal Power Act (FPA). 16 U.S.C. 824(e) (2000). A non-public utility that seeks voluntary compliance with the reciprocity condition of an open access transmission tariff may satisfy that condition by adopting these procedures and agreement, or by filing interconnection rules that substantially conform with, or are superior to, the *pro forma* SGIP and *pro forma* SGIA. 3 Capitalized terms used in this order have the meanings specified in the Glossaries of Terms or the text of the *pro forma* SGIP or the *pro forma* SGIA. Small Generating Facility means the device for which the Interconnection Customer (the owner or operator of the Small Generating Facility) has requested interconnection. The utility with which the Small Generating Facility is interconnecting is the Transmission Provider. A Small Generating Facility is a device used for the production of electricity having a capacity of no more than 20 megawatts. The interconnection process begins when the Interconnection Customer submits an application for interconnection (Interconnection Request) to the Transmission Provider. 4 Comparable documents for generators larger than 20 megawatts in size are set forth in Order No. 2003 and are referred to as the LGIP and LGIA. *See* Standardization of Generator Interconnection Agreements and Procedures, Order No. 2003, 68 FR 49845 (August 19, 2003), FERC Stats. & Regs. ¶ 31,146
(2003)(Order No. 2003), *order on reh'g* , Order No. 2003-A, 69 FR 15932 (March 26, 2004), FERC Stats. & Regs. ¶ 31,160
(2004)(Order No. 2003-A), *order on reh'g* , Order No. 2003-B, 70 FR 265 (January 4, 2005), FERC Stats. & Regs. ¶ 31,171
(2005)(Order No. 2003-B), *order on reh'g* , Order No. 2003-C, 70 FR 37661 (June 30, 2005), FERC Stats. & Regs. ¶ 31,190
(2005)(Order No. 2003-C); *see also* Notice Clarifying Compliance Procedures, 106 FERC ¶ 61,009 (2004). II. Background 2. Under Order No. 2006, if the proposed interconnection of the Interconnection Customer's Small Generating Facility with the Transmission Provider's Transmission System does not qualify for review under the accelerated Fast Track Process or the 10 kW Inverter Process, it is evaluated using industry-standard interconnection studies. These studies—the Feasibility Study, the System Impact Study, and the Facilities Study—are performed by the Transmission Provider under the *pro forma* study agreements in the *pro forma* SGIP. These study agreements, to be signed by the Transmission Provider and Interconnection Customer, are similar to, but less complex than, similar agreements for Large Generators contained in Order No. 2003. The Commission developed the *pro forma* SGIP and SGIA to offer a simple process for interconnecting Small Generating Facilities with the nation's electric grid. 5 To this end, the three *pro forma* SGIP study agreements did not include boilerplate contract provisions addressing issues such as waiver, amendment, and governing law. 5 *See* Order No. 2006 at P 1, 509. III. Request for Clarification 3. Previously, in its request for rehearing of Order No. 2006, SoCal Edison urged the Commission to adopt miscellaneous boilerplate contract provisions in the *pro forma* study agreements. It proposed that the Commission include in the *pro forma* study agreements the miscellaneous provisions contained in article 12 of the *pro forma* SGIA. The Commission did not address this issue in Order No. 2006-A, and on rehearing of that order, SoCal Edison repeats its request. Commission Conclusion 4. We agree with SoCal Edison that the *pro forma* SGIP study agreements should contain standard legal terms and conditions. Although these added provisions will lengthen the study agreements, we conclude that their inclusion will benefit both generators and Transmission Providers. Since the period of time between when the study agreements are signed and when the studies are complete is short, we expect that including standard legal protections will clarify each party's legal rights under the study agreements and minimize disputes. 5. We agree with SoCal Edison that certain of the provisions in article 12 of the SGIA provide the necessary clarity and legal protections to the parties, and will therefore adopt several of those provisions, with some minor editorial revisions, into each study agreement. Specifically, we will add to each study agreement articles 12.1 through 12.4 and 12.6 through 12.8 (including provisions on governing law, amendment, third-party beneficiaries, waiver, multiple counterparts, partnership, and severability); as well as articles 12.11 and 12.12 (subcontractors and reservation of rights). 6 We will not include article 12.9 (security arrangements) or article 12.10 (environmental releases) since neither of these provisions is relevant during the study phase of an interconnection project. Nor do we include article 12.5 (entirety of agreement), since it suggests that the SGIP may not be used to interpret the parties' obligations under the study agreements. The new provisions will become articles 13 through 21 of the Feasibility Study Agreement and the System Impact Study Agreement; and articles 11 through 19 of the Facilities Study Agreement. While this will increase the length of each study agreement, the increase in certainty justifies the inclusion of additional legal boilerplate. 6 The revised study agreements (not including unchanged attachments) are included as Appendices 1-3 to this order. 6. We also clarify that section 4 of the *pro forma* SGIP (dealing with matters such as dispute resolution, confidentiality, record retention, etc.) also applies to the interconnection study process. These provisions, along with the contractual provisions being added to the study agreements themselves, provide the parties with a way to resolve disputes and the necessary legal protections should a dispute arise. IV. Additional Changes to the SGIA 7. Finally, we note that articles 1.1 through 1.4 of the *pro forma* SGIA are not listed in the *pro forma* SGIA's Table of Contents. We will correct that here. The corrections to article 1 of the Table of Contents are included as Appendix 4 of this order. V. Compliance 8. As in Order No. 2006, the tariffs of non-independent Transmission Providers will be deemed to have been modified to include the revised *pro forma* SGIP study agreements and SGIA on the effective date of this order. The non-independent Transmission Provider is not required to make any additional filing before it is otherwise required to do so by Order No. 2006. 7 If a non-independent Transmission Provider seeks to modify the *pro forma* study agreements it must make an FPA section 205 filing explaining why its changes are “consistent with or superior to” the Commission's *pro forma* study agreements. 8 7 *See* Order No. 2006 at P 544 (stating that a non-independent Transmission Provider wishing to adopt the *pro forma* SGIP and *pro forma* SGIA without modification may wait until it complies with the Commission's Electronic Tariff Filings rulemaking); *see also* Electronic Tariff Filings, Notice of Proposed Rulemaking, 69 FR 43929 (Jul. 23, 2004), FERC Stats. & Regs. ¶ 32,575 (2004). 8 *See* Order No. 2006 at P 546. 9. Independent Transmission Providers will be given an additional 60 days after the effective date of this order to make conforming changes. If the Commission has already acted on the independent Transmission Provider's Order Nos. 2006 and 2006-A compliance filing by the effective date of this order, the independent Transmission Provider must make a new compliance filing to incorporate the new provisions (or request variation). If the Commission has not yet acted on the independent Transmission Provider's Order Nos. 2006 or 2006-A compliance filings, the independent Transmission Provider must submit an amendment to its pending filing. Independent Transmission Providers that have been given an extension of time to make Order Nos. 2006 and 2006-A compliance filings beyond the effective date of this order must include the changes to their study agreements in that filing. 10. Any study agreements signed before the effective date of this order are grandfathered and need not be revised to include the revisions set forth in this order. All study agreements signed on or after the effective date of this order must include the revisions set forth in this order. VI. Information Collection Statement 11. Order Nos. 2006 and 2006-A contain information collection requirements for which the Commission obtained approval from the Office of Management and Budget (OMB). The OMB Control Number for this collection of information is 1902-0203. By clarifying the provisions of Order Nos. 2006 and 2006-A, this order does not make substantive modifications to the Commission's information collection requirements and, accordingly, OMB approval for this order is not necessary. However, the Commission will send a copy of this order to OMB for informational purposes. VII. Document Availability 12. The Commission will publish the full text of this document in the **Federal Register** . Interested persons also may obtain this document from the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern Time) at 888 First Street, NE., Room 2A, Washington, DC. This document is also available electronically from the Commission's eLibrary system ( *http://www.ferc.gov/docs-filing/elibrary.asp* ) in PDF and Microsoft Word format. To access this document in eLibrary, type “RM02-12” in the docket number field and specify a date range that includes this document's issuance date. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Help Line at 202-502-8222 or the Public Reference Room at 202-502-8371 Press 0, TTY 202-502-8659. E-mail the Public Reference Room at *public.referenceroom@ferc.gov.* VIII. Effective Date 13. Changes to Order Nos. 2006 and 2006-A made in this Order on Rehearing will become effective on August 28, 2006. List of Subjects in 18 CFR Part 35 Electric power rates, Electric utilities, Reporting and recordkeeping requirements. By the Commission. Magalie R. Salas, Secretary. Note: The following appendices will not appear in the Code of Federal Regulations. Appendix 1: Revised Feasibility Study Agreement Attachment 6 Feasibility Study Agreement THIS AGREEMENT is made and entered into this ___day of________ 20__ by and between______________ , a _______organized and existing under the laws of the State of__________ , (“Interconnection Customer,”) and______________ , a _______; existing under the laws of the State of__________ , (“Transmission Provider”). Interconnection Customer and Transmission Provider each may be referred to as a “Party,” or collectively as the “Parties.” Recitals WHEREAS, Interconnection Customer is proposing to develop a Small Generating Facility or generating capacity addition to an existing Small Generating Facility consistent with the Interconnection Request completed by Interconnection Customer on __________ ; and WHEREAS, Interconnection Customer desires to interconnect the Small Generating Facility with the Transmission Provider's Transmission System; and WHEREAS, Interconnection Customer has requested the Transmission Provider to perform a feasibility study to assess the feasibility of interconnecting the proposed Small Generating Facility with the Transmission Provider's Transmission System, and of any Affected Systems; NOW, THEREFORE, in consideration of and subject to the mutual covenants contained herein the Parties agreed as follows: 1.0 When used in this Agreement, with initial capitalization, the terms specified shall have the meanings indicated or the meanings specified in the standard Small Generator Interconnection Procedures. 2.0 The Interconnection Customer elects and the Transmission Provider shall cause to be performed an interconnection feasibility study consistent the standard Small Generator Interconnection Procedures in accordance with the Open Access Transmission Tariff. 3.0 The scope of the feasibility study shall be subject to the assumptions set forth in Attachment A to this Agreement. 4.0 The feasibility study shall be based on the technical information provided by the Interconnection Customer in the Interconnection Request, as may be modified as the result of the scoping meeting. The Transmission Provider reserves the right to request additional technical information from the Interconnection Customer as may reasonably become necessary consistent with Good Utility Practice during the course of the feasibility study and as designated in accordance with the standard Small Generator Interconnection Procedures. If the Interconnection Customer modifies its Interconnection Request, the time to complete the feasibility study may be extended by agreement of the Parties. 5.0 In performing the study, the Transmission Provider shall rely, to the extent reasonably practicable, on existing studies of recent vintage. The Interconnection Customer shall not be charged for such existing studies; however, the Interconnection Customer shall be responsible for charges associated with any new study or modifications to existing studies that are reasonably necessary to perform the feasibility study. 6.0 The feasibility study report shall provide the following analyses for the purpose of identifying any potential adverse system impacts that would result from the interconnection of the Small Generating Facility as proposed: 6.1 Initial identification of any circuit breaker short circuit capability limits exceeded as a result of the interconnection; 6.2 Initial identification of any thermal overload or voltage limit violations resulting from the interconnection; 6.3 Initial review of grounding requirements and electric system protection; and 6.4 Description and non-binding estimated cost of facilities required to interconnect the proposed Small Generating Facility and to address the identified short circuit and power flow issues. 7.0 The feasibility study shall model the impact of the Small Generating Facility regardless of purpose in order to avoid the further expense and interruption of operation for reexamination of feasibility and impacts if the Interconnection Customer later changes the purpose for which the Small Generating Facility is being installed. 8.0 The study shall include the feasibility of any interconnection at a proposed project site where there could be multiple potential Points of Interconnection, as requested by the Interconnection Customer and at the Interconnection Customer's cost. 9.0 A deposit of the lesser of 50 percent of good faith estimated feasibility study costs or earnest money of $1,000 may be required from the Interconnection Customer. 10.0 Once the feasibility study is completed, a feasibility study report shall be prepared and transmitted to the Interconnection Customer. Barring unusual circumstances, the feasibility study must be completed and the feasibility study report transmitted within 30 Business Days of the Interconnection Customer's agreement to conduct a feasibility study. 11.0 Any study fees shall be based on the Transmission Provider's actual costs and will be invoiced to the Interconnection Customer after the study is completed and delivered and will include a summary of professional time. 12.0 The Interconnection Customer must pay any study costs that exceed the deposit without interest within 30 calendar days on receipt of the invoice or resolution of any dispute. If the deposit exceeds the invoiced fees, the Transmission Provider shall refund such excess within 30 calendar days of the invoice without interest. 13.0 *Governing Law, Regulatory Authority, and Rules:* The validity, interpretation and enforcement of this Agreement and each of its provisions shall be governed by the laws of the state of __________ (where the Point of Interconnection is located), without regard to its conflicts of law principles. This Agreement is subject to all Applicable Laws and Regulations. Each Party expressly reserves the right to seek changes in, appeal, or otherwise contest any laws, orders, or regulations of a Governmental Authority. 14.0 *Amendment:* The Parties may amend this Agreement by a written instrument duly executed by both Parties. 15.0 *No Third-Party Beneficiaries:* This Agreement is not intended to and does not create rights, remedies, or benefits of any character whatsoever in favor of any persons, corporations, associations, or entities other than the Parties, and the obligations herein assumed are solely for the use and benefit of the Parties, their successors in interest and where permitted, their assigns. 16.0 *Waiver* 16.1 The failure of a Party to this Agreement to insist, on any occasion, upon strict performance of any provision of this Agreement will not be considered a waiver of any obligation, right, or duty of, or imposed upon, such Party. 16.2 Any waiver at any time by either Party of its rights with respect to this Agreement shall not be deemed a continuing waiver or a waiver with respect to any other failure to comply with any other obligation, right, duty of this Agreement. Termination or default of this Agreement for any reason by Interconnection Customer shall not constitute a waiver of the Interconnection Customer's legal rights to obtain an interconnection from the Transmission Provider. Any waiver of this Agreement shall, if requested, be provided in writing. 17.0 *Multiple Counterparts:* This Agreement may be executed in two or more counterparts, each of which is deemed an original but all constitute one and the same instrument. 18.0 *No Partnership:* This Agreement shall not be interpreted or construed to create an association, joint venture, agency relationship, or partnership between the Parties or to impose any partnership obligation or partnership liability upon either Party. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as or be an agent or representative of, or to otherwise bind, the other Party. 19.0 *Severability:* If any provision or portion of this Agreement shall for any reason be held or adjudged to be invalid or illegal or unenforceable by any court of competent jurisdiction or other Governmental Authority,
(1)such portion or provision shall be deemed separate and independent,
(2)the Parties shall negotiate in good faith to restore insofar as practicable the benefits to each Party that were affected by such ruling, and
(3)the remainder of this Agreement shall remain in full force and effect. 20.0 *Subcontractors:* Nothing in this Agreement shall prevent a Party from utilizing the services of any subcontractor as it deems appropriate to perform its obligations under this Agreement; provided, however, that each Party shall require its subcontractors to comply with all applicable terms and conditions of this Agreement in providing such services and each Party shall remain primarily liable to the other Party for the performance of such subcontractor. 20.1 The creation of any subcontract relationship shall not relieve the hiring Party of any of its obligations under this Agreement. The hiring Party shall be fully responsible to the other Party for the acts or omissions of any subcontractor the hiring Party hires as if no subcontract had been made; provided, however, that in no event shall the Transmission Provider be liable for the actions or inactions of the Interconnection Customer or its subcontractors with respect to obligations of the Interconnection Customer under this Agreement. Any applicable obligation imposed by this Agreement upon the hiring Party shall be equally binding upon, and shall be construed as having application to, any subcontractor of such Party. 20.2 The obligations under this article will not be limited in any way by any limitation of subcontractor's insurance. 21.0 *Reservation of Rights:* The Transmission Provider shall have the right to make a unilateral filing with FERC to modify this Agreement with respect to any rates, terms and conditions, charges, classifications of service, rule or regulation under section 205 or any other applicable provision of the Federal Power Act and FERC's rules and regulations thereunder, and the Interconnection Customer shall have the right to make a unilateral filing with FERC to modify this Agreement under any applicable provision of the Federal Power Act and FERC's rules and regulations; provided that each Party shall have the right to protest any such filing by the other Party and to participate fully in any proceeding before FERC in which such modifications may be considered. Nothing in this Agreement shall limit the rights of the Parties or of FERC under sections 205 or 206 of the Federal Power Act and FERC's rules and regulations, except to the extent that the Parties otherwise agree as provided herein. IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their duly authorized officers or agents on the day and year first above written. [Insert name of Transmission Provider] Signed: Name (Printed): Title: [Insert name of Interconnection Customer] Signed: Name (Printed): Title: Appendix 2: Revised System Impact Study Agreement Attachment 7 System Impact Study Agreement THIS AGREEMENT is made and entered into this ___ day of ________ 20__ by and between ______________ , a _______ organized and existing under the laws of the State of __________ , (“Interconnection Customer,”) and ______________ , a _______ existing under the laws of the State of __________ , (”Transmission Provider”). Interconnection Customer and Transmission Provider each may be referred to as a “Party,” or collectively as the “Parties.” Recitals WHEREAS, the Interconnection Customer is proposing to develop a Small Generating Facility or generating capacity addition to an existing Small Generating Facility consistent with the Interconnection Request completed by the Interconnection Customer on __________ ; and WHEREAS, the Interconnection Customer desires to interconnect the Small Generating Facility with the Transmission Provider's Transmission System; WHEREAS, the Transmission Provider has completed a feasibility study and provided the results of said study to the Interconnection Customer (This recital to be omitted if the Parties have agreed to forego the feasibility study.); and WHEREAS, the Interconnection Customer has requested the Transmission Provider to perform a system impact study(s) to assess the impact of interconnecting the Small Generating Facility with the Transmission Provider's Transmission System, and of any Affected Systems; NOW, THEREFORE, in consideration of and subject to the mutual covenants contained herein the Parties agreed as follows: 1.0 When used in this Agreement, with initial capitalization, the terms specified shall have the meanings indicated or the meanings specified in the standard Small Generator Interconnection Procedures. 2.0 The Interconnection Customer elects and the Transmission Provider shall cause to be performed a system impact study(s) consistent with the standard Small Generator Interconnection Procedures in accordance with the Open Access Transmission Tariff. 3.0 The scope of a system impact study shall be subject to the assumptions set forth in Attachment A to this Agreement. 4.0 A system impact study will be based upon the results of the feasibility study and the technical information provided by Interconnection Customer in the Interconnection Request. The Transmission Provider reserves the right to request additional technical information from the Interconnection Customer as may reasonably become necessary consistent with Good Utility Practice during the course of the system impact study. If the Interconnection Customer modifies its designated Point of Interconnection, Interconnection Request, or the technical information provided therein is modified, the time to complete the system impact study may be extended. 5.0 A system impact study shall consist of a short circuit analysis, a stability analysis, a power flow analysis, voltage drop and flicker studies, protection and set point coordination studies, and grounding reviews, as necessary. A system impact study shall state the assumptions upon which it is based, state the results of the analyses, and provide the requirement or potential impediments to providing the requested interconnection service, including a preliminary indication of the cost and length of time that would be necessary to correct any problems identified in those analyses and implement the interconnection. A system impact study shall provide a list of facilities that are required as a result of the Interconnection Request and non-binding good faith estimates of cost responsibility and time to construct. 6.0 A distribution system impact study shall incorporate a distribution load flow study, an analysis of equipment interrupting ratings, protection coordination study, voltage drop and flicker studies, protection and set point coordination studies, grounding reviews, and the impact on electric system operation, as necessary. 7.0 Affected Systems may participate in the preparation of a system impact study, with a division of costs among such entities as they may agree. All Affected Systems shall be afforded an opportunity to review and comment upon a system impact study that covers potential adverse system impacts on their electric systems, and the Transmission Provider has 20 additional Business Days to complete a system impact study requiring review by Affected Systems. 8.0 If the Transmission Provider uses a queuing procedure for sorting or prioritizing projects and their associated cost responsibilities for any required Network Upgrades, the system impact study shall consider all generating facilities (and with respect to paragraph 8.3 below, any identified Upgrades associated with such higher queued interconnection) that, on the date the system impact study is commenced— 8.1 Are directly interconnected with the Transmission Provider's electric system; or 8.2 Are interconnected with Affected Systems and may have an impact on the proposed interconnection; and 8.3 Have a pending higher queued Interconnection Request to interconnect with the Transmission Provider's electric system. 9.0 A distribution system impact study, if required, shall be completed and the results transmitted to the Interconnection Customer within 30 Business Days after this Agreement is signed by the Parties. A transmission system impact study, if required, shall be completed and the results transmitted to the Interconnection Customer within 45 Business Days after this Agreement is signed by the Parties, or in accordance with the Transmission Provider's queuing procedures. 10.0 A deposit of the equivalent of the good faith estimated cost of a distribution system impact study and the one half the good faith estimated cost of a transmission system impact study may be required from the Interconnection Customer. 11.0 Any study fees shall be based on the Transmission Provider's actual costs and will be invoiced to the Interconnection Customer after the study is completed and delivered and will include a summary of professional time. 12.0 The Interconnection Customer must pay any study costs that exceed the deposit without interest within 30 calendar days on receipt of the invoice or resolution of any dispute. If the deposit exceeds the invoiced fees, the Transmission Provider shall refund such excess within 30 calendar days of the invoice without interest. 13.0 *Governing Law, Regulatory Authority, and Rules:* The validity, interpretation and enforcement of this Agreement and each of its provisions shall be governed by the laws of the state of __(where the Point of Interconnection is located), without regard to its conflicts of law principles. This Agreement is subject to all Applicable Laws and Regulations. Each Party expressly reserves the right to seek changes in, appeal, or otherwise contest any laws, orders, or regulations of a Governmental Authority. 14.0 *Amendment:* The Parties may amend this Agreement by a written instrument duly executed by both Parties. 15.0 *No Third-Party Beneficiaries:* This Agreement is not intended to and does not create rights, remedies, or benefits of any character whatsoever in favor of any persons, corporations, associations, or entities other than the Parties, and the obligations herein assumed are solely for the use and benefit of the Parties, their successors in interest and where permitted, their assigns. 16.0 *Waiver* 16.1 The failure of a Party to this Agreement to insist, on any occasion, upon strict performance of any provision of this Agreement will not be considered a waiver of any obligation, right, or duty of, or imposed upon, such Party. 16.2 Any waiver at any time by either Party of its rights with respect to this Agreement shall not be deemed a continuing waiver or a waiver with respect to any other failure to comply with any other obligation, right, duty of this Agreement. Termination or default of this Agreement for any reason by Interconnection Customer shall not constitute a waiver of the Interconnection Customer's legal rights to obtain an interconnection from the Transmission Provider. Any waiver of this Agreement shall, if requested, be provided in writing. 17.0 *Multiple Counterparts:* This Agreement may be executed in two or more counterparts, each of which is deemed an original but all constitute one and the same instrument. 18.0 *No Partnership:* This Agreement shall not be interpreted or construed to create an association, joint venture, agency relationship, or partnership between the Parties or to impose any partnership obligation or partnership liability upon either Party. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as or be an agent or representative of, or to otherwise bind, the other Party. 19.0 *Severability:* If any provision or portion of this Agreement shall for any reason be held or adjudged to be invalid or illegal or unenforceable by any court of competent jurisdiction or other Governmental Authority,
