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Code · REGISTER · 2006-12-01 · PROPOSED RULES · Unknown

Unknown. Final rule

90,106 words·~410 min read·/register/2006/12/01/06-9489

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--- schema: federal-register doc_type: fedreg source_file: FR-2006-12-01.xml --- 71 231 Friday, December 1, 2006 Contents Agency Agency for Healthcare Research and Quality NOTICES Agency information collection activities; proposals, submissions, and approvals, 69567-69568 06-9485 Meetings: Health Care Policy and Research Special Emphasis Panel, 69568 06-9486 Agricultural Agricultural Marketing Service RULES Soybean promotion, research, and information: United Soybean Board; representation adjustment, 69429-69430 E6-20314 PROPOSED RULES Fresh fruit and vegetable terminal market inspection services; fees increase, 69497-69500 E6-20315 NOTICES Agency information collection activities; proposals, submissions, and approvals, 69529-69530 E6-20395 Agriculture Agriculture Department See Agricultural Marketing Service See Animal and Plant Health Inspection Service See Forest Service See National Agricultural Statistics Service Animal Animal and Plant Health Inspection Service NOTICES Meetings:
Veterinary biological products; manufacture, distribution, and use; regulatory and policy issues, 69530 E6-20391 Reports and guidance documents; availability, etc.: Sterile fruit flies; potential sites for production facility or potential alternate sources; information request, 69530-69531 E6-20392 Arts Arts and Humanities, National Foundation See National Foundation on the Arts and the Humanities Blind Blind or Severely Disabled, Committee for Purchase From People Who Are See Committee for Purchase From People Who Are Blind or Severely Disabled Centers Centers for Medicare & Medicaid Services RULES Medicare:
Physician fee schedule (CY 2007); payment policies and relative value units, 69624-70251 06-9086 Children Children and Families Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 69568-69569 06-9487 06-9488 Coast Guard Coast Guard RULES Ports and waterways safety; regulated navigation areas, safety zones, security zones, etc.: Honolulu Captain of Port Zone, HI; waters surrounding U.S. Forces vessel SBX-1, 69484-69486 E6-20355 PROPOSED RULES Ports and waterways safety; regulated navigation areas, safety zones, security zones, etc.:
Chesapeake Bay, MD, 69514-69517 E6-19677 Georgetown Channel, Potomac River, Washington, DC, 69517-69519 E6-19678 NOTICES Agency information collection activities; proposals, submissions, and approvals, 69579-69580 E6-20356 Organization, functions, and authority delegations: Ship Security Alert System notices; e-mail address change, 69580-69581 E6-20357 Commerce Commerce Department See Industry and Security Bureau See International Trade Administration See National Oceanic and Atmospheric Administration Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement list; additions and deletions, 69535-69540 E6-20328 E6-20363 E6-20364 Copyright Copyright Royalty Board, Library of Congress RULES Noncommercial educational broadcasting; use of certain copyrighted works:
Musical compositions performance by colleges and universities; cost of living adjustment, 69486 E6-20110 Customs Customs and Border Protection Bureau RULES Merchandise, special classes: Import restrictions— Bolivia; archaeological and ethnological materials, 69477-69478 E6-20306 Defense Defense Acquisition Regulations System RULES Acquisition regulations: Contracting officers representatives, 69488-69489 E6-20393 Contractors; levy on payment, 69489-69492 E6-20394 Contract pricing and cost accounting standards, 69492-69495 E6-20396 Technical amendments, 69489 E6-20397 Defense Defense Department See Defense Acquisition Regulations System See Navy Department Drug Drug Enforcement Administration RULES Controlled substances; manufacturers, distributors, and dispensers; registration:
Individual practitioner registration requirements; clarification, 69478-69480 E6-20334 PROPOSED RULES Controlled substances; importation and exportation: Narcotic raw materials; authorized sources, 69504 E6-20383 NOTICES *Applications, hearings, determinations, etc.:* Almac Clinical Services Inc., 69589 E6-20337 Chattem Chemicals, Inc., 69589-69590 E6-20339 Formulation Technologies LLC, 69590 E6-20336 Hospira, Inc., 69590 E6-20335 ISP Freetown Fine Chemicals, Inc., 69590-69591 E6-20347 JFC Technologies LLC, 69591 E6-20338 E6-20346 Johnson Matthey, Inc., 69591-69592 E6-20333 E6-20343 E6-20344 National Center for Natural Products Research-NIDA MProject, University of Mississippi, 69592-69593 E6-20342 Norac, Inc., 69593 E6-20340 Noramco Inc., 69593 E6-20341 Organix Inc., 69593 E6-20332 Education Education Department NOTICES Grants and cooperative agreements; availability, etc.:
Postsecondary education— Ronald E. McNair Postbaccalaureate Achievement Program, 69552-69556 E6-20370 Special education and rehabilitative services— State Personnel Development Grants Program; correction, 69622 Z6-20022 Meetings: Student Financial Assistance Advisory Committee, 69556-69557 06-9478 Employee Employee Benefits Security Administration NOTICES Employee Retirement Income Security Act: Multiemployer plan status; pending election notice, 69594-69598 06-9491 Employment Employment Standards Administration See Wage and Hour Division PROPOSED RULES Family Medical Leave Act; information request, 69504-69514 06-9489 Energy Energy Department See Energy Efficiency and Renewable Energy Office See Federal Energy Regulatory Commission NOTICES Meetings:
Environmental Management Site-Specific Advisory Board— Paducah Gaseous Diffusion Plant, KY, 69557 E6-20316 Energy Energy Efficiency and Renewable Energy Office NOTICES Meetings: State Energy Advisory Board, 69557-69558 E6-20318 EPA Environmental Protection Agency RULES Air quality implementation plans; approval and promulgation; various States: West Virginia Correction, 69486-69488 E6-20291 Water programs: Federal Insecticide, Fungicide, and Rodenticide Act; implementation— Pesticides applied to U.S. waters; statement and guidance; correction, 69622 Z6-20002 PROPOSED RULES Air programs; approval and promulgation;
State plans for designated facilities and pollutants: Arkansas, 69519-69527 E6-20295 NOTICES Agency information collection activities; proposals, submissions, and approvals, 69558-69561 E6-20352 E6-20353 Environmental statements; availability, etc.: Agency comment availability, 69561-69562 E6-20350 Agency weekly receipts, 69562-69563 E6-20349 Grants and cooperative agreements; availability, etc.: State Innovation Grant Program, 69563-69564 E6-20351 Reports and guidance documents; availability, etc.:
Sources and environmental releases of dioxin-like compounds in the United States for the years 1987, 1995, and 2000; inventory, 69564-69565 E6-20294 FAA Federal Aviation Administration RULES Standard instrument approach procedures, 69438-69440 E6-20156 VOR Federal airways Correction, 69438 E6-20279 PROPOSED RULES Schools and other certificated agencies: Repair stations, 70254-70273 06-9479 NOTICES Exemption petitions; summary and disposition, 69605 E6-20354 Reports and guidance documents; availability, etc.:
Aircraft records recording; acceptance of transfer statements filed under Uniform Commercial Code; correction, 69622 C6-9250 FDIC Federal Deposit Insurance Corporation NOTICES Meetings; Sunshine Act, 69565 06-9496 06-9497 Federal Emergency Federal Emergency Management Agency NOTICES Disaster and emergency areas: Louisiana, 69581 E6-20331 Federal Energy Federal Energy Regulatory Commission RULES Electric utilities (Federal Power Act): Interstate electric transmission facilities; site permit applications; filing requirements and procedures, 69440-69476 E6-20001 Federal Labor Federal Labor Relations Authority NOTICES Federal antidiscrimination, whistleblower protection, and retaliation laws;
No FEAR Act notice, 69565-69566 E6-20330 Federal Motor Federal Motor Carrier Safety Administration NOTICES Committees; establishment, renewal, termination, etc.: Commercial Driver's License Advisory Committee, 69605-69606 E6-20304 Federal Railroad Federal Railroad Administration NOTICES Safety advisories, bulletins and directives: Passenger train safety; passengers boarding or alighting from trains, 69606-69607 E6-20359 Federal Reserve Federal Reserve System RULES Electronic fund transfers (Regulation E):
Financial institutions compliance requirements for electronic fund transfer; official staff commentary, 69430-69438 E6-20300 PROPOSED RULES Electronic fund transfers (Regulation E): Financial institutions compliance requirements for electronic fund transfer; exception from terminal receipts requirements, 69500-69504 E6-20301 NOTICES Banks and bank holding companies: Formations, acquisitions, and mergers, 69566 E6-20322 Food Food and Drug Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 69569-69570 E6-20307 Foreign Foreign Assets Control Office NOTICES Sanctions; blocked persons, specially designated nationals, terrorists, narcotics traffickers, and foreign terrorist organizations:
Narcotics-related blocked persons; additional designations, 69609-69613 E6-20375 Forest Forest Service NOTICES Recreation fee areas: North Carolina national forests; reserved picnic shelter fees, 69531-69532 06-9477 Health Health and Human Services Department See Agency for Healthcare Research and Quality See Centers for Medicare & Medicaid Services See Children and Families Administration See Food and Drug Administration See Indian Health Service See National Institutes of Health 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 Grants and cooperative agreements; availability, etc.:
Homeless assistance; excess and surplus Federal properties, 69581 06-9433 Indian Indian Health Service NOTICES Organization, functions, and authority delegations: Navajo Area Indian Health Service, 69570-69577 06-9476 Industry Industry and Security Bureau NOTICES Export privileges, actions affecting: Data Physics Corp. et al., 69540-69543 06-9419 Interior Interior Department See Land Management Bureau See National Park Service IRS Internal Revenue Service NOTICES Privacy Act; systems of records, 69613-69619 E6-20372 International International Trade Administration NOTICES Antidumping:
Malleable cast iron pipe fittings from— China, 69546-69550 E6-20366 Silicon metal from— Brazil, 69550 E6-20368 Stainless steel bar from— Spain, 69550-69551 E6-20367 Antidumping and countervailing duties: Administrative review requests, 69543-69545 E6-20360 Five-year (sunset) reviews— Advance notification, 69545 E6-20361 Initiation of reviews, 69545-69546 E6-20362 International International Trade Commission NOTICES Import investigations: Folding gift boxes from— China, 69586-69588 E6-20281 Industrial biotechnology: development and adoption by the U.S. chemical and biofuel industries, 69588-69589 E6-20374 Justice Justice Department See Drug Enforcement Administration Labor Labor Department See Employee Benefits Security Administration See Employment Standards Administration See Wage and Hour Division Land Land Management Bureau NOTICES Coal leases, exploration licenses, etc.:
Colorado, 69581-69582 E6-20299 Environmental statements; availability, etc.: Atlantic Rim Natural Gas Development Project; WY, 69582-69583 E6-20376 Realty actions; sales, leases, etc.: Nevada, 69583-69584 E6-20308 New Mexico, 69584-69585 E6-20305 Library Library of Congress See Copyright Royalty Board, Library of Congress National Agricultural National Agricultural Statistics Service NOTICES Agency information collection activities; proposals, submissions, and approvals, E6-20296 69532-69535 E6-20297 E6-20303 National Foundation National Foundation on the Arts and the Humanities NOTICES Agency information collection activities; proposals, submissions, and approvals, 69598 E6-20369 National Highway National Highway Traffic Safety Administration NOTICES Meetings:
Emergency Medical Services Federal Interagency Committee, 69607-69608 E6-20311 NIH National Institutes of Health NOTICES Agency information collection activities; proposals, submissions, and approvals, 69577-69578 E6-20373 Meetings: National Cancer Institute, 69578 06-9480 National Institute of Arthritis and Musculoskeletal and Skin Diseases, 69579 06-9483 National Institute of Mental Health, 69578 06-9481 National Institute of Nursing Research, 69579 06-9484 National Institute on Alcohol Abuse and Alcoholism, 69578 06-9482 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management:
Western Pacific fisheries— Bottomfish and seamount groundfish, crustacean, and precious corals, 69495-69496 E6-20378 PROPOSED RULES Fishery conservation and management: Western Pacific fisheries— Western Pacific Fishery Management Council; meetings, 69527-69528 E6-20380 NOTICES Endangered and threatened species: Anadromous fish take— Washington; chinook salmon and steelhead, 69551-69552 E6-20377 Meetings: Pacific Fishery Management Council, 69552 E6-20320 National Park National Park Service NOTICES National Register of Historic Places; pending nominations, 69585 E6-20348 Navy Navy Department NOTICES Agency information collection activities; proposals, submissions, and approvals; correction, 69622 C6-9400 Nuclear Nuclear Regulatory Commission RULES Special nuclear material; domestic licensing:
Items relied on for safety; facility change process Effective date confirmed, 69430 E6-20321 NOTICES Environmental statements; availability, etc.: Insmed Pharmaceuticals, Inc., 69601-69602 E6-20327 *Applications, hearings, determinations, etc.:* Exelon Generation Co., LLC, 69598-69600 E6-20319 Pension Pension Benefit Guaranty Corporation RULES Single employer plans: Allocation of assets— Benefits payable in terminated plans, 69480-69481 E6-20389 Valuation of benefits and assets; expected retirement age, 69481-69482 E6-20387 NOTICES Pension Plan Termination Insurance Program:
Flat premium rates, 69602-69603 E6-20386 Pipeline Pipeline and Hazardous Materials Safety Administration PROPOSED RULES Hazardous materials: Packaging requirements; miscellaneous amendments Correction, 69527 E6-20358 Railroad Railroad Retirement Board NOTICES Agency information collection activities; proposals, submissions, and approvals, 69603 E6-20345 SEC Securities and Exchange Commission NOTICES Self-regulatory organizations; proposed rule changes: National Securities Clearing Corp., 69604-69605 E6-20309 *Applications, hearings, determinations, etc.:* Software Brokers of America, Inc., 69603-69604 E6-20310 Statistical Statistical Reporting Service See National Agricultural Statistics Service Surface Surface Transportation Board NOTICES Railroad operation, acquisition, construction, etc.:
Union Pacific Railroad Co., 69608 E6-20244 Washington County, OR, 69608-69609 E6-20245 Thrift Thrift Supervision Office NOTICES Agency information collection activities; proposals, submissions, and approvals, 69619-69621 E6-20379 Transportation Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration See Federal Railroad Administration See National Highway Traffic Safety Administration See Pipeline and Hazardous Materials Safety Administration See Surface Transportation Board Treasury Treasury Department See Foreign Assets Control Office See Internal Revenue Service See Thrift Supervision Office RULES Merchandise, special classes:
Import restrictions— Bolivia; archaeological and ethnological materials, 69477-69478 E6-20306 Privacy Act; implementation, 69482-69484 E6-20384 Wage Wage and Hour Division PROPOSED RULES Family Medical Leave Act; information request, 69504-69514 06-9489 Separate Parts In This Issue Part II Health and Human Services Department, Centers for Medicare & Medicaid Services, 69624-70251 06-9086 Part III Transportation Department, Federal Aviation Administration, 70254-70273 06-9479 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. 71 231 Friday, December 1, 2006 Rules and Regulations DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 1220 [Docket No. LS-06-01] Soybean Promotion and Research: Amend the Order To Adjust Representation on the United Soybean Board AGENCY:
Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: This final rule adjusts the number of members for certain States on the United Soybean Board (Board) to reflect changes in production levels that have occurred since the Board was reapportioned in 2003, which became effective with 2004 nominations. These adjustments are required by the Soybean Promotion and Research Order (Order) and would result in an increase in Board membership from 64 to 68 effective with the Secretary's 2007 nominations and appointments.
EFFECTIVE DATE: January 2, 2007. FOR FURTHER INFORMATION CONTACT: Kenneth R. Payne, Chief; Marketing Programs Branch; Agricultural Marketing Service (AMS), USDA, room 2638-S; STOP 0251; 1400 Independence Avenue, SW.; Washington, DC 20250-0251; telephone 202-720-1115 or via e-mail at *Kenneth.Payne@usda.gov.* SUPPLEMENTARY INFORMATION: Executive Order 12866 The Office of Management and Budget
(OMB)has waived the review process required by Executive Order 12866 for this action. Executive Order 12988 This rule was reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have a retroactive effect. This rule would not preempt any State or local laws, regulations, or policies unless they present an irreconcilable conflict with this rule. The Soybean Promotion, Research, and Consumer Information Act
(Act)provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 1971 of the Act, a person subject to the Order may file a petition with the Secretary stating that the Order, any provision of the Order, or any obligation imposed in connection with the Order, is not in accordance with law and requesting a modification of the Order or an exemption from the Order. The petitioner is afforded the opportunity for a hearing on the petition. After a hearing, the Secretary would rule on the petition. The Act provides that the district courts of the United States in any district in which such person is an inhabitant, or has his principal place of business, has jurisdiction to review the Secretary's ruling on the petition, if a complaint for this purpose is filed within 20 days after the date of the entry of the ruling. Regulatory Flexibility Act The Agricultural Marketing Service has determined that this rule will not have a significant economic impact on a substantial number of small entities as defined by the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ), because it only adjusts representation on the Board to reflect changes in production levels that have occurred since the Board was reapportioned in 2003. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly burdened. As such, these changes will not impact on persons subject to the program. There are an estimated 663,800 soybean producers and an estimated 10,000 first purchasers who collect the assessment, most of whom would be considered small entities under the criteria established by the Small Business Administration (13 CFR 121.601). Paperwork Reduction Act In accordance with OMB regulations [5 CFR part 1320] that implement the Paperwork Reduction Act of 1995 [44 U.S.C. Chapter 35], the information collection and recordkeeping requirements contained in the Order and Rules and Regulations have previously been approved by OMB under OMB control number 0581-0093. Background and Proposed Changes The Act (7 U.S.C. 6301-6311) provides for the establishment of a coordinated program of promotion and research designed to strengthen the soybean industry's position in the marketplace, and to maintain and expand domestic and foreign markets and uses for soybeans and soybean products. The program is financed by an assessment of 0.5 percent of the net market price of soybeans sold by producers. Pursuant to the Act, an Order was made effective July 9, 1991. The Order established a Board of 60 members. For purposes of establishing the Board, the United States was originally divided into 31 geographic units. Representation on the Board from each unit was determined by the level of production in each unit. The Secretary appointed the initial Board on July 11, 1991. The Board is composed of soybean producers. Section 1220.201(c) of the Order provides that at the end of each three
(3)year period, the Board shall review soybean production levels in the geographic units throughout the United States. The Board may recommend to the Secretary modification in the levels of production necessary for Board membership for each unit. Section 1220.201(d) of the Order provides that at the end of each three
(3)year period, the Secretary must review the volume of production of each unit and adjust the boundaries of any unit and the number of Board members from each such unit as necessary to conform with the criteria set forth in § 1220.201(e):
(1)To the extent practicable, States with annual average soybean production of less than 3,000,000 bushels shall be grouped into geographically contiguous units, each of which has a combined production level equal to or greater than 3,000,000 bushels, and each such group shall be entitled to at least one member on the Board;
(2)units with at least 3,000,000 bushels, but fewer than 15,000,000 bushels shall be entitled to one board member;
(3)units with 15,000,000 bushels or more but fewer than 70,000,000 bushels shall be entitled to two Board members;
(4)units with 70,000,000 bushels or more but fewer than 200,000,000 bushels shall be entitled to three Board members; and
(5)units with 200,000,000 bushels or more shall be entitled to four Board members. A proposed rule was published in the **Federal Register** (71 FR 41741) on July 24, 2006, with a 30-day comment period. The Department received no comments. The increase in representation on the Board, from 64 to 68 members, is based on average production levels for the years 2001-2005 (excluding the crops in years in which production was the highest and in which production was the lowest) as reported by the Department of Agriculture's National Agricultural Statistics Service in the “Crop Production 2005 Summary”, which was published in January 2006. The number of geographical units remains at 30. This final rule increases Board membership from 64 members to 68 members effective with 2007 nominations and appointments. This final rule adjusts representation on the Board as follows: State Previous representation Current representation Nebraska 3 4 North Dakota 2 3 Pennsylvania 1 2 Virginia 1 2 List of Subjects In 7 CFR Part 1220 Administrative practice and procedure, Advertising, Agricultural research, Marketing agreements, Soybeans and soybean products, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, Title 7, part 1220 is amended as follows: PART 1220—SOYBEAN PROMOTION, RESEARCH, AND CONSUMER INFORMATION 1. The authority citation for 7 CFR part 1220 continues to read as follows: Authority: 7 U.S.C. 6301-6311. 2. In § 1220.201, the table immediately following paragraph
(a)is revised to read as follows: § 1220.201 Membership of board.
(a)* * * Unit Number of members Illinois 4 Iowa 4 Minnesota 4 Indiana 4 Nebraska 4 Missouri 3 Ohio 3 Arkansas 3 South Dakota 3 Kansas 3 Michigan 3 North Dakota 3 Mississippi 2 Louisiana 2 Tennessee 2 North Carolina 2 Kentucky 2 Pennsylvania 2 Virginia 2 Maryland 2 Wisconsin 2 Georgia 1 South Carolina 1 Alabama 1 Delaware 1 Texas 1 Oklahoma 1 New York 1 Unit Number of members Eastern Region (Massachusetts, New Jersey Connecticut, Florida, Rhode Island, Vermont, New Hampshire, Maine, West Virginia, District of Columbia, and Puerto Rico 1 Western Region (Montana, Wyoming, Colorado, New Mexico, Idaho, Utah, Arizona, Washington, Oregon, Nevada, California, Hawaii, and Alaska) 1 Dated: November 27, 2006. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E6-20314 Filed 11-30-06; 8:45 am] BILLING CODE 3410-02-P NUCLEAR REGULATORY COMMISSION 10 CFR Part 70 RIN 3150-AH96 Facility Change Process Involving Items Relied on for Safety: Confirmation of Effective Date AGENCY: Nuclear Regulatory Commission. ACTION: Direct final rule: Confirmation of effective date. SUMMARY: The Nuclear Regulatory Commission
(NRC)is confirming the effective date of December 11, 2006, for the direct final rule that was published in the **Federal Register** on September 27, 2006 (71 FR 56344). This direct final rule amended the NRC's regulations to clarify a requirement pertaining to items relied on for safety (IROFS). This rulemaking corrected an inconsistency in the regulations pertaining to IROFS. DATES: The direct final rule published at 71 FR 56344, Sept. 27, 2006 is effective December 11, 2006. ADDRESSES: Documents related to this rulemaking, including comments received, may be examined at the NRC Public Document Room, Room O-1F23, 11555 Rockville Pike, Rockville, MD. These same documents may also be viewed and downloaded electronically via the rulemaking Web site ( *http://ruleforum.llnl.gov* ). For information about the interactive rulemaking Web site, contact Ms. Carol Gallagher
(301)415-5905; e-mail *CAG@nrc.gov* . FOR FURTHER INFORMATION CONTACT: Dr. Anthony N. Tse, Office of Federal and State Materials and Environmental Management Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone
(301)415-6233 (e-mail: *ant@nrc.gov* ). SUPPLEMENTARY INFORMATION: On September 27, 2006 (71 FR 56344), the NRC published in the **Federal Register** a direct final rule amending its regulations in 10 CFR part 70 to clarify a requirement pertaining to items relied on for safety (IROFS). In the direct final rule, NRC stated that if no significant adverse comments were received, the direct final rule would become final on December 11, 2006. The NRC did not receive any comments that warranted withdrawal of the direct final rule. Therefore, this rule will become effective as scheduled. Dated at Rockville, Maryland, this 27th day of November, 2006. For the Nuclear Regulatory Commission. Michael T. Lesar, Chief, Rulemaking, Directives, and Editing Branch, Division of Administrative Services, Office of Administration. [FR Doc. E6-20321 Filed 11-30-06; 8:45 am] BILLING CODE 7590-01-P FEDERAL RESERVE SYSTEM 12 CFR Part 205 [Regulation E; Docket No. R-1265] Electronic Fund Transfers AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final rule; official staff interpretation. SUMMARY: The Board is amending Regulation E, which implements the Electronic Fund Transfer Act, and the official staff commentary to the regulation. The final rule clarifies that the requirement to obtain a consumer's authorization to initiate an electronic fund transfer to the consumer's account to collect a fee for an EFT or check that has been returned applies to any person that intends to collect the fee in that manner, and not to the account-holding financial institution. The final rule also provides guidance on the consumer notice requirements when a person initiates an electronic fund transfer to collect a returned item fee or engages in an electronic check conversion transaction. The amendments supersede corresponding provisions addressing these issues in the Board's January 2006 final rule and August 2006 interim final rule. DATES: The final rule is effective January 1, 2007. FOR FURTHER INFORMATION CONTACT: Vivian W. Wong, Attorney, or Ky Tran-Trong or David A. Stein, Counsels, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551, at
(202)452-2412 or
(202)452-3667. For users of Telecommunications Device for the Deaf
(TDD)only, contact
(202)263-4869. SUPPLEMENTARY INFORMATION: I. Statutory Background The Electronic Fund Transfer Act (EFTA or Act) (15 U.S.C. 1693 *et seq.* ), enacted in 1978, provides a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer
(EFT)systems. The EFTA is implemented by the Board's Regulation E (12 CFR part 205). Examples of the types of transfers covered by the Act and regulation include transfers initiated through an automated teller machine (ATM), point-of-sale
(POS)terminal, automated clearinghouse (ACH), telephone bill-payment plan, or remote banking service. The Act and regulation provide for disclosure of the terms and conditions of an EFT service; documentation of EFTs by means of terminal receipts and periodic account activity statements; limitations on consumer liability for unauthorized transfers; procedures for error resolution; and certain rights related to preauthorized EFTs. Further, the Act and regulation also prescribe restrictions on the unsolicited issuance of ATM cards and other access devices. The official staff commentary (12 CFR part 205 (Supp. I)) interprets the requirements of Regulation E to facilitate compliance and provides protection from liability under Sections 915 and 916 of the EFTA for financial institutions and persons subject to the Act. 15 U.S.C. 1693m(d)(1). The commentary is updated periodically to address significant questions that arise. II. Background and Overview of Comments Received On January 10, 2006, the Board published a final rule which addressed, among other things, how a payee can obtain a consumer's authorization to electronically collect fees for items returned due to insufficient or uncollected funds in the consumer's account. 71 FR 1,638 (January 10, 2006) (January 2006 final rule). Authorization is obtained when notice is provided to the consumer stating that the fee will be collected by means of an EFT, along with a disclosure of the specific amount of the fee, and the consumer goes forward with the underlying transaction. *See* 71 FR at 1,645-46, 1,659. The Board subsequently published an interim final rule in August 2006 (August 2006 interim rule) to clarify certain provisions in the January 2006 final rule. 71 FR 51,451 (August 30, 2006). The August 2006 interim rule corrected an omission in the January 2006 final rule to provide that the requirement to obtain a consumer's authorization to electronically collect fees for items returned due to insufficient or uncollected funds in the consumer's account applies to the person initiating an EFT to collect the fee in this manner, and not to the consumer's account-holding financial institution. The August 2006 interim rule included further guidance regarding the notice requirement, including how to disclose the amount of the fee when the amount may vary based on the amount of the underlying transaction or other factors. With respect to the notice requirements for obtaining authorization at POS for both the electronic collection of insufficient funds fees and for electronic check conversion transactions, the August 2006 interim rule clarified that the notice given to consumers at the time of the transaction may be substantially similar, and need not be identical, to the notice posted at POS. To give interested parties an opportunity to comment on these revisions, the Board solicited comment on the August 2006 interim rule. The Board received 14 comment letters on the August 2006 interim rule. Commenters included banks, credit unions, a check services provider, a large retailer, and industry trade associations, and consumer groups. The following is a summary of the comments received; the section-by-section analysis discusses specific comments in more detail. In general, industry commenters supported the Board's clarification that the notice and authorization requirements apply to the person seeking to collect the insufficient or uncollected funds fee electronically. They also supported the Board's clarification that the authorization requirement does not apply to any fees for returned items due to insufficient or uncollected funds imposed on the consumer's account by the account-holding institution. Some industry commenters, however, urged the Board to reconsider, for operational reasons, the requirements to provide *both* a posted notice as well as a copy of that notice, or substantially similar notice, to consumers at POS. Industry commenters also expressed concerns about the requirement to disclose the amount of the fee, particularly when the fee may vary from state to state. By contrast, consumer groups disagreed with the notion that a consumer can authorize the collection of an insufficient funds fee via an EFT from the consumer's account solely by going forward with an underlying transaction after receiving notice of the payee's intent to collect the fee electronically. III. Summary of the Final Rule The Board is adopting final revisions to Regulation E and the staff commentary largely as published in the August 2006 interim rule. The rule has been revised to apply to any fees collected for an EFT or a check that has been returned unpaid, and is not limited to fees collected after an item has been returned due to insufficient or uncollected funds in a consumer's account. Additional clarifications and modifications have been made to respond to commenters' concerns. In addition to explaining that the requirement to obtain the consumer's authorization applies to the person electronically collecting the returned item fee, the final rule clarifies that if the amount of the fee may vary based on the transaction amount or on other factors, an explanation of how the fee is calculated may generally be provided. For POS transactions, the person collecting the fee must provide consumers with two separate notices, one that is posted in a prominent and conspicuous location, and a second that the consumer may retain. If the fee may vary depending on the amount of the transaction or for other reasons, an explanation of how that fee is determined may be stated on the posted notice. However, if the amount of the fee can be calculated at the time of the transaction, the person collecting the fee must state the specific fee amount on the notice given to the consumer. The final rule has been revised to allow persons that may not be able to provide a retainable notice at the time of the transaction ( *e.g.* , because they do not have terminals or registers capable of printing the necessary disclosures) to send a notice to the consumer's address as soon as reasonably practicable after the person has initiated an EFT to collect the fee. The effective date of the final rule is January 1, 2007. As provided in the August 2006 interim rule, to facilitate compliance and minimize the implementation costs, the final rule provides a one-year delayed compliance date, until January 1, 2008, for the requirement to disclose the amount of the returned item fee (or an explanation of how the fee is determined) on the copy of the notice (or substantially similar notice) provided to the consumer in connection with a POS transaction. IV. Section-by-Section Analysis Section 205.3 Coverage 3(a) General Section 205.3(a) is being adopted as set forth in the August 2006 interim rule to incorporate a revision that was inadvertently omitted from the January 2006 final rule. *See* 71 FR 1,638 (January 10, 2006). Specifically, § 205.3(a) is revised, pursuant to the Board's authority under Sections 904(c) and 904(d)(1) of the EFTA, to clarify that the requirement in § 205.3(b)(3) to obtain a consumer's authorization to collect a fee for a returned EFT or check via an EFT to the consumer's account applies to any person. *See* 71 FR at 1,645-46. As further discussed under § 205.3(b)(3), this amendment clarifies that the requirement to obtain the consumer's authorization applies to the person seeking to collect the returned item fee electronically and not to the consumer's account-holding institution. No commenters objected to this clarification. 3(b) Electronic Fund Transfer Electronic Check Conversion Under the January 2006 final rule, merchants and other payees in electronic check conversion
(ECK)transactions are required to obtain the consumer's authorization for the one-time transfer. 1 Generally, authorization for the ECK transaction is obtained when the payee provides a notice to the consumer that information from the consumer's check received as payment may be used to initiate an EFT, and the consumer goes forward with the transaction. At POS, the notice must be posted in a prominent and conspicuous location, and a copy of the notice must be provided to the consumer at the time of the transaction, such as on a receipt. *See* § 205.3(b)(2); 71 FR at 1,640-41. Model language was provided in the January 2006 final rule to facilitate compliance. *See* Model Clause A-6. 1 In an ECK transaction, a merchant or other payee takes information from a consumer's check to initiate a one-time EFT from the consumer's account. The August 2006 interim rule clarified that the notice given to the consumer at the time of the transaction must be substantially similar to the notice posted at POS, but need not be an exact copy of the posted notice. The clarification allows a payee in an ECK transaction to modify the text of the notice given to the consumer to make the notice more meaningful to the consumer. For example, the payee could change the text from “You authorize us to use information from your check * * * ” to “I authorize you to use information from my check * * * .” Industry commenters supported the revision, and it is adopted in the final rule. Collection of Returned Item Fees Through an Electronic Fund Transfer Persons Subject to the Requirement An EFT from a consumer's account to collect a fee for the return of an EFT or a check is covered by Regulation E and must be authorized by the consumer. Under § 205.3(b)(3) of the January 2006 final rule, a consumer authorizes the electronic collection of a fee for a returned EFT or check when the consumer receives notice of the intent to collect the fee from the consumer's account by EFT, along with a disclosure of the amount of the fee, and goes forward with the underlying transaction. *See* 71 FR at 1,645-46. Although § 205.3(b)(3) was intended to apply to the person electronically collecting a fee for a returned item, the rule did not specifically indicate the party that was required to provide the notice. Under § 205.3(b)(3)(i) of the August 2006 interim rule, the obligation to provide notice to obtain the consumer's authorization applies to the person that initiates an EFT to collect the fee, which typically would be a merchant or other payee. However, in some cases this may be a third party, either on behalf of the payee as the payee's service provider or after it has acquired the right to the payment from the payee. Thus, if the person that initiates collection of the fee by an EFT failed to obtain a consumer's authorization, the person collecting the fee, and not the consumer's account-holding financial institution, has violated the regulation. All commenters addressing this provision agreed with the Board's clarification that the notice and authorization requirement applies to the person initiating an EFT to collect the fee, and the final rule reflects this approach. However, because an EFT or check may be returned for reasons other than insufficient or uncollected funds in a consumer's account, the rule has been revised to apply the consumer authorization requirement more generally to any fees collected electronically when an EFT or check has been returned unpaid. For example, a check may be returned if the check does not bear the consumer's signature. In addition, the reference in § 205.3(b)(3)(i) of the August 2006 interim rule referring to the return of an unpaid item “to that person” has been deleted to acknowledge that in some cases, the person collecting the fee will not necessarily be the merchant or other payee, but may instead be a third party. The commentary to the final rule clarifies that the requirement in § 205.3(b)(3) to obtain a consumer's authorization to collect a fee for a returned item is not intended to apply to the consumer's account-holding financial institution when it assesses a separate fee against the consumer's account for returning a check or EFT unpaid or for paying an overdraft. *See* comment 3(b)(3)-1. Notice Requirements—General Authorization Requirements Both the January 2006 final rule and the August 2006 interim rule provided that to obtain a consumer's authorization to collect a fee for an item that is returned unpaid due to insufficient or uncollected funds in the consumer's account, notice must first be provided of the intent to electronically collect that fee, and such notice also must state the amount of the fee. *See* § 205.3(b)(3)(i); 71 FR 1,645-46. Consumers are deemed to authorize the electronic collection of the fee if the consumer goes forward with the underlying transaction after receiving such notice. Payees in accounts receivable conversion
(ARC)transactions will typically provide written notice on a billing statement or invoice. *See* 71 FR at 1,646; 71 FR at 51,453. As further discussed below in § 205.3(b)(3)(ii), for one-time transactions at POS, the notice must be posted in a prominent and conspicuous location and a copy of the notice must be provided to the consumer. The August 2006 interim rule also provided guidance regarding how the amount of the fee can be disclosed if it may vary from transaction to transaction. The final rule substantially adopts these provisions of the interim rule, with some modifications to the regulation and commentary text to cover fees for returned items generally, and to clarify how the requirement applies in practice. Consumer groups objected to the notion that a consumer authorizes the electronic collection of a fee for a returned item solely by receiving notice of the payee's intent to do so and going through with the underlying transaction. In their view, a consumer may intend to enter into an underlying check conversion transaction, but is not likely to anticipate having the item returned. Consequently, consumer groups argue that the consumer cannot be said to intend to authorize a debit to collect fees associated with the return of the underlying item. Consumer groups were particularly concerned that the Board's rule would facilitate the ability of Internet payday lenders to electronically access consumers' accounts at any time without restriction simply by including a clause in the on-line loan agreement providing for such debits. Under the final rule, a consumer may authorize a subsequent electronic collection of a returned item fee when the consumer receives notice (or notice is posted in the case of POS transactions) indicating that possibility at the time of the underlying transaction. *See also* comment 3(b)(3)-4, discussed below, addressing how notice may be provided when the person collecting the returned item fee is not the merchant or other payee to whom the consumer provides payment. The Board believes that a notice provided to consumers (or posted on signage) before a consumer selects a payment method will adequately apprise consumers of the possibility that a fee may be debited from their accounts in the event an item is returned unpaid. The prior notice allows the consumer to make an informed decision about whether to proceed with a particular payment method ( *e.g.* , a check conversion transaction) or to pay by other means. The final rule does not address whether a person has a substantive right to collect a returned item fee—that is a matter of state or other law. The Board further notes that other federal or state laws, such as the Fair Debt Collection Practices Act, as well as payment system rules may impose additional substantive requirements. In addition, the Board also understands that in some cases, a payee may seek to collect more than one returned item fee in connection with a single underlying item that has been returned unpaid more than once. Although Regulation E does not prohibit the collection of more than one fee for a single underlying item if appropriate notice is provided to the consumer, such a practice may nevertheless be impermissible under certain state laws, and could potentially raise concerns about unfair or deceptive practices. A few industry commenters raised concerns about the statement in the supplementary information for the August 2006 interim rule that a separate notice to obtain the consumer's authorization must be provided each time a payee seeks to collect an insufficient funds fee for a returned item. In particular, these commenters expressed concern that this statement could be interpreted to require separate consumer authorizations for each fee collected electronically even when the consumer has agreed to preauthorized transfers for the underlying transactions under § 205.10(b). For example, a consumer authorizing monthly debits under § 205.10(b) may also agree to the electronic collection of returned item fees in connection with those debits under the terms of the same agreement. The Board did not intend to suggest that Regulation E requires separate consumer authorizations for each returned item fee collected electronically when the consumer has agreed to preauthorized transfers for the underlying transactions. The Board notes, however that, as is the case for all disclosures under Regulation E, the notice regarding the person's intent to collect returned item fees electronically must be clear and readily understandable to the consumer. *See* § 205.4(a). Moreover, if the consumer later revokes his or her authorization under the agreement, the payee must terminate all subsequent debits under that authorization. *See* § 205.10(c); comment 10(c)-2. Disclosure of Returned Item Fees The final rule also adopts the provision in the August 2006 interim rule in § 205.3(b)(3)(i) permitting the person collecting a fee for a returned EFT or check to provide an explanation of how the fee is determined if the amount of the fee may vary based on the amount of the underlying transaction or other factors. The August 2006 interim rule recognized that state laws governing the maximum fee that may be collected for items returned unpaid are not uniform. For example, in some states, the fee may vary based on the transaction amount or the amount of time the obligation is outstanding. Thus, persons that intend to collect the maximum amount permitted by state law may be unable to disclose a specific dollar amount on a notice that would be given to all consumers. For example, a payee at POS would be unable to post a notice disclosing a specific fee amount if the fee will vary depending on the amount of the underlying transaction. Industry commenters generally supported the flexibility provided by § 205.3(b)(3)(i), but a few commenters asserted that the rule continues to impose unnecessary burden on businesses operating in multiple states. The commenters noted that even when the amount of the fee is fixed under an applicable state law, payees would have to modify their notice in each state. Moreover, the rule could potentially result in lengthy explanations about how to calculate the fee which would not necessarily enhance consumer understanding. A trade association of finance and treasury professionals asserted that consumers would receive adequate disclosure so long as they are provided a general statement that the fee will not exceed the maximum amount permitted by applicable state law. The Board believes, however, that merely disclosing that a fee will be collected in an amount that is in accordance with state law would not provide consumers with sufficient detail about the fee because consumers are unlikely to be familiar with the limits established under the state law governing the individual transaction. The vagueness of such a disclosure would thus make it difficult for consumers to later reconcile any debits to collect the fee with information on their periodic statements. Accordingly, the Board is adopting § 205.3(b)(3)(i) as set forth in the August 2006 interim rule to require disclosure of the fee (or an explanation of how that fee is determined where the fee amount may vary from transaction to transaction). Thus, the rule would require for example, a merchant or other payee that does business in two different states, one of which allows a maximum returned item fee of $25, and the other allowing a maximum fee of $35, to disclose the specific fee that would be collected electronically in each state. Comment 3(b)(3)-2 is adopted largely as proposed and provides an example of how the rule would apply when a person seeks to collect a returned item fee electronically in connection with an ARC transaction. The comment has been revised in the final rule to clarify that the term “ARC transaction” may also cover situations where a consumer makes an in-person payment for an invoice at the payee's physical location ( *e.g.* , when a consumer goes to a bank branch to make a loan payment at a teller window) or leaves the payment in a dropbox, instead of mailing the payment to the payee. These circumstances would thus not be subject to the notice requirements for POS transactions under § 205.3(b)(3)(ii). To facilitate compliance, Model Clause A-8 of Appendix A in the final rule includes model language that payees may use to disclose their intent to collect a fee for an EFT or check returned unpaid electronically and the amount of the fee. The model language is modified from the wording used in the August 2006 interim rule to apply to all types of returned item fees and to reflect that in some cases the person collecting the fee may not be the merchant or other payee to whom the consumer has provided payment. One commenter expressed concern that state law may require the person collecting the fee to use specific wording for such notices, which might be inconsistent with the Board's model language. While use of the model language would provide a safe harbor for persons seeking to collect returned item fees electronically, the regulation does not mandate use of the model language. Thus, a person may comply with the rule without using the Board's model language so long as that person apprises the consumer that the fee will be collected electronically and states the amount of the fee (or how the fee is determined). Notice Requirements—POS Transactions Forms of Notice Under the August 2006 interim rule, payees at POS must post notice of their intent to electronically collect a fee for a returned EFT or check (along with the amount of the fee) in a prominent and conspicuous location, and a copy of the notice, or substantially similar notice, must be provided to the consumer at the time of the transaction, such as on the sales receipt. *See* § 205.3(b)(3)(ii). If the amount of the fee to be collected electronically can be determined at the time of the transaction, the notice provided to the consumer must state the specific amount of the fee. The final rule generally adopts the approach set forth in the interim rule in § 205.3(b)(3)(ii), but allows a payee to mail a notice to a consumer's address as an alternative to providing a consumer a retainable notice at the time of the transaction. One large retailer urged the Board to allow payees to choose a single method for notifying consumers about the fee, *either* posting a notice at POS *or* providing consumers with such notice via a receipt. This retailer stated that the costs of providing both forms of notice to consumers at POS would be a significant barrier to wider industry adoption of ACH payment methods and, moreover, that the information provided in the notices was irrelevant to the vast majority of consumers who do not have checks returned. A vendor of check processing services commented that some merchants do not convert checks received at POS but may nevertheless collect fees electronically if an item is returned unpaid. According to this commenter, merchants that do not convert checks are unlikely to upgrade their registers to provide consumers with receipts containing the required disclosures. As a result, the commenter stated that the interim rule would prevent these merchants from being able to collect such fees by means of an EFT, a process that is considerably more efficient than other traditional collection methods, such as processing a demand draft (or remotely created check). This commenter suggested that the Board allow merchants to send a notice to the consumer after the transaction occurs but before any debit to the consumer's account to collect the insufficient funds fee. Because a very high percentage of checks are paid when presented, the commenter noted that the notice would thus only have to be mailed to the small number of consumers for whom the notice would be relevant, *i.e.* , those who have their checks or other items returned. The final rule adopts § 205.3(b)(3)(ii) largely as set forth in the interim rule with a minor change to the rule text to refer to the person “initiating an EFT” to collect the insufficient funds fee for consistency with the general rule in § 205.3(b)(3)(i). In addition, § 205.3(b)(3)(ii) has been revised to allow a person collecting returned item fees electronically to subsequently send a copy of the posted notice (or a substantially similar notice) to consumers instead of providing a notice at the time of the transaction. Persons collecting the fee would still be required to post notice of their intent to collect fees for returned items and a disclosure of the amount of the fee (or a description of how that fee is determined). The revised rule, however, permits persons that may not be able to provide notices at the time of the transaction (for example, because they do not have registers or terminals capable of printing receipts or of providing the required notices) the flexibility to collect any resulting returned item fees electronically. The flexibility provided in the revised rule would also be available for persons who, for operational or other reasons, choose not to provide notices at the time of the transaction. The Board believes that the purpose served by the notice given to the consumer, that is, to provide a source of information about the fee that the consumer can refer to later ( *e.g.* , if necessary to reconcile with entries on a periodic statement), can also be accomplished by permitting the payee to mail the notice at a later time. This alternative has the added benefit of providing notice only to those consumers for whom the notice is particularly relevant. Persons electing to mail notices to a consumer's address must send the notice as soon as reasonably practicable after the person initiates an EFT to collect the fee from the consumer's account. Thus, given the notice's intended purpose of providing the consumer information about the debit, the final rule does not require the notice to be sent prior to the initiation of the EFT to collect the fee. If, however, the person does not provide a consumer with a notice at the time of the transaction and is unable to mail a notice because, for example, the consumer's check does not bear the consumer's address, the person would violate the rule. Similarly, in a debit card transaction where the consumer's address typically would not be collected, the person collecting the returned item fee would violate the rule if it does not provide the consumer a copy of the notice regarding the fee, or a substantially similar notice, either at the time of the transaction or in a subsequent mailing. Comment 3(b)(3)-4 is added in the final rule to address the situation where the merchant or other payee to whom the underlying payment is made is not the same person that collects a returned item fee electronically if the payment is returned. Because the obligation to obtain the consumer's authorization for the EFT debit falls on the person collecting the fee in this manner, comment 3(b)(3)-4 states that the person initiating the EFT to the consumer's account to collect the fee may provide the requisite notices under § 205.3(b)(3) through a third party, such as a merchant. For example, the person electronically collecting a returned item fee could have the merchant at POS post the required signage and provide a retainable copy of the notice to the consumer on the person's behalf. Disclosure of Returned Item Fee for POS Transactions Under § 205.3(b)(3)(ii) of the August 2006 interim rule, if the dollar amount of the fee can be calculated at the time of the transaction, the copy of the notice (or substantially similar notice) provided to the consumer at the time of the transaction must state that dollar amount, rather than an explanation of how that fee is determined. This provision is adopted generally as set forth in the August 2006 interim rule. Persons that elect to send notices to a consumer's address are required to state the amount of the fee being collected at the time the notice is mailed. Comment 3(b)(3)-3 illustrates, by way of example, how a person would disclose the amount of any fees assessed for a returned item in connection with a POS transaction. Industry commenters continued to raise concerns about the costs of reprogramming terminals at POS to provide the amount of the fee on the notice provided to the consumer at the time of the transaction and urged the Board to delete the requirement. The Board believes the one-year delayed compliance date, discussed below, should significantly reduce the implementation costs and has retained the requirement to disclose the fee on the retainable notice in the final rule. Moreover, the alternative described above permitting the person collecting the fee to send a notice by mail after the transaction should further reduce the costs of compliance. Delayed Compliance Date for Fee Disclosures Provided to Consumers at POS Terminals The Board provided a one-year delayed compliance date for the requirement to disclose the amount of the fee on the notice given to the consumer to minimize the expense associated with reprogramming terminals by the January 1, 2007 compliance date. No commenters objected to the delayed compliance date and it is adopted as proposed. The delayed compliance date applies whether the retainable notice is provided at the time of the transaction or subsequently sent to the consumer. One industry commenter also suggested extending the delayed compliance date to other requirements of the August 2006 interim rule. Given that payees will already have had approximately one year to implement the other requirements, and because those requirements do not present the same programming issues as the disclosure of the amount of the fee on the notice given to consumers, the January 1, 2007 compliance date is retained. Accordingly, this delayed compliance provision is limited solely to the disclosure on the retainable notice given to the consumer regarding the amount of the returned item fee that may be collected and does not apply to the requirement to disclose the payee's intent to electronically collect the fee on that notice. The delayed compliance date also does not apply to the requirement to provide the amount of the fee, or an explanation of how the fee is determined, on the posted notice. V. Final Regulatory Flexibility Analysis The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* )
(RFA)generally requires an agency to perform an assessment of the impact a rule is expected to have on small entities. However, under section 605(b) of the RFA, 5 U.S.C. 605(b), the regulatory flexibility analysis otherwise required under section 604 of the RFA is not required if an agency certifies that the rule will not have a significant economic impact on a substantial number of small entities, and provides a statement providing the factual basis for such certification. Based on its analysis and for the reasons stated below, the Board certifies that the final rule will not have a significant economic impact on a substantial number of small entities. 1. *Statement of the need for, and objectives of, the final rule.* The EFTA was enacted to provide a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer systems. The primary objective of the EFTA is the provision of individual consumer rights. 15 U.S.C. 1693. The EFTA authorizes the Board to prescribe regulations to carry out the purpose and provisions of the statute. 15 U.S.C. 1693b(a). The Act expressly states that the Board's regulations may contain “such classifications, differentiations, or other provisions, * * * as, in the judgment of the Board, are necessary or proper to effectuate the purposes of [the Act], to prevent circumvention or evasion [of the Act], or to facilitate compliance [with the Act].” 15 U.S.C. 1693b(c). The Act also states that “[i]f electronic fund transfer services are made available to consumers by a person other than a financial institution holding a consumer's account, the Board shall by regulation assure that the disclosures, protections, responsibilities, and remedies created by [the act] are made applicable to such persons and services.” 15 U.S.C. 1693b(d). The Board believes that the revisions to Regulation E discussed below are within Congress's broad grant of authority to the Board to adopt provisions that carry out the purposes of the statute. The Board is revising Regulation E to clarify that a person that intends to collect a fee for a returned EFT or check by means of an EFT from a consumer's account must obtain the consumer's authorization. Authorization is obtained when the person collecting the fee electronically provides a written notice (or posts the notice in the case of a POS transaction) of the intent to collect the fee electronically, along with a disclosure of the dollar amount of the fee, and the consumer goes forward with the underlying transaction after receiving that notice. This requirement would allow consumers to receive prior notice of a person's intent to electronically collect a returned item fee and enable the Board to promote consistency in the notice provided to consumers. In response to industry requests for flexibility with respect to the requirement to provide consumers with a copy of the notice posted at POS informing them of the person's intent to electronically collect a returned item fee, the final rule states that persons may provide a notice that is substantially similar to the posted notice. A parallel revision is made with respect to the electronic check conversion requirements at POS. Accordingly, payees may provide consumers with a notice that is substantially similar to the notice posted at POS informing consumers that the payee may convert checks received as payment to EFTs. In addition, to address state laws that, for example, permit a fee for returned items to be imposed based on a percentage of the underlying transaction (rather than a flat fee regardless of the transaction amount), the final rule permits persons collecting the fee to disclose a description of how the fee will be determined in lieu of an actual dollar amount. However, if the dollar amount of the fee can be calculated at the time the notice is given to the consumer, this amount must be stated on the version of the notice provided to the consumer. In response to concerns about the costs of implementing systems to provide a copy of the posted notice or substantially similar notice to the consumer at the time of a POS transaction with the dollar amount of the fee, or an explanation of how such fee would be calculated if the fee may vary based on the underlying transaction amount or other factors, the final rule permits persons to send such notice to a consumer's address at a later time. 2. *Issues raised by comments in response to the initial regulatory flexibility analysis.* In accordance with section 603(a) of the RFA, the Board conducted an initial regulatory flexibility analysis in connection with the September 2004 proposal (69 FR 55,996 (September 17, 2004)). In accordance with section 604(a) of the RFA, the Board also conducted a final regulatory flexibility analysis in connection with its January 2006 final rule (71 FR 1,638 (January 10, 2006)) and with its August 2006 interim rule (71 FR 51,451 (August 30, 2006)). The Board did not receive any comments on any of these regulatory flexibility analyses specifically with respect to the disclosure of a person's intent to electronically collect a returned item fee. However, one commenter, a major provider of check processing services, in response to the September 2004 proposal, noted that in general any changes to the authorization language provided to consumers in electronic check conversion transactions at POS locations would entail re-programming of the terminals typically used to provide notices and obtain the consumer's authorization. In response to the August 2006 interim rule, three commenters, including the same provider of check processing services, asserted that it will be costly to reprogram POS terminals to state the amount of the returned item fee that would be collected electronically. 3. *Small entities affected by the final rule.* Persons that initiate one-time EFTs from a consumer's account to electronically collect a fee for items returned unpaid will be required under the regulation to obtain the consumer's authorization for the transfer. The person that initiates the EFT to debit the consumer's account for the fee must provide written notice of the intent to collect the fees electronically and disclose the dollar amount of the fee. For ARC transactions, notice will likely be provided on a billing statement or invoice. At POS, notice must be provided by posted signage, and a copy of the notice or a substantially similar notice must be given to the consumer either at the time of the transaction or sent at a later time. The Board believes many small businesses that electronically collect fees for returned items are currently providing written notices regarding the intent to collect such fees electronically, either on posted signage or on a transaction receipt at POS, and possibly both. Similarly, the Board believes that payees are providing written notices in ARC transactions because payment system rules currently require written notices. Therefore, small entities affected by this final rule are unlikely to have to craft entirely new notices as a result of this rule. Although they will have to review, and likely revise, their existing notices, including reprogramming the terminals used to generate these notices, the Board does not expect that the burden associated with these tasks will be significant. To further facilitate compliance, the Board provided model language for the notice requirement in this final rule. In addition, the final rule extends for one year, the compliance date for the requirement to disclose the dollar amount of the returned item fee on the retainable notice provided to the consumer to allow additional time for any necessary programming changes. For fees collected in connection with returned items in a POS transaction, the final rule also permits the person collecting the fee to mail a copy of the notice regarding electronic collection of fees for returned items at a later time as an alternative to providing a copy of such notice at the time of the underlying transaction. Therefore, small entities that do not currently have systems in place to provide the notice at the time of the transaction need not invest in new systems at POS to comply with the rule. 4. *Other federal rules.* The Board has not identified any federal rules that duplicate, overlap, or conflict with the final revisions to Regulation E. VI. Paperwork Reduction Act In accordance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the rule under the authority delegated to the Board by the Office of Management and Budget (OMB). The final rule contains requirements subject to the PRA. The collection of information that is required by this rule is found in 12 CFR 205.3(b)(3). The Federal Reserve may not conduct or sponsor, and an organization is not required to respond to, this information collection unless the information collection displays a currently valid OMB control number. The OMB control number is 7100-0200. This information is required to provide benefits for consumers and is mandatory (15 U.S.C. 1693 *et seq.* ). The respondents/recordkeepers are for-profit financial institutions, including small businesses. Institutions are required to retain records for 24 months. All persons, such as merchants and other payees, that may collect a returned item fee via an EFT from the consumer's account potentially are affected by this collection of information, because these persons will be required to obtain a consumer's authorization for the electronic transfer under § 205.3(b)(3). Burden with respect to the requirement to provide notice to the consumer for the purpose of obtaining the consumer's authorization for the electronic collection of fees for returned items was previously estimated in the January 2006 final rule (Docket No. R-1210 and R-1234), and reported in accordance with those estimates in documents filed with OMB. Under the Board's prior analysis, the total burden under Regulation E, including but not limited to the burden of obtaining a consumer's authorization to collect a returned item fee electronically as a result of the January 2006 final rule as further amended by this final rule, is 1,252,684 hours. The burden estimate comprises the total paperwork burden for all persons subject to the regulation and is not limited to the burden for the 1,289 respondents regulated by the Federal Reserve that are required to comply with Regulation E. Because the records would be maintained by the institutions and the notices are not provided to the Federal Reserve, no issue of confidentiality arises under the Freedom of Information Act. Text of Final Revisions Comments are numbered to comply with **Federal Register** publication rules. List of Subjects in 12 CFR Part 205 Consumer protection, Electronic fund transfers, Federal Reserve System, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the interim final rule amending 12 CFR part 205 and the Official Staff Commentary which was published at 71 FR 51451 on August 30, 2006, is adopted as a final rule with the following changes: PART 205—ELECTRONIC FUND TRANSFERS (REGULATION E) 1. The authority citation for part 205 continues to read as follows: Authority: 15 U.S.C. 1693b. 2. In § 205.3, paragraphs
(a)and (b)(2)(ii) are republished, and (b)(3) is revised as follows: § 205.3 Coverage.
