Unknown. Final rule
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/register/2006/09/11/06-7580A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
--- schema: federal-register doc_type: fedreg source_file: FR-2006-09-11.xml --- 71 175 Monday, September 11, 2006 Contents Agricultural Agricultural Marketing Service RULES National Organic Program: Allowed and prohibited substances; national list, 53299-53303 E6-14923 Specialty Crop Block Grant Program; implementation, 53303-53309 06-7580 Agriculture Agriculture Department See Agricultural Marketing Service See Farm Service Agency See Rural Business-Cooperative Service See Rural Housing Service See Rural Utilities Service Alcohol Alcohol, Tobacco, Firearms, and Explosives Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, 53478-53479 E6-14925 E6-14926 Broadcasting Broadcasting Board of Governors NOTICES Meetings;
Sunshine Act, 53363 06-7588 Centers Centers for Disease Control and Prevention NOTICES Meetings: Immunization Practices Advisory Committee, 53454-53455 E6-14949 Centers Centers for Medicare & Medicaid Services NOTICES Grants and cooperative agreements; availability, etc.: Medicare— Medicare Health Care Quality Demonstration Programs, 53455-53456 06-7574 Coast Guard Coast Guard RULES Drawbridge operations: Delaware, 53323-53325 E6-14984 PROPOSED RULES Drawbridge operations: Pennsylvania, 53352-53354 E6-14983 Commerce Commerce Department See International Trade Administration See National Oceanic and Atmospheric Administration Copyright Copyright Royalty Board, Library of Congress RULES Agency organization, administration, and procedural regulations;
Title 37 CFR Chapter III; establishment, 53325-53331 E6-14893 Customs Customs and Border Protection Bureau NOTICES Tariff classification standards: Sugar beet thick juice, 53460-53462 E6-14924 Defense Defense Department NOTICES Federal Acquisition Regulation (FAR): Agency information collection activities; proposals, submissions, and approvals, 53424 06-7540 Meetings: Defense Science Board, 53424 06-7564 Education Education Department NOTICES Grants and cooperative agreements; availability, etc.:
Postsecondary education— Graduate Assistance in Areas of National Need, 53425-53428 E6-15009 Employee Employee Benefits Security Administration PROPOSED RULES Employee Retirement Income Security Act: Independence of employee benefit plan accountants, 53348-53351 E6-14913 Energy Energy Department See Federal Energy Regulatory Commission EPA Environmental Protection Agency RULES Superfund program: Emergency planning and community right to-know— Isophorone diisocyanate, 53331-53335 E6-14849 Toxic substances:
Chemical inventory update reporting, 53335-53337 E6-14993 PROPOSED RULES Superfund program: Emergency planning and community right-to-know— Isophorone diisocyanate, 53354-53355 E6-14843 Export Export-Import Bank NOTICES Meetings; Sunshine Act, 53451 06-7602 Farm Farm Credit Administration NOTICES Meetings; Sunshine Act, 53452 06-7594 Farm Farm Service Agency NOTICES Agency information collection activities; proposals, submissions, and approvals, 53362 E6-14996 FAA Federal Aviation Administration RULES Airworthiness directives:
Arrow Falcon Exporters, Inc., et al., 53319-53321 06-7577 Special conditions— Airbus Model A380-800 airplanes, 53309-53313 E6-15001 E6-15005 Airworthiness standards: Special conditions— Airbus Model A380-800 airplane, escape systems inflation systems, 53313-53318 E6-15010 E6-15011 Airbus Model A380-800 airplane, flotation and ditching, 53315-53316 E6-15012 Standard instrument approach procedures, 53321-53323 E6-14737 PROPOSED RULES Airworthiness directives: Airbus, 53341-53345 E6-14945 Bombardier, 53345-53347 E6-14941 Lockheed, 53347-53348 E6-14944 NOTICES Aeronautical land-use assurance; waivers:
Muskegon County Airport, MI, 53486-53487 06-7525 Oneida-Scott Municipal Airport, TN, 53487 06-7576 Meetings: Air Traffic Procedures Advisory Committee, 53487-53488 06-7523 Research, Engineering and Development Advisory Committee, 53488 06-7524 Reports and guidance documents; availability, etc.: 10-minute rated takeoff thrust/power during takeoff with one-engine inoperative; policy statement, 53488 06-7575 Federal Election Federal Election Commission NOTICES Meetings; Sunshine Act, 53452 06-7592 Special elections; filing dates:
Texas, 53452-53453 E6-14961 Federal Emergency Federal Emergency Management Agency NOTICES Disaster and emergency areas: Texas, 53462 E6-15013 E6-15014 Federal Energy Federal Energy Regulatory Commission NOTICES Electric rate and corporate regulation combined filings, 53435-53439 E6-14950 E6-14951 Environmental statements; availability, etc.: Dorena Lake Dam Hydroelectric Project, OR, 53439 E6-14959 Environmental statements; notice of intent: Cheniere Creole Trail Pipeline, L.P., 53439-53441 E6-14980 Gulf South Pipeline Co., LP, 53441-53443 E6-14968 Hydroelectric applications, 53443-53451 E6-14952 E6-14953 E6-14954 E6-14967 Meetings:
Cranberry Pipeline Corp.; technical conference, 53451 E6-14969 Idaho Power Co.; correction, 53451 E6-14957 *Applications, hearings, determinations, etc.:* Alliance Pipeline L.P., 53428 E6-14970 ANR Pipeline Co., 53428-53429 E6-14962 CenterPoint Energy-Mississippi River Transmission Corp., 53429 E6-14975 Energy West Development, Inc., 53429-53430 E6-14971 EPIC Merchant Energy NE, L.P., et al., 53430 E6-14965 Freedom Partners, LLC, 53430 E6-14963 High Island Offshore System, L.L.C., 53431 E6-14973 E6-14976 Michigan Gas Utilities Corp., 53431-53432 E6-14960 Northwest Pipeline Corp., 53432 E6-14974 Rockies Express Pipeline LLC, 53433 E6-14972 Tennessee Gas Pipeline Co., 53433 E6-14979 Transcontinental Gas Pipe Line Corp., 53434 E6-14978 Valero Power Marketing LLC, 53434-53435 E6-14964 Williston Basin Interstate Pipeline Co., 53435 E6-14977 Federal Highway Federal Highway Administration NOTICES Environmental statements; availability, etc.:
Pulaski and Laurel Counties, KY, 53488-53489 06-7566 Federal Motor Federal Motor Carrier Safety Administration NOTICES Motor carrier safety standards: Driver qualifications; vision requirement exemptions, 53489-53490 E6-14998 Federal Reserve Federal Reserve System NOTICES Banks and bank holding companies: Formations, acquisitions, and mergers, 53453 E6-14988 Federal Open Market Committee: Domestic policy directives, 53453 E6-15015 Federal Retirement Federal Retirement Thrift Investment Board NOTICES Meetings;
Sunshine Act, 53453-53454 06-7596 Fish Fish and Wildlife Service PROPOSED RULES Endangered and threatened species: Critical habitat designations— Canada lynx; contiguous United States distinct population segment, 53355-53361 06-7579 NOTICES Endangered and threatened species and marine mammal permit applications, determinations, etc., 53464-53465 E6-15006 Endangered and threatened species permit applications, determinations, etc., 53465-53466 E6-15007 Environmental statements; notice of intent:
Palo Alto, CA; Stanford University; habitat conservation plan; public scoping meetings, 53466-53467 06-7572 GSA General Services Administration NOTICES Federal Acquisition Regulation (FAR): Agency information collection activities; proposals, submissions, and approvals, 53424 06-7540 Health Health and Human Services Department See Centers for Disease Control and Prevention See Centers for Medicare & Medicaid Services See National Institutes of Health NOTICES Meetings: American Health Information Community, 53454 06-7537 Homeland Homeland Security Department See Coast Guard See Customs and Border Protection Bureau See Federal Emergency Management Agency Housing Housing and Urban Development Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 53462-53464 E6-14919 E6-14920 06-7529 Interior Interior Department See Fish and Wildlife Service See National Park Service See Surface Mining Reclamation and Enforcement Office International International Trade Administration NOTICES Antidumping:
Corrosion-resistant carbon steel flat products from— Canada, 53363-53370 E6-14912 Korea, 53370-53377 E6-15004 Cut-to-length carbon steel plate from— Germany, 53382-53387 E6-15008 Romania, 53377-53382 E6-14911 Frozen fish fillets from— Vietnam, 53387-53400 E6-15003 Granular polytetrafluoroethylene resin from— Italy, 53400-53403 E6-14909 Heavy forged hand tools, finished or unfinished, with or without handles from— China, 53403-53405 E6-14917 Low enriched uranium from— France, 53405 E6-15000 Polyethylene retail carrier bags from— Thailand, 53405-53412 E6-14914 Welded ASTM A-312 stainless steel pipe from— Korea and Taiwan, 53412-53413 E6-14999 Countervailing duties:
Corrosion-resistant carbon steel flat products from— Korea, 53413-53421 E6-14916 Justice Justice Department See Alcohol, Tobacco, Firearms, and Explosives Bureau See Justice Programs Office NOTICES Pollution control; consent judgments: San Diego, CA, 53477 06-7531 Justice Justice Programs Office NOTICES Agency information collection activities; proposals, submissions, and approvals, 53479 E6-14927 Labor Labor Department See Employee Benefits Security Administration See Mine Safety and Health Administration Library Library of Congress See Copyright Royalty Board, Library of Congress Maritime Maritime Administration NOTICES Environmental statements; availability, etc.:
Nuclear ship SAVANNAH decommissioning, 53490-53491 E6-14985 Mine Mine Safety and Health Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 53480-53481 E6-14910 E6-14915 NASA National Aeronautics and Space Administration NOTICES Federal Acquisition Regulation (FAR): Agency information collection activities; proposals, submissions, and approvals, 53424 06-7540 NIH National Institutes of Health NOTICES Agency information collection activities; proposals, submissions, and approvals, 53456-53457 E6-14928 Meetings:
Clinical Center, 53457 06-7534 National Institute of Environmental Health Sciences, 53457 06-7536 National Library of Medicine, 53457-53458 06-7535 Scientific Review Center, 53458-53460 06-7532 06-7533 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management: Alaska; fisheries of Exclusive Economic Zone— Chiniak Gully; opening of research area for vessels using trawl gear, 53338-53339 06-7569 Pollock, 53337-53339 06-7568 06-7570 Shallow-water species; opening to vessels using trawl gear in Gulf of Alaska, 53339-53340 06-7571 NOTICES Endangered and threatened species:
Recovery plans— Pacific salmon and steelhead trout, 53421-53422 E6-14986 Environmental statements; notice of intent: Palo Alto, CA; Stanford University; habitat conservation plan; public scoping meetings, 53466-53467 06-7572 Meetings: Mid-Atlantic Fishery Management Council, 53422 E6-14981 North Pacific Fishery Management Council, 53422-53423 E6-14982 Scientific research permit applications, determinations, etc., 53423-53424 E6-14987 E6-14997 National Park National Park Service NOTICES Native American human remains, funerary objects; inventory, repatriation, etc.:
Kansas State University, Manhattan, KS, 53467-53469 E6-14929 E6-14931 Northern Arizona Museum, Flagstaff, AZ, 53469-53470 E6-14932 University of Colorado Museum, Boulder, Colorado, 53470-53473 E6-14933 E6-14934 University of North Carolina, Chapel Hill, NC, 53473-53475 E6-14935 Wisconsin State Historical Society, Madison, WI; inventory from La Crosse, WI; correction, 53475-53476 E6-14930 National Science National Science Foundation NOTICES Meetings: Geosciences Advisory Committee, 53482 06-7567 Nuclear Nuclear Regulatory Commission NOTICES Agency information collection activities; proposals, submissions, and approvals, 53482 E6-14937 *Applications, hearings, determinations, etc.:* FirstEnergy Nuclear Operating Co. et al, 53482-53483 E6-14936 Public Public Debt Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, 53491 E6-14946 Rural Rural Business-Cooperative Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 53362-53363 06-7573 Rural Rural Housing Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 53362-53363 06-7573 RUS Rural Utilities Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 53362-53363 06-7573 SEC Securities and Exchange Commission PROPOSED RULES Securities:
Transfer agent forms; electronic filing, 53494-53542 06-7269 NOTICES Agency information collection activities; proposals, submissions, and approvals, 53483 E6-14948 Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC; correction, 53492 Z6-14304 International Securities Exchange, Inc., 53483-53485 E6-14947 Social Social Security Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 53485-53486 E6-14900 Surface Surface Mining Reclamation and Enforcement Office PROPOSED RULES Permanent program and abandoned mine land reclamation plan submissions:
Pennsylvania, 53351-53352 E6-14756 NOTICES Agency information collection activities; proposals, submissions, and approvals, 53476-53477 06-7561 06-7562 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Federal Motor Carrier Safety Administration See Maritime Administration Treasury Treasury Department See Public Debt Bureau Separate Parts In This Issue Part II Securities and Exchange Commission, 53494-53542 06-7269 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 71 175 Monday, September 11, 2006 Rules and Regulations DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 205 [Docket Number TM-04-01FR] RIN 0581-AC35 National Organic Program (NOP); Amendments to the National List of Allowed and Prohibited Substances (Crops and Processing) AGENCY:
Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: This final rule would amend the U.S. Department of Agriculture's
(USDA)National List of Allowed and Prohibited Substances (National List) regulations to reflect recommendations submitted to the Secretary of Agriculture (Secretary) by the National Organic Standards Board
(NOSB)from November 15, 2000, through March 3, 2005. Consistent with the recommendations from the NOSB, this final rule adds thirteen substances, along with any restrictive annotations, to the National List. This final rule also amends the mailing address for where to file a Certification or Accreditation appeal. EFFECTIVE DATE: This rule becomes effective September 12, 2006. FOR FURTHER INFORMATION CONTACT: Bob Pooler, Agricultural Marketing Specialist, Telephone:
(202)720-3252; Fax:
(202)205-7808. SUPPLEMENTARY INFORMATION: I. Background On December 21, 2000, the Secretary established, within the NOP [7 CFR part 205], the National List regulations (§§ 205.600 through 205.607). The National List identifies synthetic substances and ingredients that are allowed and nonsynthetic (natural) substances and ingredients that are prohibited for use in organic production and handling. Under the authority of the Organic Foods Production Act of 1990 (OFPA), as amended, (7 U.S.C. 6501 *et seq.* ), the National List can be amended by the Secretary based on proposed amendments developed by the NOSB. Since established, the National List has been amended three times, October 31, 2003 (68 FR 61987), November 3, 2003 (68 FR 62215), and October 21, 2005 (70 FR 61217). This final rule amends the National List to reflect recommendations submitted to the Secretary by the NOSB from November 15, 2000, through March 3, 2005. Between the specified time period, the NOSB has recommended that the Secretary add four substances to § 205.601 and eleven substances to § 205.605 of the National List regulations. This final rule also amends the mailing address for where to file a Certification or Accreditation appeal pursuant to § 205.681(d). II. Overview of Amendments The following provides an overview of the amendments made to designated sections of the National List regulations: Section 205.601 Synthetic Substances Allowed for Use in Organic Crop Production This final rule amends the following inert ingredient to § 205.601 of the National List regulations: Glycerine oleate (Glycerol monooleate) (CAS # 37220-82-9)—for use only until December 31, 2006. This final rule amends the following seed preparation to § 205.601 of the National List regulations: Hydrogen chloride (CAS # 7647-01-0)—for delinting cotton seed for planting. This final rule amends the following slug and snail bait to § 205.601 of the National List regulations: Ferric phosphate (CAS # 10045-86-0). Section 205.605 Nonagricultural (Nonorganic) Substances Allowed as Ingredients in or on Processed Products Labeled as “Organic” or “Made With Organic (Specified Ingredients or Food Group(s))” This final rule amends § 205.605(a) of the regulations by adding the following substances: Egg white lysozyme (CAS # 9001-63-2). L-Malic acid (CAS # 97-67-6). Microorganisms—any food grade bacteria, fungi, and other microorganisms. This final rule also amends § 205.605(b) of the regulations by adding the following substances: Activated charcoal (CAS #s 7440-44-0; 64365-11-3)—only from vegetative sources; for use only as a filtering aid. Cyclohexylamine (CAS # 108-91-8)—for use only as a boiler water additive for packaging sterilization. Diethylaminoethanol (CAS # 100-37-8)—for use only as a boiler water additive for packaging sterilization. Octadecylamine (CAS # 124-30-1)—for use only as a boiler water additive for packaging sterilization. Peracetic acid/Peroxyacetic acid (CAS # 79-21-0)—for use in wash and/or rinse water according to FDA limitations. For use as a sanitizer on food contact surfaces. Sodium acid pyrophosphate (CAS # 7758-16-9)—for use only as a leavening agent. Tetrasodium pyrophosphate (CAS # 7722-88-5)—for use only in meat analog products. Section 205.681 Appeals This final rule amends § 205.681(d)(1) of the regulations by updating the mailing address for where to file a Certification or Accreditation appeal as follows: Administrator, USDA, AMS, c/o NOP Appeals Staff, Stop 0203, Room 302-Annex, 1400 Independence Avenue, SW., Washington, DC 20250-0203. III. Related documents Seven notices and one proposed rule (70 FR 54660, September 16, 2005) were published regarding the meetings of the NOSB and its deliberations on recommendations and substances petitioned for amending the National List. Substances and recommendations included in this final rule were announced for NOSB deliberation in the following **Federal Register** Notices:
(1)65 FR 64657, October 30, 2000, (Peracetic acid);
(2)66 FR 48654, September 21, 2001, (Ammonium hydroxide, Cyclohexlamine, and Octadecylamine);
(3)67 FR 19375, April 19, 2002, (Diethylaminoethanol);
(4)67 FR 54784, August 26, 2002, (Activated charcoal);
(5)68 FR 23277, May 1, 2003, (Egg white lysozyme, Glycerine oleate, L-Malic acid, Microorganisms, Sodium acid pyrophosphate and Tetrahydrofurfuryl alcohol);
(6)69 FR 18036, April 6, 2004, (Hydrogen Chloride, and Tetrasodium pyrophosphate); and