(1)such portion or provision shall be deemed separate and independent,
(2)the Parties shall negotiate in good faith to restore insofar as practicable the benefits to each Party that were affected by such ruling, and
(3)the remainder of this Agreement shall remain in full force and effect. 20.0 *Subcontractors:* Nothing in this Agreement shall prevent a Party from utilizing the services of any subcontractor as it deems appropriate to perform its obligations under this Agreement; provided, however, that each Party shall require its subcontractors to comply with all applicable terms and conditions of this Agreement in providing such services and each Party shall remain primarily liable to the other Party for the performance of such subcontractor. 20.1 The creation of any subcontract relationship shall not relieve the hiring Party of any of its obligations under this Agreement. The hiring Party shall be fully responsible to the other Party for the acts or omissions of any subcontractor the hiring Party hires as if no subcontract had been made; provided, however, that in no event shall the Transmission Provider be liable for the actions or inactions of the Interconnection Customer or its subcontractors with respect to obligations of the Interconnection Customer under this Agreement. Any applicable obligation imposed by this Agreement upon the hiring Party shall be equally binding upon, and shall be construed as having application to, any subcontractor of such Party. 20.2 The obligations under this article will not be limited in any way by any limitation of subcontractor's insurance. 21.0 *Reservation of Rights:* The Transmission Provider shall have the right to make a unilateral filing with FERC to modify this Agreement with respect to any rates, terms and conditions, charges, classifications of service, rule or regulation under section 205 or any other applicable provision of the Federal Power Act and FERC's rules and regulations thereunder, and the Interconnection Customer shall have the right to make a unilateral filing with FERC to modify this Agreement under any applicable provision of the Federal Power Act and FERC's rules and regulations; provided that each Party shall have the right to protest any such filing by the other Party and to participate fully in any proceeding before FERC in which such modifications IN WITNESS THEREOF, the Parties have caused this Agreement to be duly executed by their duly authorized officers or agents on the day and year first above written. [Insert name of Transmission Provider] Signed: Name (Printed): Title: [Insert name of Interconnection Customer] Signed: Name (Printed): Title: Appendix 3: Revised Facilities Study Agreement Attachment 8 Facilities Study Agreement THIS AGREEMENT is made and entered into this ___ day of ________ 20 __ by and between ______________ , a _______ organized and existing under the laws of the State of __________ , (“Interconnection Customer,”) and ______________ , a _______ existing under the laws of the State of __________ , (“Transmission Provider”). Interconnection Customer and Transmission Provider each may be referred to as a “Party,” or collectively as the “Parties.” Recitals WHEREAS, the Interconnection Customer is proposing to develop a Small Generating Facility or generating capacity addition to an existing Small Generating Facility consistent with the Interconnection Request completed by the Interconnection Customer on __________ ; and WHEREAS, the Interconnection Customer desires to interconnect the Small Generating Facility with the Transmission Provider's Transmission System; WHEREAS, the Transmission Provider has completed a system impact study and provided the results of said study to the Interconnection Customer; and WHEREAS, the Interconnection Customer has requested the Transmission Provider to perform a facilities study to specify and estimate the cost of the equipment, engineering, procurement and construction work needed to implement the conclusions of the system impact study in accordance with Good Utility Practice to physically and electrically connect the Small Generating Facility with the Transmission Provider's Transmission System. NOW, THEREFORE, in consideration of and subject to the mutual covenants contained herein the Parties agreed as follows: 1.0 When used in this Agreement, with initial capitalization, the terms specified shall have the meanings indicated or the meanings specified in the standard Small Generator Interconnection Procedures. 2.0 The Interconnection Customer elects and the Transmission Provider shall cause a facilities study consistent with the standard Small Generator Interconnection Procedures to be performed in accordance with the Open Access Transmission Tariff. 3.0 The scope of the facilities study shall be subject to data provided in Attachment A to this Agreement. 4.0 The facilities study shall specify and estimate the cost of the equipment, engineering, procurement and construction work (including overheads) needed to implement the conclusions of the system impact study(s). The facilities study shall also identify
(1)the electrical switching configuration of the equipment, including, without limitation, transformer, switchgear, meters, and other station equipment,
(2)the nature and estimated cost of the Transmission Provider's Interconnection Facilities and Upgrades necessary to accomplish the interconnection, and
(3)an estimate of the time required to complete the construction and installation of such facilities. 5.0 The Transmission Provider may propose to group facilities required for more than one Interconnection Customer in order to minimize facilities costs through economies of scale, but any Interconnection Customer may require the installation of facilities required for its own Small Generating Facility if it is willing to pay the costs of those facilities. 6.0 A deposit of the good faith estimated facilities study costs may be required from the Interconnection Customer. 7.0 In cases where Upgrades are required, the facilities study must be completed within 45 Business Days of the receipt of this Agreement. In cases where no Upgrades are necessary, and the required facilities are limited to Interconnection Facilities, the facilities study must be completed within 30 Business Days. 8.0 Once the facilities study is completed, a facilities study report shall be prepared and transmitted to the Interconnection Customer. Barring unusual circumstances, the facilities study must be completed and the facilities study report transmitted within 30 Business Days of the Interconnection Customer's agreement to conduct a facilities study. 9.0 Any study fees shall be based on the Transmission Provider's actual costs and will be invoiced to the Interconnection Customer after the study is completed and delivered and will include a summary of professional time. 10.0 The Interconnection Customer must pay any study costs that exceed the deposit without interest within 30 calendar days on receipt of the invoice or resolution of any dispute. If the deposit exceeds the invoiced fees, the Transmission Provider shall refund such excess within 30 calendar days of the invoice without interest. 11.0 *Governing Law, Regulatory Authority, and Rules:* The validity, interpretation and enforcement of this Agreement and each of its provisions shall be governed by the laws of the state of __________ (where the Point of Interconnection is located), without regard to its conflicts of law principles. This Agreement is subject to all Applicable Laws and Regulations. Each Party expressly reserves the right to seek changes in, appeal, or otherwise contest any laws, orders, or regulations of a Governmental Authority. 12.0 *Amendment:* The Parties may amend this Agreement by a written instrument duly executed by both Parties. 13.0 *No Third-Party Beneficiaries:* This Agreement is not intended to and does not create rights, remedies, or benefits of any character whatsoever in favor of any persons, corporations, associations, or entities other than the Parties, and the obligations herein assumed are solely for the use and benefit of the Parties, their successors in interest and where permitted, their assigns. 14.0 *Waiver* 14.1 The failure of a Party to this Agreement to insist, on any occasion, upon strict performance of any provision of this Agreement will not be considered a waiver of any obligation, right, or duty of, or imposed upon, such Party. 14.2 Any waiver at any time by either Party of its rights with respect to this Agreement shall not be deemed a continuing waiver or a waiver with respect to any other failure to comply with any other obligation, right, duty of this Agreement. Termination or default of this Agreement for any reason by Interconnection Customer shall not constitute a waiver of the Interconnection Customer's legal rights to obtain an interconnection from the Transmission Provider. Any waiver of this Agreement shall, if requested, be provided in writing. 15.0 *Multiple Counterparts:* This Agreement may be executed in two or more counterparts, each of which is deemed an original but all constitute one and the same instrument. 16.0 *No Partnership:* This Agreement shall not be interpreted or construed to create an association, joint venture, agency relationship, or partnership between the Parties or to impose any partnership obligation or partnership liability upon either Party. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as or be an agent or representative of, or to otherwise bind, the other Party. 17.0 *Severability:* If any provision or portion of this Agreement shall for any reason be held or adjudged to be invalid or illegal or unenforceable by any court of competent jurisdiction or other Governmental Authority,
(1)such portion or provision shall be deemed separate and independent,
(2)the Parties shall negotiate in good faith to restore insofar as practicable the benefits to each Party that were affected by such ruling, and
(3)the remainder of this Agreement shall remain in full force and effect. 18.0 *Subcontractors:* Nothing in this Agreement shall prevent a Party from utilizing the services of any subcontractor as it deems appropriate to perform its obligations under this Agreement; provided, however, that each Party shall require its subcontractors to comply with all applicable terms and conditions of this Agreement in providing such services and each Party shall remain primarily liable to the other Party for the performance of such subcontractor. 18.1 The creation of any subcontract relationship shall not relieve the hiring Party of any of its obligations under this Agreement. The hiring Party shall be fully responsible to the other Party for the acts or omissions of any subcontractor the hiring Party hires as if no subcontract had been made; provided, however, that in no event shall the Transmission Provider be liable for the actions or inactions of the Interconnection Customer or its subcontractors with respect to obligations of the Interconnection Customer under this Agreement. Any applicable obligation imposed by this Agreement upon the hiring Party shall be equally binding upon, and shall be construed as having application to, any subcontractor of such Party. 18.2 The obligations under this article will not be limited in any way by any limitation of subcontractor's insurance. 19.0 *Reservation of Rights:* The Transmission Provider shall have the right to make a unilateral filing with FERC to modify this Agreement with respect to any rates, terms and conditions, charges, classifications of service, rule or regulation under section 205 or any other applicable provision of the Federal Power Act and FERC's rules and regulations thereunder, and the Interconnection Customer shall have the right to make a unilateral filing with FERC to modify this Agreement under any applicable provision of the Federal Power Act and FERC's rules and regulations; provided that each Party shall have the right to protest any such filing by the other Party and to participate fully in any proceeding before FERC in which such modifications IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their duly authorized officers or agents on the day and year first above written. [Insert name of Transmission Provider] Signed: Name (Printed): Title: [Insert name of Interconnection Customer] Signed: Name (Printed): Title: Appendix 4: Revised Table of Contents for Article 1 of the SGIA Table of Contents Page No. Article 1. Scope and Limitations of Agreement 1 1.1 Applicability 1 1.2 Purpose 1 1.3 No Agreement to Purchase or Deliver Power 1 1.4 Limitations 1 1.5 Responsibilities of the Parties 2 1.6 Parallel Operation Obligations 2 1.7 Metering 3 1.8 Reactive Power 3 [FR Doc. E6-11989 Filed 7-26-06; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 376 [Docket No. RM06-19-000, Order No. 680] Commission Procedures During Periods of Emergency Requiring Activation of Continuity of Operations Plan Issued July 20, 2006. AGENCY: Federal Energy Regulatory Commission, DOE. ACTION: Final rule. SUMMARY: In this rule the Commission establishes procedures with regard to filing and other requirements if the Commission is required to implement its Continuity of Operations Plan in response to an emergency situation that disrupts communications to or from the Commission's headquarters or which otherwise impairs headquarters operations. The rule temporarily suspends filing requirements and ensures that deadlines for Commission actions that fall during the period the plan is in operation are met, thereby providing continuity in the conduct of the Commission's business and certainty to parties with business before the Commission. EFFECTIVE DATE: The rule will become effective July 20, 2006. FOR FURTHER INFORMATION CONTACT: John Clements, Office of the General Counsel, Federal Energy Regulatory Commission, Room 101-57, 888 First St., NE., Washington, DC 20426, 202-502-8070. SUPPLEMENTARY INFORMATION: Before Commissioners: Joseph T. Kelliher, Chairman; Nora Mead Brownell, and Suedeen G. Kelly. I. Introduction 1. The Federal Energy Regulatory Commission (Commission) is amending its regulations to modify certain filing requirements and establish procedures to be effective during emergencies affecting the Commission that require it to implement its Continuity of Operations Plan (COOP Plan). The COOP Plan was developed to address emergency conditions lasting up to 30 days during which Commission headquarters operations may be temporarily disrupted or communications may be temporarily unavailable, either of which may prevent the public or the Commission from meeting regulatory or statutory requirements. 1 The COOP Plan is designed to ensure that the Commission is able to quickly restore its ability to perform essential functions should such conditions occur. 2 The rule temporarily suspends filing requirements and ensures that deadlines for Commission actions that fall during the period the plan is in operation are met, thereby providing continuity in the conduct of the Commission's business and certainty to parties with business before the Commission. 3 1 The emergency conditions which might trigger activation of the COOP Plan are not identical to “emergency conditions” as heretofore defined in 18 CFR 376.201. One of the revisions discussed below modifies that section to cover the emergency conditions that would trigger activation of the COOP Plan. 2 More information concerning the COOP Plan can be found on the Commission's Web site at *www.ferc.gov/coop.asp.* 3 Activation of the COOP Plan affects communications with headquarters only, and does not affect communications required to be made directly to the Commission's Regional Offices. II. Discussion A. Acceptance and Suspension of Pending Filings Requiring Commission Action by a Date Certain 2. The rule provides for the acceptance and suspension, during emergencies that disrupt normal operations and communications and require activation of the COOP Plan, 4 of pending filings upon which the Commission would be required to act by a date certain during the period of emergency. The effective date(s) of such filings shall be the date(s) requested, to be effective subject to refund and further order of the Commission. These include filings made pursuant to: 4 Not all disruptions of communications with the Commission's headquarters will require activation of the COOP Plan and the triggering of these regulations. For instance, a brief outage of eLibrary that prevents entities from making electronic filings would not trigger activation of the COOP Plan. • Section 4 of the Natural Gas Act; • Section 205 of the Federal Power Act; and • Section 6(3) of the Interstate Commerce Act. B. Electric Reliability Organization Penalties 3. If the date on which a penalty imposed by an Electric Reliability Organization pursuant to FPA § 215 would take effect falls during a period when the COOP Plan is activated, review of such penalty by the Commission will be deemed to be initiated and the penalty shall be stayed pending further action by the Commission. C. Consistency of State Action With Reliability Standard 4. If the date by which a Commission determination under FPA § 215 as to whether a State action is inconsistent with a reliability standard is required to be made falls during a period when the COOP Plan is activated, the effectiveness of the State action will be deemed to be stayed pending further action by the Commission. D. Tolling of Time Periods for Commission Action 5. The rule also tolls for purposes of further consideration the time periods for certain Commission actions that will be required during the emergency. These include the: • 60-day period for acting on requests for Exempt Wholesale Generator or Foreign Utility Company status; • 60-day period for acting on interlocking directorate applications; • 90-day period for acting on requests for certification of qualifying facility status; • 60-day period for acting on holding company and transaction exemptions and waivers; • 180-day period for acting on public utility and holding company applications for dispositions, considerations, or acquisitions; • 150-day period for acting on intrastate pipeline applications for approval of proposed rates; • Period ending 60 days prior to the Electric Reliability Organization's
(ERO)fiscal year for acting on the ERO's budget; • 60-day period for acting on notifications that a Reliability Standard may conflict with a function, rule, order, tariff, rate schedule or agreement; • 60-day period for acting on applications for review of a penalty imposed by the ERO for violation of a reliability standard; • 45-day Protest period for protesting Prior Notice Filings, and the 30-day period for resolving and filing to withdraw such Protests; 5 5 The result of these suspensions is that no facilities subject to the prior notice provisions of the Commission's blanket certificate regulations not finally authorized prior to the activation of the COOP Plan shall be constructed during its activation in the absence of specific authorization by the Commission. • 30-day period for acting on requests for rehearing; • Time periods prescribed in 18 CFR 385.714-715 for acting on interlocutory appeals and certified questions. E. Suspension of Certain Requirements 6. Disruptions to normal operations and communications during an emergency that require activation of the COOP Plan could make compliance with some Commission statutes, regulations, or orders difficult or impossible. This rule suspends those requirements during the emergency. The affected regulatory requirements include mandatory filings, submissions, and notifications, as well as voluntary notices, contacts, or reports to the Commission. They include: • Filings to comply with Commission orders, including orders issued by administrative law judges; • Filings required to be made by a date certain under the Commission's regulations or orders; • Motions to intervene and protests, and notices of intervention; • Comments responding to proposed rulemakings or technical conferences; • Responses to data requests; • Self-reports of violations; • Responses to staff audit reports; • Contacts with the Commission's Enforcement Hotline; • Accounting filings required by the Commission's Uniform Systems of Accounts; and • Forms, reports, and submissions required to be filed by a date certain. 7. The rule also grants certain relief with respect to the Commission's Standards of Conduct for Transmission Providers that are also affected by the emergency affecting the Commission. Specifically, such Transmission Providers may, for 30 days, delay compliance with the requirement of § 358.4(a)(2) of the regulations 6 to report to the Commission each emergency that resulted in any deviation from the Standards of Conduct within 24 hours of such deviation. Unless the emergency prevents the Transmission Provider from posting information on the OASIS or Internet Web site, the Transmission Provider must comply with those posting requirements. The 30-day period may be extended as necessary. 6 18 CFR 358.4(a)(2). F. Intention Not To Act 8. The rule provides that, during the emergency conditions that require activation of the COOP Plan, the Commission will not initiate an enforcement action under § 210(h)(2) of the Public Utility Regulatory Policies Act of 1978. 7 Applicants may, as a consequence, bring their own enforcement actions in the appropriate courts. 7 16 U.S.C. 824a-3(h)(2). G. Suspension of Proceedings Before Administrative Law Judges 9. The rule also suspends all hearings, prehearing conferences, settlement conferences, and meetings before administrative law judges while the COOP Plan is activated. H. Delegations of Authority 10. This rulemaking also revises the Commission's rules regarding emergency operations to ensure that delegations of authority will remain effective in the event the COOP Plan is activated. The revisions clarify § 376.206 of the Commission's regulations to specify with more particularity what persons will be authorized to exercise delegated authority in the event the officials to whom delegations are made under Part 375 are unavailable. Section 376.204(b)(2) also is being revised to update the list of officials designated to act on behalf of the Commission in the event of an emergency. Finally, the definition of “emergency condition” contained in § 376.201 is being revised to include specifically any condition that necessitates activation of the COOP Plan. I. Related Matters 11. The COOP Plan includes procedures to inform the public when the COOP Plan is activated, when alternate channels of communication are established, when normal operations and communications are resumed, and the length of any grace period to comply with requirements that were suspended during the emergency. A press release will be sent to major wire services, industry press, and appropriate metropolitan area radio stations announcing that the Commission has activated the COOP Plan. The Commission's alternative Web site ( *http://www.fercalt.gov* ) will be activated and a notice that the COOP Plan has been activated will be prominently displayed thereon. The alternative Web site will act as a resource for the press, industry, and general public. An additional press release will be sent to appropriate media outlets when the COOP Plan is deactivated and the Commission's headquarters constituted, and appropriate modifications made to the alternative Web site. 12. Finally, during periods when the COOP is activated, the Commission will continue to act on requests to ensure continued construction of essential natural gas facilities with sensitive construction timelines, on Commencement of Service requests, and on completion of dam safety work, in a manner consistent with the maintenance of environmental protections. The Commission will further ensure that its personnel are available to respond to and address: Plant accidents or reportable incidents at LNG facilities; dam safety, public safety, and security incidents at jurisdictional hydropower projects; and regional and interregional bulk power systems incidents and emergencies, including blackouts. Alternate channels of communication will include measures to ensure that these activities can go forward unhindered. Regulatory Flexibility Act Certification 13. The Regulatory Flexibility Act of 1980
(RFA)8 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. 9 The Commission is not required to make such an analysis if a rule would not have such an effect. This Final Rule merely temporarily suspends or waives certain filings and other requirements. Therefore, this Final Rule will not have a significant economic impact on a substantial number of small entities and no regulatory flexibility analysis is required. 8 5 U.S.C. 601-12. 9 The RFA definition of “small entity” refers to the definition provided in the Small Business Act, which defines a “small business concern” as a business which is independently owned and operated and which is not dominant in its field of operation. 15 U.S.C. 632. The Small Business Size Standards component of the North American Industry Classification System defines a small electric utility as one that, including its affiliates, is primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and whose total electric output for the preceding fiscal years did not exceed 4 million MWh. 13 CFR 121.201. Information Collection Statement 14. Office of Management and Budget
(OMB)regulations require OMB to approve certain information collection requirements imposed by agency rule. 10 This Final Rule contains no new information collections. Therefore, OMB review of this Final Rule is not required. 10 5 CFR 1320.12. Environmental Analysis 15. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended. 11 This rule is procedural in nature and therefore falls under this exception; consequently, no environmental consideration is necessary. 11 Regulations Implementing the National Environmental Policy Act, Order No. 486, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & Regs. Regulations Preambles 1986-1990 ¶ 30,783 (1987). Document Availability 16. In addition to publishing the full text of this document in the **Federal Register,** the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through the Commission's Home Page ( *http://www.ferc.gov* ) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. Eastern time) at 888 First Street, NE., Room 2A, Washington, DC 20426. 17. From the Commission's Home Page on the Internet, this information is available in the eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in FERRIS, type the docket number excluding the last three digits of this document in the docket number field. 18. User assistance is available for eLibrary and the Commission's Web site during normal business hours. For assistance, please contact Online Support at 1-866-208-3676 (e-mail at *FERCOnlineSupport@FERC.gov* ), or the Public Reference Room at
(202)502-8371, TTY 202-502-8659 (e-mail at *public.referenceroom@ferc.gov* ). Effective Date and Congressional Notification 19. These regulations are effective on July 20, 2006. The provisions of 5 U.S.C. 801 regarding Congressional review of Final Rules do not apply to this Final Rule, because the rule concerns agency procedure and practice and will not substantially affect the rights of non-agency parties. The Commission finds that notice and public procedure are unnecessary because no new burden or regulatory requirement is imposed on regulated entities or the general public. For the same reason, the Commission finds good cause to waive the customary 30-day notice period before the effective date of this Final Rule. List of Subjects in 18 CFR Part 376 Civil defense, Organization and functions (Government agencies). By the Commission. Magalie R. Salas, Secretary. In consideration of the foregoing, the Commission amends part 376, Chapter I, Title 18, Code of Federal Regulations, as follows: PART 376—ORGANIZATION, MISSION, AND FUNCTIONS; OPERATIONS DURING EMERGENCY CONDITIONS 1. The authority citation for part 376 continues to read as follows: Authority: 5 U.S.C. 553; 42 U.S.C. 7101-7352; E.O. 12009, 3 CFR 1978 Comp., p. 142. 2. In § 376.201, paragraph (a)(3) is revised and paragraph (a)(4) is added to read as follows: § 376.201 Emergency condition defined.
(a)* * *
(3)At a time specified by the authority of the President; or
(4)At such time that the Commission's Continuity of Operations Plan is activated; and 3. In § 376.204, paragraphs (b)(2)(ii), (b)(2)(v), (b)(2)(vi), (b)(2)(viii), (b)(2)(ix) and (b)(2)(x) are revised to read as follows: § 376.204 Delegation of Commission's authority during emergency conditions.