(a)*General.* This part applies to any electronic fund transfer that authorizes a financial institution to debit or credit a consumer's account. Generally, this part applies to financial institutions. For purposes of §§ 205.3(b)(2) and (b)(3), 205.10(b), (d), and
(e)and 205.13, this part applies to any person.
(b)*Electronic fund transfer.* * * *
(2)*Electronic fund transfer using information from a check.* * * *
(ii)The person initiating an electronic fund transfer using the consumer's check as a source of information for the transfer must provide a notice that the transaction will or may be processed as an electronic fund transfer, and obtain a consumer's authorization for each transfer. A consumer authorizes a one-time electronic fund transfer (in providing a check to a merchant or other payee for the MICR encoding, that is, the routing number of the financial institution, the consumer's account number and the serial number) when the consumer receives notice and goes forward with the underlying transaction. For point-of-sale transfers, the notice must be posted in a prominent and conspicuous location, and a copy thereof, or a substantially similar notice, must be provided to the consumer at the time of the transaction.
(3)*Collection of returned item fees via electronic fund transfer.*
(i)*General.* The person initiating an electronic fund transfer to collect a fee for the return of an electronic fund transfer or a check that is unpaid, including due to insufficient or uncollected funds in the consumer's account, must obtain the consumer's authorization for each transfer. A consumer authorizes a one-time electronic fund transfer from his or her account to pay the fee for the returned item or transfer if the person collecting the fee provides notice to the consumer stating that the person may electronically collect the fee, and the consumer goes forward with the underlying transaction. The notice must state that the fee will be collected by means of an electronic fund transfer from the consumer's account if the payment is returned unpaid and must disclose the dollar amount of the fee. If the fee may vary due to the amount of the transaction or due to other factors, then, except as otherwise provided in paragraph (b)(3)(ii) of this section, the person collecting the fee may disclose, in place of the dollar amount of the fee, an explanation of how the fee will be determined.
(ii)*Point-of-sale transactions.* If a fee for an electronic fund transfer or check returned unpaid may be collected electronically in connection with a point-of-sale transaction, the person initiating an electronic fund transfer to collect the fee must post the notice described in paragraph (b)(3)(i) of this section in a prominent and conspicuous location. The person also must either provide the consumer with a copy of the posted notice (or a substantially similar notice) at the time of the transaction, or mail the copy (or a substantially similar notice) to the consumer's address as soon as reasonably practicable after the person initiates the electronic fund transfer to collect the fee. If the amount of the fee may vary due to the amount of the transaction or due to other factors, the posted notice may explain how the fee will be determined, but the notice provided to the consumer must state the dollar amount of the fee if the amount can be calculated at the time the notice is provided or mailed to the consumer.
(iii)*Delayed compliance date for fee disclosure.* Through December 31, 2007, the notice required to be provided to consumers under paragraph (b)(3)(ii) of this section in connection with a point-of-sale transaction, whether given to the consumer at the time of the transaction or subsequently mailed to the consumer, need not include either the dollar amount of any fee collected electronically for a check or electronic fund transfer returned unpaid or an explanation of how the amount of the fee will be determined. 3. In Appendix A to Part 205, in Section A-8, the heading “Model Clause for Electronic Collection of Insufficient Funds Fees” is revised as “Model Clause for Electronic Collection of Returned Item Fees”, and the text of the paragraph is revised. Appendix A to Part 205—Model Disclosure Clauses and Forms A-8 MODEL CLAUSE FOR ELECTRONIC COLLECTION OF RETURNED ITEM FEES (§ 205.3(b)(3)) If your payment is returned unpaid, you authorize [us/ name of person collecting the fee electronically] to make a one-time electronic fund transfer from your account to collect a fee of [$__]. [If your payment is returned unpaid, you authorize [us/ name of person collecting the fee electronically] to make a one-time electronic fund transfer from your account to collect a fee. The fee will be determined [by]/ [as follows]: [________].] 4. In Supplement I to Part 205, under *Section 205.3—Coverage,* the heading “Paragraph 3(b)(3)—Collection of Insufficient Funds Fees via Electronic Fund Transfer” is revised as “Paragraph 3(b)(3)—Collection of Returned Item Fees via Electronic Fund Transfer”, paragraphs 1. through 3. are revised, and paragraph 4. is added. SUPPLEMENT I TO PART 205—OFFICIAL STAFF INTERPRETATIONS Section 205.3—Coverage *3(b) Electronic Fund Transfer* Paragraph 3(b)(3)—Collection of Returned Item Fees via Electronic Fund Transfer 1. *Fees imposed by account-holding institution.* The requirement to obtain a consumer's authorization to collect a fee via EFT for the return of an EFT or check unpaid applies only to the person that intends to initiate an EFT to collect the returned item fee from the consumer's account. The authorization requirement does not apply to any fees assessed by the consumer's account-holding financial institution when it returns the unpaid underlying EFT or check or pays the amount of an overdraft. 2. *Accounts receivable transactions.* In an accounts receivable
(ARC)transaction where a consumer sends in a payment for amounts owed (or makes an in-person payment at a biller's physical location, such as when a consumer makes a loan payment at a bank branch or places a payment in a dropbox), a person seeking to electronically collect a fee for items returned unpaid must obtain the consumer's authorization to collect the fee in this manner. A consumer authorizes a person to electronically collect a returned item fee when the consumer receives notice, typically on an invoice or statement, that the person may collect the fee through an EFT to the consumer's account, and the consumer goes forward with the underlying transaction by providing payment. The notice must also state the dollar amount of the fee. However, an explanation of how that fee will be determined may be provided in place of the dollar amount of the fee if the fee may vary due to the amount of the transaction or due to other factors, such as the number of days the underlying transaction is left outstanding. For example, if a state law permits a maximum fee of $30 or 10% of the underlying transaction, whichever is greater, the person collecting the fee may explain how the fee is determined, rather than state a specific dollar amount for the fee. 3. *Disclosure of dollar amount of fee for POS transactions.* The notice provided to the consumer in connection with a POS transaction under § 205.3(b)(3)(ii) must state the amount of the fee for a returned item if the dollar amount of the fee can be calculated at the time the notice is provided or mailed. For example, if notice is provided to the consumer at the time of the transaction, if the applicable state law sets a maximum fee that may be collected for a returned item based on the amount of the underlying transaction (such as where the amount of the fee is expressed as a percentage of the underlying transaction), the person collecting the fee must state the actual dollar amount of the fee on the notice provided to the consumer. Alternatively, if the amount of the fee to be collected cannot be calculated at the time of the transaction (for example, where the amount of the fee will depend on the number of days a debt continues to be owed), the person collecting the fee may provide a description of how the fee will be determined on both the posted notice as well as on the notice provided at the time of the transaction. However, if the person collecting the fee elects to send the consumer notice after the person has initiated an EFT to collect the fee, that notice must state the amount of the fee to be collected. 4. *Third party providing notice.* The person initiating an EFT to a consumer's account to electronically collect a fee for an item returned unpaid may obtain the authorization and provide the notices required under § 205.3(b)(3) through third parties, such as merchants. By order of the Board of Governors of the Federal Reserve System, November 27, 2006. Jennifer J. Johnson, Secretary of the Board. [FR Doc. E6-20300 Filed 11-30-06; 8:45 am] BILLING CODE 6210-01-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 71 [Docket No. FAA-2006-25186; Airspace Docket No. 06-AAL-18] RIN 2120-AA66 Re-Designation of VOR Federal Airway V-431; Alaska AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule; technical amendment. SUMMARY: This technical amendment corrects a final rule published in the **Federal Register** on July 7, 2006 (71 FR 38516), Docket No. FAA-2005-20551, Airspace Docket No. 06-AAL-18. In that rule, the reference to Docket No. FAA-2005-20551 as published was in error. The correct Docket No. is FAA-2006-25186. Also, the reference to FAA Order 7400.9 was published as FAA Order 7400.9O. The correct reference is FAA Order 7400.9P. Additionally, the corresponding date that refers to the date the Order was effective should state “September 15, 2006” instead of “September 16, 2006”. DATES: *Effective Date:* 0901 UTC, December 1, 2006. The Director of the Federal Register approves this incorporation by reference action under 1 CFR part 51, subject to the annual revision of FAA Order 7400.9 and publication of conforming amendments. FOR FURTHER INFORMATION CONTACT: Tracy Rosgen, Airspace and Rules, Office of System Operations Airspace and AIM, Federal Aviation Administration, 800 Independence Avenue, SW., Washington, DC 20591; telephone:
(202)267-8783. SUPPLEMENTARY INFORMATION: History On July 7, 2006, a final rule was published in the **Federal Register,** Docket No. FAA-2005-20551, Airspace Docket No. 06-AAL-18, that amended Title 14 Code of Federal Regulations part 71 by re-designating VOR Federal Airway V-431, AK (71 FR 38516). In that rule, the reference to Docket No. FAA-2005-20551 is incorrect. The correct Docket No. is FAA-2006-25186. Also, the reference to FAA Order 7400.9 was published as FAA Order 7400.9O. The correct reference is FAA Order 7400.9P. Additionally, the corresponding date that refers to the date the Order was effective should state “September 15, 2006” instead of “September 16, 2006”. Amendment to Final Rule Accordingly, pursuant to the authority delegated to me, the reference to FAA Order 7400.9 for Airspace Docket No. FAA-2005-20551, Airspace Docket No. 06-AAL-18, as published in the **Federal Register** on July 7, 2006 (71 FR 38516), is corrected as follows: 1. On page 38516, in column 3, in the heading of the document, following 14 CFR Part 71, “Docket No. FAA-2005-20551” is corrected to read “Docket No. FAA-2006-25186”. 2. On page 38517, in column 1, in the second paragraph following the rule section, in line 3, “FAA Order 7400.9O” is corrected to read “FAA Order 7400.9P”, and in line 4, “September 16, 2006” is corrected to read “September 15, 2006”. § 71.1 [Corrected] 3. On page 38517, in column 2, in amendatory instruction 2, in line 2, “FAA Order 7400.9O” is corrected to read “FAA Order 7400.9P”, and in line 5, “September 16, 2006” is corrected to read “September 15, 2006”. Issued in Washington, DC, on November 22, 2006. Edith V. Parish, Manager, Airspace and Rules. [FR Doc. E6-20279 Filed 11-30-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 97 [Docket No. 30524; Amdt. No. 3195] Standard Instrument Approach Procedures; Miscellaneous Amendments AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Final rule. SUMMARY: This amendment amends Standard Instrument Approach Procedures (SIAPs) for operations at certain airports. These regulatory actions are needed because of changes occurring in the National Airspace System, such as the commissioning of new navigational facilities, addition of new obstacles, or changes in air traffic requirements. These changes are designed to provide safe and efficient use of the navigable airspace and to promote safe flight operations under instrument flight rules at the affected airports. DATES: This rule is effective December 1, 2006. The compliance date for each SIAP is specified in the amendatory provisions. The incorporation by reference of certain publications listed in the regulations is approved by the Director of the Federal Register as of December 1, 2006. ADDRESSES: Availability of matter incorporated by reference in the amendment is as follows: *For Examination—* 1. FAA Rules Docket, FAA Headquarters Building, 800 Independence Ave, SW., Washington, DC 20591; 2. The FAA Regional Office of the region in which affected airport is located; or 3. The National Flight Procedures Office, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 or, 4. The National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html* . *For Purchase* —Individual SIAP copies may be obtained from: 1. FAA Public Inquiry Center (APA-200), FAA Headquarters Building, 800 Independence Avenue, SW., Washington, DC 20591; or 2. The FAA Regional Office of the region in which the affected airport is located. *By Subscription* —Copies of all SIAPs, mailed once every 2 weeks, are for sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. FOR FURTHER INFORMATION CONTACT: Donald P. Pate, Flight Procedure Standards Branch (AFS-420), Flight Technologies and Programs Division, Flight Standards Service, Federal Aviation Administration, Mike Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma City, OK 73169 (Mail Address: P.O. Box 25082 Oklahoma City, OK 73125) telephone:
(405)954-4164. SUPPLEMENTARY INFORMATION: This amendment to Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) amends Standard Instrument Approach Procedures (SIAPs). The complete regulatory description of each SIAP is contained in the appropriate FAA Form 8260, as modified by the the National Flight Data Center (FDC)/Permanent Notice to Airmen (P-NOTAM), which is incorporated by reference in the amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of the Code of Federal Regulations. Materials incorporated by reference are available for examination or purchase as stated above. The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the **Federal Register** expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. The provisions of this amendment state the affected CFR sections, with the types and effective dates of the SIAPs. This amendment also identifies the airport, its location, the procedure identification and the amendment number. The Rule This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP as modified by FDC/P-NOTAMs. The SIAPs, as modified by FDC P-NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these chart changes to SIAPs, the TERPS criteria were applied to only these specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for all these SIAP amendments requires making them effective in less than 30 days. Further, the SIAPs contained in this amendment are based on the criteria contained in TERPS. Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making these SIAPs effective in less than 30 days. Conclusion The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866;
(2)is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and
(3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. List of Subjects in 14 CFR Part 97 Air Traffic Control, Airports, Incorporation by reference, and Navigation (Air). Issued in Washington, DC on November 17, 2006. James J. Ballough, Director, Flight Standards Service. Adoption of the Amendment Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal regulations, Part 97, 14 CFR part 97, is amended by amending Standard Instrument Approach Procedures, effective at 0901 UTC on the dates specified, as follows: PART 97—STANDARD INSTRUMENT APPROACH PROCEDURES 1. The authority citation for part 97 continues to read as follows: Authority: 49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120, 44502, 44514, 44701, 44719, 44721-44722. 2. Part 97 is amended to read as follows: By amending: § 97.23 VOR, VOR/DME, VOR or TACAN, and VOR/DME or TACAN; § 97.25 LOC, LOC/DME, LDA, LDA/DME, SDF, SDF/DME; § 97.27 NDB, NDB/DME; § 97.29 ILS, ILS/DME, ISMLS, MLS/DME, MLS/RNAV; § 97.31 RADAR SIAPs; § 97.33 RNAV SIAPs; and § 97.35 COPTER SIAPs, Identified as follows: * * * Effective Upon Publication FDC Date State City Airport FDC No. Subject 11/03/06 VA RICHMOND RICHMOND INTL 6/5376 ILS RWY 34, ILS RWY 34 (CAT II), ILS RWY 34 (CAT III), AMDT 13A. 11/06/06 PA PHILADELPHIA PHILADELPHIA INTL 6/5484 ILS RWY 9R, ILS RWY 9R (CAT II), ILS RWY 9R (CAT III), AMDT 9. 11/06/06 PA PHILADELPHIA PHILADELPHIA INTL 6/5487 ILS RWY 27R, AMDT 10. 11/06/06 PA PHILADELPHIA PHILADELPHIA INTL 6/5488 ILS OR LOC RWY 17, AMDT 6A. 11/06/06 PA PHILADELPHIA PHILADELPHIA INTL 6/5489 ILS OR LOC RWY 9L, AMDT 4A. 11/06/06 PA PHILADELPHIA PHILADELPHIA INTL 6/5491 RNAV
(GPS)RWY 35, AMDT 1. 11/07/06 TX AUSTIN AUSTIN-BERGSTROM INTL 6/5492 ILS RWY 17R, AMDT 2A. 11/07/06 MO ST LOUIS LAMBERT-ST LOUIS INTL 6/5680 ILS RWY 12R, AMDT 21B. 11/13/06 MA HYANNIS BARNSTABLE MUNI-BOARDMAN/POLANDO FIELD 6/6061 ILS OR LOC RWY 24, AMDT 17A. 11/13/06 MI LANSING CAPITAL CITY 6/6064 NDB OR GPS RWY 28L, AMDT 24. 11/13/06 WA OAK HARBOR WES LUPIEN 6/6088 RADAR-1, ORIG. 11/14/06 ME PORTLAND PORTLAND INTL JETPORT 6/6193 ILS OR LOC RWY 11. 11/14/06 NH PORTSMOUTH PORTSMOUTH INTL AT PEASE 6/6196 VOR OR TACAN OR GPS RWY 34, ORIG-A. 11/14/06 NH PORTSMOUTH PORTSMOUTH INTL AT PEASE 6/6200 VOR OR TACAN RWY 16, AMDT 5. [FR Doc. E6-20156 Filed 11-30-06; 8:45 am] BILLING CODE 4910-13-P DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Parts 50 and 380 [Docket No. RM06-12-000; Order No. 689] Regulations for Filing Applications for Permits to Site Interstate Electric Transmission Facilities Issued November 16, 2006. AGENCY: Federal Energy Regulatory Commission, DOE. ACTION: Final rule SUMMARY: The Federal Energy Regulatory Commission (Commission) is implementing new regulations in accordance with section 1221 of the Energy Policy Act of 2005 to establish filing requirements and procedures for entities seeking to construct electric transmission facilities. The regulations will coordinate the processing of Federal authorizations and environmental review of electric transmission facilities in national interest transmission corridors. DATES: *Effective Date:* This rule will become effective February 2, 2007. FOR FURTHER INFORMATION CONTACT: John Schnagl, Office of Energy Projects, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-8756. *john.schnagl@ferc.gov.* Carolyn Van Der Jagt, Office of the General Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.
(202)502-8620. *carolyn.VanDerJagt@ferc.gov.* SUPPLEMENTARY INFORMATION: TABLE OF CONTENTS *Paragraph* *numbers* I. Background *2* II. Discussion *11* A. National Interest Transmission Corridors *11* B. Permit Findings *14* 1. Commission Jurisdiction under 216(b)(1) *14* a. One Year Clock/Pre-filing *16* b. Withholding/Conditioning Approval *24* c. Other Jurisdictional Issues *35* 2. Other Findings under 216(b)(2) through
(6)*37* C. Project Participation *45* 1. Landowners *50* 2. Stakeholders and Notification *60* 3. Document Availability *73* 4. Participation Process *74* D. Pre-filing *90* 1. Initial Consultation Issues *92* 2. Third-party Contractors *100* 3. Subsequent Filing Requirements *103* 4. Lead Agency Issues/Coordinating Federal Permits *105* 5. Timeframe for Pre-filing *112* 6. Review of Director's Decisions in Pre-filing *116* E. Application Requirements *118* F. Filing Requirements *120* 1. State Record *122* 2. Exhibits *126* a. Exhibit E—Maps *129* b. Exhibit F—Environmental Requirements *130* i. Section 380.5-Actions that Require EAs *134* ii. Section 380.6 Actions that Require EISs *135* iii. Section 380.10—Participation in Commission Proceeding *137* iv. Resource Report 1—General Requirements *138* v. Resource Report 2—Water Use and Quality *142* vi. Resource Report 3-Fish, Wildlife, and Vegetation *144* vii. Resource Report 4—Cultural Resources *146* viii. Resource Report 5—Socioeconomics *150* ix. Resource Report 6—Geological Resources *159* x. Resource Report 7—Soils *160* xi. Resource Report 8—Land Use, Recreation, and Aesthetics *162* xii. Resource Report 9—Alternatives *175* xiii. Resource Report 10—Reliability and Safety *180* xiv. Resource Report 11—Design and Engineering *182* c. Exhibit G—Engineering Data *185* d. Exhibit H—System Analysis Data *188* e. Exhibit I—Project Cost and Financing *192* G. Critical Energy Infrastructure Information *194* H. Accepting/Rejecting Applications *198* I. Hearings *199* J. Permit Conditions *204* K. State and Local Permits *213* L. Subsequent Modifications to Facilities *219* M. Definitions *221* N. Eminent Domain Issues *225* O. Filing Fees/Funding *228* P. Technical Conferences *229* III. Information Collection Statement *231* IV. Environmental Analysis *236* V. Regulatory Flexibility Act *237* VI. Document Availability *238* VII. Effective Date and Congressional Notification *241* Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff. 1. On June 16, 2006, the Federal Energy Regulatory Commission (Commission) issued a Notice of Proposed Rulemaking
(NOPR)in this proceeding. 1 In the NOPR, the Commission proposed regulations in accordance with section 1221 of the Energy Policy Act of 2005 (EPAct 2005) 2 to implement filing requirements and procedures for entities seeking permits to construct or modify electric transmission facilities under the circumstances set forth in that section. This Final Rule considers comments submitted in response to the NOPR, and as a result, makes various modifications to the regulatory text described in the NOPR. Following the issuance of this rule, we will convene regional conferences to assist stakeholders in its implementation. 1 71 FR 36258 (June 26, 2006); FERC Stats. & Regs. ¶ 32,605 (2006). 2 Pub. L. 109-58, 119 Stat. 594 (2005). I. Background 2. On August 8, 2005, EPAct 2005 became law. Section 1221 of EPAct 2005 adds a new section 216 to the Federal Power Act (FPA), providing for Federal siting of electric transmission facilities under certain circumstances. 3. New FPA section 216 requires that the Secretary of the Department of Energy (DOE or Secretary) identify transmission constraints. It mandates that the Secretary conduct a study of electric transmission congestion within one year of enactment and every three years thereafter, and that the Secretary then issue a report. The Secretary is further empowered to designate certain constrained areas as national interest electric transmission corridors (National Corridors). 4. FPA section 216(b) provides that the Commission may issue permits to construct or modify electric transmission facilities in a National Corridor under certain circumstances. The Commission has the authority to issue permits to construct or modify electric transmission facilities if it finds that:
(1)A State in which such facilities are located does not have the authority to approve the siting of the facilities or to consider the interstate benefits expected to be achieved by the construction or modification of the facilities;
(2)the applicant is a transmitting utility but does not qualify to apply for siting approval in the State because the applicant does not serve end-use customers in the State; or
(3)the State commission or entity with siting authority withholds approval of the facilities for more than one year after an application is filed or one year after the designation of the relevant national interest electric transmission corridor, whichever is later, or the State conditions the construction or modification of the facilities in such a manner that the proposal will not significantly reduce transmission congestion in interstate commerce or is not economically feasible. 3 3 Under FPA section 216(i)(4), the Commission may not issue a permit for facilities within a State that is a party to an interstate compact establishing a regional transmission siting agency unless the members of the compact are in disagreement and the Secretary of the Department of Energy makes certain findings. 5. Additionally, under FPA sections 216 (b)(2) through (6), before issuing a permit the Commission must find that the proposed facility:
(1)Will be used for the transmission of electric energy in interstate commerce;
(2)is consistent with the public interest;
(3)will significantly reduce transmission congestion in interstate commerce and protect or benefit consumers;
(4)is consistent with sound national energy policy and will enhance energy independence; and
(5)will maximize, to the extent reasonable and economical, the transmission capabilities of existing towers or structures. 6. New FPA section 216(h)(2) designates DOE as lead agency to coordinate all Federal authorizations needed to construct proposed electric transmission facilities in National Corridors. Under FPA section 216(h)(4)(A), to ensure timely efficient reviews and permit decisions, DOE is required to establish prompt and binding intermediate milestones and ultimate deadlines for all Federal reviews and authorizations required for a proposed electric transmission facility. 4 Section 216(h)(5)(A) of the FPA requires that DOE as lead agency, in consultation with the other affected agencies, prepare a single environmental review document that would be used as the basis for all decisions for the proposed projects under Federal law. 4 Under FPA section 216(h)(6)(A), if any agency has denied a Federal authorization required for a transmission facility, or has failed to act by the deadline established by the Secretary, the applicant or any State in which the facility would be located may file an appeal with the President. 7. On May 16, 2006, the Secretary delegated paragraphs (2), (3), (4)(A)-(B), and
(5)of FPA section 216(h) to the Commission as they apply to proposed facilities in designated National Corridors for which an application for authority to construct has been submitted to the Commission. 5 Specifically, the Secretary delegated to the Commission DOE's lead agency responsibilities for the purpose of coordinating all applicable Federal authorizations and related environmental review and preparing a single environmental review document for facilities falling within the Commission's siting jurisdiction. With respect to such projects, the Commission will establish prompt and binding intermediate milestones and ultimate deadlines for the review, and ensure that all Federal permits are issued, and reviews are completed, within a year or as soon as practicable thereafter. 5 Department of Energy Delegation Order No. 00-004.00A. 8. On August 8, 2006, DOE issued its National Electric Transmission Congestion Study that examined transmission congestion and constraints and identified affected transmission paths in many areas of the nation. 6 DOE states that it expects the study to open a dialogue with stakeholders in areas of the Nation where congestion is a matter of concern, focusing on ways in which these problems might be alleviated. DOE states that where appropriate in relation to the congestion areas, it may designate National Corridors. 6 Department of Energy, National Electric Transmission Congestion Study, Executive Summary (2006), *http://www.oe.energy.gov/energy_policy/epa_sec1221.htm#Timeline* (follow “Congestion Study Executive Summary” hyperlink). 9. Also on August 8, 2006, several Federal agencies including DOE and the Commission entered into a Memorandum of Understanding on Early Coordination of Federal Authorization and Related Environmental Reviews Required in Order to Site Electric Transmission Facilities (MOU). 7 The purpose of the MOU is to establish a framework for early cooperation and participation that will enhance coordination of all applicable land use authorizations, related environmental, cultural, and historic preservation reviews, and any other approvals that may be required under Federal law in order to site an electric transmission facility. 7 The other agencies include the Department of Defense, the Department of Agriculture, the Department of the Interior, the Department of commerce, the Environmental Protection Agency, the Council on Environmental Quality, and the Advisory Council on Historic Preservation. 10. FPA section 216(c)(2) requires that the Commission issue rules specifying the form of, and the information to be contained in, an application for proposed construction or modification of electric transmission facilities in National Corridors, and the manner of service of notice of the permit application on interested persons. The Commission is implementing those regulations in a new part 50 of existing subchapter B of its regulations. II. Discussion A. National Interest Transmission Corridors 11. As stated, on August 8, 2006, DOE issued its National Electric Transmission Congestion Study and stated that where appropriate in relation to the congestion areas, it may designate National Corridors. Once DOE designates a National Corridor, the Commission has the authority under FPA section 216(b) to issue permits to construct or modify electric transmission facilities in such a corridor under certain circumstances. 12. The Western Interstate Energy Board and Committee on Regional Electric Power Cooperation (Western Energy Board) and Western Governor's Association (Western Governors) request that the Commission delay issuing the Final Rule until DOE acts on establishing National Corridors. Section 216(c)(2) of the FPA requires that the Commission issue rules specifying the form of the application, the information to be contained in the application, and the manner of service and notice of the permit application on interested persons. While the Commission has no authority to issue a permit unless a facility is in a National Corridor, this does not affect the Commission's ability to put in place the filing requirements that will apply once National Corridors are designated. The Commission, therefore, declines to delay issuance of the Final Rule. The Commission believes that prompt issuance of the Final Rule, coupled with regional conferences to discuss its implementation, is in the public interest and provides timely notice to stakeholders of the procedures that will apply to applications submitted under FPA section 216. 13. American Electric Power Service Corporation
(AEP)requests that the Commission define what constitutes a National Corridor and whether the designation is a permanent one. Massachusetts Energy and Facilities Siting Board (Massachusetts Energy Board) requests that the Commission define the ends, geographic dimensions, and specified boundaries for a National Corridor. U.S. Department of the Interior
(DOI)also requests clarification on what constitutes a National Corridor. The Commission declines to make such rulings. DOE, not the Commission, is responsible for designating and defining the National Corridors under EPAct 2005. Thus, it would be inappropriate for the Commission to establish an independent definition in the Final Rule or opine on whether a corridor designation is a permanent one. B. Permit Findings 1. Commission Jurisdiction Under 216(b)(1) 14. Under FPA section 216(b)(1), the Commission has the authority to issue permits to construct or modify electric transmission facilities if:
(A)A State in which the transmission facilities are to be constructed or modified does not have the authority to—(i) approve the siting of the facilities; or
(ii)consider the interstate benefits expected to be achieved by the proposed construction or modification of transmission facilities in the State;
(B)the applicant for a permit is a transmitting utility under this Act but does not qualify to apply for a permit or siting approval for the proposed project in a State because the applicant does not serve end-use customers in the State; or
(C)a State commission or other entity that has authority to approve the siting of the facilities has—(i) withheld approval for more than 1 year after the filing of an application or 1 year after the designation of the relevant national interest electric transmission corridor, whichever is later; or
(ii)conditioned its approval in such a manner that the proposed construction or modification will not significantly reduce transmission congestion in interstate commerce or is not economically feasible. 15. Numerous commenters request that the Commission specifically address what it will require of applicants to establish the basis and supporting rationale for the Commission's claiming jurisdiction over proposed electric transmission facilities. 8 Specifically, they request that the Commission clarify how it intends to determine when the clock starts and stops for the one-year time period for State action on siting requests under FPA section 216(b)(1)(C). They also request that the Commission clarify under what circumstances it will determine that a State has withheld approval and what conditions in a State authorization the Commission will consider sufficient to trigger Commission jurisdiction. The commenters also request that the Commission generally explain how, and when, it will make the determination that it indeed has jurisdiction over a proposed project. 8 American Public Power Association (APPA), American Transmission Co. (American Transmission), California Resources Agency (CA Resources), Edison Electric Institute (EEI), Kentucky Public Service Commission (Kentucky PSC), New York Department of Public Service (DPS), New York State Senator Wright (Senator Wright), Southern Company Services (Southern Company), Southern California Edison Co. (SoCal Edison), Washington Energy Facility Site Evaluation Council (Washington Council), Western Energy Board, Western Governors, and the Wilderness Society (Wilderness). a. One Year Clock/Pre-Filing 16. Many commenters request that the Commission specifically address when the one-year period for State processing of an application will commence. They state that the Commission should specify that the one-year clock will not start running until the State determines that the application submitted to it is final and in compliance with the State's filing requirements. 9 Several commenters contend that the States should have the ability to re-start the one-year review period if the applicant significantly modifies or makes substantive changes to its application. 10 The Wilderness Society (Wilderness) states that the Commission should require that the applicant prove that it made a good faith effort to comply with State siting and permitting requirements. The Western Energy Board requests that the Commission clarify that an applicant who has not obtained the required Federal permit findings in support of a State application has not filed a complete State application. Iowa Board states that one-year time period should not include periods of appellate review. 9 Allegheny Power (Allegheny), California Public Utilities Commission (California PUC), Iowa Utilities Board (Iowa Board), Massachusetts Energy Board, National Association of Regulatory Utility Commissioners (NARUC), Pennsylvania Public Utilities Commission (Pennsylvania PUC), Pepco Holdings, Potomac Electric Power Co., Delmarva Power & Light Co., and Atlantic City Electric Co. (PHI Companies), San Diego Gas & Electric (SDG&E), Western Energy Board, Public Service Commission of Wisconsin (Wisconsin PSC), and Washington Council. 10 Iowa Board, NARUC, and Wisconsin PSC. 17. Several commenters also request that the Commission require an applicant demonstrate how its proposed application has met the statutory requirements for Commission jurisdiction prior to initiating the pre-filing process. 11 Others request that the Commission begin the pre-filing process while the State process is ongoing. 12 11 CA Resources, Communities, Iowa Board, NARUC, New York PSC, Senator Wright, SoCal Edison, Washington Council, and Western Energy Board. 12 APPA, AEP, Allegheny, Southern Companies, National Grid USA (National Grid), SDG&E, National Rural Electric Cooperative Association (NRECA), and Virginia Electric and Power Co. (Virginia Electric). 18. Communities Against Regional Interconnect (Communities) contend that permitting the pre-filing process to be initiated simultaneous with the ongoing State process represents nothing more than the Commission's desire to “pounce” at the moment its jurisdiction is triggered. Communities, CA Resources, and New York DPS are concerned that simultaneous filings could result in an unwarranted and massive expenditure of time and resources, if it turns out the Commission lacks jurisdiction to consider the application. Iowa Board contends that simultaneous filing deprives States of their authority and conflicts with the purpose of the law. Senator Wright and NARUC note that allowing the pre-filing process to begin at such an early stage prevents the Commission from fully considering the information brought forth during the State siting process. 19. The Commission appreciates the concerns of the States regarding the potential for overlap in State and Commission siting processes. However, the language of FPA section 216 provides for this potential overlap by allowing the Commission to issue a construction permit one year after the State siting process has begun and requiring an expeditious pre-application mechanism for all permit decisions under Federal law. Thus, the Commission pre-filing process can occur at the same time as parallel State proceedings. 13 To ensure that needed infrastructure is built, Congress therefore adopted a statutory scheme that permits parallel proceedings. 13 The Commission's pre-filing process is discussed in section II.D. of this Final Rule. 20. While we believe the statute clearly permits parallel Commission-State processes, after taking into account the comments of State agencies and other stakeholders, we do not adopt the approach proposed in the NOPR. Rather, we adopt an approach that is more fully respectful of State jurisdiction. 21. Although some overlap in State and Federal proceedings is inevitable, as was contemplated by FPA section 216, we believe that States which have authority to approve the siting of facilities should have one full year to consider a siting application without there being any overlapping Commission process. Therefore, we find that, in cases where our jurisdiction rests on FPA section 216(b)(1)(C), 14 the pre-filing process should not commence until one year after the relevant State applications have been filed. This will give the States one full year to process an application without any intervening Federal proceedings, including both the pre-filing and application processes. Once that year is complete, an applicant may seek to commence our pre-filing process. Thereafter, once the pre-filing process is complete, the applicant may submit its application for a construction permit. We believe this approach most adequately addresses State concerns. If we determine in the future, however, that the lack of a Commission pre-filing process prior to the end of the one year is delaying projects or otherwise not in the public interest, we will reconsider this issue. 14 In all other instances ( *i.e.* , where the state does not have jurisdiction to act or otherwise to consider interstate benefits, or the applicant does not qualify to apply for a permit with the State because it does not serve end use customers in the State), the pre-filing process may be commenced at any time. 22. The States also express concern that the one-year time period can be abused. For example, an applicant might not provide complete information to the States in the hopes of frustrating their ability to act within one year and, hence, invoking the Commission's jurisdiction. The Commission believes such instances should be rare. We also wish to make clear that we will not countenance such behavior. The Commission expects all potential applicants under FPA section 216 to act in good faith as it relates to State jurisdiction. Although the Commission may exercise jurisdiction in all instances where a State has withheld approval for more than one year, the Commission, in determining whether to do so, will weigh heavily clear evidence that an applicant has abused the State process. 23. Under the approach adopted herein, once the one-year time period has elapsed the applicant may commence pre-filing. At the pre-filing consultation required under § 50.5(b) of the Commission's regulations, the applicant will need to tell Commission staff the date that it filed its application and the status of that application. As part of the pre-filing consultation, the Director of the Office of Energy Projects
(OEP)will review the applicant's progress at the State proceeding. After the initial consultation process, if the Director of OEP determines that there is sufficient reason to commence pre-filing, a notice will be issued under § 50.5(d) of the regulations. To the extent the State proceeding is still ongoing, the Commission will host a scoping meeting or technical conference to work with the applicant and the State agencies to discuss the need to coordinate, among other things, simultaneous environmental reviews. We believe that such coordination is appropriate because, in some instances, the State may be able to complete its action while our pre-filing process is ongoing, possibly allowing us to terminate any proceedings under FPA section 216. b. Withholding/Conditioning Approval 24. Numerous commenters request that the Commission define the criteria it would use to determine that a State has withheld approval or conditioned its approval so as to render a project not economically feasible, triggering Commission jurisdiction. 15 The Western Energy Board and California PUC maintain that a State should not be deemed to have withheld or unreasonably conditioned approval if it fails to act within one year because a project has not received Federal agency approvals or because of delays related to “another provision of Federal law.” California PUC points out that FPA § 216(h)(4)(B) allows the Commission to extend its process beyond a year for those reasons. 15 Department of Interior, Iowa Utility Board, Massachusetts Energy Board, National Parks, National Regulatory Commissioners, Pennsylvania PUC, PJM, Washington Council, Wisconsin PSC, Western Energy Board. 25. The Iowa Board and Senator Wright state that the Commission should clarify that a State's timely and lawful denial of a transmission project should not give rise to Commission jurisdiction. The Iowa Board also contends that any other conclusion would allow an applicant to sidestep an adverse State ruling by subsequently requesting Federal jurisdiction. The Wisconsin PSC asks that the Commission clarify that State denial for failure to meet proper State requirements does not trigger the withheld approval provision. It claims that this would be a situation where a State agency acted properly and is not guilty of regulatory failure. Communities state that the Commission should not have jurisdiction where the State denies siting approval for valid reasons under State law, such as the protection of environmental resources, the health and safety of its citizens, or if better alternatives are identified through the process. 26. FPA section 216(b)(1)(C) provides jurisdiction to the Commission whenever a State has “withheld approval” for more than one year. The statute does not explicitly define the full range of State actions that are deemed to be withholding approval. Nonetheless, to promote regulatory certainty, we believe it is our responsibility to interpret the statutory language in this proceeding and to give all parties notice of such interpretation. To this end, we believe that a reasonable interpretation of the language in the context of the legislation supports a finding that withholding approval includes denial of an application. 27. Support for this interpretation is found in comparing the language added by EPAct 2005 as new FPA section 216(b)(1)(C)(i) to that of new FPA section 203(a)(5), also added by EPAct 2005. There, in requiring that the Commission grant or deny applications for approval of certain merger transactions within 180 days after the application is filed, the statute specifies the consequences “[i]f the Commission does not act.” The Commission has an obligation to construe a statute in such a manner as to give every word some operative effect. 16 Interpreting the phrase “withhold approval” to mean “does not act” fails to recognize Congress' use of different words to express its intent. 16 *Cooper Industries, Inc.* v. *Aviall Services, Inc.* , 543 U.S. 157, 167 (2004). 28. Further support for this interpretation can be found in the fact that in addition to giving the Commission jurisdiction to site transmission facilities whenever a State has “withheld approval” for more than a year, FPA section 216(b)(1)(C) also gives the Commission jurisdiction to act in instances where a State has approved construction, but “conditioned its approval” in such a manner that the proposed construction or modification is not economically feasible. Since Congress has provided the Commission with the authority to intervene in circumstances where a State has issued an authorization which will essentially prevent a project from going forward, it would not be reasonable to interpret the statute in such a manner that would leave the Commission without authority to intervene in instances where a State has expressly denied an application. 29. Moreover, legislative history lends support to this interpretation of the statute. Congress devoted substantial time to consideration of energy legislation in the years immediately prior to the enactment of EPAct 2005. It is noteworthy that transmission siting language first appeared in legislation considered in the House of Representatives in 2003. That measure (H.R. 6) allowed the Commission to exercise jurisdiction where a State entity with transmission siting authority “has withheld approval, conditioned its approval in such a manner that the proposed construction or modification will not significantly reduce transmission congestion in interstate commerce and is otherwise not economically feasible, or delayed final approval for more than one year after the filing of an application seeking approval * * *.” 17 In addition, the report language accompanying the above legislative text states, “The section provides that for such lines, persons may obtain a permit from FERC and exercise eminent domain if, after one year, a State is unable or refuses to site the line.” 18 The fact that this precursor to the transmission siting provision of EPAct 2005 distinguished “withholding approval” from “delaying final approval for more than one year” and was interpreted to include a State “refusing to site a line” supports the conclusion that “withholding approval” was intended to mean something beyond a failure to act. 17 H.R. 6, 108th Cong. § 16012 (2003). 18 H.R. Rep No. 108-65 (April 6, 2003) (emphasis added). 30. Finally, Section 216(b)(1)(C)(i) allows the Commission to exercise jurisdiction where a State entity with siting authority has “withheld approval for more than 1 year after the filing of an application seeking approval pursuant to applicable law * * *.” If an applicant seeks State siting approval pursuant to applicable law, and the State does not grant the application within one year, the approval is withheld, regardless of whether the State takes a specific action denying it. Indeed, the term “withhold” in this context means to refrain from granting approval, and, conversely, the term “deny” is synonymous with “withhold.” Webster's Third New International dictionary defines “withhold” as “* * * to desist or refrain from granting, giving, or allowing * * *.” The same dictionary defines “deny” as “ * * * to refuse to grant: WITHHOLD” [caps in original]. “Denial,” similarly, is defined as “refusal to grant * * *: rejection of something requested.” Furthermore, Roget's International Thesaurus 4th Ed., Section 776 (“Refusal”) at paragraph 776.4 lists “deny, withhold, hold back * * *” as synonyms. Thus, there is no textual or lexical basis for saying that a formal denial does not entail refraining to grant or allow ( *i.e.* to withhold). To say that an official denial does not count as a withholding is to say that “to deny” means something other than “to refrain from granting,” which would not be a reasonable interpretation. 31. Therefore, the Commission finds that when a State fails to act or rejects an application, it has withheld approval and the proposed facility would be subject to the Commission's jurisdiction. However, the fact that we possess jurisdiction does not mean that it will be exercised in all cases. Rather, we retain the discretion, in appropriate circumstances, to allow State processes to be completed beyond the one-year period provided in the statute. Indeed, under the approach described above, the States will, in many cases, have more than *two* years to complete their action, and thereby avoid issuance of a construction permit by this Commission, because our pre-filing and construction permit processes typically take more than one year to complete (which is in addition to the one year provided to State authorities). 32. We also clarify that mere consideration of an application by the Commission does not equate to a jurisdictional determination or Commission approval of the proposed project. Once an application is filed for consideration by the Commission, anyone who questions the Commission's jurisdiction over the proposed project, the timing of the exercise of that jurisdiction, or the merits of the proposal can raise those matters in its intervention or protest. The Commission will make a jurisdictional determination and address comments and protests in a subsequent order issued on the merits of the proposed project. 33. Allegheny requests that the Commission address whether the following would constitute withholding approval:
(1)A State cannot make a decision in one year due to State statutes or rules;
(2)the State has declined to establish a procedural schedule for reaching a decision within a year;
(3)a State commission, after an elapse of one year, has not acted on an application; and
(4)approval is conditioned in an unacceptable manner, but does not meet the significantly reduce transmission congestion or not economically feasible test. Wilderness states that the Commission should adopt detailed standards defining what constitutes an economically infeasible project or restrictions that prevent a proposed project from significantly reducing congestion. Communities argue that Commission jurisdiction should not be triggered simply because mitigation measures might increase the costs of the project. DOI also encourages the Commission to look closely at the reason that certain conditions were imposed on a project. 34. The Commission believes that these issues cannot be resolved adequately on a generic basis in this rule. Rather, it is important to consider all relevant factors presented on a case-by-case basis. The Commission will, therefore, not limit its ability to review an application on a case-by-case basis by establishing specific criteria that it will consider in determining if its jurisdiction had properly been invoked under FPA section 216(b)(1). c. Other Jurisdictional Issues 35. PJM Interconnection
(PJM)requests that the Commission address the Commission's jurisdiction over facilities that span multiple States where one State may have approved the facilities and another does not. While the Commission's jurisdiction may, in these circumstances, only attach to the portion of the facility that would qualify under FPA section 216(b)(1), under the National Environmental Policy Act of 1969 (NEPA), the Commission would have to analyze the impact of the entire project. The Commission may, however, adopt State analyses where possible. Additionally, to make its determination under FPA sections 216(b)(2) through
(6)the Commission would have to review the operation of the facility as a whole. 36. PHI Companies request that the Commission clarify that where a State does not have the authority to grant eminent domain rights for transmission facilities, that constitutes the State not having authority to approve the siting of facilities, thus giving a project sponsor immediate access to the Commission's jurisdiction. While State law may not authorize the taking of property by eminent domain, if it still has laws that address the siting of electric transmission facilities, it appears that the Commission's jurisdiction will not attach unless the State fails to act or denies an application as required by FPA section 216(b)(1)(C). We will, however, consider such issues if, and when, they arise. 2. Other Findings Under 216(b)(2) Through
(6)37. Under FPA sections 216(b)(2) through (6), the Commission must find that the proposed facility:
(1)Will be used for the transmission of electric energy in interstate commerce;
(2)is consistent with the public interest;
(3)will significantly reduce transmission congestion in interstate commerce and protect or benefit consumers;
(4)is consistent with sound national energy policy and will enhance energy independence; and
(5)will maximize, to the extent reasonable and economical, the transmission capabilities of existing towers or structures. 38. NARUC asserts that the final rule needs to state more clearly how the Commission will implement all five of the above criteria. Pacific Gas and Electric Company (PG&E) requests that the Commission clarify how it intends to measure and analyze sufficient showings related to consistency with the public interest and national policy. DOI and Laura and John Reinhardt (Reinhardts) request that the Commission define the criteria necessary to establish a basis for the public interest determination. Massachusetts Energy Board states the Commission should define “consistent with the public interest” to include that there is no superior approach to the identified transmission project; there is no superior alternative to the proposed route; and all feasible mitigation of environmental impacts and any adverse reliability impacts will be undertaken. 39. Wisconsin PSC states the Commission should examine a variety of factors, including cost-effectiveness, safety, engineering, project alternatives, individual hardships, reliability, competitive impacts, and environmental impact to judge whether a project is in the public interest. PJM believes the Commission should specifically look at adding a reliability requirement and a market efficiency analysis. NARUC requests that the Commission consider the impact of the project on host States and any possible mitigation, and also require that harmful financial impacts of the project are mitigated through an applicable cost allocation methodology within the Commission's jurisdiction. 40. PSEG Companies contend that the Commission should define the term public interest to consider the energy and environmental policies of the States where the transmitted energy will provide power. It states that “significant” should be defined as it applies to the reduction of congestion and that “sound national energy policy” should be clarified to consider that national security concerns will be taken into consideration. Finally, PSEG Companies state that the criteria for approval should be on a cost-benefit basis and an applicant should specify whether the project is being built for reliability or for economic reasons because that could lead to a different evaluation. Wilderness asserts that the Commission's public interest determination should consider the benefits of electric transmission, the project's environmental impacts, and alternatives with less environmental impacts. Progress Energy (Progress) cautions the Commission to be mindful that a policy of maximum use of existing towers and structures should be conditioned upon maintaining or improving the reliability of the transmission system. 41. While commenters have raised a number of valid public interest considerations, the Commission cannot adopt an exclusive list of factors or construct a bright-line test to determine whether a project meets all the statutory criteria. It is difficult to construct helpful bright line standards or tests for this area. Bright line tests are unlikely to be flexible enough to resolve specific cases and to allow the Commission to take into account the different interests that must be considered. In reviewing a proposed project, the Commission will consider all relevant factors presented on a case-by-case basis and balance the public benefits against the potential adverse consequences. The Commission will conduct an independent environmental analysis of the project and determine if there is no significant impact as required by NEPA. It will look at alternatives, including, as appropriate, alternatives other than transmission lines, and consider whether the proposed facilities would maximize the use of existing transmission facilities. It will review the alternatives for their respective impacts on the environment and will determine mitigation measures to lessen the adverse impacts. The Commission will review the proposed project and determine if it reduces the transmission congestion identified in DOE's study and if it will protect or benefit consumers. It will investigate and determine the impact the proposed facility will have on the existing transmission grid and the reliability of the system. 42. The Commission will also consider the adverse effects the proposed facilities will have on landowners and local communities. The Commission will evaluate the entire record of the proceeding, and after due consideration of the issues raised, determine if the proposed project is consistent with Congress' goals and objectives in enacting FPA section 216, while avoiding unnecessary disruptions to the environment and the unneeded exercise of eminent domain. The Commission's review of a proposed project will be a flexible balancing process during which it will weigh the factors presented in a particular application. It will impose appropriate conditions necessary to avoid adverse economic, competitive, environmental or other effects on the relevant interests from the construction of a new project, and will approve the project only where the public benefits to be achieved from the project outweigh the adverse effects. 43. PG&E states the Commission should rebuttably presume a need for a project subject to the independent oversight of an approved independent system operator
(ISO)or regional transmission organization
(RTO)without a direct economic interest in the application process. It contends that this will maximize efficiency as participants must already make showings of local or regional need to gain approval from an ISO or RTO. PSEG Companies encourages the Commission to incorporate the results of the RTO process into its proceeding. APPA asserts that if a project results from an open and collaborative regional planning process designed to meet the transmission needs of load-serving entities
(LSE)within the national interest electric transmission corridors, or a consortium with broad LSE ownership/participation then there should be a presumption of public interest. Similarly, NRECA contends that the Commission cannot reasonably make the FPA section 216(b)(2) through
(6)findings unless the proposed expansion or modification arose from a truly open and inclusive joint transmission planning process. It requests that the Commission require an applicant to complete a joint planning process before beginning the pre-filing process. 44. The Commission agrees that the determinations of an independent entity, such as an RTO, should be given due weight in our assessment of whether a particular facility is needed to protect or benefit customers. We will, therefore, consider any such independent determinations as a factor, along with all other relevant factors, in determining whether the statutory criteria have been met. C. Project Participation 45. Section 216(d) of the FPA requires that the Commission afford each State in which the transmission facility covered by the permit application is or will be located, each affected Federal agency and Indian tribe, private property owners, and other interested persons, a reasonable opportunity to present their views and recommendations with respect to the need for and impact of a facility covered by the permit application. Additionally, under FPA section 216(h)(3) and its delegated authority, the Commission needs to coordinate the Federal authorization and review process with any Federal agencies, Indian tribes, multistate entities, and State agencies that are responsible for conducting separate permitting and environmental reviews of the facilities. 46. Under the Commission's review process, any interested entity or individual will have multiple opportunities to participate and express its views on the proposed project. 19 Under § 50.4 of the Commission's regulations, the applicant is required to develop a Project Participation Plan (Participation Plan) to facilitate participation from all stakeholders during the Commission's proceedings. The Participation Plan will be used to provide accurate and timely information, including the environmental impacts, as well as the national and local benefits, of the proposed project, to all stakeholders. The Commission expects that the applicant will conduct various outreach activities to solicit comments on its proposal before commencing the Commission's review process. 19 The Commission considers any interested entity or individual to be included in its definition of stakeholder in § 50.1 of the Commission's regulations. 47. In addition to the applicant's outreach activities, Commission staff will conduct its pre-filing process. As part of this process, Commission staff will start its scoping and environmental review of the proposed project as required by NEPA. As part of this review, it will seek comments and recommendations from interested stakeholders. Commission staff will use those comments during its preliminary review of the proposed project to formulate the issues raised by the project and to assist the applicant in compiling the information necessary for the Commission staff to draft the environmental document and for the Commission to address those issues during the application process. 48. Once the application is filed, it will be noticed and interested stakeholders will be able to file to intervene and/or file protests and/or comments concerning the applicant's proposal. Additionally, during the application proceeding, the Commission will issue a draft environmental document. 20 The environmental document will also be subject to a comment period where any stakeholder may file comments concerning the findings made in that document. Finally, the Commission will issue a final environmental document and an order addressing the issues raised in the proceeding. 20 The Commission will issue an environmental assessment under § 380.5 or an environmental impact statement under § 380.6 of the Commission's regulations depending upon the level of NEPA review that will be required for the proposed project. 49. The Commission received numerous comments on its proposal for public participation in its siting process. Many commenters requested clarification on how the Commission envisioned its notification requirements would be implemented, who would be notified about the project, and how an interested stakeholder would be able to access information and participate in the Commission's proceedings. Some commenters were concerned that the Commission's definition of affected landowners was too limited. Others thought it was too broad. Some commenters were afraid that their group may be excluded from the definition of stakeholder. Others thought a stakeholder's right to participate should be restricted. 1. Landowners 50. Under § 50.1, an affected landowner is an owner of property interests, as noted in the most recent tax notice, whose property is:
(1)Directly affected, crossed or used, by the proposed project; or
(2)abuts either side of an existing right-of-way or proposed facility site or right-of-way, or contains a residence within 50 feet of a proposed construction work area. In addition, § 50.4(c) requires that the applicant notify any landowner with a residence within a quarter mile from the edge of the construction right-of-way. 51. Communities contend that the definition of affected landowner is too limited and must be broadened to provide a fair opportunity for intervention and a comprehensive environmental review. It states that it should include all landowners directly affected by the proposed facility so that all such individuals are allowed to participate fully in the proceeding. DOI requests that the definition of affected landowners include land management agencies. Similarly, National Parks Conservation Association (Parks Association) requests that the definition of affected landowner be reworded so that land managing agencies with fee simple lands and those lands in which agencies own scenic easements, are notified during the appropriate times. 21 They contend that if the Commission does not include Federal agencies as “affected landowners,” it needs to develop a notification criterion for Federal agencies that manage public lands. DOI also encourages the Commission to add a procedure for notifying stakeholders who would be within the viewshed, but not necessarily abutting, the proposal project to help notify other Federal governments and agencies involved in the project. 21 Lackawaxen River Conservancy adopts the comment of the Parks Association. 52. Parks Association requests that the reference to “directly affected” landowners in § 50.1(a)(1) needs to be defined since an electricity corridor might not cross or use parklands, but could still “directly” affect the scenic and historic resources of a park. It also states that a specific definition of “used” in § 50.1 should be added and include landowners whose property is exposed to noise and visual impacts. Moreover, Park Associations believes the quarter mile distance requirement is inadequate to address the possible adverse impacts on lands discussed in the land use, recreation, and aesthetics resource report. Massachusetts Energy Board requests that the Commission define affected landowner using a distance greater than 50 feet from overhead transmission lines or use a definition based on a distance from the edge of the cleared or permanent right-of-way. 22 22 Additionally, Massachusetts Siting Board also states that the word “and” should be replaced with “or” after the phrase “temporary workspace”. We agree that the word “and” between the two requirements should be replaced with “or” and have changed the regulation accordingly. 53. The definition of affected landowner is meant to encompass owners of property either directly within or adjacent to the proposed right-of-way and construction area. If a land management agency manages land on or adjacent to the proposed right-of-way and construction area, it will be considered an affected landowner. While the definition only encompasses land on or abutting a proposed right-of-way, the applicant must also notify all landowners with a residence within a quarter mile of the edge of the construction right-of-way under the notification requirements of § 50.4(c)(1). The Commission believes that between the definition of affected landowner and the expanded quarter mile notification requirement, a sufficient group of individuals will be notified of the proposed project. 54. Stakeholders do not need to be an affected landowner or live in a residence within a quarter mile of the proposed site to participate in the Commission's proceedings. Under the definition of stakeholder in § 50.1, any interested entity or person may file comments as a stakeholder and participate in the Commission's process. Even if a specific land management agency is not included in the definition of affected landowner, it can still participate as a stakeholder. Resource Report 8, in § 380.16(j), requires that the applicant identify the existing land use in the vicinity of the proposed facility, including areas designated for studies under Federal law under § 380.16(j)(7). If, for some reason, a specific land management agency is not identified in the early planning stages of a project, as discussed below, during the pre-filing process Commission staff will work with the applicant to determine if any potential stakeholder has been missed and if they have, to make sure that they have had notice of the proposed project and an opportunity to participate. 55. Southern states that owners with property interests that abut an existing right-of-way should not be included in the definition of affected landowners unless it becomes necessary to secure easements or other rights from such owners. It argues that the definition should be limited to owners of property interests directly affected by the project and not to property interests that abut existing rights-of-way. Allegheny states that the Commission should only require notification of landowners with residence within 50 feet of a construction work site, as required under the affected landowner definition under the Commission's natural gas pipeline regulations in § 157.6(d)(2)(ii) and not expand the landowner group to residences within a quarter mile of the right-of-way as required under § 50.4(c). 56. While property owners with land that abuts the proposed right-of-way or with a residence within 50 feet of the proposed construction work area may not be required to negotiate easements once the ultimate route is determined, one of the purposes of the pre-filing process is to review the applicant's proposed route and explore route alternatives and variations based on the input the Commission receives from property owners and other interested entities and individuals. It is important that potentially affected property owners are notified early on in this review process to provide the Commission with their views and recommendations as required under FPA section 216(d). Additionally, once construction commences, abutting property owners may be impacted by the construction activities conducted in such close proximity to their property and should be made aware of these activities. 57. The Commission also believes it is appropriate to notify all landowners within a quarter mile of the proposed right-of-way. Unlike gas pipelines which are generally buried underground, electric transmission lines can be seen from greater distances. Therefore, more surrounding landowners should be directly notified by the applicant. The fact that these landowners are not designated as affected landowners does not diminish their right to be notified and participate in the Commission's proceedings. Additionally, the Commission will also notify these individuals of its intent to conduct its environmental review and will seek comments from them during that review. 58. PG&E states that the Commission should defer to States' distance requirements for notification of affected landowners. It requests that where there is no corresponding State requirement, the Commission should designate the appropriate minimum distance between the proposed project and a landowner's property that would trigger the direct notification requirement. National Grid recommends that the Commission only require notification within 300 feet of the construction right-of-way. 59. The Commission does not believe it is appropriate to defer to States' distance requirements for notification of affected landowners or that notification within 300 feet is sufficient to reach the broad group of participants that the Commission seeks to include in these proceedings. Moreover, having different requirements in different States may result in inconsistent requirements along the route of a multistate project. 2. Stakeholders and Notification 60. Section § 50.1 defines a stakeholder as a Federal, State, or multistate, Tribal or local agency, any affected non-governmental organization, or other interested person. In other words, a stakeholder includes agencies and individuals contemplated under FPA section 216(d) and the permitting agencies contemplated under FPA section 216(h)(3). 23 Under § 50.4(c) the applicant is required to notify all known stakeholders, including affected landowners, of the proposed new facilities or modification of existing facilities within 14 days after the Director of OEP or his designee notifies the applicant of the commencement of the pre-filing process. Additionally, under proposed § 50.4(c)(1)(ii), the applicant must publish the notice of the pre-filing request and application filing twice in a daily or weekly newspaper of general circulation in each county in which the facilities will be located. 23 Section § 50.1 defines a permitting entity as any entity, including Federal, State, Tribal, or multistate, or local agency that is responsible for conducting reviews for any Federal authorization that will be required to construct an electric transmission facility in a national interest electric transmission corridor. 61. Communities states that while counties are technically included in the definition of a person under § 385.102(d) of the Commission's regulations they should, nevertheless, be prominently listed as stakeholders for the purposes of these regulations. Imperial states that as a political subdivision, it should be accorded stakeholder status. The Commission considers any interested entity or individual to be included in its definition of stakeholder in § 50.1 of the regulations. Thus, if a particular entity, such as a non-public utility or a county, is not specifically listed in the definition of stakeholder, it still may comment and participate in the Commission's proceedings. 62. SoCal Edison, PG&E, and NRECA request that the applicant provide electric utilities and affected transmission owners and operators with notice and opportunities to participate in the process if they would be connected to an applicant's proposed transmission facility, provide service in the service area, or would be impacted, either by environmental, reliability or structural impact, as a result of the project. Western Energy Board requests that the applicant should also notify individuals who have expressed an interest in the State proceeding. It also requests that the Commission include a requirement for the applicant to periodically update the notification list as properties change hands. 63. The Commission agrees that electric utilities and transmission owners and operators that are connected to the applicant's proposed transmission facilities should be notified of the proposed project. We also believe it is appropriate for the applicant to notify individuals that have expressed an interest in the State proceeding, if a list of those individuals is available to the applicant. Accordingly, we will expand the notification requirement in § 50.4(c)(1) to include electric utilities and transmission owners and operators that are or may be connected to the applicant's proposed transmission facilities and any known individuals that have expressed an interest in the State proceeding. 64. Section 50.4(c)(3) requires that the applicant supply a stakeholder notice of the proposed project if a stakeholder is identified subsequent to the initial notice of the project. If a property changes hands during the pre-filing and application proceeding, the applicant is required to notify the new owners once they are identified. We will not, however, require that the applicant actively monitor land sales along the project route to determine if a piece of property happens to be sold during the Commission's proceedings. 65. White Mountain Apache Tribe (White Mountain) recommends that the Commission require applicants to publish the notice of a pre-filing request in tribal newspapers when any part of the project will affect tribal lands. We agree and will add tribal newspapers to the notification requirement of § 50.4(c)(1)(ii). 66. DOI recommends that the notices published in the newspapers include a map of sufficient detail to allow the reader an immediate understanding of the general location or the proposed construction right-of-way. Section 50.4(c)(2)(i)(C) requires the filing of a general location map. The notice also provides information concerning how an individual can seek additional information if the information in the newspaper is not sufficient. 67. Affiliated Tribes of Northwest Indians (Affiliated) and White Mountain state that the Commission should assure that all Tribal entities whose traditional lands or cultural places are crossed by a potential project should be notified. National Grid states that the Commission should clarify what Tribal governments involved in the project means so the proper ones can be notified. Section 50.4(c)(1) requires that the applicant notify tribal governments. We believe this is sufficient to address Affiliated's and White Mountain's concerns. We also do not believe any clarification of Tribal government is necessary. That information is readily available from the Bureau of Indian Affairs or the State or Tribal Historic Preservation Office. Moreover, as discussed below, part of the pre-filing process is for the Commission staff to work with the applicant to determine if any potential stakeholder has been missed and if they have, to make sure that they have had notice of the proposed project and an opportunity to participate. 68. EEI requests that the Commission limit the term stakeholder to an affected agency or person. 24 It contends that interested person could include a broad range of parties that are not impacted by the proposed project. Southern states that interested person should be reasonably and precisely drawn to clearly specify the scope of their participation, including actions these participants may take with respect to any project or application. National Grid states that the Commission should require stakeholders to provide notice to Commission staff and the applicant of the stakeholder's interest and intended involvement in the pre-filing process. 24 PHI Companies supports EEI's comments. 69. The Commission intends to seek comments from a broad group of participants during the pre-filing process. Once the application is filed the Commission will still entertain comments from interested entities and individuals. If anyone wishes to intervene in the application proceeding and become a party, however, they will need to file a motion to intervene in accordance with § 385.214 of the Commission's regulations. Under § 385.214(b)(2) the motion to intervene must show that the movant has an interest that is directly affected by the outcome of the proceeding. 70. Old Dominion Electric Cooperative (Old Dominion) is concerned that stakeholders will not receive sufficient notice of the commencement of the pre-filing proceeding because the Director of OEP will only notify the applicant under § 50.5(d). Old Dominion suggests, among other things, that the Director's notice be published in the **Federal Register** and be made available on the Commission's website. As discussed above, the Commission has modified the group of stakeholders listed in § 50.5(e)(3) that are required to receive notification of the Director of OEP's notice commencing the pre-application process from the applicant. Additionally, the notice will be available on the Commission's Web site. We find that is sufficient notification of the commencement of the pre-filing process. 71. Reinhardts request that the Commission require that the applicant file a formal affidavit with: A copy of the notice sent to landowners; a copy of the newspaper notices and list of publications where they appeared; and the names and addresses of all notified entities so that third parties are able to verify that the applicant has complied with the notice requirements. Western Energy Board states that the applicant should be held to a higher standard than “good faith effort” for the notification of property owners. Affiliated contends that the notice requirements are insufficient because there are no penalties to assure that all stakeholders are identified at the beginning of the project. American Transmission asserts that the notification should be made on a good faith effort basis and stakeholders will have a reasonable opportunity to receive notice. NRECA states that the notification requirement should be deemed deficient if the applicant learns of additional stakeholders after the 14-day period. 72. Pre-filing is an information-gathering process. During this process, Commission staff will work with the applicant to make sure that all interested stakeholders have been made aware of the proposed project and have had an opportunity for their views and recommendations to be considered. Thus, part of the pre-filing process is for the Commission staff to review who the applicant has notified and to work with the applicant to determine if a potential stakeholder has been missed and if they have, to make sure that they received notice of the proposed project and an opportunity to participate. The Commission has successfully relied on this process in its review of hydroelectric and natural gas projects. 3. Document Availability 73. Under § 50.4(b), an applicant is required to make copies of all of its filings readily available for all stakeholders to review at accessible central locations, either in paper or electronic format, and on the applicant's project Web site. Allegheny requests that the Commission add a provision comparable to those in the natural gas pipeline certificate regulations that reduce the applicant's service requirements if its materials include voluminous or difficult to reproduce material. The Commission agrees that if these materials are readily available at central locations and on the applicant's project Web site, it should not be required to serve these materials on all parties as required under § 385.2010 of the Commission's regulations. Thus, we will add § 50.4(b)(3) to the regulations to state: An applicant is not required to serve voluminous or difficult to reproduce material, such as copies of certain environmental information, to all parties, as long as such material is publicly available in an accessible central location in each county throughout the project area and on the applicant's project Web site. 4. Participation Process 74. As stated, under the Commission's review process all interested stakeholders will have numerous opportunities to present their views and recommendations with respect to the need for and impact of a proposed facility. Those opportunities include participating during the applicant's outreach activities, during the Commission's NEPA process during both the pre-filing and application processes, and through the Commission's intervention and protest procedures during the application process. Numerous commenters raise concerns about their ability to participate in the pre-filing and application processes. 75. Reinhardts state that the Participation Plan should include information of how interested persons may be notified of dates and times for public meetings or hearings on the proposed project. Star Group