(7)70 FR 7224, February 11, 2005, (Ferric phosphate). IV. Statutory and Regulatory Authority The OFPA, as amended (7 U.S.C. 6501 *et seq.* ), authorizes the Secretary to make amendments to the National List based on proposed amendments developed by the NOSB. Sections 6518(k)(2) and 6518(n) of OFPA authorizes the NOSB to develop proposed amendments to the National List for submission to the Secretary and establishes a petition process by which persons may petition the NOSB for the purpose of having substances evaluated for inclusion on or deletion from the National List, respectively. The National List petition process is implemented under § 205.607 of the NOP regulations. The current petition process (65 FR 43259) can be accessed through the NOP Web site at *http://www.ams.usda.gov/nop.* A. Executive Order 12866 This action has been determined to be not significant for purposes of Executive Order 12866, and therefore, has not been reviewed by the Office of Management and Budget. B. Executive Order 12988 Executive Order 12988 instructs each executive agency to adhere to certain requirements in the development of new and revised regulations in order to avoid unduly burdening the court system. This final rule is not intended to have a retroactive effect. States and local jurisdictions are preempted under § 2115 of the OFPA (7 U.S.C. 6514) from creating programs of accreditation for private persons or State officials who want to become certifying agents of organic farms or handling operations. A governing State official would have to apply to USDA to be accredited as a certifying agent, as described in § 2115(b) of the OFPA (7 U.S.C. 6514(b)). States are also preempted under §§ 2104 through 2108 of the OFPA (7 U.S.C. 6503 through 6507) from creating certification programs to certify organic farms or handling operations unless the State programs have been submitted to, and approved by, the Secretary as meeting the requirements of the OFPA. Pursuant to § 2108(b)(2) of the OFPA (7 U.S.C. 6507(b)(2)), a State organic certification program may contain additional requirements for the production and handling of organically produced agricultural products that are produced in the State and for the certification of organic farm and handling operations located within the State under certain circumstances. Such additional requirements must:
(a)Further the purposes of the OFPA,
(b)not be inconsistent with the OFPA,
(c)not be discriminatory toward agricultural commodities organically produced in other States, and
(d)not be effective until approved by the Secretary. Pursuant to § 2120(f) of the OFPA (7 U.S.C. 6519(f)), this final rule would not alter the authority of the Secretary under the Federal Meat Inspection Act (21 U.S.C. 601 *et seq.* ), the Poultry Products Inspections Act (21 U.S.C. 451 *et seq.* ), or the Egg Products Inspection Act (21 U.S.C. 1031 *et seq.* ), concerning meat, poultry, and egg products, nor any of the authorities of the Secretary of Health and Human Services under the Federal Food, Drug and Cosmetic Act (21 U.S.C. 301 *et seq.* ), nor the authority of the Administrator of the Environmental Protection Agency
(EPA)under the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136 *et seq.* ). Section 2121 of the OFPA (7 U.S.C. 6520) provides for the Secretary to establish an expedited administrative appeals procedure under which persons may appeal an action of the Secretary, the applicable governing State official, or a certifying agent under this title that adversely affects such person or is inconsistent with the organic certification program established under this title. The OFPA also provides that the U.S. District Court for the district in which a person is located has jurisdiction to review the Secretary's decision. C. Regulatory Flexibility Act The Regulatory Flexibility Act
(RFA)(5 U.S.C. 601 *et seq.* ) requires agencies to consider the economic impact of each rule on small entities and evaluate alternatives that would accomplish the objectives of the rule without unduly burdening small entities or erecting barriers that would restrict their ability to compete in the market. The purpose is to fit regulatory actions to the scale of businesses subject to the action. Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities. Pursuant to the requirements set forth in the RFA, the Agricultural Marketing Service
(AMS)performed an economic impact analysis on small entities in the final rule published in the **Federal Register** on December 21, 2000 (65 FR 80548). The AMS has also considered the economic impact of this action on small entities. The impact on entities affected by this final rule would not be significant. The effect of this final rule would be to allow the use of additional substances in agricultural production and handling. This action would relax the regulations published in 7 CFR part 205 and would provide small entities with more tools to use in day-to-day operations. The AMS concludes that the economic impact of this addition of allowed substances, if any, would be minimal and entirely beneficial to small agricultural service firms. Accordingly, USDA certifies that this rule will not have a significant economic impact on a substantial number of small entities. Small agricultural service firms, which include producers, handlers, and accredited certifying agents, have been defined by the Small Business Administration
(SBA)(13 CFR 121.201) as those having annual receipts of less than $6,500,000 and small agricultural producers are defined as those having annual receipts of less than $750,000. This final rule would have an impact on a substantial number of small entities. The U.S. organic industry at the end of 2001 included nearly 6,949 certified organic crop and livestock operations. These operations reported certified acreage totaling more than 2.09 million acres of organic farm production. Data on the numbers of certified organic handling operations (any operation that transforms raw product into processed products using organic ingredients) were not available at the time of survey in 2001; but they were estimated to be in the thousands. By the end of 2004, the number of certified organic crop, livestock, and handling operations totaled nearly 11,400 operations. Based on 2003 data, certified organic acreage increased to 2.2 million acres. U.S. sales of organic food and beverages have grown from $1 billion in 1990 to an estimated $12.2 billion in 2004. Organic food sales are projected to reach $14.5 billion for 2005; total U.S. organic sales, including nonfood uses, are expected to reach $15 billion in 2005. The organic industry is viewed as the fastest growing sector of agriculture, representing 2 percent of overall food and beverage sales. Since 1990, organic retail sales have historically demonstrated a growth rate between 20 to 24 percent each year. This growth rate is projected to decline and fall to a rate of 5 to 10 percent in the future. In addition, USDA has accredited 96 certifying agents who have applied to USDA to be accredited in order to provide certification services to producers and handlers. A complete list of names and addresses of accredited certifying agents may be found on the AMS NOP Web site, at *http://www.ams.usda.gov/nop.* AMS believes that most of these entities would be considered small entities under the criteria established by the SBA. D. Paperwork Reduction Act No additional collection or recordkeeping requirements are imposed on the public by this final rule. Accordingly, OMB clearance is not required by section 350(h) of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, *et seq.,* or OMB's implementing regulation at 5 CFR part 1320. AMS is committed to compliance with the Government Paperwork Elimination Act (GPEA), which requires Government agencies in general to provide the option of submitting information of transaction business electronically to the maximum extent possible. E. Discussion of Comments Received Twenty-nine
(29)comments were received on proposed rule TM-04-01. In general, comments favored amending the National List with the proposed substances identified in the proposed rule. However, there were some commenters that raised concerns with proposed restrictions to the use of substances being added to § 205.605(b) and the expiration date attached to the use of ammonium hydroxide. A few commenters, suggested technical changes to the CAS numbers for glycerine oleate. These same commenters asserted that tetrasodium pyrophosphate and sodium acid pyrophosphate should not be added to the National List. We also received a comment asking the USDA to “clarify that the category of 'microorganisms” also includes food grade by-products derived from microorganisms that exhibit similar characteristics or functions as the microorganism.” Changes Made Based on Comments The following changes are made based on comments received. First, Restriction to Use of Substances on § 205.605(b). The proposed rule restricted the use of synthetic substances being added to § 205.605(b). It restricted the synthetic substances to the handling of agricultural products labeled “made with organic (specified ingredients or food group(s)) and prohibited the use of the proposed synthetic substances in handling agricultural products labeled as “organic.” Commenters, however, were largely opposed to restricting the use of the proposed synthetic substances to products labeled as “made with organic (specified ingredients or food group(s)). The proposed rule restricted the use of these substances because of the final judgment and order in the case of *Harvey* v. *Johanns,* issued on June 9, 2005, by the United States District Court, District of Maine. The district court ruled that 7 CFR 205.600(b) and 205.605(b) of the National List regulations are contrary to the OFPA and exceed the Secretary's rulemaking authority to the extent that they permit the addition of synthetic ingredients and processing aids in handling and processing of agricultural products which contain a minimum of 95 percent organic content and which are eligible to bear the USDA seal. Due to this ruling by the district court, the USDA determined that any new additions to the National List would have to comply with the court's order. However, in October 2005, Congress voted to amend § 6517 of the OFPA to permit the use of certain synthetic substances in organic handling. Therefore, we agree with the commenters and have removed the restrictive language from substances being added to § 205.605(b) of the National List. Second, Glycerine Oleate CAS #. In proposing glycerine oleate for addition to the National List, the proposed rule identified the substance with the following CAS #s: 111-03-5, 25496-72-4, and 37220-82-9. Commenters stated that the listing of CAS #s 111-03-5 and 25496-72-4 are incorrect and not necessary because they now appear on the EPA's List 4A. Inert substances that appear on the EPA's List 4a are already permitted for use in organic crop production under the National List regulations. We agree with the commenters and have removed the CAS #s 111-03-5 and 25496-72-4 from the listing of glycerine oleate. Third, Ammonium Hydroxide Expiration Date. Based on the recommendation from the NOSB in October 2001, ammonium hydroxide was proposed for inclusion on the National List with an expiration date of October 21, 2005. Most commenters supported the inclusion of ammonium hydroxide on the National List and requested that the expiration date be amended to acknowledge the three years that the NOSB had intended to allow the use of the substance. Some commenters expressed the view that ammonium hydroxide should not be added to the National List. They asserted that processors have managed without use of the substance in the last four years and suggest that there are a number of alternatives to ammonium hydroxide for boiler maintenance. We have taken into account the concerns of the commenters. However, the expiration date recommended by the NOSB for the use of ammonium hydroxide has lapsed. As a result, ammonium hydroxide is not being added to the National List at this time. To be reconsidered for inclusion on the National List, the NOSB will have to submit a new recommendation to the Secretary to amend the National List to permit the use of ammonium hydroxide. Fourth, Non-Inclusion of Tetrahydrofurfyl Alcohol (THFA). The NOSB recommended the inclusion of THFA to the National List, with the restriction that it could only be used until December 21, 2006. THFA was petitioned for use in organic crop production as an inert pesticidal ingredient. Under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), the EPA had registered THFA as a List 3 inert (Inerts of Unknown Toxicity). However, the EPA is currently evaluating THFA for reassessment under the Food Quality Protection Act
(FQPA)and has identified risks of concern that require the use of THFA as an inert ingredient in pesticide products to be significantly limited. Based on consultations with the EPA concerning the future use of THFA, the Secretary has been advised to withhold listing THFA as an allowed substance on the National List. Due to potential risk issues associated with THFA's use in crop production, the Secretary will wait until the EPA has concluded its reassessment of the substance before reconsidering its inclusion to the National List. The EPA's proposed rulemaking for proposed action on THFA can be found in the **Federal Register,** 71 FR 18689 (April 12, 2006). Changes Requested But Not Made First, Sodium Acid Pyrophosphate. The NOSB recommended the use of sodium acid pyrophosphate at its May 2003, meeting in Austin, TX. After the May meeting, the NOP requested that the NOSB submit documentation that would reflect how the recommended substance met the evaluation criteria specified in §§ 6517 and 6518 of the OFPA, before the recommended substance would be considered by the Secretary for proposed rulemaking. The NOSB submitted the documentation as requested by the NOP. The NOP, in turn, reviewed and used the documentation to draft a proposed rule for adding sodium acid pyrophosphate to the National List. In response to the proposed rule, a few commenters stated that the NOP did not make all supporting documentation (the NOSB decision sheet checklist and a supplemental technical review used by the NOSB to evaluate sodium acid pyrophosphate) available to the public for consideration in developing comments regarding the addition of sodium acid pyrophosphate to the National List. They asserted that sodium acid pyrophosphate should be tabled until all supporting information for sodium acid pyrophosphate is made available to the public. The NOSB decision sheet checklist and supplemental technical review for sodium acid pyrophosphate were not posted on the NOP Web site during the public comment period for the proposed rule TM-04-01. However, all documents related to the review of substances for inclusion on the National List are always available to the public through the NOP office. If the public is aware that such a document is not available on the NOP Web site, a request may always be submitted to the NOP to receive the related documents. Taking into account the commenters' position regarding easy accessibility to materials review documents, we do not believe their position warrants the NOP deferring final action on the substance. Evidence has not been submitted that would suggest sodium acid pyrophosphate violates the evaluation criteria specified in the OFPA. Second, Tetrasodium Pyrophosphate. A few commenters opposed the addition of tetrasodium pyrophosphate on the National List because of reasons that were expressed in an earlier proposed rule (68 FR 27941, May 22, 2003). Commenters had stated that the use of tetrasodium pyrophosphate conflicts with § 205.600(b)(4) of the NOP regulations. They also stated that the annotation associated with tetrasodium pyrophosphate is too vague. The NOP disagrees with the commenters. The NOP specifically referred tetrasodium pyrophosphate back to the NOSB, as a result of receiving such comments in response to the May 2003, proposed rule. The NOP charged the NOSB with determining whether the proposed use of tetrasodium pyrophosphate conflicts with § 205.600(b)(4) of the NOP regulations. Through further review and deliberation at their April 2004, meeting in Chicago, IL, the NOSB determined that the proposed use of tetrasodium pyrophosphate did not conflict with § 205.600(b)(4) of the NOP regulations. In response to the concerns of the commenters, the NOSB provided that the primary use of tetrasodium pyrophosphate, as petitioned, is not to serve as a preservative, or to “recreate” flavor, color or texture. They acknowledged that the substance may be used to create texture; however, it is not being used to “recreate” texture, as is referenced in § 205.600(b)(4) of the regulations. Third, Microorganisms. A commenter requested the NOP to “clarify that the category of ‘microorganisms’ also includes food grade by-products derived from microorganisms that exhibit similar characteristics or functions as the microorganism.” The NOP does not have enough information to address this commenter's concern. His request must be evaluated by the NOSB. As a result, the NOP instructs the commenter to submit a petition to the NOSB that would request evaluation of the types of substances for which he seeks clarification. F. Effective Date This final rule reflects recommendations submitted to the Secretary by the NOSB. The thirteen substances being added to the National List were based on petitions from the industry and evaluated by the NOSB using criteria in the Act and the regulations. Because these substances are critical to organic production and handling operations, producers and handlers should be able to use them in their operations as soon as possible. Accordingly, AMS finds that good cause exists under 5 U.S.C. 553(d)(3) for not postponing the effective date of this rule until 30 days after publication in the **Federal Register** . List of Subjects in 7 CFR Part 205 Administrative practice and procedure, Agriculture, Animals, Archives and records, Imports, Labeling, Organically produced products, Plants, Reporting and recordkeeping requirements, Seals and insignia, Soil conservation. For the reasons set forth in the preamble, 7 CFR part 205, Subpart G is amended as follows: PART 205—NATIONAL ORGANIC PROGRAM 1. The authority citation for 7 CFR part 205 continues to read as follows: Authority: 7 U.S.C. 6501-6522. 2. Section 205.601 is amended by: a. Revising paragraph (h). b. Revising paragraph (m)(2). c. Adding a new paragraph (n). d. Reserving paragraphs (o)-(z). The revisions and additions read as follows: § 205.601 Synthetic substance allowed for use in organic crop production.