(b)* * *
(2)* * *
(ii)Director of the Office of Energy Markets and Reliability;
(v)Director of the Office of Enforcement;
(vi)Deputy Directors, Office of Energy Markets and Reliability, in order of seniority;
(viii)Deputy General Counsels, in order of seniority;
(ix)Associate General Counsels and Solicitor, in order of seniority;
(x)Assistant Directors and Division heads, Office of Energy Markets and Reliability; Assistant Directors and Division heads, Office of Energy Projects; Assistant General Counsels; and Assistant Directors and Division heads, Office of Enforcement; in order of seniority. 4. Section 376.206 is revised to read as follows: § 376.206 Delegation of functions of certain Commission staff members. When, by reason of emergency conditions, the Secretary, Director of any Office or Division, or officer in charge of a regional office, is not available and capable of carrying out his or her functions, such functions are delegated to staff members designated by the Chairman to perform such functions. If no staff member so designated is available and capable of carrying out their functions, such functions are delegated to the next subordinate employee in the Office or Division of the highest grade and longest period of service in that grade. If no subordinate employee of the Office or Division is available and capable of carrying out their functions, such functions are delegated to the Commission employee of the highest grade and longest period of service in that grade who is available and capable of carrying out their functions. 5. Section 376.209 is added to read as follows: § 376.209 Procedures during periods of emergency requiring activation of the Continuity of Operations Plan. (a)(1) The Commission's Continuity of Operations Plan is activated during emergency conditions lasting up to 30 days during which Commission headquarters operations may be temporarily disrupted or communications with the Commission's headquarters may be temporarily unavailable, either of which may prevent the public or the Commission from meeting regulatory or statutory requirements. The provisions of this paragraph are effective upon activation of the Plan. The Commission will notify the public that the Plan has been activated by sending a press release announcing that fact to major wire services, industry press, and appropriate metropolitan area radio stations announcing that the Commission has activated the Plan. The Commission's alternative Web site ( *http://www.fercalt.gov* ) will be activated and a notice that the Plan has been activated will be prominently displayed thereon. The alternative Web site will act as a resource for the press, industry, and general public. An additional press release will be sent to appropriate media outlets when the Plan is deactivated and the Commission's headquarters constituted, and appropriate modifications made to the alternative Web site.
(2)During periods when the Continuity of Operations Plan is activated, the Commission will continue to act on requests to ensure continued construction of essential natural gas facilities with sensitive construction timelines, on Commencement of Service requests, and on completion of dam safety work, in a manner consistent with the maintenance of environmental protections. The Commission will further ensure that its personnel are available to respond to plant accidents or reportable incidents at LNG facilities, and address dam safety, public safety, and security incidents at jurisdictional hydropower projects. Alternate channels of communication will include measures to ensure that these activities can go forward unhindered.
(b)*Standards of conduct for transmission service providers.* During periods when the Commission's Continuity of Operations Plan is activated, a Transmission Provider affected by the same emergency affecting the Commission may, for 30 days, delay compliance with the requirement to report to the Commission each emergency that resulted in any deviation from the standards of conduct within 24 hours of such deviation. If the emergency prevents a Transmission Provider from posting information on the OASIS or Internet Web site, the Transmission Provide may, for 30 days, also delay compliance with the requirements of § 358.4(a)(2) of this chapter to post this information on the OASIS or Internet Web site, as applicable. Upon application by any such Transmission Provider, the Commission may extend these periods.
(c)*Tolling of time periods for Commission action.* The Commission tolls, for purposes of further consideration, the time period in which the Commission must act on the following matters if the time period during which the Commission would ordinarily be required to act closes during the period when the Continuity of Operations Plan is activated:
(1)60-day period to act on requests for Exempt Wholesale Generator or Foreign Utility Company status;
(2)90-day period for acting on requests for certification of qualifying facility status;
(3)60-day period for acting on interlocking directorate applications;
(4)60-day period for acting on Public Utility Holding Company Act exemptions and waivers;
(5)180-period for acting on applications under § 203 of the FPA;
(6)150-day period for acting on intrastate pipeline applications for approval of proposed rates;
(7)Period ending 60 days prior to the Electric Reliability Organization's
(ERO)fiscal year for acting on the ERO's budget;
(8)60-day period for acting on notifications that a Reliability Standard may conflict with a function, rule, order, tariff, rate schedule or agreement;
(9)60-day period for acting on applications for review of a penalty imposed by the ERO for violation of a reliability standard;
(10)45-day Protest period for protesting Prior Notice Filings, and the 30-day period for resolving and filing to withdraw such Protests;
(11)30-day period for acting on requests for rehearing; and
(12)Time periods for acting on interlocutory appeals and certified questions.
(d)*Suspension of certain requirements.* During periods when the Commission's Continuity of Operations Plan is activated, requirements for the following filings, submissions, and notifications are suspended.
(1)Filings to comply with Commission orders, including orders issued by administrative law judges;
(2)Filings required to be made by a date certain under the Commission's regulations or orders;
(3)Motions to intervene and protests, and notices of intervention;
(4)Comments responding to proposed rulemakings or technical conferences;
(5)Responses to data requests;
(6)Self-reports of violations;
(7)Responses to staff audit reports;
(8)Contacts with the Commission's Enforcement Hotline;
(9)Accounting filings required by the Commission's Uniform Systems of Accounts; and
(10)Forms required to be filed by a date certain.
(e)*Acceptance and Suspension of Rate Filings.* When the date by which the Commission is required to act on filings made pursuant to section 4 of the Natural Gas Act, sections 205 of the Federal Power Act, and section 6(e) of the Interstate Commerce Act falls during periods when the Continuity of Operations Plan is activated, such filings shall be deemed to be accepted and suspended and made effective on the requested effective date, subject to refund and further order of the Commission.
(f)*Electric Reliability Organization Penalties.* If the date on which an Electric Reliability Organization imposes a penalty under Federal Power Act § 215 would take effect falls during a period when the COOP Plan is activated, review of such penalty by the Commission shall be deemed to be initiated and the penalty shall be stayed pending further action of the Commission.
(g)*Consistency of State action with reliability standard.* If the date by which a Commission determination under FPA § 215 as to whether a State action is inconsistent with a reliability standard is required to be made falls during a period when the COOP Plan is activated, the effectiveness of the State action will be deemed to be stayed pending further action by the Commission.
(h)*Suspension of Evidentiary Hearings.* During periods when the Continuity of Operations Plan is activated, all hearings, prehearing conferences, settlement conferences, and meetings before administrative law judges are suspended.
(i)*Enforcement Actions.* During periods when the Continuity of Operations Plan is activated, the Commission will not initiate an enforcement action under section 210(h)(2) of the Public Utility Regulatory Policies Act of 1978. [FR Doc. E6-11990 Filed 7-26-06; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 866 [Docket No. 2006N-0276] Medical Devices; Immunology and Microbiology Devices; Classification of Fecal Calprotectin Immunological Test Systems AGENCY: Food and Drug Administration, HHS. ACTION: Final rule. SUMMARY: The Food and Drug Administration
(FDA)is classifying fecal calprotectin immunological test systems into class II (special controls). The special control that will apply to these devices is the guidance document entitled, “Class II Special Controls Guidance Document: Fecal Calprotectin Immunological Test Systems.” The agency is classifying these devices into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of these devices. Elsewhere in this issue of the **Federal Register** , FDA is announcing the availability of a guidance document that will serve as the special control for these devices. DATES: This rule is effective August 28, 2006. The classification was effective April 26, 2006. FOR FURTHER INFORMATION CONTACT: Deborah Moore, Center for Devices and Radiological Health (HFZ-440), Food and Drug Administration, 2098 Gaither Rd., Rockville, MD 20850, 240-276-0493. SUPPLEMENTARY INFORMATION: I. What is the Background of this Rulemaking? In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976, the date of enactment of the Medical Device Amendments of 1976 (the amendments), generally referred to as postamendments devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless the device is classified or reclassified into class I or class II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the act, to a predicate device that does not require premarket approval. The agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807) of FDA's regulations. Section 513(f)(2) of the act provides that any person who submits a premarket notification under section 510(k) of the act for a device that has not previously been classified may, within 30 days after receiving an order classifying the device in class III under section 513(f)(1) of the act, request FDA to classify the device under the criteria set forth in section 513(a)(1) of the act. FDA shall, within 60 days of receiving such a request, classify the device by written order. This classification shall be the initial classification of the device. Within 30 days after the issuance of an order classifying the device, FDA must publish a notice in the **Federal Register** announcing such classification (section 513(f)(2) of the act). In accordance with section 513(f)(1) of the act, FDA issued an order on March 21, 2006, classifying the Genova Diagnostics, Inc. PhiCal TM Fecal Calprotectin Immunoassay in class III, because it was not substantially equivalent to a device that was introduced or delivered for introduction into interstate commerce for commercial distribution before May 28, 1976, or a device that was subsequently reclassified into class I or class II. On March 23, 2006, Genova Diagnostics, Inc. submitted a petition requesting classification of the PhiCal TM Fecal Calprotectin Immunoassay under section 513(f)(2) of the act. The manufacturer recommended that the device be classified into class II (Ref. 1). In accordance with section 513(f)(2) of the act, FDA reviewed the petition in order to classify the device under the criteria for classification set forth in 513(a)(1) of the act. Devices are to be classified into class II if general controls, by themselves, are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the petition, FDA determined that the Genova Diagnostics, Inc. PhiCal TM Fecal Calprotectin Immunoassay can be classified into class II with the establishment of special controls. FDA believes that special controls, in addition to general controls, are adequate to provide reasonable assurance of the safety and effectiveness of the device and that there is sufficient information to establish special controls to provide such assurance. The device is assigned the generic name “fecal calprotectin immunological test system,” and it is identified as an *in vitro* diagnostic device that consists of reagents used to quantitatively measure, by immunochemical techniques, fecal calprotectin in human stool specimens. The device is intended for *in vitro* diagnostic use as an aid in the diagnosis of inflammatory bowel diseases (IBD), specifically Crohn's disease and ulcerative colitis, and as an aid in differentiation of IBD from irritable bowel syndrome. FDA has identified the risks to health associated with this type of device as inaccurate risk assessment and improper patient management. Failure of the system to perform as indicated, or error in interpretation of results, could lead to inaccurate risk assessment and improper management of patients with IBD. Specifically, a falsely low fecal calprotectin reading could result in a determination that the patient does not have IBD, which could delay appropriate treatment. A falsely high fecal calprotectin reading could result in a determination that the patient has IBD, which could lead to unnecessary evaluation and testing, or inappropriate treatment decisions. The use of assay results without consideration of other diagnostic testing and the total clinical picture could also pose a risk. FDA believes that the class II special controls guidance document will aid in mitigating the potential risks to health by providing recommendations for the validation of performance characteristics, including software validation, control methods, reproducibility, and clinical studies. The guidance document also provides information on how to meet premarket [510(k)] submission requirements for the device. FDA believes that the special controls guidance document, in addition to general controls, addresses the risks to health identified in the previous paragraph and provides reasonable assurances of the safety and effectiveness of the device. Thus, on April, 26, 2006, FDA issued an order to the petitioner classifying the device into class II. FDA is codifying this classification at 21 CFR 866.5180. Following the effective date of the final classification rule, manufacturers will need to address the issues covered in this special controls guidance. However, the manufacturer need only show that its device meets the recommendations of the guidance or in some other way provides equivalent assurance of safety and effectiveness. Section 510(m) of the act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k) of the act if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. FDA has determined that premarket notification is necessary to provide reasonable assurance of the safety and effectiveness of the device. Thus, this type of device is not exempt from premarket notification requirements. Persons who intend to market this type of device must submit to FDA a premarket notification, before marketing the device, which contains information about the fecal calprotectin immunological test system they intend to market. II. What is the Environmental Impact of This Rule? The agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Thus, neither an environmental assessment nor an environmental impact statement is required. III. What is the Economic Impact of This Rule? FDA has examined the impacts of the final rule under Executive Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this final rule is not a significant regulatory action as defined by the Executive order. The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because classification of this device into class II will relieve manufacturers of the cost of complying with the premarket approval requirements of section 515 of the act (21 U.S.C. 360e), and may permit small potential competitors to enter the marketplace by lowering their costs, the agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $115 million, using the most current
(2003)Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount. IV. Does This Final Rule Have Federalism Implications? FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies 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. Accordingly, the agency has concluded that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required. V. How Does This Rule Comply with the Paperwork Reduction Act of 1995? This final rule contains no collections of information. Thus, clearance by the Office of Management and Budget
(OMB)under the Paperwork Reduction Act of 1995
(PRA)is not required. FDA concludes that the special controls guidance document contains information collection provisions that are subject to review and clearance by OMB under the PRA. Elsewhere in this issue of the **Federal Register** , FDA is publishing a notice announcing the availability of the guidance document entitled, “Class II Special Controls Guidance Document: Fecal Calprotectin Immunological Test Systems.” The notice contains an analysis of the paperwork burden for the guidance. VI. What References are on Display? The following reference has been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. 1. Petition from Genova Diagnostics, Inc., for reclassification of the PhiCal TM Fecal Calprotectin Immunoassay submitted March 22, 2006. List of Subjects in 21 CFR Part 866 Medical devices. Thus, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 866 is amended as follows: PART 866—IMMUNOLOGY AND MICROBIOLOGY DEVICES 1. The authority citation for 21 CFR part 866 continues to read as follows: Authority: 21 U.S.C. 351, 360, 360c, 360e, 360j, 371. 2. Section 866.5180 is added to subpart F to read as follows: § 866.5180 Fecal calprotectin immunological test system.
(a)*Identification* . A fecal calprotectin immunological test system is an *in vitro* diagnostic device that consists of reagents used to quantitatively measure, by immunochemical techniques, fecal calprotectin in human stool specimens. The device is intended for *in vitro* diagnostic use as an aid in the diagnosis of inflammatory bowel diseases (IBD), specifically Crohn's disease and ulcerative colitis, and as an aid in differentiation of IBD from irritable bowel syndrome.
(b)*Classification* . Class II (special controls). The special control for these devices is FDA's guidance document entitled “Class II Special Controls Guidance Document: Fecal Calprotectin Immunological Test Systems.” For the availability of this guidance document, see § 866.1(e). Dated: July 19, 2006. Linda S. Kahan, Deputy Director, Center for Devices and Radiological Health. [FR Doc. E6-11975 Filed 7-26-06; 8:45 am] BILLING CODE 4160-01-S ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 300 [EPA-HQ-SFUND-1990-0011; FRL-8202-8] National Oil and Hazardous Substances Pollution Contingency Plan; National Priorities List AGENCY: Environmental Protection Agency. ACTION: Direct final notice of deletion of the Arctic Surplus Site from the National Priorities List. SUMMARY: The Environmental Protection Agency (EPA), Region 10, is publishing a direct final notice of deletion of the Arctic Surplus Site (Site), located in Fairbanks, Alaska, from the National Priorities List (NPL). The NPL, promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, is appendix B of 40 CFR part 300, which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). This direct final deletion is being published by EPA with the concurrence of the State of Alaska, through the Alaska Department of Environmental Conservation
(ADEC)because EPA has determined that all appropriate response actions under CERCLA have been completed and, therefore, further remedial action pursuant to CERCLA is not appropriate. DATES: This direct final deletion will be effective September 25, 2006 unless EPA receives adverse comments by August 28, 2006. If adverse comments are received, EPA will publish a timely withdrawal of the direct final deletion in the **Federal Register** informing the public that the deletion will not take effect. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-SFUND-1990-0011, by one of the following methods: • *http://www.regulations.gov* . Follow the on-line instruction for submitting comments. • E-mail: *gusmano.jacques@epa.gov* . • Fax:
(907)271-3424. • Mail: Jacques L. Gusmano, Remedial Project Manager, U.S. Environmental Protection Agency, Region 10, Alaska Operations Office, 222 West 7th Avenue, Suite 19, Anchorage, Alaska 99513. • Hand Delivery: 222 West 7th Avenue, Suite 19, Anchorage, Alaska 99513. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. *Instructions:* Direct your comments to Docket ID No. EPA-HQ-SF-1990-0011. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at *http://www.regulations.gov* including any personal information provided, unless the comment includes information claimed to be Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through *http://www.regulations.gov* or e-mail. The *http://www.regulations.gov* Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through *http://www.regulations.gov* , your e-mail will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. *Docket:* All documents in the docket are listed in the *http://www.regulations.gov* index in the Deletion Docket Bibliography. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Deletion Docket materials are available electronically or in hard copy at the EPA's Region 10 Superfund Records Center, 1200 Sixth Avenue, Seattle, Washington 98101 and the Defense Reutilization & Marketing Office (Administrative Records) Building 5001, Mile Badger Road, Fairbanks, AK 99703 at
(907)353-1143. The Region 10 Superfund Records Center is open from 8 a.m. to 4:30 p.m. by appointment, Monday through Friday, excluding legal holidays. The Superfund Records Center telephone number is
(206)553-4494. FOR FURTHER INFORMATION CONTACT: Jacques L. Gusmano, Remedial Project Manager, U.S. Environmental Protection Agency, Region 10, Alaska Operations Office, 222 West 7th Avenue, Suite 19, Anchorage, Alaska 99513, phone:
(907)271-1271, fax:
(907)271-3424, e-mail: *gusmano.jacques@epa.gov* . SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction II. NPL Deletion Criteria III. Deletion Procedures IV. Basis for Intended Site Deletion V. Deletion Action I. Introduction EPA Region 10 is publishing this direct final notice of deletion of the Arctic Surplus Site, which is located in Fairbanks, Alaska from the NPL. The EPA identifies sites that appear to present a significant risk to public health or the environment and maintains the NPL as the list of those sites. As described in 300.425(e)(3) of the NCP, sites deleted from the NPL remain eligible for remedial actions if conditions at a deleted site warrant such action. Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication of a notice of intent to delete. This action will be effective September 25, 2006 unless EPA receives adverse comments by August 28, 2006 on this document. If adverse comments are received within the 30-day public comment period for this document, EPA will publish a timely withdrawal of this direct final deletion before the effective date of the deletion and the deletion will not take effect. EPA will, as appropriate, prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. There will be no additional opportunity to comment. Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the Arctic Surplus Salvage Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period. II. NPL Deletion Criteria Section 300.425(e) of the NCP provides that sites may be deleted from, or recategorized on the NPL, where no further response is appropriate. In making a determination to delete a site from the NPL, EPA shall consider, in consultation with the State, whether any of the following criteria have been met:
(i)Responsible parties or other parties have implemented all appropriate response actions required;
(ii)All appropriate Fund-financed responses under CERCLA have been implemented, and no further action by responsible parties is appropriate; or
(iii)The Remedial Investigation has shown that the site poses no significant threat to public health or the environment and, therefore, remedial measures are not appropriate. Even if a site is deleted from the NPL, where hazardous substances, pollutants or contaminants remain at the site above levels that allow for unlimited use and unrestricted exposure, CERCLA section 121(c), 42 U.S.C. 9621(c) requires that a subsequent review of the site will be conducted at least every five years after the initiation of the remedial action at the deleted site to ensure that the site remains protective of public health and the environment. If new information becomes available which indicates a need for further action, EPA may initiate additional remedial actions. Whenever there is a significant release from a deleted site from the NPL, the site may be restored to the NPL without application of the Hazard Ranking System. In the case of this site, the selected remedy is protective of human health and the environment; however, because the remedy leaves waste on site above levels that allow for unlimited use and unrestricted exposure, a review of the selected remedy will be conducted at least every five years from initiation of the remedial action. III. Deletion Procedures The following procedures were used for the intended deletion of Arctic Surplus:
(1)EPA Region 10 issued a Record of Decision
(ROD)and an Explanation of Significant Differences
(ESD)which documented the remedial action goals.
(2)The Defense Logistics Agency
(DLA)issued a Remedial Action Report and a Final Closeout Report indicating remedial activities completed was issued by EPA.
(3)The State of Alaska has concurred with the proposed deletion decision.
(4)Concurrently with the publication of this direct final notice of deletion, a notice of the availability of the parallel notice of intent to delete published today in the “Proposed Rules” section of the **Federal Register** is being published in the *Fairbanks Daily News-Miner* and is being distributed to appropriate Federal, State, and local government officials and other interested parties; the newspaper notice announces the 30-day public comment period concerning the notice of intent to delete the Site from the NPL.