(Star)states that the Participation Plan should identify the means by which stakeholders will be given the opportunity to meet with the applicant to attempt to understand and resolve key issues. American Transmission believes the Commission should give more guidance concerning what constitutes a complete Participation Plan. Old Dominion requests that the Commission require the applicants provide a summary of stakeholder participation to date in the Participation Plan, including concerns expressed by stakeholders, and efforts by the applicant to address those concerns. 76. The Commission expects that the applicant will have conducted outreach activities at the planning and/or State level prior to commencing the Commission's pre-filing process. The Participation Plan must detail all of the outreach activities the applicant has done to date and summarize the input it received during that outreach. It also must include a list and schedule of all pre-filing and application activities the applicant is planning, including, among other things, consultations, information gathering, and proposed location(s) and date(s) for the meetings. The applicant must also describe how it intends to keep the stakeholders apprised of any updates to its Participation Plan, including, but not limited to, postings to its project Web site and how the stakeholder can reach the company's contact to seek additional information. 77. Parks Association and DOI request that the Commission require applicants to release a pre-route proposal before the pre-filing process begins for a permit. One of the purposes of the pre-filing process is for Commission staff to work with the applicant and interested stakeholders to determine the ultimate route of the proposed project. Moreover, for siting proceedings that are initiated in a State proceeding, stakeholders will already have some idea of the approximate route from that proceeding. The Commission does not believe it is necessary to add yet another level of notification to an already potentially lengthy process. 78. PSE&G and Allegheny request that the Commission establish a docketed, publicly-noticed proceeding for pre-filing or use a technical conference to assure that stakeholders will be afforded a formal opportunity to present their views. New Jersey Board of Public Utilities (New Jersey BPU) requests that the Commission provide for videoconferencing of the meetings. Old Dominion states that the Commission should not only fix the time by which interventions are due, but also provide a fixed time for interested parties to file comments or protests to applications. Communities, Old Dominion, and Star are concerned that the pre-filing process does not provide an opportunity to give any meaningful input to the Commission. Communities argue that without notice and comment during the pre-filing process or transparency in the Commission's decision-making process, intervenors and the public will be significantly handicapped in their efforts to meaningfully participate once the formal application process begins. They are also concerned that interested parties and the public will not have any intervention rights or any comment rights during the pre-filing process. 79. The Commission's pre-filing procedures offer numerous occasions for stakeholders to express their interests and make meaningful contributions. Once the Commission commences the pre-filing proceeding, it will assign a docket number to the project. All the applicant's pre-filing materials will be posted under that docket number in the Commission's eLibrary and will be available through the Commission's Web site. All subsequent filings made in that docket by the applicant, any comments filed by stakeholders in that docket, and any issuances made by the Commission in that docket, including notices and requests for additional information will be posted on eLibrary under that docket number. 25 25 Information concerning how to use the Commission's services can be found on the Commission's Web site at *http://www.ferc.gov* and will also be included in the notices the Commission issues concerning the proposed project. 80. Once the Commission staff establishes that the applicant has filed sufficient preliminary information to proceed with pre-filing, the Commission will issue a notice of intent
(NOI)to prepare an environmental document. The NOI will describe the project, list potential issues identified by the Commission staff, 26 and explain the Commission's scoping and environmental review process. It will explain how to participate in the Commission's process by submitting written comments. The notice will set a date by which time the comments will be due. It will also list the scoping meetings the Commission staff will hold at various locations throughout the proposed project route to access the maximum amount of participation possible. The Commission will have a transcriber at its scoping meeting to create a record of the comments received at that meeting. 26 The list of issues may be modified during the environmental review process based on the comments received during the Commission staff's analysis. 81. Depending on the issues that arise during the course of pre-filing, Commission staff may determine that it is necessary to hold various technical conferences or other meetings to acquire additional input and information concerning the proposed project. The Commission will issue notices of these meetings in the docket number assigned to the project. Additionally, the applicant will need to update its Participation Plan to reflect any additional outreach that may be conducted as part of the Commission's review process. If the Commission determines it is appropriate, it could arrange to provide for videoconferencing of certain meetings. However, because the Commission conducts various meetings along the route of the proposed project, videoconferencing should not be necessary. Additionally, transcripts of the meeting will be available under the assigned docket in eLibrary and the Commission's Web site. 82. AEP is concerned that there is no limit on stakeholder input in the pre-filing process. It states that stakeholders can push for revisions and continue to ask questions, which continue to postpone a project. AEP recommends that the process should be modeled more like a rulemaking with time-limited input. EEI asserts that the applicant should not necessarily be obligated to communicate with parties that have not demonstrated that they will be impacted by the proposed project. Southern states that the obligation to entertain requests for information should be limited in scope and in terms of the participants that may request additional information or else it would lead to significant delays. 83. During pre-filing, the Commission will solicit comments from stakeholders. Any notice issued by the Commission soliciting comments will include a deadline date for those comments. The Commission expects that the applicant will address stakeholder concerns in various ways. Under § 50.4(a)(1), the applicant is required to have a point of contact within the company to answer general inquiries that may arise. The applicant can also establish a link on the project Web site that addresses frequently asked questions and refer the inquiry to that link or other areas on the Web site to address inquiries, as appropriate. 84. Based on the comments received in response to the NOI and information gathered on visits to the site of the proposed project, Commission staff will work with the applicant to compile the information and conduct the studies necessary for the Commission staff to prepare a draft environmental document. Once the Director of OEP has determined that sufficient information has been gathered for the Commission to proceed with the final review of the applicant's proposed project, pre-filing will end and the applicant will file an application. 85. Once the application is filed, it will be noticed and interested entities and individuals will be able to file to intervene and become a party to the proceeding under Subpart B of Part 385 of the Commission's regulations. Instructions on how to do this will be explained in the notice of the application and are available on the Commission's Web site. 86. American Transmission requests that the Commission allow State, local, and regional planning and siting entities to participate in the proceeding as a matter of right. Communities state that local counties that will be impacted by the proposed facilities should have automatic rights to intervene and receive notices and information. NRECA contends that the Commission should coordinate closely with the Rural Utilities Service to avoid duplication and the imposition of additional burdens on applicants. 27 27 The Rural Utilities Service provides capital to upgrade, expand, maintain, and replace America's vast rural electric infrastructure. NRECA states that financing obtained through the Rural Utilities Service is subject to rigorous long-term planning obligations that are substantially more demanding than the resource adequacy requirements that apply to other LSEs. 87. Under § 385.214 of the Commission's regulations, any State commission, Advisory Council on Historical Preservation, the U.S. Departments of Agriculture, Commerce, and the Interior, any State fish and wildlife, water quality certification, or water rights agency, or Indian tribe with authorization to issue a water quality certification is a party to any proceeding upon filing a notice of intervention in that proceeding. The Commission sees no reason to expand this regulation. All other interested persons may seek intervention by filing a motion to intervene. 88. DOI raises several issues pertaining to the timing of the draft environmental document under the NEPA. Specifically, it is concerned as to when other Federal agencies will get an opportunity to review the draft document. It encourages the Commission to include a timeframe for public review of the NEPA document along with clarification as to when the Commission will issue the NEPA document. After the application is filed, the Commission will issue a draft environmental document, on which interested stakeholders will be able to comment. All comments received will be addressed in the final environmental document which will be completed before the Commission issues an order on the merits of the application. 89. When the Commission completes its review of the application, it will issue an order addressing the issues raised in the proceeding and issuing, or denying, a permit to construct the proposed facilities. Under FPA section 313(a) and § 385.713 of the Commission's regulations, any party may file a request for rehearing. Requests for rehearing must include the information required under § 385.719(c) of the Commission's regulations. The Commission will issue an order addressing the issues raised in the rehearing requests. If the Commission denies the rehearing requests, any party who intervened in the proceeding and is aggrieved by the Commission's order may file, under FPA section 313(b), an appeal in the United States Court of Appeals. D. Pre-Filing 90. The purpose of the pre-filing process is to facilitate maximum participation from all stakeholders to provide them with an opportunity to present their views and recommendations with respect to the need for and impact of the facilities early on in the planning stages of the proposed facilities as required under FPA section 216(d). In addition to gathering stakeholder input, during this time Commission staff will work with the applicant to compile the information required for a complete application under §§ 50.6 and 50.7. 91. The filing requirements in §§ 50.6 and 50.7 set forth the basic information that the Commission will need for a generic project. However, each project will have its own unique issues that will need to be considered on a case-by-case basis. For example, an electric transmission facility constructed through farmland will have a different impact than one that will go through a heavily populated area. During the pre-filing process, Commission staff will initiate its independent environmental analysis of the project as required by NEPA. It will conduct scoping meetings and site visits. Staff will use the information gathered through this process and from information acquired from stakeholder input to define the issues particular to a specific project. Based on these activities, Commission staff assists the applicant in compiling the information necessary for the Commission to address the specific concerns raised by the proposed project during the application process. 1. Initial Consultation Issues 92. Section 50.5(b) requires that an applicant meet with the Director of OEP before filing its pre-filing materials. During the consultation process, Commission staff will review the applicant's proposed project description, including the status of the applicant's progress towards collecting the data needed to commence the pre-filing process, and any preliminary contacts the applicant has had with stakeholders, including its progress in DOE's pre-application process and in the State proceeding, if applicable. 93. Commission staff will review the applicant's eligibility for Commission jurisdiction for a permit for the proposed facility, outline the pre-filing process, and provide guidance as to what further work is necessary to prepare the pre-filing request. Commission staff will also review the proposed project to determine if the applicant will be required to hire a third-party contractor to assist in preparing a NEPA document under the direction of the Commission staff. 94. Virginia Electric requests that the Commission explain what will be reviewed by staff in the initial consultation and when such reviews will take place. American Transmission requests that the Commission define what constitutes a complete set of pre-filing information to assist in expediting the process. 95. While any applicant may seek guidance on a potential project from Commission staff at any time, the Commission expects that the applicant will commence the initial consultation process for pre-filing when it believes that there is sufficient evidence that a proposed project will be subject to the Commission's jurisdiction and it has prepared the required pre-filing information. At the pre-filing consultation, Commission staff will review the applicant's specific project and the information the applicant has compiled to date and discuss how that information complies with the initial pre-filing filing requirements in § 50.5(e) and the application filing requirements in §§ 50.6 and 50.7. Commission staff will also review what work the applicant has done at the State level, the amount of community outreach the applicant has conducted, and the results of that outreach. 96. While the potential differences between projects make it difficult for the Commission to specifically define what would constitute complete pre-filing information, § 50.5(e) lists the minimum filing requirements that are needed for an applicant to commence the pre-filing process. If the Commission staff find that the applicant has sufficient information to comply with the pre-filing filing requirements in § 50.5(e), the applicant will be allowed to commence pre-filing. If the applicant does not have sufficient information to meet the pre-filing filing requirements, Commission staff will work with the applicant to determine what additional information will be needed to proceed. If the applicant does not have the necessary information, it may take more than one pre-filing consultation before the applicant is prepared to commence pre-filing. 97. EEI argues that rather than requiring applicants to develop and implement an extensive new pre-filing public Participation Plan, the Commission should simply require the applicant to provide appropriate notification to stakeholders that the venue for the siting approval process has moved from the State to the Federal level along with an explanation of how they can become involved in the Commission's process as an intervenor or under NEPA. SDG&E recommends that an applicant should be able to bypass the pre-filing stage, if at the initial consultation with the Director of OEP it is determined that it has submitted sufficient information with OEP to support beginning to process the application, has submitted a Participation Plan, and has complied with the pre-filing requirements of § 50.5(e). PHI Companies similarly suggest the pre-filing process should be optional. 98. Because pre-filing is a fact-finding process used by the Commission staff to commence and initiate its independent environmental analysis and to define specific issues raised by specific projects, it is not possible for an applicant to by-pass the process. However, the time it takes for an applicant to complete the pre-filing process could be significantly reduced depending on the amount of work the applicant had completed in compiling the necessary information prior to the pre-filing process. 99. PJM requests that the Commission staff commence its system analysis review of the proposed facilities during the pre-filing process. Commission staff primarily focuses on compiling the information for the subsequent environmental review during pre-filing. In cases where a project would be located in the geographic area covered by an RTO, we expect much of the information for the system analysis to be developed in consultation with the RTO during the pre-filing phase. If necessary, however, Commission staff will work with the applicant during pre-filing to identify specific information that will be required for the Commission to conduct a system analysis during the application process. 2. Third-Party Contractors 100. Under § 50.5(c)(6) the applicant is required to propose at least three third-party NEPA contractors for the Commission to consider for the proposed project. Under § 50.5(d)(1), the Director of OEP's pre-filing notice will designate the chosen third-party contractor at the beginning of the pre-filing process. 101. Southern states that the applicant should be entitled to select any third-party NEPA contractor to use in its pre-filing and application process, insofar as the Director of OEP determines that a third-party contractor will be necessary. Similarly, National Grid states that an applicant should be permitted to express a preference for a particular contractor and the Commission's staff should generally defer to the applicant's choice because the applicant is financially responsible for the contractor's work. Los Angeles DWP is concerned that the requirement to finalize the contract with the third-party contractor may take 90 days or longer unless one of the four NEPA contractors selected who is currently under contract with the Los Angeles DWP. American Transmission requests that the Commission clarify why it requires that third party contracts be finalized in two weeks in all cases; instead it recommends that it should be 45 days. DOI requests clarification or a reference to the criteria that the Commission will use to determine if a third-party contractor must be hired. 102. The Commission is required under NEPA to do an independent analysis of the environmental impacts of a proposed project. Depending on the amount of work involved, it often requires that the applicant hire a third-party contractor to assist the Commission in analyzing the proposed project. The third-party contractor, while paid for by the applicant, reports directly to Commission staff. Thus, the Director of OEP will designate the appropriate third-party contractor. 28 While § 50.5(e)(2) requires that the applicant finalize the contract with the selected third-party contractor within 14 days the Commission may waive that requirement rule for good cause. If the applicant cannot finalize the contract with the third-party contractor within two weeks, it can request a waiver of the requirement of § 50.5(e)(2). We note, however, that preparation of an environmental document is a time and labor intensive process. The Commission has implemented the 14-day requirement as a way to expedite the process. 28 See 40 CFR 1506.5(c), requiring that a contractor used to prepare an environmental impact statement is to be chosen solely by the lead agency (or where appropriate, by a cooperating agency). 3. Subsequent Filing Requirements 103. Section 50.5(e) lists the initial filing requirements and filing deadlines that are required for the Commission staff to commence the pre-filing process. Parks Associations is concerned that this language does not impose strict deadlines to protect the public interest. On the other hand, National Grid requests that the Commission permit reasonable extensions of time beyond the 60-day timeframe for submitting resource reports. 104. The deadline requirements in the regulations are intended by the Commission to expedite the pre-filing process. Since part of the pre-filing process is to assist the applicant in compiling the information needed to file a complete application, the Commission does not expect that the preliminary resource reports filed at the beginning of the pre-filing process will contain every detail required for the ultimate report that will need to be filed with the application. The resource reports required in § 50.5(e)(7) should be preliminary reports that contain sufficient information for Commission staff to commence the pre-filing process and specifically the NEPA process. Commission staff will work with the applicant throughout the pre-filing process to develop all the necessary information for each resource report. It should be noted, however, that delays in filing these materials may delay the decision to allow an application to be filed. 4. Lead Agency Issues/Coordinating Federal Permits 105. Effective May 16, 2006, DOE delegated paragraphs (2), (3), (4)(A)-(B), and
(5)of FPA section 216(h) to the Commission as they apply to proposed facilities in designated national interest electric transmission corridors. 29 Specifically, it delegated lead agency responsibilities for the purpose of coordinating all applicable Federal authorizations and related environmental review and preparing a single environmental review document for facilities in a National Corridor. 29 Supra note 5. 106. PJM states that the Final Rule should promote coordination among Federal agencies and the resolution of disputes among Federal agencies. AEP states that while the Commission developed well-defined procedures for interacting with State agencies, it should also coordinate siting for the various Federal agencies. DOI requests clarification on whether there are two separate pre-filing processes (one led by DOE and one led by the Commission). Western Energy Board raises similar concerns regarding the duplication of the two processes. 107. As stated, several Federal agencies including DOE and the Commission entered into a MOU to establish a framework for early cooperation and participation that will enhance coordination of all applicable land use authorizations, related environmental, cultural, and historic preservation reviews, and any other approvals that may be required under Federal law in order to site electric transmission facilities. The MOU requires participating agencies, to the extent practicable, to commit to early involvement and cooperation to ensure that timely decisions are made and that the responsibilities of each agency are met. The Commission intends to work with DOE and the participating agencies to ensure that all Federal permit decisions are rendered in a timely manner. 108. National Grid states that the Commission should request that DOE delegate lead agency status to the Commission at the time the Commission's pre-filing process begins rather than at the filing of an application. Virginia Electric states that the Commission should try to amend its delegated authority to transfer DOE's pre-application coordination to the Commission or coordinate and use DOE's pre-application process to the maximum extent practicable as its own pre-filing process. It contends that anything else may require the applicant to duplicate its agency review activities with the Commission and DOE. EEI requests that the Commission explain the timing and coordination of its lead agency authority with DOE and clarify that filing requirements from permitting agencies be relevant, and preferably significant. 109. We anticipate working closely with DOE and other Federal agencies under the terms of the DOE MOU to coordinate all Federal actions and to ensure that DOE's and Commission's processes interact seamlessly and with as little duplication of effort as possible. We expect that we will coordinate with DOE on an ongoing basis on general issues regarding these matters, as well as on specific cases. In light of this, we see no need to seek amendment of DOE's delegation order. 110. Progress contends that the Commission should exercise lead agency authority in circumstances where Federal agencies are impeding the construction of new transmission facilities regardless of whether the State still has jurisdiction or if it is outside a National Corridor. California PUC similarly urges the Commission to use its lead agency authority to get Federal agencies to expeditiously review applications during the time an application is filed at the State level. PSE&G encourages the Commission not to overstep its statutory authority in this regard. 111. Under DOE's May 17, 2006 delegation order, the Commission is responsible for acting as lead agency when an applicant has submitted an application to the Commission to construct or modify electric transmission facilities. Thus, the Commission's lead agency delegated authority only pertains to facilities subject to the Commission's jurisdiction in National Corridors. DOE retains lead agency authority for coordinating Federal action on facilities not subject to the Commission's delegated authority. 5. Timeframe for Pre-Filing 112. Because of the potential for differences between projects, the Commission does not propose to set exact timeframes for the pre-filing process. The timeframe will depend upon, among other things, the size of the project, stakeholder participation, the applicant's preparedness, and the applicant's progress at the State level. The Commission expects that the pre-filing process for large, multistate “greenfield” projects, will take longer than the pre-filing process for minor modifications to existing facilities. 30 The Commission anticipates that the pre-filing process for extensive projects may take a year to complete. Additionally, the environmental resource reports required under § 380.16, discussed below, will require comprehensive field work to compile the information necessary to comply with the Commission's obligations under NEPA. 30 Greenfield facilities are facilities that primarily will be located in new rights-of-way. 113. Southern states that the Commission should acknowledge that the time required for processing applications will vary and that the Commission may also lack authority to require any deadline is met. American Transmission states that the Commission should create a definitive timeline for the submission of information and for the receipt of responsive action by Commission staff. DOI also urges the Commission to establish a chronological timeline to assist applicants and permitting entities to better understand the timing of steps within the permitting process. EEI opposes a uniform pre-filing process schedule. Allegheny states that minor modifications should not require a full-blown pre-filing process. 114. Northern Wasco County Peoples Utility District and Seattle City Light state that since major transmission projects entail long lead-times for land acquisition, procurement, design/engineering and construction, they are concerned that the rule may unnecessarily prolong the amount of time required to take action on project applications. SDG&E states that the rules should embody the urgency reflected in the statute that energy security may be at stake due to delays in transmission siting. EEI requests that the Commission explain the variables in determining how long the pre-filing and NEPA processes will take. Allegheny states that a two-year process for authorization is too long for extensive, reliability-driven transmission projects. 115. As stated in the NOPR and above, because of the potential differences between projects, the Commission cannot establish or predict timeframes for electric transmission projects proceedings. NEPA requires the Commission to conduct an independent environmental analysis of a proposed project. The Commission's NEPA analysis may require a more stringent review of the environmental impacts than is required at the State level. The pre-filing timeframe is dependent upon how far along the applicant is on compiling the information needed by the Commission, the complexity of the project, and what additional information will be required based on the specific issues raised for the individual project. The Commission agrees that time is of the essence in the siting of these facilities. Thus, it believes that it is incumbent on a project sponsor and States to work together in an attempt to site the facilities at the State level. This would be the most expeditious way to site the facilities. 6. Review of Director's Decisions in Pre-Filing 116. Under § 50.5(f), the Director of OEP will determine when there is sufficient information for the applicant to file its application. Old Dominion requests that the Commission provide an opportunity for stakeholder comment before the OEP Director determines that the pre-filing process is complete. Allegheny states that since the Commission had delegated broad authority to OEP, it should provide potential applicants with an opportunity to seek Commission review of OEP's decisions. Southern states that the Commission should add a review process to allow applicants to review and challenge a determination by the Director of OEP. It claims that an absence of due process could lead to court challenges. DOI requests that Federal agencies be consulted prior to the conclusion of the pre-filing process. 117. Stakeholders have various opportunities to comment during the pre-filing process. Therefore, we do not believe it is necessary to add any additional round of comments. Moreover, once the pre-filing process is complete, the applicant will be filing an application for Commission review of the proposed facility which will be noticed and subject to the Commission's intervention and protest procedures. As a general matter, the Commission relies on its staff to develop the record necessary for the Commission to act on energy project applications, and it does not anticipate entertaining interlocutory appeals regarding the Director of OEP's pre-filing decisions. E. Application Requirements 118. Pennsylvania PUC states that for a more informed process the Commission should include procedures whereby the application would publicly disclose what information or data the application has omitted. Section 50.2(c) requires that the applicant provide all information required in Part 50 unless it shows that the information is not necessary. We find that this is sufficient to address the concern raised by Pennsylvania PUC. 119. NRECA states that entities seeking permits should be required to show that all requirements are met, including Federal, State, and Tribal permitting requirements which would be consistent with the natural gas regulations. Section 50.2(d) is identical to the requirement in § 157.5(c) and no further modification is necessary. F. Filing Requirements 120. Section 50.6 lists the general requirements that need to be met when filing an application for a permit. Section 50.6(e) requires that the applicant demonstrate how its proposed project would satisfy the requirements of FPA section 216(b)(2) through (6). The Commission will review this information in addition to the technical information provided in the Exhibits submitted under § 50.7 in making its findings concerning the proposed project. As stated, the filing requirements in §§ 50.6 and 50.7 are the basic information that the Commission will need for a generic project. However, each project will have its own unique issues that will need to be considered on a case-by-case basis. An applicant may request a waiver of a specific requirement if it believes it may not be applicable to its particular project. Similarly, the Commission may request additional information if it deems it is necessary to address issues raised by a proposed project. 121. Various commenters raised issues concerning the Commission's need for specific requirements in each of the exhibits. Some requested that the Commission require additional information. Others question the Commission's need for some of the required information. Several commenters request that the Commission accept the record from the State proceeding to satisfy some of the Commission's filing requirements. 1. State Record 122. The Commission received numerous comments requesting that it maximize the use of information, notices, and materials produced during the State siting process to avoid the costly duplication of materials. 31 Specifically, Allegheny states that the Commission should not require an applicant to notify stakeholders, conduct public meetings, and submit studies of information that are duplicative of State commission requirements. PHI Companies contend that, at a minimum, the Commission should allow for a waiver of various pre-filing and application steps that the applicant can demonstrate have been satisfied in the State proceeding. Committees request that the Commission require that the record already developed for any State permitting authority be filed and included in the Commission's record. 31 Communities, American Public Power, EEI, PHI Companies, PSE&G, NARUC, Allegheny, SDG&E, National Grid, American Transmission, SoCal Edison, Pennsylvania PUC, Western Governor's, Virginia Electric, PPL Electric, and California PUC. 123. California PUC states that the Commission should incorporate the findings from the State siting process into its proceeding. SDG&E asserts that the Commission should accept the State's environmental review to the extent it satisfies the requirements of NEPA and to rely on prior NEPA analysis performed as well. Pennsylvania PSC states that the Commission should incorporate the work of already existing planning processes conducted either by regional State organizations or RTOs. SoCal Edison recommends that the Commission adopt generally applicable standards for the submission of previously collected materials to expedite the process. PPL Electric urges the Commission to rely on the aid of State officials to navigate the State siting procedures. 124. It is our expectation that by working with States, applicants, Federal agencies and other stakeholders on an ongoing basis, we will be able to ensure, to the maximum extent possible, that information developed in State proceedings can be used, where appropriate, at the Commission, thereby increasing efficiency and lessening burdens on all parties. 125. While the Commission will accept any pertinent information developed in the State proceeding or elsewhere into its record, the Commission is required under NEPA to do an independent review of environmental impacts. The Commission will take all filed information into consideration as it conducts its review. Similarly, it will consider the State findings while it considers its own findings under FPA section 216(b). Its ultimate determination on whether to issue a permit, however, will be based on the entire record developed in the Commission proceeding after due consideration of all the issues raised. 2. Exhibits 126. Section § 50.7 contains the requirements for the exhibits that must be filed with the application. The exhibits will contain the technical data needed for the Commission's analysis of the application. All the environmental data required under Part 380, specifically the Resource Reports required under § 380.16, will be filed as proposed Exhibit F. Engineering data and system analysis data must be filed in Exhibits G and H. 127. The Massachusetts Energy Board recommends that the Commission add another exhibit that would require that the applicant submit construction information including: construction procedures; construction schedules; plans to coordinate with local authorities; construction noise impacts and noise mitigation; mitigation of wetland impacts of construction; plans for mitigation of the traffic impacts of project construction; and plans to inhibit unauthorized travel on the right-of-way. These are all required to be filed under the environmental requirements in Exhibit F or will be addressed in the Commission environmental analysis. Therefore, additional exhibits are not necessary. 128. Affiliated contends that either § 50.6 or § 50.7 should require an exhibit which describes all tribal interests in the project and outcomes from all Tribal stakeholder participation in the project pre-filing activities and any issues discussed and whether they were either resolved or unresolved and details of the resolution or breakdown in discussions. Tribal governments or agencies are required to be notified at the beginning of the pre-filing process. In addition, information concerning tribal interests are required under § 360.16(f) and § 360.16(j). The Commission believes this is sufficient basic information for the Commission to commence its review of a proposed project. As stated, each project will raise its own unique issues for which the Commission may request additional information if it deems it is necessary to address particular issues raised by a proposed project. Any information developed during the pre-filing process will be made part of the record and will be considered by the Commission as it conducts its substantive review when an application is subsequently filed. a. Exhibit E—Maps 129. Section 50.7(e) states that the format for maps will be determined during the initial pre-filing consultation. American Transmission contends that the Commission should use a uniform format that satisfies other government agencies and avoids redundancy. Because technology changes over time, the Commission will not specify a specific format in its regulations. Particular formats will be addressed during the initial pre-filing consultation. Additionally, a potential applicant may contact Commission staff at any time for guidance on the Commission's required formats. b. Exhibit F—Environmental Requirements 130. The Commission is required to conduct an environmental analysis of a proposed electric transmission project under NEPA. Exhibit F requires that the applicant file the environmental information required under Part 380 of the Commission's regulations. As stated, the filing requirements are the basic information that the Commission will need for a generic project. However, each project will have its own unique issues that will need to be considered on a case-by-case basis. At the pre-filing consultation and throughout the pre-filing process, Commission staff will work with the applicants and stakeholders to determine the issues that arise for each project. Depending on those issues, the Commission staff may require additional information. Conversely, if certain of the filing requirements are not needed for certain projects, Commission staff will consider whether waivers are appropriate for those requirements. 131. Massachusetts Energy Board states that the Commission should include regulatory procedures for evaluating alternatives to a project, minimizing environmental impacts, and denying a permit to construct a project that has significant avoidable adverse impacts. The principal purposes of the Commission's environmental review are to:
(1)Identify and assess the potential impact on the natural and human environment that would result from the implementation of a proposed project;
(2)identify and recommend reasonable alternatives, including, as appropriate, alternatives other than transmission lines, and specific mitigation measures to avoid or minimize environmental impact; and
(3)encourage and facilitate public involvement in the environmental review process. During the application process, the Commission will review the analysis created in the environmental document in concert with the other information analyzed during its review process to determine if it is in the public interest to issue a permit to construct the facilities. If it determines that it is not, it will deny the application. 132. Reinhardts state that the Commission should broaden its rules and its area of inquiry to reasonably justify whether one State or region should suffer the significant environmental and aesthetic burdens associated with large transmission infrastructure to bring economic benefit and pollution reduction to another. The Commission's mandate under the FPA is to determine if the proposed facility is consistent with the public interest on a national level. It may be that a transmission facility will cross several States in order to benefit consumers in other States. The fact that the facility may not benefit the State's crossed by the facility is not determinative on the Commission's decision if the facility benefits a broader region. 133. Communities state that the applicant should be required to demonstrate a good faith attempt to negotiate access, and if access is denied, provide thorough research of all available documentation regarding the property. The Commission expects that the applicant will attempt to negotiate access to as much of the proposed right-of-way as possible for survey purposes. It is in landowners' best interests to allow the applicant access and to get involved in the pre-filing process to have input in the ultimate alignment of the proposed facility. During the pre-filing and application processes, there is more flexibility to achieving shifts in alignment of the proposed facility to accommodate individual landowner needs on their property. i. Section 380.5—Actions That Require EAs 134. Section 380.5 (b)(14) provides that under certain circumstances the Commission may prepare an environmental assessment
(EA)instead of an environmental impact statement
(EIS)for a proposed project. American Transmission seeks clarification on whether the Commission will allow applicants the option of preparing a preliminary applicant-prepared environmental assessment. The Commission will decide if an EA or EIS is applicable for a proposed project. If the Commission determines that an EA is appropriate, the Commission will accept an applicant-prepared preliminary draft. After reviewing the draft, the Commission may still require a third-party contractor to assist with finalizing the draft NEPA document. ii. Section 380.6—Actions That Require EISs 135. Section 380.6 requires that an EIS be prepared for major electric transmission facilities using a right-of-way in which there is no existing facility. 32 Affiliated proposes that the Commission also add “for which there are likely to be endangered species impacted, substantial issues under the National Preservation Act, or a significant impact to the natural or human environment.” The Commission will require an EIS for these and several other reasons. The decision on what needs to be addressed in the EIS generally is determined on a case-by-case basis based on the information compiled during the pre-filing process. We do not believe it is appropriate to add language that could be interpreted to limit the Commission's discretion to prepare an EIS. 32 Section 380.6 also lists when EISs are required for natural gas pipelines and hydroelectric projects. AEP requests that the Commission eliminate the references to pipeline projects. Those sections were added to assure the proper placement of the semicolons and the word “and”. They have no other purpose relative to electric transmission siting. 136. Virginia Electric contends that the Commission should delete the “major” before “transmission facilities” in § 380.6 because FPA section 216 confers jurisdiction to the Commission over all electric transmission facilities. The word major in § 380.6 denotes when the Commission will prepare an EIS under § 380.6 as opposed to an EA under § 380.5. The Commission will still review all proposals for electric transmission facilities under its FPA jurisdiction. iii. Section 380.10—Participation in Commission Proceeding 137. In § 380.10(a)(2)(iii), the Commission clarified that interventions should not be filed in natural gas pre-filing proceedings and in the proposed electric transmission pre-filing proceedings. Old Dominion points out that while interested parties cannot intervene in the pre-filing phase, they can submit comments. New Jersey BPU states that this section should reference the stakeholder participation provided in §§ 50.4 and 50.5 to clarify that stakeholders have the right to be involved in the process. Section 380.10(a)(2)(iii) already refers back to the pre-filing activities under § 50.5. We do not believe any further reference to that section is necessary. iv. Resource Report 1—General Requirements 138. Resource Report 1 requires that the applicant describe, among other things, the facilities associated with the project, special construction and operation procedures, and construction timetables. National Grid contends that whether a project is going to be built in an existing right-of-way should dictate the amount and type of data needed on construction methods, workspace, and related matters. As stated, specific projects will be considered on a case-by-case basis. Projects constructed in an existing right-of-way will raise different issues than a greenfield facility. 139. Section 380.16(c)(2)(i), requires maps and photos covering at least a one-half mile wide corridor centered on the electric transmission facility centerline. Communities contend that a fair definition of the area of impact should begin with a minimum of one-half mile and require an evaluation of the extent beyond that point for each type of impact. National Grid states that the map and photos should be consistent with the State's corridor requirements. The Commission uses the one-half mile distance as a generally acceptable distance for its map requirements. On a case-by-case basis, it will determine the extent of the area of impact based on the specific information gathered during the review process. 140. Section 380.16(c)(2)(i) requires United States Geological Survey
(USGS)7.5-minutes series topographic maps or maps of equivalent detail. The Massachusetts Energy Board contends that these maps are not adequate for a detailed evaluation of impacts in densely populated areas and requests a better resolution of detail than USGS-based maps. We agree that the impact of a proposed facility in a densely populated area will raise different issues than a facility located in a rural area. The Commission will address the issues, as necessary, in each individual proceeding before the Commission. 141. The Center for Biological Diversity requests that the general content requirement include a full lifecycle assessment and air quality and greenhouse gas emissions. It contends that the Commission's NEPA analyses must address the full lifecycle of electric generation and include analysis, mitigation measures, and alternatives that address air quality impacts, energy losses, criteria pollutants, and greenhouse gas emissions. The Commission will review these impacts of the proposed facilities, as required by NEPA and all other relevant environmental laws. v. Resource Report 2—Water Use and Quality 142. Section 380.16(d) requires that the applicant describe water quality and provide data sufficient to determine the expected impact of the project and effectiveness of mitigation, enhancement, or protective measures. DOI urges the Commission to review the regional impact from local water use. EEI states that the requirement that the applicant identify known public and private groundwater supply wells or springs is inappropriate for above-ground facilities. AEP contends that the Commission should eliminate this requirement because it only pertains to pipeline projects. National Grid states that the Commission should grant requests for waiver for this report for overhead electric transmission projects where no water use or quality effects would occur. 143. The construction of electric transmission facilities will create ground disturbance that may disrupt groundwater in the area of the construction. Thus, the Commission will require that the applicant comply with the requirements of this section. vi. Resource Report 3—Fish, Wildlife, and Vegetation 144. Section 360.16(e) requires that the applicant file information describing aquatic life, wildlife, and vegetation in the vicinity of the proposed project. Massachusetts Energy Board requests that the Commission require applicants to provide habitat information obtained from State natural heritage officials. Section 360.16 (e)(8) requires that applicants include correspondence from, among others, State fish and wildlife agencies. We believe this is sufficient to address Massachusetts Energy Board's concern. 145. DOI requests that the applicant identify Federal- and State-listed threatened or endangered species in the project area and the impacts to such species in this report. It also requests the section be expanded to require mitigation for invasive species. Sections 360.16(e)(4) and
(5)require that the applicant address specific areas of significant habitats or communities of species of special concern to the Federal- and State-listed or proposed threatened or endangered species or critical habitat, respectively. vii. Resource Report 4—Cultural Resources 146. Section 360.16(f) requires that the applicant file the information needed for the Commission to determine that it has complied with the requirements of the National Historic Preservation Act (NHPA). Wilderness states that Resource Report 4 should explicitly state that the project must comply with section 106 of the NHPA. DOI requests that the report should be expanded to cover nationally and regionally significant historical and cultural resources. It also believes the report should cover the potential construction impacts on archeological sites which may be present in the identified project site. 147. Resource Report 4 is specifically designed to gather all the information necessary for the Commission to comply with NHPA section 106. We do not believe it is necessary to specifically state this in the list of information that the Commission requires the applicant to file. Resource Report 4 requires that the applicant provide the information requested by DOI. Moreover, the Commission's environmental review document will cover the potential impacts on the identified sites. 148. Communities state that there is no valid reason for allowing the delay in the filing of certain reports until immediately before the permit is issued. They contend that all such reports should be filed with the application or the application may be deemed incomplete until such filings are made. The Commission does not believe it is necessary that the applicant have all the cultural resources reports and plans completed before it issues a permit. Under some circumstance where access to private property is denied, the applicant will not have access to the property to complete the report until after the permit is issued and the applicant gains access by eminent domain. The Commission will not authorize construction, however, until permittee has complied with all the requirements of NHPA and all other relevant environmental laws. 149. National Grid contends that the Commission should grant requests for waiver of Resource Report 4 if overhead electric lines are on existing rights-of-way. Regardless of the location of the facilities, the Commission will still need to comply with NHPA section 106. viii. Resource Report 5—Socioeconomics 150. Section 360.16(g) requires that the applicant provide information concerning the impact of the proposed project on the towns and counties in the vicinity of the project. Section 360.16(g)(2) requires that the applicant evaluate the impact of any substantial immigration of people on governmental facilities and services, and plans to reduce the impact on local infrastructure. 151. EEI states that electric transmission line construction typically does not involve a large influx of workers into an area, so a requirement for an evaluation of the impact of the immigration of people and a fiscal impact analysis evaluating incremental local government expenditures is unnecessary. The construction of any major energy infrastructure facility has the potential to require some influx of workers into the areas. Depending on the facilities available, number of employees, and duration of their stay they may have a major impact on communities. This may especially be the case with the expedited construction we expect for permitted projects. 152. Under § 360.16(g)(7), the applicant is required to conduct a property value impact analysis of the proposed transmission line for residential properties located adjacent to or abutting the right-of-way. Numerous commenters recommended expansion or deletion of the proposed property value impact analysis. 153. EEI requests that the Commission delete the requirement for a property value impact analysis for residential properties located adjacent or abutting to the proposed right-of-way. National Grid asserts that requiring property value impact for these facilities is unwarranted and it would serve only to promote and fuel not-in-my-backyard sentiment. It also contends that assessing property values for virgin right-of-ways would be very time consuming with no tangible benefits. 154. Virginia Electric states that there is no consensus to support a conclusion that transmission lines have any impact on real property values and that the type of property value impact studies in this regulation would overstate, by double-counting, the normal right-of-way cost for the project. SoCal Edison believes such a requirement would be highly subjective and could significantly delay approval of a transmission facility. EEI is concerned that a property value impact study would be highly subjective and could further complicate negotiations and communication between the transmission project sponsor and homeowners in the vicinity of the project. AEP states that the Commission should reconsider requiring this information because it will be time-consuming and the conclusions would be highly speculative. 155. EEI and SoCal Edison assert that there is no similar requirement in the Commission's regulation regarding the siting of other energy infrastructure. SoCal Edison states that such an analysis is not required by NEPA. EEI, National Grid, and SoCal Edison also note that this type of information is not generally required at the state level. 156. Communities request that the analysis include all landowners, residential and commercial, within the entire area of impact and should require a fiscal impact analysis on both local and regional economies. Wilderness recommends that the Commission's analysis use the methods described in “Socio-Economic Framework for Public Land Management Planning: Indicators for the West's Economy”. In addition, it requests that the assessment consider the potential impacts on the values of public lands. 157. After considering the comments raised in this proceeding, the Commission agrees that the property value impact analysis should be eliminated from the Final Rule. The Commission believes that requiring such information could significantly delay the development of transmission projects, which is contrary to the national interest. The Commission also is concerned with the accuracy of such studies and the fact that no uniform methodology is available to calculate the impact of transmission lines on property values. In many cases, such studies could be highly speculative and inaccurate while providing limited beneficial information to the public. Finally, the Commission agrees that there is no particular rationale why such a study should be required when it is not required for other infrastructure projects before the Commission or generally required at the State level. 158. Given the speculative nature of these reports and the time and resources the application would need to dedicate towards completion of this study, the Commission does not believe such a requirement is consistent with the purpose of EPAct 2005. The Commission will consider such information when provided in making a determination on the project, but such information will not be required. ix. Resource Report 6—Geological Resources 159. Section 350.16(h) requires that the applicant describe geological resources and hazards in the project area that might be directly or indirectly affected by the proposed action or that could place the proposed facilities at risk, the potential effects of those hazards on the facilities, and methods proposed to reduce the effects or risks. National Grid states that this requirement should be eliminated for overhead electric transmission line projects and required only for underground projects, where the nature of the facility makes such analysis relevant and appropriate. 33 Construction of electric transmission facilities will require the placement of towers subject to substantial loads in areas with potential geological hazards that the Commission would want to take into account in its analysis. Therefore, we will not eliminate this requirement. 33 DOI requests that Resource Report 6 address impacts to local aquifers or water sources which may supply water to local communities. These impacts are specifically addressed in Resource Report—2—Water use and quality. x. Resource Report 7—Soils 160. Section 360.16(i) requires that the applicant provide information on the soils that will be affected by the proposed project, the effect on those soils, and measures to minimize or avoid impact. EEI, AEP, and National Grid contend that the Commission should eliminate this requirement because electric transmission projects will have no significant impacts on soil. We disagree. Whenever there is ground disturbance and the possibility of erosion, the Commission needs to determine the potential impact of that activity. 161. DOI recommends that this report include a requirement to identify highly erodible soils. Section 360.16(i)(1) requires that the applicant list the soil associations that would be crossed and describe, among other things, the erosion potential. We think this adequately addresses DOI's concern. xi. Resource Report 8—Land Use, Recreation, and Aesthetics 162. Section 360.16(j) requires that the applicant describe the existing uses of land within a quarter mile of the edge of the proposed right-of-way and changes to the land use if the project is approved. It also requires that the applicant list all buildings within a half-mile of the center of the proposed right-of-way. Communities state that the Commission should clarify in the regulation that not only must existing land use be evaluated but also all permitted land use. Under § 360.16(j)(3), the applicant is required to provide information on “planned development” in the project area, which is defined as development included in a master plan or on file with local planning authorities and would included permitted land use. 163. DOI requests that this report include identification of the loss of agricultural/grazing property within the project area. Section 360.16(j) requires that the applicant address changes to those land uses that will occur if the project is approved. 164. EEI states that the requirement that the applicant submit information regarding a corridor that is one-half mile wide is unnecessarily broad, and could pose an undue burden on the applicant, and would exceed the study corridor width used in many States. It contends that the appropriate corridor width will vary from State to State depending on topography, the nature of development in the vicinity, and other factors. Therefore, it requests that the Final Rule be modified to permit the applicant to propose a corridor width that takes these factors into account. In the alternative, EEI states that the Final Rule should be modified to require information be provided for a corridor that is 200 feet wide, an approach that it states is consistent with current practice in certain States. Southern raises similar concerns. AEP states that the Commission's land use requirement of a quarter mile would be excessively costly. DOI also requests that the Commission explain the justification for the quarter-mile distance requirement. 165. The Commission believes that it is reasonable to require preliminary information on land uses and inhabited buildings within a half-mile corridor along a proposed transmission line. Having information about such areas from the outset will enable the Commission to more efficiently examine minor routing alternatives or modifications. In some instances, based on a review of the preliminary materials and information gained during the scoping process, the Commission may request additional information. 166. Section 350.16(j)(4) requires that the applicant identify various areas including, among others, sugar maple stands, orchards and nurseries, game management areas, national or State forest, parks, golf courses, or recreational or scenic areas. Massachusetts Energy Board requests that the Commission add cranberry bogs after orchards and nurseries. The Commission will consider additional areas that need to be identified on a case-by-case basis depending on the proposed project. 167. Wilderness requests that the Commission lands managed by the Bureau of Land Management, the National Park Service, and the U.S. Forest Service be specifically listed as requiring information in Resource Report 8. It contends that the regulations should emphasize the protection of the special values of public lands. Section 360.16(j)(4) requires that the applicant identify all lands owned and controlled by Federal or State agencies, as well as land owned by private preservation groups in addition to parks and recreation areas. We believe this sufficiently covers the areas of concern raised by Wilderness in its comment. If Wilderness believes that something was overlooked when an applicant makes a specific filing, it can file comments during the Commission's scoping period. 168. EEI states that the Commission's requirement that the applicant identify Indian Tribes that may attach significance to the project's right-of-way is broad and vague and should be removed. It contends that there are transmission lines that are hundreds of miles long and that it would be difficult to determine the “project vicinity”. EEI asserts that the cultural resources consultations with Native Americans required in § 380.16(f) and the requirement that the applicant identify Native American religious sites and cultural properties in § 380.16(j)(4) should be sufficient to assure that appropriate consideration is given to the impacts on tribal resources of a proposed transmission facility. 169. Affiliated states that the applicant should provide names of all Indian tribes who may have permit authority or the ability to consent to, or withhold consent over, any aspect of the project. Affiliated also asserts that the rule should describe the different interests tribes have in projects, either as permitting and consenting entities inside the external boundaries of reservations, or outside of reservations on tribal traditional lands or cultural places. It should also explicitly cite, describe, and inform other stakeholders of the Commission's tribal obligations, identify treaty rights, and any other tribal interests that may be impacted by the proposed project. Confederated Tribes of the Warm Springs Reservation of Oregon (Confederated Tribes) requests that the Commission require an applicant to identify treaty rights and any other tribal interests that may be impacted by the proposed project in § 380.16(j)(5). 170. As discussed above, the Commission believes that the filing requirements concerning tribal interests under § 360.16(f) and § 360.16(j) and the notification requirements under § 50.4(c) are sufficient to provide the basic information for the Commission to commence its review of a proposed project. 171. Pre-filing is an information gathering process. During this process, Commission staff will work with the applicant to make sure that all interested stakeholders, including any tribes, have been made aware of the proposed project and have had an opportunity for their views and recommendations to be considered. Any issues particular to a proposed project will be raised and evaluated during the pre-filing process. Information developed during the pre-filing process will be made part of the record and will be considered by the Commission as it conducts its review when an application is subsequently filed. 172. Southern contends that the requirement in § 350.16(j)(6) to list all schools, homes, and other structures within one-half mile of a proposed facility and AM radio transmitters within 10,000 feet imposes an enormous burden with no discernible benefit. We disagree. It is more efficient for Commission staff to consider the land use and aesthetic issues within a wider area than to prematurely narrow the focus of the evaluation and scoping process. Any lesser requirement might require the applicant to do a more expansive review later in the process in response to stakeholder comments which could potentially extend the processing time for the proposed project. 173. Section 380.16(j)(11) requires that the applicant describe the visual characteristics of the lands and waters affected by the project. EEI states that significant visual impacts are inherent in virtually all transmission line construction and cannot be avoided or minimized in most cases. Therefore, it argues that the Commission's requirement that the applicant describe how the facilities will impact the visual character of the project right-of-way and list measures to lessen these impacts should be modified to clarify that an applicant must only propose measures to lessen such impacts “to the extent practicable.” The Commission understands that it is difficult to lessen the impact of an electric transmission facility and will consider visual impacts on a case-by-case basis, but nevertheless needs visual impact information to complete its NEPA and public interest analysis. 174. National Grid states that the Commission should change this report to require the applicant to identify and give a general description of the surrounding areas and describe the effect of the proposed project on those areas. A general description of the surrounding areas is not sufficient for the Commission's land use review. As stated, it is more efficient for the Commission to consider land use issues within a wider area. xii. Resource Report 9—Alternatives 175. Section 380.16(k) requires that the applicant describe alternatives to the project and compare the environmental impacts of the alternatives. Center for Biological Diversity wants to ensure the full environmental impacts of the alternatives are considered. National Grid states that the Commission should clarify that the applicant is only required to prepare resource reports for proposed projects, not alternatives. American Transmission requests that the Commission specify what is meant by all alternatives, including the identity of the number of alternative routes that must be considered. AEP states that Resource Report 9 would require excessive research, including costly environmental analyses, to be completed on an undefined and seemingly limitless number of alternative routes. Southern states that it is not clear how much information an applicant needs to collect to review and report on alternatives and that it could lead to an enormous burden. 176. For the preliminary reports required at the early stages of pre-filing, the applicant need only submit information that would allow Commission staff to discern reasonable alternatives. As the Commission conducts its site visits and reviews the comments submitted during the scoping period, alternatives will be considered. Once the applicant reaches a decision regarding its final proposed route, it will need to comply with the resource report requirements for that route before the application is filed. 177. Wilderness states that alternatives should be identified to avoid the locations identified in Resource Report 8 or to explain why they could not be avoided altogether. It also requests that a transparent comparison of costs and environmental impacts should be included in this section. The purpose of the Commission's NEPA analysis is to analyze the potential environmental impacts of a proposed project and reasonable alternatives to that project. Section 380.16(k) requires that applicants describe and evaluate alternatives including a discussion of costs and benefits. While the avoidance of impacts to special land use areas is not specifically addressed in the resource report, it will be explored through the course of the NEPA review. 178. APPA states that non-wires alternatives should be thoroughly evaluated “up front” during the interregional planning process and should not be among the alternatives evaluated by the Commission in the construction permit application process. Massachusetts Energy Board, New Jersey BPU, and Pennsylvania PUC all request that the Commission consider alternatives beyond new transmission lines, including configuration and design alternatives, upgrades to existing transmission facilities, and demand side alternatives. Reinhardts suggest the Commission consider “system alternatives” to a proposed project as opposed to just route alternatives. California PUC contends that the Commission should consider alternatives inside and outside the National Corridors and use all the information on alternatives developed in the State siting process. Communities requests that the Commission require the applicant to evaluate all technologically achievable alternatives. 179. NEPA requires the Commission to consider and discuss reasonable alternatives; it does not require consideration of patently unsuitable alternatives. 34 The Commission's experience in the hydropower and gas pipeline programs is that the range of reasonable alternatives can best be determined based upon the facts of a specific siting proposal. In light of the specific facts raised by individual projects, the applicant will be required to address a variety of alternatives in the resource reports, including, where appropriate, alternatives other than new transmission lines. Moreover, reasonable alternatives can be identified by Commission staff or other stakeholders at various points during the proceeding for consideration in the NEPA process. 34 *See American Rivers* v. *FERC* , 201 F.3d 1186, 1200 (9th Cir. 2000). xiii. Resource Report 10—Reliability and Safety 180. Section 380.16(l) requires that the applicant address potential hazards to the public and how these will affect reliability. Communities request that the report include an evaluation of homeland security issues and whether the project will result in energy independence. Homeland security related issues will be addressed on a case-by-case basis. 181. Southern states that the Commission should not require an applicant to include a discussion on potential acoustic or electric noise from electric and magnetic fields (EMF). National Grid contends that since these requirements are duplicative of local requirements, the Commission should waive the requirements where the applicant can demonstrate that comparable requirements are being complied with at a local level. As discussed above, an applicant may use any information developed during its planning stage and for the State proceeding to satisfy the Commission's filing requirements. However, it must clearly explain and demonstrate how that information complies with the Commission's specific requirements. xiv. Resource Report 11—Design and Engineering 182. EEI states that the requirement that the applicant submit detailed design and engineering drawings showing all major project structures is inconsistent with typical industry and State permitting practice which is to only submit pole spotting or spacing information and general consideration of structure type when siting authorization is sought. It states that detailed engineering is then completed after a proposed transmission project is authorized. EEI contends that electric transmission lines are subject to specific field designs along their entire length to accommodate particular circumstances. Therefore, it states it would be more appropriate for the Commission to require the submission of detailed engineering information after a permit is issued rather than beforehand. National Grid states that this requirement should be modified to require only maps of the proposed siting route and drawings depicting the predominate type of structures to be used. 183. The Commission expects the applicant to be able to commence construction when the Commission issues the permit. The applicant can develop its design during the pre-filing phase, but the Commission expects that all design plans should be well-defined when it files its application. 184. Massachusetts Energy Board requests that the Commission require applicants to provide an explanation for any selection of a structure design that is different from structures already present and an explanation of any structure placement that is longitudinally offset from existing structures. Resource Report 1 requires that the applicant describe the facilities associated with the proposed construction. If the Massachusetts Energy Board believes additional information is required for a specific project, it should file comments during the NEPA scoping process and those comments will be addressed in that proceeding. c. Exhibit G—Engineering Data 185. The Commission requires specific engineering data to support its review of a proposed transmission line in Exhibit G. National Manufacture's contend that flexibility should be allowed in the permit application facilities description because the design will probably not be finalized at the time of permit application. It also notes that filings have historically been made 5 to 10 years before the final design is completed. The Commission expects that the applicant will be prepared to commence construction when the permit is issued. Thus, it will need to have all its final designs completed prior to when the Commission issues an order on the merit of a proposed project. 186. Massachusetts Energy Board states that the Commission should require applicants to provide:
(1)Existing and expected EMF cross-sectional profiles for points along a proposed project and identify any low-cost mitigation of EMF;
(2)information on interference with existing cathodic protection systems;
(3)an analysis of noise levels:
(4)engineering data on substations and switching station that would be constructed or altered in connection with the transmission line project; and
(5)any other information that has been identified as a requirement component of siting review or of an application to construct in the State in which the facility will be located. DOI also requests the Commission review the potential environmental impact of noise. 187. The information Massachusetts Energy Board and DOI recommend the Commission should require applicants to provide is already required by Resource Report 10. Should other pertinent information be identified during the State siting process, this information may be filed for consideration by the Commission. d. Exhibit H—System Analysis Data 188. Exhibit H requires information to evaluate the impact the proposed facilities will have on the existing electric transmission system performance, including an analysis of existing and expected congestion, power flow cases which include contingency data files, a list of assumptions and guidelines used in the cases, a stability analysis, a short circuit analysis and a concise analysis that explains how system reliability will be improved, how long-term regional planning is impacted and how congestion will be impacted on the applicant's entire system. 189. Communities state that system analyses should include all relevant reliability assessments completed by State commissions, ISO, RTO, energy service companies and the like. New Jersey BPU states that the Commission analysis should include input from a RTO/ISO (if applicable) because they are in the best position to analyze the impact new facilities will have on overall system performance. In determining whether to issue a permit to construct the proposed facilities, the Commission will review all processes that were conducted by the applicant with the relevant stakeholders in determining whether to approve the proposed facilities, including input from RTOs and ISOs. 190. Reinhardts contend that the Commission must consider how interstate transmission will impact electricity available to individual States and regions. They state that the Commission's rules must include data requirements that would shed light on potential reliability issues. They also assert that the rules should:
(1)Require full disclosure of all electric generation (new or existing) for which the new transmission facilities have been proposed;
(2)require that alternatives to the proposed transmission include alternative electric generation scenarios; and
(3)require a detailed analysis of all impacts that would be imposed by construction of the desired interstate transmission resources that are expected to feed into the new transmission facilities to meet identifiable power needs. APPA and PJM suggest more details concerning the reliability criteria the Commission will use to approve projects. PSEG Companies and APPA contend that there is a need for a broad congestion analysis. 191. The Commission anticipates that DOE will designate corridors to help connect existing generation to load. In most cases, the proposed project will be limited to transmission facilities designed to achieve this purpose. The Commission's decision on the proposed project will take into account the applicant's submitted reliability and systems analysis, an analysis of alternatives, and an analysis of project impacts as required by NEPA. Additionally, based on the specific issues that arise in individual projects, the Commission may request additional information to assure that the proposed project is in compliance with any Commission-approved reliability standard. e. Exhibit I—Project Cost and Financing 192. Exhibit I requires general information concerning the cost of the proposed project. Communities state that the applicant should provide a detailed analysis of the projected cost impact on customers both inside and outside the National Corridors. California PUC states that the description of project financing should identify the specific mechanisms by which the applicant will seek cost recovery, what categories of ratepayer costs would be recovered from, and what rate or other incentives the applicant proposes to seek. It contends that this will provide adequate transparency regarding the financial impact of the project on the State or region. 193. Cost recovery and the effect on customer rates are not part of the proceeding to issue a construction permit. The Commission will address issues related to the costs associated with the proposed facilities in separate rate proceedings filed under FPA section 205. 35 Any concerns about cost recovery should be raised in those proceedings. 35 *See, e.g., Allegheny Energy, Inc.* , 116 FERC ¶ 61,058 (2006), *American Electric Power Service Corp.* , 116 FERC ¶ 61,059 (2006). *See also* Promoting Transmission Investment through Pricing Reform, 71 FR 43294 (July 31, 2006); FERC Stats. & Regs. ¶ 31,222 (2006). G. Critical Energy Infrastructure Information 194. Information filed during the pre-filing and application proceedings will likely contain critical energy infrastructure information (CEII). Under § 50.4(c)(5), access to this information is subject to the CEII requirement in § 388.113 of the Commission's regulations. 195. Western Energy Board, 36 NARUC, and CA Resources contend that the Commission should recognize that State agencies with permitting or other regulatory authority with respect to a project are distinguishable from individuals or businesses seeking CEII information for their own private interests. They state that such agencies are invested by statute with safeguarding the public interest and as such, have a need to know with respect to CEII, and should not be required to demonstrate a need for the CEII when requesting this material. In their filings, they make various recommendations for changes to the Commission's CEII regulations. 36 Washington Council adopts the comments of the Western Energy Board. 196. On September 21, 2006, in Docket No. RM06-23-000, the Commission issued a notice of proposed rulemaking regarding its regulations for access to CEII. 37 Copies of the comments submitted by Western Energy Board, NARUC, Washington Council, and CA Resources have been placed in the official record in Docket No. RM06-23-000, and will be addressed in that proceeding. 37 Critical Energy Infrastructure Information, 71 FR 58321 (Oct. 3, 2006); FERC Stats. & Regs. ¶ 32,607 (2006). 197. DOI requests the Commission include a definition of CEII along with an identified procedure for obtaining CEII. The Commission finds that the reference in § 50.4(c)(5) to the CEII regulations § 388.113 is sufficient to direct the reader to the Commission's procedures concerning CEII. H. Accepting/Rejecting Applications 198. Under § 50.8(b), the Director of OEP may reject an application that does not comply with any applicable statute, rule, or order as provided for under § 385.2001(b) of the Commission's regulations. Allegheny requests that the Commission impose a 10-day deadline for the rejection of applications as required under § 157.8(a) of the Commission's natural gas regulations. The Director of OEP will either notice the application or reject it, in a timely manner. Assigning an arbitrary deadline for these actions is not in the interest of an applicant who is earnestly trying to perfect an application. I. Hearings 199. Section 50.3(e) states that the Commission will conduct a paper hearing on applications for permits for electric transmission facilities. NARUC contends that the regulations do not provide for notice and an opportunity for a hearing as required under FPA section 216(b). They argue that the major portion of the Commission's examination of the application and the participation of the States occurs in the pre-filing process and that the applicant, not the Commission, is tasked with deciding what kind of participation process will provide interested persons an opportunity to be heard. They state that because the majority of the evaluative work performed with respect to the application will occur before the hearing process ever begins, the Commission will deprive interested persons of the ability to participate in a fair and open process. NARUC also states that during the pre-filing process the applicant can make its case to the Commission before interested persons can intervene, test the information provided by the applicant, and provide their own analysis without being subject to the Commission's ex parte restrictions. 200. Pre-filing is an information-gathering process. The Commission will assign a docket number at the beginning of the process. All filings made in that docket from both the applicant and stakeholders will be available for anyone to comment on. During this process, Commission staff will work with the applicant to make sure that all interested stakeholders have been made aware of the proposed project and have had an opportunity for their views and recommendations to be considered. The Commission staff also will start its environmental scoping and review process. During this process, Commission staff will conduct public meetings and/or technical conferences and work with the applicant and all stakeholders to formulate the issues raised by a particular project and to compile the information that will be needed by the Commission to address those issues when it conducts the substantive review of the proposed project during the application process. During pre-filing, Commission staff will be available to provide guidance on the process to both the applicant and any interested stakeholder. 201. Once the Commission staff determines that there is sufficient information for the Commission to evaluate the proposed project, the applicant will file its application. At that point, the hearing envisioned under FPA section 216(b) will commence. The application will be subject to the Commission's notice, intervention, and protest requirements. Based on the information in the application and the information compiled during the application proceeding, the Commission will evaluate the proposed project and issue an order on the merits. Thus, any interested stakeholder will have numerous opportunities to participate not only informally during the pre-filing process, but also formally during the application process. 202. Southern contends that a paper hearing should not preclude an evidentiary hearing in the event that circumstances dictate one. Iowa Board similarly argues that paper hearings should not foreclose the possibility of a live hearing if it is more appropriate. New Jersey BPU states that the Commission should determine the nature of the hearing depending on the circumstances, including whether material issues of fact are in dispute that cannot be adequately resolved on the written record. Pennsylvania PUC urges the Commission to adopt provisions that provide for a hearing that affords entities an opportunity to present their case in full using all due process protections afforded by a contested on-the-record proceeding. SoCal Edison states that when material disputes are raised, the Commission should have a full hearing before an ALJ with the appropriate protections. Western Governors raise similar concerns. 203. The Commission believes that in most instances, the Commission will make its ultimate determination on the basis of the paper record compiled in the proceeding. The Commission may order a trial-type hearing, however, either on its own motion or the motion of any interested party of record in accordance with subpart E of Part 385 of the regulations if the Commission deems it appropriate. J. Permit Conditions 204. Section 50.11(b) requires that the permittee accept the permit in writing within 30 days from the date of the order issuing the permit. EEI contends that the deadline should be extended to allow the permittee to seek rehearing. It states that this is necessary because certain aspects of the permit order may render the proposed project uneconomic or otherwise infeasible. Therefore, it states that the applicant's rehearing request must be addressed before it can determine whether or not to accept the permit. Allegheny makes similar arguments. The Commission agrees that an applicant should be able to appeal the Commission's decision before it is required to accept its permit and has modified § 50.11(b) accordingly. 205. Los Angeles Department of Water and Power (Los Angeles DWP) contends that acceptance of a permit would require approval of its Board of Commissioners and that the approval may take more than 30 days. Los Angeles DWP proposes that the 30 day period be extended in response to a reasonable request by the applicant. The Commission may waive a rule for good cause shown. If a permittee needs an extension of time to accept its permit it may request a waiver of § 50.11(b). 206. Section 50.11(c) requires, among other things, that the facilities be constructed in a matter to prevent interference with service furnished by other public utilities. Imperial states that the construction, installation, operation, and maintenance of new transmission facilities should be conducted in a manner that prevents interference with service not only furnished by public utilities, but also services furnished by non-public utilities. We will add non-public utilities to § 50.11(c). 207. Section 50.11(d) requires written authorization from the Director of OEP prior to commencing construction or initiating operations of the approved facilities. American Transmission states that the Commission's issuance of a permit should be sufficiently final so that applicants can begin the construction process, including making financial commitments. It contends that any further delay would be unnecessary. The Commission generally imposes a substantial number of conditions in its orders authorizing project construction, such as requests that the permittee receive all final comments from various resource agencies before commencing construction. Additionally, the permittee may not be able to conduct all of the required surveys until it is able to condemn the property with the eminent domain authority received with the issuance of the Commission's permit. Thus, the Commission requires that the permittee complete all conditions precedent before it will authorize the construction of the facilities. 208. Virginia Electric states that written authorization obtained from the Director of OEP should permit both commencing construction of the facilities and initiating operations. A single permit will allow for the timely construction and operations of new transmission facilities. Generally, the Commission will not authorize the commencement of service on the new facilities until it determines that the rehabilitation and restoration of the right-of-way and other areas affected by the project are proceeding satisfactorily. Accordingly, the permittee needs authorization from the Director of OEP to make the facilities available for service. 209. Communities contend that in instances of delayed construction, there should be a provision for reopening the order granting the permit to allow for public scrutiny of the change of circumstances to ensure that the delay is in the public interest. Section 50.11(e) requires that the facilities be completed within the timeframe specified in the Commission order. If the facilities are constructed as required by the Commission, there will be no reason to revisit the Commission's decision. Section 50.11(e) also states that if the permittee does not complete the facilities within the specified timeframe it must file a request for an extension of time. 210. Under § 50.11(g) a permitee must notify affected landowners that have executed easement agreements to convey property rights for the proposed facilities if the permit is transferred. EEI states that the requirement that the permit holder notify all affected landowners if a permit is transferred could be unduly burdensome in many instances when the permittee no longer knows the identity of landowners along the right-of-way because the transmission line was authorized and landowners consulted many years previously. The Commission is issuing a permit to construct the facilities. If a permit is transferred at any time before the facilities are constructed, the new permittee will be required to contact all landowners subject to easement agreements that a different company will be constructing the facilities and who they will need to contact while the facilities are being constructed. 211. Affiliated states that compliance with applicable tribal law should be included as condition to a permit. Section 50.11 details general conditions that will apply to all permits issued by the Commission. The Commission also will impose other conditions to address specific issues that will arise in a proceeding on a case-by-case basis. 212. American Transmission states that the Commission should include reporting requirements which could capture any changes since a permit is issued. National Grid states that there should be no ongoing reporting requirements regarding operations and maintenance. The Commission's jurisdiction under FPA section 216 is to issue permits to construct electric transmission facilities. Once the facilities are constructed and operational and all the Commission's right-of-way restoration conditions have been met, the Commission's jurisdiction over the facilities under FPA section 216 ends. Thus, there will be no changes to the permits or any ongoing reporting and maintenance requirements. K. State and Local Permits 213. Under §§ 50.5(c)(2) and
(3)the applicant is required to include a description of the zoning requirements for the facilities and a list of local entities with local authorization requirements, respectively. EEI states that the requirements that the applicant describe the zoning and site availability for any permanent facilities and to account for each of the local permitting requirements could potentially be misconstrued by localities to imply that a transmission project sponsor must obtain local permits. It contends that this is counter to the plain language of FPA section 216 that preempts State and local law, including zoning requirements. It requests that the Commission clarify that the Final Rule preempts State and local permitting requirements. American Transmission requests that the Commission clarify the need for zoning requirement information. 214. While the Commission may, where appropriate, require applicants comply with State and local permitting, we note, any State or local permits issued with respect to jurisdictional facilities must be consistent with the conditions of the Commission's permit. The Commission encourages cooperation between the applicants and local authorities. However, this does not mean that State and local agencies, through application of State or local laws, may prohibit or unreasonably delay the construction of facilities approved by the Commission. 38 38 *See, e.g., Schneidewind* v. *ANR Pipeline Co.* , 485 U.S. 293 (1988); *National Fuel Gas Supply* v. *Public Service Comm'n* , 894 F.2d 571 (2d Cir. 1990). 215. Communities state that while the Commission may assert jurisdiction over the siting of transmission facilities, it cannot ignore the role the States must still play in the siting process. They argue that the Commission is attempting to limit State authority to only State agencies that provide authorization under Federal law. They contend that this is inconsistent with the requirements of FPA section 216(h)(3) which requires that the NEPA review process be coordinated with State agencies conducting separate permitting and environmental reviews. 216. FPA section 216(h), which is entitled “Coordination of Federal Authorizations for Transmission Facilities”, directs the Commission, under its delegated authority, to “coordinate the Federal authorization and review process under this subsection with * * * State agencies”. Section 216(h)(3) specifically involves only Federal authorizations. Under FPA section 216(h)(4), however, the Commission can coordinate with “State agencies that are willing to coordinate their own separate permitting and environmental reviews with the Federal authorizations and environmental reviews.” 217. As stated, under § 50.5(c)(3), in the initial pre-filing filing requirements the applicant is required to list all local entities with local authorization requirements. Section 50.5(c)(3) also requires that the applicant explain how it intends to account for the local permits in the environmental review process and when it intends to file for such permits. Once the pre-filing process commences, under § 50.5(e)(6), the applicant is required to submit a schedule detailing when it intends to submit the applications with the local agency. Further, under § 50.5(e)(8), the applicant is required to submit status reports updating its progress in obtaining those permits. 218. Commission staff will work with the applicant and the local agencies throughout the pre-filing and application process to get the information required for all applicable Federal and State permit processes needed to site the proposed facilities. However, as discussed above, a State or local agency cannot prevent the construction of the facility through its permitting process, which is preempted by Federal law in instances where our jurisdiction is triggered under FPA section 216. For example, it would be inconsistent with the text, purpose and intent of FPA section 216 to allow a State permitting agency to halt the construction of a facility that has been permitted by the Commission for the very reason that the State agency withheld approval of the project for more than one year. To hold otherwise would essentially render FPA section 216 a nullity. L. Subsequent Modifications to Facilities 219. Several commenters request clarification on how a permittee may make minor improvements to the facilities authorized by the Commission after they are constructed. EEI requests that the permit include provisions that allow a permittee to make minor improvements after facilities are constructed. Allegheny states that the Commission should clarify the process for making modifications to existing facilities to specify that an applicant is not required to first seek State approval. Allegheny further requests that when such a modification is proposed, the Commission's review be limited to the proposed modifications, whether the existing facility was sited by the Commission or State siting authority. National Grid contends that a transmission siting permit is valid in perpetuity. It argues that otherwise, an applicant would have no incentive for investment. It also requests that the Commission develop criteria to determine whether project modification requires notice to the Commission or a revision to the permit. 220. As stated, once the facilities are constructed, the Commission's jurisdiction under FPA section 216 ends. All modifications to existing transmission facilities will be subject to the provisions of FPA section 216 at the time the facilities are proposed. Specifically, the facilities will have to be located in a then-designated National Corridor and will have to qualify for the Commission's jurisdiction under FPA section 216(b)(1). M. Definitions 221. Section 50.1 lists the terms the Commission determined needed to be specifically defined in the regulations. Allegheny requests that the Commission define the terms “project” and “transmission facility” to clarify that they only pertain to the portions of transmission facilities that a transmission owner is unable to successfully site through a State process. Southern contends that the Commission should consider defining “project” to embody the triggering requirements in FPA section 216(b). The only projects that the Commission will be issuing permits to are those that will fall under FPA section 216(b). Thus, no further explanation of those terms is necessary. 222. National Grid requests that the Commission define “Electric transmission facilities” to include those facilities, including various listed equipment and materials, used for the transmission of electric energy in interstate commerce for the sale of electric energy at wholesale. Transmission facilities that will be subject to a Commission permit will include all the facilities necessary to provide service on the facilities approved by the Commission. Further definition of facilities in the regulations is unnecessary. 223. Section 50.1 defines transmitting utility as an entity that owns, operates, or controls facilities used for the transmission of electric energy in interstate commerce for the sale of electric energy at wholesale. Massachusetts Energy Board states that the Commission should consider defining the terms “transmission” and “wholesale” in the definition of transmitting utility or reference the existing CFR definitions. Section 50.1 defines a transmitting utility consistent with the definition in FPA section 3(23). The Commission does not believe any further definition is necessary. 224. Southern requests that the Commission define the term “applicant” and clarify that the permitting process will only be available to transmission utilities, unless exceptional circumstances are shown. The Commission does not believe that it was Congress' intent in enacting EPAct 2005 to limit the construction of electric transmission facilities in national interest transmission corridors to any specific entity. The Commission will accept any viable project proposed by any prospective transmission company. N. Eminent Domain Issues 225. Under § 50.4(c)(2)(i)(E), the applicant must include a brief summary of what rights the affected landowner has at the Commission and in proceedings under the eminent domain rules of the relevant State. Reinhardts request that the pre-filing notifications include a statement that the applicant will have the ability to use the power of eminent domain to get the land for the facility and the basis for that authority. Southern states that the Commission should not require an applicant to summarize the State eminent domain rules because the applicant would be legally liable for the accuracy of this information. 226. The Commission believes that the applicant should provide landowners with some basic information concerning what is involved in the eminent domain process. The general public is probably not greatly informed on these matters and may need to invest significant time and money just to get a basic understanding. We do not believe that providing this information would put the applicant at risk for unnecessary litigation, especially if the applicant prefaces its explanation with a disclaimer statement. It can also refer the landowner to a State agency or the State Attorney General for further information concerning the laws of their State, if appropriate. Additionally, we will require that the applicant explain that it has the right to acquire the property by eminent domain under FPA section 216(e). 227. Communities suggest that if State law limits eminent domain authority, the Federal court likewise is constrained. Southern states that the Commission should make clear how, and to what extent, the United States District Courts are to employ State practices and procedures as part of an eminent domain proceeding commenced in a Federal forum. Section 216(e)(3) of the FPA states: The practice and procedures of any action or proceeding conducted under this subsection in the district court of the United States shall conform as nearly as practicable to the practice and procedures in a similar action or proceeding in the courts of the State in which the property is located. Thus, it is for the court to decide what procedures are appropriate for their individual proceedings. O. Filing Fees/Funding 228. Affiliated states that if Tribes are impacted by any project, a filing fee should be required by the Commission to fund reasonable tribal responses and requirements under these regulations. Washington Council contends that the Commission should require the applicants fund reasonable State participation in FERC siting proceedings. Parks Association request that the applicant fund third-party contractors for the research that other agencies will need to do for the resource reports. The Commission does not require that applicants fund any participation in Commission proceedings and will not do so here. P. Technical Conferences 229. APPA, NARUC, and CA Resources request that the Commission hold a technical conference prior to issuing the Final Rule to discuss various issues raised in the NOPR. Specifically, APPA requests that the Commission hold a technical conference to help define diverse State and Federal processes and the regulator's legal authorities. NARUC contends that the Commission should hold a technical conference to give the State commissions an opportunity to address key matters related to the implementation of this rule. CA Resources Agency requests that the Commission hold a technical conference or establish an informal workshop to develop solutions to the issue of the concurrent jurisdiction and with regard to potential changes to the Commission's CEII regulations. 230. The Commission believes that the comments filed in response to the NOPR are sufficient for the Commission to issue a Final Rule without further proceedings. By acting promptly, the Commission is assured that it will have its procedures required under FPA section 216(c) in place when DOE designates National Corridors. III. Information Collection Statement 231. The Commission is submitting the following collection of information contained in this proposed rulemaking to the Office of Management and Budget
(OMB)for review under section 3507(d) of the Paperwork Reduction Act of 1995. 39 The Commission will identify the information provided for under the proposed Part 50 as FERC-729. 39 44 U.S.C. 3507(d). 232. The number of applicants for electric transmission permits in national interest electric transmission corridors is unknown. Proposed transmission projects would have to, among other things, significantly reduce electric transmission congestion in a national interest electric transmission corridor. These corridors are yet to be defined by the Secretary. Also, Federal permitting of electric transmission facilities used in interstate commerce will occur only if, or when, States do not or cannot act on an application, or have conditioned a project in such a manner that the proposed construction or modification will not significantly reduce congestion in interstate commerce or is not economically feasible. Any estimates of the number of anticipated electric transmission construction permit applications are extremely variable, ranging from two to 20 per year. 233. The Commission solicited comments on the Commission's need for the information required by the proposed regulations, whether the information will have practical utility, the accuracy of the provided burden estimates, ways to enhance the quality and clarity of the information that the Commission will collect, and any suggested methods for minimizing the respondent's burden, including the use of information techniques. The burden estimates for complying with this proposed rule are as follows: Data collection Number of respondents Number of responses Hours per response Total annual hours FERC-729 10 1 9,600 96,000 The Commission did not receive any specific comments concerning its burden estimates. Where commenters raised concerning specific information collection requirement would be burdensome to implement, the Commission has addressed elsewhere in the rule. Information Collection Costs: Because of the regional differences and the various staffing levels that will be involved in preparing the documentation (legal, technical and support) the Commission is using an hourly rate of $150 to estimate the costs for filing and other administrative processes (reviewing instructions, searching data sources, completing and transmitting the collection of information). The estimated annual cost is anticipated to be $14.4 million. The Commission sought comments on these estimates and did not receive any. Therefore, it will use these estimates in the Final Rule. *Title:* FERC-729 Electric Transmission Facilities. *Action:* Proposed Data Collections. *OMB Control No.:* To be determined. Upon approval of a collection of information, OMB will assign an OMB control number and an expiration date. Respondents subject to the filing requirements of this rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number or the Commission has provided justification as to why the control number should not be displayed. *Respondents:* Businesses or other for profit, State, local, or Tribal government. Necessity of the Information: The information collected from applicants will be used by the Commission to review the suitability of the proposal for a permit to construct the proposed electric transmission facilities. 234. Interested persons may obtain information on the reporting requirements by contacting the following: Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426 [Attention: Michael Miller, Office of the Executive Director, Phone:
(202)502-8415, fax:
(202)273-0873, e-mail: michael.miller@ferc.gov] 235. For submitting comments concerning the collection(s) of information and the associated burden estimate(s), 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, fax:
(202)395-7285, e-mail: *oira_submission@omb.eop.gov.* As the OMB control number has not been assigned to this information collection, please use the docket number for reference in your comments. IV. Environmental Analysis 236. The Commission is required to prepare an EA or an EIS for any action that may have a significant adverse effect on the human environment. 40 No environmental consideration is raised by the promulgation of a rule that is procedural in nature or does not substantially change the effect of legislation or regulations being amended. The proposed regulations implement the procedural filing requirements for applications to construct electric transmission facilities. Accordingly, neither an EIS nor EA is required. 40 *Order No. 486, Regulations Implementing the National Environmental Policy Act* , 52 FR 47897 (Dec. 17, 1987), FERC Stats. Regs. Preambles 1986-1990 ¶30,783 (1987). V. Regulatory Flexibility Act 237. The Regulatory Flexibility Act of 1980
(RFA)41 generally requires a description and analysis of final rules that will have significant economic impact on a substantial number of small entities. The Commission expects entities seeking approval for interstate transmission siting will be major transmission utilities capable of financing complex and costly transmission projects. The Commission anticipates that the high cost of construction of transmission facilities will bar the entry into this field by small entities as defined by the RFA. Therefore, the Commission concludes that this proposed rule would not have a significant economic impact on a substantial number of small entities. 41 5 U.S.C. 601-612. VI. Document Availability 238. 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 FERC's Home Page ( *http://www.ferc.gov* ) and in FERC'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. 239. From FERC's Home Page on the Internet, this information is available on 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 the docket number excluding the last three digits of this document in the docket number field. 240. User assistance is available for eLibrary and the FERC's website during normal business hours from our 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.reference room@ferc.gov* . VII. Effective Date and Congressional Notification 241. These regulations are effective January 30, 2007. The Commission has determined, with the concurrence of the Administrator of the Office of Information and Regulatory Affairs of OMB, that this rule is not a “major rule” as defined in section 351 of the Small Business Regulatory Enforcement Fairness Act of 1996. The Commission will submit the Final Rule to both houses of Congress and to General Accounting Office List of Subjects 18 CFR Part 50 Administrative practice and procedure, Electric power, Reporting and recordkeeping requirements. 18 CFR Part 380 Environmental impact statements, Reporting and recordkeeping requirements. By the Commission. Commissioner Kelly dissenting in part with a separate statement attached. Magalie R. Salas, Secretary. In consideration of the foregoing, the Commission adds Part 50 and amends Part 380, Chapter I, Title 18, *Code of Federal Regulations* , as follows: 1. Part 50 is added to Subchapter B to read as follows: PART 50—APPLICATIONS FOR PERMITS TO SITE INTERSTATE ELECTRIC TRANSMISSION FACILITIES Sec. 50.1 Definitions. 50.2 Purpose and intent of rules. 50.3 Applications/pre-filing; rules and format. 50.4 Stakeholder participation. 50.5 Pre-filing procedures. 50.6 Applications: general content. 50.7 Applications: exhibits. 50.8 Acceptance/rejection of applications. 50.9 Notice of application. 50.10 Interventions. 50.11 General conditions applicable to permits. Authority: 16 U.S.C. 824p, DOE Delegation Order No. 00-004.00A. § 50.1 Definitions. As used in this part: *Affected landowners* include owners of property interests, as noted in the most recent county/city tax records as receiving the tax notice, whose property:
(1)Is directly affected ( *i.e.* , crossed or used) by the proposed activity, including all facility sites, rights-of-way, access roads, staging areas, and temporary workspace; or
(2)Abuts either side of an existing right-of-way or facility site owned in fee by any utility company, or abuts the edge of a proposed facility site or right-of-way which runs along a property line in the area in which the facilities would be constructed, or contains a residence within 50 feet of a proposed construction work area. *Director* means the Director of the Office of Energy Projects or his designees. *Federal authorization* means permits, special use authorization, certifications, opinions, or other approvals that may be required under Federal law in order to site a transmission facility. *National interest electric transmission corridor* means any geographic area experiencing electric energy transmission capacity constraints or congestion that adversely affects consumers, as designated by the Secretary of Energy. *Permitting entity* means any Federal or State agency, Indian tribe, multistate, or local agency that is responsible for issuing separate authorizations pursuant to Federal law that are required to construct electric transmission facilities in a national interest electric transmission corridor. *Stakeholder* means any Federal, State, interstate, Tribal, or local agency, any affected non-governmental organization, affected landowner, or interested person. *Transmitting utility* means an entity that owns, operates, or controls facilities used for the transmission of electric energy in interstate commerce for the sale of electric energy at wholesale. § 50.2 Purpose and intent of rules.
(a)The purpose of the regulations in this part is to provide for efficient and timely review of requests for permits for the siting of electric transmission facilities under section 216 of the Federal Power Act. The regulations ensure that each stakeholder is afforded an opportunity to present views and recommendations with respect to the need for and impact of a facility covered by the permit. They also coordinate, to the maximum extent practicable, the Federal authorization and review processes of other Federal and State agencies, Indian tribes, multistate, and local entities that are responsible for conducting any separate permitting and environmental reviews of the proposed facilities.
(b)Every applicant shall file all pertinent data and information necessary for a full and complete understanding of the proposed project.
(c)Every requirement of this part will be considered as an obligation of the applicant which can only be avoided by a definite and positive showing that the information or data called for by the applicable rules is not necessary for the consideration and ultimate determination of the application.
(d)The burden of assuring that all applications and information submitted under this part is in an intelligible form and any omission of data is justified rests with the applicant. § 50.3 Applications/pre-filing; rules and format.
(a)Filings are subject to the formal paper and electronic filing requirements for proceedings before the Commission as provided in part 385 of this chapter.
(b)Applications, amendments, and all exhibits and other submissions required to be furnished by an applicant to the Commission under this part must be submitted in an original and 7 conformed copies.
(c)When an application considered alone is incomplete and depends vitally upon information in another application, it will not be accepted for filing until the supporting application has been filed. When applications are interdependent, they must be filed concurrently.
(d)All filings must be signed in compliance with § 385.2005 of this chapter.
(e)The Commission will conduct a paper hearing on applications for permits for electric transmission facilities.
(f)Permitting entities will be subject to the filing requirements of this section and the prompt and binding intermediate milestones and ultimate deadlines established in the notice issued under § 50.9.
(g)Any person submitting documents containing critical energy infrastructure information must follow the procedures specified in § 388.113 of this chapter. § 50.4 Stakeholder participation. A Project Participation Plan is required to ensure stakeholders have access to accurate and timely information on the proposed project and permit application process.
(a)*Project Participation Plan.* An applicant must develop a Project Participation Plan and file it with the pre-filing materials under § 50.5(c)(7) that:
(1)Identifies specific tools and actions to facilitate stakeholder communications and public information, including an up-to-date project Web site and a readily accessible, single point of contact within the company;
(2)Lists all central locations in each county throughout the project area where the applicant will provide copies of all their filings related to the proposed project; and
(3)Includes a description and schedule explaining how the applicant intends to respond to requests for information from the public as well as Federal, State, and Tribal permitting agencies, and other legal entities with local authorization requirements.
(b)*Document Availability* .
(1)Within three business days of the date the pre-filing materials are filed or application is issued a docket number, an applicant must ensure that:
(i)Complete copies of the pre-filing or application materials are available in accessible central locations in each county throughout the project area, either in paper or electronic format; and
(ii)Complete copies of all filed materials are available on the project Web site.
(2)An applicant is not required to serve voluminous or difficult to reproduce material, such as copies of certain environmental information, on all parties, as long as such material is publicly available in an accessible central location in each county throughout the project area and on the applicant's project website.
(c)*Project notification.*
(1)The applicant must make a good faith effort to notify: all affected landowners; landowners with a residence within a quarter mile from the edge of the construction right-of-way of the proposed project; towns and communities; permitting agencies; other local, State, Tribal, and Federal governments and agencies involved in the project; electric utilities and transmission owners and operators that are or may be connected to the application's proposed transmission facilities; and any known individuals that have expressed an interest in the State permitting proceeding. Notification must be made:
(i)By certified or first class mail, sent:
(A)Within 14 days after the Director notifies the applicant of the commencement of the pre-filing process under § 50.5(d);
(B)Within 3 business days after the Commission notices the application under § 50.9; and
(ii)By twice publishing a notice of the pre-filing request and application filings, in a daily, weekly, and/or tribal newspaper of general circulation in each county in which the project is located, no later than 14 days after the date that a docket number is assigned for the pre-filing process or to the application.
(2)*Contents of participation notice*
(i)The pre-filing request notification must, at a minimum, include:
(A)The docket number assigned to the proceeding;
(B)The most recent edition of the Commission's pamphlet *Electric Transmission Facilities Permit Process* . The newspaper notice need only refer to the pamphlet and indicate that it is available on the Commission's website;
(C)A description of the applicant and a description of the proposed project, its location (including a general location map), its purpose, and the timing of the project;
(D)A general description of the property the applicant will need from an affected landowner if the project is approved, how to contact the applicant, including a local or toll-free phone number, the name of a specific person to contact who is knowledgeable about the project, and a reference to the project website. The newspaper notice need not include a description of the property, but should indicate that a separate notice is being mailed to affected landowners and governmental entities;
(E)A brief summary of what rights the affected landowner has at the Commission and in proceedings under the eminent domain rules of the relevant State. The newspaper notice does not need to include this summary;
(F)Information on how to get a copy of the pre-filing information from the company and the location(s) where copies of the pre-filing information may be found as specified in paragraph
(b)of this section;
(G)A copy of the Director's notification of commencement of the pre-filing process, the Commission's Internet address, and the telephone number for the Commission's Office of External Affairs; and
(H)Information explaining the pre-filing and application process and when and how to intervene in the application proceedings.
(ii)The application notification must include the Commission's notice issued under § 50.9.
(3)If, for any reason, a stakeholder has not yet been identified when the notices under this paragraph are sent or published, the applicant must supply the information required under paragraphs (c)(2)(i) and
(ii)of this section when the stakeholder is identified.
(4)If the notification is returned as undeliverable, the applicant must make a reasonable attempt to find the correct address and notify the stakeholder.
(5)Access to critical energy infrastructure information is subject to the requirements of § 388.113 of this chapter. § 50.5 Pre-filing procedures.
(a)*Introduction.* Any applicant seeking a permit to site new electric transmission facilities or modify existing facilities must comply with the following pre-filing procedures prior to filing an application for Commission review.
(b)*Initial consultation.* An applicant must meet and consult with the Director concerning the proposed project.
(1)At the initial consultation meeting, the applicant must be prepared to discuss the nature of the project, the contents of the pre-filing request, and the status of the applicant's progress toward obtaining the information required for the pre-filing request described in paragraph
(c)of this section.
(2)The initial consultation meeting will also include a discussion of whether a third-party contractor is likely to be needed to prepare the environmental documentation for the project and the specifications for the applicant's solicitation for prospective third-party contractors.
(3)The applicant also must discuss how its proposed project will be subject to the Commission's jurisdiction under section 216(b)(1) of the Federal Power Act. If the application is seeking Commission jurisdiction under section 216(b)(1)(C) of the Federal Power Act, the applicant must be prepared to discuss when it filed its application with the State and the status of that application.
(c)*Contents of the initial filing.* An applicant's pre-filing request will be filed after the initial consultation and must include the following information:
(1)A description of the schedule desired for the project, including the expected application filing date, desired date for Commission approval, and proposed project operation date, as well as the status of any State siting proceedings.
(2)A detailed description of the project, including location maps and plot plans to scale showing all major components, including a description of zoning and site availability for any permanent facilities.
(3)A list of the permitting entities responsible for conducting separate Federal permitting and environmental reviews and authorizations for the project, including contact names and telephone numbers, and a list of local entities with local authorization requirements. The filing must include information concerning:
(i)How the applicant intends to account for each of the relevant entity's permitting and environmental review schedules, including its progress in DOE's pre-application process; and
(ii)When the applicant proposes to file with these permitting and local entities for the respective permits or other authorizations.
(4)A list of all affected landowners and other stakeholders (include contact names and telephone numbers) that have been contacted, or have contacted the applicant, about the project.
(5)A description of what other work already has been done, including, contacting stakeholders, agency and Indian tribe consultations, project engineering, route planning, environmental and engineering contractor engagement, environmental surveys/studies, open houses, and any work done or actions taken in conjunction with a State proceeding. This description also must include the identification of the environmental and engineering firms and sub-contractors under contract to develop the project.
(6)Proposals for at least three prospective third-party contractors from which Commission staff may make a selection to assist in the preparation of the requisite NEPA document, if the Director determined a third-party contractor would be necessary in the Initial Consultation meeting.
(7)A proposed Project Participation Plan, as set forth in § 50.4(a).
(d)*Director's notice.*
(1)When the Director finds that an applicant seeking authority to site and construct an electric transmission facility has adequately addressed the requirements of paragraphs (a), (b), and
(c)of this section, and any other requirements determined at the Initial Consultation meeting, the Director will so notify the applicant.
(i)The notification will designate the third-party contractor, and
(ii)The pre-filing process will be deemed to have commenced on the date of the Director's notification.
(2)If the Director determines that the contents of the initial pre-filing request are insufficient, the applicant will be notified and given a reasonable time to correct the deficiencies.
(e)*Subsequent filing requirements.* Upon the Director's issuance of a notice commencing an applicant's pre-filing process, the applicant must:
(1)Within 7 days, finalize and file the Project Participation Plan, as defined in § 50.4(a), and establish the dates and locations at which the applicant will conduct meetings with stakeholders and Commission staff.
(2)Within 14 days, finalize the contract with the selected third-party contractor, if applicable.
(3)Within 14 days:
(i)Provide all identified stakeholders with a copy of the Director's notification commencing the pre-filing process;
(ii)Notify affected landowners in compliance with the requirements of § 50.4(c); and
(iii)Notify permitting entities and request information detailing any specific information not required by the Commission in the resource reports required under § 380.16 of this chapter that the permitting entities may require to reach a decision concerning the proposed project. The responses of the permitting entities must be filed with the Commission, as well as being provided to the applicant.
(4)Within 30 days, submit a mailing list of all stakeholders contacted under paragraph (e)(3) of this section, including the names of the Federal, State, Tribal, and local jurisdictions' representatives. The list must include information concerning affected landowner notifications that were returned as undeliverable.
(5)Within 30 days, file a summary of the project alternatives considered or under consideration.
(6)Within 30 days, file an updated list of all Federal, State, Tribal, and local agencies permits and authorizations that are necessary to construct the proposed facilities. The list must include:
(i)A schedule detailing when the applications for the permits and authorizations will be submitted (or were submitted);
(ii)Copies of all filed applications; and
(iii)The status of all pending permit or authorization requests and of the Secretary of Energy's pre-application process being conducted under section 216(h)(4)(C) of the Federal Power Act.
(7)Within 60 days, file the draft resource reports required in § 380.16 of this chapter.
(8)On a monthly basis, file status reports detailing the applicant's project activities including surveys, stakeholder communications, and agency and tribe meetings, including updates on the status of other required permits or authorizations. If the applicant fails to respond to any request for additional information, fails to provide sufficient information, or is not making sufficient progress towards completing the pre-filing process, the Director may issue a notice terminating the process.
(f)*Concluding the pre-filing process.* The Director will determine when the information gathered during the pre-filing process is complete, after which the applicant may file an application. An application must contain all the information specified by the Commission staff during the pre-filing process, including the environmental material required in part 380 of this chapter and the exhibits required in § 50.7. § 50.6 Applications: general content. Each application filed under this part must provide the following information:
(a)The exact legal name of applicant; its principal place of business; whether the applicant is an individual, partnership, corporation, or otherwise; the State laws under which the applicant is organized or authorized; and the name, title, and mailing address of the person or persons to whom communications concerning the application are to be addressed.
(b)A concise description of applicant's existing operations.
(c)A concise general description of the proposed project sufficient to explain its scope and purpose. The description must, at a minimum: Describe the proposed geographic location of the principal project features and the planned routing of the transmission line; contain the general characteristics of the transmission line including voltage, types of towers, origin and termination points of the transmission line, and the geographic character of area traversed by the line; and be accompanied by an overview map of sufficient scale to show the entire transmission route on one or a few 8.5 by 11-inch sheets.
(d)Verification that the proposed route lies within a national interest electric transmission corridor designated by the Secretary of the Department of Energy under section 216 of the Federal Power Act.
(e)Evidence that:
(1)A State in which the transmission facilities are to be constructed or modified does not have the authority to approve the siting of the facilities or consider the interstate benefits expected to be achieved by the proposed construction or modification of transmission facilities in the State;
(2)The applicant is a transmitting utility but does not qualify to apply for a permit or siting approval of the proposed project in a State because the applicant does not serve end-use customers in the State; or
(3)A State commission or other entity that has the authority to approve the siting of the facilities has:
(i)Withheld approval for more than one year after the filing of an application seeking approval under applicable law or one year after the designation of the relevant national interest electric transmission corridor, whichever is later; or
(ii)Conditioned its approval in such a manner that the proposed construction or modification will not significantly reduce transmission congestion in interstate commerce or is not economically feasible.
(f)A demonstration that the facilities to be authorized by the permit will be used for the transmission of electric energy in interstate commerce, and that the proposed construction or modification:
(1)Is consistent with the public interest;
(2)Will significantly reduce transmission congestion in interstate commerce and protects or benefits consumers;
(3)Is consistent with sound national energy policy and will enhance energy interdependence; and
(4)Will maximize, to the extent reasonable and economical, the transmission capabilities of existing towers or structures.
(g)A description of the proposed construction and operation of the facilities, including the proposed dates for the beginning and completion of construction and the commencement of service.
(h)A general description of project financing.
(i)A full statement as to whether any other application to supplement or effectuate the applicant's proposals must be or is to be filed by the applicant, any of the applicant's customers, or any other person, with any other Federal, State, Tribal, or other regulatory body; and if so, the nature and status of each such application.
(j)A table of contents that must list all exhibits and documents filed in compliance with this part, as well as all other documents and exhibits otherwise filed, identifying them by their appropriate titles and alphabetical letter designations. The alphabetical letter designations specified in § 50.7 must be strictly adhered to and extra exhibits submitted at the volition of applicant must be designated in sequence under the letter Z (Z1, Z2, Z3, etc.).
(k)A form of notice suitable for publication in the **Federal Register** , as provided by § 50.9(a), which will briefly summarize the facts contained in the application in such a way as to acquaint the public with its scope and purpose. The form of notice also must include the name, address, and telephone number of an authorized contact person. § 50.7 Applications: exhibits. Each exhibit must contain a title page showing the applicant's name, title of the exhibit, the proper letter designation of the exhibit, and, if 10 or more pages, a table of contents, citing by page, section number or subdivision, the component elements or matters contained in the exhibit.
(a)*Exhibit A—Articles of incorporation and bylaws.* If the applicant is not an individual, a conformed copy of its articles of incorporation and bylaws, or other similar documents.
(b)*Exhibit B—State authorization.* For each State where the applicant is authorized to do business, a statement showing the date of authorization, the scope of the business the applicant is authorized to carry on and all limitations, if any, including expiration dates and renewal obligations. A conformed copy of applicant's authorization to do business in each State affected must be supplied upon request.
(c)*Exhibit C—Company officials.* A list of the names and business addresses of the applicant's officers and directors, or similar officials if the applicant is not a corporation.
(d)*Exhibit D—Other pending applications and filings.* A list of other applications and filings submitted by the applicant that are pending before the Commission at the time of the filing of an application and that directly and significantly affect the proposed project, including an explanation of any material effect the grant or denial of those other applications and filings will have on the application and of any material effect the grant or denial of the application will have on those other applications and filings.
(e)*Exhibit E—Maps of general location of facilities.* The general location map required under § 50.5(c) must be provided as Exhibit E. Detailed maps required by other exhibits must be filed in those exhibits, in a format determined during the pre-filing process in § 50.5.
(f)*Exhibit F—Environmental report.* An environmental report as specified in §§ 380.3 and 380.16 of this chapter. The applicant must submit all appropriate revisions to Exhibit F whenever route or site changes are filed. These revisions must identify the locations by mile post and describe all other specific differences resulting from the route or site changes, and should not simply provide revised totals for the resources affected. The format of the environmental report filing will be determined during the pre-filing process required under § 50.5.
(g)*Exhibit G—Engineering data.*
(1)A detailed project description including:
(i)Name and destination of the project;
(ii)Design voltage rating (kV);
(iii)Operating voltage rating (kV);
(iv)Normal peak operating current rating;
(v)Line design features for minimizing television and/or radio interference cause by operation of the proposed facilities; and
(vi)Line design features that minimize audible noise during fog/rain caused by operation of the proposed facilities, including comparing expected audible noise levels to the applicable Federal, State, and local requirements.
(2)A conductor, structures, and substations description including:
(i)Conductor size and type;
(ii)Type of structures;
(iii)Height of typical structures;
(iv)An explanation why these structures were selected;
(v)Dimensional drawings of the typical structures to be used in the project; and
(vi)A list of the names of all new (and existing if applicable) substations or switching stations that will be associated with the proposed new transmission line.
(3)The location of the site and right-of-way including:
(i)Miles of right-of-way;
(ii)Miles of circuit;
(iii)Width of the right-of-way;
(iv)A brief description of the area traversed by the proposed transmission line, including a description of the general land uses in the area and the type of terrain crossed by the proposed line;
(4)Assumptions, bases, formulae, and methods used in the development and preparation of the diagrams and accompanying data, and a technical description providing the following information:
(i)Number of circuits, with identification as to whether the circuit is overhead or underground;
(ii)The operating voltage and frequency; and
(iii)Conductor size, type and number of conductors per phase.
(5)If the proposed interconnection is an overhead line, the following additional information also must be provided:
(i)The wind and ice loading design parameters;
(ii)A full description and drawing of a typical supporting structure including strength specifications;
(iii)Structure spacing with typical ruling and maximum spans;
(iv)Conductor (phase) spacing; and
(v)The designed line-to-ground and conductor-side clearances.
(6)If an underground or underwater interconnection is proposed, the following additional information also must be provided:
(i)Burial depth;
(ii)Type of cable and a description of any required supporting equipment, such as insulation medium pressurizing or forced cooling;
(iii)Cathodic protection scheme; and
(iv)Type of dielectric fluid and safeguards used to limit potential spills in waterways.
(7)Technical diagrams that provide clarification of any of the above items should be included.
(8)Any other data or information not previously identified that has been identified as a minimum requirement for the siting of a transmission line in the State in which the facility will be located.
(h)*Exhibit H—System analysis data.* An analysis evaluating the impact the proposed facilities will have on the existing electric transmission system performance, including:
(1)An analysis of the existing and expected congestion on the electric transmission system.
(2)Power flow cases used to analyze the proposed and future transmission system under anticipated load growth, operating conditions, variations in power import and export levels, and additional transmission facilities required for system reliability. The cases must:
(i)Provide all files to model normal, single contingency, multiple contingency, and special protective systems, including the special protective systems' automatic switching or load shedding system; and
(ii)State the assumptions, criteria, and guidelines upon which they are based and take into consideration transmission facility loading; first contingency incremental transfer capability (FCITC); normal incremental transfer capability (NITC); system protection; and system stability.
(3)A stability analysis including study assumptions, criteria, and guidelines used in the analysis, including load shedding allowables.
(4)A short circuit analysis for all power flow cases.
(5)A concise analysis to include:
(i)An explanation of how the proposed project will improve system reliability over the long and short term;
(ii)An analysis of how the proposed project will impact long term regional transmission expansion plans;
(iii)An analysis of how the proposed project will impact congestion on the applicant's entire system; and
(iv)A description of proposed high technology design features.
(6)Detailed single-line diagrams, including existing system facilities identified by name and circuit number, that show system transmission elements, in relation to the project and other principal interconnected system elements, as well as power flow and loss data that represent system operating conditions.
(i)*Exhibit I—Project Cost and Financing.*
(1)A statement of estimated costs of any new construction or modification.
(2)The estimated capital cost and estimated annual operations and maintenance expense of each proposed environmental measure.
(3)A statement and evaluation of the consequences of denial of the transmission line permit application.
(j)*Exhibit J—Construction, operation, and management.* A concise statement providing arrangements for supervision, management, engineering, accounting, legal, or other similar service to be rendered in connection with the construction or operation of the project, if not to be performed by employees of the applicant, including reference to any existing or contemplated agreements, together with a statement showing any affiliation between the applicant and any parties to the agreements or arrangements. § 50.8 Acceptance/rejection of applications.
(a)Applications will be docketed when received and the applicant so advised.
(b)If an application patently fails to comply with applicable statutory requirements or with applicable Commission rules, regulations, and orders for which a waiver has not been granted, the Director may reject the application as provided by § 385.2001(b) of this chapter. This rejection is without prejudice to an applicant's refiling a complete application. However, an application will not be rejected solely on the basis that the environmental reports are incomplete because the company has not been granted access by affected landowners to perform required surveys.
(c)An application that relates to a proposed project or modification for which a prior application has been filed and rejected, will be docketed as a new application. § 50.9 Notice of application.
(a)Notice of each application filed, except when rejected in accordance with § 50.8, will be issued and subsequently published in the **Federal Register** .