(h)As slug or snail bait. Ferric phosphate (CAS # 10045-86-0).
(m)* * *
(2)EPA List 3—Inerts of Unknown Toxicity allowed:
(i)Glycerine Oleate (Glycerol monooleate) (CAS #s 37220-82-9)—for use only until December 31, 2006.
(ii)Inerts used in passive pheromone dispensers.
(n)Seed preparations. Hydrogen chloride (CAS # 7647-01-0)—for delinting cotton seed for planting. 3. Section 205.605 is amended by: a. Adding three materials to paragraph (a). b. Adding seven new substances to paragraph (b). The additions read as follows: § 205.605 Nonagricultural (nonorganic) substances allowed as ingredients in or on processed products labeled as “organic” or “made with organic (specified ingredients or food group(s)).”
(a)* * * Egg white lysozyme (CAS # 9001-63-2) L-Malic acid (CAS # 97-67-6). Microorganisms—any food grade bacteria, fungi, and other microorganism.
(b)* * * Activated charcoal (CAS #s 7440-44-0; 64365-11-3)—only from vegetative sources; for use only as a filtering aid. Cyclohexylamine (CAS # 108-91-8)—for use only as a boiler water additive for packaging sterilization. Diethylaminoethanol (CAS # 100-37-8)—for use only as a boiler water additive for packaging sterilization. Octadecylamine (CAS # 124-30-1)—for use only as a boiler water additive for packaging sterilization. Peracetic acid/Peroxyacetic acid (CAS # 79-21-0)—for use in wash and/or rinse water according to FDA limitations. For use as a sanitizer on food contact surfaces. Sodium acid pyrophosphate (CAS # 7758-16-9)—for use only as a leavening agent. Tetrasodium pyrophosphate (CAS # 7722-88-5)—for use only in meat analog products. 4. In § 205.681, paragraph (d)(1) is revised to read as follows: § 205.681 Appeals.
(d)* * *
(1)Appeals to the Administrator must be filed in writing and addressed to: Administrator, USDA, AMS, c/o NOP Appeals Staff, Stop 0203, Room 302-Annex, 1400 Independence Avenue, SW., Washington, DC 20250-0203. Dated: September 5, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E6-14923 Filed 9-8-06; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 1290 [Docket No. FV06-1290-1 FR] RIN 0581-AC59 Specialty Crop Block Grant Program AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: This rule provides regulations to implement the Specialty Crop Block Grant Program (SCBGP) to enhance the competitiveness of specialty crops. This action establishes the eligibility and application requirements, the review and approval process, and grant administration procedures for the SCBGP. The SCBGP is authorized under Section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note). EFFECTIVE DATE: October 11, 2006. FOR FURTHER INFORMATION CONTACT: Trista Etzig, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., Stop 0243, Washington, DC 20250-0243; Telephone:
(202)690-4942; Fax:
(202)690-0102; or e-mail: *trista.etzig@usda.gov* . SUPPLEMENTARY INFORMATION: Executive Order 12866 This proposed rule has been determined to be not significant for the purposes of Executive Order 12866 by the Office of Management and Budget (OMB). Public Law 104-4 Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State and local governments and the private sector. Under section 202 of the UMRA, the Agricultural Marketing Service
(AMS)generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State and local governments, in the aggregate, or by the private sector, of $100 million or more in any one year (2 U.S.C. 1532). When such a statement is needed for a rule, section 205 of the UMRA generally requires federal agencies to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule (2 U.S.C. 1535). This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State and local governments or the private sector of $100 million or more in any one year. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA. Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This action is not intended to have retroactive effect. This rule will not preempt any State or local laws, regulations or policies, unless they present an irreconcilable conflict with this rule. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this rule. Catalog of Federal Domestic Assistance This program is listed in the Catalog of Federal Domestic Assistance under No. 10.169, Specialty Crop Block Grant Program. Executive Order 12372 This program is not subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V published at 48 FR 29115 (June 24, 1983). Executive Order 13132 It has been determined that this rule does not have sufficient Federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule would not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various levels of government. Regulatory Flexibility Act The AMS certifies that this rule will not have a significant impact on a substantial number of small entities as defined in the Regulatory Flexibility Act, Pub. L. 96-534, as amended (5 U.S.C. 601 *et seq.* ). This rule only will impact State departments of agriculture that apply for grant funds. States include the fifty States, the District of Columbia, and the Commonwealth of Puerto Rico. The States are not small entities under the Act. Authority for a Specialty Crop Block Grant Program This program is intended to accomplish the goals of increasing fruit, vegetable, and nut consumption and improving the competitiveness of United States specialty crop producers. The SCBGP is authorized under section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note). Section 101 directs the Secretary of Agriculture to make grants to States for each of the fiscal years 2005 through 2009 to be used by State departments of agriculture solely to enhance the competitiveness of specialty crops. Background The Fruit and Vegetable Program will periodically announce that applications may be submitted for participation in a “Specialty Crop Block Grant Program” (SCBGP), which will be administered by personnel of the Agricultural Marketing Service (AMS). Periodically, funding may be appropriated to the Secretary of Agriculture to provide specialty crop block grants. To the extent that funds are available, each year the AMS will publish a **Federal Register** notice announcing the program and soliciting grant applications. Subject to the appropriation of funds, each State that submits an application that is reviewed and approved by AMS is to receive at least $100,000 to enhance the competitiveness of specialty crops. In addition, each State will receive an amount that represents the proportion of the value of specialty crop production in the state in relation to the national value of specialty crop production using the latest available complete specialty crop production data set in all states whose applications are accepted. All 50 States, the District of Columbia, and the Commonwealth of Puerto Rico are eligible to participate. “Specialty crops” for the purpose of this rule, means fruits and vegetables, tree nuts, dried fruits, and nursery crops (including floriculture). SCBGP applications will be accepted from any State department of agriculture, including the agency, commission, or department of a State government responsible for agriculture within the State. Section 1290.6 prescribes the application procedure that includes a State plan to indicate how grant funds will be utilized to enhance the competitiveness of specialty crops using measurable expected outcomes. Applications can be submitted for projects up to 3 calendar years in length. Applicants wishing to serve multi-state projects must submit the project in their State plan indicating which State is taking the coordinating role and the percent of the budget covered by each State. Section 1290.8 prescribes that under the SCBGP program, the AMS will enter into agreements with those State departments of agriculture or other entities that are responsible for agriculture within a State whose applications have been approved. The State department of agriculture will assure that the State will comply with the requirements of the State plan. The State department of agriculture will also assure that funds shall supplement the expenditure of State funds in support of specialty crops grown in that State, rather than replace State funds. The AMS will provide the entire funding to the approved applicants by a one-time combined electronic transfer. SCBGP participants must deposit funds in federally insured, interest-bearing accounts and remit to AMS interest earned in accordance with 7 CFR 3015 and 3016. Section 1290.9 prescribes the reporting and oversight requirements. If the grant period is more than one year, State departments of agriculture are required to submit an annual performance report(s) and a final performance report evaluating their project(s)using the measurable outcomes presented in the State plan, as well as a final financial report. If the grant period is less than a year, State departments of agriculture are required to submit a final performance report and a final financial report. Section 1290.10 prescribes the audit requirements of the State. The State is accountable for conducting annual financial audits of the expenditures of all SCBGP funds. Not later than 30 days after completion of the audit, the State shall submit a copy of the audit results with an executive summary to AMS. Notice of this action was published in the **Federal Register** on April 20, 2006. Interested persons were invited to submit written comments until May 22, 2006. During the comment period, eighty-two comments were received from members of Congress, producers of specialty crops, marketers of specialty crops, trade organizations, and interested consumers. Three comments were received after the comment period, but they did not introduce any new issues AMS has considered each comment timely submitted, and they are discussed below. Summary of Comments Received Purpose and Scope Two commenters stated that the rule is not consistent in defining the program's purpose to “enhance the competitiveness of specialty crops.” The commenters went on to say that the rule also states the program's purpose as “increasing fruit, vegetable and nut consumption and improving the competitiveness of specialty crops.” The Act includes a provision on Findings and Purpose (Sec. 2) and a provision concerning the Availability and Purpose of Grants (Sec. 101(a)). The statements appeared in the supplementary information and Paperwork Reduction Act sections of the proposed rule and are within the meaning of these sections of the Act. Accordingly, no changes have been made as a result of these comments. One commenter wanted clarification that funding is only to support specialty crops grown in the U.S. Another commenter asked if funds could be spent on projects in foreign markets to enhance the competitiveness of U.S. specialty crops. A purpose of the Act is to improve the competitiveness of United States specialty crop producers. Accordingly, this program only supports specialty crops grown in the United States. Furthermore, the Specialty Crop Block Grant Program funding may support U.S. grown specialty crops in both domestic and foreign markets. Eight commenters requested reference to 7 CFR Part 3016 in Section 1290.1 be removed because it restricts grant funds from being used for advertising, public relations, selling, and marketing. Part 3016 refers to OMB Circular A-87 which provides that advertising and public relations costs are allowable when they are undertaken for “purposes necessary to meet the requirements of the Federal award” ( *i.e.