(5)All relevant documents have been compiled in the site deletion docket and made available in the local site information repositories. If adverse comments are received within the 30-day public comment period on this document, EPA will publish a timely notice of withdrawal of this direct final notice of deletion before its effective date. EPA will prepare a response to comments, and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. Deletion of the Site from the NPL does not in itself, create, alter or revoke any individual's rights or obligations. The NPL is designed primarily for informational purposes and to assist Agency management. As mentioned in Section II of this document, Sec. 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions. IV. Basis for Intended Site Deletion The following site summary provides the Agency's rationale for the proposal to delete this Site from the NPL. Site Background and History The Arctic Surplus Site, which consists of several land parcels, occupies 24.5 acres and is located on the northeast corner of Badger Road and the Old Richardson Highway, approximately six miles southeast of Fairbanks, Alaska. The western portion of the site was owned by the Department of Defense
(DOD)and, from 1944 to 1956, a landfill used by the military was located on the parcel. Following its sale by DOD in 1959, the entire site was used as a salvage yard, resulting in the accumulation of a large amount of both salvageable and non-salvageable materials. The salvage yard activities that have impacted the site include: Lead battery recycling; batteries were stored and then cracked to collect lead for recycling; Draining oil from transformers, some of which contained polychlorinated biphenyls (PCBs); Burning spent transformer oils to fuel an incinerator used to reclaim copper from transformer coils and lead from batteries; Salvaging mechanized equipment, which may have caused fluids to leak; Accumulating spent ordnance and explosives-related scrap; and, Storing oils, chemicals, containerized gases, and other hazardous materials improperly. Arctic Surplus was the subject of a Preliminary Assessment Report under the CERCLA dated June 29, 1987, and a Site Inspection in August/September 1988. The Site was proposed for the NPL on October 26, 1989, and was listed on August 30, 1990. Since its identification as a CERCLA site, numerous investigations and removal actions have been performed to characterize the Site and address potential Site risks. Removal actions were completed during 1989, 1990, and 1991 by EPA and by the Defense Logistics Agency
(DLA)for DOD. During 1989, the site was fenced, approximately 22,000 pounds of asbestos were removed, and approximately 75 gallons of the pesticide, chlordane, were stabilized and removed. During 1990, more extensive removal actions included the dismantling of an incinerator and removal and offsite disposal of associated ash and contaminated soil, and the removal and offsite disposal of approximately 13 cubic yards of PCB-contaminated soil, 315 cubic yards of lead-contaminated soil from “battery-cracking,” and approximately 160 cubic yards of chlordane-contaminated soil. The removal actions also included bulking and removal of containerized waste, removal of battery casings, draining and disposal of transformer oils, and capping of specific areas of contaminated soil. In 1991, another removal action was completed to investigate alleged buried hazardous wastes and delineate the extent of localized contamination. To facilitate the investigation, approximately 300 non-PCB transformers were moved and staged for removal. The Remedial Investigation
(RI)began in 1992 and was completed in 1994. In the RI, several potential source areas were identified including on the western half of the Site: Battery cracking areas; Buried materials, including the old military landfill; Incinerator area; and Transformer processing areas. Additional potential source areas in other parts of the site were drum storage areas, and salvage and debris piles scattered all around the property. The two primary contaminants of concern
(COCs)identified were lead and PCBs. Lead was identified at concentrations greater than 500 milligrams per kilogram (mg/kg) in surface soils over much of the western portion of the Site. It was also found at elevated concentrations in a limited number of samples of off-property soils, presumably transported by traffic, filling, and grading, or particulate transport from wind. PCB transformer oils were found in old transformers, drums, and oil-stained soils in several areas of the Site. During the 1990 removal actions, free product in containers was removed and heavily contaminated soils were excavated and removed from the Site. Subsequent analyses of the surface soil throughout much of the western part of the Site detected elevated concentrations of PCBs in surface soils, locally in excess of 100 mg/kg. Groundwater quality was studied in the RI as a potential contaminant pathway. One on-site monitoring well contained trichloroethylene
(TCE)ranging from 6-14 ug/l (drinking water standard for TCE, 5 ug/l); this on-site well was located in the center of the property. No wells down gradient of this well, or any area residential wells had TCE concentrations above MCLs. Selected Remedy On September 28, 1995, the Regional Administrator signed a Record of Decision
(ROD)selecting the following remedy: Relocation and sorting of salvage material and debris, which must be moved to provide access to the contaminated soil; Excavation and stockpiling of soil exceeding cleanup standards for treatment or disposal; Onsite treatment of soil exceeding 50 mg/kg PCBs by solvent extraction; Onsite treatment of soil exceeding the lead industrial cleanup standard of 1,000 mg/kg by stabilization/solidification. Offsite disposal of soil exceeding hot spot concentrations for pesticides of 21 mg/kg 4,4′-DDD, 15 mg/kg 4,4′-DDT, and 0.44 ug/kg 2,3,7,8-TCDD equivalence for dioxin/furans; Consolidation of treated soils into a containment area over the old closed military landfill; Capping of the containment area with a steep-sided cap to prevent future use; and Implementation of institutional controls including long-term groundwater monitoring, and operation and maintenance of fences and the cap; restrictions to prevent use of groundwater, maintain industrial use, and prevent any unauthorized access or use of the capped area. The design process to implement the ROD began in June 2002 with a reevaluation of the remedy selection. The design team consisted of representatives from EPA, ADEC, DLA, and DLA's consultants. The purpose of the reevaluation was to assess the current condition of the site relative to the ROD's goals and objectives, and to identify any improvements to the remediation process that could be implemented. The proposed treatment and cap design changes were evaluated by EPA and an Explanation of Significant Difference (ESD), signed on June 17, 2003, documented the changes to the original ROD. The changes to the ROD included in the ESD are: Treatment of soil with PCB concentration between 10 and 50 mg/kg by solidification/stabilization and placement of the treated soil in the onsite containment area, Offsite disposal of soil with PCBs greater than 50 mg/kg, Capping the new waste containment area with a geosynthetic clay liner
(GCL)instead of compacted silt, Flattening the cap profile to allow for reuse of the land, and Develop permanent institutional controls that will be attached to the property and transfer with the land. Response Actions EPA was negotiating an Agreement on Consent
(AOC)with DOD when the remedial actions were begun. The final AOC was signed on December 11, 2003. The other PRPs did not participate in the cleanup actions. The cleanup activities that were conducted had two major objectives; to implement the ROD including the ESD changes; and to remove or demilitarize any ordnance or potentially explosive items. A Remedial Action Work Plan for the ROD which specified soil cleanup activities was issued in May 2003. Implementation of the soil remedy began in June 2003. The CERCLA remedial actions included: Relocating, sorting, and decontamination of salvage material, ancillary scrap (transformers, compressed gas cylinders, etc.), and debris to access the contaminated soil beneath; Excavation and stockpiling of contaminated soils with concentrations greater than 1,000 mg/kg lead or 10 mg/kg PCBs and off-property soils with concentrations greater than 400 mg/kg lead and/or 1 mg/kg PCBs; Excavation and segregation of soil with concentrations of PCBs greater than 50 mg/kg; dioxin concentrations greater than 0.44 ug/kg; DDD concentrations greater than 21 mg/kg; and/or DDT concentrations greater than 15 mg/kg; Shipment of dioxin-, DDT-, and DDD-contaminated soil and soil with greater than 50 mg/kg PCBs offsite for disposal; Solidification/stabilization of contaminated soil containing lead at concentrations greater than 1,000 mg/kg, and soil with greater than 10 mg/kg but less than 50 mg/kg PCB; Placement of stabilized soils into a containment area, which also encompasses the old existing landfill located in the southwestern section of the site; and Capping the stabilized soil in the containment area and the existing landfill with a GCL cap. Operation and Maintenance Pursuant to the Administrative Order of Consent dated December 11, 2003, the long-term groundwater monitoring and the operations and maintenance (O&M) actions will be performed by DOD for the first five years, ending in September 2008. There are seven existing onsite groundwater monitoring wells that will be used for the long-term monitoring. There are three wells specifically downgradient of the new containment cell and one upgradient. The three other wells included in the long-term monitoring are along the northern property boundary. Provisions are included to extend this commitment as needed to maintain the site. The current O&M plan includes semi-annual groundwater monitoring and assessment of cap integrity. Institutional Controls The institutional controls relating to site access and land use restrictions were not part of the Administrative Order, but were made part of a State of Alaska action using a document called “Conservation Easement,” recorded on September 21, 2004. This type of enforceable document was used at Arctic Surplus because there was no Settlement Document, i.e., consent decree, signed by all of the PRPs, only an Administrative Order with DOD. The signatories to the Conservation Easement for Arctic Surplus are the property owners, who have agreed to the terms of the Conservation Easement. The administration and enforcement of this document for Arctic Surplus was delegated to ADEC by the Alaska Department of Natural Resources
(ADNR)by a Management Right Assignment dated September 29, 2004. This Assignment has been filed by ADNR for the State of Alaska. This Conservation Easement document also includes EPA as a partner to ADEC for management and enforcement. ADEC has the responsibility to implement the Conservation Easement as an institutional control, and will provide EPA and the PRPs with a notice of any problems based on any site inspections. Five-Year Review Hazardous substances remain at the Site above levels that allow unlimited use and unrestricted exposure after the completion of the remedial action. Pursuant to CERCLA section 121(c) and as provided in the current guidance on Five-Year Reviews: OSWER Directive 9355.7-03B-P, Comprehensive Five-Year Review Guidance, dated June 2001, EPA must conduct a statutory Five-Year Review. The first Five-Year Review Report will be completed by December 22, 2008. Community Involvement EPA held nine public meetings, issued 13 fact sheets and published notices of three public comment periods in the **Federal Register** and in local newspapers. The meetings and fact sheets focused on CERCLA-required comment periods, informational meetings, enforcement actions, alternative analysis or schedule announcements, and public involvement sessions. Since completion of remedial actions there have been minimal public comments. Applicable Deletion Criteria One of the three criteria for deletion specifies that EPA may delete a site from the NPL if “responsible parties have implemented all appropriate response actions required.” EPA, with the concurrence of the State of Alaska, believe that this criterion for deletion has been met. There is no significant threat to human health or the environment and, therefore, no further remedial action is necessary. State Concurrence In a letter dated May 23, 2006, from the Alaska Department of Environmental Conservation (ADEC), ADEC concurs with the proposed deletion of the Arctic Surplus Site from the NPL. V. Deletion Action The EPA, with concurrence of the State of Alaska, has determined that all appropriate responses under CERCLA have been completed, and that no further response actions, under CERCLA, other than O&M and five-year reviews, are necessary. Therefore, EPA is deleting the Site from the NPL. Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective September 25, 2006 unless EPA receives adverse comments by August 28, 2006. If adverse comments are received within the 30-day public comment period, EPA will publish a timely withdrawal of this direct final notice of deletion before the effective date of the deletion and it will not take effect. In this case, EPA will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. There will be no additional opportunity to comment. List of Subjects in 40 CFR Part 300 Environmental protection, Air pollution control, Chemicals, Hazardous substances, Hazardous waste, Intergovernmental relations, Penalties, Reporting and recordkeeping requirements, Superfund, Water pollution control, Water supply. Dated: July 18, 2006. Michelle Pirzadeh, Acting Regional Administrator, Region 10. For the reasons set out in the preamble, 40 CFR part 300 is amended as follows: PART 300—[AMENDED] 1. The authority citation for part 300 continues to read as follows: Authority: 42 U.S.C. 9601-9657; 33 U.S.C. 1321(c)(2); E.O. 12777, 56 FR 54757, 3 CFR, 1991 Comp., p. 351; E.O. 12580, 52 FR 2923, 3 CFR 1987 Comp., p. 193. Appendix B—[Amended] 2. Table 1 of Appendix B to part 300 is amended by removing the entry for “Arctic Surplus, Fairbanks, Alaska.” [FR Doc. E6-11809 Filed 7-26-06; 8:45 am] BILLING CODE 6560-50-P 71 144 Thursday, July 27, 2006 Proposed Rules DEPARTMENT OF HOMELAND SECURITY 6 CFR Part 5 [Docket No. DHS-2006-0035] Privacy Act of 1974: Implementation of Exemptions AGENCY: Office of the Secretary, Department of Homeland Security. ACTION: Notice of proposed rulemaking. SUMMARY: The Department of Homeland Security is giving concurrent notice of a revised and updated system of records pursuant to the Privacy Act of 1974 for the Automated Biometric Identification System. In this proposed rulemaking, the Department proposes to exempt portions of this system of records from one or more provisions of the Privacy Act because of criminal, civil, and administrative enforcement requirements. DATES: Comments must be received on or before August 28, 2006. ADDRESSES: You may submit comments, identified by docket number DHS-2006-0035, by one of the following methods: • Federal e-Rulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting comments. • Fax:
(202)298-5201. • Mail: Steve Yonkers, US-VISIT Privacy Officer, 245 Murray Lane, SW., Washington, DC 20538; Maureen Cooney, Acting Chief Privacy Officer, Department of Homeland Security, 601 S. 12th Street, Arlington, VA 22202-4220. *Instructions:* All submissions received must include the agency name and docket number for this notice. All comments received will be posted without change to *http://www.regulations.gov* , including any personal information provided. *Docket:* For access to the docket to read background documents or comments received, go to *http://www.regulations.gov.* FOR FURTHER INFORMATION CONTACT: Steve Yonkers, US-VISIT Privacy Officer, 245 Murray Lane, SW., Washington, DC 20538, by telephone
(202)298-5200, or by facsimile
(202)298-5201. SUPPLEMENTARY INFORMATION: Background In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, the Department of Homeland Security
(DHS)is publishing a revision to existing Privacy Act systems of records known as Enforcement Operational Immigration Records/Automated Biometric Identification System (ENFORCE/IDENT) in today's edition of the **Federal Register** . This proposed rule would exempt certain records from the access and amendment provisions of law as permitted by the Privacy Act. ENFORCE is the primary administrative case management system for Immigration and Customs Enforcement (ICE). IDENT is the primary repository of biometric information held by DHS in connection with its several and varied missions and functions, including, but not limited to: The enforcement of civil and criminal laws (including the immigration law); investigations, inquiries, and proceedings thereunder; and national security and intelligence activities. IDENT is a centralized and dynamic DHS-wide biometric database that also contains limited biographic and encounter history information needed to place the biometric information in proper context. The information is collected by, on behalf of, in support of, or in cooperation with DHS and its components and may contain personally identifiable information collected by other Federal, state, local, tribal, foreign, or international government agencies. For business purposes these two systems were operated jointly. Now, as a part of operational and technical restructuring, these systems will be operated independently—IDENT under the management of US-VISIT and ENFORCE under the management of ICE. Consequently, the ENFORCE/IDENT system notice is being split into two system notices: One for ENFORCE and one for IDENT. The Privacy Act notice for ENFORCE/IDENT was last published in the **Federal Register** on March 20, 2006 (71 FR 13987). In this notice of proposed rulemaking, DHS now is proposing to exempt IDENT, in part, from certain provisions of the Privacy Act. The Privacy Act embodies fair information principles in a statutory framework governing the means by which the United States Government collects, maintains, uses, and disseminates personally identifiable information. The Privacy Act applies to information that is maintained in a “system of records.” A “system of records” is a group of any records under the control of an agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual. Individuals may request their own records that are maintained in a system of records in the possession or under the control of DHS by complying with DHS Privacy Act regulations, 6 CFR part 5. The Privacy Act requires each agency to publish in the **Federal Register** a description of the type and character of each system of records that the agency maintains, and the routine uses that are contained in each system in order to make agency recordkeeping practices transparent, to notify individuals regarding the uses to which personally identifiable information is put, and to assist individuals in finding such files within the agency. The Privacy Act allows Government agencies to exempt certain records from the access and amendment provisions. If an agency claims an exemption, however, it must issue a Notice of Proposed Rulemaking to make clear to the public the reasons why a particular exemption is claimed. DHS is claiming exemption from certain requirements of the Privacy Act for IDENT. Some information in IDENT relates to official DHS national security, immigration and border management, and law enforcement activities. These exemptions are needed to protect information relating to DHS activities from disclosure to subjects or others related to these activities. Specifically, the exemptions are required to preclude subjects of these activities from frustrating these processes; to avoid disclosure of activity techniques; to protect the identities and physical safety of confidential informants and of immigration and border management and law enforcement personnel; to ensure DHS's ability to obtain information from third parties and other sources; to protect the privacy of third parties; and to safeguard classified information. Disclosure of information to the subject of the inquiry could also permit the subject to avoid detection or apprehension. The exemptions proposed here are standard law enforcement and national security exemptions exercised by a large number of Federal law enforcement and intelligence agencies. In appropriate circumstances, where compliance would not appear to interfere with or adversely affect the law enforcement purposes of this system and the overall law enforcement process, the applicable exemptions may be waived. List of Subjects in 6 CFR Part 5 Privacy, Freedom of information. For the reasons stated in the preamble, DHS proposes to amend Chapter I of Title 6, Code of Federal Regulations, as follows: PART 5—DISCLOSURE OF RECORDS AND INFORMATION 1. The authority citation for part 5 continues to read as follows: Authority: Pub. L. 107-296, 116 Stat. 2135, 6 U.S.C. 101 *et seq.* ; 5 U.S.C. 301. Subpart A also issued under 5 U.S.C. 552. Subpart B also issued under 5 U.S.C. 552a. 2. Amend Appendix C to part 5 by adding the following new paragraph 6: Appendix C—DHS Systems of Records Exempt From the Privacy Act 6. The Department of Homeland Security Automated Biometric Identification System (IDENT) consists of electronic and paper records and will be used by DHS and its components. IDENT is the primary repository of biometric information held by DHS in connection with its several and varied missions and functions, including, but not limited to: the enforcement of civil and criminal laws (including the immigration law); investigations, inquiries, and proceedings thereunder; and national security and intelligence activities. IDENT is a centralized and dynamic DHS-wide biometric database that also contains limited biographic and encounter history information needed to place the biometric information in proper context. The information is collected by, on behalf of, in support of, or in cooperation with DHS and its components and may contain personally identifiable information collected by other Federal, State, local, tribal, foreign, or international government agencies. Pursuant to exemptions 5 U.S.C. 552a(j)(2) of the Privacy Act, portions of this system are exempt from 5 U.S.C. 552a(c)(3) and (4); (d); (e)(1), (e)(2), (e)(3), (e)(4)(G), (e)(4)(H), (e)(5) and (e)(8); (f)(2) through (5); and (g). Pursuant to 5 U.S.C. 552a(k)(2), this system is exempt from the following provisions of the Privacy Act, subject to the limitations set forth in those subsections: 5 U.S.C. 552a (c)(3), (d), (e)(1), (e)(4)(G), and (e)(4)(H). Exemptions from these particular subsections are justified, on a case-by-case basis to be determined at the time a request is made, for the following reasons:
(a)From subsection (c)(3) and
(4)(Accounting for Disclosures) because release of the accounting of disclosures could alert the subject of an investigation of an actual or potential criminal, civil, or regulatory violation to the existence of the investigation; and reveal investigative interest on the part of DHS as well as the recipient agency. Disclosure of the accounting would therefore present a serious impediment to law enforcement efforts and/or efforts to preserve national security. Disclosure of the accounting would also permit the individual who is the subject of a record to impede the investigation, to tamper with witnesses or evidence, and to avoid detection or apprehension, which would undermine the entire investigative process.
(b)From subsection
(d)(Access to Records) because access to the records contained in this system of records could inform the subject of an investigation of an actual or potential criminal, civil, or regulatory violation, to the existence of the investigation, and reveal investigative interest on the part of DHS or another agency. Access to the records could permit the individual who is the subject of a record to impede the investigation, to tamper with witnesses or evidence, and to avoid detection or apprehension. Amendment of the records could interfere with ongoing investigations and law enforcement activities and would impose an impossible administrative burden by requiring investigations to be continuously reinvestigated. In addition, permitting access and amendment to such information could disclose security-sensitive information that could be detrimental to homeland security.
(c)From subsection (e)(1) (Relevancy and Necessity of Information) because in the course of investigations into potential violations of Federal law, the accuracy of information obtained or introduced occasionally may be unclear or the information may not be strictly relevant or necessary to a specific investigation. In the interests of effective law enforcement, it is appropriate to retain all information that may aid in establishing patterns of unlawful activity.
(d)From subsection (e)(2) (Collection of Information from Individuals) because requiring that information be collected from the subject of an investigation would alert the subject to the nature or existence of an investigation, thereby interfering with the related investigation and law enforcement activities.
(e)From subsection (e)(3) (Notice to Subjects) because providing such detailed information would impede law enforcement in that it could compromise the existence of a confidential investigation or reveal the identity of witnesses or confidential informants.
(f)From subsections (e)(4)(G) and
(H)(Agency Requirements), and (f)(2 through 5) (Agency Rules) because portions of this system are exempt from the individual access provisions of subsection
(d)and thereby would not require DHS to establish requirements or rules for records which are exempted from access.
(g)From subsection (e)(5) (Collection of Information) because in the collection of information for law enforcement purposes it is impossible to determine in advance what information is accurate, relevant, timely, and complete. Compliance with (e)(5) would preclude DHS agents from using their investigative training and exercise of good judgment to both conduct and report on investigations.
(h)From subsection (e)(8) (Notice on Individuals) because compliance would interfere with DHS' ability to obtain, serve, and issue subpoenas, warrants, and other law enforcement mechanisms that may be filed under seal, and could result in disclosure of investigative techniques, procedures, and evidence.
(i)From subsection
(g)to the extent that the system is exempt from other specific subsections of the Privacy Act. Dated: July 16, 2006. Maureen Cooney, Acting Chief Privacy Officer. [FR Doc. E6-11996 Filed 7-26-06; 8:45 am] BILLING CODE 4410-10-P DEPARTMENT OF AGRICULTURE Farm Service Agency 7 CFR Part 762 RIN 0560-AH41 Guaranteed Loan Fees AGENCY: Farm Service Agency, USDA. ACTION: Proposed rule; correction and extension of comment period. SUMMARY: This document corrects the telephone number for the facsimile machine (“fax”) for submission of public comments on the proposed rule entitled Guaranteed Loan Fees published May 15, 2006 (71 FR 27978-27980) and extends the comment period. The original comment period for the proposed rule closed on July 14, 2006, and FSA is extending it until August 4, 2006. Respondents who sent comments to the earlier fax number are encouraged to contact the person named below to find out if their comments were received and re-submit them to fax number below if necessary. FOR FURTHER INFORMATION CONTACT: Galen VanVleet at
(202)720-3889. All comments and supporting documents on this rule may be viewed by contacting the information contact. All comments received, including names and addresses, will become a matter of public record. SUPPLEMENTARY INFORMATION:
(1)This document corrects the proposed rule entitled Guaranteed Loan Fees published May 15, 2006 (71 FR 27978-27980). Due to a drafting error the telephone number for the fax machine for submission of comments was incorrect. Although the machine of the person sending the comment would have indicated that the transmission failed, and a correct number could have been obtained by calling the agency contact, FSA has decided to correct the proposed rule and extend the comment period to ensure that all parties who wish to comment on the proposed rule are provided the maximum opportunity to do so. Accordingly, in the proposed rule, in the first column, in the ADDRESSES section, the fax number shown, “202-690-6797” is corrected to read “202-720-6797.”