(b)The notice will establish prompt and binding intermediate milestones and ultimate deadlines for the coordination, and review of, and action on Federal authorization decisions relating to, the proposed facilities. § 50.10 Interventions. Notices of applications, as provided by § 50.9, will fix the time within which any person desiring to participate in the proceeding may file a petition to intervene, and within which any interested regulatory agency, as provided by § 385.214 of this chapter, desiring to intervene may file its notice of intervention. § 50.11 General conditions applicable to permits.
(a)The following terms and conditions, among others as the Commission will find are required by the public interest, will attach to the issuance of each permit and to the exercise of the rights granted under the permit.
(b)The permit will be void and without force or effect unless accepted in writing by the permittee within 30 days from the date of the order issuing the permit. *Provided that* , when an applicant files for rehearing of the order in accordance with FPA section 313(a), the acceptance must be filed within 30 days from the issue date of the order of the Commission upon the application for rehearing or within 30 days from the date on which the application may be deemed to have been denied when the Commission has not acted on such application within 30 days after it has been filed. *Provided further* , that when a petition for review is filed in accordance with the provisions of FPA section 313(b), the acceptance shall be filed within 30 days after final disposition of the judicial review proceedings thus initiated.
(c)*Standards of construction and operation.* In determining standard practice, the Commission will be guided by the provisions of the American National Standards Institute, Incorporated, the National Electrical Safety Code, and any other codes and standards that are generally accepted by the industry, except as modified by this Commission or by municipal regulators within their jurisdiction. Each electric utility will construct, install, operate, and maintain its plant, structures, equipment, and lines in accordance with these standards, and in a manner to best accommodate the public, and to prevent interference with service furnished by other public or non-public utilities insofar as practical.
(d)Written authorization must be obtained from the Director prior to commencing construction of the facilities or initiating operations. Requests for these authorizations must demonstrate compliance with all terms and conditions of the construction permit.
(e)Any authorized construction or modification must be completed and made available for service by the permitee within a period of time to be specified by the Commission in each order issuing the transmission line construction permit. If facilities are not completed within the specified timeframe, the permittee must file for an extension of time under § 385.2008 of this chapter.
(f)A permittee must file with the Commission, in writing and under oath, an original and four conformed copies, as provided in § 385.2011 of this chapter, of the following:
(1)Within ten days after the bona fide beginning of construction, notice of the date of the beginning; and
(2)Within ten days after authorized facilities have been constructed and placed in service, notice of the date of the completion of construction and commencement of service.
(g)The permit issued to the applicant may be transferred, subject to the approval of the Commission, to a person who agrees to comply with the terms, limitations or conditions contained in the filing and in every subsequent Order issued thereunder. A permit holder seeking to transfer a permit must file with the Secretary a petition for approval of the transfer. The petition must:
(1)State the reasons supporting the transfer;
(2)Show that the transferee is qualified to carry out the provisions of the permit and any Orders issued under the permit;
(3)Be verified by all parties to the proposed transfer;
(4)Be accompanied by a copy of the proposed transfer agreement;
(5)Be accompanied by an affidavit of service of a copy on the parties to the permit proceeding; and
(6)Be accompanied by an affidavit of publication of a notice concerning the petition and service of such notice on all affected landowners that have executed agreements to convey property rights to the transferee and all other persons, municipalities or agencies entitled by law to be given notice of, or be served with a copy of, any application to construct a major electric generation facility. PART 380—REGULATIONS IMPLEMENTING THE NATIONAL ENVIRONMENTAL POLICY ACT 2. The authority citation for part 380 continues to read as follows: Authority: 42 U.S.C. 4321-4370a, 7101-7352; E.O. 12009, 3 CFR 1978. Comp., p. 142. 3. Section 380.3 is amended by republishing paragraphs
(a)introductory text and
(b)introductory text, and by adding a new paragraph (c)(3) to read as follows: § 380.3 Environmental information to be supplied by an applicant.
(a)An applicant must submit information as follows:
(b)An applicant must also:
(c)* * *
(3)*Electric transmission project.* For pre-filing requests and applications filed under section 216 of the Federal Power Act identified in §§ 380.5(b)(14) and 380.6(a)(5). 4. Section 380.5 is amended by revising paragraphs (b)(11), (b)(12), and (b)(13), and by adding a new paragraph (b)(14) to read as follows: § 380.5 Actions that require an environmental assessment.
(b)* * *
(11)Approval of electric interconnections and wheeling under section 202(b), 210, 211, and 212 of the Federal Power Act, unless excluded under § 380.4(a)(17);
(12)Regulations or proposals for legislation not included under § 380.4(a)(2);
(13)Surrender of water power licenses and exemptions where project works exist or ground disturbing activity has occurred and amendments to water power licenses and exemptions that require ground disturbing activity or changes to project works or operations; and
(14)Except as identified in § 380.6, authorization to site new electric transmission facilities under section 216 of the Federal Power Act and DOE Delegation Order No. 00-004.00A. 5. Section 380.6 is amended by revising paragraphs (a)(3) and (a)(4) and by adding a new paragraph (a)(5) to read as follows: § 380.6 Actions that require an environmental impact statement.
(a)* * *
(3)Major pipeline construction projects under section 7 of the Natural Gas Act using right-of-way in which there is no existing natural gas pipeline;
(4)Licenses under Part I of the Federal Power Act and part 4 of this chapter for construction of any unconstructed water power projects; and
(5)Major electric transmission facilities under section 216 of the Federal Power Act and DOE Delegation Order No. 00-004.00A using right-of-way in which there is no existing facility. 6. Section 380.8 is revised to read as follows: § 380.8 Preparation of environmental documents. The preparation of environmental documents, as defined in § 1508.10 of the regulations of the Council on Environmental Quality (40 CFR 1508.10), on hydroelectric projects, natural gas facilities, and electric transmission facilities in national interest electric transmission corridors is the responsibility of the Commission's Office of Energy Projects, 888 First Street NE., Washington, DC 20426,
(202)219-8700. Persons interested in status reports or information on environmental impact statements or other elements of the NEPA process, including the studies or other information the Commission may require on these projects, can contact this office. 7. Section 380.10 is amended by adding paragraph (a)(2)(iii) to read as follows: § 380.10 Participation in Commission proceeding.
(a)* * *
(2)* * *
(iii)Commission pre-filing activities commenced under §§ 157.21 and 50.5 of this chapter, respectively, are not considered proceedings under part 385 of this chapter and are not open to motions to intervene. Once an application is filed under part 157 subpart A or part 50 of this chapter, any person may file a motion to intervene in accordance with §§ 157.10 or 50.10 of this chapter or in accordance with this section. 8. Section 380.15 is amended by revising paragraph (c), the heading in paragraph (d), and paragraph (f)(5) to read as follows: § 380.15 Siting and maintenance requirements.
(c)*Safety regulations.* The requirements of this paragraph do not affect a project sponsor's obligations to comply with safety regulations of the U.S. Department of Transportation and recognized safe engineering practices for Natural Gas Act projects and the National Electric Safety Code for section 216 Federal Power Act projects.
(d)*Pipeline and electric transmission facilities construction.* * * *
(f)* * *
(5)For Natural Gas Act projects, the site of above-ground facilities which are visible from nearby residences or public areas, should be planted in trees and shrubs, or other appropriate landscaping and should be installed to enhance the appearance of the facilities, consistent with operating needs. 9. A new § 380.16 is added to read as follows: § 380.16 Environmental reports for section 216 Federal Power Act Permits.
(a)*Introduction.*
(1)The applicant must submit an environmental report with any application that proposes the construction or modification of any facility identified in § 380.3(c)(3). The environmental report must include the 11 resource reports and related material described in this section.
(2)The detail of each resource report must be commensurate with the complexity of the proposal and its potential for environmental impact. Each topic in each resource report must be addressed or its omission justified, unless the data is not required for that type of proposal. If material required for one resource report is provided in another resource report or in another exhibit, it may be cross referenced. If any resource report topic is required for a particular project but is not provided at the time the application is filed, the environmental report must explain why it is missing and when the applicant anticipates it will be filed.
(b)*General requirements.* As appropriate, each resource report must:
(1)Address conditions or resources that are likely to be directly or indirectly affected by the project;
(2)Identify significant environmental effects expected to occur as a result of the project;
(3)Identify the effects of construction, operation (including maintenance and malfunctions), as well as cumulative effects resulting from existing or reasonably foreseeable projects;
(4)Identify measures proposed to enhance the environment or to avoid, mitigate, or compensate for adverse effects of the project; and
(5)Provide a list of publications, reports, and other literature or communications, including agency contacts, that were cited or relied upon to prepare each report. This list must include the names and titles of the persons contacted, their affiliations, and telephone numbers.
(6)Whenever this section refers to “mileposts” the applicant may substitute “survey centerline stationing” if so preferred. However, whatever method is chosen must be used consistently throughout the resource reports.
(c)*Resource Report 1—General project description.* This report must describe facilities associated with the project, special construction and operation procedures, construction timetables, future plans for related construction, compliance with regulations and codes, and permits that must be obtained. Resource Report 1 must:
(1)Describe and provide location maps of all project facilities, include all facilities associated with the project (such as transmission line towers, substations, and any appurtenant facilities), to be constructed, modified, replaced, or removed, including related construction and operational support activities and areas such as maintenance bases, staging areas, communications towers, power lines, and new access roads (roads to be built or modified). As relevant, the report must describe the length and size of the proposed transmission line conductor cables, the types of appurtenant facilities that would be constructed, and associated land requirements.
(2)Provide the following maps and photos:
(i)Current, original United States Geological Survey
(USGS)7.5-minute series topographic maps or maps of equivalent detail, covering at least a 0.5-mile-wide corridor centered on the electric transmission facility centerline, with integer mileposts identified, showing the location of rights-of-way, new access roads, other linear construction areas, substations, and construction materials storage areas. Nonlinear construction areas must be shown on maps at a scale of 1:3,600 or larger keyed graphically and by milepost to the right-of-way maps. In areas where the facilities described in paragraph (j)(6) of this section are located, topographic map coverage must be expanded to depict those facilities.
(ii)Original aerial images or photographs or photo-based alignment sheets based on these sources, not more than one year old (unless older ones accurately depict current land use and development) and with a scale of 1:6,000, or larger, showing the proposed transmission line route and location of transmission line towers, substations and appurtenant facilities, covering at least a 0.5 mile-wide corridor, and including mileposts. The aerial images or photographs or photo-based alignment sheets must show all existing transmission facilities located in the area of the proposed facilities and the location of habitable structures, radio transmitters and other electronic installations, and airstrips. Older images/photographs/alignment sheets must be modified to show any residences not depicted in the original. In areas where the facilities described in paragraph (j)(6) of this section are located, aerial photographic coverage must be expanded to depict those facilities. Alternative formats ( *e.g.* , blue-line prints of acceptable resolution) need prior approval by the environmental staff of the Office of Energy Projects.
(iii)In addition to the copies required under § 50.3(b) of this chapter, the applicant must send three additional copies of topographic maps and aerial images/photographs directly to the environmental staff of the Commission's Office of Energy Projects.
(3)Describe and identify by milepost, proposed construction and restoration methods to be used in areas of rugged topography, residential areas, active croplands and sites where explosives are likely to be used.
(4)Identify the number of construction spreads, average workforce requirements for each construction spread and estimated duration of construction from initial clearing to final restoration, and any identified constraints to the timing of construction.
(5)Describe reasonably foreseeable plans for future expansion of facilities, including additional land requirements and the compatibility of those plans with the current proposal.
(6)Describe all authorizations required to complete the proposed action and the status of applications for such authorizations. Identify environmental mitigation requirements specified in any permit or proposed in any permit application to the extent not specified elsewhere in this section.
(7)Provide the names and mailing addresses of all affected landowners identified in § 50.5(c)(4) of this chapter and certify that all affected landowners will be notified as required in § 50.4(c) of this chapter.
(d)*Resource Report 2—Water use and quality.* This report must describe water quality and provide data sufficient to determine the expected impact of the project and the effectiveness of mitigative, enhancement, or protective measures. Resource Report 2 must:
(1)Identify and describe by milepost waterbodies and municipal water supply or watershed areas, specially designated surface water protection areas and sensitive waterbodies, and wetlands that would be crossed. For each waterbody crossing, identify the approximate width, State water quality classifications, any known potential pollutants present in the water or sediments, and any potable water intake sources within three miles downstream.
(2)Provide a description of site-specific construction techniques that will be used at each major waterbody crossing.
(3)Describe typical staging area requirements at waterbody and wetland crossings. Also, identify and describe waterbodies and wetlands where staging areas are likely to be more extensive.
(4)Include National Wetland Inventory
(NWI)maps. If NWI maps are not available, provide the appropriate State wetland maps. Identify for each crossing, the milepost, the wetland classification specified by the U.S. Fish and Wildlife Service, and the length of the crossing. Include two copies of the NWI maps (or the substitutes, if NWI maps are not available) clearly showing the proposed route and mileposts. Describe by milepost, wetland crossings as determined by field delineations using the current Federal methodology.
(5)Identify aquifers within excavation depth in the project area, including the depth of the aquifer, current and projected use, water quality, and known or suspected contamination problems.
(6)Discuss proposed mitigation measures to reduce the potential for adverse impacts to surface water, wetlands, or groundwater quality. Discuss the potential for blasting to affect water wells, springs, and wetlands, and measures to be taken to detect and remedy such effects.
(7)Identify the location of known public and private groundwater supply wells or springs within 150 feet of proposed construction areas. Identify locations of EPA or State-designated, sole-source aquifers and wellhead protection areas crossed by the proposed transmission line facilities.
(e)*Resource Report 3—Fish, wildlife, and vegetation.* This report must describe aquatic life, wildlife, and vegetation in the vicinity of the proposed project; expected impacts on these resources including potential effects on biodiversity; and proposed mitigation, enhancement, or protection measures. Resource Report 3 must:
(1)Describe commercial and recreational warmwater, coldwater, and saltwater fisheries in the affected area and associated significant habitats such as spawning or rearing areas and estuaries.
(2)Describe terrestrial habitats, including wetlands, typical wildlife habitats, and rare, unique, or otherwise significant habitats that might be affected by the proposed action. Describe typical species that have commercial, recreational, or aesthetic value.
(3)Describe and provide the affected acreage of vegetation cover types that would be affected, including unique ecosystems or communities such as remnant prairie or old-growth forest, or significant individual plants, such as old-growth specimen trees.
(4)Describe the impact of construction and operation on aquatic and terrestrial species and their habitats, including the possibility of a major alteration to ecosystems or biodiversity, and any potential impact on State-listed endangered or threatened species. Describe the impact of maintenance, clearing and treatment of the project area on fish, wildlife, and vegetation. Surveys may be required to determine specific areas of significant habitats or communities of species of special concern to State, Tribal, or local agencies.
(5)Identify all Federally-listed or proposed threatened or endangered species and critical habitat that potentially occur in the vicinity of the project. Discuss the results of the consultation requirements listed in § 380.13(b) through § 380.13(b)(5)(i) and include any written correspondence that resulted from the consultation. The initial application must include the results of any required surveys unless seasonal considerations make this impractical. If species surveys are impractical, there must be field surveys to determine the presence of suitable habitat unless the entire project area is suitable habitat.
(6)Identify all Federally-listed essential fish habitat
(EFH)that potentially occurs in the vicinity of the project. Provide information on all EFH, as identified by the pertinent Federal fishery management plans, that may be adversely affected by the project and the results of abbreviated consultations with NMFS, and any resulting EFH assessments.
(7)Describe site-specific mitigation measures to minimize impacts on fisheries, wildlife, and vegetation.
(8)Include copies of correspondence not provided under paragraph (e)(5) of this section, containing recommendations from appropriate Federal and State fish and wildlife agencies to avoid or limit impact on wildlife, fisheries, and vegetation, and the applicant's response to the recommendations.
(f)*Resource Report 4—Cultural resources.* In order to prepare this report, the applicant must follow the principles in § 380.14.
(1)Resource Report 4 must contain:
(i)Documentation of the applicant's initial cultural resources consultations, including consultations with Native Americans and other interested persons (if appropriate);
(ii)Overview and Survey Reports, as appropriate;
(iii)Evaluation Report, as appropriate;
(iv)Treatment Plan, as appropriate; and
(v)Written comments from State Historic Preservation Officer(s) (SHPO), Tribal Historic Preservation Officers (THPO), as appropriate, and applicable land-managing agencies on the reports in paragraphs (f)(1)(i) through
(iv)of this section.
(2)The initial application or pre-filing documents, as applicable, must include the documentation of initial cultural resource consultation(s), the Overview and Survey Reports, if required, and written comments from SHPOs, THPOs, and land-managing agencies, if available. The initial cultural resources consultations should establish the need for surveys. If surveys are deemed necessary by the consultation with the SHPO/THPO, the survey reports must be filed with the initial application or pre-filing documents.
(i)If the comments of the SHPOs, THPOs, or land-management agencies are not available at the time the application is filed, they may be filed separately, but they must be filed before a permit is issued.
(ii)If landowners deny access to private property and certain areas are not surveyed, the unsurveyed area must be identified by mileposts, and supplemental surveys or evaluations must be conducted after access is granted. In those circumstances, reports, and treatment plans, if necessary, for those inaccessible lands may be filed after a permit is issued.
(3)The Evaluation Report and Treatment Plan, if required, for the entire project must be filed before a permit is issued.
(i)In preparing the Treatment Plan, the applicant must consult with the Commission staff, the SHPO, and any applicable THPO and land-management agencies.
(ii)Authorization to implement the Treatment Plan will occur only after the permit is issued.
(4)Applicant must request privileged treatment for all material filed with the Commission containing location, character, and ownership information about cultural resources in accordance with § 388.112 of this chapter. The cover and relevant pages or portions of the report should be clearly labeled in bold lettering: “CONTAINS PRIVILEGED INFORMATION—DO NOT RELEASE.”
(5)Except as specified in a final Commission order, or by the Director of the Office of Energy Projects, construction may not begin until all cultural resource reports and plans have been approved.
(g)*Resource Report 5—Socioeconomics.* This report must identify and quantify the impacts of constructing and operating the proposed project on factors affecting towns and counties in the vicinity of the project. Resource Report 5 must:
(1)Describe the socioeconomic impact area.
(2)Evaluate the impact of any substantial immigration of people on governmental facilities and services and plans to reduce the impact on the local infrastructure.
(3)Describe on-site manpower requirements and payroll during construction and operation, including the number of construction personnel who currently reside within the impact area, will commute daily to the site from outside the impact area, or will relocate temporarily within the impact area.
(4)Determine whether existing housing within the impact area is sufficient to meet the needs of the additional population.
(5)Describe the number and types of residences and businesses that will be displaced by the project, procedures to be used to acquire these properties, and types and amounts of relocation assistance payments.
(6)Conduct a fiscal impact analysis evaluating incremental local government expenditures in relation to incremental local government revenues that will result from construction of the project. Incremental expenditures include, but are not limited to, school operating costs, road maintenance and repair, public safety, and public utility costs.
(h)*Resource Report 6—Geological resources.* This report must describe geological resources and hazards in the project area that might be directly or indirectly affected by the proposed action or that could place the proposed facilities at risk, the potential effects of those hazards on the facility, and methods proposed to reduce the effects or risks. Resource Report 6 must:
(1)Describe, by milepost, mineral resources that are currently or potentially exploitable.
(2)Describe, by milepost, existing and potential geological hazards and areas of nonroutine geotechnical concern, such as high seismicity areas, active faults, and areas susceptible to soil liquefaction; planned, active, and abandoned mines; karst terrain; and areas of potential ground failure, such as subsidence, slumping, and landsliding. Discuss the hazards posed to the facility from each one.
(3)Describe how the project will be located or designed to avoid or minimize adverse effects to the resources or risk to itself, including geotechnical investigations and monitoring that would be conducted before, during, and after construction. Discuss also the potential for blasting to affect structures, and the measures to be taken to remedy such effects.
(4)Specify methods to be used to prevent project-induced contamination from surface mines or from mine tailings along the right-of-way and whether the project would hinder mine reclamation or expansion efforts.
(i)*Resource Report 7—Soils.* This report must describe the soils that will be affected by the proposed project, the effect on those soils, and measures proposed to minimize or avoid impact. Resource Report 7 must:
(1)List, by milepost, the soil associations that would be crossed and describe the erosion potential, fertility, and drainage characteristics of each association.
(2)Identify, by milepost, potential impact from: Soil erosion due to water, wind, or loss of vegetation; soil compaction and damage to soil structure resulting from movement of construction vehicles; wet soils and soils with poor drainage that are especially prone to structural damage; damage to drainage tile systems due to movement of construction vehicles and trenching activities; and interference with the operation of agricultural equipment due to the possibility of large stones or blasted rock occurring on or near the surface as a result of construction.
(3)Identify, by milepost, cropland, and residential areas where loss of soil fertility due to construction activity can occur. Indicate which are classified as prime or unique farmland by the U.S. Department of Agriculture, Natural Resources Conservation Service.
(j)*Resource Report 8—Land use, recreation, and aesthetics.* This report must describe the existing uses of land on, and (where specified) within 0.25 mile of, the edge of the proposed transmission line right-of-way and changes to those land uses that will occur if the project is approved. The report must discuss proposed mitigation measures, including protection and enhancement of existing land use. Resource Report 8 must:
(1)Describe the width and acreage requirements of all construction and permanent rights-of-way required for project construction, operation and maintenance.
(i)List, by milepost, locations where the proposed right-of-way would be adjacent to existing rights-of-way of any kind.
(ii)Identify, preferably by diagrams, existing rights-of-way that will be used for a portion of the construction or operational right-of-way, the overlap and how much additional width will be required.
(iii)Identify the total amount of land to be purchased or leased for each project facility, the amount of land that would be disturbed for construction, operation, and maintenance of the facility, and the use of the remaining land not required for project operation and maintenance, if any.
(iv)Identify the size of typical staging areas and expanded work areas, such as those at railroad, road, and waterbody crossings, and the size and location of all construction materials storage yards and access roads.
(2)Identify, by milepost, the existing use of lands crossed by the proposed transmission facility, or on or adjacent to each proposed project facility.
(3)Describe planned development on land crossed or within 0.25 mile of proposed facilities, the time frame (if available) for such development, and proposed coordination to minimize impacts on land use. Planned development means development which is included in a master plan or is on file with the local planning board or the county.
(4)Identify, by milepost and length of crossing, the area of direct effect of each proposed facility and operational site on sugar maple stands, orchards and nurseries, landfills, operating mines, hazardous waste sites, wild and scenic rivers, designated trails, nature preserves, game management areas, remnant prairie, old-growth forest, national or State forests, parks, golf courses, designated natural, recreational or scenic areas, or registered natural landmarks, Native American religious sites and traditional cultural properties to the extent they are known to the public at large, and reservations, lands identified under the Special Area Management Plan of the Office of Coastal Zone Management, National Oceanic and Atmospheric Administration, and lands owned or controlled by Federal or State agencies or private preservation groups. Also identify if any of those areas are located within 0.25 mile of any proposed facility.
(5)*Tribal resources* . Describe Indian tribes, tribal lands, and interests that may be affected by the project.
(i)Identify Indian tribes that may attach religious and cultural significance to historic properties within the project right-of-way or in the project vicinity, as well as available information on Indian traditional cultural and religious properties, whether on or off of any Federally-recognized Indian reservation.
(ii)Information made available under this section must delete specific site or property locations, the disclosure of which will create a risk of harm, theft, or destruction of archaeological or Native American cultural resources or to the site at which the resources are located, or which would violate any Federal law, including the Archaeological Resources Protection Act of 1979, 16 U.S.C. 470w-3, and the National Historic Preservation Act of 1966, 16 U.S.C. 470hh.
(6)Identify, by milepost, all residences and buildings within 200 feet of the edge of the proposed transmission line construction right-of-way and the distance of the residence or building from the edge of the right-of-way. Provide survey drawings or alignment sheets to illustrate the location of the transmission facilities in relation to the buildings.
(i)*Buildings:* List all single-family and multi-family dwellings and related structures, mobile homes, apartment buildings, commercial structures, industrial structures, business structures, churches, hospitals, nursing homes, schools, or other structures normally inhabited by humans or intended to be inhabited by humans on a daily or regular basis within a 0.5-mile-wide corridor centered on the proposed transmission line alignment. Provide a general description of each habitable structure and its distance from the centerline of the proposed project. In cities, towns, or rural subdivisions, houses can be identified in groups. Provide the number of habitable structures in each group and list the distance from the centerline to the closest habitable structure in the group.
(ii)*Electronic installations:* List all commercial AM radio Transmitters located within 10,000 feet of the centerline of the proposed project and all FM radio transmitters, microwave relay stations, or other similar electronic installations located within 2,000 feet of the centerline of the proposed project. Provide a general description of each installation and its distance from the centerline of the projects. Locate all installations on a routing map.
(iii)*Airstrips:* List all known private airstrips within 10,000 feet of the centerline of the project. List all airports registered with the Federal Aviation Administration
(FAA)with at least one runway more than 3,200 feet in length that are located within 20,000 feet of the centerline of the proposed project. Indicate whether any transmission structures will exceed a 100:1 horizontal slope (one foot in height for each 100 feet in distance) from the closest point of the closest runway. List all airports registered with the FAA having no runway more than 3,200 feet in length that are located within 10,000 feet of the centerline of the proposed project. Indicate whether any transmission structures will exceed a 50:1 horizontal slope from the closest point of the closest runway. List all heliports located within 5,000 feet of the centerline of the proposed project. Indicate whether any transmission structures will exceed a 25:1 horizontal slope from the closest point of the closest landing and takeoff area of the heliport. Provide a general description of each private airstrip, registered airport, and registered heliport, and state the distance of each from the centerline of the proposed transmission line. Locate all airstrips, airports, and heliports on a routing map.
(7)Describe any areas crossed by or within 0.25 mile of the proposed transmission project facilities which are included in, or are designated for study for inclusion in: The National Wild and Scenic Rivers System (16 U.S.C. 1271); The National Trails System (16 U.S.C. 1241); or a wilderness area designated under the Wilderness Act (16 U.S.C. 1132).
(8)For facilities within a designated coastal zone management area, provide a consistency determination or evidence that the applicant has requested a consistency determination from the State's coastal zone management program.
(9)Describe the impact the project will have on present uses of the affected areas as identified above, including commercial uses, mineral resources, recreational areas, public health and safety, and the aesthetic value of the land and its features. Describe any temporary or permanent restrictions on land use resulting from the project.
(10)Describe mitigation measures intended for all special use areas identified under this section.
(11)Describe the visual characteristics of the lands and waters affected by the project. Components of this description include a description of how the transmission line project facilities will impact the visual character of project right-of-way and surrounding vicinity, and measures proposed to lessen these impacts. Applicants are encouraged to supplement the text description with visual aids.
(12)Demonstrate that applications for rights-of-way or other proposed land use have been or soon will be filed with Federal land-management agencies with jurisdiction over land that would be affected by the project.
(k)*Resource Report 9—Alternatives.* This report must describe alternatives to the project and compare the environmental impacts of such alternatives to those of the proposal. It must discuss technological and procedural constraints, costs, and benefits of each alternative. The potential for each alternative to meet project purposes and the environmental consequences of each alternative must be discussed. Resource Report 9 must:
(1)Discuss the “no action” alternative and other alternatives given serious consideration to achieve the proposed objectives.
(2)Provide an analysis of the relative environmental benefits and impacts of each such alternative, including but not limited to:
(i)For alternatives considered in the initial screening for the project but eliminated, describe the environmental characteristics of each alternative, and the reasons for rejecting it. Where applicable, identify the location of such alternatives on maps of sufficient scale to depict their location and relationship to the proposed action, and the relationship of the transmission facilities to existing rights-of-way; and
(ii)For alternatives that were given more in-depth consideration, describe the environmental characteristics of each alternative and the reasons for rejecting it. Provide comparative tables showing the differences in environmental characteristics for the alternative and proposed action. The location, where applicable, of any alternatives in this paragraph shall be provided on maps equivalent to those required in paragraph (c)(2) of this section.
(l)*Resource Report 10—Reliability and Safety.* This report must address the potential hazard to the public from facility components resulting from accidents or natural catastrophes, how these events will affect reliability, and what procedures and design features have been used to reduce potential hazards. Resource Report 10 must:
(1)Describe measures proposed to protect the public from failure of the proposed facilities (including coordination with local agencies).
(2)Discuss hazards, the environmental impact, and service interruptions which could reasonably ensue from failure of the proposed facilities.
(3)Discuss design and operational measures to avoid or reduce risk.
(4)Discuss contingency plans for maintaining service or reducing downtime.
(5)Describe measures used to exclude the public from hazardous areas. Discuss measures used to minimize problems arising from malfunctions and accidents (with estimates of probability of occurrence) and identify standard procedures for protecting services and public safety during maintenance and breakdowns.
(6)Provide a description of the electromagnetic fields to be generated by the proposed transmission lines, including their strength and extent. Provide a depiction of the expected field compared to distance horizontally along the right-of-way under the conductors, and perpendicular to the centerline of the right-of-way laterally.
(7)Discuss the potential for acoustic and electrical noise from electric and magnetic fields, including shadowing and reradiation, as they may affect health or communication systems along the transmission right-of-way. Indicate the noise level generated by the line in both dB and dBA scales and compare this to any known noise ordinances for the zoning districts through which the transmission line will pass.
(8)Discuss the potential for induced or conducted currents along the transmission right-of-way from electric and magnetic fields.
(m)*Resource Report 11—Design and Engineering.* This report consists of general design and engineering drawings of the principal project facilities described under Resource Report 1—General project description. If the version of this report submitted with the application is preliminary in nature, applicant must state that in the application. The drawings must conform to the specifications determined in the initial consultation meeting required by § 50.5(b) of this chapter.
(1)The drawings must show all major project structures in sufficient detail to provide a full understanding of the project including:
(i)Plans (overhead view);
(ii)Elevations (front view);
(iii)Profiles (side view); and
(iv)Sections.
(2)The applicant may submit preliminary design drawings with the pre-filing documents or application. The final design drawings may be submitted during the construction permit process or after the Commission issues a permit and must show the precise plans and specifications for proposed structures. If a permit is granted on the basis of preliminary designs, the applicant must submit final design drawings for written approval by the Director of the Office of Energy Project's prior to commencement of any construction of the project.
(3)*Supporting design report.* The applicant must submit, at a minimum, the following supporting information to demonstrate that existing and proposed structures are safe and adequate to fulfill their stated functions and must submit such information in a separate report at the time the application is filed:
(i)An assessment of the suitability of the transmission line towers and appurtenant structures locations based on geological and subsurface investigations, including investigations of soils and rock borings and tests for the evaluation of all foundations and construction materials sufficient to determine the location and type of transmission line tower or appurtenant structures suitable for the site;
(ii)Copies of boring logs, geology reports, and laboratory test reports;
(iii)An identification of all borrow areas and quarry sites and an estimate of required quantities of suitable construction material;
(iv)Stability and stress analyses for all major transmission structures and conductors under all probable loading conditions, including seismic, wind, and ice loading, as appropriate, in sufficient detail to permit independent staff evaluation.
(4)The applicant must submit two copies of the supporting design report described in paragraph (m)(3) of this section at the time preliminary and final design drawings are filed. If the report contains preliminary drawings, it must be designated a “Preliminary Supporting Design Report.” Note: The following Appendix will not be published in the Code of Federal Regulations. Appendix—List of Commenters Affiliated Tribes of Northwest Indians Allegheny Power American Electric Power Service Corp. American Public Power Association American Transmission Co. California Public Utilities Commission California Resources Agency Center for Biological Diversity Communities Against Regional Interconnect Confederate Tribes of the Warm Springs Reservation of Oregon Edison Electric Institute Imperial Irrigation District Iowa Utilities Board Kentucky Public Service Commission Lackawaxen River Conservancy Los Angeles Department of Water and Power Massachusetts Energy and Facilities Siting Board National Association of Regulatory Utility Commissioners National Electric Manufacturers Association National Grid USA National Parks Conservation Association National Rural Electric Cooperative Association New Jersey Board of Public Utilities New York Department of Public Service New York Independent System Operator New York State Senator Wright Northern Wasco Peoples Utility District Old Dominion Electric Cooperative Pacific Gas and Electric Co. Pennsylvania Public Utilities Commission PEPCO Holdings, Potomac Electric Power Co., Delmarva Power & Light Co., and Atlantic City Electric Co. PPL Electric Utilities Corp. Progress Energy PSEG Companies Public Service Commission of Wisconsin Reinhardt, Laura and John San Diego Gas & Electric Sayward, Mazur Seattle City Light Southern California Edison Co. Southern Company Services Star Group The Wilderness Society U.S. Department of the Interior Virginia Electric and Power Co. Virginia Farm Bureau Federation Washington Energy Facility Site Evaluation Council Western Governor's Association Western Interstate Energy Board and Committee on Regional Electric Power Cooperation White Mountain Apache Tribe Wyoming Infrastructure Authority KELLY, Commissioner, *dissenting in part:* Section 216(b)(1)(c)(i) of the Federal Power Act provides that the Commission may issue a permit for the construction of an electric transmission line if the State having the authority to site the line has
(i)withheld approval for more than 1 year after the filing of an application seeking approval pursuant to applicable law or 1 year after the designation of the relevant national interest electric corridor, whichever is later. The majority finds that this language also means that the Commission can issue a permit for the construction of an electric transmission line if the State has *denied* the permit application. I believe the majority's interpretation flies in the face of the plain language of the statute, the purposes of the statute, well-established principles of statutory interpretation and supporting case law, and inappropriately preempts the States in the process. When interpreting a statute, there is an understanding that Congress says what it means and means what it says therefore, the court will first determine whether the language at issue has a plain and unambiguous meaning. 42 To that end, words will be interpreted as taking their ordinary, contemporary, common meaning. 43 42 *Hartford Underwriters Ins. Co.* v. *Union Planters Bank, N.A.,* 120 S.Ct. 1942, 1947 (2000). 43 *Perrin* v. *United States,* 444 U.S. 37, 42 (1979). The word “withhold” is variously defined as “to refrain from giving, granting, or permitting” (American Heritage Dictionary), “to hold back . . . keep from action—to desist or refrain from granting, giving, or allowing” (Webster's Dictionary), and “to omit to disclose upon request; as, to withhold information” (Black's Law Dictionary). In my view, it defies common sense to insert the concept of “reject” or “deny” into this universally acknowledged definition. Moreover statutory provisions must be read in context. 44 The language at issue here is not, as the majority asserts, “withheld approval.” Rather, it is “withheld approval for more than 1 year after the filing of an application.” When “withheld approval” is read in its appropriate context, it simply cannot mean “deny,” because otherwise the provision must be read to mean that the Commission would have jurisdiction when a state has “denied approval for more than 1 year after the filing of an application.” This reading is nonsensical; yet to read it as the majority does would render the phrase “for more than one year” superfluous. As noted in *Cooper Industries, Inc. Aviall Services—* the very opinion the majority cites for the notion that it must give every word in a statute some operative effect—any reading that would render part of a statute entirely superfluous is something a court should be “loath to do.” 45 44 *Bailey* v. *United States,* 516 U.S. 137, 145 (1995). 45 Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157 (2004). States have always had exclusive, plenary jurisdiction over transmission siting. 46 In 2005, Congress passed EPAct, which, for the first time, carefully carves out a limited role for the federal government in the area of transmission siting. EPAct amended the FPA to give the Commission the authority to site electric transmission facilities in five specific situations. 47 The majority's interpretation of Section 216(b)(1)(C)(i) would add a sixth situation: The Commission would have jurisdiction to approve the siting of a transmission line pursuant to federal law where the State has lawfully denied an application pursuant to state law. 46 FPA section 201(a) confers to the Commission jurisdiction over the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce, and notes that such regulation extends “only to those matters which are not subject to regulation by the States.” See also *New York* v. *FERC,* 535 U.S. 1, 24
(2002)(“FERC has recognized that the States retain significant control over local matters”), citing Order No. 888 at 31,782 & n. 543, FERC Stats. & Regs., Regs. Preamble, Jan. 1991-June 1996, ¶ 31,036, 31,632, 61 Fed. Reg. 21540
(1996)(“Among other things, Congress left to the States authority to regulate generation and transmission siting”). 47 See Section 216(b)(1) subsections (A)(i), (A)(ii), B, (C)(i), (C)(ii). The authority to lawfully deny a permit is critically important to the States for ensuring that the interests of local communities and their citizens are protected. What the Commission does today is a significant inroad into traditional state transmission siting authority. It gives states two options: Either issue a permit, or we'll do it for them. Obviously this is no choice. This is preemption. Courts “have long presumed that Congress does not cavalierly pre-empt” state law. 48 Indeed, courts should not find federal pre-emption “in the absence of persuasive reasons—either that the nature of the regulated subject matter permits no other conclusion, or that the Congress has unmistakably so ordained.” 49 In short, courts must start with the “basic assumption that Congress did not intend to displace state law.” 50 48 *Meditronic, Inc.* v. *Lohr* , 518 U.S. 470, 485 (1996). 49 *Fla. Lime & Avocado Growers, Inc.* v. *Paul,* 373 U.S. 132, 142 (1963); *See also Gregory* v. *Ashcroft* , 501 U.S. 452
(1991)(for a court to find federal pre-emption, it must be “unmistakably clear” that Congress intended to do so). 50 *Building & Construction Trades Council* v. *Associated Builders,* 507 U.S. 218 (1993). There is no evidence to counter this “presumption against pre-emption.” To the contrary, I find it inconceivable that Congress would have specifically listed in section 216(b)(1) a number of circumstances that will trigger Commission jurisdiction, yet fail to include on that list denial of a permit. If Congress had intended to take away the States' authority to lawfully deny a permit, surely it would have said so in unmistakable terms. Like me, I suspect that many will be surprised by the majority's interpretation. The Commission received 51 letters commenting on the proposed rule, including many that delved into minute details of the rule. Yet, no one opined, let alone argued, that the Commission has jurisdiction if a State denies a permit. Indeed, there is evidence beyond the plain meaning of the statute that Congress did not intend to give the Commission the authority to override a State's denial of a permit application. In Section 216(b)(1)(A)(ii), Congress told the States that they cannot retain jurisdiction to site transmission facilities unless they have the authority to “consider the interstate benefits expected to be achieved by the proposed construction or modification of transmission facilities in the State.” It makes little sense that Congress would have said, on the one hand, the State has the authority to review a permit application if it takes these factors into account, but on the other hand, it doesn't really matter if the State takes these factors into account because if the State doesn't approve the permit, it loses jurisdiction to the Commission. I realize that the majority is concerned that the goal of Section 216 to encourage the construction of transmission facilities may be frustrated if our backstop authority does not extend to denials of permits. However, I believe that States, as well as applicants, will act in good faith in processing requests for permits. Moreover, as noted above, Congress included the requirement that States must have the authority to consider the interstate benefits of applicants' proposals. Accordingly, States will be required to look beyond their borders in considering whether to approve or deny permit applications. If a State does not adequately take these benefits into account and denies the permit application, then applicants will have a remedy in court. For these reasons, I respectfully dissent. _______________ Suedeen G. Kelly [FR Doc. E6-20001 Filed 11-30-06; 8:45 am] BILLING CODE 6717-01-P DEPARTMENT OF HOMELAND SECURITY Bureau of Customs and Border Protection DEPARTMENT OF THE TREASURY 19 CFR PART 12 [CBP Dec. 06-26] RIN 1505-AB74 Extension of Import Restrictions Imposed on Archaeological and Ethnological Material From Bolivia AGENCIES: Customs and Border Protection; Department of Homeland Security; Department of the Treasury. ACTION: Final rule. SUMMARY: This document amends Title 19 of the Code of Federal Regulations (19 CFR) to reflect the extension of the import restrictions on certain archaeological and ethnological material from Bolivia that were imposed by Treasury Decision (T.D.) 01-86. The Assistant Secretary for Educational and Cultural Affairs, United States Department of State, has determined that conditions continue to warrant the imposition of import restrictions. Accordingly, the restrictions will remain in effect for an additional 5 years, and Title 19 of the CFR is being amended to reflect this extension until December 4, 2011. These restrictions are being extended pursuant to determinations of the United States Department of State made under the terms of the Convention on Cultural Property Implementation Act in accordance with the United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. T.D. 01-86 contains the Designated List of archaeological and ethnological material from Bolivia. DATES: *Effective Date:* December 4, 2006. FOR FURTHER INFORMATION CONTACT: For legal aspects, George F. McCray, Esq., Chief, Intellectual Property Rights and Restricted Merchandise Branch,
(202)572-8710. For operational aspects, Michael Craig, Chief, Other Government Agencies Branch,
(202)344-1684. SUPPLEMENTARY INFORMATION: Background Pursuant to the provisions of the 1970 United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention, codified into U.S. law as the Convention on Cultural Property Implementation Act (Pub. L. 97-446, 19 U.S.C. 2601 *et seq.* ), the United States entered into a bilateral agreement with Bolivia on December 4, 2001, concerning the imposition of import restrictions on certain archaeological and ethnological material from Bolivia. The archaeological material subject to the bilateral agreement represent the pre-Columbian cultures of Bolivia and range in date from approximately 10,000 B.C. to A.D. 1532. The ethnological materials subject to the bilateral agreement are from the Colonial and Republican periods and range in date from A.D. 1533 to 1900. On December 7, 2001, the United States Customs Service published T.D. 01-86 in the **Federal Register** (66 FR 63490), which amended 19 CFR 12.104g(a) to reflect the imposition of these restrictions and included a list designating the types of articles covered by the restrictions. Import restrictions listed in 19 CFR 12.104g(a) are “effective for no more than five years beginning on the date on which the agreement enters into force with respect to the United States. This period can be extended for additional periods not to exceed five years if it is determined that the factors which justified the initial agreement still pertain and no cause for suspension of the agreement exists” (19 CFR 12.104g(a)). After reviewing the findings and recommendations of the Cultural Property Advisory Committee, the Assistant Secretary for Educational and Cultural Affairs, United States Department of State, concluding that the cultural heritage of Bolivia continues to be in jeopardy from pillage of certain archaeological and ethnological materials, made the necessary determination to extend the import restrictions for an additional five years on October 17, 2006. Accordingly, CBP is amending 19 CFR 12.104g(a) to reflect the extension of the import restrictions. The Designated List of Archaeological and Ethnological Material from Bolivia covered by these import restrictions is set forth in T.D. 01-86. The Designated List and accompanying image database may also be found at the following Internet Web site address: *http://exchanges.state.gov/culprop/blfact.html.* The restrictions on the importation of these archaeological and ethnological materials from Bolivia are to continue in effect for an additional 5 years. Importation of such material continues to be restricted unless the conditions set forth in 19 U.S.C. 2606 and 19 CFR 12.104c are met. Inapplicability of Notice and Delayed Effective Date This amendment involves a foreign affairs function of the United States and is, therefore, being made without notice or public procedure (5 U.S.C. 553(a)(1)). In addition, CBP has determined that such notice or public procedure would be impracticable and contrary to the public interest because the action being taken is essential to avoid interruption of the application of the existing import restrictions (5 U.S.C. 553(b)(B)). For the same reasons, pursuant to 5 U.S.C. 553(d)(3), a delayed effective date is not required. Regulatory Flexibility Act Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) do not apply. Executive Order 12866 Because this rule involves a foreign affairs function of the United States, it is not subject to Executive Order 12866. Signing Authority This regulation is being issued in accordance with 19 CFR 0.1(a)(1). List of Subjects in 19 CFR Part 12 Cultural property, Customs duties and inspection, Imports, Prohibited merchandise. Amendment to CBP Regulations For the reasons set forth above, part 12 of Title 19 of the Code of Federal Regulations (19 CFR part 12), is amended as set forth below: PART 12—SPECIAL CLASSES OF MERCHANDISE 1. The general authority citation for part 12 and the specific authority citation for § 12.104g continue to read as follows: Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), Harmonized Tariff Schedule of the United States (HTSUS)), 1624; Sections 12.104 through 12.104i also issued under 19 U.S.C. 2612; 2. In § 12.104g(a), the table of the list of agreements imposing import restrictions on described articles of cultural property of State Parties is amended in the entry for Bolivia by removing the reference to “T.D. 01-86” in the column headed “Decision No.” and adding in its place the language “T.D. 01-86 extended by CBP Dec. 06-26”. Deborah J. Spero, Acting Commissioner, Bureau of Customs and Border Protection. Approved: November 27, 2006. Timothy E. Skud, Deputy Assistant Secretary of the Treasury. [FR Doc. E6-20306 Filed 11-30-06; 8:45 am] BILLING CODE 9111-14-P DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Part 1301 [Docket No. DEA-244F] RIN 1117-AA89 Clarification of Registration Requirements for Individual Practitioners AGENCY: Drug Enforcement Administration (DEA), Department of Justice. ACTION: Final rule. SUMMARY: The Drug Enforcement Administration
(DEA)is amending its registration regulations to make it clear that when an individual practitioner practices in more than one State, he or she must obtain a separate DEA registration for each State. This amendment will make it easier for practitioners to understand the requirements of the Controlled Substances Act and its implementing regulations. DATES: The rule is effective January 2, 2007. FOR FURTHER INFORMATION CONTACT: Mark W. Caverly, Chief, Liaison and Policy Section, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, Telephone
(202)307-7297. SUPPLEMENTARY INFORMATION: DEA's Legal Authority DEA enforces the Controlled Substances Act (21 U.S.C. 801-971) (CSA), as amended. DEA publishes the implementing regulations for this statute in Title 21 of the Code of Federal Regulations (CFR), Parts 1300 to end. These regulations are designed to ensure that there is a sufficient supply of controlled substances for legitimate medical and scientific purposes and deter the diversion of controlled substances to illegal purposes. Controlled substances are drugs that have a potential for abuse and psychological and physical dependence; these include substances classified as opiates, stimulants, depressants, hallucinogens, anabolic steroids, and drugs that are immediate precursors of these classes of substances. DEA lists controlled substances in 21 CFR Part 1308. The substances are divided into five schedules: Schedule I substances have a high potential for abuse and have no accepted medical use in treatment in the United States. These substances may only be used for research, chemical analysis, or manufacture of other drugs. Schedule II-V substances have an accepted medical use and also have a potential for abuse and psychological and physical dependence. The CSA mandates that DEA establish a closed system of control for manufacturing, distribution, and dispensing of controlled substances. Any person who manufactures, distributes, dispenses, imports, exports, or conducts research or chemical analysis with controlled substances must register with DEA (unless exempt), keep track of all stocks of controlled substances, and maintain records to account for all controlled substances received, distributed, or otherwise disposed of. Background The CSA requires that a separate registration be obtained for each principal place of business or professional practice where controlled substances are manufactured, distributed, or dispensed (21 U.S.C. 822(e)). DEA has provided a limited exception to this requirement (21 CFR 1301.12(b)(3)): practitioners who register at one location, but practice at others within the same State, are not required to register for any other location in that State at which they only prescribe controlled substances. If they maintain supplies of controlled substances, administer, or directly dispense controlled substances at a location, they must register for that location (21 U.S.C. 823(f)). The exception applies only to secondary locations within the same State in which the practitioner maintains his/her DEA registration. However, because the language in § 1301.12(b)(3) does not specify that it pertains to *intrastate* locations *only* , individual practitioners have been applying the regulation to *interstate* situations, which is contrary to the intent of the regulation, the CSA, and the underlying principles that apply to individual practitioner registration. DEA individual practitioner registrations are based on a State license to practice medicine and prescribe controlled substances. DEA relies on State licensing boards to determine that practitioners are qualified to dispense, prescribe or administer controlled substances and to determine what level of authority practitioners have, that is, what schedules they may dispense, prescribe, or administer. State authority to conduct the above-referenced activities only confers rights and privileges within the issuing State; consequently, the DEA registration based on a State license cannot authorize controlled substance dispensing outside the State. To clarify the regulation, DEA issued a Notice of Proposed Rulemaking
(NPRM)on December 7, 2004 (69 FR 70576), proposing to revise § 1301.12(b)(3) to make explicit that the exception from registration requirements is limited to other locations in the same State or jurisdiction of the United States, and seeking comments on the proposed revision. Discussion of Comments Nine commenters submitted comments on the proposed rule; all of the commenters were practitioners or represented practitioners. *General Objections.* One physician stated that he had licenses in three States and asserted that because the licensed entity was the physician, it was contradictory to impose different Federal licenses on the same individual. Another commenter noted that practitioners are required to comply with State laws whether DEA issues a State-specific or a national registration. Other commenters stated that requiring multiple registrations would result in physicians writing the wrong DEA number on prescriptions and in patients receiving unwarranted law enforcement scrutiny because they receive a prescription in one State and fill it in another. One pharmacist stated that multiple DEA registration numbers for practitioners would increase the burden on pharmacies. Two commenters stated that separate DEA registrations would make it difficult to mine data on pharmacy claims for Medicare, whose regions include more than one State; there would be no way to determine whether practitioners with the same name prescribing in multiple States are the same person. The commenters stated that holding multiple DEA registrations would hinder attempts to identify excessive prescribing of controlled substances. One commenter suggested registering each practice site, collecting fees for each State, but using a single DEA number. Another commenter stated the system is contrary to efforts to move toward a uniform and centralized health care information system. The commenter stated that the proposed Department of Health and Human Services National Health Information Network would include prescription information, including the registration number under which the prescription was issued; requiring the system to recognize multiple registrations for a practitioner would introduce unnecessary complexity into the system. Two commenters believed that requiring registrations for separate States would increase their costs. One commenter stated that he could not recoup the cost of registering more than one location through reimbursement fees or other charges passed on to patients. *DEA Response:* As mandated in the CSA, DEA issues registrations based on the State license to practice medicine and dispense controlled substances. Section 823(f) of Title 21, U.S. Code, states that DEA shall register a practitioner to dispense controlled substances if the applicant is authorized to dispense controlled substances under the laws of the State in which the applicant practices. Just as a license to practice medicine in one State does not authorize a practitioner to practice in any other State, a DEA registration based on a particular State license cannot authorize dispensing controlled substances in another State. As DEA pointed out in the NPRM, different States may provide a practitioner with different prescribing authority; State medical licenses may be suspended or revoked in one State, but not another. A single DEA registration would, in effect, divorce the DEA registration from State authorizations. Although, as one commenter noted, practitioners have separate legal obligations under State laws, separate DEA registrations provide a means of taking action against those practitioners who ignore their State authorizations and whose licenses are suspended or revoked in a single State. In addition, linking the DEA registration to State authority allows pharmacies to rely on the DEA registration to determine whether the prescriber is authorized to issue a controlled substance prescription in the State. If the DEA registration was not based on authority from a specific State, the burden on pharmacies to verify the eligibility of practitioners to authorize prescriptions would increase significantly. DEA recognizes that the requirement to have separate DEA registrations for each State imposes a burden on practitioners who practice in multiple States. However, DEA notes that it received only nine comments from practitioners or their representatives; currently, DEA has almost 1.1 million practitioner registrants. This may indicate that most practitioners operating in multiple States already hold appropriate DEA registrations. DEA also recognizes that multiple registrations make it difficult to use prescription records to identify practitioners who may be overprescribing. That problem, however, is not unique to those operating in multiple States. Under the CSA, practitioners who administer or directly dispense controlled substances must maintain a separate DEA registration at each location where they handle controlled substances. Consequently, many practitioners already hold multiple DEA registrations even when they practice within a single State. DEA currently has almost 1.1 million practitioner registrants; based on the number of practitioners in the United States, it is likely that at least 200,000 registrants have multiple DEA registrations. Although this may create problems for databases and other healthcare information systems, the CSA requires this approach to maintain control over the dispensing of controlled substances. The CSA requires persons handling controlled substances in more than one State to be registered with the DEA in each State in which they practice. The CSA also requires DEA to recover the full costs of the Diversion Control Program through registration and reregistration application fees. Thus, DEA must abide by its statutory mandates by collecting registration fees for each registered location. *Locum Tenens:* Three commenters raised the issue of multiple registrations for practitioners who serve as locum tenens practitioners in multiple States. They stated that adding separate DEA registrations for each of the States would be confusing and costly. *DEA Response:* The revision of the regulation will not affect DEA's approach on locum tenens practitioners. DEA will be addressing policies regarding locum tenens practitioners in other documents to be published in the **Federal Register** . *Other Issues:* Several commenters noted that they practice close to State borders and see patients who live in other States. One commenter asked if a practitioner would need a separate registration if the patients were from another State. Two commenters asked if a practitioner's prescription could legally be filled in another State. One commenter asked if he needed multiple registrations in a single State if he administers controlled substances in two locations. *DEA Response:* A practitioner must have a DEA registration for any State in which he or she is dispensing (including prescribing) controlled substances. A practitioner must have a separate registration for each location at which he or she stores, administers, or directly dispenses controlled substances. Summary The CSA requires that a separate registration be obtained for each principal place of business or professional practice where controlled substances are manufactured, distributed, or dispensed (21 U.S.C. 822(e)). DEA has historically provided an exception that a practitioner who is registered at one location, but also practices at other locations, is not required to register separately for any other location at which controlled substances are only prescribed (21 CFR 1301.12(b)(3)). If the practitioner maintains supplies of controlled substances, administers, or directly dispenses controlled substances at the separate location the practitioner must register for that location. The exception applies only to a secondary location within the same State in which the practitioner maintains his/her registration. DEA individual practitioner registrations are based on State authority to practice medicine and prescribe controlled substances. Since a DEA registration is based on a State license, it cannot authorize controlled substance dispensing outside that State. Hence, the separate registration exception applies only to locations within the same State in which practitioners have their DEA registrations. Regulatory Certifications Regulatory Flexibility Act The Deputy Assistant Administrator hereby certifies that this rulemaking has been drafted in accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), has reviewed this regulation, and by approving it certifies that this regulation will not have a significant economic impact on a substantial number of small entities. This rule merely clarifies existing regulations regarding the registration by individual practitioners conducting business in more than one State. Executive Order 12866 The Deputy Assistant Administrator further certifies that this rulemaking has been drafted in accordance with the principles in Executive Order 12866, Section 1(b). This rule has been determined to be a significant regulatory action. Therefore, this action has been reviewed by the Office of Management and Budget. This rule merely clarifies existing regulations regarding the registration by individual practitioners conducting business in more than one State. Executive Order 12988 This regulation meets the applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform. Executive Order 13132 This rulemaking does not preempt or modify any provision of State law; nor does it impose enforcement responsibilities on any State; nor does it diminish the power of any State to enforce its own laws. Accordingly, this rulemaking does not have federalism implications warranting the application of Executive Order 13132. Paperwork Reduction Act This rulemaking merely clarifies that DEA registration must be obtained by practitioners for each State in which a practitioner conducts business, except under certain specific circumstances. While it is possible that the amendment of the regulations could cause certain persons who were not previously registered in a State to register with DEA, it is not possible for DEA to determine how many persons might be affected by this circumstance. It is important to note that this rule serves merely as a clarification. The Controlled Substances Act, which establishes the requirement of registration, has not been changed, and the requirement of registration addressed by this rulemaking remains consistent. Therefore, persons who register as a result of publication of this clarification should have been previously registered with DEA, but were not registered due to confusion regarding registration requirements. Thus, at this time, as DEA is not able to determine the impact of this rulemaking on the registrant population, DEA will make any necessary revisions to the affected information collection at the time of renewal of the collection. Unfunded Mandates Reform Act of 1995 This rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $118,000,000 or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. Congressional Review Act This rule is not a major rule as defined by Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act). This rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets. List of Subjects in 21 CFR Part 1301 Administrative practice and procedure, Drug traffic control, Security measures. For the reasons set forth above, 21 CFR part 1301 is amended as follows: PART 1301—REGISTRATION OF MANUFACTURERS, DISTRIBUTORS, AND DISPENSERS OF CONTROLLED SUBSTANCES 1. The authority citation for part 1301 continues to read as follows: Authority: 21 U.S.C. 821, 822, 823, 824, 871(b), 875, 877, 951, 952, 953, 956, 957. 2. Section 1301.12 is amended by revising paragraph (b)(3) to read as follows: § 1301.12 Separate registrations for separate locations.