* if the purpose of the grant is to promote a specialty crop, then it is allowable to use grant funds for advertising the specialty crop). Accordingly, no change is made as a result of these comments. Definitions USDA received 10 comments on the definition of “specialty crops”. The commenters recommended the following be included in the specialty crop definition: Low growing dense perennial turfgrass sod, processed fruit and vegetable products, Christmas trees, potatoes, dry beans, sugar beets, grapes for wine, vegetable seeds, maple syrup, apple cider, certified organic crops, flax, dry peas, exotic fruits and vegetables grown in Hawaii such as coffee, cacoa, seed crops, algae and seaweed, kava, ginger root, vanilla, lavender, honey, and sugar cane. While in some instances including examples in a definition may improve clarity, we believe that additions beyond the language reflected in the Act would be counter productive given the numerous commodities that come within the definition of specialty crops. USDA will work with State departments of agriculture in providing further assistance with this definition. Fourteen comments were received requesting that a definition for “enhancing the competitiveness” of specialty crops be included in the regulations. AMS believes that these comments have merit and a definition has been included in the regulations for clarity at § 1290.2(c). Examples of enhancing the competitiveness of specialty crops include, but are not limited to: Research, promotion, marketing, nutrition, trade enhancement, food safety, food security, plant health programs, education, “buy local” programs, increased consumption, increased innovation, improved efficiency and reduced costs of distribution systems, environmental concerns and conservation, product development, and developing cooperatives. Nine comments were received concerning how to incorporate outcome measures in a State plan. In order to provide additional clarity concerning this matter, examples of outcome measures may include per capita consumption, consumer awareness as a percent of target market reached, market penetration based on sales by geographic region, dollar value of exports, or Web site hits. Furthermore, for clarity, the final rule at § 1290.6(b)(7) has been modified to state that expected measurable outcomes may be long term that exceed the grant period and that timeframes should be included in the State plan when long term outcome measures will be achieved. Eligible Grant Projects Seventy-one comments were received from processors and wineries to remove the last sentence of § 1290.4(b) which provides that “priority will be given to fresh specialty crop projects.” These comments have merit. The Act does not restrict the term specialty crops to only fresh commodities and, as such, both fresh and processed specialty crop producers would benefit from the block grants provided for in this program. Accordingly, this sentence has been removed from § 1290.4(b) in the final rule. USDA received four comments on the timeframe of eligible grant projects. One commenter requested projects longer than three years should be allowed without the requirement to obtain approval from USDA. Two commenters recommended project deadlines be set by the State. One commenter pointed out that the authorizing statute does not specify a time constraint of three years. Based upon experience with other grant programs, we consider three years as appropriate and reasonable. Furthermore, USDA intends to track projects through performance reports during the grant period. The grant period is established by the longest approved project in the State plan, so if a project goes beyond the grant period, AMS must be notified. Secondly, the final rule in § 1290.4(b) has been clarified to state, for cause, an extension of the grant period not to exceed three years may be granted by AMS on a case by case basis with a written request from the State. Another commenter recommended USDA give extra time for evaluation of projects in addition to three years. State departments of agriculture have appropriate time for project evaluation. Reporting requirements are based on the grant period established by the longest project submitted and approved in the State plan which can not exceed three years. Some projects may be completed prior to the annual or final reporting period. Therefore, State departments of agriculture will have at least 90 days, if not more, to evaluate their projects and submit performance reports to USDA. This commenter also requested that a definition for project activities should be added to the regulations. We disagree. Each State department of agriculture has discretion to select projects to include in their State plan and, as such, providing examples of project activities in the regulations could suggest limitation and a narrowing of the range of project activities. Restrictions and Limitations on Grant Funds Two comments were received concerning the language in § 1290.5(c) “grant funds shall supplement the expenditure of State funds in support of specialty crops grown in that State, rather than replace State funds.” One commenter stated “it is unrealistic for programs not to cross between state funding and federal funding.” Another commenter wanted clarification if the language prevents a State from creating a new state program that would support specialty crops. This language in § 1290.5(c) of the rule reflects the statutory language that appears in Sec. 101(d)(3) of the Act which provides that a grant application should contain an assurance that grant funds received under this section shall supplement the expenditure of State funds in support of specialty crops grown in that State, rather than replace State funds. Under section § 1290.5(c) of the rule, grant funds can supplement existing programs or create new programs, but not replace state funds. Accordingly, no changes are made as a result of these comments. Electronic Transfer of Funds Three comments were received on the electronic transfer of funds. One commenter recommended direct payments be made to a third party. Another commenter recommended USDA award funding on a fixed-based or deliverable-based basis and another commenter explained one State has a policy that state funds are spent on projects and then the State seeks a one time reimbursement of federal dollars at the end of the projects. Since the grant agreements are made with the State department of agriculture, it is appropriate that the funds will be transferred to the State department of agriculture after the grant agreement is signed. The State department of agriculture can then disperse the funds based upon their approved State plans. Completed Application Comments from seventeen organizations were received on the application process. Seven commenters recommended USDA notify the State departments of agriculture on the exact amount of funds they are to receive prior to submitting State plans. USDA intends to notify the State departments of agriculture of the exact amount of grant funds they may receive in the Notice for Applications, which will be published in the **Federal Register** soon after publication of this final rule. In addition, three comments were received recommending USDA explain how funds will be distributed if one or more States do not file an application or if an application is denied. One commenter recommended funds not distributed be rolled over and made available the following fiscal year to that respective State who did not apply the previous year and another commenter recommended that funds not distributed be allocated pro rata to all other States. The commenter went on further to request that USDA provide for an appeal process by a State department of agriculture should USDA deny a State plan. With regard to rolling over funds to the following fiscal year, States who do not apply for or do not request all available funding during the specified grant application period will forfeit all or that portion of available funding not requested for that application year. Finally, Sec. 101(f) of the Act provides that the Secretary of Agriculture may accept or reject applications for a grant. Accordingly, no change is made in the regulations concerning additional processes. However, we are clarifying § 1290.7 concerning review of applications to include language concerning not only accepting applications, but also rejecting them as well. Nonetheless, USDA will work closely with State departments of agriculture to assist applicants in meeting deadlines. Ten commenters recommended that the application process be adjusted because State departments of agriculture need time to work with grant partners and decide on projects. In addition, 10 comments were received recommending USDA allow State departments of agriculture flexibility to establish granting processes, collaborate with subgrantees, and select projects based on the unique needs and priorities of that State. Under the Specialty Crop Block Grant Program, State departments of agriculture must submit their State plans within one year after the publication of the Notice for Applications. This one year period is reasonable and provides State departments of agriculture a sufficient amount of time to establish granting processes, collaborate with subgrantees, decide on projects, and develop and submit their State plan to USDA. Accordingly, no changes to the regulations are made as a result of these comments. Another commenter recommended post-approval adjustments to allow States to participate in multi-state projects. State departments of agriculture will have one year to work with other State departments of agriculture to coordinate multi-state projects prior to submitting State plans. Again, a one year period is appropriate and will provide a reasonable amount of time for participation in multi-state projects. Therefore, no change to the regulations is made as a result of this comment. Another commenter requested clarification on the number of State plans that need to be submitted to USDA. A State department of agriculture must submit one plan to USDA that includes all projects and submit annual performance reports and a final