(2)As a result of the correction, this document also extends the comment period until August 4, 2006, in order to ensure that the public can submit timely comments. Signed in Washington, DC, on July 21, 2006. Glen L. Keppy, Acting Administrator, Farm Service Agency. [FR Doc. E6-11979 Filed 7-26-06; 8:45 am] BILLING CODE 3410-05-P DEPARTMENT OF HOMELAND SECURITY Office of the Secretary 8 CFR Parts 215 and 235 [DHS 2005-0037] RIN 1601-AA35 United States Visitor and Immigrant Status Indicator Technology Program (“US-VISIT”); Enrollment of Additional Aliens in US-VISIT AGENCY: Office of the Secretary, DHS. ACTION: Proposed rule with request for comments. SUMMARY: The Department of Homeland Security established the United States Visitor and Immigrant Status Technology (US-VISIT) program in 2003 to verify the identities and travel documents of aliens. US-VISIT automates this verification by comparing biometric identifiers, and by comparing biometric identifiers with information drawn from intelligence and law enforcement watchlists and databases. Aliens subject to US-VISIT may be required to provide fingerscans, photographs, or other biometric identifiers upon arrival at, or departure from, the United States. Currently, aliens entering the United States pursuant to a nonimmigrant visa, or those traveling without a visa as part of the Visa Waiver Program, are subject to US-VISIT requirements, with certain limited exceptions. Under this proposed rule, the Department of Homeland Security will be extending US-VISIT requirements to all aliens with the exception of aliens who are specifically exempted and Canadian citizens applying for admission as B1/B2 visitors for business or pleasure. DATE: Written comments must be submitted on or before August 28, 2006. ADDRESSES: You may submit comments identified by Docket Number DHS-2005-0037 by one of the following methods: • Federal Rulemaking Portal: *http://www.regulations.gov.* Follow the instructions for submitting the comments. All submissions received must include the agency name and docket number for this rulemaking. All comments received will be posted without change to *http://www.regulations.gov,* including any personal information provided. • Written comments may be submitted to Michael Hardin or Craig Howie, Senior Policy Advisors, US-VISIT, Department of Homeland Security; 1616 North Fort Myer Drive, 18th Floor, Arlington, VA 22209. FOR FURTHER INFORMATION CONTACT: Michael Hardin or Craig Howie, Senior Policy Advisors, US-VISIT, Department of Homeland Security, 1616 Fort Myer Drive, 18th Floor, Arlington, Virginia 22209,
(202)298-5200. SUPPLEMENTARY INFORMATION: I. Background and Purpose The Department of Homeland Security
(DHS)established the United States Visitor and Immigrant Status Indicator Technology Program (US-VISIT) in accordance with several statutory mandates that collectively require DHS to create an integrated, automated biometric entry and exit system that records the arrival and departure of aliens; verifies the identities of aliens; and authenticates travel documents presented by such aliens through the comparison of biometric identifiers. Aliens subject to US-VISIT may be required to provide fingerscans, photographs, or other biometric identifiers upon arrival at, or departure from, the United States. DHS views US-VISIT as a biometrically-driven program designed to enhance the security of United States citizens and visitors while expediting legitimate travel and trade, ensuring the integrity of the immigration system, and protecting visitors' personal information. The statutes that authorize DHS to establish US-VISIT include, but are not limited to: • Section 2(a) of the Immigration and Naturalization Service Data Management Improvement Act of 2000, Public Law 106-215, 114 Stat. 337 (June 15, 2000); • Section 205 of the Visa Waiver Permanent Program Act of 2000, Public Law 106-396, 114 Stat. 1637, 1641 (October 30, 2000); • Section 414 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), Public Law 107-56, 115 Stat. 271, 353 (October 26, 2001); • Section 302 of the Enhanced Border Security and Visa Entry Reform Act of 2002 (Border Security Act) Public Law 107-173, 116 Stat. 543, 552 (May 14, 2002); and • Section 7208 of the Intelligence Reform and Terrorism Prevention Act of 2004, Public Law 108-458 (December 17, 2004). DHS provided detailed abstracts of the particular sections of the statutes that established and authorized the US-VISIT program in two prior rulemakings. See 69 FR 468 (January 5, 2004); 69 FR 53318 (August 31, 2004). On January 5, 2004, DHS implemented the first phase of the US-VISIT biometric component by publishing an interim final rule in the **Federal Register** providing that aliens seeking admission into the United States through nonimmigrant visas must provide fingerprints, photographs, or other biometric identifiers upon arrival in or departure from the United States at air and sea ports of entry. Effective September 30, 2004, nonimmigrants seeking to enter the United States without visas under the Visa Waiver Program
(VWP)also are required to provide biometric information under US-VISIT. 69 FR 53318 (August 31, 2004). US-VISIT is now operational for entry at 115 airports, 15 sea ports, and at 154 land border ports of entry. The most up-to-date list of ports of entry where US-VISIT is operational can be found at: *http://www.dhs.gov/usvisit.* The following categories of aliens currently are expressly exempt from US-VISIT requirements: • Aliens admitted on an A-1, A-2, C-3, G-1, G-2, G-3, G-4, NATO-1, NATO-3, NATO-4, NATO-5, or NATO-6 visa; • Children under the age of 14; • Persons over the age of 79; and • Certain officials of the Taipei Economic and Cultural Representative Office and members of their immediate families seeking admission on E-1 visas. 8 CFR 235.1(d)(1)(iv). In addition, the Secretary of State and Secretary of Homeland Security may jointly exempt classes of aliens from US-VISIT. The Secretaries of State and Homeland Security, as well as the Director of the Central Intelligence Agency, also may exempt any individual from US-VISIT. 8 CFR 235.1(d)(iv)(B). In many cases, US-VISIT begins overseas, at United States consular offices issuing visas, where aliens' biometrics (digital finger scans and photographs) are collected and checked against a database of known criminals, suspected terrorists, and those who have previously violated immigration laws. When the alien arrives at the port of entry, US-VISIT compares the biometrics of the person (finger scans and a digital photograph) to verify that the person at the port of entry is the same person who received the visa. For those whose biometrics were not captured overseas, a Customs and Border Protection
(CBP)officer at the port of entry collects digital finger scans and a digital photograph of the alien. These biometrics may be • Checked against watchlists and previous uses of the document; • Verified at the time of exit; and • Compared during subsequent interactions, such as a future admission. There are additional aliens that have not yet been subject to the requirements of US-VISIT, but who are not expressly exempt from US-VISIT requirements. Through this proposed rule, DHS proposes to amend its regulations to expand DHS biometric collection and processing through the US-VISIT program to all aliens except those specifically exempted. DHS will implement this rule in a way that minimizes risk of impact to travel and trade. 1 1 Immediately following the introduction of US-VISIT in January 2004, CBP introduced a “wait time mitigation strategy.” In the event that wait times at air and sea primary inspection last longer than one hour, and if the threat level was at yellow, green, or blue, a port may incrementally relieve congestion by eliminating the fingerprinting requirement for successive classifications of people, for example, aliens aged 14-17 when accompanied by an adult, or aliens between the ages of 60-79. However, this mitigation strategy has rarely been needed even after the inclusion of Visa Waiver Program aliens. Nonetheless, the procedures remain in place and can be used following the inclusion of additional aliens, if necessary. DHS has determined that expanding US-VISIT to additional aliens will improve public safety, national security, and the integrity of the immigration process. Establishing and verifying the identity of an alien and whether that alien is admissible to the United States based on all relevant information is critical to the security of the United States and the enforcement of the United States immigration laws. Processing additional aliens in US-VISIT reduces the risk that an individual traveler's identity (and travel document) could be used by another individual to enter the United States. By linking the alien's biometric information with the alien's travel documents, DHS reduces the likelihood that another individual could later assume that identity or use that document to gain admission to the United States. At present, US-VISIT biometrically screens alien arrivals at all air and sea ports of entry at primary inspection. US-VISIT also screens alien arrivals at land border ports of entry during secondary inspection rather than primary inspection because of the volume and facility limitations of the land border ports. Referral of aliens to secondary inspection at the land border ports of entry is premised on processes that already require secondary inspection ( *e.g.* , Form I-94 issuance) or an officer's indication that further investigation of the alien's identity or admissibility is needed to properly determine that the alien is admissible. Since US-VISIT biometric processing was initiated on January 5, 2004, the program has successfully identified a number of aliens with criminal or immigration violations that would not otherwise have been known. Between January 5, 2004, and May 25, 2006, DHS took adverse action against more than 1160 individuals based on information obtained through the US-VISIT biometric screening process. By “adverse action,” DHS means that the alien was: • Arrested pursuant to a criminal arrest warrant; • Denied admission, placed in expedited removal, and returned to the country of last departure; or • Otherwise detained and denied admission to the United States. Adding additional aliens to the US-VISIT program will likely result in DHS identifying additional aliens who are inadmissible or who otherwise present security and criminal threats, including those who may be traveling improperly on previously established identities and those who potentially pose a threat to the security interests of the United States. II. Additional Aliens Subject to US-VISIT A. Specific Groups of Aliens Proposed To Be Added Under existing regulations, DHS has been collecting and storing biometric data on specific classes of aliens in US-VISIT. Nonimmigrant aliens seeking admission to the United States pursuant to a nonimmigrant visa, B-1/B-2 Visa and Border Crossing Card (Form DSP 150), or under the Visa Waiver Program, currently provide biometrics for processing in US-VISIT. 8 CFR 235.1(d)(1)(ii). This proposed change to the regulations would permit enrollment of any alien in US-VISIT, with the exception of those Canadian citizens applying for admission as B-1/B-2 visitors for business or pleasure, and those specifically exempted. Several large classes of aliens will be affected by this change in the regulations, including: • Lawful Permanent Residents (LPRs). • Aliens seeking admission on immigrant visas. • Refugees and asylees. • Certain Canadian citizens who receive a Form I-94 at inspection or who require a waiver of inadmissibility. • Aliens paroled into the United States. • Aliens applying for admission under the Guam Visa Waiver Program. The authorizing statutes, which all refer to “aliens” without differentiation, support the inclusion of lawful permanent residents
(LPRs)into the US-VISIT program. See section 101(a)(3) of the Immigration and Nationality Act of 1952, as amended, 8 U.S.C. 1101(a)(3) (“The term ‘alien’ means any person not a citizen or national of the United States”). For an LPR, a Form I-551, permanent resident card, serves as a travel or entry document. Pursuant to 8 CFR 211.1(a)(2), a Form I-551 is a documentary substitute for an immigrant visa for readmission to the United States as a permanent resident. Accordingly, the US-VISIT biometric collection will now apply to LPRs. DHS is not proposing that LPRs submit any additional information above and beyond that which is currently required. As part of the adjustment of status process, under current regulations, an alien between the ages of 14 and 79 (the same age parameters as applied to US-VISIT enrollment and verification) must submit a set of 10 fingerprints and photographs to DHS, Citizenship and Immigration Services (USCIS), as applicable. (See Form I-485, “Application to Register Permanent Residence or Adjust Status”). As part of the immigrant visa BioVisa process, the Department of State has collected two index finger prints. Thus, many LPRs have already submitted fingerprints and, for US-VISIT purposes, taking finger scans at the time of admission will be a biometric verification of the LPR's identity against those prints previously collected. However, DHS does not have electronically-searchable fingerprints for all LPRs. When those LPRs are encountered, their finger scans will be collected for an initial electronic enrollment. The LPR will provide the same biometrics (finger scans, photograph), under either the “verification” or “enrollment” scenario. There is no difference in what information is collected from the perspective of the LPR or in how other aliens are processed. Similarly, DHS already possesses biometric data through the USCIS application process for asylees and refugees. *See, e.g.* , Form I-589 (Application for Asylum). To the greatest extent practicable, DHS will use this existing information to initially “enroll” these aliens into US-VISIT. The US-VISIT process at ports of entry is generally therefore a verification against the biometric information previously submitted to DHS, to ensure that the alien is the person whom he or she claims to be. The inclusion of aliens being admitted with an immigrant visa is to ensure parity with LPRs and because an immigrant visa is a United States-issued travel document. As noted above, these aliens submitted fingerprints as part of the immigrant visa application process. Aliens applying for admission with an immigrant visa are currently submitting fingerprints and photographs as part of the admission process. Most Canadians traveling from within the Western Hemisphere do not require a visa or other documentation to enter the United States for short business or pleasure trips. This rule does not change 8 CFR 212.1(a)(1), which exempts those Canadian citizens from the requirement to present a passport or nonimmigrant visa prior to admission into the United States. This will be addressed in upcoming rulemakings involving the Western Hemisphere Travel Initiative. See 70 FR 52037 (September 1, 2005) (ANPRM). Canadians, other than those described below, will not be enrolled in, or verified against, US-VISIT at this time. Canadian citizens accustomed to border crossings for the purposes of shopping, visiting friends and family, or taking a holiday in the United States (typically activities encompassed by the nonimmigrant B-2, visitor for pleasure category) are not included in US-VISIT by the provisions of this proposed rule. Canadians who would be included in US-VISIT as a result of adoption of this proposed rule will be those issued a Form I-94, including:
(1)Canadians applying for admission in the following nonimmigrant classifications: • C, aliens in transit to or through the United States; • D, alien crew members (Form I-95); • F, all alien students and dependents; • H, all alien specialty, nurse, temporary agricultural and nonagricultural workers, trainees and dependents; • I, all representatives of foreign media and dependents; • J, exchange visitors and dependents; • L, intracompany transferees and dependents; • M, vocational or nonacademic student and dependents; • O, aliens of extraordinary ability or achievement, including assistants and dependents; • P, aliens internationally recognized as athletes, entertainers or participants in a culturally unique program and dependents; • Q-1 and Q-3, international cultural exchange program participant and dependents; • R, religious workers and dependents; • S, alien witnesses or informants and dependents; • T, victims of trafficking and dependents; • TN under the provisions of the North American Free Trade Agreement; and
(2)Canadians who are granted a waiver of inadmissibility in order to enter the United States. Processing these Canadian citizens biometrically through US-VISIT will ensure parity with other aliens applying for admission to the United States, and it will increase security. Aliens who are currently required to present a valid nonimmigrant visa are required to provide biometrics as part of admission, including those Canadian citizens required to obtain either an E (Treaty Trader or Investor) nonimmigrant or K (fiancé/fiancée or spouse of a United States citizen) nonimmigrant visa. Canadians who require a waiver of inadmissibility are already required to provide biometric data in secondary inspection at the port of entry as part of the waiver application. This change in regulations will permit DHS to better verify identity and determine if new derogatory information exists on subsequent encounters. DHS acknowledges that some Canadian citizens holding valid nonimmigrant status, such as an H-1B worker, commute into the United States daily for purposes of employment while continuing to reside in Canada. At northern land borders, CBP officers at ports of entry have existing protocols for this situation and will not refer Canadian commuter to secondary inspection for a biometric verification against the US-VISIT system. These Canadian citizens will be screened biometrically via US-VISIT when applying for a new multiple-entry Form I-94 which typically happens at approximately six month intervals or when referred to secondary inspection for other reasons. All aliens paroled into the United States will provide biometrics and be processed through US-VISIT. Parolees are aliens who are permitted to enter the United States at a port of entry without being legally admitted, and may be subject to specific terms as a condition of the parole. Section 212(d) of the Act, 8 U.S.C. 1182(d). Because these aliens are ultimately allowed physically into the United States, they should be subject to the same requirements as other aliens admitted to the United States. B. Mechanism for Enrolling Additional Aliens Operationally, these additional aliens will be processed through US-VISIT differently at the air and sea ports of entry than at the land ports of entry. At air and sea ports of entry, the controlled environment—where all arriving aliens and United States citizens are interviewed by a CBP officer—currently allows for biometric collection and US-VISIT processing at primary inspection for the majority of the arriving aliens addressed in this rulemaking. Therefore, DHS expects to be able to include all non-exempt aliens into US-VISIT almost immediately at the air and sea ports. At the land border ports of entry, where aliens arrive by vehicle and as pedestrians, the additional aliens will be processed through US-VISIT somewhat differently at the time of initial application for admission to the United States. LPRs will go through biometric collection if they are referred to secondary inspection by the primary inspecting officer. The officer has the discretion to send any person to secondary inspection if the officer has any question as to the true identity of person bearing the document or of person's admissibility to the United States. The remaining aliens will be processed through US-VISIT in secondary inspection the same way other aliens currently subject to US-VISIT (those that require a Form I-94) at the land ports of entry. This will not impose an additional imposition since these aliens are already processed in secondary since they generally require a Form I-94. DHS is including additional aliens into the US-VISIT program in the same way it has included aliens with Form DSP-150 Border Crossing Cards (BCCs). To date, at land borders only holders of BCCs who use the BCC as a visa and thus require a Form I-94 are generally required to be processed through US-VISIT. US-VISIT currently does not process, on a regular basis, applicants for admission with BCCs who wish to use the document simply as a BCC, which authorizes them to stay in the United States for up to 30 days, within 25 miles of the United States-Mexican border (75 miles in parts of Arizona). This policy has allowed DHS to take a measured approach to implementing US-VISIT at the land borders and to ensure that US-VISIT processing does not have a negative impact on the land border communities. However, even under this current policy, an alien seeking admission with a BCC and not obtaining a Form I-94 can still be required to undergo US-VISIT processing at the discretion of the inspecting officer. DHS requests public comment on all of these issues, but would regard as most helpful comments on the ramifications of adding additional classifications at land borders. DHS places a great deal of importance on input from the public concerning the performance and implementation of the US-VISIT program. In particular, DHS seeks input on specific steps or milestones that should take place prior to processing future additional classifications of aliens in US-VISIT at land borders. III. Regulatory Requirements A. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA), 5 U.S.C. 605(b), as amended by the Small Business Regulatory Enforcement and Fairness Act of 1996 (SBREFA), requires an agency to prepare and make available to the public a regulatory flexibility analysis that describes the effect of the rule on small entities ( *i.e.* , small businesses, small organizations, and small governmental jurisdictions). DHS has considered the impact of this rule on small entities and has determined that this rule will not have a significant economic impact on a substantial number of small entities. The individual aliens to whom this rule applies are not small entities as that term is defined in 5 U.S.C. 601(6). There is no change expected in any process as a result of this rule that would have a direct effect, either positive or negative, on a small entity. Accordingly, this rule will not have a significant economic impact on a substantial number of small entities and DHS does not believe that US-VISIT processing will impede the free flow of travel and trade, especially such travel and trade relating directly to small entities. B. Executive Order 12866 Under section 3(f) of Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993) (as amended), DHS has determined that this proposed rule is a “significant regulatory action” because there is significant public interest in issues pertaining to national security, immigration policy, and international trade and travel relating to this proposed rule. Accordingly, this proposed rule has been submitted to the Office of Management and Budget
(OMB)for review. DHS currently processes through US-VISIT, using biometrics, all aliens entering the United States with a nonimmigrant visa or under the Visa Waiver Program at any air, sea, or land port of entry. As of May 25, 2006, US-VISIT biometric screening has resulted in DHS's ability to take adverse action against 1160 aliens whose prior criminal actions rendered the alien ineligible for admission or who pose a security threat to the United States. This proposed rule will strengthen the ability of CBP officers to identify and take action against persons whose conduct renders them security threat and therefore ineligible for admission. For example, DHS expects that, just as 1160 nonimmigrants have been intercepted by DHS using the biometric screening of US-VISIT, additional individuals applying for admission with permanent resident cards or reentry permits will be found, by the comparison of biometric identifiers, to have violated the terms of their permanent resident status. Such violations may be the result of the commission of various crimes, tampering with the actual permanent resident card, or attempting to gain entry by attempting to assume the identity of another LPR. Such violations could ultimately result in the LPR losing permanent resident status and possible removal from the United States, or the exclusion or removal of an individual from the United States for fraud. Based on the number of permanent resident cards that are seized by CBP officers at ports of entry (approximately 15,000 in FY 2005) and DHS Forensic Document Laboratory analyses each month (approximately 250), DHS estimates that US-VISIT biometric screening has the potential to identify a significant number of aliens each month in need of additional investigation prior to being admitted to the United States. In addition, based on the numbers of refugee travel documents
(519)and immigrant visas (2,287) that CBP officers intercepted in attempts to use the documents fraudulently by aliens during FY2005, US-VISIT estimates that interception of fraudulently used documents will increase with the introduction of biometric verification of identity. DHS expects similar results—an increase in the number of aliens identified with possible admission-related or immigration problems—by including the other groups of aliens highlighted in this proposed rule into the US-VISIT biometric screening protocol. For example, aliens holding immigrant visas have a six-month validity window from the date the visa is issued to arrive in the United States. Events could occur during this time period that could result in the alien being found inadmissible to the United States that might only be discovered as the result of biometric comparisons. Over the last several years, over one million aliens have entered the United States annually on immigrant visas. Refugees and asylees—appearing before Government officers in many instances without the benefit of even the most basic form of identity documentation—potentially pose a risk to public safety and security. In many instances, the United States Government is providing these individuals with a new identity. It is important to recognize that for refugees and asylees, US-VISIT will be verifying the identity of these aliens by comparing the biometrics collected at the time of an application for admission to the United States with the biometrics that were already collected during the initial refugee or asylee adjudication process. Similarly, aliens paroled into the United States warrant the additional screening derived by using US-VISIT. While the majority of these aliens have been screened overseas in order to determine whether a parole should be granted, it is in the security interest of the United States to verify that the individuals who arrive at the border are the same individuals screened for parole. Approximately 150,000 aliens are granted parole into the United States each year. The costs associated with implementation of this proposed rule for select travelers not otherwise exempt from US-VISIT requirements include an increase of approximately 15 seconds in initial inspection processing time (additional biometric collection) per applicant over the current average inspection time. No significant difference is anticipated in the processing of an alien traveling with a visa or under the VWP, as compared to any other alien who is exempted from the visa requirements. These ports of entry encompass over 99% of all air and sea border traffic and over 95% of all land border traffic for these alien classifications. DHS, through CBP, has carefully monitored the impact of US-VISIT biometric data collection on the inspection of applicants for admission at air, sea, and land borders. At air and sea ports, internal studies have established that the biometric collection adds no more than 15 seconds on average to the inspection processing time at primary inspection. At land border ports, internal studies have shown positive results, and in some POEs the amount of time to process an alien for admission using the US-VISIT process was actually shorter than it had been previously due to the automation of data collection and implementation of a standard process. A close examination of the first three land ports of entry to begin US-VISIT biometric collection as part of admission found that the average processing time for applicants requiring a Form I-94 or Form I-94W actually decreased and sometimes resulted in significantly reduced processing times. Port of entry Average form I-94 processing time before implementing US-VISIT Average form I-94 processing time after implementing US-VISIT Port Huron, MI 11 minutes, 42 seconds 9 minutes, 58 seconds. Douglas, AZ 4 minutes, 16 seconds 3 minutes, 12 seconds. Laredo, TX 12 minutes, 10 seconds 2 minutes, 18 seconds. Accordingly, DHS does not believe that US-VISIT processing impedes the free flow of travel and trade. In addition, over time, the efficiency with which the process is employed will increase, and the process can be expected to further improve. DHS will not apply this rule to all aliens crossing land borders until technological advancements are identified, tested, and implemented to ensure that the land border commerce and traffic concerns are significantly mitigated. DHS may choose to implement this rule in the air and sea environment before the land border environment. As mentioned in the August 31, 2004, rule, DHS has developed a number of mitigation strategies, not unlike those already available to CBP under other conditions to mitigate delays. DHS, while not anticipating significant delays for travelers, will nevertheless develop procedures and strategies to deal with any significant delays that may occur through unanticipated and unusually heavy travel periods. C. Executive Order 13132 Executive Order 13132 requires DHS to develop a process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” Such policies are defined in the Executive Order to include rules 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.” DHS has analyzed this proposed rule in accordance with the principles and criteria in the Executive Order and has determined that this proposed rule would 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, DHS has determined that this proposed rule does not have federalism implications. This rule provides for the collection by the Federal Government of biometric identifiers from certain aliens seeking to enter or depart from the United States, for the purpose of improving the administration of federal immigration laws and for national security. States do not conduct activities with which the provisions of this specific rule would interfere. D. Executive Order 12988 This proposed rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988. That Executive Order requires agencies to conduct reviews, before proposing legislation or promulgating regulations, to determine the impact of those proposals on civil justice and potential issues for litigation. The Order requires that agencies make reasonable efforts to ensure that the regulation clearly identifies preemptive effects, effects on existing federal laws and regulations, identifies any retroactive effects of the proposal, and other matters. DHS has determined that this regulation meets the requirements of Executive Order 12988 because it does not involve retroactive effects, preemptive effects, or other matters addressed in the Order. E. Unfunded Mandates Reform Act of 1995 Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, 109 Stat. 48 (March 22, 1995) (2 U.S.C. 1501 *et seq.* ), requires Federal agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of more than $100 million in any one year (adjusted for inflation with 1995 base year). Before promulgating a rule for which a written statement is needed, section 205 of the UMRA requires DHS to identify and consider a reasonable number of regulatory alternatives and to adopt the least costly, most cost-effective, or least burdensome option that achieves the objective of the rule. Section 205 allows DHS to adopt an alternative, other than the least costly, most cost-effective, or least burdensome option if DHS publishes an explanation with the final rule. This proposed rule will not result in the expenditure, by State, local or tribal governments, or by the private sector, of more than $100 million annually. Thus, DHS is not required to prepare a written assessment under UMRA. F. Small Business Regulatory Enforcement Fairness Act of 1996 This proposed rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804, as this proposed rule will not result in an annual effect on the economy of $100 million or more. G. Trade Impact Assessment The Trade Impact Agreement Act of 1979, Public Law 96-39, tit IV, secs. 401-403, 93 Stat. 242 (July 26, 1979), as amended (19 U.S.C. 2531-2533), prohibits Federal agencies from engaging in any standards or related activities that create unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic objectives, such as safety, are not considered unnecessary obstacles. The statute also requires consideration of international standards and, where appropriate, that they be the basis for United States standards. DHS has determined that this proposed rule will not create unnecessary obstacles to the foreign commerce of the United States and that any minimal impact on trade that may occur is legitimate in light of this rule's benefits for the national security and public safety interests of the United States. In addition, DHS notes that this effort considers and utilizes international standards concerning biometrics, and will continue to consider these standards when monitoring and modifying the program. H. National Environmental Policy Act of 1969 DHS will analyze the actions contained in this proposed rule for purposes of complying with the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 *et seq.* , and Council on Environmental Quality
(CEQ)regulations, 40 CFR parts 1501-1508. Depending upon the environmental impacts, DHS will conduct the appropriate level of analysis in accordance with NEPA. I. Paperwork Reduction Act This proposed rule establishes the process by which DHS will require certain aliens who cross the borders of the United States to provide fingerprints, photograph(s), and potentially other biometric identifiers upon their arrival and departure at designated ports. These requirements constitute an information collection under the Paperwork Reduction Act (PRA), 44 U.S.C. 507 *et seq.* OMB, in accordance with the Paperwork Reduction Act, has previously approved this information collection for use. The OMB Control Number for this collection is 1600-0006. Since this rule provides a mechanism for the addition of new aliens by Notice in the **Federal Register** who may be photographed and fingerprinted, and who may be required to provide other biometric identifiers, DHS has submitted the required Paperwork Reduction Change Worksheet (OMB-83C) to the Office of Management and Budget
(OMB)reflecting the increase in burden hours and OMB has approved the changes. J. Public Privacy Interests As discussed in the January 5, 2004, (69 FR 468) and August 31, 2004, (69 FR 53318) interim rules, US-VISIT records will be protected consistent with all applicable privacy laws and regulations. Personal information will be kept secure and confidential and will not be discussed with, nor disclosed to, any person within or outside US-VISIT other than as authorized by law and as required for the performance of official duties. In addition, careful safeguards, including appropriate security controls, will ensure that the data is not used or accessed improperly. The DHS Chief Privacy Officer will review pertinent aspects of the program to ensure that these proper safeguards and security controls are in place. The information will also be protected in accordance with the DHS published privacy policy for US-VISIT. Affected persons will have a three-stage process for redress if there is concern about the accuracy of information. An individual may request a review or change, or a DHS officer may determine that an inaccuracy exists in a record. A DHS officer can modify the record. If the individual remains dissatisfied with this response, he or she can request assistance from the US-VISIT Privacy Officer, and can ask that the Privacy Officer review the record and address any remaining concerns. The DHS Privacy Office will advise US-VISIT to further ensure that the information collected and stored in IDENT and other systems associated with US-VISIT is being properly protected under the privacy laws and guidance. US-VISIT also has a program-dedicated Privacy Officer to handle specific inquiries and to provide additional advice concerning the program. Finally, DHS will maintain secure computer systems that will ensure that the confidentiality of an individual's personal information is maintained. In doing so, the Department and its information technology personnel will comply with all laws and regulations applicable to government systems, such as the Federal Information Security Management Act of 2002, Title X, Public Law 107-296, 116 Stat. 2259-2273 (Nov. 25, 2002) (codified in scattered sections of titles 6, 10, 15, 40, and 44 U.S.C.); Information Management Technology Reform Act (Clinger-Cohen Act), 40 U.S.C. 11101 *et seq.* ; Computer Security Act of 1987, 40 U.S.C. 1441 *et seq.* (as amended); Government Paperwork Elimination Act, 44 U.S.C. 101, 3504; and Electronic Freedom of Information Act of 1996, 5 U.S.C. 552. List of Subjects 8 CFR Part 215 Administrative practice and procedure, Aliens, Travel restrictions. 8 CFR Part 235 Aliens, Immigration, Registration, Reporting and recordkeeping requirements. Accordingly, chapter I of title 8 of the Code of Federal Regulations is proposed to be amended as follows: PART 215—CONTROL OF ALIENS DEPARTING FROM THE UNITED STATES 1. The authority citation for part 215 continues to read as follows: Authority: 8 U.S.C. 1104; 1184; 1185 (pursuant to E.O. 13323, published January 2, 2004), 1365a and note, 1379, 1731-32. 2. Section 215.8 is proposed to be amended by revising paragraph (a)(1) as follows: § 215.8 Requirements for biometric identifiers from aliens on departure from the United States. (a)(1) The Secretary of Homeland Security, or his designee, may establish pilot programs at land border ports of entry, and at up to fifteen air or sea ports of entry, designated through notice in the **Federal Register** , through which the Secretary or his delegate may require an alien admitted to or paroled into the United States, other than aliens exempted under paragraph (a)(2) of this section or Canadian citizens under section 101(a)(15)(B) of the Act who were not otherwise required to present a visa or have been issued Form I-94 or Form I-95 upon arrival at the United States, who departs the United States from a designated port of entry, to provide fingerprints, photograph(s) or other specified biometric identifiers, documentation of his or her immigration status in the United States, and such other evidence as may be requested to determine the alien's identity and whether he or she has properly maintained his or her status while in the United States. PART 235—INSPECTION OF PERSONS APPLYING FOR ADMISSION 3. The authority citation for part 235 continues to read as follows: Authority: 8 U.S.C. 1101 and note, 1103, 1183, 1185 (pursuant to E.O. 13323 published on January 2, 2004), 1201, 1224, 1225, 1226, 1228, 1365a note, 1379, 1731-32. 4. Sections 235.1 is proposed to be amended by revising paragraphs (d)(1)(ii) as follows: § 235.1 Scope of examination.