(b)* * *
(3)An office used by a practitioner (who is registered at another location in the same State or jurisdiction of the United States) where controlled substances are prescribed but neither administered nor otherwise dispensed as a regular part of the professional practice of the practitioner at such office, and where no supplies of controlled substances are maintained. Dated: October 21, 2006. Joseph T. Rannazzisi, Deputy Assistant Administrator, Office of Diversion Control. [FR Doc. E6-20334 Filed 11-30-06; 8:45 am] BILLING CODE 4410-09-P PENSION BENEFIT GUARANTY CORPORATION 29 CFR Part 4022 Benefits Payable in Terminated Single-Employer Plans AGENCY: Pension Benefit Guaranty Corporation. ACTION: Final rule. SUMMARY: This rule amends Appendix D to the Pension Benefit Guaranty Corporation's regulation on Benefits Payable in Terminated Single-Employer Plans by adding the maximum guaranteeable pension benefit that may be paid by the PBGC with respect to a plan participant in a single-employer pension plan that terminates in 2007. The amendment is necessary because the maximum guarantee amount changes each year, based on changes in the contribution and benefit base under section 230 of the Social Security Act. The effect of the amendment is to advise plan administrators, participants and beneficiaries of the increased maximum guarantee amount for 2007. DATES: *Effective Date:* January 1, 2007. FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager, Regulatory and Policy Division, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.) SUPPLEMENTARY INFORMATION: Section 4022(b) of the Employee Retirement Income Security Act of 1974 provides for certain limitations on benefits guaranteed by the PBGC in terminating single-employer pension plans covered under Title IV of ERISA. One of the limitations, set forth in section 4022(b)(3)(B), is a dollar ceiling on the amount of the monthly benefit that may be paid to a plan participant (in the form of a life annuity beginning at age 65) by the PBGC. The ceiling is equal to “$750 multiplied by a fraction, the numerator of which is the contribution and benefit base (determined under section 230 of the Social Security Act) in effect at the time the plan terminates and the denominator of which is such contribution and benefit base in effect in calendar year 1974 [$13,200].” This formula is also set forth in § 4022.22(b) of the PBGC's regulation on Benefits Payable in Terminated Single-Employer Plans (29 CFR part 4022). Appendix D to Part 4022 lists, for each year beginning with 1974, the maximum guaranteeable benefit payable by the PBGC to participants in single-employer plans that have terminated in that year. Section 230(d) of the Social Security Act (42 U.S.C. 430(d)) provides special rules for determining the contribution and benefit base for purposes of ERISA section 4022(b)(3)(B). Each year the Social Security Administration determines, and notifies the PBGC of, the contribution and benefit base to be used by the PBGC under these provisions, and the PBGC publishes an amendment to Appendix D to Part 4022 to add the guarantee limit for the coming year. The PBGC has been notified by the Social Security Administration that, under section 230 of the Social Security Act, $72,600 is the contribution and benefit base that is to be used to calculate the PBGC maximum guaranteeable benefit for 2007. Accordingly, the formula under section 4022(b)(3)(B) of ERISA and 29 CFR 4022.22(b) is: $750 multiplied by $72,600/$13,200. Thus, the maximum monthly benefit guaranteeable by the PBGC in 2007 is $4,125.00 per month in the form of a life annuity beginning at age 65. This amendment updates Appendix D to Part 4022 to add this maximum guaranteeable amount for plans that terminate in 2007. (If a benefit is payable in a different form or begins at a different age, the maximum guaranteeable amount is the actuarial equivalent of $4,125.00 per month.) General notice of proposed rulemaking is unnecessary. The maximum guaranteeable benefit is determined according to the formula in section 4022(b)(3)(B) of ERISA, and these amendments make no change in its method of calculation but simply list 2007 maximum guaranteeable benefit amounts for the information of the public. The PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866. Because no general notice of proposed rulemaking is required for this regulation, the Regulatory Flexibility Act of 1980 does not apply (5 U.S.C. 601(2)). List of Subjects in 29 CFR Part 4022 Pension insurance, Pensions, Reporting and recordkeeping requirements. In consideration of the foregoing, 29 CFR part 4022 is amended as follows: PART 4022—BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS 1. The authority citation for part 4022 continues to read as follows: Authority: 29 U.S.C. 1302, 1322, 1322b, 1341(c)(3)(D), and 1344. 2. Appendix D to part 4022 is amended by adding a new entry to the end of the table to read as follows. The introductory text is reproduced for the convenience of the reader and remains unchanged. Appendix D to Part 4022—Maximum Guaranteeable Monthly Benefit The following table lists by year the maximum guaranteeable monthly benefit payable in the form of a life annuity commencing at age 65 as described by § 4022.22(b) to a participant in a plan that terminated in that year: Year Maximum guaranteeable monthly benefit * * * * * 2007 $4,125.00 Issued in Washington, DC, this 17th day of November, 2006. Vincent K. Snowbarger, Interim Director, Pension Benefit Guaranty Corporation. [FR Doc. E6-20389 Filed 11-30-06; 8:45 am] BILLING CODE 7709-01-P PENSION BENEFIT GUARANTY CORPORATION 29 CFR Part 4044 Allocation of Assets in Single-Employer Plans; Valuation of Benefits and Assets; Expected Retirement Age AGENCY: Pension Benefit Guaranty Corporation. ACTION: Final rule. SUMMARY: This rule amends the Pension Benefit Guaranty Corporation's regulation on Allocation of Assets in Single-Employer Plans by substituting a new table that applies to any plan being terminated either in a distress termination or involuntarily by the PBGC with a valuation date falling in 2007, and is used to determine expected retirement ages for plan participants. This table is needed in order to compute the value of early retirement benefits and, thus, the total value of benefits under the plan. DATES: *Effective Date:* January 1, 2007. FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager, Regulatory and Policy Division, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.) SUPPLEMENTARY INFORMATION: The PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044) sets forth (in subpart B) the methods for valuing plan benefits of terminating single-employer plans covered under Title IV of the Employee Retirement Income Security Act of 1974. Under ERISA section 4041(c), guaranteed benefits and benefit liabilities under a plan that is undergoing a distress termination must be valued in accordance with part 4044, subpart B. In addition, when the PBGC terminates an underfunded plan involuntarily pursuant to ERISA Section 4042(a), it uses the subpart B valuation rules to determine the amount of the plan's underfunding. Under § 4044.51(b) of the asset allocation regulation, early retirement benefits are valued based on the annuity starting date, if a retirement date has been selected, or the expected retirement age, if the annuity starting date is not known on the valuation date. Sections 4044.55 through 4044.57 set forth rules for determining the expected retirement ages for plan participants entitled to early retirement benefits. Appendix D of part 4044 contains tables to be used in determining the expected early retirement ages. Table I in appendix D (Selection of Retirement Rate Category) is used to determine whether a participant has a low, medium, or high probability of retiring early. The determination is based on the year a participant would reach “unreduced retirement age” ( *i.e.* , the earlier of the normal retirement age or the age at which an unreduced benefit is first payable) and the participant's monthly benefit at unreduced retirement age. The table applies only to plans with valuation dates in the current year and is updated annually by the PBGC to reflect changes in the cost of living, etc. Tables II-A, II-B, and II-C (Expected Retirement Ages for Individuals in the Low, Medium, and High Categories respectively) are used to determine the expected retirement age after the probability of early retirement has been determined using Table I. These tables establish, by probability category, the expected retirement age based on both the earliest age a participant could retire under the plan and the unreduced retirement age. This expected retirement age is used to compute the value of the early retirement benefit and, thus, the total value of benefits under the plan. This document amends appendix D to replace Table I-06 with Table I-07 in order to provide an updated correlation, appropriate for calendar year 2007, between the amount of a participant's benefit and the probability that the participant will elect early retirement. Table I-07 will be used to value benefits in plans with valuation dates during calendar year 2007. The PBGC has determined that notice of and public comment on this rule are impracticable and contrary to the public interest. Plan administrators need to be able to estimate accurately the value of plan benefits as early as possible before initiating the termination process. For that purpose, if a plan has a valuation date in 2007, the plan administrator needs the updated table being promulgated in this rule. Accordingly, the public interest is best served by issuing this table expeditiously, without an opportunity for notice and comment, to allow as much time as possible to estimate the value of plan benefits with the proper table for plans with valuation dates in early 2007. The PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866. Because no general notice of proposed rulemaking is required for this regulation, the Regulatory Flexibility Act of 1980 does not apply (5 U.S.C. 601(2)). List of Subjects in 29 CFR Part 4044 Pension insurance, Pensions. In consideration of the foregoing, 29 CFR part 4044 is amended as follows: PART 4044—[AMENDED] 1. The authority citation for part 4044 continues to read as follows: Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362. 2. Appendix D to part 4044 is amended by removing Table I-06 and adding in its place Table I-07 to read as follows: Appendix D to Part 4044—Tables Used To Determine Expected Retirement Age Table I-07.—Selection of Retirement Rate Category [For plans with valuation dates after December 31, 2006, and before January 1, 2008] Participant reaches URA in year— Participant's Retirement Rate Category is— Low 1 if monthly benefit at URA is less than— Medium 2 if monthly benefit at URA is From To High 3 if monthly benefit at URA is greater than— 2008 522 522 2,204 2,204 2009 534 534 2,257 2,257 2010 547 547 2,311 2,311 2011 560 560 2,367 2,367 2012 574 574 2,426 2,426 2013 588 588 2,486 2,486 2014 603 603 2,549 2,549 2015 618 618 2,612 2,612 2016 634 634 2,678 2,678 2017 or later 649 649 2,745 2,745 1 Table II-A. 2 Table II-B. 3 Table II-C. Issued in Washington, DC, this 17th day of November, 2006. Vincent K. Snowbarger, Interim Director, Pension Benefit Guaranty Corporation. [FR Doc. E6-20387 Filed 11-30-06; 8:45 am] BILLING CODE 7709-01-P DEPARTMENT OF THE TREASURY 31 CFR Part 1 Privacy Act; Implementation AGENCY: Internal Revenue Service, Treasury. ACTION: Interim final rule. SUMMARY: In accordance with the requirements of the Privacy Act of 1974, as Amended, the Department of the Treasury gives notice of an amendment to this part by revising the titles of two Privacy Act systems of records and removing five other Privacy Act systems of records. The systems of records are related to the functions of the Internal Revenue Service (IRS), Office of Professional Responsibility (OPR). DATES: *Effective Date:* January 2, 2007. Comments must be received no later than January 2, 2007. You may also submit comments through the Federal rulemaking portal at *http://www.regulations.gov* (follow the instructions for submitting comments). ADDRESSES: Comments should be sent to the Office of Governmental Liaison and Disclosure, IRS, 1111 Constitution Avenue, NW., Washington, DC 20224. To arrange to see the comments, see FOR FURTHER INFORMATION CONTACT below. FOR FURTHER INFORMATION CONTACT: Earl Prater, Senior Counsel, OPR, at
(202)874-5936, or for voice mail,
(202)622-8018 (not toll free numbers). SUPPLEMENTARY INFORMATION: The IRS is proposing to simplify the administration of OPR's Privacy Act systems of records by consolidating the current 11 OPR systems. A proposed notice to revise and consolidate the Privacy Act systems of records maintained by the OPR will be published separately in the **Federal Register.** The proposed notice to alter OPR's current 11 systems of records will consolidate all records into the three revised systems of records: Treasury/IRS 37.006—Correspondence, Miscellaneous Records, and Information Management Records; Treasury/IRS 37.007—Practitioner Disciplinary Records; and Treasury/IRS 37.009—Enrolled Agent Records. This realignment of the records being maintained by OPR will permit more precise expression of the data elements and will permit the published notices to serve more effectively as guides for the public in understanding how OPR collects, maintains, discloses, and uses these individually identifiable records. Currently, seven of those Privacy Act systems of records are exempt from provisions of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2). Under 5 U.S.C. 552a(k)(2), the head of an agency may promulgate rules to exempt a system of records from certain provisions of 5 U.S.C. 552a if the system contains investigatory material compiled for law enforcement purposes. The purpose of the interim final rule is to revise the inventory of OPR systems of records for which an exemption is claimed pursuant to 5 U.S.C. 552a(k)(2) as found in paragraph (g)(viii) of this part to reflect the proposed revision and consolidation of those systems. No new exemptions are being proposed. This action removes the following five systems of records from the paragraph (g)(1)(viii) of Section 1.36: Number Name of system IRS 37.002 Files containing derogatory information about individuals whose applications for enrollment to practice before the IRS have been denied and applicant appeal files. [formerly known as “Applicant Appeal Files”] IRS 37.003 Closed files containing derogatory information about individuals' practice before the Internal Revenue Service and files of attorneys and certified public accountants formerly enrolled to practice. IRS 37.004 Derogatory information (No Action). IRS 37.005 Present suspensions and disbarments resulting from administrative proceeding. IRS 37.011 Present suspensions from practice before the Internal Revenue Service. The action also amends Section 1.36 by revising the title of two systems of records listed in Paragraph (g)(1)(viii) from “IRS 37.007—Inventory” to “IRS 37.007—Practitioner Disciplinary Records,” and from “IRS 37.009—Enrolled Agents and Resigned Enrolled Agents (Action pursuant to 31 CFR 10.55(b))” to “IRS 37.009—Enrolled Agent Records.” These regulations are being published as an interim final rule because the amendments do not impose any requirements on any member of the public. These amendments are the most efficient means for the Treasury Department to implement its internal requirements for complying with the Privacy Act. Accordingly, pursuant to 5 U.S.C. 553(b)(B) and (d)(3), the Department of the Treasury finds good cause that prior notice and other public procedures with respect to this rule are unnecessary, and good cause for making this interim final rule effective 30 days after publication in the **Federal Register.** Pursuant to Executive Order 12866, it has been determined that this interim final rule is not a significant regulatory action, and therefore, does not require a regulatory impact analysis. Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act, 5 U.S.C. 601-612, do not apply. List of Subjects in 31 CFR Part 1 Privacy. Part 1, subpart C of title 31 of the Code of Federal Regulations is amended as follows: PART 1—[AMENDED] 1. The authority citation for part 1 continues to read as follows: Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also issued under 5 U.S.C. 552 as amended. Subpart C also issued under 5 U.S.C. 552a. 2. Section 1.36, paragraph (g)(1)(viii) is amended by removing from the table entries IRS 37.002, 37.003, 37.004, 37.005 and 37.011. Paragraph (g)(1)(viii) is further amended by removing from IRS 37.007, “Inventory” and adding in its place, “Practitioner Disciplinary Records” and by removing from IRS 37.009, “Resigned Enrolled Agents (action pursuant to 31 CFR 10.55(b))” and adding in its place, “Enrolled Agents Records” to read as follows: § 1.36 Systems exempt in whole or in part from provisions of 5 U.S.C. 552a and this part.
(g)* * *
(1)* * *
(viii)* * * Number Name of system * * * * * * * IRS 37.007 Practitioner Disciplinary Records IRS 37.009 Enrolled Agent Records * * * * * * * Dated: October 24, 2006. Sandra L. Pack, Assistant Secretary for Management and Chief Financial Officer. [FR Doc. E6-20384 Filed 11-30-06; 8:45 am] BILLING CODE 4830-01-P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [COTP Honolulu 06-008] RIN 1625-AA87 Security Zone; Waters Surrounding U.S. Forces Vessel SBX-1, HI AGENCY: Coast Guard, DHS. ACTION: Temporary final rule. SUMMARY: The Coast Guard is establishing a temporary 500-yard moving security zone around the U.S. Forces vessel SBX-1 during transit within the Honolulu Captain of the Port Zone. This security zone is necessary to protect the SBX-1 from hazards associated with vessels and persons approaching too close during transit. Entry of persons or vessels into this temporary security zone is prohibited unless authorized by the Captain of the Port (COTP). DATES: This rule is effective from 12 a.m.
(HST)on November 13, 2006, until 11:59 p.m.
(HST)on December 3, 2006. ADDRESSES: Documents indicated in this preamble as being available in the docket are part of docket COTP Honolulu 06-008 and are available for inspection or copying at Coast Guard Sector Honolulu between 7 a.m. and 3:30 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: Lieutenant (Junior Grade) Quincey Adams, U.S. Coast Guard Sector Honolulu at
(808)842-2600. SUPPLEMENTARY INFORMATION: Regulatory Information We did not publish a notice of proposed rulemaking
(NPRM)for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM. The Coast Guard was not given the final voyage plan in time to complete full notice-and-comment rulemaking procedures, rulemaking, and the need for this temporary security zone was not determined until less than 30 days before the SBX-1 will require the protection provided by this rule. Publishing an NPRM and delaying the effective date would be contrary to the public interest since the transit would occur before completion of the notice-and-comment rulemaking process, thereby jeopardizing the security of the people and property associated with the operation. Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the **Federal Register** . The COTP finds this good cause to be the immediate need for a security zone to allay the waterborne security threats surrounding the SBX-1's transit. Background and Purpose On October 6, 2006, the SBX-1 entered the Honolulu Captain of the Port Zone and transited to Pearl Harbor, HI for repairs. On October 5, 2006, the Coast Guard issued a temporary final rule (COTP Honolulu 06-006; § 165.T14-148 Security zone; waters surrounding U.S. Forces vessel SBX-1, HI) to protect the vessel during transit. That rule expired at 6 p.m. on October 11, 2006, and is scheduled to be published with other temporary rules that expired before they could be published full-text in the **Federal Register** . Due to the unknown duration of repairs, the SBX-1's actual departure date and time will not be known in advance. The Coast Guard is establishing this security zone to ensure that the vessel is protected during its upcoming departure from Pearl Harbor with as much public notice as possible. Discussion of Rule This temporary security zone is effective from 12 a.m.
(HST)on November 13, 2006, until 11:59 p.m.
(HST)on December 3, 2006. It is located within the Honolulu Captain of the Port Zone (See 33 CFR 3.70-10) and covers all U.S. navigable waters extending 500 yards in all directions from the U.S. Forces vessel SBX-1, from the surface of the water to the ocean floor. The security zone moves with the SBX-1 while in transit. The security zone becomes fixed when the SBX-1 is anchored, position-keeping, or moored. The security zone will be activated and enforced for just a few days during its three-week effective period. A broadcast notice to mariners will be issued to notify the public of this activation and enforcement period as soon as possible. If the Coast Guard has at least 48 hours notice of the movement of the SBX-1, the broadcast notice to mariners will be published giving the public 48 hours notice of the enforcement period commencement. From the 1 and 2 buoy for Pearl Harbor until it departs the COTP zone, SBX-1 is expected to have a Coast Guard escort. The general regulations governing security zones contained in 33 CFR 165.33 apply. Entering into, transiting through, or anchoring within this zone is prohibited unless authorized by the Captain of the Port or a designated representative thereof. The Captain of the Port will cause notice of the enforcement of the security zone described in this section to be made by broadcast notice to mariners. Any Coast Guard commissioned, warrant, or petty officer, and any other Captain of the Port representative permitted by law, may enforce the zone. The Captain of the Port may waive any of the requirements of this rule for any person, vessel, or class of vessel upon finding that application of the security zone is unnecessary or impractical for the purpose of maritime security. Vessels or persons violating this rule are subject to the penalties set forth in 33 U.S.C. 1232 and 50 U.S.C. 192. Regulatory Evaluation This rule is not a “significant regulatory action” under § 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under § 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Homeland Security (DHS). The Coast Guard expects the economic impact of this rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary. This expectation is based on the limited duration of the zone, the limited geographic area affected by it, and its ability to move with the protected vessel. Small Entities Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. We expect that there will be little or no impact to small entities due to the narrowly tailored scope of this security zone. Assistance for Small Entities Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding this rule so that they could better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). Collection of Information This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Federalism A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and either preempts State law or imposes a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism. Unfunded Mandates Reform Act The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble. Taking of Private Property This rule will not affect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights. Civil Justice Reform This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. Protection of Children We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children. Indian Tribal Governments This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Energy Effects We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211. Technical Standards The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards is inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards. Environment We have analyzed this rule under Commandant Instruction M16475.lD, which guides the Coast Guard in complying with the National Environmental Policy Act of 1969
(NEPA)(42 U.S.C. 4321-4370f), and have concluded that there are no factors in this case that limit the use of a categorical exclusion under section 2.B.2 of the Instruction. Therefore, under figure 2-1, paragraph (34)(g) of the Commandant Instruction M16475.1D, this rule is categorically excluded from further environmental documentation. List of Subjects 33 CFR Part 165 Harbors, Marine Safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways. For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows: PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. Chapter 701; 50 U.S.C. 191, 195; 33 CFR 1.05-1(g), 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1. 2. Add temporary § 165.T14-150 to read as follows: § 165.T14-150 Security zone; waters surrounding U.S. Forces vessel SBX-1, HI.
(a)*Location.* The following area, in U.S. navigable waters within the Honolulu Captain of the Port Zone (see 33 CFR 3.70-10), from the surface of the water to the ocean floor, is a security zone: All waters extending 500 yards in all directions from U.S. Forces vessel SBX-1. The security zone moves with the SBX-1 while it is in transit and becomes fixed when the SBX-1 is anchored, position-keeping, or moored.
(b)*Effective period.* This security zone is effective from 12 a.m.
(HST)on November 13, 2006, until 11:59 p.m.
(HST)on December 3, 2006.
(c)*Regulations.* The general regulations governing security zones contained in 33 CFR 165.33 apply. Entering into, transiting through, or anchoring within this zone is prohibited unless authorized by the Captain of the Port or a designated representative thereof.
(d)*Enforcement.* The Coast Guard will begin enforcement of the security zone described in this section upon the SBX-1's departure from Pearl Harbor, HI.
(e)*Informational notice.* The Captain of the Port of Honolulu will cause notice of the enforcement of the security zone described in this section to be made by broadcast notice to mariners.
(f)*Authority to enforce.* Any Coast Guard commissioned, warrant, or petty officer, and any other Captain of the Port representative permitted by law, may enforce this temporary security zone.
(g)*Waiver.* The Captain of the Port may waive any of the requirements of this rule for any person, vessel, or class of vessel upon finding that application of the security zone is unnecessary or impractical for the purpose of maritime security.
(h)* Penalties.* Vessels or persons violating this rule are subject to the penalties set forth in 33 U.S.C. 1232 and 50 U.S.C. 192. Dated: November 3, 2006. V. B. Atkins, Captain, U.S. Coast Guard, Captain of the Port, Honolulu. [FR Doc. E6-20355 Filed 11-30-06; 8:45 am] BILLING CODE 4910-15-P LIBRARY OF CONGRESS Copyright Royalty Board 37 CFR Part 253 [Docket No. 2006-2 CRB NCBRA] Cost of Living Adjustment for Performance of Musical Compositions by Colleges and Universities AGENCY: Copyright Royalty Board, Library of Congress. ACTION: Final rule. SUMMARY: The Copyright Royalty Judges, on behalf of the Copyright Royalty Board of the Library of Congress, announce a cost of living adjustment of 1.3% in the royalty rates paid by colleges, universities, or other nonprofit educational institutions that are not affiliated with National Public Radio for the use of copyrighted published nondramatic musical compositions in the ASCAP, BMI and SESAC repertoires. The cost of living adjustment is based on the change in the Consumer Price Index from October 2005 to October 2006. EFFECTIVE DATE: January 1, 2007. FOR FURTHER INFORMATION CONTACT: Gina Giuffreda, Attorney Advisor, or Abioye E. Oyewole, CRB Program Specialist. Telephone:
(202)707-7658. Telefax:
(202)252-3423. SUPPLEMENTARY INFORMATION: Section 118 of the Copyright Act, 17 U.S.C., creates a compulsory license for the use of published nondramatic musical works and published pictorial, graphic, and sculptural works in connection with noncommercial broadcasting. Terms and rates for this compulsory license, applicable to parties who are not subject to privately negotiated licenses, are published in 37 CFR part 253 and are subject to adjustment at five-year intervals. 17 U.S.C. 118(c). The most recent proceeding to consider the terms and rates for the section 118 license occurred in 2002. 67 FR 15414 (April 1, 2002). Final regulations governing the terms and rates of copyright royalty payments with respect to certain uses by public broadcasting entities of published nondramatic musical works, and published pictorial, graphic, and sculptural works for the license period beginning January 1, 2003, and ending December 31, 2007, were published in the **Federal Register** on December 17, 2002. 67 FR 77170 (December 17, 2002). Pursuant to these regulations, on December 1 of each year, the Librarian shall publish a notice of the change in the cost of living as determined by the Consumer Price Index (all consumers, all items) during the period from the most recent Index published prior to the previous notice, to the most recent Index published prior to December 1 of that year. 37 CFR 253.10(a). The regulations also require that the Librarian publish a revised schedule of rates for the public performance of musical compositions in the ASCAP, BMI, and SESAC repertoires by public broadcasting entities licensed to colleges and universities, reflecting the change in the Consumer Price Index. 37 CFR 253.10(b). Accordingly, the Copyright Royalty Judges, on behalf of the Copyright Royalty Board of the Library of Congress, are hereby announcing the change in the Consumer Price Index and performing the annual cost of living adjustment to the rates set out in § 253.5(c). The change in the cost of living as determined by the Consumer Price Index (all consumers, all items) during the period from the most recent Index published before December 1, 2005, to the most recent Index published before December 1, 2006, is 1.3% (2005's figure was 199.2; the figure for 2006 is 201.8, based on 1982-1984 = 100 as a reference base). Rounding off to the nearest dollar, the royalty rates for the use of musical compositions in the repertoires of ASCAP, BMI, and SESAC are $277, $277, and $90, respectively. List of Subjects in 37 CFR Part 253 Copyright, Radio, Television. Final Regulations For the reasons set forth in the preamble, part 253 of title 37 of the Code of Federal Regulations is amended as follows: PART 253-USE OF CERTAIN COPYRIGHTED WORKS IN CONNECTION WITH NONCOMMERCIAL EDUCATIONAL BROADCASTING 1. The authority citation for part 253 continues to read as follows: Authority: 17 U.S.C. 118, 801(b)(1) and 803. 2. Section 253.5 is amended by revising paragraphs (c)(1) through (c)(3) as follows: § 253.5 Performance of musical compositions by public broadcasting entities licensed to colleges and universities.
(c)* * *
(1)For all such compositions in the repertory of ASCAP, $277 annually.
(2)For all such compositions in the repertory of BMI, $277 annually.
(3)For all such compositions in the repertory of SESAC, $90 annually. Dated: November 22, 2006. James Scott Sledge, Chief Copyright Royalty Judge, Copyright Royalty Board. [FR Doc. E6-20110 Filed 11-30-06; 8:45 am] BILLING CODE 1410-72-P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R03-OAR-2006-0728; FRL-8249-7] Approval and Promulgation of Air Quality Implementation Plans; West Virginia; Emission Reductions to Meet Phase II of the Nitrogen Oxides (NO <sup>X</sup> ) SIP Call; Correction AGENCY: Environmental Protection Agency (EPA). ACTION: Direct final rule; correcting amendment. SUMMARY: This document corrects an error in the rule language of a final rule pertaining to EPA's direct final action to convert a conditional approval in the West Virginia State Implementation Plan
(SIP)to a full approval. The SIP revision pertains to nitrogen oxides (NO <sup>X</sup> ) emission reductions required in West Virginia to meet Phase II of the NO <sup>X</sup> SIP Call. EFFECTIVE DATE: December 1, 2006. FOR FURTHER INFORMATION CONTACT: Marilyn Powers,
(215)814-2308 or by e-mail at *powers.marlyn@epa.gov.* SUPPLEMENTARY INFORMATION: Throughout this document wherever “we,” “us,” or “our” are used we mean EPA. On September 28, 2006 (71 FR 56881), we published a final rulemaking action announcing our action to approve nitrogen oxides (NO <sup>X</sup> ) emission reductions required in West Virginia to meet Phase II of the NO <sup>X</sup> SIP Call. In that document, we inadvertently omitted information describing the **Federal Register** publication date and page citation of the approval date for West Virginia Regulation 45 CSR 1. This action adds the omitted language. In rule document E6-15981 published in the **Federal Register** on September 28, 2006 (71 FR 56881), on pages 56883 (bottom) and 56884 (top), the revised rule language described in Amendatory Instruction Number 2 is corrected to add a **Federal Register** publication date and page citation for each revised entry in 40 CFR 52.2520(c) for West Virginia Regulation 45 CSR 1. Section 553 of the Administrative Procedure Act, 5 U.S.C. 553(b)(B), provides that, when an agency for good cause finds that notice and public procedure are impracticable, unnecessary or contrary to the public interest, the agency may issue a rule without providing notice and an opportunity for public comment. We have determined that there is good cause for making today's rule final without prior proposal and opportunity for comment because we are merely correcting an incorrect citation in a previous action. Thus, notice and public procedure are unnecessary. We find that this constitutes good cause under 5 U.S.C. 553(b)(B). Statutory and Executive Order Reviews Under Executive Order (E.O.) 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and is therefore not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)). Because the agency has made a “good cause” finding that this action is not subject to notice-and-comment requirements under the Administrative Procedures Act or any other statute as indicated in the SUPPLEMENTARY INFORMATION section above, it is not subject to the regulatory flexibility provisions of the Regulatory Flexibility Act (5 U.S.C 601 *et seq.* ), or to sections 202 and 205 of the Unfunded Mandates Reform Act of 1995
(UMRA)(Pub. L. 104-4). In addition, this action does not significantly or uniquely affect small governments or impose a significant intergovernmental mandate, as described in sections 203 and 204 of UMRA. This rule also does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it 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 governments, as specified by Executive Order 13132 (64 FR 43255, August 10, 1999). This rule also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant. This technical correction action does not involve technical standards; thus the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The rule also does not involve special consideration of environmental justice related issues as required by Executive Order 12898 (59 FR 7629, February 16, 1994). In issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct, as required by section 3 of Executive Order 12988 (61 FR 4729, February 7, 1996). EPA has complied with Executive Order 12630 (53 FR 8859, March 15, 1998) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the Paperwork Reduction Act of 1995. (44 U.S.C. 3501 *et seq.* ) The Congressional Review Act (5 U.S.C. 801 *et seq.* ), as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. Section 808 allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding that notice and public procedure is impracticable, unnecessary or contrary to the public interest. This determination must be supported by a brief statement. 5 U.S.C. 808(2). As stated previously, EPA had made such a good cause finding, including the reasons therefore, and established an effective date of December 1, 2006. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the **Federal Register** . This correction to 40 CFR § 52.2520(c) for West Virginia is not a “major rule” as defined by 5 U.S.C. 804(2). Dated: November 21, 2006 William T. Wisniewski, Acting Regional Administrator, Regional Administrator, Region III. 40 CFR Part 52 is amended as follows: PART 52—[AMENDED] 1. The authority citation for 40 CFR part 52 continues to read as follows: Authority: 42 U.S.C. 7401 *et seq.* Subpart XX—West Virginia 2. In § 52.2520, the table in paragraph
(c)is amended by revising entries for [45CSR] Series 1, Sections 1-5, 22, 70-72, 74, 89, 90, and 100 to read as follows: § 52.2520 Identification of plan.
(c)*EPA-Approved Regulations.* EPA-Approved Regulations in the West Virginia SIP State citation [Chapter 16-20 or 45 CSR] Title/subject State effective date EPA approval date Additional explanation/citation at 40 CFR § 52.2565 [45 CSR] Series 1 Control and Reduction of Nitrogen Oxides From Non-Electric Generating Units As a means to Mitigate Transport of Ozone Precursors Section 45-1-1 General 5/1/06 9/28/06, 71 FR 58661 Section 45-1-2 Definitions 5/1/06 9/28/06, 71 FR 58661 Section 45-1-3 Acronyms 5/1/06 9/28/06, 71 FR 58661 Section 45-1-4 NO <sup>X</sup> Budget Trading Program Applicability 5/1/06 9/28/06, 71 FR 58661 Section 45-1-5 Retired Unit Exemption 5/1/06 9/28/06, 71 FR 58661 * * * * * * * Section 45-1-22 Information Requirements for NO <sup>X</sup> Budget Permit Applications 5/1/06 9/28/06, 71 FR 58661 * * * * * * * Section 45-1-70 General Monitoring Requirements 5/1/06 9/28/06, 71 FR 58661 Section 45-1-71 Initial Certification and Recertification Procedures 5/1/06 9/28/06, 71 FR 58661 Section 45-1-72 Out of Control Periods 5/1/06 9/28/06, 71 FR 58661 * * * * * * * Section 45-1-74 Recordkeeping and Reporting 5/1/06 9/28/06, 71 FR 58661 * * * * * * * Section 45-1-89 Appeal Procedures 5/1/06 9/28/06, 71 FR 58661 New Section Section 45-1-90 Requirements for Stationary Internal Combustion Engines 5/1/06 9/28/06, 71 FR 58661 New Section. Section 45-1-100 Requirements for Emissions of NO <sup>X</sup> from Cement Manufacturing Kilns 5/1/06 9/28/06, 71 FR 58661 * * * * * * * [FR Doc. E6-20291 Filed 11-30-06; 8:45 am] BILLING CODE 6560-50-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 201 RIN 0750-AF30 Defense Federal Acquisition Regulation Supplement; Contracting Officers' Representatives (DFARS Case 2005-D022) AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text pertaining to the designation of a contracting officer's representative. The rule clarifies the authority of a contracting officer's representative and relocates text to the DFARS companion resource, Procedures, Guidance, and Information. DATES: *Effective Date:* December 1, 2006. FOR FURTHER INFORMATION CONTACT: Ms. Robin Schulze, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone
(703)602-0326; facsimile
(703)602-0350. Please cite DFARS Case 2005-D022. SUPPLEMENTARY INFORMATION: A. Background This final rule revises DFARS text addressing contracting officers' representatives. The DFARS changes— • Clarify the authority of a contracting officer's representative; and • Remove internal DoD procedures relating to the designation of a contracting officer's representative. Text on this subject has been relocated to the DFARS companion resource, Procedures, Guidance, and Information (PGI), available at *http://www.acq.osd.mil/dpap/dars/pgi.* DoD published a proposed rule at 71 FR 27659 on May 12, 2006. One source submitted comments on the proposed rule. That source recommended revising the rule at 201.602-2(2)(v) to require that the contracting officer include a copy of the written designation of the contracting officer's representative in the official contract file. DoD agrees with the recommended requirement for file documentation, but, since this is an administrative matter internal to the Government, DoD has added the requirement to the corresponding text at PGI 201.602-2. DoD has adopted the proposed DFARS rule as a final rule without change. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the rule addresses internal DoD procedural matters and makes no significant change to DoD contracting policy. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Part 201 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR part 201 is amended as follows: PART 201—FEDERAL ACQUISITION REGULATIONS SYSTEM 1. The authority citation for 48 CFR part 201 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 2. Section 201.602-2 is revised to read as follows: 201.602-2 Responsibilities.
(1)Follow the procedures at PGI 201.602-2 regarding designation of a contracting officer's representative (COR).
(2)A COR—
(i)Must be a Government employee, unless otherwise authorized in agency regulations;
(ii)Must be qualified by training and experience commensurate with the responsibilities to be delegated in accordance with department/agency guidelines;
(iii)May not be delegated responsibility to perform functions at a contractor's location that have been delegated under FAR 42.202(a) to a contract administration office;
(iv)Has no authority to make any commitments or changes that affect price, quality, quantity, delivery, or other terms and conditions of the contract; and
(v)Must be designated in writing, and a copy furnished the contractor and the contract administration office—
(A)Specifying the extent of the COR's authority to act on behalf of the contracting officer;
(B)Identifying the limitations on the COR's authority;
(C)Specifying the period covered by the designation;
(D)Stating the authority is not redelegable; and
(E)Stating that the COR may be personally liable for unauthorized acts. [FR Doc. E6-20393 Filed 11-30-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Part 208 Defense Federal Acquisition Regulation Supplement; Technical Amendment AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD is making a technical amendment to the Defense Federal Acquisition Regulation Supplement (DFARS) to update a reference number within the DFARS text. DATES: *Effective Date:* December 1, 2006. FOR FURTHER INFORMATION CONTACT: Ms. Michele Peterson, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone
(703)602-0311; facsimile
(703)602-0350. SUPPLEMENTARY INFORMATION: This final rule amends DFARS 208.7003-2(a) by updating a reference to a section of the Federal Acquisition Regulation. List of Subjects in 48 CFR Part 208 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR part 208 is amended as follows: PART 208—REQUIRED SOURCES OF SUPPLIES AND SERVICES 1. The authority citation for 48 CFR part 208 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. 208.7003-2 [Amended] 2. Section 208.7003-2 is amended in paragraph
(a)by removing “8.001” and adding in its place “8.002”. [FR Doc. E6-20397 Filed 11-30-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 212, 232, and 252 [DFARS Case 2004-D033] Defense Federal Acquisition Regulation Supplement; Levy on Payments to Contractors AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has adopted as final, with changes, an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to address the effect of Internal Revenue Service
(IRS)levies on contract payments. The rule requires DoD contractors to promptly notify the contracting officer if a levy may result in an inability to perform a contract. DATES: *Effective Date:* December 1, 2006. FOR FURTHER INFORMATION CONTACT: Mr. Bill Sain, Defense Acquisition Regulations System, OUSD(AT&L)DPAP(DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone
(703)602-0293; facsimile
(703)602-0350. Please cite DFARS Case 2004-D033. SUPPLEMENTARY INFORMATION: A. Background DoD published an interim rule at 70 FR 52031 on September 1, 2005, addressing policy and procedures that apply when an IRS levy may result in a contractor's inability to perform a DoD contract. DoD received comments from 6 sources in response to the interim rule. DoD considered all comments and has incorporated the following changes in the final rule: DFARS 212.301(f)—Addition of a prescription for use of the clause at 252.232-7010, Levies on Contract Payments, in contracts for the acquisition of commercial items. DFARS 232.7101 and 252.232-7010—Clarification that the requirement for the contractor to notify the contracting officer applies in situations where the levy may result in an “inability to perform the contract.” This change eliminates the term “jeopardize contract performance,” since that term may be understood as establishing a different standard than causing an inability to perform. DFARS 232.7102—Exclusion of micro-purchases from the requirement to use the clause at 252.232-7010. The following is a discussion of the public comments and the issues relating to the development of the final rule: 1. *Comment:* One respondent recommended amendment of the rule at 232.7101 and 252.232-7010 to provide that the contractor must notify the procuring contracting officer
(PCO)in all instances when a levy is imposed. This would ensure that the PCO is aware of potential performance problems before they occur. Once notified of the levy, the PCO could monitor the contractor's performance and perform surveillance of the contractor's financial condition. *DoD Response:* DoD believes that notification should be limited to situations where the levy will be likely to cause an inability to perform the contract. To require reporting each time a levy is imposed, even when the contractor believes there will be no impact on the contract, would not provide useful data to the PCO, and could lead to unnecessary administrative effort on the part of the Government, as well as the contractor. The Paperwork Reduction Act (44 U.S.C. 3501, *et seq.* ) requires that the Government minimize the reporting requirements incorporated into regulations. 2. *Comment:* Two respondents recommended amendment of the rule to require that contractors notify both the PCO and the administrative contracting officer (ACO). *DoD Response:* DoD believes that the PCO is the best point of contact for this process, but has revised the rule to require that the contractor notify the PCO, in writing, with a copy to the ACO. 3. *Comment:* One respondent commented that the rule unnecessarily requires a mandatory report to the PCO by the contractor (including a report of “no effect”) regarding the assessment on national security, even if the contractor concludes that the levy will not create an “inability to perform” and that the withholding will have no effect on national security. The respondent explained that it did not interpret the rule as requiring an automatic report under the first requirement unless the contractor concludes that the levy will actually jeopardize contract performance; however, the respondent believed that there is an ambiguity in the rule concerning the extent of the reporting requirement, particularly when the contract clause (at 252.232-7010(b)) requires a mandatory report only when “a levy is imposed . . . and the levy will jeopardize contract performance” because the contractor is required to report on both the jeopardy to contract performance and whether there will be any effect on national security. *DoD Response:* The contractor is required to report to the contracting officer if, and only if, the contractor believes that the levy may cause an inability to perform the contract. This reporting requirement is necessary in order to apprise the PCO of circumstances that create barriers to successful contract performance. The contractor is also required (at DFARS 252.232-7010(b)(3)) to provide advice as to whether the inability to perform may adversely affect national security, with rationale and adequate supporting documentation. 4. *Comment:* One respondent commented that the tests under the rule that apply to the two requirements are different. “Jeopardize contract performance” may have a limited impact, while “inability to perform” is more difficult for the contractor to assess. *DoD Response:* The interim rule did establish two different standards, “jeopardize contract performance” and causing an “inability to perform.” The Government's interest is in knowing when the levy may cause an inability to perform, not necessarily in knowing of each impediment that may jeopardize operations and that can be overcome in the normal course of business. To clarify this requirement, the final rule now consistently refers to situations where the levy may result in an “inability to perform.” 5. *Comment:* One respondent commented that, while DFARS 232.7101(b) requires the contracting officer to notify the Director, Defense Procurement and Acquisition Policy, when the contractor's inability to perform may adversely affect national security or may result in significant increased costs to the Government, neither the policy description nor the clause requests information from the contractor as to whether the levy will have any impact on Government costs. *DoD Response:* The assessment as to whether an inability to perform on a contract will lead to significantly increased costs is an internal one for the buying activity. The PCO and the PCO's customer would be able to assess, based on such factors as cost/price analysis of the affected contract, alternative sources of supply, or existing inventories, whether a probability exists for significantly increased costs to the Government. Therefore, the final rule does not include a requirement for contractor information on this factor. 6. *Comment:* One respondent recommended that the contract clause be revised to specify, consistent with DFARS 232.7101(c), that the contracting officer will provide the notification described in DFARS 252.232-7010(c). The clause currently provides only that DoD will provide a notification to the contractor. *DoD Response:* DFARS 252.232-7010(c) has been revised to require that the PCO notify the contractor, in writing, of the DoD decision. 7. *Comment:* One respondent recommended that DFARS Procedures, Guidance, and Information
(PGI)be expanded to require notification by the PCO to the procuring agency's senior procurement executive, concurrent with the notification to the Director, Defense Procurement and Acquisition Policy, that is prescribed in the rule. *DoD Response:* DoD agrees that senior agency procurement leadership, possibly including the senior procurement executive, should be included in the notification process. Corresponding PGI coverage provides that the contracting officer will notify the Director, Defense Procurement and Acquisition Policy, in accordance with agency procedures. DoD believes that the individual DoD components should determine the specific routing of such notifications in their internal guidance. 8. *Comment:* One respondent stated that DFARS 232.7100, Scope of subpart, should cite Internal Revenue Code 6331 and 6332, since those sections established the Federal Payment Levy Program. *DoD Response:* The coverage in DFARS Subpart 232.71, Levies on Contract Payments, addresses a narrow part of levies against payments, specifically, the process for dealing with collections against contract payments that may cause an inability to perform. Therefore, DoD believes that the current citation is appropriately precise. 9. *Comment:* One respondent stated that the rule should indicate when the clause needs to be included in contracts, e.g., greater than $100,000. Similarly, another respondent recommended that contracts below the simplified acquisition threshold be excluded. *DoD Response:* While DoD understands that contracts below the simplified acquisition threshold have a reduced likelihood of impacting national security, the possibility exists that, in a critical situation, a levy could lead to such a circumstance. Therefore, DoD believes that the clause prescription should apply to contracts below the simplified acquisition threshold, with the exception of micro-purchases. DFARS 232.7102 has been revised to exclude micro-purchases from the clause prescription. 10. *Comment:* Two respondents requested clarification as to whether the clause applies to contracts for the acquisition of commercial items. *DoD Response:* While DoD understands that contracts for the acquisition of commercial items have a reduced likelihood of impacting national security, the scope of commercial items is very broad, and such contracts can be very large, even including critical items. Therefore, the possibility exists that, in a given situation, a levy could impact contract performance that, in a certain circumstance, could impact national security. DoD believes that the clause should be used in contracts for commercial items above the micro-purchase threshold. DFARS 212.301(f) has been amended to incorporate a prescription for inclusion of the clause at 252.232-7010 in contracts for the acquisition of commercial items. 11. *Comment:* One respondent recommended that the clause prescription permit the contracting officer to waive (without significant procedural requirements) the inclusion of the clause in solicitations and contracts when the contracting officer believes the risk of a levy having an adverse impact on performance is low. *DoD Response:* While there may be contracts that have a reduced likelihood of impacting national security or leading to significantly higher costs to the Government in the event of an inability to perform, the possibility exists that, in a critical situation, a levy could lead to such a circumstance. Therefore, DoD did not make the suggested change. 12. *Comment:* One respondent commented that the vast majority of DoD contracts contain the clause at FAR 52.232-23, Assignment of Claims, with Alternate I, which provides for a no-setoff commitment, and asked how DFARS 252.232-7010, Levies on Contract Payments, would interact with FAR 52.232-23, with Alternate I. *DoD Response:* Levies cannot be applied against payments for contracts that have been assigned in accordance with the clause at FAR 52.232-23, Assignment of Claims, with Alternate I, unless the agency or the contracting officer has excluded the no-setoff commitment in accordance with DFARS 232.803(d). 13. *Comment:* Two respondents had comments regarding the requirement for assessing the impact of an inability to perform on national security. One indicated that this should be a judgment for the Government, since contractors cannot possibly know such things. The other respondent indicated that this may be beyond the contractor's knowledge and capability. *DoD Response:* The contractor generally is not in a position to determine the impact on national security, and the rule assigns that responsibility to DoD. However, the policy at 232.7101, and the clause at 252.232-7010, call for advice from the contractor as to whether national security might be impacted. The advice may be helpful to the buying activity in developing a decision as to the impact on national security. No change in the rule is necessary. 14. *Comment:* One respondent commented that the Background section of the **Federal Register** notice should be changed to make it consistent with DFARS 232.7101, Policy and Procedures. Specifically, that section should be revised to indicate that the contractor will notify the contracting officer when the contractor believes a levy imposed on a DoD contract payment will “jeopardize contract performance.” The respondent also recommended that the Paperwork Reduction Act section of the **Federal Register** notice be revised for consistency with DFARS 232.7101, to indicate that the rule requires contractors to provide certain information to the Government when levies “jeopardizing contract performance and adversely affecting national security” are imposed on DoD contract payments. *DoD Response:* As discussed in the response to Comment 4 above, to avoid confusion, the final rule eliminates use of the term “jeopardize contract performance” and now consistently refers to requirements for the contractor to notify the contracting officer when a levy may result in an “inability to perform.” 15. *Comment:* One respondent recommended that DoD initiate actions to draft proposed legislation that will require all Federal agencies to provide notice by e-mail for all potential offsets at least 30 days in advance of the target offset date to certain contractor points of contact established in the Central Contractor Registration system. The respondent maintains that Federal agencies, and the Internal Revenue Service in particular, have not been compliant with the intent and spirit of the Debt Collection Improvement Act of 1996, in making the offsets to recover levies related to contract overpayment and tax underpayments. *DoD Response:* The comment is beyond the scope of this DFARS case. However, DoD notes that the Internal Revenue Service issues a Collection Due Process notice 30 days before collection action, such as a levy. Therefore, the contractor is already aware of the debt, and DoD believes that further notice should not be necessary. 16. *Comment:* One respondent strongly encouraged DoD to review the interaction between DoD and the Federal Payment Levy Program and the Treasury Offset Program, with a particular focus on the procedural requirements to notify the contractor, to the maximum extent practicable, before DoD notifies the Treasury Department of a contract debt. *DoD Response:* FAR 32.610, Demand for Payment of Contract Debt, already provides for issuance of a demand for payment, and specifies that the contractor has 30 days to make payment without interest. DoD considers that the existing FAR requirements provide adequate notice to a contractor of a contract debt. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the rule applies to only those contractors that have a delinquent tax debt. The number of contractors that fall into this category is expected to be less than 10 per year. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* Although the rule requires contractors to provide certain information to the Government when an IRS levy may result in an inability to perform a contract, the number of contractors subject to this requirement is expected to be less than 10 per year. List of Subjects in 48 CFR Parts 212, 232, and 252 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Accordingly, the interim rule amending 48 CFR parts 232 and 252, which was published at 70 FR 52031 on September 1, 2005, is adopted as a final rule with the following changes: 1. The authority citation for 48 CFR Parts 212, 232, and 252 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 212—ACQUISITION OF COMMERCIAL ITEMS 2. Section 212.301 is amended by adding paragraph (f)(xi) to read as follows: 212.301 Solicitation provisions and contract clauses for the acquisition of commercial items.
(f)* * *
(xi)Use the clause at 252.232-7010, Levies on Contract Payments, as prescribed in 232.7102. PART 232—CONTRACT FINANCING 3. Sections 232.7101 and 232.7102 are revised to read as follows: 232.7101 Policy and procedures.
(a)The contracting officer shall require the contractor to—
(1)Promptly notify the contracting officer when a levy may result in an inability to perform the contract; and
(2)Advise the contracting officer whether the inability to perform may adversely affect national security.
(b)The contracting officer shall promptly notify the Director, Defense Procurement and Acquisition Policy (DPAP), when the contractor's inability to perform will adversely affect national security or will result in significant additional costs to the Government. Follow the procedures at PGI 232.7101(b) for reviewing the contractor's rationale and submitting the required notification.
(c)The Director, DPAP, will promptly evaluate the contractor's rationale and will notify the IRS, the contracting officer, and the payment office, as appropriate, in accordance with the procedures at PGI 232.7101(c).
(d)The contracting officer shall then notify the contractor in accordance with paragraph
(c)of the clause at 252.232-7010 and in accordance with the procedures at PGI 232.7101(d). 232.7102 Contract clause. Use the clause at 252.232-7010, Levies on Contract Payments, in all solicitations and contracts other than those for micro-purchases. PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 4. Section 252.232-7010 is amended by revising the clause date and paragraphs
(b)and
(c)to read as follows: 252.232-7010 Levies on Contract Payments. LEVIES ON CONTRACT PAYMENTS (DEC 2006)
(b)When a levy is imposed on a payment under this contract and the Contractor believes that the levy may result in an inability to perform the contract, the Contractor shall promptly notify the Procuring Contracting Officer in writing, with a copy to the Administrative Contracting Officer, and shall provide—
(1)The total dollar amount of the levy;
(2)A statement that the Contractor believes that the levy may result in an inability to perform the contract, including rationale and adequate supporting documentation; and
(3)Advice as to whether the inability to perform may adversely affect national security, including rationale and adequate supporting documentation.
(c)DoD shall promptly review the Contractor's assessment, and the Procuring Contracting Officer shall provide a written notification to the Contractor including—
(1)A statement as to whether DoD agrees that the levy may result in an inability to perform the contract; and (2)(i) If the levy may result in an inability to perform the contract and the lack of performance will adversely affect national security, the total amount of the monies collected that should be returned to the Contractor; or
(ii)If the levy may result in an inability to perform the contract but will not impact national security, a recommendation that the Contractor promptly notify the IRS to attempt to resolve the tax situation. [FR Doc. E6-20394 Filed 11-30-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF DEFENSE Defense Acquisition Regulations System 48 CFR Parts 215, 230, 252, and 253 [DFARS Case 2003-D014] Defense Federal Acquisition Regulation Supplement; Contract Pricing and Cost Accounting Standards AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD). ACTION: Final rule. SUMMARY: DoD has issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to update text addressing contract pricing matters and cost accounting standards administration. The rule implements statutory provisions regarding exceptions to cost or pricing data requirements and waiver of cost accounting standards, and relocates internal DoD procedures relating to pricing considerations and cost accounting standards to the DFARS companion resource, Procedures, Guidance, and Information. DATES: *Effective Date:* December 1, 2006. FOR FURTHER INFORMATION CONTACT: Mr. Bill Sain, Defense Acquisition Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense Pentagon, Washington, DC 20301-3062. Telephone
(703)602-0293; facsimile
(703)602-0350. Please cite DFARS Case 2003-D014. SUPPLEMENTARY INFORMATION: A. Background This final rule updates DFARS text addressing contract pricing matters and cost accounting standards administration. The DFARS changes include— ○ Addition of text at 215.403-1 and 230.201-5 to implement Section 817 of the National Defense Authorization Act for Fiscal Year 2003 (Pub. L. 107-314) regarding exceptions to cost or pricing data requirements and waiver of cost accounting standards. ○ Deletion of 215.404-1(d), Cost realism analysis, because FAR 15.404-1 contains sufficient policy on this subject. ○ Deletion of unnecessary introductory text at redesignated 215.404-71-4(f), Facilities capital employed, Values: Normal and designated ranges. ○ Relocation of the definition of “Acceptable estimating system” from 215.407-5-70(a)(1) to the contract clause at 252.215-7002, Cost Estimating System Requirements; elimination of 215.407-5-70(b)(1)(iii) and
(iv)and relocation of the language to the new definition at 252.215-7002(a); and deletion of duplicative language at 252.215-7002(b). ○ Removal of 230.7000, Contract facilities capital estimates; 230.7001, Use of DD Form 1861; and 230.7002, Preaward facilities capital applications; and relocation of text on these subjects to 215.404-71-4, Weighted guidelines method—Facilities capital employed, since these sections pertain to the calculation of weighted guidelines for profit, rather than cost accounting standards. ○ Elimination of 230.7003, Postaward facilities capital applications, and 230.7004-1, Forms CASB-CMF, since these sections duplicate Cost Accounting Standard
(CAS)414, Cost of Money as an Element of the Cost of Facilities Capital; FAR 31.205-10, Cost of Money; and the implementing contract clauses. ○ Elimination of the definitions of “intangible capital asset” and “tangible capital asset” at 230.7100(a) and (b), since these definitions are provided in the cost accounting standards; elimination of the definition of “cost of money rate” at 230.7100(c), because it conflicts with cost accounting standards; and elimination of the definition of “representative investment” at 230.7100(d), because it is unnecessary. ○ Elimination of 230.7101, Calculations, and 230.7102, Determining imputed cost of money, because they are adequately covered in CAS 417, Cost of Money as an Element of the Cost of Capital Assets Under Construction (48 CFR 9904.417). ○ Removal of 230.7103, Preaward capital employed application, and relocation of text on this subject to 215.404-73(b)(2)(i), Offsets for facilities capital cost of money, since it applies to offsets in determining profit, rather than cost accounting standards. ○ Relocation of the following text to the DFARS companion resource, Procedures, Guidance, and Information (PGI), at *http://www.acq.osd.mil/dpap/dars/pgi.* ○ 215.403-5, Instructions for submission of cost or pricing data or information other than cost or pricing data. ○ 215.404-2, Information to support proposal analysis. ○ 215.404-3, Subcontract pricing considerations. ○ 215.404-70, DD Form 1547, Record of Weighted Guidelines Method Application. ○ 215.404-76, Reporting profit and fee statistics. ○ 215.406-1, Prenegotiation objectives. ○ 215.406-3, Documenting the negotiation. ○ 215.407-4, Should-cost review. ○ 215.407-5-70(e) and (f), Estimating systems—Disclosure, maintenance, and review requirements. ○ 215.470(b) and (c), Estimated data prices, except that the first sentence of
(b)remains in DFARS, and is revised for clarity. ○ 230.201-5(a)(1), Waiver (partial relocation). ○ 230.7004-2, DD Form 1861 (relocated to PGI 215.404-71-4(c), consistent with the relocation of 230.7000, 230.7001, and 230.7002 to DFARS 215.404-71-4. ○ 253.215-70, DD Form 1547, Record of Weighted Guidelines Application. DoD published a proposed rule at 70 FR 75440 on December 20, 2005. One industry association submitted comments on the proposed rule. The industry association questioned the proposed relocation of the weighted guidelines profit analysis procedures from DFARS Subpart 15.4 to PGI, since considerations that DoD contracting officers use to develop profit objectives have a significant impact on industry. DoD agrees with this comment and has retained the weighted guidelines procedures in DFARS Subpart 215.4, with the exception of the text at 215.404-70, which merely provides a general description of the DD Form 1547 and its use, and the text at 215.404-76, which deals exclusively with internal DoD reporting of profit and fee statistics. Additional differences between the proposed and final rules include— 215.403-1(c)(1)—This text, which addresses standards for exceptions from cost or pricing data requirements, is retained in the DFARS, since these standards affect industry. 215.403-1(c)(3)—This text is amended to clarify that the determination as to whether a commercial item exception applies is made by the contracting officer. 215.406-1—The reference to corresponding PGI text is revised to indicate that the PGI procedures are mandatory. This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. B. Regulatory Flexibility Act DoD certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, *et seq.* , because the rule updates, clarifies, and relocates DFARS text, but makes no significant change to DoD contracting policy. C. Paperwork Reduction Act The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, *et seq.* List of Subjects in 48 CFR Parts 215, 230, 252, and 253 Government procurement. Michele P. Peterson, Editor, Defense Acquisition Regulations System. Therefore, 48 CFR Parts 215, 230, 252, and 253 are amended as follows: 1. The authority citation for 48 CFR Parts 215, 230, 252, and 253 continues to read as follows: Authority: 41 U.S.C. 421 and 48 CFR Chapter 1. PART 215—CONTRACTING BY NEGOTIATION 2. Section 215.403-1 is amended as follows: a. By adding paragraph (c)(3); b. By redesignating paragraphs (c)(4)(A) and
(B)as paragraphs (c)(4)(C) and
(D)respectively; and c. By adding new paragraphs (c)(4)(A) and
(B)to read as follows: 215.403-1 Prohibition on obtaining cost or pricing data.