report that summarizes progress on all projects in the State plan. This comment has merit and has been clarified in the final rule in § 1290.6(b) and § 1290.9. One commenter asked for guidance on what is an acceptable percentage for project administrative costs. Based upon experience with other grant programs, we consider administrative costs not exceeding 10 percent of any proposed budget as appropriate and reasonable. If administrative costs exceed 10 percent, a State department of agriculture should include a justification in their State plan. This comment has merit and § 1290.6(b)(4) has been clarified accordingly. One commenter asked if a State department of agriculture may charge the paperwork burden costs and audit costs to administrative expenses. These are acceptable administrative expenses. While these costs may be considered acceptable, USDA will work with States concerning acceptable costs on a case-by-case basis. Five commenters wanted clarification that an application would be reviewed and approved by USDA before the grant funds are dispersed. These comments have merit and this has been clarified at § 1290.8 in the final rule. Review of Grant Applications Eight comments were received on the grant application review process stating USDA should not need to approve each project and the State department of agriculture should have flexibility in selecting projects. Each State department of agriculture has discretion to select projects to include in their State plan, while final review and approval of the State plan resides with USDA. Grant Agreements One commenter suggested language be added to the rule to indicate “it shall be allowable to include fee-based or deliverable-based projects as part of an approvable grant agreement with the State department of agriculture.” A State department of agriculture is responsible for selecting the type of projects that enhance the competitiveness of specialty crops to include in their State plan subject to USDA review and approval. We believe that it is preferable to retain a measure of flexibility in the regulations. Including such language in the regulations is not necessary. Accordingly, no change to the regulations is made as a result of this comment. Reporting and Oversight Requirements One commenter wanted language added to the rule to indicate the allowance for subgrantees, and whether subgrantees would be subject to the same reporting requirements and financial audit requirements of the applicant as stated previously. The State department of agriculture is responsible for selecting the type of projects that enhance the competitiveness of specialty crops and whether to include subgrantees or not. Retaining a measure of flexibility in the regulations is preferable. As such, the recommended language is not necessary in the regulations. Whether subgrantees are included or not in a project is a matter for a State department of agriculture to decide. The State department of agriculture remains accountable for the project reporting. Audit Requirements Four comments were received regarding the requirement to follow Government Auditing Standards as being costly. Two commenters recommended the Single Audit Act should oversee the audit requirement. Two commenters asked for clarification on who would perform the audit, how the audit requirement affected subgrantees, and if the audit was fiscal or performance based. Section 101
(h)of the Specialty Crops Competitiveness Act provides that the State shall conduct an audit of the expenditures of grant funds by the State. The Act further provides that not later than 30 days after the completion of the audit, the State shall submit a copy of the audit to the USDA. Accordingly, the State and not the subgrantee is accountable for audit requirements. Furthermore, under this program, an audit is required to be conducted. Whether the Single Audit Act applies or not to an eligible grantee, audit results must be provided to AMS for the SCBGP grant expenditures. Government Auditing Standards are applicable as provided for under the Act as well as revised OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.” General One commenter asked for a cost benefit analysis on the SCBGP. The SCBGP is authorized by statute to enhance the competitiveness of specialty crops. We have conducted the required analyses for the rulemaking, which appear as part of this document. The commenter also recommended records be kept for seven years. We disagree. State departments of agriculture will be required to retain records pertaining to the SCBGP for 3 years after completion of the grant period or until final resolution of any audit findings or litigation claims relating to the SCBGP. This is a part of normal business practice and consistent with USDA regulations (7 CFR parts 3015 and 3016). Finally, we have added for clarity a paragraph
(f)to § 1290.9 concerning the three year record retention period. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ), the AMS had previously submitted this information collection to OMB and obtained approval of this information collection under OMB number 0581-0236. The information collection requirements in this request are applied only to those State departments of agriculture who voluntarily participate in the SCBGP. The information collected is needed for the implementation of the SCBGP, to determine a State department of agriculture's eligibility in the program, and to certify that grant participants are complying with applicable program regulations. Data collected is the minimum information necessary to effectively carry out the requirements of the program, and to fulfill the intent of Section 101 of the Competitiveness Act of 2004. State departments of agriculture who wish to participate in the SCBGP will have to submit standard form SF-424, “Application for Federal Assistance”, approved under OMB#4040-0004. After receipt of the SF-424, the State department of agriculture will have to submit SF-424B, “Assurances-Non-Construction Programs”, approved under OMB#0348-0040 as part of the grant agreement to the AMS. The State department of agriculture will then submit to the AMS 90 days after the expiration date of the grant period SF269 “Financial Status Report (Long Form)”, if the project had program income, approved under OMB#0348- 0039, or SF269A “Financial Status Report (Short Form)”, approved under OMB#0348-0038. Completed applications must also include a State plan to show how grant funds will be utilized to enhance the competitiveness of specialty crops. After approval of a grant application, State departments of agriculture will have to enter into a grant agreement with AMS by reading and signing the grant agreement. The grant period is not to exceed three calendar years, therefore State departments of agriculture will have to submit to AMS annual performance reports within 90 days after the first year of the grant agreement and within 90 days after the second year of the grant agreement. If a project goes beyond the grant period, not to exceed three years, a State department of agriculture will have to submit a letter to AMS requesting a grant period extension. A State department of agriculture will have to submit a final performance report to AMS within 90 days following the expiration date of the grant period. No later than 60 days after expiration of the grant period, a State will be required to conduct an audit of SCBGP grant funds. An audit report will be required to be submitted to AMS no later than 30 days after completion of the audit. The SCBGP is expected to accomplish the goal of enhancing the competitiveness of specialty crops. This program would not be maintained by any other agency, therefore, the requested information will not be available from any other existing records. AMS is committed to compliance with the Government Paperwork Elimination Act (GPEA), which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. The SF forms and State plan can be filled out electronically and printed out for submission or filled out electronically and submitted as an attachment through Grants.gov. The annual performance reports, final performance report, and the audit report/executive summary can be submitted electronically. The grant agreement requires an original signature and can be submitted by mail. Finally, State departments of agriculture will be required to retain records pertaining to the SCBGP for 3 years after completion of the grant period or until final resolution of any audit findings or litigation claims relating to the SCBGP. This is a part of normal business practice and consistent with USDA regulations (7 CFR Parts 3015 and 3016). The estimated one-time cost for all State departments of agriculture in completing the information collection is $9,980. This total cost was calculated by multiplying the estimated 499 total burden hours by $20 per hour (a sum deemed reasonable, shall the respondents be compensated for this time). Comments were invited on the information collection in the April 20, 2006, notice of proposed rulemaking. The deadline for comments ended on June 19, 2006. Five comments were received stating the time estimated to prepare applications and reports is understated because many hours of planning would have to occur before a State department of agriculture could prepare an application that might include multiple projects and subgrantees. AMS recognized that there would be planning involved in the preparation of the information collection and included this time into the average burden hours per response. AMS believes that the burden hours stated in the rule are accurate because the burden hours are based on the average time it takes the 52 State departments of agriculture to complete the information collection requirements. List of Subjects in 7 CFR Part 1290 Specialty crop block grants, Agriculture, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, Title 7, Chapter XI of the Code of Federal Regulations is amended as follows: 1. A new part 1290 is added to read as follows: PART 1290—SPECIALTY CROP BLOCK GRANT PROGRAM Sec. 1290.1 Purpose and scope. 1290.2 Definitions. 1290.3 Eligible grant applicants. 1290.4 Eligible grant project. 1290.5 Restrictions and limitations on grant funds. 1290.6 Completed application. 1290.7 Review of grant applications. 1290.8 Grant agreements. 1290.9 Reporting and oversight requirements. 1290.10 Audit requirements. Authority: 7 U.S.C. 1621 note. § 1290.1 Purpose and scope. Pursuant to the authority conferred by Section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note) AMS will make grants to States to enhance the competitiveness of specialty crops in accordance with the terms and conditions set forth herein and other applicable federal statutes and regulations including, but not limited to, 7 CFR Part 3016. § 1290.2 Definitions.