(d)* * *
(1)* * *
(ii)The Secretary of Homeland Security or his delegate may require any alien seeking admission to or parole into the United States, other than aliens exempted under paragraph (d)(1)(iv) of this section or Canadian citizens under section 101(a)(15)(B) of the Act who are not otherwise required to present a visa or be issued Form I-94 or Form I-95 for admission or parole into the United States, to provide fingerprints, photograph(s) or other specified biometric identifiers, documentation of his or her immigration status in the United States, and such other evidence as may be requested to determine the alien's identity and whether he or she has properly maintained his or her status while in the United States. The failure of an applicant for admission to comply with any requirement to provide biometric identifiers may result in a determination that the alien is inadmissible under section 212(a) of the Immigration and Nationality Act or any other law. Dated: July 13, 2006. Michael Chertoff, Secretary. [FR Doc. E6-11993 Filed 7-26-06; 8:45 am] BILLING CODE 4410-10-P DEPARTMENT OF TRANSPORTATION Federal Highway Administration 23 CFR Parts 771 and 774 Federal Transit Administration 49 CFR Part 622 [Docket No. FHWA-05-22884] RIN 2125-AF14 and 2132-AA83 Parks, Recreation Areas, Wildlife and Waterfowl Refuges, and Historic Sites AGENCIES: Federal Highway Administration
(FHWA)and Federal Transit Administration (FTA), DOT. ACTION: Notice of proposed rulemaking (NPRM); request for comments. SUMMARY: This proposal would modify the procedures for granting approvals under 23 U.S.C. 138 and 49 U.S.C. 303 (hereafter referred to as “Section 4(f)” 1 ) in several ways. First, this proposal clarifies the factors to be considered and the standards to be applied when determining if an alternative for avoiding the use of Section 4(f) property is feasible and prudent. Second, this NPRM proposes to clarify the factors to be considered when selecting a project alternative in situations where all alternatives use Section 4(f) property and no feasible and prudent avoidance alternative exists. Third, this proposal would establish procedures for determining that the use of a Section 4(f) property has *de minimis* impacts. Fourth, the proposal updates the regulation to recognize statutory and common-sense exceptions for uses that advance Section 4(f)'s preservationist goals; as well as the option of conducting certain Section 4(f) evaluations on a programmatic basis. Fifth, this proposal would move the Section 4(f) regulations out of the agencies' National Environmental Policy Act regulations (23 CFR part 771, “Environmental Impact and Related Procedures”), into a separate part of 23 CFR, with a reorganized structure that is easier to use. 1 Section 4(f) of the Department of Transportation Act of 1966 was technically repealed in 1983 when it was codified without substantive change at 49 U.S.C. 303. A provision with the same meaning is found at 23 U.S.C. 138 and applies only to FHWA actions. This regulation continues to refer to Section 4(f) as such because it would create needless confusion to do otherwise; the policies Section 4(f) engendered are widely referred to as “Section 4(f)” matters. DATES: Comments must be received on or before September 25, 2006. Late-filed comments will be considered to the extent practicable. ADDRESSES: Written Comments: Submit written comments to the Dockets Management System, U.S. Department of Transportation, Room PL-401, 400 Seventh Street, SW., Washington, DC 20590-0001. *Comments.* You may submit comments identified by the docket number (FHWA-05-22884) by any of the following methods: • Federal eRulemaking Portal: *http://www.regulations.gov.* Follow the online instructions for submitting comments. • Web site: *http://dms.dot.gov.* Follow the instructions for submitting comments on the DOT electronic docket site. • Fax: 1-202-493-2478. • Mail: Docket Management System; U.S. Department of Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, Washington, DC 20590-0001. • Hand Delivery: To the Docket Management System; Room PL-401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., Washington, DC between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Instructions: All submissions must include the agency name and docket number or Regulatory Identification Number
(RIN)for this notice. For detailed instructions on submitting comments and additional information on the rulemaking process, see the Public Participation heading of the Supplementary Information section of this document. Note that all comments received will be posted without change to *http://dms.dot.gov* including any personal information provided. Please see the Privacy Act heading under Supplementary Information. Docket: For access to the docket to read background documents or comments received, go to *http://dms.dot.gov* at any time or to the Docket Management System (see ADDRESSES ). FOR FURTHER INFORMATION CONTACT: For FHWA, Diane Mobley, Office of the Chief Counsel, 202-366-1372, or Lamar Smith, Office of Project Development and Environmental Review, 202-366-8994. For FTA, Joseph Ossi, Office of Planning and Environment, 202-366-1613, or Christopher VanWyk, Office of Chief Counsel, 202-366-1733. Both agencies are located at 400 Seventh Street, SW., Washington, DC 20590-0001. Office hours are from 7:45 a.m. to 4:15 p.m. for FHWA, and 9 a.m. to 5:30 p.m. for FTA, Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: Background *SAFETEA-LU.* Section 6009 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59, Aug. 10, 2005, 119 Stat. 1144) is the impetus for this rulemaking action. Section 6009(b) directs the Secretary of Transportation (Secretary) to promulgate regulations within 1 year ( *i.e.* , by August 10, 2006). The rulemaking must clarify “the factors to be considered and the standards to be applied in determining the prudence and feasibility of alternatives, to using Section 4(f) properties for transportation projects. Section 4(f) properties are significant parks, recreation areas, refuges, and historic sites described in section 4(f) of the Department of Transportation Act of 1966, (Pub. L. 89-670, 80 Stat. 931) currently codified at 23 U.S.C. 138 and 49 U.S.C. 303. A joint FHWA-FTA regulation implementing Section 4(f) is currently located at 23 CFR 771.135. The regulation does not currently address what factors should be considered and what standards should be applied when determining if an avoidance alternative is feasible and prudent. This rulemaking proposes to establish those factors and standards as directed by SAFETEA-LU. The rulemaking also includes a new, alternative method of compliance for uses with *de minimis* impacts to a Section 4(f) property. Prior to SAFETEA-LU, Section 4(f) prohibited all uses of Section 4(f) properties for transportation projects unless the agency determined there was no feasible and prudent avoidance alternative and all possible planning to minimize harm had occurred. Section 6009(a) of SAFETEA-LU amended the statute such that uses with *de minimis* impacts can be approved without an analysis of avoidance alternatives. This section does not need regulations to become effective. However, we propose to incorporate the procedures implementing this provision into this rule. These procedures reflect the statutory provisions, and guidance issued on December 13, 2005 and provided to the public via FHWA's Web site at *http://www.fhwa.dot.gov/hep/legreg.htm.* *History.* Section 4(f) was enacted during the peak of the Interstate Highway construction program. At that time, many proposed Interstate Highways threatened major urban parks and historic districts. Much of the early case law on Section 4(f) was decided prior to the establishment of implementing regulations on cases involving these major new highways, prompting some courts to issue strict interpretations of Section 4(f). This began with the Supreme Court's seminal decision in *Citizens to Preserve Overton Park* v. *Volpe* , 401 U.S. 402
(1971)(“ *Overton Park* ”). In *Overton Park* , the Supreme Court considered a challenge to the Secretary's approval for the construction of a six-lane highway, mostly at-grade through Memphis, Tennessee's centerpiece, inner-city Overton Park. Much of the planning for the highway location occurred prior to the enactment of Section 4(f), and the reasons for FHWA's rejection of avoidance alternatives were not documented. The Court remanded the case to the district court on other grounds to answer several questions that could not be determined from the sparse administrative record. However, in its opinion, the Court articulated a high standard for compliance with Section 4(f), stating that Congress intended the protection of parkland to be of paramount importance. The Court further opined that an avoidance alternative to using Section 4(f) property must always be selected unless it would present “uniquely difficult problems” or require “costs or community disruption of extraordinary magnitude.” *Id.* , at 411-12, 416. The Court remanded the case back to the district court. This very stringent reading of Section 4(f) has guided courts ever since in applying Section 4(f) to specific decisions made by transportation agencies. In the years following *Overton Park* , courts around the country applied the decision differently to essentially similar situations, reaching different conclusions as to how various factors may be considered and what weight may be attached to those factors when the agency determines if an avoidance alternative is or is not feasible and prudent. Some court decisions produced relatively strict and inflexible, almost mechanical, interpretations of Section 4(f) and resulted in an even more stringent interpretation of what is feasible and prudent than did *Overton Park.* Those decisions severely restricted the agencies' ability to make tradeoffs among societally important resources and forced the selection of alternatives that had other significant adverse economic, social, and environmental costs, even if the impact to the Section 4(f) property was minor or the property itself relatively unimportant. One early decision, for example, held that any harm to 4(f) property, no matter how small, would trigger the application of Section 4(f). *Louisiana Environmental Society* v. *Coleman* , 537 F.2d 79 (5th Cir. 1976). Further, an avoidance alternative with significant residential displacements (more than 1500 homes taken) could not be rejected as imprudent, regardless of the scale or degree of corresponding harm to the Section 4(f) property. *Id.* Other later cases struggled to apply *Overton Park* to more factually complex projects, such as projects with multiple Section 4(f) properties and for which no total avoidance alternative is possible. At the same time, the highway program evolved from an emphasis on constructing the vast Interstate System to today's primary concerns of system preservation, congestion relief, and modernization of existing facilities. Regulations were implemented for Section 4(f) establishing a process for making and documenting decisions, including documenting the reasons for rejecting avoidance alternatives. See 23 CFR 771.135, 52 FR 32660, Aug. 28, 1987. Planning rules evolved to require early attention to avoiding major Section 4(f) properties. Each State is now required to have a continual process for evaluating and updating its long range plan for transportation improvements. One element of the planning process is to “consider, analyze as appropriate and reflect in the planning process products * * * access to * * * national parks, recreation and scenic areas, monuments and historic sites.” 23 CFR 450.208(a)(4), 58 FR 58064, Oct. 28, 1993. 2 Innumerable new mitigation options and techniques have also been developed since Section 4(f) was enacted, including context sensitive design principles, new methods for mitigating noise and reducing adverse effects to historic properties, and new stormwater treatment options. The result of these developments is that the rigid interpretations from the early court decisions are often an awkward fit with the consequences to the Section 4(f) property. In most instances, those consequences are not as extreme as what was considered in *Overton Park* and other early cases. 2 The statewide transportation planning process was also amended by SAFETEA-LU (sections 3006 and 6001); the agencies will likely implement these changes in a separate rulemaking. Over time, some courts reconciled these changes by interpreting the language of Section 4(f) and *Overton Park* in a way that balances the harm to the property with impacts to other resources. While those courts continued to insist on a heightened standard for protecting Section 4(f) sites, they did allow for consideration of mitigation opportunities, harm to other important resources, and the magnitude of impact to the Section 4(f) property. This balancing approach became the new case law standard in several areas of the country. An example of the balancing approach is a 1993 case involving the construction of a replacement road for one that had formerly traversed the top of a dam. The proposed road replacement alternative would travel through a 347 acre park, taking a total of 5.7 acres of the park. The FHWA found that there was no feasible and prudent alternative to this alignment. *Committee to Preserve Boomer Lake Park* v. *Skinner* , 4 F.3d 1543 (10th Cir. 1993). In its review of FHWA's decision, the *Boomer Lake* court described the term “prudent” as involving a “common sense balancing of practical concerns,” although cautioning that the problems encountered by proposed avoidance alternatives must be “truly unusual” or reach “extraordinary magnitude” before parkland can be taken. The court found that the avoidance alternative had several problems when compared to the proposed route, including higher road user costs, substandard curves raising safety concerns, more traffic congestion due to failure to accommodate east-west traffic, more relocations, more intersection modifications, and higher construction costs. Additionally, the court found that the proposed alignment had beneficial impacts by providing better fishing access, improving water quality, and connecting the east and west sides of the park. The court concluded that, although none of these factors alone would be a basis for rejecting the avoidance alternative, their cumulative weight was sufficient to support FHWA's decision. *Id.* General Discussion of the Proposed Rule *Feasible and Prudent Test.* As directed by Congress, this NPRM proposes to clarify the factors to be considered and the standards to be applied in determining the feasibility and prudence of alternatives avoiding the use of Section 4(f) properties by transportation projects. In the SAFETEA-LU conference report, Congress noted that “the fundamental legal standard contained in the *Overton Park* decision for evaluating the prudence and feasibility of avoidance alternatives will remain as the legal authority for these regulations, however, the Secretary will be able to provide more detailed guidance on applying these standards on a case-by-case basis.” H.R. Rep. No. 109-203, at pp. 1057-1058 (2005). This NPRM proposes a standard that is consistent with the fundamental legal standard of *Overton Park.* It would recognize the importance of protecting Section 4(f) properties and, when the impacts are more than *de minimis* , it would require the consideration and documentation of the severe problems associated with avoidance alternatives before the use of a Section 4(f) property could be approved. The agencies intend to adopt the reasoning of several U.S. Circuit Courts of Appeal that safety concerns, adverse impacts to non-Section 4(f) resources such as communities and natural environmental resources, and the costs of constructing and operating an alternative must be compared to the harm that would result to the features, activities, and attributes that qualify the Section 4(f) property for protection. This balancing must be done with a “thumb on the scale” in favor of the Section 4(f) property because of the paramount importance Section 4(f) places on those properties. Thus, to support a finding that an avoidance alternative is not feasible and prudent, the problems associated with avoiding the Section 4(f) property would always have to be severe in nature and not easily mitigated. However, a sliding scale approach to the magnitude of harm is proposed, because it is appropriate to consider the value of the individual Section 4(f) property in context. For example, some historic sites are significant beyond doubt and are permanently protected. Such properties should be protected absent extraordinary problems with the avoidance alternatives. Other historic sites of less significance, or which are likely to be legally destroyed or developed by their owner in the near future, may be outweighed by relatively less severe problems with the avoidance alternatives. A number of examples exist of a strict and inflexible interpretation of Section 4(f) causing the re-routing of a proposed transportation project at great cost in terms of money and other environmental impacts, only to see the historic property torn down soon after construction. The holistic approach proposed will provide the flexibility needed to make wise transportation decisions while still protecting Section 4(f) properties as well as other important resources. When Section 4(f) is applied without regard to other resources or without flexibility, it undermines support for Section 4(f). This proposal does not require a finding that every factor mitigating against an avoidance alternative is “unique,” despite that term appearing several times in *Overton Park's* dicta. The Seventh Circuit has explained that the *Overton Park* Court “was being emphatic, not substituting ‘unique’ for ‘prudent’ in the text of § 4(f).” *Eagle Foundation* v. *Dole* , 813 F.2d 798, 804-05 (7th Cir. 1987). We agree that severe difficulties may justify the use of a Section 4(f) property even if the type of problem is not uncommonly encountered when constructing a transportation project. Therefore, we do not propose to require a finding in every instance that the problem rendering an avoidance alternative not feasible and prudent is a “unique” problem. Rather, in determining whether there are “extraordinary circumstances” that would lead to a conclusion that it is not feasible and prudent to avoid a Section 4(f) property, it is appropriate to consider the situation as a whole, taking into account the cumulative effects of avoiding the Section 4(f) property and the net harm to the property after incorporating available mitigation. *Standard for De Minimis Impacts.* Section 6009(a) of SAFETEA-LU modified Section 4(f) to allow the agencies to approve a transportation use of Section 4(f) property with “ *de minimis* ” impacts, without an alternatives analysis and determination that no feasible and prudent avoidance alternative exists. The FHWA and the FTA issued guidance for implementing the *de minimis* impact provision on December 13, 2005. A copy of the guidance was placed in the docket for this NPRM and it is also available for review online at *http://www.fhwa.dot.gov/hep/legreg.htm.* This rulemaking includes a definition of *de minimis* impacts, and also proposes to include general standards and procedures for making findings of *de minimis* impacts. *Establishment of a New Part 774.* This NPRM proposes to separate Section 4(f) from the agencies' National Environmental Policy Act
(NEPA)regulations in 23 CFR 771. Years of applying Section 4(f) to new and unprecedented situations have led to a history of case experience that is reflected in the regulation. As a result, the rules governing Section 4(f) have grown in length and complexity to the point that they warrant their own part in the CFR for ease of reference and citation. The new part was reorganized to make it more user-friendly, and consistent terminology was adopted where the current regulation uses inconsistent terms with the same meaning. For example, Section 4(f) properties would no longer be called Section 4(f) “resources” in some sections. It should be noted that the proposed separation of the Section 4(f) and NEPA regulations is not intended to fragment compliance with Section 4(f) and NEPA. Our intent is to continue a fully integrated implementation under the unified and coordinated process provided by the NEPA procedures for compliance with the requirements of all applicable environmental laws. Placing the two regulations in close proximity within the Code of Federal Regulations, with cross-references between them, is intended to communicate the continued integration of Section 4(f) approvals with the NEPA process. Section-by-Section Analysis The following segment of this NPRM provides a section-by-section analysis of the proposed changes. Title 23 Section 771.127 Record of Decision Paragraph
(a)of this section would be revised to refer to part 774 in place of 771.135. Section 771.135 Section 4(f) (49 U.S.C. 303) This section would be deleted in its entirety. Part 774—Parks, Recreation Areas, Wildlife and Waterfowl Refuges, and Historic Sites (Section 4(f)) We propose to move the current Section 4(f) regulations from the National Environmental Policy Act regulations (23 CFR part 771) into a new 23 CFR part 774. The title of the part is proposed to be revised from simply “Section 4(f)” to incorporate the descriptive language from the title of section 6009 of SAFETEA-LU; “Parks, Recreation Areas, Wildlife and Waterfowl Refuges, and Historic Sites (Section 4(f)).” The authority is revised from part 771 to include only the citations relevant to Section 4(f) and a reference to SAFETEA-LU was added. While the agencies propose to move the current Section 4(f) regulation from 23 CFR part 771 to 23 CFR part 774 without significant substantive changes other than those noted in this preamble, the existing provisions have been reorganized to make the requirements easier to understand. The proposed structure begins with the general framework of the process of Section 4(f) approvals, followed by coordination, format, and timing requirements for making approvals, and concluding with the many specific requirements applicable to Section 4(f) decisionmaking. Since a few of the definitions were quite lengthy and complex, the agencies propose to include the definitions section at the end, rather than the more typical location at the beginning, which the agencies believe would make the regulations easier to understand. Since most of the practitioners to whom this regulation would be directed are responsible for analyses under dozens of different environmental laws, the simplified structure will facilitate compliance. The proposed structure is: Sec. 774.1 Purpose. 774.3 Section 4(f) approvals. 774.5 Coordination. 774.7 Format. 774.9 Timing. 774.11 Applicability. 774.13 Exceptions. 774.15 Constructive use determinations. 774.17 Definitions. For ease of reference, a distribution table is provided tracking the current sections and proposed sections: Current section in part 771 Proposed section None 774.1 Purpose. 771.135(a)(1) 774.3 Section 4(f) approvals. 771.135(i) [in part] 774.5 Coordination. 771.135(a)(2),
(i)[in part], (j), (k), and
(o)774.7 Format. 771.135(b) [in part], (g)(1), (l),
(m)and
(n)774.9 Timing. 771.135(b) [in part], (c), (d), (e), (g)(1) and p(5)(v) 774.11 Applicability. 771.135(f), (g)(2), (h), (p)(5) [in part], and (p)(7) 774.13 Exceptions. 771.135(p)(3), (p)(4) and (p)(6) 774.15 Constructive use determinations. 771.107(d) and (a)(2), and 771.135(p)(1) and (p)(2) 774.17 Definitions. Section 774.1 Purpose This section is new. It was added to clarify the purpose of the regulations, which is to implement 49 U.S.C. 303 and 23 U.S.C. 138 (Section 4(f)). Section 774.3 Section 4(f) Approvals This section describes the general requirements for approving the use of Section 4(f) property. Current section 771.135(a)(1) provided the basis for the part of this section concerning traditional Section 4(f) approvals. The new provision in section 6009(a) of SAFETEA-LU for making *de minimis* impact determinations in lieu of the traditional analysis is implemented with language that largely follows the statute. There are cross-references to the definitions for “use,” “feasible and prudent,” and “all possible planning,” and to the sections of the regulation governing the coordination, format, and timing of approvals as a road map for the practitioner. This section would also provide new regulatory direction for how to analyze and select an alternative when all feasible and prudent project alternatives use some Section 4(f) property, with a list of factors that should be considered. The factors were drawn from case law experience and FHWA's Section 4(f) Policy Paper. 3 It should be kept in mind that the weight given each factor would necessarily depend on the facts in each particular case, and not every factor would be relevant to every decision. Our intent is to provide the tools that will allow wise transportation decisions that minimize overall harm in these situations, while still providing the special protection afforded by Section 4(f) by requiring the problems to be severe and not easily mitigated. We encourage commenters to provide actual or hypothetical project examples of how these factors can help arrive at a better overall decision. 3 The Section 4(f) Policy Paper, issued March 1, 2005, is available for review online at *http://environment.fhwa.dot.gov/projdev/4fpolicy.htm.* A copy was also placed in the docket for this rulemaking. Section 774.5 Coordination This section would set forth the coordination required prior to making Section 4(f) approvals. With respect to the coordination for traditional Section 4(f) evaluations, part of current section 771.135(i) was included without significant substantive change. For *de minimis* impact determinations, section 6009(a) of SAFETEA-LU includes several specific coordination requirements, and those were included as well. Section 774.7 Format This section would contain the requirements related to the format for the various types of Section 4(f) analyses and approvals. Current sections 771.135(j), (k), (o), and part of