(c)* * *
(3)*Commercial items.* By November 30th of each year, departments and agencies shall provide a report to the Director, Defense Procurement and Acquisition Policy (DPAP), ATTN: DPAP/CPF, of all contracting officer determinations that commercial item exceptions apply under FAR 15.403-1(b)(3), during the previous fiscal year, for any contract, subcontract, or modification expected to have a value of $15,000,000 or more. See PGI 215.403-1(c)(3) for the format and guidance for the report. The Director, DPAP, will submit a consolidated report to the congressional defense committees.
(4)* * *
(A)The head of the contracting activity may, without power of delegation, apply the exceptional circumstances authority when a determination is made that— ( *1* ) The property or services cannot reasonably be obtained under the contract, subcontract, or modification, without the granting of the waiver; ( *2* ) The price can be determined to be fair and reasonable without the submission of certified cost or pricing data; and ( *3* ) There are demonstrated benefits to granting the waiver. See PGI 215.403-1(c)(4)(A) for guidance applicable to waivers for part of a proposal and unpriced options.
(B)By November 30th of each year, departments and agencies shall provide a report to the Director, DPAP, ATTN: DPAP/CPF, of all waivers granted under FAR 15.403-1(b)(4), during the previous fiscal year, for any contract, subcontract, or modification expected to have a value of $15,000,000 or more. See PGI 215.403-1(c)(4)(B) for the format and guidance for the report. The Director, DPAP, will submit a consolidated report to the congressional defense committees. 3. Section 215.403-5 is revised to read as follows: 215.403-5 Instructions for submission of cost or pricing data or information other than cost or pricing data. When the solicitation requires contractor compliance with the Contractor Cost Data Reporting System, follow the procedures at PGI 215.403-5. 215.404-1 [Amended] 4. Section 215.404-1 is amended by removing paragraph (d). 5. Sections 215.404-2 and 215.404-3 are revised to read as follows: 215.404-2 Information to support proposal analysis. See PGI 215.404-2 for guidance on obtaining field pricing or audit assistance. 215.404-3 Subcontract pricing considerations. Follow the procedures at PGI 215.404-3 when reviewing a subcontractor's proposal. 6. Section 215.404-4 is amended by revising paragraph (b)(1) introductory text to read as follows: 215.404-4 Profit.
(b)* * *
(1)Contracting officers shall use a structured approach for developing a prenegotiation profit or fee objective on any negotiated contract action when cost or pricing data is obtained, except for cost-plus-award-fee contracts (see 215.404-74, 216.405-2, and FAR 16.405-2) or contracts with Federally Funded Research and Development Centers (FFRDCs) (see 215.404-75). There are three structured approaches— 7. Section 215.404-70 is revised to read as follows: 215.404-70 DD Form 1547, Record of Weighted Guidelines Method Application. Follow the procedures at PGI 215.404-70 for use of DD Form 1547 whenever a structured approach to profit analysis is required. 8. Section 215.404-71-4 is amended as follows: a. By redesignating paragraphs
(b)through
(d)as paragraphs
(e)through
(g)respectively; b. By adding new paragraphs
(b)through (d); and c. In newly designated paragraph (f), by removing “These are the normal values and ranges. They apply to all situations.”. The added text reads as follows: 215.404-71-4 Facilities capital employed.
(b)*Contract facilities capital estimates.* The contracting officer shall estimate the facilities capital cost of money and capital employed using—
(1)An analysis of the appropriate Forms CASB-CMF and cost of money factors (48 CFR 9904.414 and FAR 31.205-10); and
(2)DD Form 1861, Contract Facilities Capital Cost of Money.
(c)*Use of DD Form 1861.* See PGI 215.404-71-4(c) for obtaining field pricing support for preparing DD Form 1861.
(1)*Purpose.* The DD Form 1861 provides a means of linking the Form CASB-CMF and DD Form 1547, Record of Weighted Guidelines Application. It—
(i)Enables the contracting officer to differentiate profit objectives for various types of assets (land, buildings, equipment). The procedure is similar to applying overhead rates to appropriate overhead allocation bases to determine contract overhead costs.
(ii)Is designed to record and compute the contract facilities capital cost of money and capital employed which is carried forward to DD Form 1547.
(2)*Completion instructions.* Complete a DD Form 1861 only after evaluating the contractor's cost proposal, establishing cost of money factors, and establishing a prenegotiation objective on cost. Complete the form as follows:
(i)List overhead pools and direct-charging service centers (if used) in the same structure as they appear on the contractor's cost proposal and Form CASB-CMF. The structure and allocation base units-of-measure must be compatible on all three displays.
(ii)Extract appropriate contract overhead allocation base data, by year, from the evaluated cost breakdown or prenegotiation cost objective and list against each overhead pool and direct-charging service center.
(iii)Multiply each allocation base by its corresponding cost of money factor to get the facilities capital cost of money estimated to be incurred each year. The sum of these products represents the estimated contract facilities capital cost of money for the year's effort.
(iv)Total contract facilities cost of money is the sum of the yearly amounts.
(v)Since the facilities capital cost of money factors reflect the applicable cost of money rate in Column 1 of Form CASB-CMF, divide the contract cost of money by that same rate to determine the contract facilities capital employed.
(d)*Preaward facilities capital applications.* To establish cost and price objectives, apply the facilities capital cost of money and capital employed as follows:
(1)*Cost of Money.*
(i)*Cost Objective.* Use the imputed facilities capital cost of money, with normal, booked costs, to establish a cost objective or the target cost when structuring an incentive type contract. Do not adjust target costs established at the outset even though actual cost of money rates become available during the period of contract performance.
(ii)*Profit Objective.* When measuring the contractor's effort for the purpose of establishing a prenegotiation profit objective, restrict the cost base to normal, booked costs. Do not include cost of money as part of the cost base.
(2)*Facilities Capital Employed.* Assess and weight the profit objective for risk associated with facilities capital employed in accordance with the profit guidelines at 215.404-71-4. 9. Section 215.404-73 is amended by revising paragraph (b)(2)(i) to read as follows: 215.404-73 Alternate structured approaches.
(b)* * *
(2)* * *
(i)The contracting officer shall reduce the overall prenegotiation profit objective by the amount of facilities capital cost of money under Cost Accounting Standard
(CAS)414, Cost of Money as an Element of the Cost of Facilities Capital (48 CFR 9904.414). Cost of money under CAS 417, Cost of Money as an Element of the Cost of Capital Assets Under Construction (48 CFR 9904.417), should not be used to reduce the overall prenegotiation profit objective. The profit amount in the negotiation summary of the DD Form 1547 must be net of the offset. 10. Section 215.404-76 is revised to read as follows: 215.404-76 Reporting profit and fee statistics. Follow the procedures at PGI 215.404-76 for reporting profit and fee statistics. 11. Sections 215.406-1 and 215.406-3 are revised to read as follows: 215.406-1 Prenegotiation objectives. Follow the procedures at PGI 215.406-1 for establishing prenegotiation objectives. 215.406-3 Documenting the negotiation. Follow the procedures at PGI 215.406-3 for documenting the negotiation. 12. Section 215.407-4 is revised to read as follows: 215.407-4 Should-cost review. See PGI 215.407-4 for guidance on determining whether to perform a program or overhead should-cost review. 13. Section 215.407-5-70 is amended by revising paragraphs (a)(1), (b)(1), (e), and
(f)to read as follows: 215.407-5-70 Disclosure, maintenance, and review requirements.
(a)* * *
(1)*Acceptable estimating system* is defined in the clause at 252.215-7002, Cost Estimating System Requirements.
(b)* * *
(1)DoD policy is that all contractors have acceptable estimating systems that consistently produce well-supported proposals that are acceptable as a basis for negotiation of fair and reasonable prices.
(e)*Review procedures.* Follow the procedures at PGI 215.407-5-70(e) for establishing and conducting estimating system reviews.
(f)*Disposition of survey team findings.* Follow the procedures at PGI 215.407-5-70(f) for disposition of the survey team findings. 14. Section 215.470 is amended by revising paragraph (b), removing paragraph (c), and redesignating paragraph
(d)as paragraph (c). The revised text reads as follows: 215.470 Estimated data prices.
(b)When data are required to be delivered under a contract, include DD Form 1423, Contract Data Requirements List, in the solicitation. See PGI 215.470(b) for guidance on the use of DD Form 1423. PART 230—COST ACCOUNTING STANDARDS ADMINISTRATION 15. Section 230.201-5 is revised to read as follows: 230.201-5 Waiver. (a)(1)(A) The military departments and the Director, Defense Procurement and Acquisition Policy, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics)— *(1)* May grant CAS waivers that meet the conditions in FAR 30.201-5(b)(1); and *(2)* May grant CAS waivers that meet the conditions in FAR 30.201-5(b)(2), provided the cognizant Federal agency official granting the waiver determines that— *(i)* The property or services cannot reasonably be obtained under the contract, subcontract, or modification, as applicable, without granting the waiver; *(ii)* The price can be determined to be fair and reasonable without the application of the Cost Accounting Standards; and *(iii)* There are demonstrated benefits to granting the waiver.
(B)Follow the procedures at PGI 230.201-5(a)(1) for submitting waiver requests to the Director, Defense Procurement and Acquisition Policy.
(2)The military departments shall not delegate CAS waiver authority below the individual responsible for issuing contracting policy for the department.
(e)By November 30th of each year, the military departments shall provide a report to the Director, Defense Procurement and Acquisition Policy, ATTN: DPAP/CPF, of all waivers granted under FAR 30.201-5(a), during the previous fiscal year, for any contract, subcontract, or modification expected to have a value of $15,000,000 or more. See PGI 230.201-5(e) for format and guidance for the report. The Director, Defense Procurement and Acquisition Policy, will submit a consolidated report to the CAS Board and the congressional defense committees. Subparts 230.70 and 230.71 [Removed] 16. Subparts 230.70 and 230.71 are removed. PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES 17. Section 252.215-7002 is amended as follows: a. By revising the clause date; b. In paragraph (a), by revising the paragraph heading and adding a definition of “Acceptable estimating system”; and c. By revising paragraph (b). The revised and added text reads as follows: 252.215-7002 Cost Estimating System Requirements. COST ESTIMATING SYSTEM REQUIREMENTS (DEC 2006)
(a)*Definitions.* *Acceptable estimating system* means an estimating system that—
(1)Is maintained, reliable, and consistently applied;
(2)Produces verifiable, supportable, and documented cost estimates that are an acceptable basis for negotiation of fair and reasonable prices;
(3)Is consistent with and integrated with the Contractor's related management systems; and
(4)Is subject to applicable financial control systems.
(b)*General.* The Contractor shall establish, maintain, and comply with an acceptable estimating system. PART 253—FORMS 18. Section 253.215-70 is revised to read as follows: 253.215-70 DD Form 1547, Record of Weighted Guidelines Application. Follow the procedures at PGI 253.215-70 for completing DD Form 1547. [FR Doc. E6-20396 Filed 11-30-06; 8:45 am] BILLING CODE 5001-08-P DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 665 [Docket No. 060724200-6302-03; I.D. 052506A and 071106G] RIN 0648-AT95 and 0648-AT94 Fisheries in the Western Pacific; Bottomfish and Seamount Groundfish, Crustacean, and Precious Corals Fisheries; Permit and Reporting Requirements AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce. ACTION: Final rule; effectiveness of collection-of-information requirements. SUMMARY: NMFS announces approval by the Office of Management and Budget
(OMB)of collection-of-information requirements contained in regulations implementing the amendments to the Bottomfish and Seamount Groundfish Fishery Management Plan (FMP), Crustaceans FMP, and Precious Corals FMP. The intent of this final rule is to inform the public of the permitting and reporting requirements. DATES: Amendments to §§ 665.14, 665.41, and 665.61, published at 71 FR 53605 (September 12, 2006), and amendments to §§ 665.14 and 665.61, published at 71 FR 64474 (November 2, 2006) are effective on January 2, 2007. ADDRESSES: Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this final rule may be submitted to William L. Robinson, Administrator, NMFS Pacific Islands Region (PIR), 1601 Kapiolani Boulevard, Suite 1110, Honolulu, HI 96814-4700, and to David Rostker, OMB, by e-mail to *David_Rostker@omb.eop.gov* , or fax to 202-395-7285. FOR FURTHER INFORMATION CONTACT: Bob Harman, NMFS PIR, 808-944-2271. SUPPLEMENTARY INFORMATION: Electronic Access This **Federal Register** document is also accessible at the web site of the Office of the **Federal Register** : *www.gpoaccess.gov/fr/index.html* . Background A final rule for amendments to the Bottomfish and Seamount Groundfish, Crustaceans, and Precious Corals FMPs was published in the **Federal Register** on September 12, 2006 (71 FR 53605), and the requirements of that final rule, other than the collection-of-information requirements, were effective on October 12, 2006. Because OMB approval of the collection-of-information requirements had not been received by the date that final rule was published, the effective date of the permitting and reporting requirements in that rule was delayed. Also, another final rule for an amendment to the Bottomfish and Seamount Groundfish FMP was published in the **Federal Register** on November 2, 2006 (71 FR 64474), and the requirements of that final rule, other than the collection-of-information requirements, will be effective on December 4, 2006. Because OMB approval of the collection-of-information requirements had not been received by the date that rule was published, the effective date of the permitting and reporting requirements in that rule was also delayed. OMB approved the collection-of-information requirements contained in the two rules on November 7, 2006. Accordingly, this final rule makes effective the collection-of-information requirements at §§ 665.14, 665.41, and 665.61, which were amended in the September 12, 2006, final rule, and the collection-of- information requirements at §§ 665.14 and 665.61, which were amended in the November 2, 2006, final rule. Classification This final rule has been determined to be not significant for purposes of Executive Order 12866. Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act (PRA), unless that collection of information displays a currently valid OMB control number. This final rule contains revisions to collection-of- information requirements subject to the PRA under OMB control numbers 0648-0214 and 0648-0490. The public reporting burden for these requirements is estimated to be 30 min for a new permit application, and 5 min for completing a fishing logbook each day. These estimates include time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding these burden estimates or any other aspect of this data collection, including suggestions for reducing the burden, to William L. Robinson (see ADDRESSES ), or by e-mail to *David_Rostker@omb.eop.gov* , or fax to 202-395-7285. Dated: November 27, 2006. Samuel D. Rauch III, Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service. [FR Doc. E6-20378 Filed 11-30-06; 8:45 am] BILLING CODE 3510-22-S 71 231 Friday, December 1, 2006 Proposed Rules DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 51 [Docket Number FV-06-308] RIN 0581-AC63 Multi-Year Revision of Fees for the Fresh Fruit and Vegetable Terminal Market Inspection Services AGENCY: Agricultural Marketing Service, USDA. ACTION: Proposed rule. SUMMARY: This proposed rule would revise the regulations governing the inspection and certification for fresh fruits, vegetables and other products by increasing certain fees charged for the inspection of these products at destination markets for the next two fiscal years (FY-2007 and FY-2008) by approximately 15 percent. These revisions are necessary in order to recover, as nearly as practicable, the costs of performing inspection services at destination markets under the Agricultural Marketing Act of 1946 (AMA of 1946). The fees charged to persons required to have inspection on imported commodities in accordance with the Agricultural Marketing Agreement Act of 1937 and for imported peanuts under section 1308 of the Farm Security and Rural Investigation Act of 2002. DATES: Comments must be postmarked, courier dated, or sent via the Internet on or before January 2, 2007. ADDRESSES: Interested persons are invited to submit written comments concerning this proposal. Comments are to be sent to the U.S. Department of Agriculture, Agricultural Marketing Service, Fruit and Vegetable Programs, Fresh Products Branch, 1400 Independence Ave., SW., Room 0640-S, Washington, DC 20250-0295, faxed to
(202)720-5136, sent via e-mail to *FPB.DocketClerk@usda.gov* , or via the Internet: *http://www.regulations.gov.* Comments should make reference to the date and page number of this issue of the **Federal Register** and will be made available for public inspection in the above office during regular business hours. FOR FURTHER CONTACT INFORMATION: Rita Bibbs-Booth, USDA, 1400 Independence Ave., SW., Room 0640-S, Washington, DC 20250-0295, or call
(202)720-0391. SUPPLEMENTARY INFORMATION: Executive Order 12866 and Regulatory Flexibility Act This rule has been determined to be “non-significant” for the purposes of Executive Order 12866, and has not been reviewed by the Office of Management and Budget. Also, pursuant to the requirement set forth in the Regulatory Flexibility Act (RFA), AMS has considered the economic impact of this action on small entities. Accordingly, AMS proposes this initial regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. The proposed action described herein is being taken for several reasons, including that additional user fee revenues are needed to cover the costs or:
(1)Providing current program operations and services:
(2)improving the timeliness in which inspection services are provided; and
(3)improving the work environment. AMS regularly reviews its user-fee financed programs to determine if the fees are adequate. The Fresh Products Branch
(FPB)has and will continue to seek out cost saving opportunities and implement appropriate changes to reduce its costs. Such actions can provide alternatives to fee increases. FPB has reduced costs by approximately $2 million. However, even with these efforts, FPB's existing fee schedule will not generate sufficient revenue to cover program costs while maintaining the Agency mandated reserve balance. Current revenue projections for FPB's destination market inspection work during FY-2006 are $15.3 million with costs projected at $20.4 million and an end-of-year reserve balance of $12.7 million. However, this reserve balance is due in part, to appropriated funding received in October 2001, for infrastructure, workplace, and technological improvements. FPB's costs of operating the destination market program are expected to increase to approximately $21.6 million during FY-2007 and $22.5 million during FY-2008. Revenues are projected to be $15.3 million for end of the fiscal year. The reserve balance for FY-2007 and FY-2008, will fall below the Agency's mandated four-month reserve level. The reserve balance is projected to be $6.5 million for FY-2007 (3.6 months) and a negative $584,000 for FY-2008 (−0.3) months). This proposed fee increase should result in an estimated average of $2.4 million in additional revenues per year (effective in FY-2007, if the fees were implemented by October 1, 2006). This will not cover all of FPB's costs. FPB will need to continue to increase fees in order to cover the program's operating cost and maintain the required reserve balance. FPB believes that increasing fees incrementally is appropriate at this time. Additional fee increases beyond FY-2008 will be needed to sustain the program in the future. However, we will continue to reduce costs, wherever possible. Employee salaries and benefits are major program costs that account for approximately 80 percent of FPB's total operating budget. A general and locality salary increase for Federal employees, ranging from 2.87 to 5.62 percent depending on locality, effective January 2006, has significantly increased program costs and will continue to increase costs at a similar rate in future years. This salary adjustment will increase FPB's costs by over $700,000 per year. Increases in health and life insurance premiums, along with workers compensation will also increase program costs. In addition, inflation also impacts FPB's non-salary costs. These factors have increased FPB's costs of operating this program by over $600,000 per year. Additional funds of approximately $155,000 are necessary in order for FPB to continue to cover the costs associated with additional staff and to maintain office space and equipment. Additional revenues are also necessary to improve the work environment by providing training and purchasing needed equipment. In addition, FPB began in 2001, developing (with appropriated funds) the Fresh Electronic Inspection Reporting/Resource System (FEIRS) to replace its manual paper and pen inspection reporting process. FEIRS was implemented in 2004. This system has been put in place to enhance and streamline FPB's fruit and vegetable inspection process, however additional revenue is required to maintain FEIRS. FPB has also begun to cover the costs associated with the Training and Development Center
(TDC)in Fredericksburg, VA. A portion of the appropriated funds received in October 2001 were for infrastructure improvements including the development and maintenance of the inspector Training and Development Center. With appropriated funding now depleted, FPB is now obligated to support the TDC under revenues from the terminal market user fee inspection program. This proposed rule should increase user fee revenue generated under the destination market program by approximately 15 percent. This action is authorized under the Agricultural Marketing Act of 1946 (AMA of 1946) (See 7 U.S.C. 1622(h)), which provides that the Secretary of Agriculture may assess and collect “such fees as will be reasonable and as nearly as may be to cover the costs of services rendered * * * ” There are more than 2,000 users of FPB's destination market grading services (including applicants who must meet import requirements 1 —inspections which amount to under 2.5 percent of all lot inspections performed). A small portion of these users are small entities under the criteria established by the Small Business Administration (13 CFR 121.201). There would be no additional reporting, recordkeeping, or other compliance requirements imposed upon small entities as a result of this proposed rule. In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and recordkeeping requirements in Part 51 have been approved previously by OMB and assigned OMB No. 0581-0125. FPB has not identified any other Federal rules which may duplicate, overlap or conflict with this proposed rule. 1 Section 8e of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), requires that whenever the Secretary of Agriculture issues grade, size, quality or maturity regulations under domestic marketing orders for certain commodities, the same or comparable regulations on imports of those commodities must be issued. Import regulations apply during those periods when domestic marketing order commodities must be issued. Import regulations apply during those periods when domestic marketing order regulations are in effect. Section 1308 of the Farm Security and Rural Investment Act of 2002 (Public Law 107-171), 7 U.S.C. 7958, required USDA among other things to develop new peanut quality and handling standards for imported peanuts marketing in the United States. Currently, there are 14 commodities subject to 8e import regulations: Avocados, dates (other than dates for processing), filberts, grapefruit, kiwifruit, olives (other than Spanish-style green olives), onions, oranges, potatoes, prunes, raisins, table grapes, tomatoes and walnuts. A current listing of the regulated commodities can be found under 7 CFR Parts 944, 980, 996, and 999. The destination market grading services are voluntary (except when required for imported commodities) and the fees charged to users of these services vary with usage. However, the impact on all businesses, including small entities, is very similar. Further, even though fees will be raised, the increase is not excessive and should not significantly affect these entities. Finally, except for those persons who are required to obtain inspections, most of these businesses are typically under no obligation to use these inspection services, and, therefore, any decision on their part to discontinue the use of the services should not prevent them from marketing their products. Executive Order 12988 This proposed 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. Proposed Action The AMA of 1946 authorizes official inspection, grading, and certification, on a user-fee basis, of fresh fruits, vegetables and other products such as raw nuts, Christmas trees and flowers. The AMA of 1946 provides that reasonable fees be collected from the users of the services to cover, as nearly as practicable, the cost of the services rendered. This proposed rule would amend the schedule for fees and charges for inspection services rendered to the fresh fruit and vegetable industry to reflect the costs necessary to operate the program. AMS regularly reviews its user-fee financed programs to determine if the fees are adequate. The Fresh Products Branch
(FPB)has and will continue to seek out cost saving opportunities and implement appropriate changes to reduce its costs. Such actions can provide alternatives to fee increases. FPB has reduced costs by approximately $2 million. However, even with these efforts, FPB's existing fee schedule will not generate sufficient revenue to cover program costs while maintaining the Agency mandated reserve balance. Current revenue projections for FPB's destination market inspection work during FY-2006 are $15.3 million with costs projected at $20.4 million and an end-of-year reserve balance of $12.7 million. However, this reserve balance is due in part, to appropriated funding received in October 2001, for infrastructure, workplace, and technological improvements. FPB's costs of operating the destination market program are expected to increase to approximately $21.6 million during FY-2007 and $22.5 million during FY-2008. Revenues are projected to be $15.3 million for end of the fiscal year. The reserve balance for FY-2007 and FY-2008, will fall below the Agency's mandated four-month reserve level. The reserve balance is projected to be $6.5 million for FY-2007 (3.6 months) and a negative $584,000 for FY-2008 (−0.3) months). Employee salaries and benefits are major program costs that account for approximately 80 percent of FPB's total operating budget. A general and locality salary increase for Federal employees, ranging from 2.87 to 5.62 percent depending on locality, effective January 2006, has significantly increased program costs, and will continue to increase costs at a similar rate in future years. This salary adjustment will increase FPB's costs by over $700,000 per year. Increases in health and life insurance premiums, along with workers compensation will also increase program costs. In addition, inflation also impacts FPB's non-costs. These factors have increased FPB's costs of operating this program by over $600,000 per year. Additional revenues (approximately $155,000) are necessary in order for FPB to continue to cover the costs associated with additional staff and to maintain office space and equipment. Additional revenues are also necessary to continue to improve the work environment by providing training and purchasing needed equipment. In addition, FPB began in 2001, developing (with appropriate funds) an automated system known as FEIRS, to replace its manual paper and pen inspection reporting process. Approximately $10,000 in additional revenue per month will be needed to maintain the system. This system has been put in place to enhance FPB's fruit and vegetable inspection processes. FPB has also begun to cover the costs associated with the Training and Development Center
(TDC)in Fredericksburg, VA. A portion of the appropriated funds received in October 2001 were for infrastructure improvements including the development and maintenance of the inspector Training and Development Center. With appropriated funding now depleted, FPB is now obligated to support the TDC under revenues from the terminal market user fee inspection program. Based on the aforementioned analysis of this program's increasing costs, AMS proposes to increase the fees for destination market inspection services. The following table compares current fees and charges with the proposed fees and charges for fresh fruit and vegetable inspection as found in 7 CFR 51.38. Unless otherwise provided for by regulation or written agreement between the applicant and the Administrator, the charge in the schedule of fees as found in § 51.38 are: Service Current 2007 2008 Quality and condition inspections of products each in quantities of 51 or more packages and unloaded from the same land or air conveyance: —Over a half carlot equivalent of each product $114.00 $131.00 $151.00 —Half carlot equivalent or less of each product 95.00 109.00 125.00 —For each additional lot of the same product 52.00 60.00 69.00 Condition only inspections of products each in quantities of 51 or more packages and unloaded from the same land or air conveyance: —Over a half carlot equivalent of each product 95.00 109.00 125.00 —Half carlot equivalent or less of each product 87.00 100.00 115.00 —For each additional lot of the same product 52.00 60.00 69.00 Quality and condition and condition only inspections of products each in quantities of 50 or less packages unloaded from the same land or air conveyance: —For each product 52.00 60.00 69.00 —For each additional lot of any of the same product 52.00 60.00 69.00 —Lots in excess of carlot equivalents will be charged proportionally by the quarter carlot Dock side inspections of an individual product unloaded directly from the same ship: —For each package weighing less than 30 pounds 1 2.9 1 3.3 1 3.8 —For each package weighing 30 or more pounds 1 4.4 1 5.1 1 5.9 —Minimum charge per individual product 114.00 131.00 151.00 —Minimum charge for each additional lot of the same product 52.00 60.00 69.00 Hourly rate for inspections performed for other purposes during the grader's regularly scheduled work week: —Hourly rate for non-carlot equivalent inspections such as count, size, temperature, container, etc. or work associated with inspections such as digital image services will be charged at a rate that reflects the cost of providing the service 56.00 64.00 74.00 Overtime rate (per hour additional) for all inspections performed outside the grader's regularly scheduled work week 29.00 33.00 38.00 Holiday pay: Hourly rate for inspections performed under 40 hour contracts during the grader's regularly scheduled work week 56.00 64.00 74.00 Rate for billable mileage 1.00 1.15 1.32 1 Cents. A thirty-day comment period is provided for interested persons to comment on this proposed action. Given the current financial status of the program, thirty days is deemed appropriate in order to have any fee increase, if adopted, to be in place as close as possible to the beginning of the fiscal year 2007. List of Subjects in 7 CFR Part 51 Agricultural commodities, Food grades and standards, Fruits, Nuts, Reporting and record keeping requirements, Trees, Vegetables. For reasons set forth in the preamble, 7 CFR part 51 is proposed to be amended as follows: PART 51—[AMENDED] 1. The authority citation for 7 CFR Part 51 continues to read as follows: Authority: 7 U.S.C. 1621-1627. 2. Section 51.38 is revised to read as follows: § 51.38 Basis for fees and rates.
(a)When performing inspections of product unloaded directly from land or air transportation, the charges shall be determined on the following basis:
(1)Quality and condition inspections of products in quantities of 51 or more packages and unloaded from the same air or land conveyance:
(i)$131 ($151) for over a half carlot equivalent of an individual product;
(ii)$109 ($125) for a half carlot equivalent or less of an individual product;
(iii)$60 ($69) for each additional lot of the same product.
(2)Condition only inspection of products each in quantities of 51 or more packages and unloaded from the same land or air conveyance:
(i)$109 ($125) for over a half carlot equivalent of an individual product;
(ii)$100 ($115) for a half carlot equivalent or less of an individual product;
(iii)$60 ($69) for each additional lot of the same product.
(3)For quality and condition inspection and condition only inspection of products in quantities of 50 or less packages unloaded from the same conveyance:
(i)$60 ($69) for each individual product:
(ii)$60 ($69) for each additional lot of any of the same product. Lots in excess of carlot equivalents will be charged proportionally by the quarter carlot.
(b)When performing inspections of palletized products unloaded directly from sea transportation or when palletized product is first offered for inspection before being transported from the dock-side facility, charges shall be determined on the following basis:
(1)Dock-side inspections of an individual product unloaded directly from the same ship:
(i)3.3 (3.8) cents per package weighing less than 30 pounds;
(ii)5.1 (5.9) cents per package weighing 30 or more pounds;
(iii)Minimum charge of $131 ($151) per individual product;
(iv)Minimum charge of $60 ($69) for each additional lot of the same product
(2)[Reserved]
(c)When performing inspections of products from sea containers unloaded directly from sea transportation or when palletized products unloaded directly from sea transportation are not offered for inspection at dock-side, the carlot fees in “a” of this section shall apply.
(d)When performing inspections for Government agencies, or for purposes other than those prescribed in paragraphs
(a)through
(c)of this section, including weight-only and freezing-only inspections, fees for inspections shall be based on the time consumed by the grader in connection with such inspections, computed at a rate of $64 ($74) per hour: *Provided* , that:
(1)Charges for time shall be rounded to the nearest half hour;
(2)The minimum fee shall be two hours for weight-only inspections, and one-half hour for other inspections;
(3)When weight certification is provided in addition to quality and/or condition inspection, a one-hour charge shall be added to the carlot fee;
(4)When inspections are performed to certify product compliance for Defense Personnel Support Centers, the daily or weekly charge shall be determined by multiplying the total hours consumed to conduct inspections by the hourly rate. The daily or weekly charge shall be prorated among applicants by multiplying the daily or weekly charge by the percentage of product passed and/or failed for each applicant during that day or week. Waiting time and overtime charges shall be charged directly to the applicant responsible for their incurrence.
(e)When performing inspections at the request of the applicant during periods which are outside the grader's regularly scheduled work week, a charge for overtime or holiday work shall be made at the rate of $33 ($38) per hour or portion thereof in addition to the carlot equivalent fee, package charge, or hourly charge specified in this subpart. Overtime or holiday charges for time shall be rounded to the nearest half hour.
(f)When an inspection is delayed because product is not available or readily accessible, a charge for waiting time shall be made at the prevailing hourly rate in addition to the carlot equivalent fee, package charge, or hourly charge specified in this subpart. Waiting time shall be rounded to the nearest half hour. Dated: November 27, 2006. Lloyd C. Day, Administrator, Agriculture Marketing Service. [FR Doc. E6-20315 Filed 11-30-06; 8:45 am] BILLING CODE 3410-02-P FEDERAL RESERVE SYSTEM 12 CFR Part 205 [Regulation E; Docket No. R-1270] Electronic Fund Transfers AGENCY: Board of Governors of the Federal Reserve System. ACTION: Proposed rule; request for public comment. SUMMARY: The Board is proposing to amend Regulation E, which implements the Electronic Fund Transfer Act, and the official staff commentary to the regulation, which interprets the requirements of Regulation E. The proposed amendments would create an exception for certain small-dollar transactions from the requirement that terminal receipts be made available to consumers at the time of the transaction. DATES: Comments must be received on or before January 30, 2007. ADDRESSES: You may submit comments, identified by Docket No. R-1270, by any of the following methods: • *Agency Web Site: http://www.federalreserve.gov.* Follow the instructions for submitting comments at *http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.* • *Federal eRulemaking Portal: http://www.regulations.gov.* Follow the instructions for submitting comments. • *E-mail: regs.comments@federalreserve.gov.* Include the docket number in the subject line of the message. • *FAX:*
(202)452-3819 or
(202)452-3102. • *Mail:* Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW., Washington, DC 20551. All public comments are available from the Board's Web site at *http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm* as submitted, unless modified for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact information. Public comments may also be viewed electronically or in paper form in Room MP-500 of the Board's Martin Building (20th and C Streets, NW.) between 9 a.m. and 5 p.m. on weekdays. FOR FURTHER INFORMATION CONTACT: Ky Tran-Trong or David A. Stein, Counsels, or Vivian W. Wong, Attorney, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551, at
(202)452-2412 or
(202)452-3667. For users of Telecommunications Device for the Deaf
(TDD)only, contact
(202)263-4869. SUPPLEMENTARY INFORMATION: I. Statutory Background The Electronic Fund Transfer Act (15 U.S.C. 1693 *et seq.* ) (EFTA or Act), enacted in 1978, provides a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer
(EFT)systems. The EFTA is implemented by the Board's Regulation E (12 CFR part 205). Examples of the types of transfers covered by the Act and regulation include transfers initiated through an automated teller machine (ATM), point-of-sale
(POS)terminal, automated clearinghouse (ACH), telephone bill-payment plan, or remote banking service. The Act and regulation provide for the disclosure of terms and conditions of an EFT service; documentation of EFTs by means of terminal receipts and periodic account activity statements; limitations on consumer liability for unauthorized transfers; procedures for error resolution; and certain rights related to preauthorized EFTs. Further, the Act and regulation also restrict the unsolicited issuance of ATM cards and other access devices. The official staff commentary (12 CFR part 205 (Supp. I)) interprets the requirements of Regulation E to facilitate compliance and provides protection from liability under Sections 915 and 916 of the EFTA for financial institutions and other persons subject to the Act. 15 U.S.C. 1693m(d)(1). The commentary is updated periodically to address significant questions that arise. II. Background Historically, consumers have tended to use cash to make small-dollar purchases, for example, to buy food or beverages from a vending machine or to pay for a subway fare. 1 Data from the payment card associations indicates, however, that in certain market segments, consumers are increasingly using credit and debit cards in place of cash, even for small-dollar transactions. 2 This shift in consumer payment preferences in small-dollar transactions is consistent with evidence suggesting the declining use of cash as a share of all payments. 3 Consumers have cited numerous reasons for using debit cards over other payment methods, such as cash or checks. These reasons include convenience, shorter checkout times, avoiding ATM fees or check printing fees, and the ability to track and record payments. 4 1 According to one industry estimate, consumers spent more than $1 trillion on transactions less than $5 in 2003, with an average payment of $3.72. *See* TowerGroup, “Making Sense from Cents: Trends in the Rebirth of Electronic Micropayments” (July 2004). 2 *See* “More and More Consumers Use Visa to Make Small Purchases,” Visa Press Release (August 24, 2006) (reporting double digit growth in the use of payment cards in the first six months of 2006 compared to the same period in 2005); “MasterCard PayPass Increases Customer Loyalty and Moves Payments Away From Cash,” Master Card Press Release (July 18, 2006). *See also* TowerGroup, “Anticipating Micropayment Growth” (October 2005) (indicating nearly $3 billion in growth (up to $13.5 billion) for transactions less than $5 using debit and credit cards between 2003 and 2004). 3 *See* Geoffrey Gerdes and Jack Walton II, “Trends in the Use of Payment Instruments in the United States,” *Federal Reserve Bulletin* 180, 181 (Spring 2005). 4 *See* Ron Borzekowski, Elizabeth Kiser, and Shaista Ahmed, “Consumers” Use of Debit Cards: Patterns, Preferences, and Price Response,” April 2006. Working paper, Federal Reserve Board. *See also* Elizabeth Klee, “Paper or Plastic? The Effect of Time on Check and Debit Card Use at Grocery Stores,” February 2006. Working paper, Federal Reserve Board (concluding that based on an analysis of grocery store scanner data, consumer preferences for debit cards over checks is significantly driven by the differences in transaction time). Merchants, financial institutions and payment card associations have responded to the shift in consumer preferences towards non-cash methods of payment for small-dollar transactions in various ways. Payment card associations have changed their rules to enable quicker processing of transactions for both debit and credit cards. For example, these associations have waived the signature and personal identification number
(PIN)authorization requirements for certain types of purchases under $25. Moreover, to encourage merchant acceptance of payment cards, these associations have also reduced their debit and credit card interchange rates for certain small-dollar transactions. 5 In addition, some card issuers have integrated new technologies into their products which allow consumers to swipe or wave radio frequency-enabled cards or other devices to authorize payment in “contactless” transactions. These initiatives have reduced the amount of time consumers spend at checkout, which has in turn allowed merchants to process more transactions in the same amount of time. 5 *See, e.g.* , “Visa Takes Big Steps Into Small Payments,” Visa Press Release (April 11, 2006). III. Summary of Proposed Revision When a debit card is used to pay for a purchase at a POS terminal, Regulation E requires that a receipt setting forth transaction information about the EFT be made available to the consumer at that time. The receipt requirement applies whenever an EFT is made at an electronic terminal, regardless of the amount of the transaction. Board staff has received several industry inquiries asking the Board to consider eliminating the receipt requirement at POS terminals for small-dollar transactions. According to industry representatives, the receipt requirement is a significant impediment to allowing consumers to use debit cards to make small-dollar purchases due to the cost of installing, servicing, and maintaining printers at POS terminals. In addition, in some applications, such as for mass transit, the additional time required to provide a receipt to each consumer using a debit card to pay for individual fares would add delays that would make it operationally unfeasible to allow consumers to use debit cards for such transactions. In light of the implementation costs and other considerations and the uncertain consumer benefit from receipts for small-dollar transactions, the Board is proposing to create an exception from the terminal receipt requirement for EFTs of $15 or less. The proposed rule would facilitate electronic transactions in circumstances where the receipt requirement is sufficiently burdensome or impractical so as to potentially deter merchants from allowing consumers to use electronic methods of payment. Moreover, it is unclear whether consumers typically request or retain receipts for small-dollar transactions at POS terminals. As further discussed in more detail in the section-by-section analysis, the Board also believes that the risks to consumers of not receiving a receipt for their transactions (and the benefit of receiving a receipt) would be minimal given the small value of the transaction. In particular, the Board notes that consumers would continue to receive a listing of each transaction on their periodic statements, regardless of the transaction amount, and would have the right to assert errors that may arise from any such transaction, provided such notice was provided within the required time frames. IV. Section-by-Section Analysis Section 205.9 Receipts at Electronic Terminals; Periodic Statements Under § 205.9(a), when a consumer initiates an EFT at an electronic terminal, a receipt reflecting the transaction details must be made available to the consumer at the time of the transaction. An electronic terminal is defined as any electronic device (other than a telephone operated by a consumer) through which a consumer may initiate an EFT. Electronic terminals include, but are not limited to, POS terminals, ATM machines, and cash dispensing machines. *See* § 205.2(h). 6 Proposed § 205.9(a)(2) would except EFTs of $15 or less from the requirement that financial institutions make a terminal receipt available at the time of the transaction. 6 The terminal receipt requirement does not apply to transactions initiated through a telephone operated by a consumer, or to transactions initiated by a consumer “by a means analogous in function to a telephone.” Thus, the receipt requirement does not apply to Internet transactions, where a consumer uses a computer to visit a merchant's web site to purchase goods or services. *See* § 205.2(h); comment 2(h)-1(ii). The National Commission on Electronic Fund Transfers, whose recommendations provided much of the basis for the EFTA, deemed the requirement to make available terminal receipts at the time a consumer initiates an EFT at an electronic terminal necessary to provide consumers, “at a minimum, records that provide the same information and can be used in the same way as cancelled checks.” 7 The legislative history of the Act indicates that Congress was similarly concerned about the importance of terminal receipts for EFTs as evidence of the transaction. In particular, Senate Banking Committee Reports noted that “receipts * * * would give the consumer written verification of the amount, date, and type of transfer and the person paid.” S. Rep. No. 915, 95th Cong., 2d Sess. 5 (1978). 8 Receipts may also serve to assist consumers in tracking their purchases for account management purposes. 7 National Commission on Electronic Fund Transfers, EFT in the United States: Policy Recommendations in the Public Interest 47-48 (1977). 8 *See also* S. Rep. No. 1273, 95th Cong., 2d Sess. 30 (1978); H.R. Rep. No. 1315, 95th Cong., 2d Sess. 6 (1978). According to industry representatives, start-up, servicing, and maintenance costs arising from the terminal receipt requirements pose a significant obstacle to the industry's efforts to offer cashless payment options for small-dollar purchases in certain retail environments. For example, in retail environments which exclusively handle small-dollar transactions, such as vending machines or parking meters, installing and maintaining additional equipment capable of providing terminal receipts may not be cost-effective. In other circumstances, the requirement to provide receipts may be impractical, such as in the case of mass-transit systems where the time required to print a receipt for each consumer purchasing single fares with a debit card would cause delays that would significantly conflict with a transit system's need to handle a heavy volume of transactions within short time periods. Anecdotally, industry representatives also report that in retail environments in which the transaction amount is typically low, such as convenience stores and quick-service restaurants, consumers often choose not to request or retain receipts for those transactions. Thus, in the absence of any relief from the receipt requirement, merchants may choose to forego the acceptance of debit cards entirely, thereby limiting consumer payment choices. To facilitate the ability of consumers to use electronic payment methods in circumstances where providing receipts may not be practical or cost-effective, the Board is proposing to exercise its authority under Section 904(c) of the EFTA to create a limited exception from the terminal receipt requirement for small-dollar transactions. 9 In weighing the appropriateness for the exception, the Board has also considered that the consumer benefit from receiving receipts is likely to be minimal for these transactions. While receipts may be important for consumers for moderate to high value transactions, the Board believes that receipts are less significant for transactions of relatively small amounts because consumers are less likely to retain them for proof of payment or for account management purposes given the limited risk of loss to the consumer. Moreover, consumers will continue to receive a record of each transaction on monthly periodic statements. 10 In the event of a double debit or incorrect EFT amount in connection with a small-dollar purchase, the consumer would retain the right to assert an error arising from that transaction with his or her financial institution. In light of these considerations, § 205.9(e) of the proposed rule would provide financial institutions an exception from the requirement to provide a receipt at the time the consumer initiates an EFT at an electronic terminal where the value of the transaction is $15 or less. The exception would apply to all types of transfers initiated by a consumer at an electronic terminal, including signature-based and personal identification number (PIN)-based debits from the consumer's account. To simplify the rule and in light of the broad definition of EFT under the regulation, the proposed exception would also apply to deposits at ATMs or other electronic terminals of $15 or less. *See* § 205.3(b)(1); comment 3(b)(1)-1(i). However, the Board anticipates that financial institutions would, for operational reasons, continue to make receipts available for ATM transactions, regardless of the amount of the transfer. 9 Section 904(c) of the EFTA provides that the rules issued by the Board “may contain such classifications, differentiations, or other provisions, and may provide for any adjustments and exceptions for any class of electronic fund transfers” that in the judgment of the Board are “necessary or proper to effectuate the purposes of [the Act], to prevent circumvention or evasion thereof, or to facilitate compliance therewith.” 10 Consumers that wish to keep a contemporaneous record of their transactions could of course deduct the transaction amount promptly in their check registers or use a similar account reconciliation process. In proposing the $15 threshold under which no terminal receipt would be required, the Board has considered a variety of factors, including the average dollar transaction amount for the various market segments for which this relief would be most useful 11 and the benefit to consumers from receiving a receipt in these transactions. While it appears that a threshold of $5 or less would enable consumers to use debit cards in the vast majority of the retail environments where cashless payment options are contemplated, the Board believes a $5 threshold would not be flexible enough to accommodate price increases that may occur over time. In addition, setting too low a threshold may impede the future acceptance of cashless methods of payments in additional retail environments, such as for parking meters and commuter rail systems. 12 The Board believes the $15 threshold would provide sufficient flexibility for the industry to accommodate consumer preferences for electronic forms of payment instead of cash in a variety of circumstances while ensuring that consumer protections provided by the regulation's receipt provisions would be retained for moderate to higher-dollar transactions in which consumers may have more need for evidence of payment and for error resolution purposes. Comment is requested on whether any additional consumer protections are necessary for consumers who would not receive receipts under the proposed rule. Comment is also requested on the dollar amount threshold set forth in the proposed rule. 11 Vending industry data indicates that the average cost in 2005 for food and beverages sold in vending machines was about 75 cents for candy, $1 for bottled beverages, and $2 for frozen and refrigerated food products. *Automatic Merchandiser* 40-62 (August 2006). In addition, a survey of major transit systems in Boston, Chicago, New York, and Washington, DC, indicates maximum one-way fares ranging between $2 and $5 for subway systems. 12 For example, commuter one-way peak fares on the Long Island Railroad
(LIRR)to or from New York's Pennsylvania Station range from just under $6 to $20. See LIRR fare map (effective March 1, 2005), available at *http://www.mta.nyc.ny.us* (visited October 15, 2006). Similarly, one payment card association reported that in 2004, its average ticket for fast-food purchases using debit and credit cards was just under $12. *See* John Stewart, “Micropayments, Macro-Market?” *Digital Transactions* (May 2005). Section 205.11 Procedures for Resolving Errors 11(a) Definition of Error New comment 11(a)-6 would provide that the fact that an institution does not make a terminal receipt available for a transaction of $15 or less is not a billing error for purposes of §§ 205.11(a)(1)(vi) or (vii). V. Initial Regulatory Flexibility Analysis The Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* )
(RFA)generally requires an agency to perform an assessment of the impact a rule is expected to have on small entities. However, under section 605(b) of the RFA, 5 U.S.C. 605(b), the regulatory flexibility analysis otherwise required under section 604 of the RFA is not required if an agency certifies, along with a statement providing the factual basis for such certification, that the rule will not have a significant economic impact on a substantial number of small entities. Based on its analysis and for the reasons stated below, the Board believes that this proposed rule will not have a significant economic impact on a substantial number of small entities. A final regulatory flexibility analysis will be conducted after consideration of comments received during the public comment period. 1. *Statement of the need for, and objectives of, the proposed rule.* The Board is revising Regulation E to provide financial institutions relief from the requirement to make available terminal receipts at the time of a transaction, for EFTs of $15 or less. The EFTA was enacted to provide a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund transfer systems. The primary objective of the EFTA is the provision of individual consumer rights. 15 U.S.C. 1693. The EFTA authorizes the Board to prescribe regulations to carry out the purpose and provisions of the statute. 15 U.S.C. 1693b(a). The Act expressly states that the Board's regulations may contain “such classifications, differentiations, or other provisions, * * * as, in the judgment of the Board, are necessary or proper to effectuate the purposes of [the Act], to prevent circumvention or evasion [of the Act], or to facilitate compliance [with the Act].” 15 U.S.C. 1693b(c). The Board believes that the revisions to Regulation E discussed above are within Congress's broad grant of authority to the Board to adopt provisions that carry out the purposes of the statute. These revisions facilitate the use of electronic payment methods by consumers in circumstances where the value to the consumer of having a record of the transaction ( *i.e.* , the terminal receipt) is limited. 2. *Small entities affected by the proposed rule.* The requirement to make available receipts when a consumer initiates an EFT at an electronic terminal applies to all financial institutions, regardless of their size. Accordingly, the proposed exception would reduce the burden and compliance costs for small institutions by providing relief from the requirement from the duty to make terminal receipts available to consumers at the time of the transaction, where the transaction amount is small. 3. *Other federal rules.* The Board has not identified any federal rules that duplicate, overlap, or conflict with the proposed revisions to Regulation E. 4. *Significant alternatives to the proposed revisions.* The Board solicits comment about additional ways to reduce regulatory burden associated with this proposed rule. VI. Paperwork Reduction Act In accordance with the Paperwork Reduction Act
(PRA)of 1995 (44 U.S.C. 3506; 5 CFR Part 1320 Appendix A.1), the Board reviewed the rule under the authority delegated to the Board by the Office of Management and Budget (OMB). The collection of information that is required by this proposed rule is found in 12 CFR part 205. The Federal Reserve may not conduct or sponsor, and an organization is not required to respond to, this information collection unless the information collection displays a currently valid OMB control number. The OMB control number is 7100-0200. This information collection is required to provide benefits for consumers and is mandatory (15 U.S.C. 1693 *et seq.* ). The respondents/recordkeepers are for-profit financial institutions, including small businesses. Institutions are required to retain records for 24 months. The proposed rule provides relief to financial institutions from the requirement to make available terminal receipts to consumers for all EFTs of $15 or less. Thus, for purposes of the PRA, respondents would face a one-time burden of 8 hours (one business day) to reprogram and update their systems if they wish to make use of the proposed exception. The Federal Reserve estimates that the total annual burden for this requirement for the 100 estimated respondents likely to be affected by this proposed rulemaking would be 800 hours. This would increase the total annual burden of this information collection from 83,866 hours to 84,666 hours. The other federal financial agencies are responsible for estimating and reporting to OMB the total paperwork burden for the institutions for which they have administrative enforcement authority. They may, but are not required to, use the Federal Reserve's burden estimates. Using the Federal Reserve's method, the total estimated annual burden for all financial institutions subject to Regulation E, including Federal Reserve-supervised institutions, would be approximately 1,397,572 hours. The above estimates represent an average across all respondents and reflect variations between institutions based on their size, complexity, and practices. All covered institutions, including retailers, ATM operators, and depository institutions (of which there are approximately 19,300) potentially are affected by this collection of information, and thus are respondents for purposes of the PRA. Comments are invited on: a. Whether the proposed collection of information is necessary for the proper performance of the Federal Reserve's functions; including whether the information has practical utility; b. the accuracy of the Federal Reserve's estimate of the burden of the proposed information collection, including the cost of compliance; c. ways to enhance the quality, utility, and clarity of the information to be collected; and d. ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology. Comments on the collection of information should be sent to Michelle Long, Federal Reserve Board Clearance Officer, Division of Research and Statistics, Mail Stop 151-A, Board of Governors of the Federal Reserve System, Washington, DC 20551, with copies of such comments sent to the Office of Management and Budget, Paperwork Reduction Project (7100-0200), Washington, DC 20503. Text of Proposed Revisions Certain conventions have been used to highlight the proposed changes to the text of the regulation and staff commentary. New language is shown inside bold-faced arrows, while language that would be deleted is set off with bold-faced brackets. Comments are numbered to comply with **Federal Register** publication rules. List of Subjects in 12 CFR Part 205 Consumer protection, Electronic fund transfers, Federal Reserve System, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, the Board proposes to amend 12 CFR part 205 and the Official Staff Commentary, as follows: PART 205—ELECTRONIC FUND TRANSFERS (REGULATION E) 1. The authority citation for part 205 would continue to read as follows: Authority: 15 U.S.C. 1693b. 2. Section 205.9 would be amended by revising paragraph
(a)and adding a new paragraph
(e)as follows: § 205.9 Receipts at electronic terminals; periodic statements.
(a)*Receipts at electronic terminals.* [A] ▸General. Except as provided in paragraph
(e)of this section, a ◂ financial institution shall make a receipt available to a consumer at the time the consumer initiates an electronic fund transfer at an electronic terminal. The receipt shall set forth the following information, as applicable:
(1)*Amount.* The amount of the transfer. A transaction fee may be included in this amount, provided the amount of the fee is disclosed on the receipt and displayed on or at the terminal.
(2)*Date.* The date the consumer initiates the transfer.
(3)*Type.* The type of transfer and the type of the consumer's account(s) to or from which funds are transferred. The type of account may be omitted if the access device used is able to access only one account at that terminal.
(4)*Identification.* A number or code that identifies the consumer's account or accounts, or the access device used to initiate the transfer. The number or code need not exceed four digits or letters to comply with the requirements of this paragraph (a)(4).
(5)*Terminal location.* The location of the terminal where the transfer is initiated, or an identification such as a code or terminal number. Except in limited circumstances where all terminals are located in the same city or state, if the location is disclosed, it shall include the city and state or foreign country and one of the following:
(i)The street address; or
(ii)A generally accepted name for the specific location; or
(iii)The name of the owner or operator of the terminal if other than the account-holding institution.