(a)*AMS* means the Agricultural Marketing Service of the U. S. Department of Agriculture.
(b)*Application* means application for Specialty Crop Block Grant Program.
(c)“ *Enhancing the competitiveness* ” of specialty crops includes, but is not limited to: Research, promotion, marketing, nutrition, trade enhancement, food safety, food security, plant health programs, education, “buy local” programs, increased consumption, increased innovation, improved efficiency and reduced costs of distribution systems, environmental concerns and conservation, product development, and developing cooperatives.
(d)*Grant period* means the period of time from when the grant agreement is signed until the completion of all SCBGP projects submitted in the State plan.
(e)*Grantee* means the government to which a grant is awarded and which is accountable for the use of the funds provided. The grantee is the entire legal entity even if only a particular component of the entity is designated in the grant agreement.
(f)*Outcome measure* means an event or condition that is external to the project and that is of direct importance to the intended beneficiaries and/or the public.
(g)*Project* means all proposed activities to be funded by the SCBGP.
(h)*Specialty crop* means fruits and vegetables, tree nuts, dried fruits, and nursery crops (including floriculture).
(i)*State* means the fifty States, the District of Columbia, and the Commonwealth of Puerto Rico.
(j)*State department of agriculture* means the agency, commission, or department of a State government responsible for agriculture within the State.
(k)*Subgrantee* means the government or other legal entity to which a subgrant is awarded and which is accountable to the grantee for the use of funds provided. § 1290.3 Eligible grant applicants. Eligible grant applicants are State departments of agriculture from the fifty states, the District of Columbia, and the Commonwealth of Puerto Rico. § 1290.4 Eligible grant project.
(a)To be eligible for a grant, the project(s) must enhance the competitiveness of specialty crops.
(b)To be eligible for a grant, the project(s) must be completed 3 calendar years after the grant agreement prescribed in § 1290.8 is signed. The grant period is established by the longest approved project submitted in the State plan. However, for cause, an extension of the grant period not to exceed three years may be granted by AMS on a case by case basis with a written request from the State. § 1290.5 Restrictions and limitations on grant funds.
(a)Grant funds may not be used to fund political activities in accordance with provisions of the Hatch Act (5 U.S.C. 1501-1508 and 7324-7326).
(b)All travel expenses associated with SCBGP projects must follow Federal Travel Regulations (41 CFR Chapters 300 through 304) unless State travel requirements are in place.
(c)Grant funds shall supplement the expenditure of State funds in support of specialty crops grown in that State, rather than replace State funds. § 1290.6 Completed application. Completed applications shall be clear and succinct and shall include the following documentation satisfactory to AMS.
(a)Completed applications must include an SF-424 “Application for Federal Assistance”.
(b)Completed applications must also include one State plan to show how grant funds will be utilized to enhance the competitiveness of specialty crops. The state plan shall include the following:
(1)*Cover page.* Include the lead agency for administering the plan and an abstract of 200 words or less for each proposed project.
(2)*Project purpose.* Clearly state the specific issue, problem, interest, or need to be addressed. Explain why each project is important and timely.
(3)*Potential impact.* Discuss the number of people or operations affected, the intended beneficiaries of each project, and/or potential economic impact if such data are available and relevant to the project(s).
(4)*Financial feasibility.* For each project, provide budget estimates for the total project cost. Indicate what percentage of the budget covers administrative costs. Administrative costs should not exceed 10 percent of any proposed budget. Provide a justification if administrative costs are higher than 10 percent.
(5)*Expected measurable outcomes.* Describe at least two discrete, quantifiable, and measurable outcomes that directly and meaningfully support each project's purpose. The outcome measures must define an event or condition that is external to the project and that is of direct importance to the intended beneficiaries and/or the public.
(6)*Goal(s).* Describe the overall goal(s) in one or two sentences for each project.
(7)*Work plan.* Explain briefly how each goal and measurable outcome will be accomplished for each project. Be clear about who will do the work. Include appropriate time lines. Expected measurable outcomes may be long term that exceed the grant period. If so, provide a timeframe when long term outcome measure will be achieved.
(8)*Project oversight.* Describe the oversight practices that provide sufficient knowledge of grant activities to ensure proper and efficient administration.
(9)*Project commitment.* Describe how all grant partners commit to and work toward the goals and outcome measures of the proposed project(s).
(10)*Multi-state projects.* If the project is a multi-state project, describe how the States are going to collaborate effectively with related projects. Each State participating in the project should submit the project in their State plan indicating which State is taking the coordinating role and the percent of the budget covered by each State. § 1290.7 Review of grant applications. Applications will be reviewed and approved or rejected as appropriate for conformance with the provisions in § 1290.6. AMS may request the applicant provide for additional information or clarification. § 1290.8 Grant agreements.
(a)After review and approval of a grant application, AMS will enter into a grant agreement with the State department of agriculture.
(b)AMS grant agreements will include at a minimum the following:
(1)The projects in the approved State plan.
(2)Total amount of Federal financial assistance that will be advanced.
(3)Terms and conditions pursuant to which AMS will fund the project(s). § 1290.9 Reporting and oversight requirements.
(a)An annual performance report will be required of all State departments of agriculture 90 days after the end of the first year of the date of the signed grant agreement and each year until the expiration date of the grant period. If the grant period is one year or less, then only a final performance report (see paragragh
(b)of this section) is required. The annual performance report shall include the following:
(1)Briefly summarize activities performed, targets, and/or performance goals achieved during the reporting period for each project.
(2)Note unexpected delays or impediments as well as favorable or unusual developments for each project.
(3)Outline work to be performed during the next reporting period for each project.
(4)Comment on the level of grant funds expended to date for each project.
(b)A final performance report will be required by the State department of agriculture within 90 days following the expiration date of the grant period. The final progress report shall include the following:
(1)An outline of the issue, problem, interest, or need for each project.
(2)How the issue or problem was approached via the project(s).
(3)How the goals of each project were achieved.
(4)Results, conclusions, and lessons learned for each project.
(5)How progress has been made to achieve long term outcome measures for each project.
(6)Additional information available ( *e.g.* publications, Web sites).
(7)Contact person for each project with telephone number and e-mail address.
(c)A final SF-269A “Financial Status Report (Short Form)” (SF-269 “Financial Status Report (Long Form)” if the project(s) had program income) is required within 90 days following the expiration date of the grant period.
(d)AMS will monitor States, as it determines necessary, to assure that projects are completed in accordance with the approved State plan. If AMS, after reasonable notice to a State, finds that there has been a failure by the State to comply substantially with any provision or requirement of the State plan, AMS may disqualify, for one or more years, the State from receipt of future grants under the SCBGP.
(e)States shall diligently monitor performance to ensure that time schedules are being met, project work within designated time periods is being accomplished, and other performance measures are being achieved.
(f)State departments of agriculture shall retain records pertaining to the SCBGP for 3 years after completion of the grant period or until final resolution of any audit findings or litigation claims relating to the SCBGP. § 1290.10 Audit requirements. The State is accountable for conducting a financial audit of the expenditures of all SCBGP funds. The State shall submit to AMS not later than 30 days after completion of the audit, a copy of the audit results. Dated: September 6, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. 06-7580 Filed 9-6-06; 4:24 pm]
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Traces to 22 documents
U.S. Code
- Purposes§ 6501
- Accreditation program§ 6514
- National organic production program§ 6503
- State organic certification program§ 6507
- Recordkeeping, investigations, and enforcement§ 6519
- Definitions§ 601
- Congressional statement of findings§ 451
- Congressional statement of findings§ 1031
- Short title§ 301
- Definitions§ 136
- Administrative appeal§ 6520
- Definitions§ 601
- Purposes§ 3501
- Rule making§ 553
- Congressional declaration of purpose; use of existing facilities; cooperation with States§ 1621
- Statements to accompany significant regulatory actions§ 1532
- Least burdensome option or explanation required§ 1535
register
10 references not yet in our index
- 7 CFR 205
- 5 CFR 1320
- 7 CFR 205.600(b)
- 7 USC 6501-6522
- 7 CFR 1290
- Pub. L. 104-4
- 7 CFR 3015
- Pub. L. 96-534
- 7 CFR 3016
- 5 USC 1501-1508
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Cite7 CFR 205
Cite5 CFR 1320
Cite7 CFR 205.600(b)
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