(i)were the basis for this section, without significant substantive change except as discussed below. New text was added describing the format for making the *de minimis* impact determinations and for making approvals when all feasible and prudent project alternatives use some Section 4(f) property. The section also provides a clear regulatory basis for programmatic Section 4(f) evaluations and approvals, a practice which the FHWA uses from time to time, 4 and which FTA may also use in the future. Finally, we propose to clarify that a preliminary Section 4(f) determination made as part of the Administration's approval of a first-tier Environmental Impact Statement
(EIS)is final with respect to those issues addressed in the preliminary determination and are not to be revisited after a final section 4(f) approval is granted during the second-tier NEPA study, which may or may not be an EIS. 4 FHWA has issued the following five programmatic Section 4(f) Evaluations:
(1)Final Nationwide Programmatic Section 4(f) Evaluation and Determination for Federal-Aid Transportation Projects That Have a Net Benefit to a Section 4(f) Property, 70 Fed. Reg. 20618 (April 20, 2005);
(2)Final Nationwide Section 4(f) Evaluation and Approval for Federally-Aided Highway Projects With Minor Involvements With Public Parks, Recreational Lands, and Wildlife and Waterfowl Refuges, 52 Fed. Reg. 31111 (August 19, 1987);
(3)Final Nationwide Section 4(f) Evaluation and Approval for Federally-Aided Highway Projects With Minor Involvements With Historic Sites, 52 Fed. Reg. 31118 (August 19, 1987);
(4)Department of Transportation, Federal Highway Administration-Programmatic Section 4(f) Evaluation and Approval for FHWA Projects that Necessitate the Use of Historic Bridges, 48 Fed. Reg. 38135 (August 22, 1983); and
(5)Negative Declaration/Section 4(f) Statement for Independent Bikeway or Walkway Construction Projects, FHWA Memorandum, May 23, 1977, can be found at *http://www.environment.fhwa.dot.gov/projdev/4fbikeways.htm.* Section 774.9 Timing This section would contain the requirements for the timing of Section 4(f) approvals. Current sections 771.135(l), and part of (b), and (g)(1) were incorporated into this section without significant substantive change. Current sections 771.135(m) and
(n)were simplified and incorporated. Section 774.11 Applicability This section answers many common questions about when Section 4(f) is applicable (additional guidance for certain resource situations can be found in FHWA's Section 4(f) Policy Paper). The section incorporates current sections 771.135(c), (d), (e), and parts of
(b)and (g)(1) without significant substantive change. New text was added clarifying that when recreational activities are permitted on rights-of-way formally reserved for future transportation use, Section 4(f) does not apply to the property. The purpose of this clarification is to encourage State and local transportation agencies to permit public recreation on reserved transportation corridors. Current text from section 771.135(p)(5)(v), regarding constructive use of parks adjacent to reserved corridors where the transportation use and the park were jointly planned, was also incorporated here without significant substantive change. Section 774.13 Exceptions This section would list exceptions to Section 4(f). Many of these situations are exceptions because the application of Section 4(f) would be contrary to the preservationist goals of the statute. Others are exceptions created by Congress in various statutes. Five of the exceptions, sections 771.135(f), (g)(2), (h), part of (p)(5), and (p)(7), are incorporated from the current regulations without significant substantive change. Five of the exceptions are new:
(1)Park road and parkway projects constructed under the Federal Lands Highway Program; 5
(2)trail projects under the Recreational Trails Program; 6
(3)enhancement and mitigation projects solely for the purpose of enhancing the activities, features, or attributes of a Section 4(f) property; 7
(4)alternative transportation projects in parks and public lands; 8 and
(5)the Interstate System and certain elements of the Interstate System. 9 5 23 U.S.C. 204. Projects under this program are expressly excepted from Section 4(f) requirements within the Section 4(f) statute itself. 6 These projects are expressly excepted from Section 4(f) requirements by 23 U.S.C. 206(h)(2). 7 This exception is proposed as a common-sense addition to the regulations. 8 This is a new transit program that was created by Congress in section 3021 of SAFETEA-LU “to enhance the protection of national parks and public lands and increase the enjoyment of those visiting the parks and public lands.” It is proposed as a common-sense addition to the regulations. 9 These projects were expressly excepted from Section 4(f) requirements by section 6007 of SAFETEA-LU. Section 774.15 Constructive Use Determinations This section would set forth the standards and procedures for deciding if a proximity impact caused by a project would be so severe as to constitute a use under Section 4(f) where there is no physical taking of property. This section incorporates current sections 771.135(p)(3), (p)(4), and (p)(6) without significant substantive change. It also includes two new examples of constructive use of wildlife and waterfowl refuges. Section 774.17 Definitions This section incorporates the definitions contained in 23 U.S.C. 101(a), and also provides definitions for: Administration; All Possible Planning; Applicant; Constructive Use; *De Minimis* Impact; Environmental Assessment (EA); Environmental Impact Statement (EIS); Feasible and Prudent Alternative; Finding of No Significant Impact (FONSI); Official(s) with Jurisdiction; Record of Decision; and Use. The definitions of “use” and “constructive use” were incorporated from current sections 771.135(p)(1) and
(2)without significant substantive change. The definition of “Administration” was incorporated from section 771.107(d) without substantive change. The other definitions are new. The definition of “Feasible and Prudent Alternative” was required by section 6009(b) of SAFETEA-LU. The proposal includes the factors to consider when deciding if an avoidance alternative is a feasible and prudent alternative to the use of a Section 4(f) property. The list of factors would promote consistent decisionmaking nationwide. The factors are based on case law and the agencies' experience assessing the environmental impacts of transportation projects. An avoidance alternative may be found not feasible and prudent based on a single factor or a combination of factors; however, we intend that these factors would only render the alternative imprudent if the problem is severe in nature and not easily mitigated. The feasible and prudent determination should include a comparison of the problems associated with the avoidance alternative and the magnitude of harm that would befall the activities, features, and attributes qualifying the property for protection under Section 4(f). As the magnitude of harm to the Section 4(f) property increases, the severity of the problems that would have to exist before the alternative could be deemed not feasible and prudent would also increase. For example, where the avoidance alternative being evaluated would cause only minor harm to an important feature of a Section 4(f) property, but would divide an established, cohesive community and relocate a substantial percent of the homes, the community impact might be considered severe enough to render the alternative not feasible and prudent. However, if the alternative would devastate the Section 4(f) property, the alternative might be deemed feasible and prudent despite the community impact. These will not always be easy decisions on which all parties will agree, and it will be crucial in such cases that the agencies thoroughly explain the reasons for their decisions. Title 49 Section 622.101 Cross-Reference to Procedures This section, which contains FTA's cross-reference to 23 CFR part 771 for FTA's NEPA regulations, would be revised to include a cross-reference to the new 23 CFR part 774, which would contain the proposed joint FHWA/FTA Section 4(f) regulations. Rulemaking Analyses and Notices All comments received on or before the close of business on the comment closing date indicated above will be considered and will be available for examination in the docket at the above address. Comments received after the comment closing date will be filed in the docket and will be considered to the extent practicable. In addition to late comments, the FHWA and the FTA will also continue to file relevant information in the docket as it becomes available after the comment period closing date, and interested persons should continue to examine the docket for new material. A final rule may be published at any time after close of the comment period. Executive Order 12866 (Regulatory Planning and Review) and DOT Regulatory Policies and Procedures We have determined preliminarily that this action would be a significant regulatory action within the meaning of Executive Order 12866 and would be significant within the meaning of Department of Transportation regulatory policies and procedures because of substantial congressional, State and local government, and public interest. Those interests include the receipt of Federal financial support for transportation investments, appropriate compliance with statutory requirements, and balancing of transportation mobility and environmental goals. We anticipate that the direct economic impact of this rulemaking would be minimal. The clarification of current regulatory requirements is mandated in SAFETEA-LU. We also consider this proposal a means to clarify and reorganize the existing regulatory requirements. These proposed changes would not adversely affect, in a material way, any sector of the economy. In addition, these changes would not interfere with any action taken or planned by another agency and would not materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. Regulatory Flexibility Act In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612) the agencies have evaluated the effects of this proposed action on small entities and have determined that the proposed action would not have a significant economic impact on a substantial number of small entities. This proposed action does not include any new regulatory requirements; it simply clarifies and reorganizes existing requirements. For this reason, the FHWA and the FTA certify that this action would not have a significant economic impact on a substantial number of small entities. Unfunded Mandates Reform Act of 1995 This proposed rule would not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, March 22, 1995, 109 Stat. 48). This proposed rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $120.7 million or more in any one year (2 U.S.C. 1532). Further, in compliance with the Unfunded Mandates Reform Act of 1995, the agencies will evaluate any regulatory action that might be proposed in subsequent stages of the proceeding to assess the affects on State, local, and tribal governments and the private sector. Executive Order 13132 (Federalism) This proposed action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, and the FHWA and the FTA have determined that this proposed action would not have sufficient federalism implications to warrant the preparation of a federalism assessment. The agencies have also determined that this proposed action would not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions. Executive Order 12372 (Intergovernmental Review) Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction; 20.500 et seq., Federal Transit Capital Investment Grants. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to these programs and were carried out in the development of this rule. The FHWA and FTA solicit comments on this issue. Paperwork Reduction Act Under the Paperwork Reduction Act of 1995
(PRA)(44 U.S.C. 3501 *et seq.* ), Federal agencies must obtain approval from the Office of Management and Budget
(OMB)for each collection of information they conduct, sponsor, or require through regulations. The FHWA and the FTA have determined that this proposal does not contain new collection of information requirements for the purposes of the PRA. The information collected in Section 4(f) evaluations is not requested of non-Federal agencies or private parties. The State and local governments and transit agencies compiling information are voluntarily serving as consultants to FHWA and FTA for their own convenience. As the proposers of the actions subject to Section 4(f), and the owners, operators, and maintainers of the resulting transportation facility, and key decision makers regarding the choices involved in project development, it is easier for them to prepare the Section 4(f) evaluations. Information is not requested of outside entities except within the PRA exception relating to “facts or opinions submitted in response to general solicitations of comments from the public.” (5 CFR 1320.3(h)(4)). National Environmental Policy Act This proposed action would not have any effect on the quality of the environment under the National Environmental Policy Act of 1969 (42 U.S.C. 4321) and is categorically excluded under 23 CFR 771.117(c)(20). The proposed action is intended to lessen adverse environmental impacts by standardizing and clarifying compliance for Section 4(f), including the incorporation of clear direction to take into account the overall harm of each alternative. Executive Order 12630 (Taking of Private Property) We have analyzed this proposed rule under Executive Order 12630, Government Actions and Interface with Constitutionally Protected Property Rights. We do not anticipate that this proposed rule would effect a taking of private property or otherwise have taking implications under Executive Order 12630. Executive Order 12988 (Civil Justice Reform) This action 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. Executive Order 13045 (Protection of Children) We have analyzed this action under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. We certify that this proposed rule is not an economically significant rule and would not cause an environmental risk to health or safety that may disproportionately affect children. Executive Order 13175 (Tribal Consultation) We have analyzed this proposed rule under Executive Order 13175, dated November 6, 2000, and believe that the proposed action would not have substantial direct effects on one or more Indian tribes; would not impose substantial direct compliance costs on Indian tribal governments; and would not preempt tribal laws. The proposed rulemaking addresses obligations of Federal funds to States for Federal-aid highway projects and to public transit agencies for capital transit projects and would not impose any direct compliance requirements on Indian tribal governments. While some historic Section 4(f) properties are eligible for Section 4(f) protection because of their cultural significance to a tribe, the proposed rule does not impose any new consultation or compliance requirements on tribal governments. Therefore, a tribal summary impact statement is not required. Executive Order 13211 (Energy Effects) We have analyzed this action under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use dated May 18, 2001. We have determined that it is not a significant energy action under that order because, although it is a significant regulatory action under Executive Order 12866, it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required. Privacy Act Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the **Federal Register** published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit *http://dms.dot.gov.* Regulation Identification Number A regulation identification number
(RIN)is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RINs contained in the heading of this document can be used to cross-reference this action with the Unified Agenda. List of Subjects 23 CFR Part 771 Environmental protection, Grant program—transportation, Highways and roads, Historic preservation, Mass transportation, Public lands, Recreation areas, Reporting and recordkeeping requirements, Wildlife refuges. 23 CFR Part 774 Environmental protection, Grant programs—transportation, Highways and roads, Historic preservation, Mass transportation, Public lands, Recreation areas, Reporting and recordkeeping requirements, Wildlife refuges. 49 CFR Part 622 Environmental impact statements, Grant programs—transportation, Mass transportation, Reporting and recordkeeping requirements. Issued on: July 18, 2006. Sandra K. Bushue, Deputy Administrator, Federal Transit Administration. J. Richard Capka, Federal Highway Administrator. For the reasons set forth in the preamble, and under the authority of 23 U.S.C. 103(c), 109, 138, and 49 U.S.C. 303, and the delegations of authority at 49 CFR 1.48(b) and 1.51, it is proposed to amend Chapter I of Title 23 and Chapter VI of Title 49, Code of Federal Regulations, by revising part 771, adding part 774, and revising part 622, respectively as set forth below. Title 23—Highways PART 771—ENVIRONMENTAL IMPACT AND RELATED PROCEDURES [AMENDED] 1. The authority citation for part 771 continues to read as follows: Authority: 42 U.S.C. 4321 *et seq.* ; 23 U.S.C. 109, 110, 128, 138 and 315; 49 U.S.C. 303, 5301(e), 5323(b), and 5324; 40 CFR parts 1500 *et seq.* ; 49 CFR 1.48(b) and 1.51. 2. Revise § 771.127(a) to read as follows: § 771.127 Record of decision.
(a)The Administration will complete and sign a record of decision
(ROD)no sooner than 30 days after publication of the final EIS notice in the **Federal Register** or 90 days after publication of a notice for the draft EIS, whichever is later. The ROD will present the basis for the decision as specified in 40 CFR 1505.2, summarize any mitigation measures that will be incorporated in the project and document any required Section 4(f) approval in accordance with part 774 of this title. Until any required ROD has been signed, no further approvals may be given except for administrative activities taken to secure further project funding and other activities consistent with 40 CFR 1506.1. § 771.135 [Removed] 3. Remove § 771.135 in its entirety. 4. Add part 774 to read as follows: PART 774—PARKS, RECREATION AREAS, WILDLIFE AND WATERFOWL REFUGES, AND HISTORIC SITES (SECTION 4(F)) Sec. 774.1 Purpose. 774.3 Section 4(f) approvals. 774.5 Coordination. 774.7 Format. 774.9 Timing. 774.11 Applicability. 774.13 Exceptions. 774.15 Constructive use determinations. 774.17 Definitions. Authority: 23 U.S.C. 103(c), 109(h), 138 and 204(h)(2); 49 U.S.C. 303; Section 6009 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (Pub. L. 109-59, Aug. 10, 2005, 119 Stat. 1144); 49 CFR 1.48 and 1.51. § 774.1 Purpose. The purpose of this part is to implement 23 U.S.C. 138 and 49 U.S.C. 303 which were originally enacted as Section 4(f) of the Department of Transportation Act of 1966 and are still commonly referred to as “Section 4(f).” § 774.3 Section 4(f) approvals.
(a)The Administration may not approve the use, as defined in § 774.17(l), of land from a significant publicly owned public park, recreation area, or wildlife and waterfowl refuge, or any significant historic site unless a determination is made that:
(1)There is no feasible and prudent alternative, as defined in § 774.17(h), to the use of land from the property; and the action includes all possible planning, as defined in § 774.17(b), to minimize harm to the property resulting from such use; or
(2)The use of the property, including any avoidance, minimization, mitigation, or enhancement measures committed to by the applicant, will have a *de minimis* impact, as defined in § 774.17(e), on the property.
(b)If the analysis in paragraph (a)(1) of this section concludes that all of the feasible and prudent project alternatives use some Section 4(f) property, then the Administration may approve the most prudent alternative that minimizes overall harm by considering the following factors:
(1)The relative severity of the harm to the protected activities, attributes, or features that qualify each Section 4(f) property for protection;
(2)The relative significance of each Section 4(f) property;
(3)The views of the official(s) with jurisdiction over each Section 4(f) property;
(4)The ability to mitigate adverse impacts to each Section 4(f) property (including any measures that result in benefits to the property);
(5)The degree to which each alternative meets the purpose and need for the project;
(6)The magnitude of any adverse impacts to resources not protected by Section 4(f);
(7)Extraordinary differences in costs among the alternatives; and
(8)Any history of concurrent planning or development of the proposed transportation project and the Section 4(f) property.
(c)The coordination requirements in § 774.5 must be completed before the Administration may make Section 4(f) approvals under this section. Requirements for the format and timing of Section 4(f) approvals are located in §§ 774.7 and 774.9, respectively. § 774.5 Coordination.
(a)Prior to making Section 4(f) approvals under § 774.3(a)(1), the Section 4(f) evaluation shall be provided for coordination and comment to the official(s) with jurisdiction over the property and to the Department of the Interior, and as appropriate to the Department of Agriculture and the Department of Housing and Urban Development. A minimum of 45 days shall be established by the Administration for receipt of comments.
(b)Prior to making *de minimis* impact findings under § 774.3(a)(2), the following coordination shall be undertaken:
(1)For historic properties, the consulting parties identified in accordance with 36 CFR part 800 must be consulted; and the official(s) with jurisdiction over the property must concur, in writing, in a finding of “no adverse effect” or “no historic properties affected” in accordance with 36 CFR part 800. The Administration shall inform the official(s) with jurisdiction of its intent to make a *de minimis* impact finding based on their concurrence in the finding of “no adverse effect” or “no historic properties affected.” Public notice and comment other than the consultation with consulting parties in accordance with 36 CFR part 800 is not required.
(2)For parks, recreation areas, and refuges, public notice and an opportunity for public review and comment concerning the effects on the protected activities, features, or attributes of the property must be provided. Following the opportunity for public review and comment, the Administration shall inform the official(s) with jurisdiction of its intent to make a *de minimis* impact finding; and the official(s) with jurisdiction over the property must concur in writing that the project will not adversely affect the activities, features, or attributes that make the property eligible for Section 4(f) protection.
(c)Uses of Section 4(f) property covered by a programmatic Section 4(f) evaluation under § 774.7(g) shall be documented and coordinated as specified in the programmatic Section 4(f) evaluation. § 774.7 Format.
(a)A Section 4(f) evaluation prepared under § 774.3(a)(1) must include sufficient supporting documentation to demonstrate why there is no feasible and prudent alternative, as defined in § 774.17(h), that would avoid using the Section 4(f) property; and the evaluation must summarize all possible planning, as defined in § 774.17(b), that occurred to minimize harm to the Section 4(f) property.
(b)The documentation supporting a Section 4(f) approval should be presented in the NEPA document for the project in accordance with §§ 771.105(a) and 771.133 of this title. If the Section 4(f) documentation cannot be included in the NEPA document, then it shall be presented in a separate document. The Section 4(f) documentation shall be developed by the applicant in cooperation with the Administration.
(c)If all feasible and prudent alternatives use some Section 4(f) property, the applicant must select the most prudent alternative that minimizes overall harm by considering the factors listed in § 774.3(b). This information must be documented in the Section 4(f) approval document.
(d)All Section 4(f) approvals under § 774.3(a)(1) must be reviewed for legal sufficiency.
(e)A Section 4(f) approval may involve different levels of detail where the Section 4(f) involvement is addressed in a tiered Environmental Impact Statement
(EIS)under § 771.111(g) of this title.