(6)*Third party transfer.* The name of any third party to or from whom funds are transferred. ▸(e) *Exception for receipts in small-value transfers.* A financial institution is not subject to the requirement to provide a receipt under paragraph
(a)of this section if the amount of the transfer is $15 or less.◂ 3. In Supplement I to part 205, under § 205.11—Procedures for Resolving Errors, under *11(a) Definition of Error* , paragraph 6. would be added. Supplement I to Part 205—Official Staff Interpretations Section 205.11—Procedures for Resolving Errors *11(a) Definition of Error* ▸6. *Terminal receipts for transfers of $15 or less.* The fact that an institution does not make a terminal receipt available for a transfer of $15 or less in accordance with § 205.9(e) is not an error for purposes of §§ 205.11(a)(1)(vi) or (vii).◂ By order of the Board of Governors of the Federal Reserve System, November 27, 2006. Jennifer J. Johnson, Secretary of the Board. [FR Doc. E6-20301 Filed 11-30-06; 8:45 am] BILLING CODE 6210-01-P DEPARTMENT OF JUSTICE Drug Enforcement Administration 21 CFR Part 1312 [Docket No. DEA-282P] RIN 1117-AB03 Authorized Sources of Narcotic Raw Materials AGENCY: Drug Enforcement Administration (DEA), Justice. ACTION: Notice of proposed rulemaking; extension of comment period. SUMMARY: DEA is extending the comment period on the Notice of Proposed Rulemaking entitled “Authorized Sources of Narcotic Raw Materials” published October 4, 2006 (71 FR 58569). DATES: The period for public comment which was to close on December 4, 2006, will be extended to January 3, 2007. Written comments must be postmarked, and electronic comments must be sent, on or before January 3, 2007. ADDRESSES: To ensure proper handling of comments, please reference “Docket No. DEA-282P” on all written and electronic correspondence. Written comments being sent via regular mail should be sent to the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, Attention: DEA Federal Register Representative/Liaison and Policy Section (ODL). Written comments sent via express mail should be sent to DEA Headquarters, Attention: DEA Federal Register Representative/ODL, 2401 Jefferson-Davis Highway, Alexandria, VA 22301. Comments may be directly sent to DEA electronically by sending an electronic message to *dea.diversion.policy@usdoj.gov.* Comments may also be sent electronically through *http://www.regulations.gov* using the electronic comment form provided on that site. An electronic copy of this document is also available at the *http://www.regulations.gov* Web site. DEA will accept attachments to electronic comments in Microsoft word, WordPerfect, Adobe PDF, or Excel file formats only. DEA will not accept any file formats other than those specifically listed here. FOR FURTHER INFORMATION CONTACT: Christine A. Sannerud, PhD, Chief, Drug and Chemical Evaluation Section, Office of Diversion Control, Drug Enforcement Administration, Washington, DC 20537, telephone:
(202)307-7183. SUPPLEMENTARY INFORMATION: DEA published a notice of Proposed Rulemaking (71 FR 58569, October 4, 2006) proposing to update the list of nontraditional countries authorized to export narcotic raw materials
(NRM)to the United States by replacing Yugoslavia with Spain. This action will maintain a consistent and reliable supply of narcotic raw materials from a limited number of countries consistent with United States' obligations under international treaties and resolutions. On November 3, 2006, DEA received a request that the comment period be extended to February 5, 2007. The Australian Government indicated that the additional time would be necessary to consult with the Australian State of Tasmania, the Tasmanian Poppy Advisory and Control Board and the Australian poppy industry to better evaluate the short- and long-term implications of this Notice of Proposed Rulemaking. Upon consideration of this request, DEA is granting a thirty day extension of the comment period. This allows sufficient time for persons to evaluate and consider all relevant information and respond accordingly. Therefore, the comment period is extended to January 3, 2007. Written comments must be postmarked, and electronic comments must be sent, on or before this date. Dated: November 28, 2006. Joseph T. Rannazzisi, Deputy Assistant Administrator. [FR Doc. E6-20383 Filed 11-30-06; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF LABOR Employment Standards Administration Wage and Hour Division 29 CFR Part 825 RIN 1215-AB35 Request for Information on the Family and Medical Leave Act of 1993 AGENCY: Employment Standards Administration, Wage and Hour Division, Department of Labor. ACTION: Request for information from the public. SUMMARY: This notice requests comments related to the Family and Medical Leave Act of 1993 (the “FMLA” or the “Act”). The Employment Standards Administration, Wage and Hour Division, of the Department of Labor (the “Department”) seeks information for its consideration and review of the Department's administration of the Act and implementing regulations. The Department held stakeholder meetings regarding the FMLA with more than 20 groups from December 2002-February 2003. Many of the subject matter areas in this request are derived from comments at those stakeholder meetings and also from
(1)rulings of the Supreme Court of the United States and other federal courts over the past twelve years;
(2)the Department's experience in administering the law; and
(3)public input presented in numerous Congressional hearings and public comments filed with the Office of Management and Budget (“OMB”) in connection with three annual reports to Congress regarding the Costs and Benefits of Federal regulations in 2001, 2002, 2004. In addition, the Department has reviewed numerous source materials about issues associated with the FMLA. During this process, the Department has heard a variety of concerns expressed about the FMLA. Some of those concerns, however, are beyond the Department's statutory authority to address. Some are not. In this regard, the Department invites interested parties having knowledge of, or experience with, the FMLA to submit comments and welcomes any pertinent information that will provide a basis for ascertaining the effectiveness of the current implementing regulations and the Department's administration of the Act. The questions posed are not meant to be an exclusive list of issues for which the Department seeks commentary and information. DATES: Public comments should be received by no later than 5 p.m. est, February 2, 2007. ADDRESSES: Address all written submissions to Richard M. Brennan, Senior Regulatory Officer, Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, NW., Washington, DC 20210. You may also submit comments by e-mail to: *whdcomments@dol.gov.* Comments of 20 pages or less may be submitted by FAX machine to
(202)693-1432, which is not a toll-free number. Because we continue to experience delays in receiving mail in the Washington, DC area, individuals are encouraged to submit comments by mail early, or to transmit them electronically by FAX or e-mail. FOR FURTHER INFORMATION CONTACT: Richard M. Brennan, Senior Regulatory Officer, Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, NW., Washington, DC 20210; telephone:
(202)693-0066 (this is not a toll free number). SUPPLEMENTARY INFORMATION: I. Background A. What the Law Covers The Family and Medical Leave Act of 1993, Public Law 103-3, 107 Stat. 6 (29 U.S.C. 2601 *et seq.* ) (the “FMLA” or the “Act”) was enacted on February 5, 1993 and became effective on August 5, 1993 for most covered employers. The FMLA entitles eligible employees of covered employers to take up to a total of twelve weeks of unpaid leave during a twelve-month period for the birth of a child; for the placement of a child for adoption or foster care; to care for a newborn or newly-placed child; to care for a spouse, parent, son or daughter with a serious health condition; or when the employee is unable to work due to the employee's own serious health condition. See 29 U.S.C. 2612. Employers covered by the law must maintain for the employee any preexisting group health coverage during the leave period and, once the leave period has concluded, reinstate the employee to the same or an equivalent job with equivalent employment benefits, pay, and other terms and conditions of employment. See 29 U.S.C. 2614. If an employee believes that his or her FMLA rights have been violated, the employee may file a complaint with the Department or file a private lawsuit in federal or state court. If the employer has violated an employee's FMLA rights, the employee is entitled to reimbursement for any tangible loss incurred, equitable relief as appropriate, interest, attorneys' fees, expert witness fees, and court costs. Liquidated damages also may be awarded. See 29 U.S.C. 2617. Title I of the FMLA applies to private sector employers of fifty or more employees, public agencies and certain federal employers and entities, such as the U.S. Postal Service and Postal Rate Commission. Title II applies to civil service employees covered by the annual and sick leave system established under 5 U.S.C. Chapter 63, plus certain employees covered by other federal leave systems. Title III established a temporary Commission on Leave to conduct a study and report on existing and proposed policies on leave and the costs, benefits, and impact on productivity of such policies. Title IV contains miscellaneous provisions, including rules governing the effect of the FMLA on more generous leave policies, other laws, and existing employment benefits. Title V originally extended leave provisions to certain employees of the U.S. Senate and House of Representatives, but such coverage was repealed and replaced by the Congressional Accountability Act of 1995, 2 U.S.C. 1301. B. Implementing Regulations The FMLA required the Department to issue regulations to implement Title I and Title IV of the FMLA within 120 days of enactment, or by June 5, 1993, with an effective date of August 5, 1993. Given this short implementation period, the Department published a notice of proposed rulemaking in the **Federal Register** on March 10, 1993 (58 FR 13394), inviting comments until March 31, 1993, on a variety of questions and issues. The Department received a total of 393 comments at that time from a wide variety of stakeholders, including employers, trade and professional associations, advocacy organizations, labor unions, state and local governments, law firms, employee benefit firms, academic institutions, financial institutions, medical institutions, Members of Congress, and others. After considering these comments, the Department issued an interim final rule on June 4, 1993 (58 FR 31794) that became effective on August 5, 1993. The Department also invited further public comment on the interim regulations through September 3, 1993, later extended to December 3, 1993 (58 FR 45433). During this comment period, the Department received more than 900 substantive and editorial comments on the interim regulations, from a wide variety of stakeholders. Based on this second round of public comments, the Department published final regulations to implement the FMLA on January 6, 1995 (60 FR 2180). The regulations were amended on February 3, 1995 (60 FR 6658) and on March 30, 1995 (60 FR 16382) to make minor technical corrections. The regulations went into effect on April 6, 1995. C. Legal Challenges The Ragsdale Decision Since the enactment of the FMLA, hundreds of reported federal cases have addressed the Act and/or implementing regulations. The most significant court decision on the validity of the regulations is that of the United States Supreme Court in *Ragsdale* v. *Wolverine World Wide, Inc.,* 535 U.S. 81 (2002). In its first case involving the FMLA, the Court ruled in March 2002 that the penalty provision in 29 CFR 825.700(a), which states “[i]f an employee takes * * * leave and the employer does not designate the leave as FMLA leave, the leave taken does not count against an employee's leave entitlement[,]” was invalid because in some circumstances it required employers to provide leave to employees beyond the 12-week statutory entitlement. “The FMLA guaranteed [Plaintiff] 12—not 42—weeks of leave[.]” Ragsdale, 535 U.S. at 96. While the Supreme Court did not invalidate the notice and designation provisions in the regulations, it made clear that any categorical penalty for a violation of such requirements set forth in the regulations would exceed the Department's statutory authority. See id. at 91-96. Other Challenges to “Categorical Penalty” Provisions *Ragsdale* is not the only court decision addressing penalty provisions contained in the regulations. Another provision of the regulations, 29 CFR 825.110(d), requires an employer to notify an employee prior to the employee commencing leave as to whether or not the employee is eligible for FMLA leave. If the employer fails to provide the employee with such information or the information is not accurate, the regulation bars the employer from challenging eligibility at a later date, even if the employee is not eligible for FMLA leave according to the statutory requirements. The majority of courts addressing this notice provision have found it to be invalid, even prior to the Ragsdale decision. See, *e.g., Woodford* v. *Cmty. Action of Greene County, Inc.,* 268 F.3d 51, 57 (2d Cir. 2001) (“The regulation exceeds agency rulemaking powers by making eligible under the FMLA employees who do not meet the statute's clear eligibility requirements.”); *Brungart* v. *BellSouth Telecomm., Inc.,* 231 F.3d 791, 796-97 (11th Cir. 2000) (“There is no ambiguity in the statute concerning eligibility for family medical leave, no gap to be filled.”); *Dormeyer* v. *Comerica Bank-Illinois,* 223 F.3d 579, 582 (7th Cir. 2000) (the regulation tries “to change the Act” because it makes eligible employees who, under the language of the statute, are ineligible for family leave; “The statutory test is perfectly clear and covers the issue. The right of family leave is conferred only on employees who have worked at least 1,250 hours in the previous 12 months”). Legal Challenges to the Definition of Serious Health Condition Other regulatory provisions have been challenged as well. In particular, challenges to the regulatory section defining the term “serious health condition,” 29 CFR 825.114, have received significant attention. See, e.g., *Miller* v. *AT&T Corp.,* 250 F.3d 820 (4th Cir. 2001); *Thorson* v. *Gemini, Inc.,* 205 F.3d 370 (8th Cir. 2000). Employers have reported to the Department that they have litigated this issue because there is much confusion as to what constitutes a “serious health condition,” and some employers have stated that the broad definition has left them in the untenable position of having to either guess what the Department and courts will deem to be serious or designate all absences for a medical condition as FMLA-protected. The Department itself has struggled with this definition. After the Act's passage, the Department promulgated section 825.114(c), which states that “[o]rdinarily, unless complications arise, the common cold, the flu, earaches, upset stomach, minor ulcers, headaches other than migraine, routine dental or orthodontia problems, periodontal disease, etc., are examples of conditions that do not meet the definition of a serious health condition and do not qualify for FMLA leave.” This regulatory language implements the legislative history of the FMLA and expresses the Congressional intent that minor, short-term illnesses for which treatment and recovery are very brief would be covered by employers' sick leave programs. See H. Rep. No. 103-8, at 40 (1993); S. Rep. No. 103-3, at 28-29 (1993). Therefore, when first asked about the proper handling of an employee's request for leave due to the common cold, the Department issued an Opinion Letter stating that “[t]he fact that an employee is incapacitated for more than three days, has been treated by a health care provider on at least one occasion which has resulted in a regimen of continuing treatment prescribed by the health care provider does not convert minor illnesses such as the common cold into serious health conditions in the ordinary case (absent complications).” DOL Opinion Letter FMLA-57 (April 7, 1995). More than a year and a half later, however, the Department issued an Opinion Letter changing its interpretation, stating that DOL Opinion Letter FMLA-57 “expresses an incorrect view, being inconsistent with the Department's established interpretation of qualifying “serious health conditions” under the FMLA regulations.” DOL Opinion Letter FMLA-86 (December 12, 1996). The Department further stated that such minor illnesses ordinarily would not be expected to last more than three days, but if they did meet the regulatory criteria for a serious health condition under section 825.114(a), they qualify for FMLA leave. Other Legal Challenges Other legal issues have arisen under the regulations. For example, litigation has ensued under section 29 CFR 825.302-.303 as to what constitutes sufficient employee notice to trigger an employer's obligations under the FMLA. See, *e.g., Spangler* v. *Fed. Home Loan Bank of Des Moines,* 278 F.3d 847 (8th Cir. 2002) (employee who had made employer aware that she had problems with depression gave sufficient notice when she called in and indicated she was out because of “depression again”). Another regulation that has been the subject of litigation is 29 CFR 825.220(d), which discusses the impact of a light duty work assignment on an employee's FMLA rights. See, e.g., *Roberts* v. *Owens-Illinois, Inc.,* 2004 WL 1087355 (S.D. Ind. May 14, 2004) (an employee uses up his or her twelve week FMLA leave entitlement while performing work in a light duty assignment); *Artis* v. *Palos Cmty. Hosp.,* 2004 WL 2125414 (N.D. Ill. Sept. 22, 2004) (same). D. Statutory and Regulatory Developments In addition to developments in the courts, over the past decade several important legislative and regulatory developments have occurred that interact with the FMLA regulations. Most significantly, in 1996 Congress enacted the Health Insurance Portability and Accountability Act (“HIPAA”), Pub. L. 104-191, which addresses in part the privacy of individually identifiable health information. On December 28, 2000, and as amended on May 31, 2002, August 14, 2002, and February 16, 2006, the Department of Health and Human Services (“HHS”) issued regulations found at 45 CFR parts 160 and 164 that provide standards for the privacy of individually identifiable health information. These standards apply only to “covered entities,” defined as a health plan, a health care clearinghouse, or a health care provider who transmits any health information in electronic form in connection with a transaction as defined in the HIPAA privacy regulations. See 45 CFR 160.102(a), 164.103. Further, HHS acknowledges that the HIPAA statute does not include “employers per se as covered entities.” The HIPAA regulations do not impede the disclosure of the protected health information for FMLA reasons if the employee has the health care provider complete the medical certification form or a document containing the equivalent information and requests a copy of that form to personally take or send to the employer in order to exercise FMLA rights. HIPAA regulations, however, clearly do come into play if, for example, the employee asks the health care provider to send the completed certification form or medical information directly to the employer or the employer's representative. HIPAA will generally require the health care provider to first receive a valid authorization from the employee before sending the information to the employer or the employer's representative. In all cases, employers have the statutory right under the FMLA to obtain sufficient medical information to determine whether an employee's leave qualifies for FMLA protections and it is the employee's responsibility to ensure that such information is provided to the employer. If an employee does not fulfill his or her obligation to provide such information upon the employer's request, the employee will not qualify for FMLA leave. See 29 CFR 825.307- .308; DOL Opinion Letter FMLA-2004-2-A (May 25, 2004). Although these rules may appear straightforward, recent enforcement experience reveals confusion with regard to the interaction of FMLA and HIPAA and clarification may be needed. Similarly, FMLA's interaction with other laws is also a potential source of confusion. For example, since the final FMLA regulations were implemented in 1995, the Equal Employment Opportunity Commission (“EEOC”), the agency responsible for enforcing the employment provisions of the Americans with Disabilities Act (“ADA”), has issued guidance with regard to the privacy of employee medical information. See, *e.g.* , Enforcement Guidance: Disability-Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act
(ADA)(EEOC 2000). E. Employer Commentary Employers report to the Department that they recognize the value of the FMLA and attempt to comply with its requirements. For example, the Department has not received complaints about the use of family leave— *i.e.* , leave for the birth or adoption of a child. Nor do employers for the most part report problems with the use of scheduled intermittent leave as contemplated by the statute, such as when an employee requests leave for medical appointments or medical treatment like chemotherapy. Rather, employers report job disruptions and adverse effects on the workforce when employees take frequent, unscheduled, intermittent leave from work with little or no advance notice to the employer. Unforeseen, Intermittent Leave The Department has received significant commentary on the requirements associated with the administration and use of unforeseen, intermittent leave set forth in 29 CFR 825.203. Employer stakeholders who have met with the Department as well as those who have submitted comments to Congress and OMB have indicated that the administration of intermittent leave, which must be done in increments that correspond to the employer's payroll system (section 825.203(d)), is overly burdensome, especially in the case of unforeseeable, intermittent leave. Similarly, many employer groups who participated in the Department's stakeholder meetings stated that the requirement that employees be permitted to take FMLA leave in the smallest increments used by the employer's payroll system has provided an opportunity to avoid compliance with accepted practices of timeliness in the workplace. Employers contend that one of the unintended consequences of the FMLA regulations has been that employers have little recourse to prevent those employees who take FMLA leave improperly from doing so under the current regulatory scheme. While the Department acknowledges that the regulations and the administrative details required by them may work in combination to allow certain employees to attempt to evade legitimate absence control policies, crafting the perfectly equipoised rule to single out only alleged misuse has proven to be a difficult task. Moreover, employee groups point to the 2000 Westat Report, at 6-7, and cite that “a majority of [establishments] reported most aspects of administering FMLA are very or somewhat easy.” 1 1 Westat, “Balancing the Needs of Families and Employers, Family and Medical Leave Surveys, 2000 Update,” January 2001. Medical Certification Procedures The proper flow of accurate medical information is critical to the smooth functioning of the FMLA. The Department has heard repeated concerns from both employers and employees with regard to the medical certification procedures required by the regulations (see also Employee Commentary, infra). Employers have complained that due to the confusing nature of the medical certification form, health care providers often do not complete it properly. Thus, in order for the employer to determine whether a serious health condition exists, the employer frequently must secure the employee's permission to contact the health care provider or ask another doctor for a second opinion. Employers assert, however, that the regulatory requirement that the employee's health care provider be contacted only through the employer's health care representative and only with the employee's permission has been very costly for employers. See 29 CFR 825.307. Several stakeholders have challenged the clarification and authentication process through letters written to OMB, describing it as difficult and time-consuming. Other commenters have noted that these limitations lead to either the employer denying FMLA leave or, conversely, improvidently granting FMLA leave because of the difficulty and expense of obtaining sufficient factual support for the employee's condition. One often-cited example is certification for chronic conditions. An employee's health care provider may certify an employee's chronic condition and list the duration as “indefinite” or “lifetime.” With respect to the frequency of the episodes of incapacity, the health care provider might write “unknown.” Employers argue that this leaves them in the difficult position of guessing about the employee's regular attendance. These regulatory limitations also apply to fitness-for-duty certifications, which employers may request as a condition of restoring an employee who has taken FMLA leave for the employee's own serious health condition. See 29 CFR 825.310. Commenters state that these regulatory limitations create risks to the employee and to co-workers when an employee is in a safety-sensitive position. Impact on Other Workers Surveys conducted by both the Society for Human Resources Management
(SHRM)and the Department reveal that employers tend to cover the work of employees out on FMLA leave with co-workers. A survey conducted by SHRM of its members in 1997 indicated that co-workers cover job duties 92% of the time when absences occur. According to the 1995 report by the Commission on Leave entitled “A Workable Balance: Report to Congress on Family and Medical Leave Policies” (the “1995 Commission on Leave Report”), the most prevalent method that employers use to cover work is to assign the work temporarily to other co-workers (72.3%). Similarly, in the Department's 2000 report, assigning work to other employees was the most prevalent method (76.5%). Impact on Benefit Programs Many employer representatives also have stated that benefit programs (excluding health benefits, which are statutorily addressed in the FMLA itself) have suffered or have even been eliminated as a result of the FMLA regulatory requirements. The most often cited example is the regulatory requirement that FMLA leave cannot disqualify an employee from a perfect attendance award, which may have the unintended consequence of discouraging such awards and programs. F. Employee Commentary Groups and organizations representing employees have also provided information to the Department about their concerns with the FMLA. Notice and Awareness of FMLA Rights One consistent concern expressed by the employee representatives during the stakeholder meetings was that employees need to be better aware of their rights under the FMLA. Awareness of FMLA rights and responsibilities is critical to fulfilling the goals of the statute, yet it has been a challenge from the inception of the FMLA. The 1995 Commission on Leave Report found that 41.9 percent of employees at covered establishments had not heard of the FMLA. In 2000, a survey of employers and a survey of employees conducted for the Department by Westat titled “Balancing the Needs of Families and Employers” (“2000 Westat Report”) found that 40.7 percent of covered employees had not heard of the FMLA and nearly half the employees did not know whether the law applied to them. Additionally, the 2000 Westat Report revealed a significant difference in the estimated number of workers taking FMLA leave based upon the employee survey (2.4 million) and the employer survey (6.1 million). 2 The reason for this discrepancy is not accounted for in the 2000 Westat Report. One reason may have been that employers were designating the employee's leave as covered FMLA leave and employees were unaware of it. This suggests the need for better communication between employers and employees. 2 See the section on the coverage and usages estimates for the details of these estimates. The regulations require an employer, under certain circumstances, to provide a posting of FMLA rights to employees in a language in which they are literate. Nonetheless, the Department received comments at the stakeholder meetings that “language barriers” continue to be an impediment to employees' understanding and exercising of their rights. Medical Certification Procedures Employees have also complained to the Department that the medical certification process is too burdensome. Section 825.305(a) states that an employer may require medical certifications to support an employee's or family member's serious health condition. Section 825.308 generally provides that employers may ask for a recertification no more often than every 30 days and only in connection with an employee's absence from work. Employees have complained that the certification process is too burdensome, and that employers repeatedly deny leave based on “inadequate” information provided by health care providers—information that the employees think is sufficient. Employees have also complained that every 30 days is too frequent to require recertification for chronic, life-long serious health conditions. At the same time, the Department's enforcement experience indicates that health care providers of employees complain that the certification requirements are too cumbersome, and they do not have the time to complete the Wage and Hour Form 380 (“WH-380”) numerous times per employee or to provide detailed information. II. Public Comments Solicited—Key Issues On Which Information Is Requested The Department seeks comments and information from the public on all issues related to the FMLA regulations. We specifically seek comment on the following issues. A. Eligible Employee • Section 825.110 of the regulations sets forth the eligibility standards employees must meet in order to take FMLA leave. Specifically, subsection 825.110(a) restates the statutory requirement that an employee needs to work for an employer for 12 months, work for 1,250 hours in the 12 months prior to taking leave, and work for an employer with 50 or more employees within 75 miles of the worksite in order to be eligible for leave. Although this provision has been in effect for over 10 years, several issues continue to arise which appear to warrant clarification. • One court has interpreted the requirement of 12 months of service under section 825.110(a)(1) to preclude an employee from aggregating for coverage purposes two separate and distinct work periods (separated by a 5 year absence from the company). See * Rucker* v. *Lee Holding, Co.,* 419 F. Supp. 2d 1 (D. Me. 2006), appeal pending, No. 06-1633 (1st Cir.). 3 The court acknowledged that the regulations at section 825.110(b) state that the “12 months an employee must have been employed * * * need not be consecutive months'' and that an employee who maintains an ongoing relationship with an employer punctuated by brief interruptions in service may combine those time periods in order to meet the 12-month requirement. The court also stated, however, that while the regulation “accommodates individuals whose employment might be intermittent or casual, it makes no allowance for an employee who severs all ties with the employer for a period of years before returning.” *Id.* at 3. The Department seeks input on whether and how to address the treatment of combining non-consecutive periods of service for purposes of meeting the 12 months requirement in section 825.110. 3 The Department filed an amicus brief in the First Circuit arguing that, under the current regulations, a five-year break in service is at the outer bounds of what is permissible. • Subsection 825.110(d) states that employee eligibility determinations “must be made as of the date leave commences.” This language has led to differing opinions about whether employees who have worked for 1,250 hours may begin a block of leave before they have met the 12-month eligibility date. Compare *Babcock* v. * BellSouth Advertising and Publ'g Corp.,* 348 F.3d 73 (4th Cir. 2003), and *Beffert* v. *Penn. Dep't of Pub. Welfare,* 2005 WL 906362 (E.D. Pa. Apr. 18, 2005), with *Willemssen* v. *Conveyor Co.,* 359 F. Supp. 2d 813 (N.D. Iowa 2005). The Department solicits comment on how to appropriately clarify this situation. For example, if an employee is on leave at the time he/she meets the 12-month eligibility requirement, should the period of leave after meeting the statutory 12-month requirement be considered protected FMLA leave? • In addition, the Department seeks comment on the differing regulatory tests used for determining employee eligibility. Subsection
(d)states that an employer must determine whether an employee has met the 12-month/1,250-hour eligibility requirements *as of the date leave is to commence* . See 29 CFR 825.110(d) (emphasis added). In contrast, subsection
(f)states that for purposes of determining whether an employee works for an employer who employs 50 or more employees within 75 miles of the worksite, the determination is to be made *as of the date that the leave request is made* . See 29 CFR 825.110(f) (emphasis added). • Section 825.111 sets forth the standards for determining employer coverage under the statutory requirement that employers must employ 50 employees within 75 miles to be covered by the FMLA (29 U.S.C. 2611(2)(B)(ii)). In December 2004, the United States Court of Appeals for the Tenth Circuit partially invalidated section 825.111(a)(3) of the existing regulations, which states that when an employee is jointly employed by two or more employers under section 825.106, the employee's worksite is the primary employer's office from which the employee has been assigned or to which the employee reports. See *Harbert* v. *Healthcare Servs. Group, Inc.* , 391 F.3d 1140 (10th Cir. 2004). The court ruled that the existing regulation, as applied to the situation of an employee with a long-term fixed worksite at a facility of the secondary employer, was arbitrary and capricious because it:
(1)Contravened the plain meaning of term “worksite” as the place where an employee actually works (as opposed to the long-term care placement agency from which she was assigned);
(2)contradicted Congressional intent (manifested in 29 U.S.C. 2611(2)(B)(ii) and the legislative history) that if any employer, large or small, has no significant pool of employees nearby (within 75 miles) to cover for an absent employee, that employer should not be required to provide FMLA leave to that employee; and
(3)created an arbitrary distinction between sole and joint employers. The Department seeks comment on these situations and any issues that may arise when an employee is jointly employed by two or more employers or when the employee works from home. B. Definition of “Serious Health Condition” • Section 825.114(c) states “[o]rdinarily, unless complications arise, the common cold, the flu, earaches, upset stomach, minor ulcers, headaches other than migraine, routine dental or orthodontia problems, periodontal disease, etc., are examples of conditions that do not meet the definition of a serious health condition and do not qualify for FMLA leave.” Have these limitations in section 825.114(c) been rendered inoperative by the regulatory tests set forth in section 825.114(a)? • Is there a way to maintain the substantive standards of section 825.114(a) while still giving meaning to section 825.114(c) and congressional intent that minor illnesses like colds, earaches, etc., not be covered by the FMLA? C. Definition of a “Day” • Should scheduled holidays count against an employee's 12 weeks of FMLA leave when the employee is out for a full week as they do now? • Should “more than three consecutive calendar days” for a serious health condition in section 825.114(a)(2)(i) mean four days or three days and any part of the fourth day? Compare *Russell* v. *North Broward Hosp.* , 346 F.3d 1335 (11th Cir. 2003) (three full days and a partial day will meet the test for continuing treatment), with *Murray* v. *Red Kap Indus., Inc.* , 124 F.3d 696, 698 (5th Cir. 1997) (“where an employee alleges that he has a serious health condition involving continuing treatment by a health care provider, he must first demonstrate a period of incapacity * * * for at least four consecutive days”); *Henderson* v. *Cent. Progressive Bank* , 2002 WL 31086086, at *3 (E.D. La. Sept. 17, 2002) (“statute requires an absence of at least four consecutive days”); *Seidle* v. *Provident Mut. Life Ins. Co.* , 871 F. Supp. 238, 243-44 (E.D. Pa. 1994) (plaintiff could not show that her son had “serious health condition” because he had been incapacitated for only three days, not the statutory four or more); *Bond* v. *Abbott Labs.* , 7 F. Supp. 2d 967, 973 (N.D. Ohio 1998) (“[plaintiff] must show that the period of incapacity was required to be at least four consecutive days”). D. Substitution of Paid Leave • What is the impact of section 825.207 which prohibits employers from applying their normal leave policies to employees substituting paid vacation and personal leave for unpaid FMLA leave? • Does the existence of paid leave policies affect the nature and type of FMLA leave used? • Do employers allow employees to use paid leave such as sick leave to cover short absences from work (such as late arrivals and early departures) for FMLA covered conditions? E. Attendance Policies • How does the FMLA impact the ability of employers to adhere to attendance policies? Has section 825.215(c)(2) impacted the employers' ability to use “perfect attendance awards” and other incentives to encourage attendance? Is there a way to structure such awards and still maintain their effectiveness as an attendance incentive? F. Different Types of FMLA Leave • Does scheduled FMLA leave present different problems or benefits from unscheduled FMLA leave? Does intermittent leave present different problems or benefits from leave taken for one continuous block of time? Does the length of leave taken present different problems or benefits? • Are there differences in leave usage based on occupation, employee classification, or other factors? • How do employers cover the work of employees taking FMLA leave? Does the length of leave impact this coverage? Does the fact that the leave is scheduled or unscheduled impact this coverage? Does the amount of notice given by the leave-taking employee impact this coverage? Does the fact that the leave is intermittent impact this coverage? • Do employers track late arrivals and early departures for FMLA-covered conditions? If so, how is such leave counted against the employee's allotment of twelve weeks of FMLA leave? • Is there any evidence that employers are improperly denying requests for FMLA leave? If so, is the denial of FMLA leave more prevalent for certain types of leave? • Is there any evidence that employees are misusing FMLA leave? If so, how does this compare to other types of leave? • Is there any evidence of employers closing or relocating facilities as a result of employee leave patterns (either scheduled or unscheduled)? • Is there a way to appropriately balance employer absence control policies and legitimate employee use of unscheduled, intermittent leave? G. Light Duty • At least two courts have interpreted section 825.220(d) to mean that an employee uses his or her 12-week FMLA leave entitlement while on a light duty assignment. Should “light duty” work count against the employee's FMLA leave entitlement and/or reinstatement rights? H. Essential Functions • In order to qualify for FMLA leave, an employee must be unable to work at all or unable to perform any one of the essential functions of the employee's position. See 29 CFR 825.115. What are the implications of permitting an employer to modify an employee's existing job duties to meet any limitations caused by the employee's serious health condition as specified by a health care provider, while maintaining the employee's same job, pay, and benefits? I. Waiver of Rights • Section 825.220(d) states that “[e]mployees cannot waive, nor may employers induce employees to waive, their rights under the FMLA.” Some courts have interpreted this language to prohibit not only an employee's prospective or future waiver of rights but also the ability of an employee to settle his or her past FMLA claim. See, e.g., *Taylor* v. *Progress Energy* , 415 F.3d 364 (4th Cir. 2005), *vacated and rehearing granted* (June 14, 2006). 4 The Department seeks input on whether a limitation should be placed on the ability of employees to settle their past FMLA claims. 4 The Department filed an amicus brief in the Fourth Circuit on rehearing arguing that the regulation should be interpreted solely to bar the waiver of prospective rights. J. Communication Between Employers and Their Employees • Some commenters have expressed concern about the lack of awareness of FMLA rights and responsibilities among some employees. The Department requests information on whether employees continue to be unaware of their rights under the Act and, if so, what steps could be taken to improve this situation. • In addition, as is discussed in the FMLA Coverage and Usage Estimates section presented below, the estimated number of workers taking FMLA leave based upon the 2000 Westat *employee* survey (2.4 million) is significantly lower than the estimate based upon the *employer* survey (6.1 million). What may account for this difference? • Although there is evidence that some employers are failing to advise workers that their leave is being charged to FMLA, the Supreme Court in *Ragsdale* held that an employee is not automatically entitled to additional FMLA leave if the employer fails to properly advise the worker that the leave is being charged to FMLA because such a categorical penalty is inconsistent with the statute. What methods are used to notify employees that their leave has been designated as FMLA leave? What improvements can be made so that employees have more accurate information on their FMLA leave balances? • What changes could be made to the regulations in order to comply with *Ragsdale* and yet assure that employers maintain proper records and promptly and appropriately designate leave as FMLA leave? • Employers have reported that some employees do not promptly notify their employers when they take unforeseeable FMLA leave. The Department requests information on the prevalence and causes of employees failing to notify their employers promptly that they are taking FMLA leave and suggestions as to how to improve this situation. K. FMLA Leave Determinations/Medical Certifications • Does the regulatory provision (section 825.307) that permits an employer to contact the employee's health care provider for purposes of clarification and authentication only through the employer's health care provider result in unnecessary expenses for employers (e.g., by requiring them to hire a health care professional for purposes of this contact) and/or delay the certification process? How should the FMLA be reconciled with the Americans with Disabilities Act (“ADA”), which governs employee medical inquiries and contains no such limitation on employer contact? What are the costs and benefits to having this limitation? • Does the model certification form (WH-380) seek the appropriate medical information? If not, what improvements could be made to the form to make it clearer and easier for health care providers to complete, so that it is more likely that the necessary and appropriate information will be reported? • Does the two-day timeframe for providing notification to employees that their FMLA leave request has been approved or denied provide adequate time for employers to review sufficiently the information and make a determination? • Section 825.308 generally permits an employer to request a medical recertification no more often than every 30 days and only in connection with the absence of the employee. Is that an appropriate timeframe? • Section 825.308(e) permits employers to request a second opinion only for the initial certification. What are the costs and benefits to greater flexibility in requesting second opinions for recertifications? Would it create any hardships? • Section 825.310(g) does not allow an employer to request a fitness for duty statement in the case of a worker who is absent intermittently. What are the benefits and burdens of permitting such fitness for duty certifications? L. Employee Turnover and Retention • How does the availability of FMLA leave affect employee morale and productivity? • Is there any evidence that FMLA leave increases employee retention, thereby, reducing employee turnover and the associated costs? III. FMLA Coverage and Usage Estimates A. Introduction In order to assist the Department's analysis of the impacts of the FMLA discussed above, the Department in the following sections presents estimates of the coverage and usage of FMLA leave in 2005. The Department generally requests comment on these estimates and any data that would allow the Department to better estimate the costs and benefits of the FMLA. Throughout this section, the Department has also identified particular issues for which we request additional information and comment. The Family and Medical Leave Act established a bipartisan Commission on Family and Medical Leave to study family and medical leave policies and their impact on workers and their employers. The Commission surveyed workers and employers and issued a report in 1995. In 1999 the Department contracted with Westat to update the employee and establishment surveys conducted in 1995. The surveys were completed in 2000. A report entitled “Balancing the Needs of Families and Employers: Family and Medical Leave Surveys, 2000 Update” was published in January 2001 (the “2000 Westat Report”) and is available on the Department's Web site at *www.dol.gov/esa/whd/fmlacomments.htm.* The 2000 Westat Report is actually composed of two separate surveys:
(1)An employer or establishment survey; and
(2)an employee survey. The following analysis updates the Department's estimates of the number of workers employed at establishments covered by the FMLA, and the number of workers who took FMLA leave in 2005 (the latest year for which BLS employment data is available). It also highlights a number of important results and caveats in the 2000 Westat Report. B. Westat's Estimates The Department is interested in refining the coverage and eligibility estimates in the 2000 Westat Report for two reasons. The Department believes there are several methodological issues in the 2000 Westat Report that resulted in the overestimation of covered and eligible workers, and an underestimation of workers not covered by the Act. 5 In addition, the employment estimates in the Westat Report are based upon their 2000 survey and may not present an accurate picture of the current workforce. 5 Westat, “Balancing the Needs of Families and Employers.” These methodological issues are footnoted in the report in a variety of places, particularly Appendix C. Although the Bureau of Labor Statistics (“BLS”) reports that total employment in 1999 was 133.5 million, the 2000 Westat Report estimated the number of covered workers by applying the percentages developed in its surveys to a workforce of 144 million. As noted in Appendix C of the 2000 report, this methodology ( *e.g.* , using an 18-20 month survey period) likely results in an overestimate of total employment. Moreover, “[h]ouseholds that refused to complete the 2000 screener tended to consist of persons that were not employed during the reference period. All other things being equal, this would lead to a higher estimate of the total number of employed persons in the 2000 survey.” 6 6 Westat, “Balancing the Needs of Families and Employers,” at C-12. Further, the 133.5 million employment estimate includes workers who are not covered by the Department's regulations implementing the Act, such as the self-employed, unpaid volunteers, and many federal employees. Including these groups in the total also distorts the estimates of covered and eligible employees. 7 7 For example, the self-employed do not need to be included in the FMLA coverage estimates since they do not have to be told to rehire themselves after they return from “family leave.” C. Number of Workers Employed at FMLA Covered Establishments and the Number of Workers Eligible To Take FMLA Leave The FMLA coverage estimates presented in this analysis are based upon applying the percentages in the 2000 Westat Report to the number of wage and salary workers in private industry and state and local governments in the 2005 Current Population Survey (see Table 1). 8 8 Of the two major BLS employment surveys, the Current Population Survey was used because it covers agriculture, while the Current Employment Statistics survey does not. Table 1.—Civilian U.S. Employment Age 16 Years and Over in 2005 Millions of employees Total Employment 141.7 Self-Employed and Unpaid Volunteers/Family Members 15.8 Federal Employees (covered by OPM's FMLA regs) 2.6 Wage and Salary Workers in Private Industry and State and Local Government* 123.3 Source: U.S. DOL, ESA estimates based upon 2005 Current Population Survey. * Includes some Federal government workers employed by certain agencies such as the USPS. The best available FMLA coverage estimates were published in Table A2-3.1 of the 2000 Westat Report, which are presented in Table 2 below. Table 2.—Coverage and Eligibility of Employees Under the Family and Medical Leave Act: 2000 Survey Percent of all employees Eligible Employees at FMLA-Covered Worksites 61.7 Non-eligible Employees at Covered Worksites 14.9 Employees at Non-covered Worksites 23.3 Source: Westat, “Balancing the Needs of Families and Employers,” at A-2-21. Does not sum to 100.0% due to rounding. The estimates of the number of workers covered and eligible for FMLA leave under the regulations administered by the Department were developed by multiplying the 123.3 million wage and salary workers in private industry and state and local governments in 2005 by the percentage estimates in Table 2 above. Table 3.—Number of Covered and Eligible Employees Under the Family and Medical Leave Act in 2005 Millions of employees Employees at FMLA-Covered Worksites 94.4 Eligible Employees at FMLA-Covered Worksites 76.1 Non-eligible Employees at FMLA Covered Worksites 18.4 Employees at Non-FMLA covered Worksites 28.7 Source: U.S. DOL, ESA based upon 2005 Current Population Survey and the 2000 Westat Report. Does not sum to 123.3 million due to rounding. • The Department requests comment on the approach used here to estimate the number of FMLA eligible workers employed at covered worksites. The Department also requests that commenters submit alternative methodologies and other available data that could be used to refine these estimates. D. Number of Covered and Eligible FMLA Leave Takers According to the 2000 Westat Report, 17.1 percent of covered and eligible employees took leave for a “covered reason.” 9 Applying this percentage to the 76.1 million eligible employees at covered worksites in Table 3 yields an estimate of 13.0 million workers who took leave that they reported was for reasons covered by the FMLA. However, 13.0 million may be an upper-bound estimate in that it may over-estimate the number of covered and eligible workers who actually took FMLA leave because many of the “covered reason[s]” for leave may not rise to the level of a serious health condition. In fact, Westat cautioned “that the leave-takers discussed in this section [the one where the 17.1 percent estimate appears] did not necessarily take leave under the FMLA.” 10 Moreover, 33.6 percent of FMLA-covered establishments report that at least some of the time employees take leave for family and medical reasons, that leave is not counted as FMLA leave. 11 9 Westat, “Balancing the Needs of Families and Employers,” at 3-5 to 3-6. 10 *Id.* at 3-5. Westat provided this caution because the questions Westat asked employees did not inquire about the seriousness of the health conditions. See questions A3, A4, and A5 of Westat's 2000 Survey of Employees Questionnaire. 11 U.S. Department of Labor, Employment Standards Administration estimate based on Westat's 2000 FMLA Establishment Survey data. The distinction between leave taken for family and medical reasons and leave that qualifies as FMLA leave is important. Only leave that qualifies as FMLA leave triggers the employee's job protection rights and counts against the 12 weeks of leave provided by the Act. In order to estimate the number of covered and eligible employees who took FMLA leave, additional analysis is necessary. According to the 2000 Westat employee survey, only 18.3 percent of covered and eligible workers who took leave that they reported was for reasons covered by the FMLA actually took FMLA leave. 12 Applying this percentage to the 13.0 million covered and eligible workers who took leave that they reported was for reasons covered by the FMLA yields an estimate of 2.4 million workers who took FMLA leave in 2005. 13 However, 2.4 million may be a lower-bound estimate in that it may under-estimate the number of covered and eligible workers who actually took FMLA leave, because evidence exists that many workers are unaware that their leave qualified and that their employers may have designated their leave as FMLA leave. 14 12 Westat, “Balancing the Needs of Families and Employers,” at 3-14. 13 This estimate is consistent with Westat's estimate of “between 2.2 and 3.3 million people” based on the employee survey. Westat, “Balancing the Needs of Families and Employers,” at 3-13. 14 According to U.S. Department of Labor, Employment Standards Administration tabulation of data in Westat's 2000 FMLA Employee Survey, 34.5 percent of covered and eligible workers who reported taking leave for an FMLA covered reason also reported that they had never heard of the FMLA. Because of the data limitations described above, the Department developed estimates of the number of covered and eligible employees who took FMLA leave based upon Westat's 2000 establishment survey rather than the employee survey. According to the 2000 Westat Report's establishment survey, 6.5 percent of employees in covered establishments took FMLA leave. 15 Applying this percentage to the 94.4 million workers employed at FMLA-covered establishments in 2005 yields an estimate of 6.1 million covered and eligible employees who took FMLA leave in 2005. 16 The Department notes that the results of the 2000 Westat establishment survey for large employers are consistent with the results of a recent WorldatWork survey. 17 15 Westat, “Balancing the Needs of Families and Employers,” at 3-14 to 3-15. 16 This estimate is consistent with Westat's estimate of “between 4.6 million and 6.1 million” based on the establishment survey. Westat, “Balancing the Needs of Families and Employers,” at 3-14. 17 A recent survey of large companies found that 9.5 percent of covered employees took FMLA leave compared to 8.9 percent for large employers in the 2000 Westat establishment survey. See WorldatWork, FMLA Perspectives and Practices, April 2005, at 7, and Westat, “Balancing the Needs of Families and Employers,” Table 3.6, at 3-15. • The Department requests comments on the approach that was used to estimate the number of covered and eligible employees who took FMLA leave. The Department also requests that commenters submit alternative methodologies and other available data that could be used to refine the estimate. Although the Department previously estimated that “over 35 million covered and eligible workers have benefited from taking leave for family and medical reasons since 1993” (emphasis added), 18 the Department is concerned that this estimate has been misinterpreted to be equivalent to the number of workers who actually took FMLA leave since 1993. 19 This is not an accurate estimate of the number of workers who took FMLA leave. As noted above, there is an important difference between leave taken for reasons covered by the FMLA and leave actually qualified as FMLA leave. The two are not the same and it is important to differentiate the two in order to estimate the marginal impact of the FMLA itself, as opposed to estimating the impact of all sick leave policies in the workforce. In addition, as noted in the 2000 Westat Report, “establishments may double count persons that took more than one FMLA leave” during the 18-20 month survey period that began in January 1999. 20 Moreover, this double counting is even more likely to occur over the longer period that began in 1993 due to workers who have chronic conditions, more than one family member with a serious health condition, or multiple pregnancies or adoptions. After reviewing the 2000 Westat Report, the Department has determined that the available data do not enable the accurate estimation of the total number of workers who took FMLA leave since 1993. 18 Westat, “Balancing the Needs of Families and Employers,” Statement from Alexis M. Herman, Secretary of Labor. 19 In the past few years, several press accounts reported that 50 million workers have taken advantage of FMLA leave since 1993 and have attributed this estimate to the Department. There is no Department estimate of 50 million workers having taken FMLA leave. While it might be possible to develop such an estimate by extrapolating from estimates in the 2000 Westat Report, such estimates would suffer from the same problems as those discussed above. 20 Westat, “Balancing the Needs of Families and Employers,” at 3-14 n. 25. • The Department requests that commenters submit alternative methodologies and other available data that could be used to develop this estimate given the data limitations and methodological issues in the 1995 and 2000 FMLA reports. E. Estimated Number of Workers Taking Intermittent FMLA Leave Although the Westat surveys tended to focus on the longest leaves taken for family and medical reasons rather than the leaves taken intermittently, the Department believes that the report can be used to develop an estimate of the number of workers that use intermittent FMLA leave. Almost one-quarter (23.9 percent) of covered and eligible workers who took FMLA leave reported taking their leave intermittently. 21 That is, they repeatedly took leave for a few hours or days at a time because of ongoing family or medical reasons. 22 Assuming that the 23.9 percent estimate applies to leave-takers as well as leave (i.e., the intermittent leave is not concentrated in a small group of leave-takers), then about 1.5 million FMLA leave-takers (i.e., 23.9% of 6.1 million FMLA leave-takers) use intermittent leave in a year. 21 U.S. Department of Labor, Employment Standards Administration, estimate based on Westat's 2000 FMLA Employee Survey data. 22 Those that answered yes to Question A5B of Westat's employee questionnaire. • The Department requests comment on the approach that was used to estimate the number of FMLA eligible workers employed at covered worksites taking intermittent FMLA leave. The Department also requests that commenters submit alternative methodologies and other available data that could be used to refine this estimate. F. The Financial Impact of Intermittent FMLA Leave In the foreword to the 2000 Westat Report, the Department noted: Two-thirds of covered employers reported that, overall, complying with the Act was very or somewhat easy * * * The survey found that for most employers, intermittent leave had no impact on their business. Slightly more than 81 percent of employers said the use of intermittent leave had no impact on productivity and 94 percent said it had no impact on their profitability. 23 23 Westat, “Balancing the Needs of Families and Employers,” at xii. However, because employers have reported that recurring unforeseen (i.e., unscheduled), intermittent FMLA leave is a problem, the Department has reexamined the estimates in the Westat Report. According to Table A2-6.13 of the Westat Report (presented below and renumbered as Table 4), 32.3 percent of establishments with over 250 employees reported a negative impact on productivity. 24 Moreover, 17.4 percent of establishments with over 250 employees reported a negative impact on profits. 25 Additionally, “[a]cross the board, administrative issues are perceived to be more difficult in 2000 than they were in 1995”; 26 24 *Id.* at A-2-59. 25 *Id.* 26 *Id.* at 6-8. Table 4.—The Impact of Intermittent Leave Taken Under FMLA on Covered Establishments by Size: 2000 Survey Percent of covered establishments with: 1-250 employees 251+ employees All covered establishments Productivity: Large negative impact — 3.2% 0.5% Moderate negative impact 12.0% 14.6% 12.2% Small negative impact** 4.8% 14.5% 5.4% No impact* 82.3% 65.7% 81.2% Small positive impact — — — Moderate positive impact — — — Large positive impact & & & Profitability: Large negative impact** — 1.2% 0.1% Moderate negative impact** 1.5% 5.5% 1.7% Small negative impact** 3.8% 10.7% 4.2% No impact** 94.5% 81.7% 93.7% Small positive impact — — — Moderate positive impact & — — Large positive impact & & & * Significant at p<.10, using a t-test. ** Significant at p<.05, using a t-test. & Indicates no significance test was conducted because of zero cell. — Indicates less than 10 unweighted cases. Note: Column percents may not total to 100% due to rounding. Source: Westat, “Balancing the Needs of Families and Employers,” pg. A-2-59. A possible explanation of the differing impact of intermittent leave by establishment size may be that FMLA leave usage varies by establishment size. In fact, Westat found “Taking FMLA leave is apparently more frequent in larger establishments (8.9 leave-takers per 100 employees) than in smaller establishments (5.5 leave-takers per 100 employees).” 27 Thus, the higher negative impacts reported by the larger firms (i.e., those with 251 or more employees) may be due to that fact that they have a higher percentage of employees taking FMLA leave than small firms (i.e., those with 50 to 250 employees). 27 *Id.* at 3-14. • The Department also requests that commenters submit alternative information related to the different impacts that intermittent leave has on large employers compared to smaller employers. The definition of intermittent leave used in the 2000 Westat Report may also mask issues of concern. As Westat specifically noted, the employee survey defined intermittent leave as “repeatedly tak[ing] leave for a few hours or days at a time because of ongoing family or medical reasons,” 28 whereas the regulations at 29 CFR 825.203(a) define it as “leave taken in separate blocks of time *due to a single qualifying reason* .” (Emphasis added.) 28 *Id.* at 2-10 n. 10. Finally, the Westat survey did not distinguish between unscheduled, intermittent leave and scheduled, intermittent leave. By including leaves that do not occur repeatedly (i.e., 2 or 3 leaves in 18-20 months) in the surveys and by not asking questions about the impact of unscheduled, intermittent leave, the report may underestimate issues associated with frequent unscheduled, intermittent leaves of a day or less. • The Department also requests that commenters submit alternative information regarding any impact that recurring unforeseen, intermittent FMLA leave may have on covered employers. G. Estimated Number of Workers Taking Unforeseen, Intermittent FMLA Leave Although the Westat Report does not provide information on the portions of the intermittent leave that are foreseeable and unforeseeable, the 2000 survey did provide some data that may be used as a rough “proxy.” Question A8a of the survey was “Did you take leave on a regular routine or as needed? ” and had two responses: “Regular Routine” and “As Needed.” Of the employees who took intermittent FMLA leave for their longest leave, 45.4 percent reported that they took it as needed. 29 Assuming that all of the intermittent FMLA leave-takers who took unforeseeable leave answered “As Needed” to question A8a, then about 700,000 workers (i.e., 45.4% of 1.5 million) took unforeseen, intermittent FMLA leave. 29 U.S. Department of Labor, Employment Standards Administration estimate based on 2000 FMLA Employee Survey data. • The Department requests comment on the approach that was used to estimate the number of FMLA eligible workers employed at covered worksites taking unforeseen, intermittent FMLA leave. • The Department also requests that commenters submit alternative methodologies and other available data that could be used to refine this estimate. • The Department also requests comment on the prevalence, durations, and causes of intermittent leave. H. The Financial Impact of Unforeseen, Intermittent FMLA Leave Based upon the preceding analysis, less than one-percent (700,000 of the 94.4 million) of the workers employed at FMLA covered establishments may be taking unforeseen, intermittent FMLA leave. If this estimate is accurate, it would seem to explain why most employers in the Westat survey reported that intermittent leave had little impact on productivity or profits. The temporary absence of less than 1 in about 135 workers probably would not have a significant impact on the overall efficiency of most employers' operations. This does not preclude the possibility, however, that unforeseen, intermittent FMLA leave may be a significant problem for some employers. The unexpected absence of certain employees may create problems in the workplace. For example, an unannounced absence can cause other workers or equipment to be idled. An unannounced absence can result in lost business or performance penalties to be imposed upon the employer. It is noteworthy that the two industries with the highest FMLA costs in the 2004 Employment Policy Foundation (“EPF”) survey were transportation (an industry which has performance penalties) and telecommunications (an industry where quality of service agreements are common). 30 Anecdotal reports also indicate that some employers schedule extra workers for some positions to avoid the negative impacts of unforeseen, intermittent leave. 30 Mulvey, Janemarie, “The Cost and Characteristics of Family and Medical Leave,” Employment Policy Foundation Issue Backgrounder (Apr. 19, 2005). But see Institute for Women's Policy Research, “Assessing the Family and Medical Leave Act: An Analysis of an Employment Policy Foundation Paper on Costs (June 29, 2005). • The Department also requests comment on the impact that unscheduled, intermittent leave has on productivity and profits. There is some indication that the use of unscheduled, intermittent FMLA leave is not evenly distributed across employers or even across the facilities of a given employer. Rather, it may be concentrated in some facilities and only becomes a problem for employers when the portion of workers taking unscheduled, intermittent FMLA leave in a given facility or operation exceeds some critical point. Some believe that the apparent concentration of workers taking unscheduled, intermittent FMLA leave may be due to poor management or other labor-relations problems. Others believe that as more and more workers in a particular facility take unscheduled leave, the likelihood that the remaining workers will become sick or injured and begin to take FMLA leave also increases. See, e.g., Workers' Compensation and Family and Medical Leave Act Claim Contagion. 31 31 Gardner, Harold H., Kleinman, Nathan L., and Butler, Richard J., Workers' Compensation and Family and Medical Leave Act Claim Contagion, Journal of Risk and Uncertainty, Volume 20, Jan. 2000, at 89-112. • The Department requests that commenters submit information on the concentration of workers taking unscheduled, intermittent FMLA leave in specific industries and employers. • The Department requests that commenters submit information on the factors contributing to large portions of the work force in some facilities taking unscheduled, intermittent FMLA leave. Finally, the problems associated with employees taking unscheduled, intermittent FMLA leave may be related to the salaried or hourly-pay status of the employees. Anecdotal reports indicate that employers do not appear to have problems when workers who are salaried and exempt from the Fair Labor Standards Act (“FLSA”) under 29 CFR part 541 take small blocks of unscheduled, intermittent FMLA leave so long as these workers complete their work. In fact, some employers may not even record absences of a couple hours or less because of the scheduling flexibility typically afforded to salaried workers, and because the absences often have no impact on such workers' pay or productivity. Employers report they have both administrative and production problems when non-exempt (typically hourly-paid) workers take unscheduled, intermittent FMLA leave, especially when these workers do not notify their employers that they are not coming to work at their scheduled reporting time. Unlike salaried employees, many non-exempt employees may not be paid when they take unscheduled, intermittent FMLA leave. • The Department requests that commenters submit information related to the different treatment of FLSA exempt and nonexempt employees taking unscheduled, intermittent FMLA leave. • The Department also requests information on the different impact the leave taking by FLSA exempt and nonexempt employees may have on the workers who are taking leave and their employers. I. Additional Questions Related to the Coverage Estimates and Their Impacts • The Department requests public comment on the estimates and the methodology used to produce these estimates, including any available information that can be used to improve the estimates of the impact that FMLA leave has on employers and employees. IV. Conclusion The Department invites interested parties having knowledge of the FMLA to submit comments and welcomes any pertinent information that will provide a basis for ascertaining the effectiveness of the current implementing regulations and the Department's administration of the Act. The issues posed in this notice are not meant to be an exclusive list of issues for which the Department seeks commentary. Victoria A. Lipnic, Assistant Secretary for Employment Standards. Paul DeCamp, Administrator, Wage and Hour Division. [FR Doc. 06-9489 Filed 11-30-06; 8:45 am]
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