(1)When the first-tier, broad-scale EIS is prepared, the detailed information necessary to complete the Section 4(f) approval may not be available at that stage in the development of the action. In such cases, the evaluation should be made on the potential impacts that a proposed action will have on Section 4(f) property and whether those impacts could have a bearing on the decision to be made. A preliminary determination may be made at this time as to whether there are feasible and prudent locations or alternatives for the action to avoid the use of Section 4(f) property. This preliminary determination shall consider all possible planning to minimize harm to the extent that the level of detail available at the first-tier EIS stage allows. It is recognized that such planning at this stage will normally be limited to ensuring that opportunities to minimize harm at subsequent stages in the development process have not been precluded by decisions made at the first-tier stage. This preliminary determination is then incorporated into the first-tier EIS.
(2)A preliminary Section 4(f) determination made in the first-tier stage shall be considered final and need not be revisited as part of a final Section 4(f) approval granted during the second-tier stage.
(3)The final Section 4(f) approval shall be made in the second-tier categorical exclusion (CE), environmental assessment (EA), or final EIS or in the record of decision
(ROD)or finding of no significant impact (FONSI). Where the Section 4(f) approval is made in a second-tier final EIS or EA, the Administration will summarize the basis for its Section 4(f) approval in the ROD or FONSI.
(f)A *de minimis* impact finding under § 774.3(a)(2) must include sufficient supporting documentation to demonstrate that the impacts, after avoidance, minimization, mitigation, or enhancement measures are taken into account, are *de minimis* as defined in § 774.17(e); and that the coordination required in § 774.5(b) has been completed.
(g)The Administration may develop additional programmatic Section 4(f) determinations. Programmatic Section 4(f) determinations shall be reviewed for legal sufficiency and approved by the Headquarters Office of the Administration. § 774.9 Timing.
(a)Any use of lands from a Section 4(f) property shall be evaluated early in the development of the action when alternatives to the proposed action are under study.
(b)For actions processed with EISs, the Administration will make the Section 4(f) approval either in its approval of the final EIS or in the ROD. Where the Section 4(f) approval is documented in the final EIS, the Administration will summarize the basis for its Section 4(f) approval in the ROD. Actions requiring the use of Section 4(f) property, and proposed to be processed with a FONSI or classified as a CE, shall not proceed until notification by the Administration of Section 4(f) approval.
(c)If the Administration determines that Section 4(f) is applicable after the CE, FONSI, or final EIS has been processed, a separate Section 4(f) approval will be required when:
(1)A proposed modification of the alignment or design would require the use of Section 4(f) property;
(2)The Administration determines that Section 4(f) applies to a property; or
(3)A proposed modification of the alignment, design, or measures to minimize harm (after the original Section 4(f) approval) would result in a substantial increase in the amount of Section 4(f) property used, a substantial increase in the adverse impacts to Section 4(f) property, or a substantial reduction in mitigation measures.
(d)A separate Section 4(f) approval required under paragraph
(c)of this section will not necessarily require the preparation of a new or supplemental environmental document. Where a separate Section 4(f) approval is required, any activity not directly affected by the separate Section 4(f) approval can proceed during the analysis, consistent with § 771.130(f) of this title.
(e)Section 4(f) may apply to archeological sites discovered during construction, as set forth in §§ 774.11(f) and 774.13(b) of this part. In such cases, the Section 4(f) process will be expedited and any required evaluation of feasible and prudent alternatives will take account of the level of investment already made. The review process, including the consultation with other agencies, will be shortened as appropriate. § 774.11 Applicability.
(a)The Administration will determine the applicability of Section 4(f) in accordance with this part.
(b)When another agency is the lead agency for the NEPA process, the Administration shall make any required Section 4(f) approvals unless the lead agency is another U.S. DOT agency.
(c)Consideration under Section 4(f) is not required when the official(s) with jurisdiction over a park, recreation area or refuge determine that the property, considered in its entirety, is not significant. In the absence of such a determination, the Section 4(f) property will be presumed to be significant. The Administration will review a determination that a park, recreation area, or refuge is not significant to assure its reasonableness.
(d)Where Federal lands or other public land holdings (e.g., State forests) are administered under statutes permitting management for multiple uses, and, in fact, are managed for multiple uses, Section 4(f) applies only to those portions of such lands which function for, or are designated in the plans of the administering agency as being for, significant park, recreation, or refuge purposes. The determination of which lands so function or are so designated, and the significance of those lands, shall be made by the official(s) with jurisdiction over the property. The Administration will review this determination to assure its reasonableness.
(e)In determining the application of Section 4(f) to historic sites, the Administration, in cooperation with the applicant, will consult with the official(s) with jurisdiction to identify all properties on or eligible for the National Register of Historic Places (National Register). The Section 4(f) requirements apply only to sites on or eligible for the National Register unless the Administration determines that the application of Section 4(f) is otherwise appropriate.
(f)Section 4(f) applies to all archeological sites on or eligible for inclusion on the National Register, including those discovered during construction, except as set forth in § 774.13(b).
(g)Temporary recreational activity on property formally reserved for future transportation use will not subject the property to Section 4(f). Where the property is formally reserved for transportation use before or at the same time an adjacent park, recreation area, or refuge is established and concurrent or joint planning or development occurs, then any resulting proximity impacts of the transportation project will not be considered a constructive use as defined in § 774.17(d). Examples of such concurrent or joint planning or development include, but are not limited to:
(1)Designation or donation of property for the specific purpose of such concurrent development by the entity with jurisdiction or ownership of the property for both the potential transportation project and the Section 4(f) property, or
(2)Designation, donation, planning or development of property by two or more governmental agencies, with jurisdiction for the potential transportation project and the Section 4(f) property, in consultation with each other. § 774.13 Exceptions. The Administration has identified various exceptions to the requirement for Section 4(f) approval. These exceptions include, but are not limited to:
(a)Restoration, rehabilitation, or maintenance of transportation facilities that are on or eligible for the National Register when:
(1)The Administration finds that such work will not adversely affect the historic qualities of the facility that caused it to be on or eligible for the National Register, and
(2)The official(s) with jurisdiction over the property have been consulted and have not objected to the Administration finding in paragraph (a)(1) of this section.
(b)Archeological sites where the Administration, after consultation with the official(s) with jurisdiction over the property, determines that the archeological resource is important chiefly because of what can be learned by data recovery and has minimal value for preservation in place. This exception applies both to situations where data recovery is undertaken or where the Administration decides, with agreement of the official(s) with jurisdiction, not to recover the resource.
(c)Designations of park and recreation lands, refuges, and historic sites that are made, or determinations of significance that are changed, late in the development of a proposed action. With the exception of the treatment of archeological resources in § 774.9(e), the Administration may permit a project to proceed without consideration under Section 4(f) if the property interest in the Section 4(f) lands was acquired for transportation purposes prior to the designation or change in the determination of significance and if an adequate effort was made to identify properties protected by Section 4(f) prior to acquisition. However, if the age of an historic site is close to, but less than, 50 years at the time of the governmental agency's acquisition, adoption, or approval, and except for its age it would be eligible for the National Register, and construction would begin after the site was eligible, then the site is considered a historic site eligible for the National Register.
(d)Temporary occupancies of land that are so minimal as to not constitute a use within the meaning of Section 4(f). The following conditions must be satisfied:
(1)Duration must be temporary, i.e., less than the time needed for construction of the project, and there should be no change in ownership of the land;
(2)Scope of the work must be minor, i.e., both the nature and the magnitude of the changes to the Section 4(f) property are minimal;
(3)There are no anticipated permanent adverse physical impacts, nor will there be interference with the protected activities, features, or attributes of the property, on either a temporary or permanent basis;
(4)The land being used must be fully restored, i.e., the property must be returned to a condition which is at least as good as that which existed prior to the project; and
(5)There must be documented agreement of the official(s) with jurisdiction over the property regarding the above conditions.
(e)Proximity impacts that are not substantial enough to constitute a “constructive use” as defined in § 774.17(d). Examples include:
(1)Compliance with the requirements of 36 CFR 800.5 for proximity impacts of the proposed action, on a site listed on or eligible for the National Register, results in an agreement of “no historic properties affected” or “no adverse effect”;
(2)The impact of projected traffic noise levels of the proposed highway project on a noise sensitive activity do not exceed the FHWA noise abatement criteria as contained in Table 1 in Part 772 of this title, or the projected operational noise levels of the proposed transit project do not exceed the noise impact criteria for a Section 4(f) activity in the FTA guidelines for transit noise and vibration impact assessment;
(3)The projected noise levels exceed the relevant threshold in paragraph (e)(2) of this section because of high existing noise, but the increase in the projected noise levels if the proposed project is constructed, when compared with the projected noise levels if the project is not built, is barely perceptible (3 dBA or less);
(4)There are proximity impacts to a Section 4(f) property, but a governmental agency's right-of-way acquisition, an applicant's adoption of project location, or the Administration approval of a final environmental document, established the location for a proposed transportation project before the designation, establishment, or change in the significance of the property. However, if the age of an historic site is close to, but less than, 50 years at the time of the governmental agency's acquisition, adoption, or approval, and except for its age it would be eligible for the National Register, and construction would begin after the site was eligible, then the site is considered a historic site eligible for the National Register;
(5)Overall (combined) proximity impacts caused by a proposed project do not substantially impair the activities, features, or attributes that qualify a property for protection under Section 4(f);
(6)Proximity impacts will be mitigated to a condition equivalent to, or better than, that which would occur if the project were not built;
(7)Change in accessibility will not substantially diminish the utilization of the Section 4(f) property; or
(8)Vibration levels from project construction activities are mitigated, through advance planning and monitoring of the activities, to levels that do not cause a substantial impairment of protected activities, features, or attributes of the Section 4(f) property.
(f)Park road or parkway projects developed in accordance with 23 U.S.C. 204.
(g)Trail-related projects funded under the Recreational Trails Program, 23 U.S.C. 206(h)(2).
(h)Transportation enhancement and mitigation projects where the use of the Section 4(f) property is solely for the purpose of preserving or enhancing the activities, features, or attributes that qualify the property for Section 4(f) protection; and the official(s) with jurisdiction over the property agrees in writing that the use benefits or improves said activities, features, or attributes of the property.
(i)Alternative transportation facilities and services in parks and public lands that are funded under 49 U.S.C. 5320.
(j)The Interstate System and individual elements of the Interstate System, with the exception of those elements formally designated by FHWA for Section 4(f) protection on the basis of national or exceptional historic significance. § 774.15 Constructive use determinations.
(a)If the project results in a constructive use, as defined in § 774.17(d), of a nearby Section 4(f) property, the Administration shall evaluate that use in accordance with § 774.3(a)(1). The Administration is not required to determine that a project would not result in a constructive use of a nearby Section 4(f) property. However, such a determination may be made at the discretion of the Administration. When a constructive use determination is made, it will be based, to the extent it reasonably can, upon the following:
(1)Identification of the current activities, features, or attributes of a property which qualify for protection under Section 4(f) and which may be sensitive to proximity impacts;
(2)An analysis of the proximity impacts of the proposed project on the Section 4(f) property. If any of the proximity impacts will be mitigated, only the net impact need be considered in this analysis. The analysis should also describe and consider the impacts which could reasonably be expected if the proposed project were not implemented, since such impacts should not be attributed to the proposed project;
(3)Consultation, on the foregoing identification and analysis, with the official(s) with jurisdiction over the Section 4(f) property.
(b)The Administration has reviewed the following situations and determined that a constructive use occurs when:
(1)The projected noise level increase attributable to the project substantially interferes with the use and enjoyment of a noise-sensitive facility of a property protected by Section 4(f), such as hearing the performances at an outdoor amphitheater, sleeping in the sleeping area of a campground, enjoyment of a historic site where a quiet setting is a generally recognized feature or attribute of the site's significance, enjoyment of an urban park where serenity and quiet are significant attributes, or viewing wildlife in an area of a wildlife and waterfowl refuge intended for such viewing;
(2)The proximity of the proposed project substantially impairs esthetic features or attributes of a property protected by Section 4(f), where such features or attributes are considered important contributing elements to the value of the property. Examples of substantial impairment to visual or esthetic qualities would be the location of a proposed transportation facility in such proximity that it obstructs or eliminates the primary views of an architecturally significant historical building, or substantially detracts from the setting of a park or historic site which derives its value in substantial part due to its setting;
(3)The project results in a restriction of access which substantially diminishes the utility of a significant publicly owned park, recreation area, or a historic site;
(4)The vibration impact from operation of the project substantially impairs the use of a Section 4(f) property, such as projected vibration levels from a rail transit project that are great enough to affect the structural integrity of a historic building or substantially diminish the utility of the building; or
(5)The ecological intrusion of the project substantially diminishes the value of wildlife habitat in a wildlife or waterfowl refuge adjacent to the project or substantially interferes with the access to a wildlife or waterfowl refuge, when such access is necessary for established wildlife migration or critical life cycle processes, or substantially reduces the wildlife use of a wildlife or waterfowl refuge. § 774.17 Definitions. The definitions contained in 23 U.S.C. 101(a) are applicable to this part. In addition, the following definitions apply:
(a)*Administration* . The Federal Highway Administration or the Federal Transit Administration, whichever is making the approval for the transportation program or project at issue.
(b)*All Possible Planning.* All possible planning to minimize harm means that measures that would reduce the adverse impacts resulting from the use of Section 4(f) property must be included in the project unless such measures are not prudent. All possible planning does not require analysis of avoidance alternatives.
(1)In evaluating the prudence of minimization and mitigation measures to minimize harm under § 774.3(a)(1), the Administration will consider:
(i)The views of the official(s) with jurisdiction over the Section 4(f) property;
(ii)With regard to public parks, recreation areas, and refuges, the measures may involve a replacement of land or facilities of comparable value and function, or monetary compensation to enhance the remaining property or to mitigate the adverse impacts of the project in other ways;
(iii)With regard to historic sites, the measures normally serve to preserve the historic activities, features, or attributes of the site as agreed by the Administration and the official(s) with jurisdiction over the property in accordance with the consultation process under 36 CFR part 800;
(iv)Whether the cost of the measures is a reasonable public expenditure in light of the adverse impacts of the project on the Section 4(f) property and the benefits of the measure to the property, in accordance with § 771.105(d) of this title; and
(v)The impacts of the measures outside of the Section 4(f) property.
(2)A *de minimis* impact finding under § 774.3(a)(2) subsumes and obviates the requirement for all possible planning to minimize harm.
(c)*Applicant.* The Federal, State, or local government authority, proposing a transportation project, that the Administration works with to conduct environmental studies and prepare environmental documents. For transportation actions implemented by the Federal government on Federal lands, the Administration or the Federal land management agency may take on the responsibilities of the applicant described herein.
(d)*Constructive Use.* A constructive use occurs when the transportation project does not incorporate land from a Section 4(f) property, but the project's proximity impacts are so severe that the protected activities, features, or attributes that qualify a property for protection under Section 4(f) are substantially impaired. Substantial impairment occurs only when the protected activities, features, or attributes of the property are substantially diminished.
(e)*De Minimis Impact.*
(1)For historic sites, *de minimis* impact means that a determination of “no adverse effect” or “no historic properties effected,” in accordance with the regulation (36 CFR part 800) implementing Section 106 of the National Historic Preservation Act of 1966, is appropriate.
(2)For parks, recreation areas, and refuges, a *de minimis* impact is one that will not adversely affect the protected features, attributes, or activities qualifying the property for protection under Section 4(f).
(f)*Environmental Assessment (EA).* Refers to a document prepared pursuant to NEPA and § 771.119 of this title for a proposed project that is not categorically excluded but for which an EIS is not clearly required.
(g)*Environmental Impact Statement (EIS).* Refers to a document prepared pursuant to NEPA and §§ 771.123 and 771.125 of this title for a proposed project that is likely to cause significant impacts on the environment.
(h)*Feasible and Prudent Alternative.* A feasible and prudent alternative avoids using Section 4(f) property and does not cause other severe problems of a magnitude that outweighs the importance of protecting the Section 4(f) property. In assessing the importance of protecting the Section 4(f) property, it is appropriate to consider the relative value of the resource to the preservation goals of the statute. An alternative may be determined not feasible and prudent if:
(1)It cannot be built as a matter of sound engineering judgment;
(2)It compromises the project to a degree that it is unreasonable to proceed with the project in light of its stated purpose and need;
(3)It results in severe safety or operational problems;
(4)After reasonable mitigation, it causes:
(i)Severe social, economic, or environmental impacts;
(ii)Severe disruption to established communities;
(iii)Severe disproportionate impacts to minority or low income populations; or
(iv)Severe impacts to environmental resources protected under other Federal statutes;
(5)It results in additional construction, maintenance, or operational costs of an extraordinary magnitude;
(6)It causes other unique problems or unusual factors; or
(7)It involves multiple factors in paragraphs
(1)through
(6)of this definition, that while individually minor, cumulatively cause unique problems or impacts of extraordinary magnitude.
(i)*Finding of No Significant Impact (FONSI).* Refers to a decision document prepared pursuant to NEPA and § 771.121 of this chapter.
(j)*Official(s) with Jurisdiction. *
(1)In the case of historic properties, the official with jurisdiction is the State Historic Preservation Officer or Tribal Historic Preservation Officer for the State or Tribal government wherein the property is located. When the Advisory Council on Historic Preservation
(ACHP)is involved in a consultation concerning a property under Section 106 of the National Historic Preservation Act, the ACHP is also an official with jurisdiction over that property for purposes of this part.
(2)In the case of public parks, recreation areas, and refuges, the official(s) with jurisdiction are the official(s) of the agency or agencies that own or administer the property in question, and who are empowered to represent the agency on matters related to the property.
(k)*Record of Decision (ROD).* Refers to a decision document prepared pursuant to NEPA and § 771.127 of this chapter.
(l)*Use.* Except as set forth in § 774.13 of this part, a “use” of Section 4(f) property occurs:
(1)When land is permanently incorporated into a transportation facility;
(2)When there is a temporary occupancy of land that is adverse in terms of the statute's preservationist purposes as determined by the criteria in § 774.13(d) of this part; or
(3)When there is a constructive use of a Section 4(f) property as defined in paragraph
(d)of this section. Federal Transit Administration Title 49—Transportation CHAPTER VI—FEDERAL TRANSIT ADMINISTRATION, DEPARTMENT OF TRANSPORTATION PART 622—ENVIRONMENTAL IMPACT AND RELATED PROCEDURES [AMENDED] 5. Revise the authority citation for Subpart A to read as follows: Authority: 42 U.S.C. 4321 *et seq.* ; 49 U.S.C. 303, 5301(e), 5323(b), and 5324; Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (Pub. L. 109-59, Aug. 10, 2005, 119 Stat. 1144); 40 CFR parts 1500 *et seq.* ; 49 CFR 1.51. 6. Revise § 622.101 to read as follows: Subpart A—Environmental Procedures § 622.101 Cross-reference to procedures. The procedures for complying with the National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321 *et seq.* ), and related statutes, regulations, and orders are set forth in part 771 of title 23 of the Code of Federal Regulations. The procedures for complying with 49 U.S.C. 303, commonly known as “Section 4(f),” are set forth in part 774 of title 23 of the Code of Federal Regulations. [FR Doc. 06-6496 Filed 7-24-06; 10:10 am]
Connectionstraces to 58
Traces to 58 documents
CFR
- Policies concerning review of applications under section 203.§ 2.26
- Applicability, definitions, and blanket authorizations.§ 33.1
- Contents of application---general information requirements.§ 33.2
- Subscription and verification (Rule 2005).§ 385.2005
- Emergency condition defined.§ 376.201
- Non-discrimination requirements.§ 358.4
- What size standards has SBA identified by North American Industry Classification System codes?§ 121.201
- Fecal calprotectin immunological test system.§ 866.5180
- Devices and electronic products.§ 25.34
- Coordination of planning process activities.§ 450.208
- FHWA categorical exclusions.§ 771.117
- Assessment of adverse effects.§ 800.5
U.S. Code
- Disposition of property; consolidations; purchase of securities§ 824b
- Interests in nonbanking organizations§ 1843
- Declaration of policy; application of subchapter§ 824
- Cogeneration and small power production§ 824a–3
- Definitions§ 632
- SHORT TITLE.§ 801
- Rule making§ 553
- Classification of devices intended for human use§ 360c
- Registration of producers of drugs or devices§ 360
- Premarket approval§ 360e
- Adulterated drugs and devices§ 351
- Cleanup standards§ 9621
- Oil and hazardous substance liability§ 1321
- Records maintained on individuals§ 552a
- Definitions§ 101
- Departmental regulations§ 301
- Public information; agency rules, opinions, orders, records, and proceedings§ 552
- Definitions§ 1101
- Inadmissible aliens§ 1182
- Avoidance of duplicative or unnecessary analyses§ 605
- Definitions§ 601
- Purposes§ 1501
- EXPEDITED PROCESSING OF REQUESTS FOR JAPANESE IMPERIAL GOVERNMENT RECORDS.§ 804
- Congressional declaration of purpose§ 4321
- Orders for printing to be acted upon within one year§ 507
- Definitions§ 11101
- Joint Committee on Printing: membership§ 101
- Powers and duties of Secretary of State§ 1104
- Preservation of parklands§ 138
- Policy on lands, wildlife and waterfowl refuges, and historic sites§ 303
- Federal lands access program§ 204
- Recreational trails program§ 206
- Definitions and declaration of policy§ 101
- Statements to accompany significant regulatory actions§ 1532
- Purposes§ 3501
- National Highway System§ 103
- Standards§ 109
- Repealed. Pub. L. 112–141, div. B, § 20002(a), July 6, 2012, 126 Stat. 622]§ 5320
register
66 references not yet in our index
- 18 CFR 33
- Pub. L. 109-58
- 119 Stat. 594
- 5 CFR 1320.12
- 18 CFR 2
- 18 CFR 35
- 18 CFR 376
- 18 CFR 385.714-715
- 5 USC 601-12
- 42 USC 7101-7352
- 3 CFR 1978
- 21 CFR 866
- 21 CFR 807
- 5 USC 601-612
- Pub. L. 104-4
- 40 CFR 300
- 42 USC 9601-9657
- 3 CFR 1987
- 6 CFR 5
- Pub. L. 107-296
- 116 Stat. 2135
- 7 CFR 762
- Pub. L. 106-215
- 114 Stat. 337
- Pub. L. 106-396
- 114 Stat. 1637
- Pub. L. 107-56
- Pub. L. 107-173
- 116 Stat. 543
- Pub. L. 108-458
- 8 CFR 235.1(d)(1)(iv)
- 8 CFR 235.1(d)(iv)(B)
- 8 CFR 235.1(d)(1)(ii)
- 8 CFR 211.1(a)(2)
- 8 CFR 212.1(a)(1)
- 109 Stat. 48
- Pub. L. 96-39
- 93 Stat. 242
- 19 USC 2531-2533
- 116 Stat. 2259
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Final Rule; Order on Rehearing of Order No
SCOTUS401 U.S. 402
F. App'x537 F.2d 79
F. App'x4 F.3d 1543
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